[asia-apec 905] Paper from the APPA Forum on Land, Food Security and Agriculture

[PAN Asia Pacific]

This is a paper from Ana de Ita of CECCAM, Mexico.  Ana was going
to present it at the Forum on Land, Food Security, and Agriculture
but had to cancel at the last nminute.

The impact of NAFTA on food security and the proposal for reordering 
Mexican territory

Ana de Ita* 


Mexico’s geographical situation —being so close, yet so far away from the United 
States— has implied profound changes related to the reordering of international 
agricultural markets. These changes signify a new political and economic context 
for Mexico’s rural areas.
        Mexico is important for the United States for a number of reasons: as a 
market for its agricultural products and inputs; as a source of inexpensive labor for 
its maquiladora industries; as a backyard for locating companies that pollute the 
environment; as a trash dump for hazardous wastes; as the key for integrating the 
rest of Latin America into a Free Trade Area that can compete with the European 
Union; as a stage for launching its viewpoints in the World Trade Organization; 
and as a passageway for transporting its exports to Asian countries.
        To fulfill these objectives the United States—under the banner of “free 
trade”—negotiated NAFTA1 with Mexico, and the agreement went into effect on 
January 1, 1994. Two countries with profound asymmetries in their levels of 
development are treated as equals in this agreement. Its most radical aspect is its 
treatment of agriculture: Mexico included all of its agricultural products in the 
category for liberalization by 2004, with the exception of some “sensitive” products 
slated for the year 2008.
        Although Mexico had participated in GATT since 1986, the commitments 
for agriculture which came out of the Uruguay Round of 1995 were much more 
flexible than those adopted with NAFTA. It is important to note that NAFTA has an 
especially determining influence on Mexico’s domestic agricultural policies since 
75% of the country’s foreign trade is with the United States, and this was true 
even before the agreement’s signing.
        In Mexico agricultural reforms aimed to modernize the country side “with 
some prodding kicks and blows from the market”  were initiated before NAFTA 
was signed. But the agreement served to definitively close the door on any 
possibility for reversing this trend. Objectives of both the reforms and NAFTA 
include dismantling the peasant economy and privatizing and concentrating 
resources, income and power, under the pretext of modernizing segments of 
traditional agriculture, through national and foreign private investment.
        I will be analyzing only the impacts related to food security and the 
reordering of territory, in order to focus on the objectives of this Conference and 
because of their significance for peasant economy and organization.

i.   Food Security

The production of basic grains and oilseeds is fundamental for guaranteeing the 
population’s food security and the survival of approximately three million peasants 
who grow these products. Eighty percent of cultivated land is used to grow these 
products. The remaining 20% is used for growing vegetables and tropical crops 
such as coffee and sugar cane (4%) and fruit production (14%).
        Nevertheless, the production of basic grains is not given any comparative 
advantages with respect to production in the United States and Canada, both 
considered to be among the world’s major barns. These products were sacrificed 
in the NAFTA negotiations, in favor of fruit and vegetables. The final agreement 
was the result  of the desire of the national political elite in the three countries to 
dismantle existing rural protection programs.2 
        Agricultural policies aimed at protecting basic grains—corn, beans, wheat, 
sorghum, soybeans and others—were eliminated between 1990 and 1994. 
Previously, these grains benefited from required prior permission for importing, a 
system of price guarantees—generally higher than international prices—and a 
system of subsidies for inputs. When NAFTA went into effect, sorghum was left 
without any protection; a 15% tariff was placed on wheat to be gradually reduced 
until its disappearance by the year 2004; a 10% tariff was placed on soybeans—
when imported between October and December—to be reduced over a ten-year 
period. And, for corn and beans, considered the most “sensitive” products, quota-
tariffs were negotiated, 139% for beans and 215% for corn, to be eliminated by the 
year 2008. The initial quota for beans for the United States was 50,000 tons, and 
for corn, 2.5 million tons, to be incremented 3% annually.
        These commitments are much more radical than those required of 
underdeveloped countries by the World Trade Organization (WTO), and the 
commitments made by Mexico to the WTO.

