Interview: Ricardo Aguilar Castillo
What changes have been implemented to improve Mexico’s agricultural productivity?
RICARDO AGUILAR CASTILLO: The transformation of the agriculture sector is ongoing. Through public policies, its main goal is transitioning to a new model that will lead to a more sustainable, fair and productive sector. Changes in SAGARPA’s structure were implemented in 2013 and visible throughout 2014, with operational rules modified to transition to a focus on productivity. For example, PROAGRO Productivo – a government programme aimed at increasing agricultural productivity with an annual budget of MXN17.6bn ($1.2bn) – no longer offers subsidies, but incentives to raise productivity. PROAGRO Productivo focuses on incentivising subsistence farmers’ production in municipalities that are part of President Enrique Peña Nieto’s Crusade Against Hunger programme. These farmers, who have less than three ha, are given MXN1500 ($101) per ha as a means to increase production. These are some changes that will have a strong impact in our sector.
Are any policies being implemented to foster improved access to credit for producers?
CASTILLO: For decades, one of the main issues facing the agriculture sector has been the difficulty producers have in accessing credit at lower rates and on longer terms. To solve this problem, the Productive and Competitive Financing Access programme has been created. This gives producers access to finance in more favourable terms. In 2014 we were able to back MXN53.24bn ($3.6bn) in credits, 54% more than in 2012. This programme benefitted 22,735 farmers in 1523 municipalities through 300 financial institutions financed by Trust Funds for Rural Development and the national agriculture bank, Financiera Nacional de Desarrollo. In total, the average interest rate in 2014 stood at 11%, compared to 15% in 2012.
Furthermore, in August 2014 the president implemented the Special Programme for Small Producers, which allows small producers to have access to credit at a yearly interest rate of 7% for men and 6.5% for women. Finally, to offer more income assurances to farmers, especially in the current scenario of international price volatility, the Productive Chain Strengthening programme supports producers with up to 85% of the premium of products listed in stock markets and up to 100% of the base compensation cost, in order for their products to be sold where consumption is high. In 2014 more than 831,000 tonnes of different products – such as coffee, barley, soy, sorghum, corn, cattle and pork – were backed by this programme.
What is being done to foster the development of the south and south-east of the country?
CASTILLO: The Productive Development of the South-Southeast programme was designed to support this underdeveloped region. It focuses on benefitting agricultural development of the 10 states that comprise the southern region of Mexico, by fostering greenhouse development and maintenance, aquaculture, repopulation of cattle ranches and technological development. Throughout 2014, over MXN1bn ($67.3m) was invested in the region as a result.
How has agriculture policy changed in recent years?
CASTILLO: President Nieto has acknowledged that the sector has been left behind in decades past, and his administration has had a strong commitment to Mexican agricultural producers. The main goals are to modernise the sector, and increase productivity and income for primary producers. This policy has a strong focus on agricultural inclusion, innovation and justice; a policy of leaving behind government subsidies; and a focus on incentives to productive projects.
The overarching goal is to rebuild the sector in order to bring a better quality of life to the 7m families that rely on it. SAGARPA aims to add value to the products of Mexico’s poorest farmers, further develop agricultural infrastructure, facilitate access to credit and implement the agricultural policy of the federal government.
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