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NAFTA to Mexican Subsistence Corn Farmers: "You've Been Made Redundant"

by: Jill Richardson

Tue Jul 06, 2010 at 00:56:10 AM PDT

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My dad thinks it's hilarious that the British way to lay off workers is to say "You've been made redundant." Nothing personal or anything, but you're a redundancy and our bottom line says you need to go. Buh-bye. That was essentially what NAFTA did to many Mexican subsistence corn farmers. The negotiators of NAFTA looked at their numbers and decided that those farmers would be more efficient if they grew something else or left farming altogether. This was a naive decision, at best. Here's a postmortem of many of the mistakes they made in their assumptions during NAFTA negotiations.

Note: My source here is "The Environmental & Social Impacts of Economic Liberalization on Corn Production in Mexico" by Alejandro Nadal.

Jill Richardson :: NAFTA to Mexican Subsistence Corn Farmers: "You've Been Made Redundant"
At the time of NAFTA, corn accounted for 60% of cultivated land in Mexico. Three million producers depend on corn for their incomes in Mexico, making up 8% of their population and 40% of their farmers. On average, Mexico has much lower corn yields than U.S. farmers - 1.8 tons per hectare in Mexico vs. 8 tons per hectare in the U.S. And it costs a U.S. farmer 40% less than a Mexican farmer (on average) to produce a bushel of corn.

On average is an important word here. The paper divides Mexican producers into three categories - competitive, intermediate, and subsistence.

Competitive farmers can attain yields similar to those in the U.S. They've got great soil, irrigation (or dependable rainfall), "input-intensive technologies" (tractors, pesticides, fertilizers, hybrid or GE seeds), and "well-established marketing channels." Often they've got a lot of land, and they have the flexibility to grow other crops instead of corn if they want to. Up the ante on the competition via a free trade agreement and these guys don't go out of business. One thing to note is that when corn prices dropped, so did prices for other crops like barley, rice, sorghum, and wheat, so it was still most profitable to grow corn, even for lower prices.

Subsistence producers, at the other end of the spectrum, make up 40% of all Mexican corn producers. (For now I'm going to skip over the intermediate producers.) Subsistence producers "operate under difficult conditions of inferior soil, sloping terrain, irregular rainfall, and small landholdings." They produce corn for their own consumption and then meet other financial needs with off-farm employment. In a pinch, they sell their excess corn (often right after harvest when the market is flooded and prices are low). If they run out of corn during the year, they have to buy more to eat (long after the harvest, when prices are high).

NAFTA negotiators assumed that corn prices wouldn't affect these subsistence farmers because they grow corn to eat and not to sell. Of course, as you can see, they do sell it to cover basic household needs. NAFTA made corn prices drop, lowering the amount these farmers can earn for their corn, but tortilla prices have stayed high (the low prices are not passed onto the consumers).

This is the group of farmers that NAFTA negotiators probably figured oughta do something other than grow corn. They are farming marginal lands and producing low yields. Wouldn't it be better for Mexico - and the world - if they did something more productive? Grow tomatoes for export perhaps, or go work in a factory in the city.

This was a stupid decision for several reasons. One is that these farmers are the stewards of some of the most varied and valuable corn genetics in the world. As corn was domesticated in Mexico, Mexico has the most variety in corn genetics. These peasants have painstakingly selected their seeds year after year to produce varieties of corn perfectly adapted to their climates and micro-climates. Should a disaster befall us (a new corn disease or pest or changing climate, for example) - especially considering that corn is one of the most important staple crops worldwide - these genetics are our best hope of finding a corn variety that can stand up to whatever new challenge the we face. Thus, the corn grown by these farmers in Mexico is not interchangeable with the corn grown by U.S. farmers. Sure, you can eat them both, or feed them both to your livestock, but only the Mexican farmers are doing the job of conserving all of these precious genetics, whereas U.S. farmers are not.

Another reason why the NAFTA negotiators screwed up is that they failed to understand corn farmers ability to just go grow something else. As mentioned earlier, prices of other crops went down at the same time the corn price dropped, so it was often still the most profitable to keep growing corn. Also, Mexico didn't have unlimited demand in the U.S. for some of its other crops (tomatoes, watermelons, citrus, peppers). For these crops, Mexico competes with California, Texas, and Florida producers, as well as Central American nations. And, NAFTA negotiators didn't take into account the role that technology would play in reducing the need for labor for these crops in the future. As new innovations allowed farmers to grow more with less, the increases in exports to the U.S. didn't translate into the same increases in labor on those farms.

Mexico's top crop (by metric tons produced) is actually sugar cane, not corn. Corn is #2. In theory - and in the treaty as signed by Mexico - NAFTA allowed Mexico to increase its sugar exports to the U.S. But the U.S. (which likes to protect its sugar industry) played a dirty trick on Mexico by slipping a designation of high fructose corn syrup as a sweetener into NAFTA before ratifying it. For technical reasons in the treaty, that little detail disqualified Mexico from sending us all of its sugar.

Then there's of course the notion that the few who are harmed by lower corn prices would be offset by the masses who would benefit from them at the supermarket. Unfortunately for Mexicans, corporations that bought corn, processed it, and sold it to consumers stepped up and took this savings for themselves. After NAFTA, tortilla prices went up.


As you can see in the graph above, Mexicans did not respond to NAFTA by producing less corn. In fact, they produced more corn. They also increased the amount of land where they grew corn. As Mexican corn producers were desperate to make ends meet in the face of lower prices, they began cultivating more marginal lands, with lower yields. I guess they didn't get the memo that they were supposed to quit growing corn and go work in a sweatshop.

