Background on Jorge Esteve Recolons and His Role
Jorge Esteve Recolons, the president of the National Agricultural Council (CNA), has raised concerns about the potential consequences of increasing corn prices for large buying companies. His warnings come amidst ongoing negotiations between the Mexican Secretary of Agriculture and Development Rural (SADER) and major corn purchasers, such as Gruma and Minsa.
CNA’s Stance on Raising Corn Prices
According to Esteve Recolons, pressuring large corn-buying companies to pay higher prices would negatively impact the competitiveness of the industry. This issue, he argues, would eventually be passed on to the end consumer.
He emphasizes that farmers’ profit margins are already slim, especially for crops like corn. Thus, demanding more payment from buyers isn’t feasible since they compete with imported goods, and “the border is open.” Consequently, buyers would likely source corn from abroad instead.
Esteve Recolons further explains that countries like the United States and Brazil provide substantial subsidies to their farmers, enabling them to sell at lower prices. To remain competitive, Mexico should consider offering similar support to its agricultural sector. Otherwise, corn producers may disappear.
Regional Differences in Corn Production and Transportation Costs
The CNA president highlights the importance of regional variations in negotiations with large flour mills. Logistics costs vary depending on the proximity to processing plants.
“If corn production is near flour mills, like Maseca or Minsa plants, they’ll likely pay a better price. However, if corn is produced in Chiapas and needs to be transported to central Mexico, logistics costs will be significantly higher,” he explains.
Key Questions and Answers
- What is the main concern of Jorge Esteve Recolons? His primary worry is that raising corn prices for large buying companies will negatively affect the industry’s competitiveness, ultimately burdening end consumers.
- Why are slim profit margins a problem for farmers? Slim margins make it challenging for farmers to absorb additional costs, such as higher payments demanded by buyers.
- How do subsidies in other countries impact Mexico’s agricultural sector? Countries like the US and Brazil offer substantial subsidies to their farmers, allowing them to sell crops at lower prices. Without similar support in Mexico, local producers may struggle to remain competitive.
- What role do regional differences play in corn negotiations? Logistics costs depend on the distance between corn production areas and flour mills. Closer proximity generally results in lower transportation expenses.
Ongoing Negotiations Between SADER and Corn Buyers
SADER, under the leadership of Claudia Sheinbaum, is engaged in discussions with major corn purchasers—like Gruma and Minsa—to secure a higher national corn price above international market levels. This initiative aims to support domestic producers amidst anticipated global production increases and subsequent price drops.
A significant portion of Mexico’s corn production, particularly from the Bajío region, is sourced by these large flour mills. Negotiations aim to establish favorable corn purchase prices for upcoming harvests by local producers.
