Mexico to drop plan to cut yellow corn imports, new agriculture minister says

By Adriana Barrera and Cassandra Garrison

MEXICO CITY, July 1 (Reuters) - Mexico’s incoming government will discard a core goal of outgoing President Andres Manuel Lopez Obrador to reduce imports of yellow corn and achieve self-sufficiency in production of the grain, according to the incoming agriculture minister.

Julio Berdegue, named to President-elect Claudia Sheinbaum’s cabinet, told Reuters Mexico will focus on maintaining self-sufficiency in white corn, which is commonly used in the country's staple tortilla.

Sheinbaum also has an “aspirational goal” to reduce deforestation linked to the agriculture sector by half by the end of her six-year term, Berdegue said in an interview on Friday.

“It is a very ambitious goal, but I believe that we can (do it),” he said, citing estimates that deforestation, which is commonly caused by land clearing for lucrative avocado and livestock production, is wiping out an average of about 200,000 hectares per year.

Under the administration of Lopez Obrador, Sheinbaum’s mentor, Mexico aimed to dramatically reduce imports of yellow corn, most often originating from the U.S., in favor of boosting local production. The government, however, failed to reduce about $6 billion in yellow corn imports annually during his tenure.

The policy originated from Lopez Obrador’s attempts to limit the use of genetically-modified (GM) corn, a position that sparked an ongoing trade dispute with the U.S., by far Mexico's largest commercial partner. Most imported yellow corn is GM and used as fodder for Mexico's livestock sector.

Lopez Obrador’s government had already walked back its GM-corn ban to restrict it only for human consumption.

Sheinbaum, set to take office in October, will leave behind the ambition to replace yellow corn imports with local production, Berdegue said, underscoring a rare divergence from Lopez Obrador's established policies.

“Our objective is not to reduce imports, our objective is to produce more,” Berdegue said.

“Our goal is not self-sufficiency in yellow corn... not in this six-year term,” he added.

Mexico will likely have to continue importing large amounts of yellow corn, said Berdegue, due to the increased demand in the livestock sector as Mexicans' appetite for meat products grows.

A trade panel of the USMCA trade pact is expected to issue a formal ruling in the dispute with Mexico over its GM corn policy by the end of the year.

The U.S. has said Mexico’s plan to limit GM corn is not based in science and violates its commitments under the trade pact. Mexico, meanwhile, argues that its policy has no impact on its commercial relationship with the U.S.

(Reporting by Adriana Barrera and Cassandra Garrison; editing by Stephen Eisenhammer and Sharon Singleton)