Market correction imposed

It seems that global market forces – so often touted as the great uplifter and liberator of the world’s poor – have of late rather let down Mexico’s poor.

Tortilla prices rose by 14 per cent last year, more than three times the inflation rate, and they have continued to surge in the first weeks of this year. The rise is partly due to US ethanol plants gobbling corn supplies and pushing prices as high as $US3.40 ($4.30) a bushel, the highest in more than a decade.

The main problem with this being that “the corn tortilla is the staple of the Mexican diet and is crucial for the poor.”

Enter the regulators. Mexico’s President Felipe Calderon yesterday signed an accord with businesses to limit the soaring tortilla prices.

The accord limits tortilla prices to 8.50 pesos ($1) per kilogram and threatens jail terms of up to 10 years for company officials found hoarding corn. ... The accord also raises quotas for duty-free corn imports to 750,000 tonnes, most of which will come from the US.

President Calderon announced these measures with righteous thunder:

The unjustifiable price rise of this product threatens the economy of millions of families. We won’t tolerate speculators or monopolists. We’ll apply the law with firmness and punish those who take advantage of people’s need.

A decidedly unorthodox form of market correction, to be sure, and from a nominally ‘conservative’ government. But sometimes one just has to help those market forces along in their uplifting and liberating.