NEW ORLEANS, La. — Mexico doesn’t want to be a referee in the wheat trade fight between Canada and the U.S.
While the two wheat exporters accuse each other of using subsidies in the battle over market share south of the Rio Grande, Mexican importers can watch and enjoy the low prices.
But Mexican government officials said last week they don’t want grain at cut-rate prices
“We oppose all kinds of subsidies, especially those directly on exports, because they distort international trade,” said Guillermo Ramos, agricultural officer with the Mexican embassy in Washington.
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It’s one thing for governments to subsidize their farmers’ income directly, he said in an interview, adding that Mexico has itself recently introduced new support programs.
But when export subsidies drive down international markets for wheat or feed grains or oilseeds, that hurts Mexican farmers by reducing the prices they get for their produce.
The U.S. is using subsidies under the Export Enhancement Program to sell wheat to Mexico, arguing Canada was stealing away its traditional market share with the aid of transportation subsidies and predatory pricing.
Known for quality
Canadian Wheat Board officials have said the reason sales have increased in recent years is that Mexico’s millers like the quality and consistency of Canadian wheat and the advantages of dealing with a single-desk seller.
Ramos wouldn’t pass judgment on the conflicting claims about which country started it or which is the worst subsidizer: “The Canadians are subsidizing and of course we know about the EEP program.”
Asked if either country can rightfully claim Mexico as a traditional market, he would say only that for many years the U.S. held 75 percent of the market and in recent years Canada has 60 to 70 percent.
He added that since disbanding Mexico’s central grain importing agency CONASUPO several years ago, the government no longer has any influence over wheat imports.
“The government doesn’t have any participation in the decisions of the private millers. The people in the industry buy wherever they choose at the cheapest price, of course.”
Manuel Rodriguez, director general of Mexico’s agriculture secretariat, said there is no question that the country will be buying more wheat in the coming years. The population of 89 million will reach 125 million by 2010. And economic growth is forecast to be six percent annually.
He said recent changes in farm programs should encourage the production of commodities in which Mexico has a comparative advantage and can export in the North American free trade zone. That will probably mean devoting more land to the production of fruits and vegetables for export and importing cereal grains.
At the end of the three-day meeting, NAWG’s board of directors passed a resolution saying the organization supports the free trade of wheat in North America, “and will continue to push for fair market pricing in the U.S. and Mexico through industry representation on the NAFTA working groups and the elimination of Canadian transportation subsidies to both the U.S. and Canada.”
