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Is Mexico Ready for a Flood of Corn and Beans

Monday, 31 Dec 2007 11:45 AM

By Allan Wall

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Tuesday, January 1, is the scheduled date for the abolition of all tariffs on corn, beans, milk and sugar entering Mexico from the U.S. — and many fear that a flood of agricultural imports will drive Mexican farmers out of business.

Protests are planned in Mexican cities, including a “human wall” on the border.

Any discussion of corn, beans and NAFTA (the North American Free Trade Agreement) enters a minefield of economic, social, cultural and political controversies.

Corn and beans have been staple foods in Mexico since pre-Hispanic times, and are important parts of the culture. Nevertheless, the country has already lost self-sufficiency in corn. Currently, Mexico produces 22 million tons of corn and imports 10 million tons.

NAFTA, depending on whom you listen to, is absolutely great or absolutely disastrous. According to polls, Mexicans and Canadians think the U.S. gets the best of NAFTA, while Americans think that Mexico does.

As with any trade pact, NAFTA has its winners and losers. Mexican vegetable farmers have done splendidly under NAFTA. On the other hand, many small farmers, including beef and pork producers, have been hit hard. Since NAFTA took effect in 1994, 3 million Mexicans have lost farm jobs.

Some are concerned about NAFTA not so much for what it is, but what it might become. Will NAFTA be transformed into a continental merger on the order of the European Union? Mexican President Felipe Calderon expressed his desire for such a union even before taking office.

Although NAFTA is a trilateral trade agreement between the U.S., Canada and Mexico, in agriculture it consists of three separate bilateral accords. There’s an American-Canadian agreement, a Canadian-Mexican agreement, and an American- Mexican agreement.

The fear in Mexico is that Mexican small farmers will be unable to compete with the flood of subsidized American imports. American farmers have higher productivity, better infrastructure and organization, and much higher government subsidies. The average production of a U.S. corn farm is 22 tons per acre, while in Mexico it’s six tons per acre, and most Mexican farms are six acres or smaller.

Nevertheless, President Calderon is dead set against renegotiating the American-Mexican agricultural accord. There are fears that renegotiating one part of the overall agreement could lead to the renegotiation of the entire accord.

Most of the tariffs on U.S. corn and beans have already been lifted, and pro-NAFTA Mexicans accuse opponents of exaggerating the impact of the January 1 date.

Said Luis de la Calle, one of the Mexican negotiators of NAFTA: “It’s an important date because it marks the end of the process. But in terms of the market, there will be very little impact.” Still, the date is symbolic.

NAFTA’s plan was to phase out the tariffs while simultaneously preparing Mexican agriculture to be ready to compete by 2008. But that didn’t happen. On the contrary, the Mexican government has allowed the infrastructure and distribution networks to decay during that time period.

As agricultural organizer Victor Suarez describes it, “There was no transition period like they promised 15 years ago. We are not ready. The only ones who are ready are the 20 big agribusiness corporations.”

Some Mexican agricultural leaders realize that if they are going to be competitive, they can’t depend on the government — they will have to help themselves and effectively organize, as American farmers have done in the past.

Suarez, for example, leads a farm co-op promoting the direct sale of corn tortillas from farmers to consumers.

Hector Salazar of the National Corn Producers Federation says his group is working to organize corn farmers so they can market their produce to food companies.

As Mexican agricultural analyst Hugo Garcia puts it, Mexican farmers “have only one way to survive, and that is by understanding the need to organize.”

Mexican farmers face great challenges, but if they can organize into cooperatives, pool resources and bargain collectively for better prices, they might stand a fighting chance.

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