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Published in Winter 2004
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Maize farmers unhappy with NAFTA's price
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By Scott Bury
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© Pablo Añeli / CEC
A farmer near Oaxaca, Mexico harvests maize at the end of a growing season. |
"I have nothing," protested
Francisco Martinez during a 2002 demonstration in Mexico City. "I am here out
of desperation because I am poorer than I have ever been." A sign carried
nearby squarely pointed a finger at the alleged culprit: "NAFTA," it read,
"Equals Death."
Given
the changes suffered by many small farmers in the past ten years, it's
understandable they felt moved to protest. Maize prices paid to producers
dropped 44 percent. A wave of cheap, subsidized US maize flooded the domestic
market. And many farmers left the land, while others struggled to earn enough
to provide for their families.
The roots of Mexico's corn
crisis go deep, however, beginning years before NAFTA. "The problem started
back with Mexico's entry into the GATT [General Agreement on Tariffs and Trade]
in 1986," according to Laura Carlsen, director of the Americas Program with
the Inter-Hemispheric Resource Centre in Mexico City. "The Mexican government
began to dismantle policies that had ensured a basic price support for corn."
The removal of tariffs,
quotas and direct supports was accelerated with the signing of NAFTA and the
opening of Mexico to international markets, says Carlsen. From 1994 to 2002, US
exports of maize to Mexico nearly tripled, from 2.2 million tonnes annually to
6 million tonnes. Mexico also became the second-largest export market for US
maize, accounting for 11 percent of all exports in 2000, or about US$550
million worth.
The effects in rural Mexico
have been pronounced. As many of the larger farmers shifted from maize to other
crops, smaller, poorer farmers actually increased the cultivated land under
maize to offset their decreasing income and feed their families. The
unfortunate irony is that these smaller farmers lost even more money on corn
every year, and fell deeper into poverty.
The expansion of maize
agriculture into more marginal lands has also proven costly for Mexico's rich
biodiversity. According to NAFTA's Promise and Reality: Lessons from Mexico for the
Hemisphere,
published by the Carnegie Endowment for International Peace, this practice has
resulted in an average deforestation rate of more than 630,000 hectares per
year since 1993 in the biologically rich regions of southern Mexico.
| DID YOU KNOW? |
- Maize covers half of the total cultivated area of
Mexico's crops, or some seven million hectares.
- The maize sector employs more than 40 percent of the
agricultural labor force, or three million people.
- Tortillas, made from corn flour, provide 59 percent of
the average caloric intake of Mexicos population.
- The price of tortillas tripled between 1994 and 1999.
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NAFTA's impact on
agriculture in Mexico, however, is decidedly mixed. Some sectors are clear
winners while others—maize in particular—have faced a harsher
adjustment to open borders despite tariff protections Mexico built into the
trade agreement.
But Brian Doidge of the
Ontario Corn Producers Association says the low prices are not the result of
free trade: "Pricing has always been determined in the Chicago exchange," he
says. What is keeping the price of corn so low is the US agricultural policy,
expressed most recently in the 2002 Farm Bill, which provides substantial
support for corn producers.
"Corn is considered the most
heavily-subsidized food crop in the US," says Tim Wise, a researcher at Tufts
University. US farmers benefit from subsidies amounting to some US$10 billion
annually, or roughly 10 times the total Mexican agricultural output.
Some observers have accused
the US of dumping corn onto the world market because the price of corn is below
its own cost of production. "This is a 'wealth effect', in that the cash may
keep farms in production longer than they would otherwise be without the
supports," says Chad Hart of the University of Iowa.
But the main winners are
traders in corn and the consumers of cheap corn, including the livestock
industries of Mexico and the US who use corn as animal feed, says Wise.
Producers and consumers of corn syrup and sweetened products, as well as many
other industrial users of corn flour, oil and syrup, have also benefited.
"It's not benefiting US
farmers," says Carlsen. "It's benefiting the corn traders. The subsidy to
farmers ends up being a subsidy to the traders and big corporations."
Hart admits that while US
agriculture benefits from the supports, and consumers from lower prices, the US
taxpayer has to cover the costs of these programs. Moreover, he admits that
other countries have been adversely affected. "Mexico, Canada, Argentina and
any other nation exporting agricultural produce will be affected," he says.
Which is why some Mexican
farmers brought their message to Mexico City, calling for renegotiation of NAFTA.
But maize pricing doesn't
express the full importance of corn in Mexican society, cautions Carlsen. In
the country where maize first evolved and which is today a world center of
maize genetic diversity, growing corn is not just a means of earning a living,
she says—it also signifies the preservation of the rural cultural identity
of Mexico.
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