Mexican Government presents anti-inflation plan to curb rising food prices
The Mexican Government presented a plan to stop the rise in food prices and keep basic food items affordable. The plan, which was prepared and presented in coordination with the private sector, contains measures that will boost food production, facilitate distribution and cut the costs of food and fertilizer inputs.
On 4 May, Mexican Prime Minister Lopez Obrador presented a plan to curb the rise in food prices in Mexico. Supply chain disruptions caused by the COVID pandemic, the post-COVID economic recovery and the war in Ukraine have resulted in an inflation rate of 7,72%, the highest in over 20 years.
The Ministers of Finance, Interior, Agriculture and Economy, the Federal Consumer Ombudsman and private sector representatives all joined the Mexican Prime Minister in the launch of the plan.
Sixteen measures
The main goal of the plan is to keep 24 basic food items (such as eggs, beans, milk, limes, oil, rice, tuna, sugar, beef, onion, and chili peppers) affordable, in particular for the poorest and most vulnerable parts of the population. The plan consists of 16 measures, among which are the following:
- Stimulate national production and build up strategic reserves of maize, beans and rice;
- Boost social programmes for the rural poor, in particular the reforestation programme Sembrando Vida (Sowing Life), which should lead to a grain production increase of 800.000 tons;
- Expand the scope of Mexico’s free handout fertilizer programme from four to nine States, which should lead to an additional 2 million tons of grain production;
- Eliminate import duties for ammonium sulphate and other fertilizer inputs, as well as for beef, maize and wheat flour;
- Boost security along the country’s highways, in order to prevent assaults on food transport;
- Cut red tape at customs and ports.
Private sector participation
The plan was developed jointly by several Ministries as well as in collaboration with private sector representatives. Many of Mexico’s large food processors and retailers publicly expressed their commitment to the plan and to keeping the prices of their products under control. The plan will have an initial duration of six months, but may be extended with another six months, if necessary.
No price controls
In the days leading up to the plan’s presentation, much of the discussion in Mexico centered around the issue of price control measures. Economists and agricultural sector representatives had warned against price controls as they would discourage farmers to increase food production or lead to a rise of the black market for food. Apparently such warnings were taken into account, as during the plan’s presentation President Lopez Obrador stressed that the plan did not include mandatory price controls.