Development & Aid, Economy & Trade, Headlines, Latin America & the Caribbean, North America

DEVELOPMENT-MEXICO: Countryside Trapped in Poverty

Diego Cevallos

MEXICO CITY, Mar 24 2004 (IPS) - Farming is a treasure trove for just a handful of the 20 million people who live in rural Mexico – and a condemnation to poverty for the vast majority of the rest. An average of 600 Mexicans abandon the countryside each day.

Of the 31 million hectares of cultivated land in Mexico, less than one million are dedicated to the lucrative production of tomatoes, asparagus, squash, broccoli, cucumbers, lemons, mango and watermelons. Exports of these fruits and vegetables have skyrocketed, expanding between 45 and 250 percent in the past decade, varying according to product.

Success has smiled upon those who grow these crops, and who receive little or no subsidies from the state. But for most of the rest, who, in an ironic twist, do receive governmental support, the harvest is one of poverty, because they are cultivating crops that are not competitive in the global market or are destined for local consumption.

"There are major distortions in the countryside. Very few farmers or entrepreneurs try to obtain capital to invest in successful projects, while the majority receive state support and continue their subsistence farming, the result of historic, structural and other reasons," Diego Contreras, an agricultural trade expert, told IPS.

Official figures indicate that three-quarters of farm plots in rural Mexico, where 75 percent of the country’s poor population lives, are planted mostly to grow food for the consumption of the families that own or rent the land.

Furthermore, 35 to 40 percent of the farm labour force is dedicated to growing corn, a traditional crop that is a staple on the Mexican dinner table, but which faces sharp competition from the United States, the world leader in maize production.

According to a recent report by the North American Commission for Environmental Cooperation, 30 to 50 percent of the corn imported from the United States is of a genetically modified variety. It is mostly intended for use as animal feed.

To harvest a ton of maize in Mexico, where there is a ban against planting genetically modified seed, around 14 workers are needed per day, while in the United States, to harvest that volume requires less than 0.14 workers, says the report by the Commission, an oversight body of the North American Free Trade Agreement (NAFTA).

Hemmed in by poverty and lack of opportunities, some 600 people leave the countryside in Mexico daily in search of work in the cities or to try to emigrate to the United States.

The force behind the decline of peasant farming is trade opening based on the "neoliberal" economic formulas, say the Permanent Agrarian Council and the National Union of Autonomous Regional Peasant Organisations, two of Mexico’s leading farm groups.

Mexico threw open the gates to its markets in 1994 when NAFTA, a treaty with Canada and the United States, took effect

In the 10 years since, Mexico’s gross domestic product (GDP) in the agricultural sector grew an annual average of 1.7 percent, while its overall GDP grew 2.6 percent.

These figures do not differ much from those recorded prior to trade liberalisation with Mexico’s northern neighbours. In the 14 years previous to NAFTA, the national agricultural GDP grew an average of 1.3 percent a year, and the overall rate was 2.4 percent.

"Blaming free trade for the failure of the Mexican countryside is a fallacy, because the numbers show that farming has been in crisis as a result of inappropriate government policies and the lack of investment in research and market studies," said Contreras.

The crisis affecting the rural sector survived the Mexican agrarian revolution of the early 20th century, which claimed approximately one million lives. It also persevered during the 71 years of rule by the Institutional Revolutionary Party (PRI), which claimed to be the heir and defender of the revolutionary process. The Vicente Fox presidency marked the end of the PRI reign.

In any case, NAFTA, signed by a PRI government, seems at least in part to have intensified the deterioration of the farm sector, because interest in agricultural investment has fallen dramatically since the accord took effect.

In 1993, direct foreign investment in Mexican agriculture was 1.1 percent of the total, and in 2003, that already small portion had plummeted to 0.02 percent.

Furthermore, the country’s annual food imports shot up to 11 billion dollars in 2002. In 1982, the total was 1.8 billion.

>From 1993 to 2003, Mexico’s overall exports grew an average of 13.9 percent a year, but the rate for farm exports was just 6.6 percent. Nevertheless, fruit and vegetable exports – the darlings of the agricultural sector – saw an annual increase of more than 11 percent.

"The thing to do is to look for a farming niche and exploit it, because otherwise everything will continue to decline in the countryside," Patricio Martínez, who runs a small company that grows and sells organic produce (not treated with chemical pesticides or fertilisers and grown from non-transgenic seed), told IPS.

Foreign sales of Mexican organic produce jumped from 34 million dollars in 1996 to 187 million in 2002.

Last year, Mexico’s peasant farmer organisations demanded that the government reformulate farm trade with the NAFTA partners in order to prevent a new phase of agricultural liberalisation from exacerbating rural poverty.

The farm trade liberalisation process was agreed to take place in three phases: the first began in 1994 when the treaty took effect, the second in January 2003, and the third is slated for 2008.

The final agreement between the Fox government and the farmers, after a series of protests and negotiations, was to comply with the NAFTA timeline, but provide new subsidies and supports for Mexican farmers, the strategy of the national government for the past 50 years – and with no major alterations.

According to the plan in place, 1.8 billion dollars in farm assistance will be distributed in the middle term. That sum is to be added to the annual national farm budget of around 11.7 billion dollars.

With the new aid, the average yearly state subsidy reaches 53 dollars per hectare, while in the United States, a world leader in farm protectionism and supports, it is 122 dollars per hectare.

"The countryside is experiencing a structural crisis that needs to be resolved with investment, research and competition policies, and not just subsidies, a strategy that in itself does not bear fruit," said Contreras.