        1. Between NATFA and domestic policy

        The importing of basic grains has increased significantly during the past 
four years and ten months since NAFTA went into effect, and it is threatening the 
country’s food security. Dependency on importing will continue to grow as trade 
liberalization continues advancing. Mexico imported approximately 9% of basic 
grains consumed in 1990; by 1993 this amount had increased to 23%; by 1996, 
the amount was 30%, and by July 1998, imports had increased by 17.2%.
        We see one of the worst examples of the effects of agricultural trade 
liberalization in corn, the basis of the Mesoamerican diet and culture. According to 
Mexican negotiators, corn was to be better protected than any other product as a 
result of NAFTA, but experience proves the opposite. Import quotas assigned to 
the United States were exceeded in 1995, again in 1996, and the same will be 
true 1998. Despite record production of corn in 1996, the government practiced 
dumping against the interests of Mexican farmers when it allowed tariff-free 
importation of 5.8 million tons—more than twice the amount specified by NAFTA 
of 2.652 million tons—and it treated China and South Africa as member countries. 
The government favored the major transnational trade and industrial corporations 
which take advantage of subsidized credits granted by the United States through 
the Commodity Credit Corporation and turn Mexican imports into a financial 
business. Mexico’s line of credit was 1.5 billion dollars. By unilaterally eliminating 
the 189% tariff for that year, Mexico received 1.028 billion dollars less in taxes. 
And, imports drove domestic prices down to the level of international prices. When 
small corn producers in Chiapas mobilized and blocked highways to demand fair 
prices for their crops, the government—backed by the army and policy—resorted 
to repression, leaving three farmers dead and others injured. On the international 
market there are mechanisms for preventing cases of dumping. In Mexico, 
however, it is the government that practices dumping, and it responds to justified 
protests with repression.
        In the case of beans, quotas were exceeded by 129% in 1996, and by July 
1998 they had been exceeded by 90%. Wheat imports increased at a dizzying 
speed from 1990 to 1997. During this period, Mexico increased its wheat imports 
from 339,000 tons to 1.78 million tons. Although the government criticizes State 
intervention, practices which worked against producers during 1995 and 1996 
fixed wheat prices below international levels. Soybean growing has practically 
disappeared because of trade liberalization. By 1997, only 6% of the volume from 
1989 was produced, and consequently, nearly all soybean consumption depends 
on imports.
        Commitments made between Mexico and the United States as part of 
NAFTA are a clear example of market reordering. Mexico, an underdeveloped 
country, sacrificed its population’s food consumption and accepted producing 
exotic, luxury products for the elite of the North. Not satisfied with only poorly 
negotiating the international agreement, the Mexican government has gone on to 
apply agricultural policies much worse than NAFTA requirements in order to 
benefit private interests.

        2.  US agricultural policy and international prices.

        In 1996 the United States reformed the agricultural policy which had been 
in effect for the previous six decades. The changes were in favor of agrofood 
corporations. The new agricultural law, the Fair Act, proposed increasing the 
supply of grains, artificially fixing low prices in the international market, and 
promoting exports through subsidies.3 
        And thus, peasant in Mexico are subject to “double dumping:” that 
committed by the United States in the world grain market, and that committed by 
the Mexican government when it unilaterally eliminates the little protection granted 
by NAFTA to producers.
        
        3. Decoupling subsidies witout peasant accountability   

        Before NAFTA began, the system of subsidies for inputs and prices was 
changed to subsidies by hectare decoupling to volume, price and product, and 
which will be provided for all basic grains in a constant amount in real terms over 
a period of 15 years. These subsidies were reduced by 30% from 1994 to 1998. 
        The combination of low international prices and an over-supply of grains, 
together with declining government-fixed domestic prices, subsidy reduction and 
unilateral elimination of tariffs has left producers in an open market, swimming 
among the sharks.
        
        As predicted, the difficulties  for underdeveloped countries to use the few 
mechanisms granted by the “free market” for protecting their food security are not 
only technical and external, but as in the case of Mexico, they respond to the 
particular interests of the dominant elite and transnational corporations. Peasants 
do not have democratic means for influencing public policies, and at every harvest 
cycle, they are obliged to carry out protests for demanding a better income from 
their products, through increases in prices and subsidies. Nonetheless, peasant 
organizations have been unable to spark a generalized, broad-based movement 
that would make it possible to change agricultural policy, and consequently, the 
peasants’ historical conquests  have been gradually lost.
        There are two alarming tendencies as a result of this policy. 
        First, the lack of financing for agriculture. -commercial banks are 
uninterested in financing agriculture and the government development bank has 
radically reduced its participation in providing funds- added to the difficulties of 
marketing their products, means small farmers with high productive potential enter 
agricultural systems by way of contracts with transnational companies. Major 
Mexican companies and transnational partners are becoming increasingly 
integrated.
        Second, another dangerous consequence is the tendency toward land 
dedicated to grain production to be in the hands of an increasingly smaller group. 
According to conservative figures based only on available government indicators, 
the number of basic grain producers has decreased by 437,000, or 20%, between 
1993 and 1998. The land dedicated to these crops has slightly increased.
        These two tendencies paint a new political panorama for Mexico’s 
countryside in which transnational companies and major Mexican firms are 
gradually acquiring more control of basic grain production and markets, thus 
weakening possibilities for peasants to play a more active role in productive 
processes. The latter was the focus around which the most important independent 
peasant organizations formed during the 1980s and up to the time of the reforms. 
UNORCA is one of those organizations.

