Biotechnology and the Future of Agrcultural Development in Mexico

Michelle Chauvet

Department of Sociology, Universidad Autónoma Metropolitana, Mexico D.F., Mexico

Introduction

The applications of biotechnology that have been made to date in agriculture and the environment have clearly been more limited than predictions during the 1970s would have led us to expect. The reasons underlying this fact have to do with the accelerating pace of change in the world.

New technologies lie at the heart of change everywhere, and their impact is felt in economic fundamentals as much as in everyday life. In developing a theoretical and methodological framework for understanding the scope of these effects, we must include a study of observable trends that will let us make a realistic assessment of progress in biotechnology.

Biotechnology and Basic World Trends

The changes now occurring in the world are being shaped by the process of globalization. This term, however, is subject to various interpretations in the debate about how best to define contemporary reality. Are we dealing with a new and unique phenomenon, or is it merely a stage or phase through which the world economy is passing? We hear talk of globalization from a wide range of people, in the media, in the academic world, and in international organizations, but are they all talking about the same thing?

It is beyond the scope of this paper to attempt to interpret these changes and their relationship to developing countries' applications of biotechnology in agriculture and the environment. My purpose is merely to stress the importance of globalization as a factor in any theoretical and methodological framework for assessing the socioeconomic impact of biotechnology, and to propose a few analytical guidelines that should be kept in mind.

Globalization is said to be leading to homogenization. In effect, the influence of the stronger economies in terms of standardizing productive processes and the workings of markets is seen as a linear process that embraces all nations as a group. Yet interdependence among countries is asymmetrical, and this in turn leads to heterogeneous forms and responses in the globalization process. Thus, progress in biotechnology has not yet been generalized in the world as a whole.

Another aspect of globalization concerns the new areas in which governments are expected to be involved. According to Alejandro Dabat, in countries that have completed the process of privatization "there is a broad consensus that the old functions of promoting economic growth through state ownership of large industrial complexes in order to subsidize production and the domestic market should now be replaced by policies favouring the development of advanced technologies, supporting international competitiveness, ensuring sustainable development, and dealing with the major social problems that are caused by accelerating technological change and international competition" (Dabat 1993, p. 25).

If this view is accurate, we can expect to see a wider use of biotechnology in agriculture and the environment. As the century draws to a close, we are in a period of transition, where, amid constant questioning and redefining, we find both resistance to and pressure for change.

In summary, for purposes of our work, we need to abandon the deterministic view that puts too much weight on the agroindustrial might of the "North" and underestimates the room for joint action by producers in countries of the "South" (Llambi 1994). We must look at those local and regional processes that seem to run counter to the global trend and be ready to monitor changes in productive processes that may modify the impacts of biotechnology as observed to date.

Methodological Approaches to Research on the Socioeconomic Impacts of Agricultural Biotechnology

There is much debate about the progress that has been achieved in biotechnology, as to whether it represents a rupture or continuity in the technology patterns that have been applied to agriculture. We reviewed this debate in an earlier paper. It is clear that biotechnology has been adopted as a new paradigm for agriculture by the scientific community, but not by the agricultural producers themselves.

We are now in a phase of transition from an old pattern of agricultural development to a new one that will have to take account of technology, among other factors. Technology by itself will not define the new pattern, but it will lead to a redefinition of the role of agriculture in modern society (Casas and Chauvet 1994).

In this time of transition, some biotechnology applications will tend to intensify the existing pattern of agricultural production, which Junne (1992) calls the "neo-Fordist" pattern, and is based on the creation of hybrids and the massive use of fertilizers, with serious consequences for the environment. There are other biotechnologies, however, which, if their use becomes general, will tend to shape a new agricultural pattern, ("post-Fordist," as Junne calls it), where productivity improvements will be based on reproductively stable varieties that are not dependent on costly inputs and that should, in our view, make it possible for agriculture to become more sustainable.

In the paper cited, we concluded that "as a general argument, biotechnology offers some interesting possibilities for developing countries. Nevertheless, its degree of relevance for the Third World will depend on many factors, primarily the identification of specific problems that call for these technologies, the types of natural resources available, as well as the nature of the existing scientific and technical infrastructure and the existence of a policy framework that can produce a biotechnology strategy" (Casas and Chauvet 1994, p.12).

