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Table 5.20

State-owned Conasupo corn prices and subsidies in Mexico (US dollars per ton)

Category

Average Conasupo purchasing prices for

White corn Yellow corn

1996 1997

1998

1999

2000

53

59

116

60

59

116

60

59

116

157

119

129

116

105

91

Average Conasupo selling prices to Tortilla factories Mexico City Other Flour companiesa

DICONSA shopsb

White corn Yellow corn Feed sector c

155 147 111

n.a.

227

194

397

438

n.a.

152

466

497

540

Retail corn price ceilings for

Tortilla Flour e

d

  • = not applicable because Conasupo was dismantled in December 1998.

    • n.

      a. = not available

Conasupo = La Compañía Nacional de Subsistencias Populares (Mexico’s National Com- pany of Popular Subsistence)

  • a.

    Since 1985, flour companies have purchased most of their corn grains directly from pro- ducers and received payments from Conasupo to lower selling prices to tortilla factories.

  • b.

    DICONSA shops are government retail shops that distribute corn and other staple prod- ucts to rural consumers at low prices.

  • c.

    Since 1996, corn grain sales from Conasupo to the feed sector have declined significantly.

  • d.

    Retail prices of tortilla and flour were different in Mexico City from the rest of the country up to 1996.

  • e.

    Excludes flour sold in bulk, defined as 1 kg or more, for which retail prices were liberal- ized in 1995.

Source: OECD, Agricultural Policies in OECD Countries, 1998–2002.

biotech variety that, according to the commission, has not been proven safe for animal or human consumption. 158

According to the Canadian International Trade Tribunal (CITT) 2001 an- nual report, US dumping and subsidization significantly reduced domes- tic Canadian corn prices. On the other hand, CITT found that corn used to feed livestock benefited farmers through lower costs of production. Nev-

158. The challenge is how to separate genetically modified corn used for feed grain from that approved for human consumption. As an example, while Starlink corn was never al- lowed for human consumption because of fears that it might trigger allergic attacks in hu- mans, the Starlink gene inadvertently contaminated grain elevators and food processing plants. By 2000, traces of Starlink were found in taco shells and corn products across the United States, prompting prices for US corn to drop in export markets. We thank Tim Josling for this observation and for providing written comments to an earlier draft. See Erin Gal- bally, “Second Round of Concern Over Starlink Corn,” Minnesota Public Radio, April 25, 2001.

342

NAFTA REVISITED: ACHIEVEMENTS AND CHALLENGES

Institute for International Economics | www.iie.com

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