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MEXICO: Is the Freeing Up of Agricultural Trade Really New?

Diego Cevallos

MEXICO CITY, Jan 4 2008 (IPS) - The elimination of all barriers to imported maize under the North American Free Trade Agreement (NAFTA) will ruin Mexico’s rural areas, according to activists and small farmers who are demanding that the measure be revoked. But the free market which opened on Jan. 1 has in fact been in effect for the past nine years.

Canada, Mexico and the United States agreed in 1994, when NAFTA came into force, that the final stage of the gradual freeing up of the region’s agricultural markets would take place in 2008, with the removal of tariffs and quotas for maize and beans – staple foods in Mexico – as well as sugar and powdered milk.

Calling Jan. 1, 2008 "a dire day for agricultural trade is an error or a trick," because the government has been authorising tariff-free imports of maize on a yearly basis since 1996, to cover the shortfall in local production, trade consultant Luis de la Calle told IPS.

If any harm has arisen from opening the market for maize, it has already happened and there will be no difference now that the tariffs have formally been eliminated, along with the need for authorisation before importing, said de la Calle, who was deputy minister of trade negotiations for Mexico during the administrations of Presidents Ernesto Zedillo (1994-2000) and Vicente Fox (2000-2006).

Some 200 opponents of NAFTA, who blame the free trade treaty for most of the ills that plague Mexico’s farming sector, closed one of the 15 border crossings into the U.S. intermittently on Tuesday. On Wednesday a similar number demonstrated outside the U.S. embassy in Mexico City.

Miguel Colunga, leader of the National Campaign in Defence of Food Sovereignty and the Revitalisation of Rural Mexico, told IPS that the 300 social and campesino (small farmer) organisations that make up the campaign will not rest until the agricultural chapter of NAFTA is renegotiated.


The campaigners, whose banner is "Sin maíz no hay país, sin frijol tampoco ¡Pon a México en tu boca!" (roughly: No maize means no Mexico, and so does no beans: Eat Mexican!), want the Mexican border closed to trade in maize and beans until the country has become competitive.

Freedom to import should only be allowed if local production cannot meet domestic demand, they insist.

"Our group is growing, and there is a good climate to press for renegotiation," said Colunga, after announcing that a number of campesino and social associations will mount a "huge" march in the Mexican capital on Jan. 31 to further their demands.

He also said that lawmakers have promised to issue a document defining their position in favour of urging the government to renegotiate NAFTA. Contacts have already been made with the authorities to arrange talks on the subject, he said.

But trade experts like de la Calle and lawyers who specialise in agricultural matters believe that renegotiations of the free trade agreement are unlikely.

The dismantling of tariff structures agreed by NAFTA has been carried out chapter by chapter, and all that remains is to eliminate restrictions on free trade in used cars, in January 2009.

The North American trade instrument does not include a commitment to do away with farm subsidies, an area in which the U.S. is a world champion.

The government of conservative Mexican President Felipe Calderón has announced that it is not in favour of renegotiating NAFTA, and in any case will help the campesinos with more programmes and resources to enable them to face the competition from abroad.

When NAFTA terms were agreed, the government of former President Carlos Salinas (1988-1994) was sure that there would be enough time to prepare the agricultural sector for full market opening in 2008.

But this was not so. "In fact, the governments left campesinos to their own devices and made cuts in all the support mechanisms, and emigration to the U.S. and to the cities increased," Colunga said.

Colunga, who raises sorghum on his 10-hectare property in the state of Chihuahua in northern Mexico, says he has had to make an enormous effort every year to avoid going bankrupt.

Twenty million people out of a total Mexican population of 109 million live in the rural areas, and 75 percent of them are poor. Barely one-third of rural labourers have employment benefits, and there is a steady flow of migrants 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.

In terms of overall farm productivity, Mexico cannot compete with the United States. However, it is the main exporter of certain products like tomatoes, lettuce, broccoli, avocadoes and mangoes to its northern neighbour.

Maize was originally domesticated in Mexico some 9,000 years ago and is still the staple food in the local diet. Mexico 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 Federation (CNC).

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 and animal consumption, and also to produce ethanol, a biofuel. In Mexico maize is grown on 8.5 million hectares.

A study by the Organisation for Economic Cooperation and Development (OECD), to which Mexico and the world’s most powerful economies belong, says that state support for Mexican agriculture during the years NAFTA has been in force was too low, and was distributed mainly in the rich northern states.

Total support for the Mexican agricultural sector between 1991 and 1993 was estimated at 3.3 billion dollars. For the period 2003-2005 it was higher, at seven billion dollars.

However, this was a nominal increase rather than a raise in real terms, says the OECD in its study Agricultural and Fisheries Policies in Mexico.

As a percentage of gross domestic product (GDP), government support for Mexico’s rural areas tumbled from three percent of GDP in the 1991-1993 period to 0.9 percent in 2003-2005, the OECD report says.

Although most organisations that oppose free trade in farm products attribute Mexico’s agricultural and livestock problems to NAFTA, studies by the Economic Commission for Latin America and the Caribbean (ECLAC) claim that backwardness in the rural sector is due to a number of factors, such as lack of state support, migration and climate problems.

Colunga said that unlike some of his fellow-campaigners, he does not think that NAFTA is the cause of all the country’s rural problems.

"The problems we have in Mexico’s rural areas date from the 1980s, before NAFTA, when our governments turned their backs on farming. Then during the opening of the markets they didn’t do their job in terms of supporting us, and that’s how we’ve got to where we are," he said.

The Calderón administration says that the liberalisation of the market should not be seen only as a threat but also as an opportunity, because just as Mexico has eliminated its agricultural trade barriers, so have Canada and the United States.

 
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