The
Mexican Farmers' Movement:
Exposing
the Myths of Free Trade
by
Laura Carlsen
Dissident Voice
March 8, 2003
Even
long-time Mexico observers sat up and took notice on January 31. The march that
day by campesino organizations, which counted on the support of unions,
universities, and civil society groups, broke the mold in a city accustomed to
large demonstrations.
By the time they reached the
Zócalo, the sum of the tidy contingents—each filed behind its identifying
banner—came to nearly a hundred thousand. Not since agrarian reform under
President Lázaro Cárdenas in the late thirties had so many campesinos marched
in the nation's capital. And perhaps not since the revolution had such a diverse
crowd united behind such radical demands. The farmers no longer demanded
government programs to alleviate their poverty or help sell their products. The
central demands of the march—renegotiation of the agricultural chapter of NAFTA
and a far-reaching national agreement on rural development-shot straight to the
heart of the neoliberal model and called for a new vision.
The reemergent Mexican
farmers' movement reflects not only the serious crisis in the country's rural
sector but also a crisis of faith in free trade itself. With the common slogan
"El campo no aguanta más" (The countryside can't take it anymore), a
wide range of rural organizations have set off a national debate on NAFTA. As a
result, some of the fundamental myths of the free trade model are being
questioned as never before in Mexico.
1.The Myth of the Free
Market
The first is the myth that
free trade exists at all. Mexican farmers are quick to point out that reality
deviates far from the logic of free trade—namely that prices are determined by
the laws of supply and demand, and that the product produced most cheaply and
efficiently always wins. Three major factors—subsidies, financing, and
oligopolies—have created distorted market conditions made-to-order for the
world's most powerful U.S.-based transnational corporations. As a result, small
farmers south of the border are being driven off the land.
The first distortion comes
in the form of U.S. government farm subsidies. The 2002 Farm Bill authorizes a
whopping $248.6 billion in farm supports. Federal government subsidies now make
up 40% of the U.S. net farm income. Though they ostensibly serve to keep family
farmers afloat, actually the billions in subsidies flow disproportionately to
corporate farmers. Along with export-import financing, they assure that huge
food and agriculture transnationals increase their profits and global reach.
Mark Ritchie of the Institute for Agriculture and Trade Policy (IATP) notes
that U.S. export subsidies end up in the pockets of the world's largest grain
traders, primarily Cargill and Archer Daniels Midland.
What does this do to the
Mexican market? A recent IATP analysis of the year 2001 reveals that corn cost
an average of $3.41 a bushel to produce in the U.S. and sold on the
international market for $2.28 a bushel. Food First, a California-based policy
institute, reports that California rice costs between $700 and $800 an acre to
produce but receives $650 an acre on the world market and that U.S. wheat is
exported at 46% below cost.
There's a name for
this—dumping—and it is supposedly prohibited under both NAFTA and World Trade
Organization (WTO) rules. According to the above calculations, the over five
million tons of U.S. corn sold in Mexico in 2001 carried a dumping margin of
25%. Analyses from past years show dumping margins of over 30%. Dumped U.S.
surpluses erode producer prices; the value of Mexican corn dropped 64% between
1985 (when Mexico signed the General Agreement on Tariffs and Trade—GATT) and
1999. They also leave Mexican producers without a market. The United Nations
Development Program estimates that worldwide U.S farm subsidies cost poor
countries about $50 billion a year in lost agricultural exports.
Mexican farmers cannot and
should not be forced to compete with grains sold at less than U.S. production
costs. They lack credit, economy of scale, fertilizers, chemical weed and pest
controls, farm equipment and, most importantly, significant government
supports. As U.S. farm support increases, Mexican government programs have
followed IMF prescriptions and all but disappeared. During the period from 1990
to 1994, Mexican farmers received 33.2% of their yearly income from the
government. For 1995 to 2001, that figure had dropped to 13.2%.
In addition to subsidized
prices, cheap and ready access to U.S. financing has played a key role in the
glut of grain imports to Mexico, which has devastated domestic prices. In 1996
the international price of corn rocketed due to fears of shortages. Despite the
high cost, that was the year Mexico more than doubled imports.
