NAFTA and Mexico's Agrarian apocalypse.

Author:Ross, John
Position:Thinking Economically
 
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At the stroke of midnight this past January 1, a hundred or so farmers and day laborers from both sides of the border converged on the hump of the Cordoba Las Americas bridge that connects El Paso and Ciudad Juarez, to mark the demise of Mexican agriculture. In accordance with the timetables set by the North American Free Trade Agreement signed by Mexico, the US and Canada 14 years ago, as of January 1 2008, all tariffs on corn, beans, powdered milk, sugar and 200 agricultural products were reduced to zero, setting in motion a doomsday scenario that farmers organizations here say will inevitably lead to crisis in the Mexican "campo" or countryside, mass abandonment of unsustainable plots, increased hunger, and even armed rebellion by the nation's beleaguered small farmers.

"If they build steel walls to keep our people from entering the United States, we will make walls of people to keep their products out of Mexico," a grizzled leader of the militant farmers' front El Barzon Popular growled into his bullhorn as the protestors spread out in the frigid dark to block the lanes of the bridge over the river the US calls the Rio Grande and Mexico the Rio Bravo. But traffic was slow and few trailers were lined up to ferry the thousands of tons of US agricultural products that pass over the Cordoba Las Americas into Mexico every day.

Strung across the roadway, each protester carried a letter of the alphabet in his or her hand but despite the palpable fear and loathing afoot out in the Mexican countryside as the tariffs plummet to nothing, the farmers could barely muster enough troops to spell out "Sin Maiz No Hay Pais--Y Tampoco Sin Frijol," including the appropriate spacing between words ("Without Corn, There Is No Country--And Also Without Beans").

Despite the midnight deadline, the immediate impacts of this premeditated apocalypse may be postponed for a while--at least until the spring planting when farmers have to calculate how many hectares they can afford to put under crops. Unlike the US, farm subsidies are a thing of the past here, stripped away years ago in the rush to NAFTA.

Reduction to zero tariffs is not in fact a steep drop. Fourteen years of incremental decreases had wiped out 90% of all protectionist barriers by 2007, and US corn growers were only shelling out 18% of the value of their exports to get their grain into Mexico. Moreover, NAFTA-driven dumping by lavishly subsidized US corn growers that allowed them to drop their loads in Mexico below cost and still make a boodle is being blunted by skyrocketing ethanol subsidies as maize climbs to record quotes on US commodity markets--the grain hit an all-time record $ 177 a metric ton last spring but has begun to slide as storage capacity for ethanol corn is saturated and distribution lags far behind production.

Meanwhile, the uptick in world corn prices...

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