Agro-industry receives a boost from state programmes, private investment and technology in San Luis Potosí

While the state of San Luis Potosí is dominated economically by its major urban centre – the eponymous capital city – and the manufacturing industry that it supports, agriculture thrives in its peripheral rural municipalities, where one in every 2499 potosinos lives, according to the Secretariat of Agriculture and Rural Development (Secretaría de Agricultura y Desarrollo Rural, SADER).

The agro-industry segment expanded by 11.5% in 2018, according to the Secretariat of Economic Development (Secretaría de Desarrollo Econó mico, SEDECO), making it the second-fastest-growing agriculture segment of any state in Mexico, with the figure well above the national average of 2.4%. The eastern municipality of Ciudad Valles is the largest agriculture producer in the state, accounting for MXN133.5m ($6.9m) in 2018, or 9.2% of San Luis Potosí’s total agricultural output.

Livestock

Several subsectors have shown signs of robust growth. Between 2014 and 2018 the volume of beef produced across the state grew by 42.9%, boosting San Luis Potosí’s national ranking from sixth to third in terms of production. Over the same period egg production increased nearly 40-fold, with the state becoming the country’s fourth-largest egg producer. While San Luis Potosí accounts for 2.7% of the country’s total beef output, it constitutes around 7.6% of Mexican goat meat. The state’s 40 slaughterhouses, eight of which are privately run, account for 2.8% of national capacity.

Agriculture

San Luis Potosí is Mexico’s top producer of unrefined cane sugar, second-largest producer of soy and the third-largest producer of oranges. It is also the country’s second-largest producer of tomatoes, with annual production valued at MXN3.4bn ($175.8m) in 2018, representing 21.3% of the state’s overall output. The state is Mexico’s third-largest exporter of tomatoes to the US, Canada and Japan. Around 73% of the 1736 ha of land covered by greenhouses across the state produce tomatoes. Lastly, the state ranks fourth nationwide for the production of chillies.

Workforce 

The population of San Luis Potosí is heavily involved in agriculture. Some 18.8% of potosinos are involved in the primary agriculture sector, and within this 83% work in arable farming, 16.9% in livestock and 0.3% in fishing. A priority of the state government is the incorporation of workers into the formal economy, with the government reporting a 16.7% growth in the number of formal jobs in rural areas between October 2015 and July 2018 in its “Third Government Report 2017-2018”. In addition, 2238 jobs were created in rural agricultural communities over the period.

Support for Producers

Beyond formal labour rights, public policies have also targeted a number of other indicators in the agriculture sector. The State Development Plan for San Luis Potosí 2015-21 comprises an agriculture development programme, which prioritises the creation of jobs and social well-being, animal health standards to open up new market opportunities, sector growth with a focus on overcoming organisational difficulties faced by small plots of land less than 5 ha and pest control.

In April 2019 the government announced a number of support programmes to stimulate the agriculture sector, with a particular emphasis on small producers in the central and southern states. In San Luis Potosí, the programmes will focus on two main objectives: the improvement of agriculture, equipment and machinery; and development of technological solutions to enhance agricultural activity.

Food Security

The Food Security in Rural Areas Project seeks to help families in rural areas improve their diets, produce agriculture on a small scale, increase their incomes and gradually move out of poverty. In its 2018 report, the state government notes that MXN285m ($14.7m) of public funding was allocated to 15,000 families across the state between 2015 and 2018. As a result, small-scale domestic production generated a surplus of up to 50% for 105 families across the five municipalities of the eastern Huasteca region, as well as enabled people to be integrated into the National System for Integral Family Development as suppliers, allowing them to sell their excess produce – including eggs, fruit and vegetables – at higher prices.

While government initiatives are helping to boost the successes of small producers, certain challenges remain. Climate change, in particular, is presenting concerns for the arid expanses of the potosino highlands, where rainfall is scarce. The drought in the first five months of 2019 had a particularly significant impact on low-income agricultural producers in rural areas, who do not have any type of agricultural insurance. Extreme climate events are growing increasingly common, and in early July 2019 SADER declared 44 of San Luis Potosí’s 58 municipalities in a state of natural disaster.

Regional Collaboration 

To promote agrifood development across the states of the Alianza Centro-Bajío-Occidente region and strengthen coordination in the sector, the Secretariat of Agricultural Development and Water Resources held a meeting with officials from León and Guanajuato in November 2018. The region accounts for 25% of national agriculture and livestock production. During the meeting an agenda was established, prioritising key areas such as water, movement of goods between the region’s states, plant and livestock pest control, workforce training and the creation of employment in rural areas – a lack of which has driven migration to urban centres in recent years.

Private Sector 

Alongside public policies to alleviate agri-food shortages and stimulate production, private investment is also helping to boost San Luis Potosí’s agriculture sector. Swiss agri-chemicals company Syngenta have been in Mexico since 2000, when they opened up a facility in San Luis Potosí. Some 58% of the products manufactured at the site remain in Mexico for national consumption, while the remainder is exported to the US and Canada.

In late 2017 Ceuta Produce, a subsidiary of US multinational Farmer’s Best, a food retailer, announced a MXN220m ($11.4m) investment that would generate 4000 new jobs in the Ciudad del Maíz agriculture region in the state’s east. Initially, the plan was to invest in 20 ha of traditional tomato fields; however, it has turned towards protecting agriculture, with the aim of producing tomatoes in greenhouses across 50 ha of land. A large proportion of the output is destined for the US market.

Elsewhere, in May 2019 local agricultural firm Grupo PROAN announced a MXN800m ($41.4m) investment in Vanegas, on the state’s high plains, to develop infrastructure that will house up to 14,000 pigs. The investment will complement an existing MXN2.5bn ($129.3m) facility in the same area, where 6.5m eggs are produced every day.

Technology 

Between 2015 and 2018 the state government oversaw the supply of water for irrigation of 9356 ha of farmland, prioritising areas under stress due to the overexploitation of aquifers. Another facet of technological advancement in agriculture is the improved methods to tackle pests. Pest control programmes are a staple of the state government’s plan, with a fruit fly eradication scheme enabling the protection of 90,000 tonnes of citrus fruits, translating into saved income of MXN400m ($20.7m) per year on average for producers. Some 18,000 producers of oranges, chillies, tomatoes, sorghum, coffee, soy and cucumbers have benefitted from 13 pest control campaigns in recent years. Another initiative, the Safe and Harmless Agri-foods Programme, aims to improve the control of pests that often affect crop and livestock operations.

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The Report: Mexico 2019

San Luis Potosí chapter from The Report: Mexico 2019

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