The Center for the Study of
Rural Change in Mexico (CECCAM) reports that an overriding incentive for
importers both in 1996 and in other years has been financial. U.S. exporters
and government export-financing organisms, particularly the Commodity Credit
Corporation (CCC), offer low-cost loans to Mexican importers buying U.S.
grains. Although rates have decreased in recent years, prevailing credit rates
in Mexico in the mid-1990s were over 30%, while the CCC offered between 7 and
8%. For Mexico-based import companies, the CCC's sweetheart rates were like
rain in a drought.
The Mexican government,
facing the same tight money problem following the 1995 devaluation crisis,
looked to the same solution. The $100 billion bailout orchestrated by the
Clinton administration in response to the peso crisis included a $1 billion
credit that obligated Mexico to purchase corn directly through the CCC program.
In the single year between 1995 and 1996, corn imports rose 120%—double the
quota stipulated under NAFTA, and all imports were tariff-free. Mexican
importers assumed over $1.5 billion in CCC credits that year, and Mexican
producers were sold down the river.
Free trade cannot exist in
the context of global oligopolies. In contrast to a World Bank report that 73%
of Mexico's rural population lives in poverty (a significant increase over the
pre-NAFTA period), the major U.S. agribusiness transnationals have grown by
leaps and bounds under the auspices of the free trade model. As international
traders with both export and import activities, many receive a triple subsidy
under NAFTA: 1) as exporters of below-cost U.S. farm products, 2) as recipients
of direct export subsidies, and 3) as Mexican importers. They also get Mexican
subsidies; for example, Cargill receives the lion's share of subsidies in the
state of Sinaloa—Mexico's most heavily subsidized agricultural state. Couple
that with the added advantage of wiping competition off the map through
below-cost prices and the deal is complete.
None of these factors stem
from farmers' productivity—the culprit in the failure of farmers to compete,
according to Mexican Secretary of Agriculture Javier Usabiaga. Instead, these
factors converge to stack the deck against Mexican small farmers.
In light of all these
negative tendencies, planners predicted that the majority of Mexican corn
farmers would have left the sector by now. They were wrong. Figures for the
year 2001 show that national corn production actually grew by 10% compared to
1994. Nearly three million Mexican farmers throughout the country still grow
corn. How, and even more importantly, why, do these farmers persevere against
the global market odds?
The answer is that in spite
of all that's been said, the Mexican farming sector is indeed highly
subsidized, though not by a government concerned with assuring the viability of
agriculture and the security of the country's food supply. Mexican farmers
themselves, and particularly southern farmers living in poverty, are subsidizing
national corn production. The subsidies come from unpaid family labor, from
small-scale commercial activities, and from the more than $9 billion in annual
remittances sent home by Mexicans working in the United States.
The remittances have a dual
role. First, the money sustains agricultural activities that have been deemed
nonviable by the international market but that serve multiple purposes: family
consumption, cultural survival, ecological conservation, supplemental income,
etc. Second, by sending money home, migrants in the U.S. seek not only to
assure a decent standard of living for their Mexican families but also to
maintain the campesino identity and community belonging that continue to define
them in economic exile. Their money, whether individual or organized,
subsidizes rural infrastructure, farm equipment, inputs, and labor and
conserves cultural identity.
The combination of these
personal subsidies and subsistence tenacity account for the otherwise
unaccountable growth in corn production in Mexico—despite the overwhelming
"comparative disadvantages" of a distorted international market. They
reflect a deep cultural resistance to the dislocation and denial inherent in
the free trade model.
2. The Myth of
"Comparative Advantages"
The U.S Grains Council
estimates that in Mexico only 1.7 to 2 million hectares have the capacity to
produce close to the U.S. standard of 8 tons of corn per hectare (2.47 acres).
The strong implication is that farmers tilling the remaining 6.5 million
hectares currently in corn production should look for other work.
The first reason why these
marginal corn producers still have not become factory workers or mango growers
is that they can't. The idea that Mexican agriculture can be restructured to
exploit comparative advantages on the international market is a pipe dream. The
characteristics of Mexico's land and climate limit regions where fruits and
vegetables—the NAFTA "winners"—can be grown, and investment is
concentrated in a very few regions in the north. Thus the model exacerbates
regional polarization and southern exclusion. Moreover, foreign investment
needed to convert crops and develop export industries has failed to arrive.
