Trade Deal With the United States Puts Many Mexican Farmers at Risk
CORN AND FREE TRADE IN NORTH AMERICA
MEXICO CITY — FROM the chile-dusted cobs sold on Mexico City street corners to the hand-made tortillas in the most remote villages, there is no other food more important in Mexico than corn.
It is the nation's biggest agricultural product. But maize is more than a key crop. It has profound historical and religious roots in Mexican society. Pre-Hispanic legends even portray man as born from corn. Today, the gold kernel continues as both a dietary staple of Mexican peasants and a politically sacred icon.
Indeed, for the first time in two decades, thanks mostly to favorable weather, Mexico has grown enough corn - 14.6 million tons - to feed it's populace. But that may change rapidly in the next few years.
The North American Free Trade Agreement (NAFTA), if passed, would effectively toss aside centuries of political and cultural sensibilities and dramatically alter the face of Mexico's corn-producing countryside.
Under NAFTA, the huge price supports the Mexican government pays would shrink to zero over 15 years. At present, Mexican corn costs $240 a ton on the domestic market, compared with at most $110 for Iowa corn picked up at the border.
At the same time, Mexico would gradually increase it's import quota, which was set at 2.5 million tons for the US in the first year NAFTA takes effect.
Economists predict a boom in US corn exports to Mexico, making it an even larger market for US farmers. Currently, the US growers have a 2.5 to 1 production-cost advantage over Mexican growers, according to Jose Luis Calva, economics professor at the National Autonomous University of Mexico and author of the book, "The Probable Effects of a Free Trade Agreement on the Mexican Countryside."
Mr. Calva figures the NAFTA will have a "devastating effect" on Mexico's 2.7 million corn producers. "This is going to provoke a tremendous rural migration of 15 million people, counting the farmers' families," he says.
"Without a doubt, under the neoliberal assumptions, most land now used to grow grains would be better dedicated to grazing cattle. But what's most convenient from the viewpoint of a global economy is not the most convenient from the point of view of the national economy," he argues.
But a study done here last year predicts a much lesser impact. Professor Santiago Levy, visiting scholar at the Autonomous Technical Institute of Mexico (ITAM) and Sweder van Wijnbergen of the Center of Economic Policy, contend that only about one-third of Mexico's corn producers sell their maize on the open market. The rest are subsistance farmers.
The professors argue lower maize prices will benefit the millions of rural workers who don't sell corn but do buy it as a staple food.
And they say some of today's corn farmers may consider other, more profitable, uses for their land - such as vegetables for export.
Calva counters that the amount of land suitable for fruits and vegetables is limited and most is already being cultivated. "Studies here and by California univerisities show there's no reason to expect a great expansion of vegetable growing in Mexico. Perhaps 50,000 hectares, no more."
He further notes that it is unlikely Mexico will ever be competitive with the US in basic grains. Mexico is at a geographical disadvantage. It doesn't have the rainfall, flat terrain, nor the amount of sunshine that are found in the central Farm Belt regions of the US.
"The two-thirds of the country where we have sufficient rain is over mountains and hills which make mechanized farm production impossible," Calva says.
Thus, although declining tariffs under the NAFTA agreement should cut the cost of importing farm equipment into Mexico, it is uncertain how far the country's farm sector can improve its efficiency.
A large portion of the farmland is expected to be converted to pasture for cows, considered a more economically practical use of the land.
But what sort of social unrest or joblessness may be provoked by the change is being debated. Calva notes that for every 10 farmers tending corn, only one cowboy is needed or can afford to tend cattle on the same amount of land.