Mexico: Seeds of rural sustainability
As Mexico continues its long haul towards economic prosperity and social inclusion, one of the principal challenges it faces is improving rural sustainability and growth. Key to improving the livelihood of the rural communities is the agriculture industry, which, despite presenting positive growth figures in 2012, faces numerous challenges. The sector is indeed the heartbeat of the rural economy, employing some 13% of the national workforce, according to 2010 data from the World Bank. Yet in 2011 it accounted for only 3.5% of GDP, down slightly from 3.8% in 2003, according to figures from the National Statistics and Geography Institute (Instituto Nacional de Estadística y Geografía, INEGI).
After output fell 4.4% in 2009, the sector showed signs of recovery with 4.1% growth in 2010. Production contracted again in 2011, however, dipping 1.5%, according to data from INEGI. It seems the industry is poised to rebound once more. Despite an early season drought, overall favourable climate conditions should see substantial increases in several key crops. In particular, expectations for crops such as corn, wheat, beans and sorghum have been revised upwards to a 16% rise in 2012, according to the secretary of agriculture. On the domestic front, corn is a significant part of the food basket.
Cash crops such as coffee are also expected have a banner year. The Mexican Coffee Growers’ Association told international press in September it expects Mexico, the world’s 10th-largest producer of coffee, to increase production by 20% this year – from 4.3m bags up to 5.16m bags, with each bag weighing 60 kg.
Sugar is likewise expected to experience a significant jump in production. The National Committee for the Sustainable Development of Sugar Cane forecasts that the 2012/13 harvesting season will see a 12.5% increase in sugar production to 5.67m tonnes. In the long term, coffee and sugar will likely remain two of Mexico’s predominant cash crops, bringing in significant export dollars, even though in the short term a reduction in the global price of coffee in 2012 and 2013 could affect net earnings.
Indeed, while industrial manufacturing in northern cities has helped to propel economic growth thanks to a more globally integrated Mexican economy, southern farming towns and communities have yet to feel the full impact of the benefits of the numerous free trade agreements signed over the past two decades. In fact, some believe free trade has hurt the industry more than it has helped.
Following the establishment of the NAFTA, Mexico’s agriculture industry has certainly benefitted from the export of crops and agricultural products to its northern neighbour, the US. However, the longer-term impacts remain somewhat controversial. The displacement of many Mexican agricultural workers who migrated north in search of higher wages, for example, is becoming a serious issue on both sides of the border.
Furthermore, smaller farmers in Mexico often lack the proper fertilisers, irrigation channels and infrastructure to compete in a global marketplace. One such example is found in the corn industry, where 50,000-100,000 Mexican farmers marched on Mexico City in 2008 to protest the elimination of tariffs on corn imported from the US as agreed on in NAFTA, despite the fact that US yellow corn differs vastly from the white corn predominantly produced and consumed in Mexico. Indeed, most small farmers find it very difficult to compete with the size, scale and efficiency of highly subsidised and mechanised US and Canadian agriculture industries.
Agricultural producers in Mexico do have some grounds for objecting to open competition with the US. Though the agriculture industry holds plenty of potential in Mexico, improving productivity, available infrastructure, and machinery and fertilisers for many of the country’s small and medium-sized farmers is key to its long-term success, and by extension, the sustainability of rural economic development.
One solution put forward by the federal government through the secretary of agriculture is to create public-private partnerships to increase productivity throughout the sector. The secretary of agriculture, livestock, rural development, fishing and food, Francisco Mayorga Castañeda, told local press in July 2012 that it was also vital to form a coalition consisting of the private sector, the public sector and the social sector to improve communication and ultimately arrive at the best possible strategy for increasing productivity.
The initial plan proposed by the government calls for the public sector to increase access to finance for small farmers and improve rural education, while the private sector’s role will be to innovate and invest in the sector. The social sector, or local communities, will be responsible for mobilising the community, as well as training and organising local producers. The system will first be implemented in five segments: grains, oils, fruits and vegetables, fishery products, and coffee and cacao, before determining its potential to operate on a larger scale.