Mexican Agriculture: Full Warehouses, Empty Pocketbooks

By  |  5 / November / 2015

This post is also available in: Spanish

793bf4f20f97060fd6b1f1ed940f27a8_MOutraged Mexican farmers arrived at the same bridges at the frontier with the United States this Monday. For ten hours they blocked the importation lane of the Córdoba/Americas international bridge that links the city of El Paso, Texas, with Ciudad Juárez in Mexico.

Unlike in other years, the farmers did not gather in front of the Chamber of Deputies to demand increases under the Special Concurrent Program (PEC)–the line items of the federal budget destined for the rural sector. No matter how much the PEC grows, the difficulties and hardships of the producers also grow. Because the budget is just a reflection of how the government’s economic and agrofood policy come together to lead Mexican agriculture to catastrophe.

This policy is so harmful that producers now find themselves in a desperate situation: their warehouses are full, but their pocketbooks are empty. Their productivity has increased but the costs of production are devouring them. They also face the terrible trade policies of a government that bases everything on a neoliberal model that goes from one failure to the next.

This situation, already unsustainable, brought hundreds of farmers out to demonstrate in the northern Mexico. The protested on the international bridge and also on various highways. They seek to show their disagreement with how the federal government manages the food production. Numerous groups gathered there to speak out about the urgency and breadth of the problem: maize, bean, apple, cotton and chili farmers; dairy farmers; and truckers.

The central demand of the farmers, most of whom are medium holders, is that the federal government stop the rapid growth of production costs for national agriculture that is hitting many production systems hard. Energy lies at the center of the increases in production costs. The figures the producers give impressie:

A liter of agricultural diesel costs the equivalent of five Mexican pesos in the United States, but costs 14.30 pesos in Mexico. Fertilizers, according to the World Bank, cost $200 less per ton on the international market than they do in our country.

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A liter of agricultural diesel costs the equivalent of five Mexican pesos in the United States, but costs 14.30 pesos in Mexico.

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Compare the present prices with the year 2002: then, with a barrel of petroleum at 50 dollars, farmers paid the Federal Commission of Electricity (CFE) 25 cents per kilowatt-hour of energy for agricultural irrigation; 5 pesos per liter of diesel and seven pesos per liter of gasoline. Today, with the price of a barrel of petroleum barely reaching 39 dollars, CFE charges 52 cents a kilowatt-hour, double the charge of 13 years ago. The price of diesel has risen more than 180%, and gasoline almost 100%.

Not only is the increase of energy cost disproportionate, it also affects national producers oriented to the internal market, and the devaluation of the Mexico peso against the dollar. It has to be taken into account that a good percentage of improved seeds need to be imported because the neoliberals have dismantled the national structure for producing them. Now with the same money, farmers acquire a 25% fewer seeds, fertilizers and agrochemicals than they were able to acquire a year ago. The same happens with parts and agricultural equipment, which they have to repair.

The ascending scale of the costs of production has to be added to the persistent tendency to the lowering of international prices of “commodities,” that is to say, agricultural products and primary materials, which is another blow to the producers’ expenses.

And if that were not enough, ASERCA—the governmental agency dedicated to setting reference prices to the subsidization of the commercialization of basic foods—is very late in the payments of subsidies both to producers and to commercial dealers. In the granary of the country, the state of Sinaloa, maize farmers claim that the government owes them five billion pesos (some $300 million) in subsidies for their harvests. In Chihuahua the Federal Government owes a total of a 1.634 billion pesos (some $100 million) for maize, beans, cotton, wheat and sorghum as well as support to commercial producers and businesses.

This policy of production costs reveals that the Secretary of Agriculture of the Mexican government is no more than a dependent of the Secretary of the Treasury, since the logic that prevails is not that the production of more and better food for the Mexican peoples is a worthy goal, but rather the technocratic and financial demands which drive the political economy of the country are what determine policy.

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The negotiation of the Trans-Pacific Partnership on the backs of the agrofood sector will come to impact very negatively the national production of basic foods

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What’s happening is what we saw in the mid-sixties: the Mexican agriculture and livestock sector is drained for having to transfer value to other sectors of the national economy. Its showing great productive capacity, but it nevertheless faces a serious process of decapitalization, first, due to the rise of production costs; second, due to the mistaken policy of prices and subsidies, and third, because of the form of international economic integration in a subordinated position that has been promoted by the federal government. The negotiation of the Trans-Pacific Partnership behind the backs of the producers of the agrofood sector will have very negative impacts on national basic food production and will generate even more unemployment in the sector. Already foreseen are grave consequences for producers of milk, sugar, coffee and apples, among others.

The free trade and neoliberal policies of those who hold power and of the agrobusiness transnationals that seek to dismantle the structue of food production in Mexico to make it even more dependent on imports pegged to an expensive dollar and bought with very cheap petroleum. We already buy more than 40% of what we eat abroad. This is a road to collapse.

Victor Quintana is advisor to the Democratic Campesino Front of Chihuahua, research professor at the Autonomous University of Ciudad Juarez and columnist for the Program of the Americas http://www.americas.org/es/

Translated by Esther Klein Buddenhagen 

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