CHALLENGES 2007-2008: Lowering Mexico’s Drawbridge to US Maize and Beans
By Diego Cevallos
MEXICO CITY, Dec 19 (IPS) - On Jan. 1, the Mexican market will be thrown wide open to imports of maize, beans, powdered milk and sugar from the United States, completing a process that began 14 years ago, in which its impoverished rural sector must compete with a powerful and heavily subsidised foreign rival.
The freeing up of Mexico’s agricultural markets has been happening gradually since 1994, when the North American Free Trade Agreement (NAFTA) between Canada, Mexico and the United States came into effect.
The date agreed for the final stage of this process was 2008. It was expected that by then Mexico would be able to cope with the removal of quotas and tariffs for imported maize and beans, the staple foods of most people in this country and an important part of their ancestral traditions.
However, with just a few days to go before the last trade barriers are dismantled, there is obvious asymmetry between the markets, especially with that of the United States, with which Mexico does 90 percent of its trade.
Maize originated in Mexico, which produces 19 million tonnes a year, compared to 300 million tonnes a year grown in the United States.
For a Mexican farmer, the cost of growing a hectare of maize is 300 times higher, and the yield 3.5 times lower, than for a farmer in the U.S., according to the non-governmental National Campesino (small farmer) Federation (CNC).
But every farmer in the U.S. is subsidised to the tune of an average 20,000 dollars a year, while in Mexico government subsidies are no more than an annual 770 dollars per farmer, the CNC says.
In the U.S., 32 million hectares are devoted to maize, used for human food and animal feed, and also to produce ethanol, a biofuel. In Mexico maize is grown on 8.5 million hectares.
“The claws of free trade will grab us by the throat in 2008 and strangle us, and the government is doing nothing about it. It just says it has to fulfil its pledge, but that will be at the expense of poor farmers who can’t compete,” Mariano Sánchez, a medium-sized bean grower in Mexico state, near the capital, told IPS.
In actual fact, NAFTA is not so much a free trade treaty as an agreement to eliminate tariff barriers. Dismantling domestic subsidies is an issue that continues to be negotiated at the World Trade Organisation (WTO), where talks are blocked because of the refusal of rich nations to stop subsidising their farmers.
“The farming sector in Mexico was never ready for NAFTA and is still not ready, in spite of all the support the authorities say they have given,” said Sánchez, who produces beans on 15 hectares of land, and sells them to local markets. He says he has steady buyers, but fears he will lose them if lower priced imported beans become available.
Twenty million people out of a total Mexican population of 109 million live in the countryside, and 75 percent of them are poor. Barely one-third of agricultural labourers have employment benefits, and there is constant migration of the work force towards Mexican cities and the United States.
Of the country’s 31 million hectares of cultivated land, less than one million produce crops for export. The rest is used to grow food largely for subsistence, with the surplus being sold on the domestic market.
Even so, more than 50 percent of the cucumber and 90 percent of lemons and mangoes consumed in the U.S. come from Mexico.
One out of six watermelons, one-quarter of melons and asparagus and one-third of the tomatoes bought by consumers in the U.S. are also from Mexico, according to government figures.
About 50 campesino organisations and groups of activists opposed to free trade have joined forces in the National Campaign in Defence of Food Sovereignty and the Revitalisation of Rural Mexico, under the banner “Sin maíz no hay país, sin frijol tampoco” (roughly: no maize means no Mexico, and so does no beans).
They have carried out a number of actions aimed at stopping the opening of the market for these essential agricultural products, so far without success.
Over 1,100 agricultural products from the U.S. and Canada can already be imported duty-free into Mexico, and the same is true of the vast majority of Mexican products sold to those countries.
Nearly all quotas and tariffs have been removed. All that remain are the protective barriers for the most sensitive products — maize, beans, powdered milk and sugar — which were left until last.
The government of conservative President Felipe Calderón says that Jan. 1 will not in any way be a dire day for Mexico.
Mexico already imports increasing amounts of maize and beans from the U.S., because it ceased to be self-sufficient in both products almost a decade ago. Therefore the regional open market is already a fact, some observers say.
The elimination of Mexico’s tariff barriers for maize is due to occur at a time when there is high international demand and high world prices for the commodity. Experts say that Mexicans will have no difficulty selling their maize, locally or for export.
Mexico produces an annual surplus of 200,000 tonnes of sugar, and the imminent change in trade rules is not expected to have a major impact on this sector.
The U.S. imports sugar, and could buy it from Mexico, says governing National Action Party (PAN) lawmaker Francisco Domínguez, an agricultural expert.
The local dairy industry, however, cannot fully satisfy local demand, and is at a technological disadvantage compared to producers in the U.S., so it could face stiff competition.
Marco Ramos, an agricultural researcher at the National Autonomous University of Mexico (UNAM), says that all Mexico’s rural problems should not be blamed “on NAFTA and free trade.”
“That’s an overly simplistic view that leaves out hard data indicating that failure in the rural sector is due to several causes,” he said.
A study published in 2005 by Braulio Serna, of the local office of the Economic Commission for Latin America and the Caribbean (ECLAC), says that NAFTA has not had a quantitatively significant impact on Mexico’s rural sector.
Analyses claiming that opening the market has been the determining factor in Mexican agricultural performance are biased, according to Serna.
The problems of the rural sector, poverty and migration are more directly linked to misguided public policies, global and national economic crises, climatic factors, low levels of technical training among farmers, and the low international commodity prices seen until a few years ago, among other things, the ECLAC expert said.
Government support for the Mexican countryside has increased in the past few years and comprises subsidies, technical support, preferential prices and investment in rural infrastructure.
This year, government spending amounted to some 16 billion dollars, 1.5 billion dollars more than in 2006. And in 2008 funding for rural areas is expected to reach 19 billion dollars.
However, most of the rural areas remain in poverty and overall production has not improved, although there are some successful export sectors.
The backing given by the Mexican state to its farmers does not match the 22 billion dollars that the U.S. gives its producers in direct subsidies alone, without taking into account the substantial additional aid they receive for marketing, technology and infrastructure.
NAFTA opponents organising the National Campaign in Defence of Food Sovereignty complained that, from January, “campesinos will have to defend themselves on their own against U.S. products which are subsidised at a level 30 times higher than the average amounts granted by the Mexican government.”
“The ingenuousness, incompetence and collusion of the federal government and many legislators have prevented them from discerning that, hidden behind this new stage of the trade agreement, a true war is being waged against our survival as an independent country,” the members of the National Campaign said in an open letter released on Dec. 10.
Delegates from the groups involved in the campaign went on a four-day hunger strike in mid-December, calling for a renegotiation of NAFTA, and announced that they would blockade border crossings to the U.S. from Jan. 1 if their demands are not addressed.
“The campaign against open markets will not change the situation. The best thing to do is to put regrets aside, and look within to find out what can be done so that rural areas in Mexico can develop,” said Ramos. (END/2007)
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