BL: Mexico to Eliminate Grain Taxes to Help Reduce Prices (Update1)
By Andres R. Martinez
May 25 (Bloomberg) -- Mexico will eliminate import tariffs on wheat, corn, rice and beans and cut in half a tariff on powdered milk to help lower food prices amid the highest inflation rate in more than three years.
The government will also eliminate import taxes on nitrogen-based fertilizer and provide farmers with credit for imports of the chemical, President Felipe Calderon said today during a news conference in Mexico City.
``The government is obligated to make sure that products get to the final consumer at the lowest price possible,'' Calderon said.
Consumer prices rose 4.83 percent in the first half of May as costs for cooking oils, rice and fuel soared. Mexico, which has the highest inflation rate since December 2004, will use some of its surplus funds to continue subsidizing energy costs.
The government will increase aid to the 5 million poorest families by 22 percent to 655 pesos a month, Calderon said. The government-run supermarkets that sell staples such as rice and corn flour to those families will also keep prices at current levels, he said.
Mexico will create a strategic corn reserve to store the grain, helping keep the cost down for the poorest Mexicans, Calderon said.
To contact the reporter on this story: Andres R. Martinez in Mexico City at amartinez28@bloomberg.net and
Last Updated: May 25, 2008 13:52 EDT
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