By GINGER THOMPSON

          MEXICO CITY -- With most of her New Year's Eve dinner keeping warm in the oven, Sylvia
          Cortez, a mother of five, stepped out last Thursday to make one last-minute purchase. But
          that trip to the store turned her festive mood sour.

          A sign on the wall announced that with the new year, the price of tortillas, which she said is the most
          important element of her family's daily diet, would go up from 15 cents a pound to about 20 cents.
          Her voice full of anger, she asked the attendant for her usual daily order, two kilograms, or about 4
          and a-half pounds, of the corn cakes, hot off a rotating grill and wrapped in a bright pink sheet of
          paper.

          And as she walked away, Mrs. Cortez said she began calculating how she would stretch her
          husband's pay of about $3.50 a day to cover the increase.

          In a move that has caused concern among millions of families like Mrs. Cortez's, the Mexican
          government has ended decades-old corn subsidies and price controls on tortillas, a staple that is as
          central to the Mexican diet -- particularly among the poor -- as bread is to Americans and rice is to
          the Chinese.

          The measure, officials said, is part of an effort by President Ernesto Zedillo to reduce government
          spending. Last year, they said, tortilla subsidies cost the government $1 billion.

          Plummeting prices for oil, whose sale accounts for a third of government revenues, have caused a
          dramatic decline in federal revenues and have forced Zedillo to make deep cuts in numerous
          programs.

          But liberating the tortilla from price controls, said Mrs. Cortez, the wife of a construction worker, is
          like pouring salt in an open wound for working-class families. Over the last few months, the prices of
          many basic foods -- including beans, milk and rice -- have gone up by 10 percent. And over the last
          year, the price of tortillas has risen more than 55 percent as the government prepared to eliminate
          subsidies.

          In the meantime, Mrs. Cortez said, her husband's salary -- the minimum wage in Mexico City -- has
          stayed the same.

          "Already my children eat meat only once a week," she said. "Maybe now I'll have to buy less fruit
          and vegetables. But I cannot buy fewer tortillas. Tortillas are what fill us."

          The government contends that price controls on tortillas depressed the industry by keeping revenues
          low for tortilla makers while their operating costs rose. They say that eliminating the subsidies will
          allow the 50,000 small- and medium-sized tortilla makers across the country to expand and
          modernize. The government also says that ending the subsidies will help preserve jobs for 160,000
          tortilla workers.

          And, although details have yet to be announced, the government also has promised to create a
          program to compensate for the end of price controls by providing free or cheap tortillas to the poor.

          Sergio Celorio, whose tortilla factory on the north side of the city produces 12 tons of tortillas a day,
          supports the elimination of price controls.

          "Subsidies aimed at consumers of tortillas have only created a community of beggars," said Celorio,
          who is president of an association of more than 17,000 tortilla makers. "What we need to do is
          stimulate the industry. Those who produce more, get paid more. That way, we would create
          communities of workers."

          Tortillas are so entrenched in Mexican culture that the recipe for the soft, bland corn cakes -- corn
          and hot water -- has hardly changed since it was created by the Aztecs. The average Mexican
          consumes nearly 300 pounds of tortillas a year, officials said. And for the poor, tortillas provide half
          their daily intake of calories.

          Recently the government has examined ideas for producing healthy tortillas, enriched with vitamins
          and minerals, to help fight widespread malnutrition and anemia among Mexico's poor. More than half
          of Mexico's people live in poverty.

          Tortilla price controls and corn subsidies began in the early 1970s during the populist presidency of
          Luis Echeverria as a way to protect the poor from starvation. And, until now, the tortilla subsidy was
          so politically sensitive that many politicians dared not destroy it.

          "The poor are always forced to carry the economic burdens of this country," said poet and social
          activist Homero Aridjis. "Eliminating tortilla subsidies will break their backs."

          Similar frustration was echoed by people who came to buy tortillas at the small tortilleria where Mrs.
          Cortez shops in the working class neighborhood of Ixtapalapa.

          The air inside the shop smelled bitter from lime, the chemical preservative that is added to the tortilla
          dough. The owner, Gabriel Peralta, spoke over the clatter of the tortilla machine, which pressed the
          dough flat, punched out round circles and then moved them on a conveyor belt through an oven.

          Customers trickled up to the counter, buying the tortillas in stacks sold by the kilogram.

          Peralta, 59, said he took over the small, one-room shop from his father. His 23-year-old son Edgar
          was standing with him at the counter, learning the trade.

          Both of them frowned when asked about the rising tortillas prices. They said that about 500 people
          buy tortillas at their store each day. Most of them are low-income people, barely able to make ends
          meet.

          "For most of the people around here, tortillas are the main food of the day," the elder Peralta said.
          Then he took a deep breath and tugged on his belt. "Pretty soon, we are going to have to hold in our
          stomachs because there will be nothing to fill them."

          Emma Guzman, a 35-year-old mother of two, interrupted before walking away with four pounds of
          tortillas. "How are we supposed to feed our children?" she grumbled.

          Norma Dominguez Sanchez, 22, made a much larger purchase. She works with her aunt in a small
          restaurant down the street and usually buys 14 to 20 pounds of tortillas each day to sell tacos and
          quesadillas for pennies each to workers in the area. But if the price of tortillas keeps rising, she said,
          she and her aunt may change their menu.

          "Rolls are cheaper, so maybe we will begin to sell sandwiches," she said. "I don't know if people will
          like it, but we may have to do it."
 

                     Copyright 1999 The New York Times Company