1. Financing the Agriculture Sector in Mèxico. April 2003

2. Structural Problems and Trends in the Mexican Agriculture Sector:

3. Rural Family Income % Structure From: De Jainvry, Alain (1995), in Casco, Andrés. La Política Sectorial Agropecuaria en México: Balance de una Década. IICA.México D.F. 2000

4. Trade balance of agriculture

5. Mexican exports of vegetables Volume (Tons) and Value (thousand dollars)

6. Evolution of primary production value versus industry value* Food, driks, tobaco and wood industryINEGI Thousand million Pesos (constant value 1993)

7. Profitability and Risks.

8. From: Banco de México, Bank of Canada and Economic Research Service, USDA. Real Interest Rate in Agriculture Sector

9. Item Net Profit (anual mean) Probability of net profit: NegativePositive>4.1% 1/ >8.7% 2/ Promissory note 28 days - 1.3459.940.115.873.55 Total Agric.0.6848.7851.2243.9836.42 Agriculture-0.0050.0149.9942.7335.20 Livestock-2.9354.7545.2538.9332.45 Grains-0.2150.3949.6142.3134.74 Fruits2.8346.5553.4548.4843.15 Industry3.3739.6760.3347.7834.56 CETES+2 pp8.699.5690.4475.0950.00 Probability of Net Profit Period 1996 – 2002 1/ Promissory note 28 days mean + standard deviation. 2/ (CETES + 2 pp) mean + standard deviation.

10. ProductProductivity(Plus) Agriculture8.70 Livestock11.95 Grains8.93 Fruit5.72 Vegetables6.76 Sugar cane14.22 Lumber3.05 Fishery2.11 To pay a loan at cetes + 2 it´s requiered: Depending on which Commodity

11. Rendimiento Fuente: Elaborado con información de Banxico. Precios Riesgo A B C D Nuez Bovino Caprino Manzana Arroz Soya Ovino Copra Frijol C Azúcar Cebada Alfalfa Porcino Maíz Sorgo Avena Forrajera Trigo Cacahuate Uva Huevo Durazno Cacao Ajo Lechuga Plátano Zanahoria Naranja Guayaba Mango Papaya Café Aguacate Nopales Tomate Verde Chile Seco Garbanzo Elote Papa Piña Fresa Sandía Pollo Melón Algodón Col Pepino Toronja Cebolla Limón Chícharo Ejotes Chile Verde Calabacita Jitomate

12. Lending

13. Bank lending and other alternatives of credit for Mexican Primary Sector. (Credit balance in billions of mexican pesos at the last day of each year) *Non Bank Financial Institutions, Financial lease, liabilities with national and international suppliers, promissory notes From: Banco de México

14. Loans Granted to the Mexican Agriculture Sector* (Credit balance in billions of mexican pesos at the last day of each year) *Agriculture, Livestock, Forestry and Fishery From: Banco de México

15. Mexican Agriculture Sector *: Default portfolio / Total of Mexican Banks. % * Agriculture, Livestock, Forestry and Fishery From: Banco de México

16. Strategy

17. California-Arizona Texas Florida México D.F. New economic order

18. Consumer Farms and Industry Suppliers The new value net From: Bovet, David y Joseph, Martha. Value Nets. Breaking the Supply Chain to Unlock Hidden Profits. Wiley, 2000. Changing from Production Chain to Value Net: from farmer to industry supplier

19. VALUE NET COMMERCE AGRO- INDUSTRY LOGISTIC Information Knownledge Action Goods and services Packing Transformation Row Materials CONSUMER PRODUCER - SUPPLIER

20. PARTNER SUPPLIER PRODUCER

21. Drive Demand Fortify Credit Supply Strengthen the development of rural markets Study of Value Chains. Technological Advicing. Training. Technological transference Financing Instruments and Services Promotion Guarantees. Technological Promotion Financing Promotion

22. Thanks Contact information: Guillermo Sánchez gsanchez@correo.fira.gob.mx