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The Crisis in Mexico

The Crisis in Mexico

You’ve heard about the food crisis in developing nations, and can feel it at home.  Here is how we are experiencing it in Mexico.

Make sure you read Part II below.

July 18, 2008

Tortillas are 6 to 9 pesos a kilo (2.2 pounds).  They make up a big part of our diet.

Tortillas are 6 to 9 pesos a kilo (2.2 pounds). They make up a big part of our diet.

What effects the United States, effects us here in Mexico.

So of course we are in an economic crisis.

Not with gas.  The government is subsidizing gas prices, which are around $2.50 a gallon.  The cost has gone up a little recently, but only by a couple of pennies.  Gringos are still crossing the border to fill up.  Lots of good that does my folks, who live a couple of hours from the border—with Canada.

The real problem is with food.  Corn is a staple here.  We eat tortillas like we ate potatoes in my New York childhood—they appear on the menu almost every day.  Tortillas provide nutrition, round out the menu, and fill you up.  Combined with beans, they provide all the amino acids we require—a complete protein for a population that eats little meat.  Tortillas have always been the food to fall back on when the money runs out in the middle of the week.  Tortillas and beans.  And when things are really tight, folks eat tortillas and hot chile peppers.  And then just tortillas.

Along comes ethanol.  It really sounded like a bright idea.  I was as excited as anyone by the idea of a green, renewable, non-polluting fuel—especially since we can make it at home.  Upon closer inspection, though, ethanol turned out to be a disaster.  The process to make it costs almost as much energy and money as gasoline.  Ethanol is cheaper because the government is holding down costs to promote it.

Farmers—who really deserve some good years, I agree—are planting more corn, to the detriment of other crops.  Corn takes a lot out of the soil, and uses tons of oil-based pesticides and fertilizers.  All those growing stalks sweep carbon dioxide out of the air—but not as effectively as meadow full of native weeds.  Land is being cleared for more corn, and the net effect is more carbon dioxide, not less.

Plus corn that is being converted into brew for our cars is corn that doesn’t go to feed people.  And tortillas are made of corn.  Mexican farmers get more money selling their maiz for ethanol than hawking it in the market.

The result is that every time we go to the store, tortillas have gone up.

There are several market basket foods—milk and tortillas are two—that are price controlled by the government to avoid price gouging.  Milk has remained right around $4 gallon, and is bought almost exclusively for babies and young children.  (Generally, only northern Europeans can digest milk as adults.  Most of the rest of the world is lactose intolerant after childhood.  This is one reason France is famous for cheeses and creams and Japan isn’t).

Tortillas, on the other hand, have gone from six to ten pesos, with reports that they could reach 15 pesos ($1.50) a kilo (a kilo is 2.2 pounds).

A little perspective is needed here.  It is easy to think “Well, tortillas have gone from $0.60 to $1.50.  They are still practically giving them away.”  But when you re feeding a family of six and make minimum wage (which is about $5 a day) and need to spend $3 on the bus to get to work and back, even if you go without lunch you aren’t left with much at the end of the day.  The extra $0.90 that used to go to buy some eggs or beans now goes toward tortillas.

Just like the crisis of 1994 when the peso was devalued and people not only lost money but had their dollar debts multiplied, we are starting to see effects of the current crisis.  We live in a working class neighborhood, and the adults are gone day and night at multiple jobs—security work, loading boxes on trucks, cleaning buildings after hours.  They look tired and worried and threadbare, and need new shoes.

And the crisis is just starting.

We have always been lucky to have inexpensive food here in Mexico.  In New York broccoli costs $2.49 a pound.  Here it is half that for a kilo.  If you buy local produce, you can still eat well for little.  But a large proportion of the population doesn’t even have little to spend.

Imported food is very expensive.  The smallest size peanut butter from the states—Jiff or Skippy, is $3.  The pound size is $4.  Soy sauce is $3 a bottle.  Huggie wet wipes which are $1.39 in Wal-Mart in the states are $4 in Wal-Mart here.  Eggs and sugar, presumably Mexican products, have gone way up, and we are glad to be out of the pastry business for the time being.

As anywhere, if you eat locally and stick to staples you can save money.  But with tortillas and beans and rice going through the roof, for many people here there is nowhere to turn.

