The 'Package against inflation' hurts the poor and the producers |  Article

By Alberto Vizcarra Ozuna

SIf you deliver the blood bank to Dracula, under an agreement based on the trust that he will not take it, or you are in a state of naivety or in complicity with that mythical character who lives precisely by sucking blood.

There is room for analogy, if we remember that President Andrés Manuel López Obrador, in October of last year, with the purpose of reinforcing the Package against Inflation and High Costs (PACIC), signed an agreement with the main private corporations dedicated to the importation and marketing of food, in which it offers them a duty-free bar to import the goods, in the confidence that this would help to prevent consumer prices from increasing. The plan did not yield the expected results. Dracula drank the blood.

The scope of the agreement against inflation was not ambitious, but it did help large importers to put their entire national storage system to the top and more. In October of last year they had said that the immediate objective was to reduce the average price of 24 products included in the basic basket by 8 percent. Seven months after the agreement, the basic basket remains on the rise and has not fallen from the heights reached since the beginning of last year.

The estimates of organisms such as the National Alliance of Small Merchants, is that despite the launch of the PACIC the basic basket of Mexicans has risen more than 60 percent, in less than a year. This includes tortillas, bread, milk, eggs, rice, beans, pasta, among other basic consumer products. The increases in egg prices are exponential. A product that had been a relatively accessible source of protein for the population for many years now has grown in price by more than 150 percent.

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The bi-monthly support granted by the government for the elderly has been devoured by these increases and the specter of hunger begins to gain ground in the poor areas of the country. According to data provided by the National Health and Nutrition Survey, 20 percent of Mexican households register severe food insecurity. According to the World Hunger Index, Mexico, during the last four years, has moved significantly away from the goal that zero hunger is proposed. These indices determine hunger on a scale of one hundred points, where zero indicates that the observed country is not hungry and one hundred is the worst condition.

In the last four years, Mexico rose to 42nd place, having occupied 23rd place, in its process of moving away from the zero hunger commitment established for 2030. But the worst thing is not the statistics that favor hunger, but the disconcerting actions of the federal government which hands over, without any regulation, the food market to large importers, and internally abandons the national producers of corn and wheat who face, for the current harvests of both grains, resounding falls in prices and excessive increases in production costs.

We are facing a counterproductive anti-inflationary policy, because the worst part of the procedure is not only the failure reflected in the irrepressible increase in the prices of the basic food basket, but also the manifest decision of the federal government not to protect national producers of basic grains, whom the presidential discourse despises with disqualifying class, accusing them of being “rich and macho”, while embracing private corporations that flood the national market with imported food products, thereby causing dumping of national producers.

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As a result of such policies, the bulk-producing regions of the country, by not receiving federal support to compensate for the losses due to the fall in international prices, will suffer considerable injuries and a good segment of producers will fall into overdue portfolios, because in addition to the increases in production costs have skyrocketed financial costs as a result of interest rate hikes. Any anti-inflationary plan that is only sent to the market and crashes against national food production is by itself nonsense.

It is not that the federal government ignores the counterintuitiveness of its anti-inflationary policy, what happens is that it lacks the necessary daring to correct the systemic flaws of the price policy imposed on basic grains with the signing of NAFTA and later ratified in T -MEC. The Secretary of the Economy, Raquel Buenrostro, has been in charge of confessing this clearly, who at the beginning of May said: “Tariffs will not be imposed on corn, International Agreements will be respected and, on the contrary, the government promotes a policy zero tariffs on basic basket products to combat the effects of global inflation…”
In its anti-inflationary plan, the government has chosen the big traders as an ally and despises, unprotects and insults the national producers of basic grains. What a way to kill the goose that lays the golden eggs and deepen Mexico’s vulnerabilities in the face of the ghost of hunger that decimates the country and regains strength to travel the world.

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