The Cases of Corn and Coffee in Mexico’s Global Economy Tim Wise, GDAE, Global Development and Environment Institute

Corn, Coffee and the Environment Based on case studies by: Olivia Acuña Rodarte – “Toward an Equitable, Inclusive, and Sustainable Agriculture: Mexico’s Basic Grains Producers Unite” Josefina Aranda Bezaury – “Peasant Farmers in a Global Economy: the State Coalition of Coffee Producers of Oaxaca” In Confronting Globalization: Economic Integration and Popular Resistance in Mexico, Timothy A. Wise, Hilda Salazar, and Laura Carlsen, eds. (Kumarian Press, 2003)

Corn Trade Under NAFTA: U.S. Advantage on a Tilted Playing Field U.S. vs. Mexico in corn production: Nearly four times the acreage Over three times the yield/acre Eleven times the production Sold at less than half the price Subsidized at a far higher rate Effect of NAFTA: Accelerated tariff reduction, 3 years instead of 15 Doubling of U.S. exports to Mexico 48% drop in producer prices

U.S. Corn in Mexico

Mexico: Important Market for U.S. Corn

Trends in Mexican Agriculture Declining government credit Declining commercial credit

Trends in Mexican Agriculture: Declining Investment

Trends in Mexican Agriculture: Reduced Subsidies Source: de Ita Rubio, Ana. “Los Impactos Socioeconomicos y Ambientales de la Liberalizacion Comercial de los Granos Basicos en el Contexto del TLCAN: El Caso de Sinaloa,” February 2003, NACEC, forthcoming.

Images of maize planting

Rural Poverty in Mexico % rural pop. under poverty line 72.4 a80.1 (6) 67.7 a72.4 (5) 60.9 a67.7 (6) 55.5 a60.9 (7) 39.9 a55.5 (8) Poverty of Rural Population by States, 1990

Corn Biodiversity in Mexico

Map of Poverty Shadows Map of Biodiversity Threats to agro-biodiversity: Shift to more profitable crops Move out of agriculture Loss of traditional knowledge Migration, abandoning land

Mexican Coffee Fifth largest world producer; largest organic producer. Second largest exported commodity after oil. 3 million people depend on coffee for their livelihoods. Two-thirds are indigenous people. 92% have small landholdings (less than 5 hectares) Sustainable production techniques: Predominantly high-quality arabica beans Over 85% shade-grown, good for birds, soil, etc. Hillside coffee, key to preventing soil erosion 75% use no chemicals, 12,000 certified organic

Unsustainable Coffee Markets: Overproduction and Declining Prices minimum cost of production

Globalization of Market Failure Trade reinforces market failures in U.S. and Mexico Negative environmental externalities in U.S. corn Water pollution from nitrogen runoff, pesticides Unsustainable water use beyond viable frontier Potential GM dangers to ecosystems, human health Positive social and environmental externalities in Mexico Lower chemical use in traditional areas Stewardship of genetic diversity, habitats Employment and livelihoods for 20% of population Important foundation for cultural cohesion

Demands of Mexican Farmers’ Movement “El Campo No Aguanta Mas” 1.Moratorium on agricultural provisions of NAFTA 2.Emergency and long-term agricultural development programs 3.Viable rural credit institutions 4.Government investment in rural infrastructure and communities 5.Food safety and quality for Mexican consumers 6.Recognition of the rights of indigenous communities

Key Lessons from Case Studies 1.Important to secure more than market access and an end to agricultural subsidies in trade agreements. 2.Food security and food sovereignty must be protected; allow protection for domestic food producers. 3.Asymmetries between trading partners must be addressed. 4.Multifunctional role of agriculture must be defended; recognize social and environmental contributions. 5.Need for strong government role – credit, marketing, technical assistance, infrastructure, etc. 6.Build on the dynamism of producer organizations, those most likely to preserve the resource base.