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

MEXICO: Free Trade Only One Factor in Rural Plight, Says Study

Diego Cevallos

MEXICO CITY, Dec 12 2005 (IPS) - A study sponsored by the regional United Nations agency ECLAC suggests that anti-globalisation and rural activists are wrong to blame NAFTA for most of the ills that afflict the Mexican countryside.

NAFTA (the North American Free Trade Agreement, made up of Canada, Mexico and the United States) has had no significant quantitative impact on the rural sector in Mexico, declared Braulio Serna, head of the agricultural development unit in the Mexican office of ECLAC (Economic Commission for Latin America and the Caribbean).

After taking a close look at the evolution of agriculture in this country, where poverty and low productivity levels plague a large proportion of its 20 million small farmers, the expert claims that those who point to free trade as a determining factor in its performance have a biased vision.

Serna’s position clashes head-on with that of Latin American movements calling for alternatives to the present form of globalisation, which see Mexico’s rural crisis as a clear illustration of the negative effects that other countries can expect if they go ahead with trade treaties like the Free Trade Area of the Americas, promoted by the United States.

“There is an ideological bias to the debate” that prevents the real facts from being seen, Serna indicated when asked by IPS about positions that run counter to his thesis.

The author of a study entitled “México: crecimiento agropecuario, capital humano y gestión de riesgo” (“Mexico: agricultural and livestock growth, human capital, and risk management”), sponsored and published this month by ECLAC, Serna asserts that free trade is not a factor that has originated or accentuated rural poverty.

However, it is a recorded fact that unemployment among peasant farmers has increased by more than 20 percent in the last 10 years, wages in the agricultural sector have fallen by 10 percent, and poverty has not been significantly reduced. Furthermore, the rural exodus has continued, and the productivity of small farmers remains on a downward spiral

On the other hand, in the course of a decade the rate of growth of the rural gross domestic product rose to an annual average of two percent, a higher rate than was recorded for the 10 years before the start of the study, while livestock and poultry production have progressed significantly and exports have grown steadily.

Today Mexico, population 104 million, exports 105 agricultural products compared to the 68 products it exported in the early 1990s. This growth has consolidated its position as an indispensable supplier for the United States’ fruit and vegetables markets. According to Serna, the problems in the rural areas of Mexico have nothing to do with free trade but are caused instead by global and national economic crises, climate factors, poor training, inconsistent public policies and low international prices of several agricultural products.

When asked why so many groups insist that NAFTA, which was launched in 1994, is the prime culprit of rural poverty and neglect, Serna replied that this point of view arises from “incomplete analyses.”

The Permanent Agrarian Council, the National Union of Autonomous Regional Peasants’ Organisations, the Network for Action against Free Trade and the leftwing Democratic Revolutionary Party – which hopes to win the presidency next year – have joined forces to call for the renegotiation of NAFTA because they feel it is sounding the death knell for small farmers.

“It has been fully proven that free trade has harmed small farmers more than any other factor,” Héctor de la Cueva, a spokesman for the Network for Action against Free Trade, told IPS.

But Serna suggested that this kind of statement needs re-thinking.

“You have to look deeper to find the origins of, and solutions to, rural problems,” and this is true not only for Mexico but for all those countries where free trade is blamed for a multitude of ills, he said.

Agriculture and stock-raising in the rural areas of Mexico have been adversely affected by the historical decline in international agricultural prices, which began in the 1970s and continued into the 1990s, the ECLAC study points out.

Another important factor was the 1994-1995 economic crisis in Mexico, which drove down productivity and wiped out what little measure of international competitiveness Mexican agriculture previously enjoyed. A number of severe droughts and floods must be added to these elements.

In addition to this complex scenario, although public policies to support the agricultural sector have been applied for several decades, they have not succeeded in making it uniformly and sustainably competitive, and its human resources are poorly educated and badly trained.

NAFTA is one more element in the equation, but it is not the main factor when it comes to assessing the present situation faced by the rural sector, the study says.

Serna acknowledged that, in spite of Mexico’s steps forward in agricultural productivity, social inequality and poverty continue to prevail in the sector.

Out of 31 million hectares cultivated each year in Mexico, the growing production of tomatoes, asparagus, pumpkins, broccoli, cucumbers, lemons, mangoes and watermelons is concentrated in less than one million hectares. Exports of these products have increased by between 45 and 250 percent in the last 10 years, according to official statistics.

These figures show that three-quarters of Mexico’s farms involve subsistence agriculture, in a country where 75 percent of the poor live in rural areas.

Furthermore, between 35 and 40 percent of the agricultural labour force is essentially devoted to growing maize, a traditional crop of great importance in the Mexican diet, but which faces tremendous competition from the United States.

The United States is the world’s biggest exporter of maize, and uses biotechnology to boost productivity.

The ECLAC study recommends investing heavily in education and training for small farmers, along with better planning and risk management, as the best way of overcoming the problems in rural areas.

Greater investment in education and training, combined with attention to the quality of those services, would undoubtedly increase productivity, the ability to participate in value added production chains, and the incomes of farmers, says the study.

Another task which might impact favourably on the welfare of the rural poor is to increase the emphasis on risk management in agricultural policy-making, especially for producers with few assets, it adds.