The government bailout takes place in the midst of growing protests by working farmers and peasants who grow sugarcane. Along with mill workers, they are demanding back payment for crops delivered to the mills, payment of back wages, and for state aid to alleviate the effects of the crisis.

Government officials have made it clear the measure is not a "populist" one, but instead is a move to rescue investors in the bankrupt companies, which have accumulated a debt of $2 billion, most of it owed to the Mexican government.

The 27 mills were owned by five consor-tiums that included Mexico's second largest sugar refiner, Grupo Azucarero Mexico SA (GAM), which, according to the Wall Street Journal, has Chicago real estate giant Sam Zell as one of its main investors.

The Mexican government has pledged the mills will be sold back to capitalists within 18 months. The government says it will pay the current owners $110 million for the plants and assume all debts of the companies. It plans to spend $300 million in upgrading the mills before they are resold.

Sections of the ruling class in Mexico have questioned whether this is the best way to confront the crisis. The takeover of the mills constitutes an "extreme measure that goes against the right of law," said Héctor Rangel, president of the Bankers Association of Mexico. He added that the steps are not going to necessarily resolve the problem.  
 
Peasants protest flood of imports
The agricultural and trade policy of President Vicente Fox has come under pressure from working farmers and peasants. There has been a wave of protests demanding the government pressure the sugar mill owners to pay the $420 million owed to sugarcane farmers and review the North American Free Trade Agreement (NAFTA).

Peasant organizations have carried out roadblocks and camped out in front of government buildings in Mexico City and other states since the beginning of July. Fox was met with protests August 23 by sugarcane growers during his visit to the city of Cuernavaca in the state of Morelos. In response to the demands by the cane growers, Secretary of Agriculture Javier Usabiaga announced at the time that a solution would be announced by September 6.

Several of the refiners received bank loans from the Foreign Trade National Bank to begin making payments to the growers, and others have been promised that the debt will be paid off as the sugar is sold.

Peasant organizations from 12 Mexican states announced they will shut down the Port of Veracruz September 15 to protest a flood of imports, illegal trade, and corruption that have ruined different agricultural sectors.

"We are not going to respect the government. We are fed up, and if they try to repress the mobilization, we will bring gasoline and torches," Victorio Malpica, a pineapple grower from Oaxaca, told the Mexican daily La Jornada. "We are not going to allow one more gram of pineapple to be imported or have our families go die in the desert in the United States," he added.

According to the article, Mexico consumes 43 million tons of grain annually, of which 16 million is imported. Pineapple imports have grown 546 percent recently.

Malpica said companies such as Del Monte and Herdez no longer buy pineapple from producers in Mexico, but their warehouses are still full. The peasant organizations are demanding Fox suspend imports or raise tariffs substantially to avoid the total bankruptcy of this section of Mexican agriculture.

In response to trade pressures from the United States, the Mexican Congress September 7 invalidated "side letters" to the North American Free Trade Agreement imposed by Washington. The unilateral protectionist "side letters" limited Mexico's sugar exports to the United States to 116,000 tons a year. Mexico produces some 500,000 tons a year of excess sugar and claims that under NAFTA it can export sugar into the United States without any tariffs.

In an address to the U.S. Congress the first week of September, Fox pointed to some of the unequal trade relations between the two countries, such as Washington's move to prevent Mexican trucks from traveling freely into the United States. He also urged Congress and the Bush administration to find a quick way to legalize the status of the estimated 3.5 million undocumented Mexicans living in the United States.  
 
 
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