Since the onset of NAFTA, 0.3% of all foreign direct investment went to
agriculture—a dismal showing by all accounts
Several sectors already
favored by natural resources, capital, proximity to the U.S. market, and
infrastructure have grown during the NAFTA years, but particularly in terms of
rural employment, they offer an option to very few farmers. Export agriculture
also employs some of the most socially and environmentally harmful methods of
food production in the countryside, including the intensive use of migrant
family labor, application of chemical inputs with severe short- and long-term
health and environmental effects, documented discrimination against women,
exploitation of child labor, and violations of human rights.
Post-NAFTA agricultural
trade has not always been a bowl of cherries even for this privileged group.
Mexico's agro-export sector has repeatedly faced trade barriers in the United
States. Counterseasonal tomato farmers in Sinaloa have fought a permanent
battle with their counterparts in Florida, who have succeeded many times in
closing the border to protect U.S. growers. Often under the pretext of sanitary
rules, the same protectionist measures have been applied against Michoacán
avocado farmers.
Still, free marketers insist
that Mexican agriculture merely needs social "safety net" programs to
assist while employment adjustments are made. What they fail to realize is that
small-scale corn production is the millennia-old safety net for all of
Mesoamerica. Trying to fit this maize-centered campesino economy—based on
cultural preservation, subsistence, and small-scale sustainable
agriculture—into the free trade model of comparative advantages is like trying
to cram a square peg into a round hole. When Mexican farmers demand new rural
policies and a new pact between the state and rural society, they are demanding
that the non-market contributions of the campesino economy be recognized as
essential to national sovereignty, cultural diversity, and rural employment.
3. The Myth of Free Trade as
a Development Model
Since the "lost
decade" of the eighties and the polarization of wealth in the nineties,
the "trickle-down" theory has fallen into disrepute. Even so, today's
neoliberals still insist that the poor will eventually benefit from the model,
and all that's needed is for the laggards to catch up, convert, modernize,
integrate, etc. As NAFTA enters its 10th year and after nearly two decades of
trade liberalization under GATT, Mexican agriculture has steadily lost ground:
statistics show 1,750,000 people displaced, as well as increases in poverty,
malnutrition, and school desertion. While President Fox and his cabinet boast
of six billion pesos in agro-export earnings, farmers point out that that money
went into the pockets of fewer than 7% of Mexico's farmers.
A major premise of both
NAFTA and the proposed Free Trade Agreement of the Americas (FTAA) is that if a
nation stays on the "yellow brick road" of IMF prescriptions and
economic integration, it will reach the "Emerald City" of U.S.
prosperity. These trade pacts offer no alternative routes, no other
destinations. Today, Mexican farmers are saying not only that they can't
compete with the U.S. agricultural model but also that they don't want to. And
they present a long list of reasons why.
One objection encompasses
social and environmental concerns about the U.S. agricultural model. The U.S.
model is not environmentally sustainable due to the large amount of chemical
pesticides, herbicides, and fertilizers applied and the monocropping
techniques; it destroys biological, agricultural, and cultural diversity; it
decimates rural employment (2% of the U.S population make a living farming
compared to 25% of the Mexican population); and it increases social inequities
by concentrating land holdings.
The second objection cites
national sovereignty and dependency issues. The free-trade model creates food
dependency through imports (Mexico now obtains 40% of its food from abroad);
links the rural sector to the whims of transnational capital instead of to the
nation's consumers and producers; strangles local and regional markets, and
encourages dependency on transnational seed and chemical conglomerates.
Farmers have also begun to
recognize consumer issues: the U.S. model erodes food quality to the consumer
by encouraging junk-food imports and chemical use, and it inhibits culinary
diversity and ethnic-based food traditions that have high cultural and health
value.
