VANCOUVER – The North American Free Trade Agreement has become a focus of farmer unrest in Mexico, sparking protests for the Mexican government to change it, or get out of the deal all together.
Yet the real culprit, according to a Mexican senator, is the country’s internal policies, which were not adjusted when NAFTA came into effect.
Jeffrey Jones, senator of the northern state of Chihuahua, told a group of Canadian farm leaders that the real problem with NAFTA is that Mexico changed too few of its internal policies to adjust to the free trade agreement between Canada, the United States and Mexico.
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He cited restrictions that allow Mexican farmers to buy fuel only from the state-owned fuel company and fertilizer from other government agencies.
But he said the biggest obstacle facing Mexican farmers is lack of credit.
“A big error was not opening up the banking industry. You cannot go through a transition if you don’t have credit.”
Jones estimated 135 large Mexican corporations have received 95 percent of the benefit from Mexico’s signing of NAFTA.
However, Jones said Mexico has natural trade advantages in labour-intensive areas like horticulture and vegetables.
But, he said, his country can’t compete in grain markets.
At the Canadian Federation of Agriculture’s annual meeting here Feb. 25-28, he spoke of a plan for dealing with American subsidies.
“If you can’t whip them, join them,” said Jones, who raises cattle and apples on his farm. His brother raises chilies and vegetables.
“We try to do as much as we can with subsidies.”
But he said even with billions of dollars in aid to Mexican farmers, a farmer growing two tonnes of corn a year is still going to be poor.
“It’s still nothing when it’s such a small volume of production,” said Jones, adding Mexican farmers receive about $4 billion of government subsidies each year.
In Chihuahua, the small acreage crop of long stem cotton is boosted from 33 cents a pound to 63 cents a pound, to give Mexican farmers the same price that American farmers receive for the crop.
But Jones said subsidies are not the way to go.
“I am convinced we must have a common interest in reducing world agricultural subsidies, especially grants that are distorting the market.”