There was a knock on the door the other day.  A young man explained that he was representing the farmers in the wide valley where we live.  The farmers could sell us corn, beans, vegetables, and tequila for very accessible prices, and still earn more than by selling their goods to food processors and middlemen.

A liter of good—quality tequila, he explained, costs $1.20 from the distiller.  Once they put it in a fancy bottle and label it, the same tequila costs ten times as much–$12.  And who earns the bulk of that money?  The middleman.

Farmers would bring their crops to our park, where we could open the sacks and divide the food among participating families at a big discount.  Would we like to sign up?

There was a rush.  Every household signed the list.  We are helping local growers, we are keeping our money from big business, and most importantly, food is getting to out neighbor families.

Both Pablos (neighbor friends who figure in our 365 posts) have lost their jobs recently and are trying new work.  Everyone is talking of moving to less expensive areas—sleepy Aguas Calientes—or hotspots like Los Cabos, where there is construction and jobs as cooks and housekeepers.

I’m heading back to the states for a few months, to look for employment.  The last time I went I was lucky enough to work as a substitute teacher.  I enjoyed meeting the kids and being in front of a class again, but there are no benefits and the money doesn’t add up very fast.  I’m looking forward to seeing what opportunities come my way this time.  It is terribly hard to be away from home and Omar for several months, but it is our best option, economically.  And I can be with my family and eat Ma’s cooking and go to the library and see my collector friends—all things I miss while I’m in Mexico.

So the secret to happiness is, as always, enjoy what you have, where you are, and who you are with today.  There are always changes in life, and nothing is permanent.

Even the economic crisis.

Dan and Omar

Economic Crisis in Mexico Part II

August 10, 2008

It is tough to say which country is experiencing the worse economic crisis—the U.S. or Mexico.  Of course, poor people are the hardest hit no matter where you are, and if you can’t feed your family, the crisis is terribly severe no matter where you are.

Mexico actually has some advantages over, say, New York, where my folks live.

Here gas is subsidized by the government.  We are something like the seventh largest gas producer, with huge deposits of petroleum in the Gulf of Mexico.  With the subsidies, we are still paying about $2.50 a gallon for gas.  Since the price of everything else is so closely tied to petroleum, either because the product is petroleum based or because it has to be shipped to the consumer, having cheaper gas is keeping down the prices of most other products.

Second, we are a farming country, and can produce food year-round.

As a matter of fact, Tlajomulco is in a large valley and even though many, many hectares have recently been cleared for housing developments, there is still a healthy agriculture business just outside our door.  Most fruits and vegetables are still reasonable, as long as you buy locally.

Of course New York is a great farming state, but come winter we import all fruits and vegetables except for apples, winter squash, potatoes, and other long-storage staples.

Still, our personal market basket in Mexico has increased 10 to 15% in the past year, even shopping the sales and concentrating on fruits and vegetables.  We eat meat, of course, but rarely make a meal of it.

What has hit Omar and I especially hard is that along with the price increases, the dollar has slumped.  One dollar now buys 9.8 pesos, as opposed to 11 pesos a year ago.  Doesn’t sound like much, but it makes a difference.  If I took out 1500 pesos last year it would cost about $132 dollars.  Now it costs $152 dollars.  So with the falling dollar and rising prices, the last several months have shown a real living increase of about 25%.

Now, this isn’t a scientific study and the official increase may be different, but for us it is costing a quarter more for the basics.

I have to add that we are also living a slightly better than in the past.  We are buying little luxuries like cranberry juice and go to the movies once a month or so.  But all in all, things are pretty tight.

A kilo of  toritillas is now $1.08.  A liter of Corona is $1.98.  Peanut butter is $4 a pound jar.

What happens to the economy in the U.S. affects the world.  It sure affects us in Mexico.

Dan and Omar

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Etiam pulvinar consectetur dolor sed malesuada. Ut convallis euismod dolor nec pretium. Nunc ut tristique massa.

Nam sodales mi vitae dolor ullamcorper et vulputate enim accumsan. Morbi orci magna, tincidunt vitae molestie nec, molestie at mi. Nulla nulla lorem, suscipit in posuere in, interdum non magna.