AMLO’s Plan to Confront Food Inflation in Latin America

On March 2, 2023, President López Obrador announced that Mexico will launch a plan against inflation with other Latin American countries to face food insecurity together. López Obrador stressed that his government would "carry out an anti-inflationary plan of mutual aid and growth for economic and commercial exchange between Latin American countries."
 
The Mexican President said he has already spoken with Presidents Luiz Inácio Lula da Silva from Brazil, Gustavo Petro from Colombia, Miguel Díaz-Canel from Cuba and Alberto Fernández from Argentina, who pledged to open dialogue with their peers in Chile and Bolivia to join forces in a plan that seeks to remove tariffs and reduce the price of food items. The leaders also want to incorporate Honduras into the agreement. However, neither Peru nor Ecuador were mentioned on this occasion. 

According to President López Obrador, the presidents will meet remotely on April 5, 2023 and then hold an in-person meeting to discuss the plan in further detail. Meanwhile, the foreign and economic ministries of the countries will begin meetings to identify trade opportunities. 

Furthermore, the president underscored that besides government institutions, the economic agreement will include the participation of producers, distributors, traders and importers from Latin America. The deal will establish prices and even remove current tariffs. “This is the beginning, and it will slowly expand. It is an economic, commercial agreement and we will invite producers, distributors, traders, importers, everyone who sells and buys. This has to do with food prices, removing tariffs and barriers that prevent obtaining food at a good price for the domestic market of Latin countries,” President López Obrador said.

During 2022, all Latin American countries faced strong inflationary pressures, as did the rest of the world, due to the crisis generated by the Ukraine war. In a joint report, the Economic Commission for Latin America and the Caribbean (ECLAC), the Food and Agriculture Organization of the United Nations (FAO) and the World Food Programme (WFP) explained that rising inflation in Latin American and Caribbean countries has increased the risk of food insecurity in the region. "This scenario of food inflation triggers problems such as difficult access to a healthy diet, food insecurity and hunger because it greatly affects lower-income households," said José Manuel Salazar, Executive Secretary, ECLAC. 

INEGI revealed that during the first half of February 2023, the annual headline inflation in Mexico stood at 7.76%. However, the annual rate in the food category was 12.66%. "This situation is disturbing since four out of 10 Mexicans face labor poverty, which means their income is not enough to feed all family members," stressed the Mexican economic watchdog ¿Como Vamos?. 

According to the organization, several basic Mexican food products continued to rise by the end of February, including the serrano pepper, with an increase of 91.8%, tomato, which increased by 57.4%, orange by 37.9% and eggs by 33.92%. These products were followed by wheat flour, which rose at 27.07%, bread at 19.75%, corn tortilla at 15.41% and milk which presented an annual increase of 13.34%.