ii Agrarian counter-reform

        One of the main conquests of the peasant revolution of  1910 in México 
was the land ownership system, under the form of ejido or social property. Article 
27 of the  Constitution prevented large concentrations of  land in a few hands, and 
prohibited domestic or foreign mercantile societies from owning land. In the 
NAFTA negotiations, the ejido was considered a “non-tariff barrier” in preventing 
foreigners from receiving the same treatment as a dosmestic subjects (“natinal 
treatment”). Article 27 was modified to promote a market in land and private 
investment, and to spur land privatization and concentration,
        Agricultural counter-reform signified the breaking up of the social “pact” 
reached by peasants and the post-revolutionary State.
        
        In a broader geopolitical framework, Andrés Barreda4 demonstrates that in 
the United States, agricultural, cattle, mineral, petroleum and industrial 
production, highway and railroad infrastructure and the major population centers 
are all concentrated in the eastern half of the country. The particular geography of 
the United States—with the Rocky Mountains as a wall between the East and the 
West—implies high transportation costs and difficulties in moving production to 
the Pacific coast.
        The triumph over Japan in the Second World War consolidated the US 
hegemony in the Pacific Ocean and made it possible for the United States to 
control vigorous industrialization along Asian’s eastern coast. But now, in the 
1990s, with China entering into capitalist competition, the United States is 
pressuring for reorganization of its capital, devaluating labor prices and reducing 
costs of transporting its goods.
        The inverted map of North America and the Caribbean demonstrates that 
the best connection between the US northeast region and the Pacific Basin 
passes through Mexican and Central American territories which are located 
between the two extremes of inter-ocean communication. The United States is 
seeking to establish new trade routes in which corridors of pseudo assembly 
industries will be installed. They will be subordinated to the major industrial 
centers and will facilitate increasing their competitiveness, by taking advantage of 
inexpensive Mexican and Central American labor and monopolizing the natural 
resources it finds in its path. The Mexican government has become a part of the 
project for subordinating national territory to the interests of US capital.
        For the privatization of territory linked to the gradual increase in the control 
over production and markets by transnational companies, the peasants presence 
in 28,000 ejidos across the country represents an obstacle. Agricultural reforms 
are staking out their disappearance.
        
        Paradoxically, the first day  that NAFTA entered into effect, the peasants 
and indigenous peoples of Chiapas organized in the Ejército Zapatista de 
Liberación Nacional (EZLN, the Zapatista National Liberation Army) rose up to 
demand:  “Enough!” Among their demands, was rejection of the agrarian counter-
reform and NAFTA, and they championed the fight against neo-liberalism.
        The first agreement signed by the Mexican government with the Zapatistas 
was on the autonomy of indigenous peoples—which the government now refuses 
to comply with. The demand for autonomy enters into direct conflict with the plan 
to reorder Mexican territory according to the interests of the United States, the 
Mexican government, and national and transnational elite. This is especially true 
since this demand identifies the right of indigenous peoples to collectively use and 
enjoy their natural resources and territories.
        The public consultation currently promoted by the EZLN to find out the 
viewpoints of the Mexican society—in each of the country’s local districts—is one 
of the actions in Mexico which can stop the advance of transnational companies, 
the expulsion of peasants from their lands, and the privatization of life.
* Researcher at the Centro de Estudios para el Cambio en el Campo Mexicano (Ceccam, Centre of Studies 
for Rural Change in México) This document was prepared for the Land, Food Security and Agriculture 
Forum at the Asian Pacifica Peoples Summit in Kuala Lumpur, Malaysia, November 11-12, 1998.
1 NAFTA also includes Canada. Actually, there are three different agreements: the one between the United 
States and Canada in effect since 1988; between the United States and Mexico; and between Mexico and 
Canada.
2 See Luis Hernández, “TLC and agricultura” (NAFTA and Agriculture).
3 Victor Suárez, “Fair Act,” in Cuadernos del Ceccam, No. 20, April 1997.
4 Andrés Barreda, “La subordinación del sureste mexicano a la geoeconomía y geopolítica 
norteamericanas,” Centro de Análisis Social, Información y Formación Popular (Center for Social Analysis, 
Information and Grassroots Training).


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