Why does the Ethanol market Affect Mexican Families?

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Ethanol is an alternative fuel derived from corn and is seen as a promising alternative energy with regard to petroleum fuels. The potential of ethanol has been recognized in America and consequently due to the increasing demand for ethanol, there has been a steep hike in the price of corn in 2006. The ever increasing price of corn has negatively affected many poor Mexican families for whom corn is a staple diet.

What is the advantage of Ethanol as a Fuel?

Ethanol is regarded as a renewable energy as it is sourced from corn which can be grown on a large scale. Besides, ethanol is less hazardous to the environment as compared to petroleum fuels. Hence ethanol is increasingly being used in vehicles as an alternative fuel. Some gas stations use ethanol mixed with petroleum fuels while in many areas ethanol is used as the only fuel to run vehicles.

What is the effect of the Rising price of Corn on Mexican Families?

Due to the rising demand of Ethanol which is sourced from corn, the price of raw corn has spiraled in countries such as Mexico. This has adversely affected the poor Mexican families which rely on tortillas made from corn for their nutritional needs. Corn with its high fiber content and other nutrients, is considered a staple diet in Mexico. The tortillas are made with corn and valuable nutrients such as calcium powder which make it a healthy and wholesome meal devoid of fat. But the rising price of corn has forced poor families to buy the cheaper variety of tortillas imported from United States which is devoid of the nutritional benefits provided by locally made tortillas. This has led to a decline in the health of the local economy and its citizens.

How has the US contributed to the rise in Corn Prices?

In 2007, the price of corn saw an increase of almost 70 percent adversely affecting the global corn market. The increase in prices was directly attributed to the increasing demand for ethanol as a biofuel. In US, itself nearly 20 percent of the corn grown locally was being used to produce ethanol which would gradually increase with each successive year leading to rising corn prices. The price of corn has led to a jump in the price of food which has directly impacted the Mexican market that relies heavily on United States to meet its needs for corn.

How has rising Corn Prices affected the cost of Food?

Due to the ethanol policy of the United States, the food costs have adversely affected even local consumers as all products using corn become more expensive. In addition, the cost of animal feed is also impacted as nearly two thirds of poultry feed constitutes of corn. This has impacted the cost of eggs, meat and soft drinks which rely on corn syrup. With a number of ethanol plants being planned for the future the situation is bound to get worse with the ever-increasing demand for corn. As a short term measure farmers may end up cultivating more corn while abandoning other crops.

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