Another general aspect that must be included in a theoretical and methodological framework is the discrepancy of interests, both those of scientists and those of markets and consumers, between industrialized and developing countries. In the case of foodstuffs, for example, on the one hand, people in developed countries worry about the risks they may be exposed to in consuming agricultural products that incorporate biotechnology. In less well-endowed countries, on the other hand, the main concern for much of the population is not the quality of food or the level of toxicity it may contain, but simply to have access to food at all.

Specific Methodologies

Although there has been little work done on the socioeconomic impact of applying biotechnology to agriculture and the environment, there are a few studies available on economic, social, and political aspects that point to a certain methodological convergence as to the actual and potential impacts. (For example, Casas and Chauvet (1994) provides a partial compilation of works that make reference to each of these aspects.) The evidence presented following refers to actual impacts that have been studied with respect to Mexican agriculture.

Methodological Criteria

Background Research: The initial studies of the socioeconomic impact of biotechnology on Mexican agriculture were done using three distinct methodological approaches. In the first, the development of agricultural biotechnology at the world level was contrasted with its progress to date in Mexico. The second approach attempted to assess the potential benefits that biotechnology might bring to agricultural products in which Mexico has a production deficit. Studies covered sorghum, soya, maize, and milk, with a focus on technological components. Finally, an analytical outlook for biotechnology in sugar, yucca, and forest products was prepared during the 1980s, when biotechnology applications were just beginning (Arroyo et al. 1989a,b).

Studies by Product and Region: Studies by product and region have been conducted to assess the impacts of biotechnology in those agricultural processes where it has been applied. This approach moves away from generalizations about the socioeconomic impact of agricultural biotechnology and allows us to determine whether such effects may be concentrated in certain regions. In Mexico, as we know, the same product can be produced using widely varying methods.

In our studies of this aspect, we began with an analysis of the production process that existed before the introduction of biotechnology, and then assessed the changes that occurred as a result of its introduction. Case studies were conducted for livestock feed and breeding and flower growing. Research into potato cultivation is currently under way.

In our research, we examined both quantitative aspects related to increased yields, cost reduction, etc., and qualitative ones arising from cultural considerations, such as quality of life and customs, traditions, and popular preferences. We also distinguished between direct and indirect effects and anticipated and unanticipated ones.

Results from Case Studies

Next, we discuss results of the analysis of the actual impacts of bio- technology in the foregoing cases made during research done by the Sociology Department at the Universidad Autonoma Metropolitana in Azcapotzalco. (The research team consisted of Michelle Chauvet, Yolanda Massieu, Yolanda Castañeda, and Rosa Elvia Barajas.)

Biotechnology and Livestock

The livestock industry now extends over 65% of Mexico's territory, if we include pasture lands as well as land used for feed crops. The basic variables to be considered in cattle production are feed, health, and management. Practices with respect to these three parameters vary between producers, even in the same region, with a general bias toward lower levels of technology (Chauvet 1993).

Cattle raising for beef is based on natural pasturage, which in turn depends on the rain cycle. For this reason, the dominant pattern is extensive/extractive. There is a relatively small sector in the arid part of the country that is based on irrigation and grass cultivation, and another in the tropic zones where pulse has been planted for grazing, but these account for only 8.2% of the total land area devoted to cattle production (Chauvet 1993) .

Technical assistance is generally limited to animal health aspects, and even here there is only minimal attention paid to disease prevention through the use of vaccines. It has been left to the public institutions to undertake the widespread campaigns required against the more contagious diseases. There is also little effort at genetic improvement, and natural mating is still the most common method of reproduction.

In terms of livestock management, each ranch worker makes his own approach, on the basis of family traditions, and with little other knowledge or training. In general, facilities are simple and crude, with little investment in machinery or buildings.

This is the pattern found everywhere in the cattle industry, in breeding, fattening, and dual-purpose production (meat and milk). The dry and semi-arid regions specialize in raising yearling calves for export, whereas the tropic zone produces fattened cattle for the domestic market. Milk production is located mainly in the temperate zone in the middle of the country.

In intensive livestock production, each productive variable is controlled. Feed is kept balanced and uniform throughout the year, and the animals are protected from diseases. Reproduction is not left to chance - artificial insemination is used to maintain or improve the genetic quality of the herd.

The stabling of dairy herds, the use of feedlots, and commercial poultry and pork production fall under this classification. Here, the technological level is similar to that of livestock raising in industrialized countries and, in fact, production models have typically been imported as a package from those countries.

