Cover Image
close this bookCERES No. 158 March - April 1996 (FAO Ceres, 1996, 50 p.)
close this folderCerescope
View the documentTrade: Bovine hormone stunts growth of cattle trade
View the documentLocal conditions: A middle-class revolt in Mexico
View the documentAgribusiness: Milk's own bacteria works as a preservative
View the documentHome front: Rain shadows offer opportunity
View the documentCommodities: The gathering wheat crisis - Middle-East may suffer
View the documentLab results: Sweetening the bitter fruit
View the documentField findings: Farmers embrace a creeper
View the documentFAO in action

Local conditions: A middle-class revolt in Mexico

Early last June a group of Yaqui farmers overturned a truckload of seeds outside the Secretariat of Agriculture of Ciudad Obregon in the state of Sonora. They were enraged over a wheat price that was low even for that farming region of northern Mexico. At roughly the same time, desperate campesinos began occupying banks, sometimes taking employees hostage. They blocked the main highways with protests, organized mass demonstrations in front of the national Parliament and local government offices and registered by the thousands with the debtor's movement El Barzon.

El Barzon, which takes its name from the yoke ring to which a plow is attached, has 2.5 million members - from credit card holders ruined by a tenfold increase in interest rates to borrowers, who have not realized the return they expected on their investment in irrigation, machinery, fertilizers, terrains.

Members of the movement are not the poor. They include farmers trying to practice a modern, capitalist agriculture as well as urban, middle-class Mexicans. They are willing to pay their debts - but only at mutually agreed interest rates and not under what El Barzon considers usurious conditions imposed by the banks.

Why have these relatively privileged producers rejected the unrestrained neo-liberalism introduced by the North American Free Trade Agreement (NAFTA) and gone into battle against the banks' interest rates? It is because Mexican agriculture has just suffered the blow of a socio-economic earthquake intensified by a drastic devaluation of the peso in December 1994. Underneath the rubble, a whole sector of the middle class, both rural and urban, is struggling against sudden pauperization.

Forced to watch their agricultural production sink under the terrible impact of foreign imports, rural, middle-class Mexicans feel particularly offended by the concentration of wealth in the hands of a few bankers. Their methods of showing their outrage are radical. They burn tractors due to be repossessed by the banks, interrupt bank auctions and retrieve goods and properties repossessed by government officials.

Due to the combined effects of NAFTA and drought, 400 000 hectares of farmland were left unsown. Mexico had to import 4 million tons of corn in 1995, compared to 2.5 million tons in 1994. Nearly 10 per cent of the US$8 billion in loans to the agricultural sector are in default, and the total grows by 29 per cent monthly.

In the newspaper La Jornada last 29 June, Jose Rodolfo Farias Arizpe, president of the Agricultural State Council of Nuevo Leon, blamed the crisis on a model of development that provides for “commercial liberalization favoring consumption and protected importers.” He cited “a lack of definition as to the role the agricultural sector should take within the context of the national economy.”

Between 21 December 1994 and 21 April 1995, 12 000 companies went under, and the total of loans in default rose to US$20 billion - 20 per cent of the banks' capital - according to Jose Quirino Salas, president of the National Assembly of Rural Agricultural Producers, Merchants, and Service Lenders of El Barzon.

Even more disturbing is the growing concentration of wealth. Out of a national population of 92.2 million, 24 193 Mexicans control 56 per cent of bank deposits. Of the 14.2 million Mexicans who manage to save anything at all, 0.17 per cent possess 91 per cent of all fixed-term deposits.

The Mexican Catholic Church has expressed strong concern over the situation. Asserting that Mexicans' standard of living has fallen by more than 50 per cent over the past six years, the Mexican Episcopate asked U.S. bishops to lobby in Washington for a “discount” on the Mexican debt. The Catholic leadership fears that worsening unemployment and poverty will breed unrest. “A starving population is capable of trying anything,” said Bishop Jose Maria Hernandez of Nezahualcoyotl.

NAFTA was signed in January 1994, and in the autumn-winter cycle of 1994-95, production of the 10 principal grains dropped by 21.6 per cent from the previous cycle, the Secretariat of Agriculture reported. Oleaginous production doubled, mainly because farmers in Tamaulipas near the United States began producing safflower seeds instead of grains. Overall, while production of rice, beans, corn and wheat dropped from 9.5 to 7.5 million tons, oleaginous production (cotton, sesame, safflower and soy) rose from 85 to 169.5 million tons.

The government has formulated plans for the rural sector under its Procampo program. The president of the National Agricultural Council, Jorge Mazon Rubio, gave the program his qualified approval but said it contains inconsistencies in design and application. The government, he said, must find “a long-term solution for the geographic areas that are unable to convert their lands to other crops, and to put into effect legislative changes that would allow the program full guarantee of enforcement for the next 15 years.”

Modifications in the Constitution to legalize reconstitution of large landholdings known as latifundios aim, in true NAFTA spirit, to speed up the capitalization of agriculture and regulate landownership. But laws alone are not enough to stimulate investment in agriculture. The low profitability of these investments, high inflation, soaring interest rates, fluctuating exchange rates, drawbacks of liberalization, the threat posed by imports and political instability all affect commercial agriculture as well as poor and middle-class indigenous groups.

Except for large companies with the capacity to reconstitute latifundios, diversify their production, assure their own distribution or heavily influence markets, there are few who can invest today in Mexican farmland. This makes NAFTA's effect in Mexico more of a looming question mark than the hoped-for panacea.