IATP | 15 January 2019
Bold farm plans in Mexico offer a ray of hope in 2019
by Karen Hansen-Kuhn
As many in the United States agriculture community breathed a sigh of relief that the recently passed Farm Bill isn’t as bad as it could be, our neighbors to the south are moving forward quickly and decisively with bold new plans to transform their food and farm system. Mexican President Andres Manuel López Obrador took office on December 1 with an inaugural address outlining 100 promises for the transformation of the country’s government and economy. The plans include pledges to root out corruption and wasteful spending and to push forward quickly on new programs and reforms promised during his campaign. A month into his term, López Obrador had already fulfilled his commitment to hold a public referendum on the construction of a controversial new airport and canceled those plans as a result. And, efforts are well underway on a bold new initiative to transform Mexican agriculture to achieve self-sufficiency in basic grains and enhance the livelihoods of family farmers and their communities.
In an era when technology and globalization often seem to erase the lessons of the past, Mexicans’ deep consciousness of their history is striking. The Mexican Revolution in the early 1900s continues to be a source of pride and inspiration, and not just in monuments and holidays. The new agriculture plan references revolutionary leader Emiliano Zapata’s 1911 Plan de Ayala, which demanded comprehensive land reform and rights for peasant farmers. In 2018, more than 100 Mexican farmers’ organizations in the Movimiento Campesino (Farmers’ Movement) came together around a new vision—the 21st Century Plan de Ayala—that was endorsed and championed by then candidate López Obrador. The new Plan de Ayala outlines a series of demands on land reform, agricultural production, and public and environmental health, grounded in the rights of farmers, farmworkers, women, indigenous people and youth. Food sovereignty—the concept that agriculture should serve local communities first, based on local decision making—is at its heart. “In short,” the groups proclaim, “we need food and nutrition sovereignty to be public policy, based mainly on small and medium-scale agricultural production, with strategic planning and developed with full participation of both producers and consumers, and guided by agroecological criteria.”
As a first step in fulfilling that commitment, the new administration has set the goal of achieving self-sufficiency in corn, wheat, rice, edible beans and milk, produced by small-scale farmers. That is hugely ambitious, as the country currently imports about 40 percent of its corn, nearly all of it from the U.S. The North American Free Trade Agreement (NAFTA) required the government to phase out its tariff protections for corn over 15 years. The Mexican government actually accelerated that timetable, leading to an abrupt increase in exports of cheap U.S. corn (and other commodities) to Mexico at prices well below the cost of production. IATP has calculated the rates of dumping for corn, wheat, rice, soy and cotton since the 1990s. During NAFTA’s first decade, corn was exported at an average of 15 percent below the cost of production. As of 2017, dumping rates were nine percent for corn, 38 percent for wheat and three percent for rice.
According to census data calculations by researchers at the Mexican Centro de Investigación y Docencia Económicas, some 4.9 million Mexican family farmers were displaced after NAFTA, with about three million becoming seasonal workers in agro-export industries. This shift was part of a dramatic reconfiguration of supply chains and a sharp increase in corporate concentration in agriculture in North America, as global firms shifted different stages of production among countries to reduce costs. Corn production in Mexico did not cease under NAFTA; much of it was redirected to the burgeoning meat industry. Large scale production of meat expanded alongside corn imports from the U.S., driving new production that contributed to the vicious cycle of farm loss and corporate concentration that has hurt farmers in all three countries.
The new program will provide public support to expand production of basic grains, milk and meat by small scale farmers, recognizing them as the backbone of Mexico’s food security and rural livelihoods. As a starting point, it establishes guaranteed prices for corn, wheat, rice, beans and milk. According to Victor Suarez Carrera, the new Undersecretary for Food Self-Sufficiency (and former Executive Director of the Asociación Nacional de Empresas Comercializadoras de Productores del Campo—National Association of Rural Producers’ Commercial Enterprises (ANEC)), that price is based on a reference price from the Chicago Mercantile Exchange, with adjustments for transportation, cost of production and a reasonable return to the farmer. It is set for the coming year, so farmers can plan around it. As indicated in the chart below, the price is guaranteed for small-scale farmers, (i.e., those producing on less than five hectares (12.35 acres) of land in the case of corn, and up to a set quantity). For the first year of operations, the program will include two million farmers.
The idea of setting floor prices for strategic agricultural production is not new; it was the basis of farm programs in the U.S. and other countries for decades. One element that is new is the use of technology to avoid some of the problems of the past. Farmers participating in the program are registered using georeferenced census data, which is intended to prevent efforts to game the system by dividing larger farms into smaller blocks.
Farmers in the program will sell their crops for distribution by Seguridad Alimentaria Mexicana (SEGALMEX, Mexican Food Security), a merger of two agencies already operating 34,000 community food distribution centers across the country. SEGALMEX will distribute the crops to the community stores, as well as using it in other federal food programs. When the local market price falls below the guaranteed price, the difference will be paid into an electronic account that could be withdrawn in cash or used at the stores for other foods, seeds or farm inputs. The community stores will also serve as distribution centers for low-cost, basic food baskets delivered as part of the government’s anti-poverty efforts. In time, Secretary Victor Villalobos hopes to expand the procurement program beyond non-perishable grains to include a broader variety of foods.