These are the livestock sectors where biotechnology processes have been applied. Three of these are discussed in the following. The first is Biofermel, a composite cattle feed made from agricultural by-products. (Biofermel is a fermentation of molasses (60%), fibre (corn stubble, 20%), cattle manure (5%), urea (2%), and water (13%), which can be substituted for 50% of feed supplements for dairy cattle, and up to 70% for fattening beef cattle (Castañeda 1991).) Its economic importance is that it can reduce feed costs by 50%. This technological innovation was developed at the Biomedical Research Institute of the National University of Mexico (UNAM/Instituto de Investigaciones Biomédicas, Universidad Nacional Autónoma de México) with production and marketing support from the Centre for Technological Innovation (CIT/Centro de Innovación Tecnológica), also at UNAM. Two production plants were built in the country's central agricultural region. Local farmers benefited by being able to sell their agricultural by-products, and nearby sugar mills provided the molasses (Castañeda 1991).

Despite the obvious potential of this new feed source for cattle, its use has not spread very widely among producers. This is mainly because of problems with marketing and distribution of the product to potential customers.

Other biotechnology products in use have come from laboratories abroad. These include probiotics for livestock and fodder crops, from Alltech Inc., and Monsanto's somatotropin (a growth hormone to stimulate milk production).

The probiotics in greatest use are those designed for feeding programs that provide for better assimilation of nutrients, and microorganisms that promote fermentation in silage and so improve its conservation. We studied the impact of these biotechnology products on milk and poultry production in the area around Aguascalientes. We found that producers who make use of these products have at least an average level of technological knowledge and the financial capacity to purchase them.

The study concluded that the use of biotechnology has not become widespread, because livestock farmers have tended to resist change. From their viewpoint, they have seen improvements in their revenues over the past 10 years, based solely on existing farming practices, and without any encouragement from government economic policies in the sector, and thus they see no need to modify their production methods. The demonstration effect is gradually leading them to introduce changes, but if their efforts are not reflected in government pricing policies, the process will come to a halt (Chauvet et al. 1992).

Somatotropin has been one of the most controversial biotechnology products. Because it is prohibited in the United States and Europe, Monsanto has been seeking other markets. Mexico offered favourable conditions, because it has a severe deficit in milk production, and holds the dubious honour of being the world's largest importer of milk powder. The product thus began to be used in certain Mexican dairying areas in 1990. In terms of its socioeconomic impact, the hormone has an immediate effect in raising yields, but such an intense rate of production exhausts the cows more quickly, necessitating higher investments that cannot, as noted earlier, be recouped at current market prices.

The final area is that of embryo transplants, a method that has been used only sporadically and is still far from being common practice. Technology levels remain low, and the essential prior step of artificial insemination is not yet widely practiced. An official campaign was launched to promote embryo transplants as a way to genetic improvement in the dairy sector, but it has not succeeded. In conclusion, biotechnology does offer possibilities for development in the livestock sector, but the Mexican industry is not yet in a position, economically or technologically, to take advantage of them.

It should be pointed out that in the case of somatotropin (rbST), the real impact occurred under conditions that were hardly anticipated. Here was an example of advanced biotechnology, developed in the First World and expected to benefit producers in industrialized countries in the first instance, being adopted by a traditionally structured cattle industry in a developing country. This demonstrates that we must be open and flexible, not linear, in our analysis of the impact of biotechnology - in this particular case, it was economic and political conditions that determined the pattern of application of somatotropin around the world.

Biotechnology and Flower Growing

The second case study on the actual impact of biotechnology concerned the intensive cultivation of flowers. The variables studied here were employment, the labour market and the monopoly of advanced technology (Massieu 1994).

Although Holland is the reigning power in the international flower market, Colombia has achieved a position of undoubted importance since the 1970s. It was during those years that Mexican flowers began to penetrate the United States market. Starting from a small base, the Mexican industry has since moved into the more systematic and intensive production of flowers.

Yolanda Massieu's field research focused on a comparison between traditional flower growing and that conducted in greenhouses, in terms of the variables mentioned earlier. Her work examined both state-owned and private enterprises. It showed the undeniable link between the use of genetically cloned materials and the increase in productivity of both land and labour. Greenhouse production of this type of plant is greater and more uniform than traditional, open-air cultivation, although a greenhouse implies a much higher level of investment.