This is just part one on NAFTA and corn in Mexico. Stay tuned for more.

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NAFTA negotiators... (4.00 / 2)
Also, we'd have to assume that NAFTA negotiators ever had anything's interests in mind beyond those of giant corporations in the first place.

Were it up to me, I'd make it so that we could ensure that NAFTA negotiators and their like ought never to participate in 'trade' agreements, or general economics, ever again.

It was mentioned in the paper (4.00 / 3)
that they did involve corn refiners and processors in the NAFTA negotiations but did not involve small subsistence farmers. No surprises there.

"I can understand someone from Iowa promoting corn and soy, but we are not feeding the world, we are feeding animals and soft drink companies." - Jim Goodman

[ Parent ]
Thanks for covering issues like these (4.00 / 3)
To my knowleage, you are the only journalist who is reporting on issues like these from this perspective. Everyone else looks at the broad trade issues from the perspective of consumers in the industrialized nations and from the perspective of agribussines as well as the companies engaged in international trade. No one else seems to care about the small scale and subsistence farmers.

Normal people scare me.... But not as much as I scare them.

you know (4.00 / 2)
there is one group that is focusing on these folks and that's the biotech industry. They are using subsistence farmers around the world as a justification for their products. So of course focusing on subsistence farmers is important in its own right for humanitarian reasons, but it's also important to find out what the reality is for them and then compare that to the rhetoric coming from the biotech industry. And i have to say, if I truly thought biotech crops were going to be the salvation of 1 billion+ starving people, I would probably be in favor of them. But all of the evidence thus far doesn't point to that. In fact, what I am seeing is that there's a lot of work done in laboratories using assumptions of great soil, irrigation, flat surfaces instead of steep slopes, and unlimited resources that then "prove" certain (usually industrial) farming techniques or seeds work, but then the same techniques don't translate to success for subsistence farmers who are dealing with rainfed, cruddy soil, low inputs, often no mechanization, and sometimes steep slopes.

On the other hand, traditional peasant farming techniques often looks very backwards in the eyes of an American but when all of the externalities and complexities are considered, even though those traditional systems were not developed via the scientific method in laboratories, often they are found to be very sophisticated and scientific. So I think more respect and attention needs to be paid to them, and that's another reason why these farmers are important to focus on.

"I can understand someone from Iowa promoting corn and soy, but we are not feeding the world, we are feeding animals and soft drink companies." - Jim Goodman

[ Parent ]
I wonder if one of the root causes of the narrow focus on crops for introduction to the subsistence farmers (4.00 / 2)
in other parts of the world is because there is a narrow focus in the agronomy courses in our colleges. We in the industrialized countries are very technology dependant, and because of that, I think we have a tendancy to view technology as the best solution to any given problem, hence GE/GMO crops, cloning for meat animals, lots of equipment, chemicals, etc. I know a lot of people, especially people who don't farm, who think that the best way to solve a problem is with advanced technology. Sometimes that is the best approach, for instance, I wouldn't want to farm 1,000 acres by hand, I'd rather use tractors, combines and other advanced equipment. Sometimes, though, advanced technology isn't the only or the best solution, especially in an area, as you've pointed out time and again on this blog, when you're working with plants and animals that are essentially landrace varieties/breeds.

Unfortunately, a lot of the research being done in agriculture is done by for profit companies. I don't know how it is right now, but when I was in school, the necessary turnaround on private R&D was 5 years, that is an R&D project had to return a profit or become financially viable within 5 years from the start of research. Even with lots of government funding, this type of research is hellishly expensive. Given that, it's no wonder that seed companies push the lines of research they are already familiar with and have proven profitable. Even if they won't actually be advantageous for the subsistence farmers in un or under developed countries in the long run.

Normal people scare me.... But not as much as I scare them.

[ Parent ]
I think you're right (4.00 / 1)
and it's not just that we're technology-dependent but what you said about our research being tied into corporations and immediate profitability - that's exactly it. You might be able to help a subsistence farmer feed his or her family with agroecology but you sure won't get rich by promoting rain-fed agriculture, manure, or saved seeds.

"I can understand someone from Iowa promoting corn and soy, but we are not feeding the world, we are feeding animals and soft drink companies." - Jim Goodman

[ Parent ]
Too true (4.00 / 2)
and the corporations, at least the for profit ones, have a legal fiduciary duty to the stock holders to turn a profit. Oh, they can do charity work as long as it doesn't dip too deeply into the profits, but really, if they were to do too much work that wasn't eventually profitable, the board would be thrown out and possibly charged criminally or have a civil suit brought against them. So, even if they wanted to, legally, in the long run, they can't help the subsistence farmers in the way the the subsistence farmers need to be helped, that is, in a way that keeps them self sufficient and independant.

I think the scientists working for these companies do good work and do that work with the best of intentions. I also think that the seeds that these companies put out do well in the right environment, but most of the areas outside of the developed countries are not that environment.

Normal people scare me.... But not as much as I scare them.

[ Parent ]
It's Funny... (4.00 / 3)
but since before the time of Albert Howard, "those traditional systems were... often ...found to be very sophisticated." And they are the ones that I'm trying to incorporate in my gardens and are advocated by folks like Eliot Coleman. Or as Wendell Berry writes "locally adapted agriculture says, what can we fit in this place that will not destroy it? Or what can nature help us to do there?"

I think we are a hell of a lot smarter than NAFTA negotiators and Monsanto and Obama and all the others in that clique.

[ Parent ]
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