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Country profile - Mexico

mexico

Approximately one quarter of Mexico's 100 million people live in rural areas, and depend primarily on agriculture. Incomes in farming tend to be low, only about a third of the national average, and agriculture contributes only 5% of the national GDP. In the north and north-east, the farms are mostly large and irrigated, producing a wide variety of crops including wheat, sorghum, oilseeds and vegetables. Over half of Mexico's cropland lies in the central highlands. Here, small-scale farmers grow mostly maize and beans, their output heavily dependent on irregular rains. What irrigation there is comes from surface storage, so is also rainfall dependent. Around Mexico City farmers grow feed grains, oil seeds, fruit and vegetables, and the tropical regions of the south produce coffee, rice, sugarcane and bananas.

Some 50% of Mexico's agricultural land is held by communal farms, called ejidos. This system was set up in the early 20th century, when large private land holdings were redistributed to peasant co-operative groups, as a way of guaranteeing them livelihoods and pacifying the rural areas. However the ejidos system also had the effect of tying people to the land, since plots could not be sold or rented, and as the population grew so individual allocations shrank. Capital investments in the farms were also poor, as the communally held land could not be used as collateral for loans, and this combination of small size and low investment led inevitably to low productivity.

In the last twenty years the agricultural sector has undergone major reform. Before the 1980s Mexican governments had pursued a policy of self-sufficiency in staples, paying farmers twice the world price for their maize, and heavily subsidizing inputs such as fertilizer and irrigation. Following debt problems in the early 1980s, price supports were progressively removed, and a fifteen year transitional programme, called Procampo, has been put in place, to help staple commodity farmers to make the shift from protected to open market production. The programme gives fixed payments on a per hectare basis, in the hope that farmers will use this money to modernise their production. Farmers are free to grow alternative crops, or diversify into livestock, forestry, ecological or aquacultural activities, and still receive the direct payment. In this way the government hopes to move agriculture away from self-sufficiency towards exports. The ejidos system has also been reformed in a bid to increase farm sizes, with co-operatives now having the right to sell or rent their land.

The creation of the North American Free Trade Area in 1994 has further pushed agricultural policy towards export production. 78% of Mexico's agricultural exports now go to the United States, predominantly fruit, vegetables, live cattle and coffee. Vegetables such as Chinese eggplant and broccoli are grown in northern provinces to supply the American Asian market, and production has been boosted by support from US importers. Under its umbrella agricultural policy, called the Alliance for the Countryside, the government has targeted various technical developments, including water distribution and irrigation systems, genetic enhancement of livestock, tractor purchase and repair programmes, and hybrid seed exchange for maize growers.

However, despite the reforms, agriculture still appears to be a sector in decline. The opening of the country to foreign imports has had a devastating effect on prices; maize prices have fallen by 45% in the last three years, sparking farmer protests in Mexico City in August last year. Farm sizes remain small, with the reform of the ejidos system slow to take effect; between 1992 and 1996 only six co-operatives decided to sell their land. And, despite the per hectare payments, the hope that dryland farmers would invest in irrigation and grow labour-intensive export crops has not been fulfilled. High value fruit and vegetable production is a high risk business, requiring appropriate plant varieties, inputs of fertilizer and pesticide, as well as the capacity to cool and transport produce over long distances. Dryland farmers have had neither the capital nor the expertise to take the risk, and credit for small farmers has been cut back at the time when it has been most needed to help fund the restructuring process. Addressing the frailty of the subsistence farming economy remains of the highest national priority, and the government is clearly looking to alternative sources of income for the millions of subsistence farmers. Mexico's Secretary of Agriculture, Javier Usabiagas, sums up the situation: "A small farmer, no matter how productive, is not going to be able to make enough money to survive. That farmer is going to have to start transforming his crops to milk, meat or anything else. In essence, he is going to have to find another job. He is going to have to become a part-time farmer."

Statistical information
  • Country: Mexico
  • Capital: Mexico City
  • Area: 1,923,040 sq km
  • Population: 101,879,171 (July 2001 est.)
  • Population growth: 1.5% (2001 est.)
  • Language: Spanish, various Mayan, Nahuatl, and other regional indigenous languages
  • Ethnic groups: mestizo (Amerindian-Spanish) 60%, Amerindian or predominantly Amerindian 30%, white 9%, other 1%
  • Labour force: agriculture 20%, industry 24%, services 56% (1998)
  • GDP: $915 billion (2000 est.)
  • GDP per capita: $9,100 (2000 est.)
  • GDP composition by sector: agriculture 5%; industry: 27%; services: 68% (2000)
  • Population below poverty line: 27% (1998 est.)
  • Major industries: food and beverages, tobacco, chemicals, iron and steel, petroleum, mining, textiles, clothing, motor vehicles, consumer durables, tourism
  • Land use: arable land 12%; permanent crops 1%; permanent pastures 39%; forests and woodland: 26%; other 22% (1993 est.)
  • Irrigated land: 61,000 sq km (1993 est.)
  • Natural resources: petroleum, silver, copper, gold, lead, zinc, natural gas, timber
  • Agricultural products: corn, wheat, soybeans, rice, beans, cotton, coffee, fruit, tomatoes; beef, poultry, dairy products; wood products
  • Export commodities: manufactured goods, oil and oil products, silver, fruits, vegetables, coffee, cotton
  • Major Export Partners: US 88.6%, Canada 2%, Spain 0.9%, Germany 0.9%, Japan 0.6%, UK 0.6%, Netherlands Antilles 0.5%, Switzerland 0.3% Venezuela 0.3%, Chile 0.3% (2000 est.)

Date published: May 2002

 

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