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 News Around the Republic of Mexico | May 2008 
President Felipe Calderón Reviews Actions to Support Families’ Economies with Industrialists
 Presidencia de la República
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| | President Felipe Calderón announces the National Program for Financing Development (PRONAFIDE) which will strengthen public finances, provide a solid financial system and improve the competitiveness of the Mexican economy. (Presidencia de la República) | | |
Mexico City, Official Residence - Mexican President Felipe Calderón met this week with the Board of Directors of the Mexican Confederation of Chambers of Industry (CONCAMIN), led by its president Ismael Plascencia Núnez, at the official Los Pinos Residence.
During the meeting, President Calderón explained the Actions to Support the Family Economy his government has implemented for the benefit of Mexicans, in response to the international increase in food prices.
The President explained that his proposal has three main axes: one, facilitate supply and consumers' access to better food prices on the international market; two, encourage food production, increase the productivity of the Mexican countryside; and three, protect the income and economies of the poorest families.
CONCAMIN board members assured the President of their support of these measures, adding that they would support him in implementing the necessary actions to keep food prices stable in production chains.
They also dealt with specific issues on the CONCAMIN agenda, such as those linked to deregulation, the incorporation of the informal sector and measures to combat piracy and contraband goods.
During the working meeting, the industrialists thanked the President for supporting the negotiations currently underway in China on compensatory quotas.
President Calderón was accompanied by Eduardo Sojo Garza-Aldape, Secretary of the Economy and Gerardo Ruiz Mateos, Head of the President’s Office.
Address by President Calderón on Actions to Support the Family Economy
Presidencia de la República
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Recently my government set in motion a series of actions to protect the economy of Mexican families, especially the poorest ones, from international increases in food prices.
Now, as never before, what happens in the rest of the world has repercussions for Mexico. In recent months, the whole world has seen steep price increases in several products, from food to petrol.
This has been attributed to a number of causes, including the enormous growth of Asian economies, primarily China and India, whose population accounts for a third of mankind.
These countries have improved the living standards and therefore food consumption of their populations, which in turn has boosted world food prices.
Another reason for this phenomenon is the international increase in oil prices, which has put up the cost of food production, and finally, the rise in the use of maize and other agricultural products to produce fuels such as ethanol, which are a complement to gasoline.
Whatever the reasons behind this world phenomenon, it particularly affects developing countries such as Mexico and the poorest countries.
The greatest priority and central objective of my government is to enable Mexicans to live better. And to prevent this situation from affecting those with least, my government will set in train a series of actions to support families’ economies.
First. In the commercial sphere and to ensure food supplies, we will lift all taxes on imported wheat, rice, and white and yellow corn; halve the tax on imported powdered milk and authorize a tariff-free bean import quota, so that these taxes do not affect food prices and so that tax reduction will also lower the price of some of these products.
These measure will also help us so that, in the event that we need certain types of food in Mexico, we will be able to import them from anywhere in the world, at the lowest possible price.
Moreover, in order to support livestock, milk, chicken and egg producers, we are lifting the tariffs on imported sorghum and soybean paste, which are crucial for feeding cattle and poultry.
Second. In order to guarantee that our farm workers continue to produce the food required by Mexican households, we have also eliminated all taxes on imported fertilizer or chemicals manufacture fertilizers and we are going to offer credit to all small producers so that they can acquire these fertilizers and pay them, if necessary, at the end of the harvest.
Farm workers living in marginalized zones will also be able to purchase fertilizers at affordable prices, through the DICONSA network.
Third. In order to capitalize and modernize the rural sector and therefore produce more food in Mexico, we will give an unprecedented boost to irrigation in the Mexican countryside. For example, we are going to build raised furrows, replace current pumps with more modern ones, and line canals to prevent water from filtering through and being lost. We are going to invest in drop irrigation and watering by sprinklers in over 200,000 hectares this year.
There is also a $20 billion peso fund to finance the purchase of tractors, machinery and farm equipment.
Fourth. In order to help the poorest families cope with the international price rise, we will guarantee the supply of basic products at fair prices. In particular, the kilo of fortified Mi Masa maize will continue to cost five pesos at DICONSA stores, while the price of a liter of LICONSA milk will remain at four pesos.
Fifth: To ensure the stability of tortilla prices, we will increase the programs to support the maize-tortilla chain and reinforce the program to modernize tortilla stores, called Mi Tortilla. We continue to have the support of many tortilla stores and all the large self-service stores to sell tortilla and bread at lower prices at these stores.
Sixth In order to protect the income and quality of life of the poorest families in Mexico, my government has decided to launch the food support program known as Living Better. This is a cash supplement to boost the income of nearly 5,300,000 households enrolled in various Federal Government programs, meaning that we will be supporting nearly 26 million Mexicans.
This means that the Oportunidades beneficiaries will now receive 365 pesos instead of the 195 they used to receive a month, in order to supplement their spending on food. Thus, the average cash supplement each family enrolled in the Oportunidades Program will receive will increase from 535 to 655 pesos a month. This constitutes an investment of $4.5 billion pesos this year along and, as I said before, will benefit nearly 26 million Mexicans.
The Living Better food support program is an effort to help families so that they can continue buying groceries without having to sacrifice other major expenses such as education and health.
Lastly, and in order not to affect Mexicans' income, government will continue supporting the price of gasoline, diesel and LP gas, despite the fact that the steep price increases worldwide. And in order to maintain gasoline, diesel and gas prices, we are going to spend nearly $200 billion pesos this year alone, which constitute most of the income derived from the international oil price increases.
This will require an enormous budgetary effort, and my government will be the first to set the example. We will redouble austerity measures in Public Federal Administration, in order to continue helping the Mexicans who need this most.
All these actions are possible due to the fact that Mexico has a strong, stable economy, resulting from the responsible handling of public finances and the reforms passed last year, which will enable us to cope with this sort of contingency.
In order to protect consumers' interests, Federal Government will follow up the pledges established and systematically monitor price developments throughout the food industry.
I warn you that we will not tolerate speculators or hoarders.
We all have something to contribute at these times when unity and solidarity among Mexicans are essential for ensuring the well-being of families with least.
Rest assured that my government will continue acting with firmness and determination to offer responsible solutions and sensible solutions to real problems so that all Mexican families, without exception, can Live Better.
I know that together we will be able to overcome this adversity, as we have overcome many others.
Thank you for your attention. |
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