The Mexican farmers'
movement is not asking for a little time and money to attain U.S. stature. When
these farmers highlight asymmetries and call for compensatory funds, they don't
aim merely to correct macroeconomic gaps and promote structural reforms (in
fact, an important source of support from labor and civil society is shared
opposition to privatization of land, oil, and the electrical sector) but rather
to develop a sensible and sensitive national development program. They
recognize that the United States is well-advanced along paths that Mexico dare
not tread if the goal is sustainable development, social equity, and a decent
quality of living for all. The new "state-urban society-rural society"
pact that Mexican farmers seek would incorporate a basic principle: a nation's
first moral and political obligation is to assure a decent standard of living
to its inhabitants by developing national policies that respond to national
needs. This includes ensuring the long-term viability of small farmers rather
than negotiating their demise; recognizing the environmental, cultural, and
social contributions of agriculture; and actively defending food security and
quality.
4. The Myth of the
Fail-Proof Policy
Faced with debacle in
Argentina and rising criticisms worldwide, neoliberal planners have
systematically refused to acknowledge any responsibility for their model's
failures. This denial of accountability, vital to the ideological defense of
free trade, is being challenged directly by farmers' demands to revise parts of
NAFTA. In response, government leaders from all three NAFTA countries have
ascribed to the text a moral authority tantamount to the Bible's and have
refused to discuss modifications, although the law clearly allows it.
Confronted by the negative
impacts of NAFTA on Mexican agriculture, the Fox administration has waffled
even more than usual. While Mexican farmers press to renegotiate the
agricultural chapter of NAFTA, the Mexican government insists that free trade
is not the source of farmers' woes. Defenders of rural policy caution against
"throwing the baby out with the bath water" and insist on the need to
surge forward with structural reforms arguing that the problem is not too much free
trade, but too little.
The U.S. embassy has played
an unusually active role, prodding the Mexican Congress and issuing several
press releases and official statements urging Mexico to tow the line. On
December 12, embassy staff came out in force to personally lobby senators, narrowly
averting a Senate vote to freeze tariffs at 2002 levels. One embassy report
attempting to justify the poor results of NAFTA refers to the
"Big-Events-Little-Time" problem. The authors argue that intervening
events (mainly the Zapatista uprising and the December 1994 devaluation) and
NAFTA's short nine-year span make it difficult to ascertain cause and effect.
On closer examination, this theory and similar dodges serve to mask a far
larger problem that has vexed free trade architects for years: the "Data-Contradicts-the-Model"
problem. Luis Tellez, who participated in NAFTA negotiations as subsecretary of
agriculture under President Salinas, expressed this problem succinctly in a
January forum: "It's not that NAFTA failed, it's just that reality didn't
turn out the way we planned it."
Conclusion: Policies Based
on People, Not Myths
If the free market doesn't
exist, and if the model is impoverishing the vast majority of rural producers,
should it continue to be considered the foremost and exclusive organizing
principle for Mexican agriculture? The farmers' movement is saying that it's
time to discard the myths and permit more human values to play a role in
agricultural policy.
Mexican farmers not only
reject an asymmetrical trade agreement that destroys their livelihoods and
their communities, they also reject being railroaded onto a one-way street. To
compete with the U.S. means to adopt the U.S. transnational-dominated model of
agriculture. Competing on these terms—the only ones understood by a market
driven solely by prices—could unravel Mexican society. Buying into this
corporate myth could jettison nine thousand years of culture, domesticated
agriculture, and biological and agricultural diversity.
The month of January 1994
opened with the NAFTA paradigm of a neoliberal future and closed with an armed
Zapatista rebellion that galvanized national and international support for a
"world of many worlds." January of 2003 opened with NAFTA tariff
eliminations to enforce the free trade model, and the month closed with 100,000
people in the streets calling for immediate renegotiation of NAFTA, food
sovereignty, and a national rural development pact. These two Januarys are the
bookends of a period of disputed definitions in Mexico. Recently, U.S.
congressional members recognized that failure to resolve the Mexican
agricultural crisis would increase migration and complicate relations between
the two nations. But the problem goes beyond migration. The United States will
face serious risks in all aspects of the binational relationship if it insists
on imposing a unilateral future on Mexico. In the not-so-distant future,
Indians and farmers could be joined by thousands from other walks of life
demanding national development that responds to their needs and not to a
myth-ridden model.
