Is Mexico Losing Its Farmers under NAFTA?

Mexico is proclaiming that it will manufacture a “suit of armor” for its farmers, to prevent their being overwhelmed by grain, meat, and milk from the United States and Canada under the North American Free Trade Agreement.

Mexican farmers’ fear of northern farm exports is particularly high right now, because Mexico’s import tariffs and tariff quotas on northern poultry meat and cheese are supposed to fall to zero this year, potentially triggering another surge in poultry and cheese imports.

Climate and geography, however, dictate that Mexico will continue to increase its farm imports—and gain importantly from the low-cost food it could not produce for itself. No farm subsidies that the Mexican government can afford would alter this trend.

Historically, the key agricultural area in Mexico was the valley in which Mexico City is located. During Aztec times, most of the food for Mexico’s largest city was grown in gardens right in and around the big lakes which then surrounded the city itself. Those days are gone forever. The lakes have largely been drained to create more building space as the population has soared from 500,000 Aztecs to more than 75 million Mexicans.

The rest of Mexico is largely high and dry, with scant rainfall and poor soils, or tropical. To date, tropical crop yields are generally poor except in such tropical commodities as cane sugar and coffee.

Given the huge tracts of prime, well-watered temperate farmland in the United States and Canada, it is no wonder that Mexico has seen a substantial trend toward more imported farm commodities since 1995. In fact, this improved opportunity to get low-cost farm commodities into an otherwise arid and infertile country should have been one of the major reasons for Mexico to sign NAFTA.

Most of Mexico’s land is too dry for crops. Most of it is rangeland, except where small amounts of irrigation are possible. Mexico City is one of the better-watered areas, with an average of only 23 inches of rainfall per year. Most of the United States gets from 30 to 50 inches of rainfall, temporally well distributed for crop growth, making it the world’s leading agricultural powerhouse.

Politically, of course, Mexico had more than 8 million farmers at the time NAFTA was signed, so the Mexican government had (and has) to make noises about preserving its agriculture and protecting its farmers. However, there is little realistic prospect that Mexico will be able to substantially increase its farm output to meet the needs of Mexico’s consumers. One of the few expansion factors is a negative: The Mexican government now says that its traditional farmers are slashing and burning an additional 3 million acres of forest into farmland each year, threatening in particular the nation’s tropical forests.

Thus, farm imports are the Mexican people’s only realistic hope for cost-effective access to good diets. (Mexican milk consumption, for example, is only half the level recommended by the World Health Organization for good nutrition.)

White corn for food is Mexico’s major farm product. Since NAFTA was signed, Mexican corn production has increased 12 percent, despite competition from imports (rising from 24 million tons in 1995 to 27 million tons in 2002, mostly in the form of white corn). However, corn imports—mostly of yellow corn for livestock feed—have increased 25 percent under NAFTA, from 8.5 million tons in 1995 to 10.7 million in 2002.

Mexico’s wheat production has dropped 9 percent, from 3.5 million tons to 3.150 since 1995. Wheat and flour imports have more than doubled, from 1.6 million tons to 3.3 million in 2002. (Mexico’s wheat production is mostly costly irrigated production.)

Mexico’s cotton production held steady at about 450,000 bales through the 1990s, but suffered a mild drop in 2001 (431,000 bales) and a precipitous decline to 188,000 bales in 2002. (Drought, low government supports, and low world prices all played a role.) Meanwhile, Mexican cotton imports soared from 554,000 bales in 1995 to 1.7 million in 2002.

Imports of livestock products have also trended strongly upward. Cheese consumption has dropped from 418,000 tons in 1995 to 215,000 in 2002 under the stress of an economic slump, but Mexican cheese imports surged from 18,00 tons to 70,000. Mexican beef production has been roughly stable (limited by rainfall) at just under 2 million tons per year, but beef imports have leapt more than tenfold, from 42,000 tons per year in 1995 to 445,000 tons in 2002. (Due to Mexico’s grain/rain shortages, many of Mexico’s own beef cattle are shipped to the United States for finishing in feedlots, and than shipped back for slaughter.) Mexican pork production has increased 15 percent since 1995, to 1.1 million tons in 2002. Pork imports, however, have jumped from 36,000 tons in 1995 to 310,000 tons in 2002.

Mexico still has more than 8 million farmers, but don’t take too much joy from that large and roughly stable number. Most Mexican farmers produce barely enough to feed themselves. In fact, most of them don’t even own their land; they’re members of the famous ejidos (cooperative farms), where the people mostly cultivate an acre or two of scraggly corn with hand-hoes. The farmers have little-to-no access to yield-raising inputs or irrigation, nor do they have any hope of improving their productivity in the years ahead. Their kids get little education and learn few skills. The only hope for a better life is to leave their land and their hand-hoes, and migrate to the cities with little more than the shirts on their backs.

So much for the wonders of traditional agriculture and national food self-sufficiency in the modern world.