Copyright 2002 Globe Newspaper Company The Boston
Globe
November 30, 2002, Saturday ,THIRD
EDITION
SECTION: BUSINESS; Pg. C1
LENGTH: 1262 words
HEADLINE:
PLOWED UNDER BY NAFTA MEXICAN FARMERS SAY THEY WILL GET BURIED BY CHEAPER US
GOODS
BYLINE: By Marion Lloyd, Globe
Correspondent
BODY: QUERETARO,
Mexico - NAFTA may have been a boon for Mexican industry, but it has been a bust
for millions of Mexican farmers who have seen their hopes of competing dwindle
with every truckload of cheap American corn.
And things
are only going to get harder for at least 15 million Mexicans who survive by
working the land.
On Jan. 1, most
remaining tariffs on agricultural goods will be lifted under the rules of the
nine-year-old North American Free Trade Agreement. In the most extreme case,
taxes on imported chicken will fall from 45 percent to zero. But even for
sectors in which the duty is a nominal 2 percent, such as on pork products,
farmers fear the reduction to zero tariffs will deal the final blow to their
ailing industries.
"We're gone, dead," said Carl
Heinz, a Mexican hog farmer making plans to sell the last of the 260 sows from
his farm on the edge of this Spanish colonial city, 150 miles northwest of
Mexico City.
Heinz blamed lower operating costs for US
farmers and lax enforcement by Mexican officials of quotas on US meat imports
for the dire straits of Mexico's 30,000 hog farmers.
Mexico's pork industry has lost 30 percent of its revenues amid the
flood of cheap pork products hitting the Mexican market since NAFTA took effect
Jan. 1, 1994, according to the Mexican Confederation of Pork Growers. Beef
farmers, who were subject to a faster reduction in tariffs, have reported a 40
percent drop in revenue since NAFTA took effect, and chicken farmers claim
similar losses.
Much of the farmers' ire is directed
toward the Farm Bill signed by President Bush in May, which
will pump $190 billion into US agriculture over the next 10 years. Critics say
the measure gives US farmers an unfair advantage over their Mexican
counterparts.
"We recognize that this country has very
little resources," Heinz said. "But without money, it's going to be very hard to
compete with a country that has a lot of money."
Mexican President Vicente Fox is not blind to the plight of the
agricultural sector, which employs an estimated 8 million Mexicans. During a
trade summit in Mexico in October he called on President Bush to reduce
subsidies for agriculture or face a potential increase in illegal immigration
from Mexico as desperate farmers head north in search of jobs.
Then, on Nov. 18, Fox announced a $10.6 billion farm program for the
2003 budget year that he said would increase financial aid to farmers as well as
boost enforcement at the border and reduce dumping of underpriced US
products.
"My administration is protecting our farmers,
helping them become more efficient and ensuring that they have equal conditions
- and, I stress, equal conditions - as those of our major competitors," Fox said
at a ceremony announcing the program, which must be approved by Mexico's
Congress.
Farm union leaders dismissed the bailout as
too little, too late. They want the government to go further and renegotiate
NAFTA to exclude agriculture, or, at the least, persuade the US government to
delay the end of tariffs by three years.
Last week, the
union led a protest outside the Senate in which several hundred farmers piled
sacks of beans and sorghum across the entrance to keep legislators from
entering. A day earlier, 2,000 farmers demanding compensation for losses
incurred during a recent drought blocked the federal highway between Mexico City
and nearby Cuernavaca for more than a day. The standoff ended after the
government agreed to pay the farmers $80 per acre of lost crops.
The farmers are unlikely to get significant help on the NAFTA issue,
however. Mexican officials fear attempts to fiddle with the rules will cause
Washington to retaliate by slapping tariffs on Mexican tomatoes and other key
export crops.
That concern was reinforced Nov. 21 when
US undersecretary for agriculture J. B. Penn told Mexican reporters, "we will
not make concessions" on NAFTA.
Indeed, US officials
have sought to appear sympathetic, in part because they need Mexico's support
for a Free Trade Area of the Americas as a counterbalance to the European
Union.
"NAFTA has benefited Mexico. [But] there are
problems, I know," US Secretary of State Colin Powell told reporters during a
visit to Mexico this week. "I know there are particular problems in the
agricultural sector. And they are going to become more difficult in 2003. And
we're very sensitive to that."
While agricultural
specialists agree the Mexican countryside is in serious trouble, they differ on
the causes.
"Blaming NAFTA for the problems of
agriculture in Mexico is a grave mistake, because it distracts from finding
solutions," said Luis de la Calle, a former Mexican deputy trade minister who
was instrumental in the 1993 NAFTA talks.
De la Calle
said the real problem was the reluctance of many Mexican farmers to adapt to the
new open market and move into more profitable, labor-intensive crops such as
tomatoes and eggplants, instead of corn and beans. "The businesses that were
able to invest in modernizing themselves are thriving," he said, noting that
Mexico's agricultural exports have gone up significantly under NAFTA, even if
profits have been concentrated among a minority of farmers.
In the case of pork, he said the industry's inability to protect itself
against animal diseases was more to blame for its slumping revenue than
competition from US imports. Heinz, the Queretaro pig farmer, is an example of
how poor sanitation controls can hurt profits. His pigs suffer from porcine
reproductive and respiratory syndrome, a disease that stunts their growth while
prohibiting their sale on global markets.
The disease
problem is so widespread that currently only two Mexican states, Sonora and
Yucatan, are allowed to export pork, and then only to Japan.
The failure of Mexican farmers to get up to speed on NAFTA should come
as little surprise, analysts said. In fact, some said, Mexico's NAFTA
negotiators intended for the farming sector to shrink as millions of Mexicans
left the farms for manufacturing jobs in the cities.
"Canada voted to have a chunk of agriculture excluded. But in Mexico,
they didn't think it was in Mexico's economic interests," said Sydney Weintraub,
chief economic analyst at the Center for Strategic and International Studies in
Washington, D.C. "Their hope was that a good many of people who work on farms,
who barely survive anyhow . . . would have been encouraged to emigrate to the
cities and earn more and do better."
Since NAFTA,
hundreds of thousands of Mexicans have left the farms for higher-paying jobs in
the clothing and electronics factories that have emerged along Mexico's northern
border. And while jobs in those factories have declined recently due to
increased competition from China, analysts said the trend in migration to the
cities will probably continue as Mexico moves toward a more industrialized
economy.
"We have a state in the United States, New
Jersey, that's called the Garden State because it used to be where fruit and
vegetables were grown for New York and Philadelphia," said Phil Martin, a labor
specialist at the University of California at Davis. "Today, they're grown in
California and Florida. That's a natural part of economic evolution."
Such arguments are little consolation for Mexican farmers
on the verge of economic collapse.
"I've done this all
my life. I studied to have a farm like this," said Heinz, who has a master's
degree in sciences and animal production from Texas A&M University. "Now I'm
being told that I should find something new."
GRAPHIC: PHOTO, Mexican pig farmer Carl Heinz, below, plans to
sell his stock, saying he can't compete with US producers. / GLOBE PHOTOS /
MARION LLOYD
Document 36 of 463. 