Corn Growers: Political Economy of a Protest
Thousands of farmers in at least 10 states have been protesting for two weeks, blocking highways to demand fair prices for their crops from the federal government. Corn producers, in particular, are demanding an increase in the price paid from 5,000 pesos to 7,200 pesos per ton.
As is often the case in protests that involve disrupting traffic, the focus is frequently placed on the impact on commuters rather than the underlying causes of the protest. Undoubtedly, the farmers' protest is causing inconvenience to those caught in the road blockades. But unfortunately, the federal government and the intermediary companies that control the majority of the production left them no other option. The root of the problem is that farmers are not being paid a fair price for their product, while a handful of near-monopolistic companies reap enormous profits from the hoarding and processing of corn.
Jesús Díaz, a corn farmer from Tototlán, Jalisco, explained it very clearly. They are paid four or five pesos per kilo of corn (four or five thousand pesos per ton), while a kilo of tortillas (made from nixtamalized corn flour) sells for 24 to 28 pesos. Who pockets those 20 or even 23 pesos between the price paid to the farmers for their corn and the price of tortillas sold to the public? Of course, other costs such as supplies, wages, and other expenses must be deducted. Even so, the difference between the two prices reveals a simple political economy behind the corn farmers' protest.
Over the years, and now during the road blockades, corn producers point to two problems: government neglect and the virtual monopolization of national corn production by four or five large companies. René Hernández, a corn producer from the municipality of Zapotlán del Rey, Jalisco, stated: “It’s a disgrace that this industry, which consists of four or five companies, holds the country hostage. We are 40,000 producers,” he asserted, adding that corn farmers have endured low prices for three years and are now demanding a bailout for the agricultural sector.
“They are four or five that sway a country,” said René Hernández, referring to these companies as hoarders, but in reality, they are practically just two producers of nixtamalized flour: Gruma and Minsa. Minsa belongs to the Promotor Empresarial de Occidente consortium, founded by businessman and former PRI senator Raymundo Gómez Flores and now run by his daughter, Altagracia Gómez Sierra, who is extremely close to Mayor Claudia Sheinbaum.
Gruma, for its part, owns the Maseca brand, which is the true monopoly of the corn industry. In fact, in October 2024, the Federal Economic Competition Commission (Cofece) concluded that “there are no competitive conditions in the market for nixtamalized corn flour sold to tortilla shops in Mexico,” due to the market concentration in Gruma's hands.
After dividing the country into eight regions and analyzing the corn industry, Cofece concluded that Gruma holds between 50% and 90% of sales in each region, with a market share two to nine times greater than its largest competitor in each region. This allows Gruma to set an average price almost 10% higher than its competitors (http://bit.ly/3JxcAXc). The market concentration is so significant that Cofece suggested Gruma sell five of its production plants, along with their entire distribution fleet and sales force, in an attempt to regulate the market. There is no indication that this has occurred. Gruma was founded by businessman Roberto González Barrera (who died in 2012) and is now run by his children. The González family was closely associated with the PRI party during its heyday and maintained close ties with the Salinas de Gortari family. They continue to have important connections within the political class across all parties.
Faced with protests and massive road blockages across the country, the federal government agreed to negotiations with corn growers' leaders. At Monday's meeting, the government proposed a base payment of 5,200 pesos per ton (to be paid by the hoarding companies) and government support of 850 pesos, for a total of 6,050 pesos per ton. The corn growers rejected the offer and insist on a payment of 7,200 pesos per ton. However, the problem will persist if the market structure, monopolized by a few companies that profit from the labor of farming families, is not dismantled.
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