The victory of Andrés Manuel López Obrador and his Morena party in Sunday’s Mexican elections has stunned international observers. The center-left insurgency received an estimated double the votes of its nearest rival in a multi-party presidential race, winning more than 50 percent of the vote, several important governorships including the first woman to run Mexico City, and an absolute majority in the House of Representatives and the Senate. However the final tally ends up, López Obrador has a resounding mandate for change.
Many observers have interpreted the results as a vote against rampant corruption; given the pervasive graft and influence-peddling in Mexico, López Obrador’s clean, austere reputation was certainly a factor for voters. But economic factors also motivated many voters, especially farmers. The majority of Mexicans have been left behind in a failing strategy to hitch the country’s fortunes to open trade with the United States under the North American Free Trade Agreement (NAFTA).
As one recent report summarized, “Poverty is worse than a quarter century ago, real wages are lower than in 1980, inequality is worsening, and Mexico ranks 18th of 20 Latin American countries in terms of income growth per person in 21st century.” It is hard to imagine worse outcomes in a country with privileged and historic access to the largest capital and consumer markets in the world—the U.S.
Among those rejoicing now over López Obrador’s victory are Mexico’s farmers, who have been largely abandoned by the government while unregulated imports of below-cost maize, wheat, pork, and other agricultural goods flooded Mexican markets under NAFTA. (See my report.) After the agreement took effect in 1994, maize farmers endured a 400-percent increase in imports of U.S. maize priced 19-percent below its costs of production, resulting in a punishing 66-percent drop in producer prices. Producers of other farm goods faced similar pressures, forcing many to become migrant workers in the strawberry fields of multinational growers or migrate to the U.S. without documentation.
Many placed their faith in López Obrador after he endorsed the Plan de Ayala 2.0, a radical platform put forward in early 2018 by a revitalized farmers’ movement. Echoing the platform, López Obrador on the campaign trail called for a return to self-sufficiency in maize and other basic food crops, a reduction in import dependence on the U.S., a shift away from chemical-intensive industrial agriculture and genetically modified crops toward more sustainable practices, and a decisive reorientation of government farm subsidies toward small and medium-scale producers. No wonder rural communities turned out in droves for Morena.
What Farmers Expect
A mobilized farmers’ movement will expect and demand action on key planks in their platform to revitalize rural Mexico. Soon after López Obrador takes office on December 1, they expect quick action on several key issues:
- Food self-sufficiency. López Obrador has promised to have farm subsidies directed to small and medium-scale farmers (those with fewer than 50 acres), a radical shift from programs that have overwhelmingly favored large farms. He can make good on that promise by shifting ProAgro subsidy payments to those farmers and making credit and crop insurance available to them.
- Support prices for key crops. López Obrador has promised minimum support prices for key food crops, to give farmers stable and remunerative prices so they can invest in their farms and raise productivity. He can act immediately on that promise.
- Expanding public procurement. One proven way to support local farmers and provide healthier foods is to expand public purchases for schools and other public institutions.
- Redirecting funds to support native maize farmers. The MasAgro Program, a government-funded effort to increase small-scale maize and wheat production, is ineffective and seeks to replace native maize varieties with commercial seeds on some 12 million acres of maize land. That is at odds with López Obrador’s pledge to support native maize and tortillas. Reforming MasAgro would be a good place to start.
- Investing in national seed research and production. López Obrador can address transnational monopolization of Mexican seed markets by restoring the nation’s capacity to breed and produce its own seeds. Successive neoliberal governments have reduced support for INIFAP, the national agricultural research institute.
- Withdrawing Mexican government support for genetically modified (GM) maize. The current government has supported Monsanto and other seed companies in their campaign to grow GM maize in Mexico. Citizen groups and the courts have prevented the controversial move citing threats to Mexico’s native maize varieties. (See my earlier article.) López Obrador can end the controversy by withdrawing government approval of the companies’ permits.
In the campaign, López Obrador was careful, never threatening to pull out of NAFTA and vowing to continue negotiations to improve the current agreement. Since his election, he has vowed to stay the course on negotiations. That won’t sit well with his farmer base. Massive, unregulated imports of cheap U.S. commodities, dumped on the Mexican market at prices below the costs of production, are incompatible with López Obrador’s commitments to food self-sufficiency, food sovereignty, and investments in small farms and native crops. There are a number of measures he can take immediately:
- Slap retaliatory tariffs on maize and other key food crops. López Obrador can announce his intentions to include maize among the products on which Mexico retaliates after President Trump’s unilateral duties on aluminum, steel, and perhaps cars. That would send a strong message that he stands with his maize farmers, and it would give producers relief from dumping-level prices while the government puts in place its full policies for food and agriculture.
- Impose countervailing duties for U.S. dumping. Mexico can justify duties on U.S. crops dumped at below the cost of production. Maize has been coming into Mexico at 12-percent below production costs, justifying a commensurate tariff on imported maize.
- Regulate GM maize imports under the Cartagena Protocol. Mexico can more closely regulate imports of U.S. maize, which is almost all GM, by invoking the Cartagena Protocol on Biosafety, which allows importers to require strict labeling and other control measures.
Of course, López Obrador can also call President Trump’s bluff on ending NAFTA. The farmers’ movement has called for Mexico to withdraw from the agreement unless there are meaningful improvements, and not the kind Trump wants. Mexico may well have less to lose from such a move than the U.S. Mexican farmers certainly wouldn’t shed many tears if their new president could once again protect them from dumped U.S. exports.
For once, Mexican farmers have a lot to look forward to.
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Source: Agric Investment Opportunities