The Mexican food crisis cannot be fully understood without taking into
account the fact that in the years preceding the tortilla crisis, the
homeland of corn had been converted to a corn-importing economy by "free
market" policies promoted by the International Monetary Fund (IMF), the
World Bank and Washington. The process began with the early 1980s debt
crisis. One of the two largest developing-country debtors, Mexico was
forced to beg for money from the Bank and IMF to service its debt to
international commercial banks. The quid pro quo for a
multibillion-dollar bailout was what a member of the World Bank
executive board described as "unprecedented thoroughgoing
interventionism" designed to eliminate high tariffs, state regulations
and government support institutions, which neoliberal doctrine
identified as barriers to economic efficiency.
Interest payments rose from 19 percent of total government expenditures
in 1982 to 57 percent in 1988, while capital expenditures dropped from
an already low 19.3 percent to 4.4 percent. The contraction of
government spending translated into the dismantling of state credit,
government-subsidized agricultural inputs, price supports, state
marketing boards and extension services. Unilateral liberalization of
agricultural trade pushed by the IMF and World Bank also contributed to
the destabilization of peasant producers.
This blow to peasant agriculture was followed by an even larger one in
1994, when the North American Free Trade Agreement went into effect.
Although NAFTA had a fifteen-year phaseout of tariff protection for
agricultural products, including corn, highly subsidized US corn quickly
flooded in, reducing prices by half and plunging the corn sector into
chronic crisis. Largely as a result of this agreement, Mexico's status
as a net food importer has now been firmly established.