Laura Carlsen is an associate of the Interhemispheric
Resource Center’s Americas Program (www.americaspolicy.org/index.html)
and co-editor of Community Control in a Global Economy (Kumarian 2003) and
Enfrentando la Globalización: Integración Económica y Respuestas Sociales en
México (Miguel Angel Porrua 2003). She can be contacted at: laura@irc-online.org
Sources for More Information
Mexican Organizations
Asociación Nacional de
Empresas Comercializadoras de Productores del Campo, A.C. (ANEC)
Tel: +(5) 661-5914 or
662-9297
Fax +(5) 661-5909
Email: anec2@laneta.apc.org
Web: http://www.laneta.apc.org/anec/
Group of Mexican basic grain
cultivators working to respond to the challenges of economic liberalization and
globalization in Mexico by developing campesino commercial networks.
Greenpeace México
Tel: +(5) 590-6868
Fax: +(5) 590-9474
Email: Adrian.ruiz@dialb.greenpeace.org
Website: http://www.greenpeace.org.mx/
Works in various ways on a
number of issues related to free trade and its environmental impacts.
Red Mexicana de Acción
Frente al Libre Comercio (RMALC)
Tel: +(52 5) 355 1177
Email: rmalc@laneta.apc.org
A coalition whose mission is
to analyze, challenge, and influence Mexican economic and trade policies.
Centro de Investigaciones
Económicas y Políticas de Acción Comunitaria (CIEPAC)
Tel: +(52 967) 678-5832
Email: ciepac@laneta.apc.org
Chiapas-based center of
investigation that conducts research and generates information and analysis on
a wide range of issues.
U.S. Organizations
Alliance for Responsible
Trade
c/o The Development Gap for
Alternative Policies (D-GAP)
Tel: (202) 898-1566
Fax: (202) 898-1612
Email: dgap@igc.apc.org
Network of labor,
family-farm, religious, women's, environmental, development and research
organizations that promotes equitable and sustainable trade and development.
Center for International
Environmental Law (CIEL)
Tel: (202) 785-8700
Fax: (202) 785-8701
Email: cielus@igc.apc.org
Web: http://www.ciel.org/
CIEL promotes innovative
methods for integrating the principles of sustainable development with
international trade and investment law and policies. In 1996, launched the
Public Participation in Trade Negotiations in the Americas Project, whose goal
is to promote broader public participation and greater attention to
environmental protection in the FTAA.
Global Development and
Environmental Institute
Tel: (617) 627-3550
Fax: (617) 627-2409
Email: gdae@tufts.edu
Web: http://www.tufs.edu/tie/gdae/
G-DAE is a research
institute at Tufts University dedicated to promoting a better understanding of
environmental and trade issues, and has produced materials on farm and trade
issues as related to NAFTA and FTAA.
Institute for Food and
Development Policy/Food First
Tel: (510) 654-4400
Fax: (510) 654-4551
Email: foodfirst@foodfirst.org
Web: http://www.foodfirst.org/
A research and advocacy
organization with international scope with particular focus on issues of food
security, hunger, and agrarian reform.
Institute for Agricultural
and Trade Policy (IATP)
Tel: (612) 870-0453
Fax: (612) 870-4846
Email: iatip@iatp.org
A research and advocacy
organizations with a special focus on farm and trade issues, including such
related issues as intellectual property rights, U.S. agricultural policy, and
role of agribusiness. Builds connections between U.S. farm groups and foreign
rural-based organizations.
Websites:
Borrador del Informe
Nacional Sobre los Avances en el Cumplimiento de la Cumbre de la Tierra
http://www.semarnat.gob.mx/río10/
Centro de Estadística
Agropecuaria (CEA)
http://www.sagarpa.gob.mx/cea.html
Centro de Estudios para el
Cambio en el Campo Mexicano (CECCAM)
http://www.laneta.apc.org/ceccam/
Coordinadora Nacional de
Organizaciones Cafetaleras
http://www.laneta.apc.org/cnoc/
Ministry of the Economy
NAFTAWorks
This government site
provides extensive information on foreign investment in Mexico, NAFTA trade
issues and trade regulations, trade agreements between the U.S. and Mexico, and
trade statistics.
Secretaría de Agricultura,
Ganadería, Desarrollo Rural, Pesca y Alimentación (SAGARPA)
Food and Agricultural
Organization (FAO)