Mexican agriculture threatened by free trade deal


By Peter Gellert

MEXICO CITY — After an initial euphoria about possible beneficial effects of the Free Trade Agreement (FTA) between Mexico, the United States and Canada, many specialists in Mexican rural affairs and peasant leaders are beginning to take a closer look.

In a recently published study, "Effects of the Free Trade Agreement on the Mexican countryside", Jose Luis Calva warns of the dangers inherent in the FTA.

Calva is a professor in agrarian economy in the Postgraduate School of Economy at the National Autonomous University of Mexico, the country's highest institute of learning. The study is available in book form, and excerpts were published in the January 6 issue of Proceso, a prestigious political weekly.

Calva is also an adviser at the Economic, Social and Technical Research Centre on World Agriculture of the Autonomous University of Chapingo, an agricultural university near Mexico City. He is author of several works on agrarian questions.

The report warns of major negative effects the FTA will have for Mexican agriculture, based on a close study of official government figures from Mexico, the United States and Canada.

Calva explains that competition in agriculture is determined by comparative technological development, availability of natural resources and official government policies in the countryside. In all three categories, he warns, the superiority of the USA and Canada over Mexico is overwhelming.

Mexican productivity levels are considerably lower than in the United States or Canada, despite the inhumanly cheap cost of farm labor. For example, during the 1985-89 period, Mexico reaped only 1540 kilograms of corn per hectare while in the United States the figure was more than four times higher, 6350 kg per hectare.

Mexico harvests an average of 542 kg of beans per hectare, compared to 1661 kg in the United States and 1865 kg per hectare in Canada, more than three times as much in both cases.

The average Mexican milk cow produces 1365 litres of milk annually, while in the USA the figure is more than quadruple, 6224 litres.

Labour productivity places Mexico at an even greater disadvantage. The average Mexican farm labourer produced $1799 in agricultural produce in 1988, while their North American counterpart produced more than $45,000. It takes the average Mexican agricultural worker 17.8 days to produce a ton of corn, compared to just 1.2 hours in the United States.

Calva says these huge differences are the result of several factors, most importantly the huge investments in research and technological innovations in the United States and Canada over the course of many decades. In addition, heavy government subsidies in North America guarantee the profitability of farming and therefore favour its capitalisation and increased use of advanced technology.

The technological gap between Mexico and its industrialised neighbours is also quite pronounced. While in the United States there are 1.5 tractor for each agricultural worker and 1.6 in Canada, in Mexico there is one tractor for every 50 workers. There are 209 harvesting machines or threshers for each thousand agricultural laborers in the United States, 332 in Canada, yet only two in Mexico.

Similar figures prevail in the use of fertilisers, genetically improved seeds and irrigation. For each agricultural labourer, the USA has 61.4 hectares of cultivated land, of which 5.9 are irrigated. In the case of Mexico, there are 2.7 hectares of cultivated land per agricultural worker, only 0.6 ha of which is irrigated.

In the USA and Canada, genetically improved seeds are used in almost all farmland, while in Mexico the figure plummets to 20%.

Climatic conditions and geographical location also weigh in favour of the United States and Canada. Mexican fields receive less rain and fewer hour of morning sunlight.

Calva argues that even without the FTA, Mexico's agricultural production is in crisis: a third of the country's grain and milk consumption must be satisfied with imports from abroad. In 1990 Mexico imported just over $4.7 billion in grains and other foodstuffs, reflecting the country's growing food dependency on the United States.

This figure would be considerably higher were it not for the deterioration of the average Mexican's diet. If the population were eating in 1990 as they ate in 1981-82, Mexico would have had to import about $10 billion in food.

Calva's conclusions about what the FTA would signify for Mexican agriculture are bleak indeed.

First, he warns of the danger of a complete disappearance of Mexico's main basic grains, corn and beans.

Second, Mexico's trade deficit will increase, as the country will have to import even more massive quantities of foodstuffs.

Thirdly, 3 million rural farmers will be reduced to absolute poverty.

Fourth, 10 million hectares will be withdrawn from agricultural production, and a chaotic fall in basic grain production will affect other sectors as well.

Fifth, at least 15 million Mexican campesinos will be forced to emigrate to the large cities, particularly Mexico City, or the United States. With the refusal of the US to allow free immigration, Mexico's cities will experience increased unemployment and the further growth of the informal or underground economy.

In the January 11 edition of the Mexico City daily La Jornada, the National Union of Regional Peasant and Agrarian Organisations aditionally close to government and ruling party — called for a broad unity process in the peasant movement to deal with the new challenges facing Mexican agriculture.

The Permanent Agrarian Congress (CAP), an umbrella organisation uniting Mexico's 12 major peasant confederations, has asked trade minister Jaime Serra Puche for clear and detailed information on how the FTA will affect Mexican agriculture.

"Much has been said, but nothing seems very clear", representatives of peasant organisations said, according to La Jornada. The CAP includes both pro-government organisations such as the National Peasant Confederation and UNORCA, as well as opposition currents such as the Independent Confederation of Peasants and Agricultural Workers (CIOC) and the General Workers, Peasants and People's Union in its ranks.

In a private meeting with the campesino leaders, Serra Puche said all products would be included in the FTA negotiations, but at different paces and rhythms.

Dolores Lopez, general secretary of the CIOC, said "Those that will benefit are a tiny handful, and the vast majority will be ruined. A few industrialists, businessmen and growers will come out ahead and we, the campesinos, will be on the losing end."

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