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MEXICO: FARMERS BRACE FOR FLOOD OF U.S. MAIZE AND BEAN IMPORTS
[December 20, 2007]

MEXICO: FARMERS BRACE FOR FLOOD OF U.S. MAIZE AND BEAN IMPORTS


(English IPS News Via Thomson Dialog NewsEdge)
MEXICO CITY, Mexico, Dec. 19, 2007 (IPS/GIN) -- U.S.-grown
maize, beans, powdered milk and sugar are set to flood the Mexican
market on Jan. 1, completing a process of market liberalization
that began 14 years ago.

"The claws of free trade will grab us by the throat in 2008 and
strangle us, and the government is doing nothing about it," said
Mariano Snchez, a bean grower from a medium-sized farm near Mexico
City. "It just said it has to fulfill its pledge, but that will be
at the expense of poor farmers who can't compete."

The freeing up of Mexico's agricultural markets has been
happening gradually since 1994, when the North American Free Trade
Agreement between Canada, Mexico and the United States came into
effect. The agreement has forced Mexico's impoverished rural sector
to compete with the U.S., a powerful and heavily subsidized foreign
rival.

The date set for the final stage of this process was 2008. It
was expected that by then Mexico would be able to cope with the
removal of quotas and tariffs for imported maize and beans, the
staple foods of most people in this country.

However, with just a few days to go before the last trade
barriers are dismantled, there is obvious asymmetry among the
markets. There is particular asymmetry between the markets of
Mexico and the United States, with which Mexico does 90 percent of
its trade.

Maize originated in Mexico, which produces 19 million metric
tons of it a year, compared to the 300 million metric tons a year
grown in the United States.

For a Mexican farmer, the cost of growing a hectare of maize is
300 times higher and the yield is 3.5 times lower than for a farmer
in the U.S., according to the nongovernmental National Campesino
Federation.

But every farmer in the U.S. is subsidized to the tune of an
average $20,000 a year, while in Mexico government subsidies are
no more than an annual $770 per farmer, the federation said.

In the U.S., 32 million hectares are devoted to maize, which is
used for human food and animal feed, as well as to produce ethanol,
a biofuel. In Mexico maize is grown on 8.5 million hectares.

NAFTA is not so much a free trade treaty as an agreement to
eliminate tariff barriers. Dismantling domestic subsidies is an
issue that continues to be negotiated at the World Trade
Organization, where talks are blocked because of the refusal of
rich nations to stop subsidizing their farmers.

"The farming sector in Mexico was never ready for NAFTA and is
still not ready, in spite of all the support the authorities say
they have given," said Snchez, who produces beans on 15 hectares
of land and sells them to local markets. He said he has steady
buyers but fears he will lose them if lower-priced imported beans
become available.

Roughly 20 million people out of a total Mexican population of
109 million live in the countryside, and 75 percent of them are
poor. Barely one-third of agricultural laborers have employment
benefits, and there is constant migration of the work force toward
Mexican cities and the United States.

Of the country's 31 million hectares of cultivated land, less
than 1 million produce crops for export. The rest is used to grow
food largely for subsistence, with the surplus being sold on the
domestic market.

Even so, more than 50 percent of the cucumber and 90 percent of
the lemons and mangoes that are consumed in the U.S. come from
Mexico.

One out of six watermelons, one-quarter of melons and asparagus
and one-third of the tomatoes bought by consumers in the U.S. are
also from Mexico, according to government figures.

About 50 campesino organizations and groups of activists opposed
to free trade have joined forces in the National Campaign in
Defense of Food Sovereignty and the Revitalization of Rural Mexico
under the slogan "Sin maz no hay pas, sin frijol tampoco." A
rough translation of the slogan is "No maize means no Mexico, and
so does no beans."

The groups have carried out a number of actions aimed at
stopping the opening of the market for these essential agricultural
products, so far without success.

More than 1,100 agricultural products from the U.S. and Canada
can already be imported duty-free into Mexico, and the same is true
of the vast majority of Mexican products sold to the U.S. and
Canada.

Nearly all quotas and tariffs have been removed. All that remain
are the protective barriers for the most sensitive products --
maize, beans, powdered milk and sugar -- which were left until
last.

The government of conservative President Felipe Caldern said
Jan. 1 will not in any way be a dire day for Mexico.

Mexico already imports increasing amounts of maize and beans
from the U.S., because it ceased to be self-sufficient in both
products almost a decade ago. Therefore the regional open market
is already a fact, some observers say.

The elimination of Mexico's tariff barriers for maize is due to
occur at a time when there is high international demand and high
world prices for the commodity. Experts say Mexicans will have no
difficulty selling their maize, locally or for export.

Mexico produces an annual surplus of 200,000 metric tons of
sugar, and the imminent change in trade rules is not expected to
have a major impact on this sector.

The U.S. imports sugar and could buy it from Mexico, said
governing National Action Party lawmaker Francisco Domnguez, an
agricultural expert.

The local dairy industry, however, cannot fully satisfy local
demand and is at a technological disadvantage compared to producers
in the U.S., so it could face stiff competition.

Marco Ramos, an agricultural researcher at the National
Autonomous University of Mexico, said all of Mexico's rural
problems should not be blamed "on NAFTA and free trade."

"That's an overly simplistic view that leaves out hard data
indicating that failure in the rural sector is due to several
causes," he said.

A study published in 2005 by Braulio Serna of the local office
of the Economic Commission for Latin America and the Caribbean said
NAFTA has not had a quantitatively significant impact on Mexico's
rural sector.

Analyses claiming that opening the market has been the
determining factor in Mexican agricultural performance are biased,
Serna said, adding that the problems of the rural sector, poverty
and migration are more directly linked to misguided public
policies, global and national economic crises, climatic factors,
low levels of technical training among farmers and the low
international commodity prices seen until a few years ago.

Government support for the Mexican countryside has increased in
the past few years and comprises subsidies, technical support,
preferential prices and investment in rural infrastructure.

This year, government spending amounted to some $16 billion,
$1.5 billion more than in 2006. In 2008 funding for rural areas is
expected to reach $19 billion.

However, most of the rural areas remain in poverty and overall
production has not improved, although there are some successful
export sectors.

The backing given by the Mexican state to its farmers does not
match the $22 billion that the U.S. gives its producers in direct
subsidies alone, without taking into account the substantial
additional aid they receive for marketing, technology and
infrastructure.

NAFTA opponents organizing the National Campaign in Defense of
Food Sovereignty have said that, starting in January, "campesinos
will have to defend themselves on their own against U.S. products
which are subsidized at a level 30 times higher than the average
amounts granted by the Mexican government."

"The ingenuousness, incompetence and collusion of the federal
government and many legislators have prevented them from discerning
that, hidden behind this new stage of the trade agreement, a true
war is being waged against our survival as an independent country,"
the members of the campaign said in an open letter released on Dec.
10.

Delegates from the groups involved in the campaign went on a
four-day hunger strike in mid-December, calling for a renegotiation
of NAFTA. They announced that they would blockade border crossings
to the U.S. starting on Jan. 1 if their demands are not addressed.

"The campaign against open markets will not change the
situation. The best thing to do is to put regrets aside and look
within to find out what can be done so that rural areas in Mexico
can develop," Ramos said. (Editing by Alana Y. Price)

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