While ensuring a fair price will go a long way toward stimulating increased production, farmers also need access to credit, technical assistance and other inputs to restore the production that was decimated during the NAFTA era. Even before López Obrador took office, the Mexican Congress overhauled its agricultural budgets to redirect support to smaller scale farmers, investing $20.5 billion MXN (approximately $1 billion USD) in 2019 to support four priority programs for production, guaranteed prices, credit for small-scale ranchers, and fertilizer.
Challenges and responses
Decades of precarious production and public support that were oriented more to poverty alleviation than investments in farming have left its mark on the countryside. In a Sinembargo article, analyst Helena Cotler Ávalos explains:
“ The solutions used in the past, based exclusively on fertilizers and agrochemicals, have left social and environmental impacts that we cannot repeat: eutrophication and contamination of water supplies, contamination of soils, irreversible harm to human health, the elimination of pollinator insects, the loss of native vegetable species, the loss of local knowledge, migration, among other things.”
She cites data from the 2014 National Agricultural Survey (INEGI) indicating that some 40 percent of farmers confront falling soil fertility and increased erosion, which leads to using more expensive and environmentally harmful fertilizers to compensate. This doesn’t just reduce agricultural yields, but also results in the loss of animal, fish and plant biodiversity and increases sediment that destabilizes dams, damages watersheds and increases risks of flooding.
The new agricultural program includes short-term measures to address soil fertility to jump start production. Plans are underway to reactivate three fertilizer plants and to regulate those prices. The hope is that the plants will generate about half of the country’s nitrogen and phosphate fertilizer needs. This runs the risk of exacerbating the damage to ecosystems. The program is still under development, so it’s not clear how these plans will unfold, but there is a commitment in the ministry and from López Obrador to encourage a transition to agroecology as the program evolves.
Suarez Carrera’s long experience with and commitment to agroecology (a conviction echoed in López Obrador’s inaugural speech), including years of experience at ANEC promoting biofertilizers and other methods to increase organic matter in soil, provide reasons for optimism. A key element of ANEC’s agroecology program is to “meet farmers where they are”—initiate a transition to agroecology based on their specific situations and expressed needs. In many cases, this has meant addressing their need for low-cost fertilizers and pesticides through the creation of “biofactories” using readily available organic inputs. As farmers learn to use those inputs, they often adopt other elements of agroecology.
President López Obrador explicitly rejected the use of genetically modified seeds in his inaugural address. While nearly all U.S. corn exported to Mexico is GM, the massive Without Corn No Country campaign has so far blocked planting of GMO corn in Mexico. Resistance to GMOs runs deep in Mexico, where hundreds of strains of corn are considered an important part of the country’s biodiversity, heritage and culture.
Advocates for sustainable agriculture, including Greenpeace Mexico and Semillas de Vida, have voiced concerns about some of President López Obrador’s appointments. Alfonso Romo, his new chief of staff, formerly led Seminis, a GMO seed company that was sold to Monsanto. Villalobos led CIBIOGEM, a government agency charged with developing policies for the use of GMOs.
On the other hand, the Fundacion Semillas de Vida’s Adelita San Vicente points out that other appointments, including that of Victor Suarez to the Agriculture ministry and María Elena Álvarez-Buylla to CONACYT (Consejo Nacional de Ciencia y Tecnología), both of whom have actively challenged GMOs in Mexico, give them hope. She commented that, “These are some of the great contradictions that we have inside” the new administration.
These contradictions will undoubtedly be tested by pressure from transnational corporations and the U.S. government. This is already evident in the text of the New NAFTA (or the United States-Mexico-Canada Agreement). That agreement includes new language on agricultural biotechnology that will increase pressure to accept shipments with low-level presence of GMOs. In a press release on the new agreement, the Office of the U.S. Trade Representative lists as a “key achievement” that the new agreement will set “unprecedented standards for agricultural biotechnology,” including new standards for gene edited materials.
More fundamentally, the new agreement would leave the fragile, new grain production open to floods of imports of cheaper U.S. goods. Mexican organizations have long called for the exclusion of basic grains from trade commitments, a demand they repeated at the start of the New NAFTA talks. The new agreement not only maintains current tariffs, but also adds new language in the Agriculture Chapter forbidding Parties from utilizing World Trade Organization (WTO) special agricultural safeguards (which would allow them to enact temporary trade barriers in cases of unstable prices or import surges). There are ongoing proposals from developing countries at the WTO to expand that provision through the establishment of a Special Safeguard Mechanism (temporary tariff protections) and the designation of Special Products (key goods for food security that could be excluded from imports), so this provision would cut off that possibility from parties to NAFTA. Article 3.3 of the New NAFTA also commits members to work together at the WTO, “with the objective of substantial progressive reductions in agriculture support and protection.” Of course, the New NAFTA is not a done deal; it will confront a skeptical Congress in the U.S. and growing concerns in Mexico and Canada.
Such an ambitious plan is bound to hit some bumps along the way, but there is little doubt that it is moving forward, and quickly. In addition to the questions raised by environmentalists, farmers just over the proposed limits (such as those with 10 hectares of land rather than five), complain that the new program fails to address their needs. Existing support for large-scale production of commodity crops and meat will continue alongside the new initiatives. Secretary Villalobos and Undersecretary Suarez recognize that truly transforming Mexican agriculture will take years, if not decades. These concerns will need to be resolved through an open, vigorous public debate. Mexican farmers’ organizations represent millions of people, and their coalition is right on top of efforts to guide this audacious program forward. It’s an inspiring effort, one, perhaps, Mexico’s neighbor to the north should learn from, too.