Interview: José Calzada Rovirosa
Which specific factors have contributed to the resilience of Mexico’s agriculture sector?
JOSE CALZADA ROVIROSA: The agriculture sector in Mexico was the most dynamic of the economy in 2016, rising by 3.5% to $88.3bn, and there is an even more positive outlook for 2017. This is all possible thanks to the drive towards modernisation we have seen over recent years. Mexico has evolved from a subsistence agricultural economy to one that is much more sophisticated from the point of view of production, with risk-protection systems, greenhouses, irrigation and more efficient farming techniques.
Globally, the trend in agriculture is towards greater specialisation, and Mexico continues to focus on its highly productive horticulture segment. For instance, Mexico is the largest exporter of beer globally and the world’s only producer of tequila, for which global demand is growing enormously.
Moreover, the country is one of the largest producers and exporters of tomatoes in the world, producing one in every three tomatoes consumed by the US, which continues to be the destination of nearly 90% of our total agricultural exports. The challenge now is to continue with the processes of modernisation that will transform the country’s path from subsistence agriculture to a culture of advanced productivity.
How are small-scale producers being assisted to enhance crop yields and improve access to credit?
CALZADA: Credit availability in the sector has expanded significantly, and in 2016 reached over MXN250bn ($15.1bn). Now we have a more ambitious goal: to include more private banks in this ecosystem. Private banks are now financing around 20% of the sector, while in other advanced economies this figure is higher, at between 70% and 80%.
Education has a huge role to play, above all in technical skills such as farming techniques and crop rotation. It is crucial that the federal government maintain strong relations with state governments to achieve the best outcome. The Ministry of Agriculture, Livestock, Rural Development, Fisheries and Food has delegations in each of the states, with whom they work directly to distribute resources, improve education and foster new ideas related to improving productivity. One such programme is aimed specifically at helping female subsistence farmers, who play a significant role in agricultural production. Improving their efficiencies will have positive impacts on all scales and for all stakeholders. The importance of small-scale production to the wider agricultural economy cannot be underestimated.
To what extent will additional free trade agreements affect the dynamics and competitiveness of the agricultural sector?
CALZADA: Looking at the global figures over the last 20 years of free trade deals, Mexico has undoubtedly benefitted, above all through its competitive advantage in the global agricultural market. With new free trade agreements in the pipeline, Mexico will have a huge opportunity to expand its reach beyond traditional markets to new export destinations.
This drive to new markets gives the country the chance to diversify its array of products, especially when it comes to markets throughout Asia. Although Mexico sells relatively few agricultural products to China at present, there is capacity for this figure to double over the coming years with products such as pork, beef and, of course, avocados.
We are the 12th-biggest food producer in the world, and hope to be the 10th-largest in just over a decade. To reach this goal, the sector will have to grow at 5% for the next eight to 10 years. This requires investment, a strong opening of international markets and solid connections between Mexico and new markets. The government has a fundamental role to play in moving this forward, through opening up access and getting the appropriate certificates for all export products.
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