ON THE low hills around the Tequila volcano, neat rows of spiky, cactus-like agave plants march across the dusty fields, as they have for centuries. But recently farmers have started to treat the blue-green plants, from which Mexico's emblematic national spirit is distilled, as if they were made of gold. In Jesus Partida's field full of baby agaves, watchmen patrol at night. “You plant the agave today, and tomorrow it's not there any more—they come at night or early in the morning and steal it,” he says. Police escort the lorries piled high with pias, the pineapple-shaped agave hearts, along the winding roads to the distilleries in the town of Tequila.

Two years ago a tonne of the pias fetched around 1,000 pesos ($106); now it can cost up to 15,000 pesos. The problem is an old one: a mismatch of supply and demand, exacerbated by bad weather and good marketing.

Mexico's old-fashioned land laws prevent the distilleries from owning farmland. Relations between the country's agave growers and the tequila producers “have not been as brotherly as they could have been,” says Jose Angel Gonzalez, of the growers' union. That lack of co-ordination has caused three or four supply shortages in the past four decades, he says. Poor farming methods, such as failing to rotate crops or use pesticides properly, have not helped either.

This time the shortage is acute, with production down by as much as half. A freak winter frost hit the Tequila area in 1997. Then a fungus attacked the weakened plants. Since an agave takes eight years to grow to maturity, the market will not return to balance quickly.

The shortage is especially painful because it began just as the industry was booming. Most tequila used to be cheap and rough, best swigged in one go. But in recent years distillers have taken their product upmarket. More refined brands have sold well, especially those of pure agave liquor, unblended with other alcohols. Too well, in fact: between 1995 and 1999, total tequila production nearly doubled, but that of the pure-agave varieties almost quadrupled. As a result, by 1999 the industry was using nearly three times as much agave as five years before.

Hence the tequila drought. Last year output began to fall. Distillers have responded by making less of the pure-agave drink. But a few small ones have had to close. And the industry regulator has caught a few others making tequila from agave grown outside the officially permitted areas (a sin as bad as making champagne from Californian grapes).

The industry is now trying to plan its future. The distillers have talked to growers about signing purchase contracts for agaves when they are planted. The regulator has stepped in with a computerised registration system for growers.

Still, it will be another four years before the agave supply begins to recover, and perhaps longer before the distilleries can meet demand. By then, scarcity and high prices may have lost them some customers. Mexicans, at least, complain that tequila is now too expensive to drink.