As regards the effect on employment, state-owned greenhouses are relatively inefficient: in the State of Morelos, (greenhouse) production for export generates more employment than (traditional) production for the domestic market. In the State of Mexico, however, intensive private greenhouse cultivation reduces the number of workdays required, in comparison with traditional flower growing (respectively, 8 and 16 days per hectare). Nevertheless, the intensive growing of flowers in greenhouses, using biotechnology in the form of cloned plant materials, absorbs considerably more labour than do other agricultural crops: 2,975 workdays per year per hectare are needed for a greenhouse, whereas sorghum, for example, uses only 10 workdays per hectare during the whole season.

In terms of monopoly power over advanced technology, the cloned materials used in greenhouses originate from multinational Dutch, U.S., and French firms, and they are expensive, thanks to the high royalties these firms charge for use of their patented products. This leads to a paradoxical situation in a country like Mexico, where flower growing dates back to pre-Hispanic times, and where there is a considerable base of traditional technology and a great range of indigenous varieties, completely unpatented, that have never been utilized for intensive horticulture. One point that stands out is the low cost of agricultural labour in Mexico - were it not so, flower growers would never be able to afford these costly advanced technologies.

In conclusion, we can discern both positive and negative impacts. The former would include significant job creation, in the midst of the widespread unemployment that afflicts Mexican agriculture. This impact in effect contradicts the deterministic "law" that holds that advanced technology always displaces labour. A negative impact, however, lies in the high production costs occasioned by the monopolistic position of the suppliers of the technology - it is only the miserable wages paid to agricultural day labourers that makes it possible to afford these costs. One reason why it is possible to pay such low wages is that the work force is predominantly female, a feature common in rural Mexico.

Moreover, the high initial investment needed to launch intensive flower cultivation has prevented this technology from being widely used. To date, only a restricted number of producers have been able to take advantage of the technology and the competitive advantage it gives them over traditional producers in the domestic market.

Biotechnology in Sugarcane and Potato Cultivation

The research team is conducting another study to assess various biotechnology-based alternatives for overcoming the current crisis in the sugar industry (Castañeda 1991). We selected this as a further case study because of the importance of the crop in Mexico and the changes that have occurred in it as a result of the move to privatization. Because the study is not yet completed, we will mention only a few features relating to our initial remarks about the phenomenon of globalization.

When the sugar industry was being privatized, some of the buyers of the sugar mills were companies producing soft drinks. Under the North American Free Trade Agreement (NAFTA) among Mexico, the United States, and Canada, sugar is one of the products that still retains tariff protection. Nevertheless, 5 months after NAFTA entered into force, the United States submitted a list of 150 products on which it wanted Mexico to accelerate tariff reduction, among them fructose syrups and sugar. Casas and Chauvet (1994) report that:

Behind this request there is a complex network of interests, which we shall merely cite without going into detail. The list lets us conclude, however, that while there may be no such thing as technological determinism (though we must take technological innovation into account in socioeconomic analysis), there are political and social forces that do indeed determine events.

The actors involved include:

1. Sugar producers in Florida, who are eager to export sugar to Mexico.

2. Sugar producers in Mexico, who would be out of business without the current tariff structure.

3. Corn producers in the United States, who supply the manufacturers of fructose.

4. 4US manufacturers of fructose, who are also interested in penetrating the Mexican market.

5. The two big soft drink bottlers, Coca Cola and Pepsi Cola, who have bought some of the Mexican sugar mills from state ownership.

6. Mexican licensees of those two bottlers, who missed out on buying sugar mills, and who now object to paying the prices set by the "Sugar Exchange" [Bolsa Azucarera] that has been formed by the owners of the integrated mills.

7. [Mexican] sugar manufacturers, who argue that continued protection is needed to allow them to modernize their mills, and who claim the right to such compensation for their investment.

8. The Mexican government, which seeks to protect Mexican agro-industry as the mainstay of millions of peasants, and which considers it inconsistent to undermine the integration of the sugar industry with the soft drink industry, which the government has been promoting.

9. US trade officials, who are pressing for changes to the agreed reduction schedules in favour of US farmers and manufacturers.

Yet another addition to this list should be the sugar industry labour union. The tariff reduction schedules have not been changed, but the conflict of interests remains.

In January, 1995, we undertook a study of the effects of biotechnology on potato growing. The study is being funded with a small grant from Consejo Nacional de Desarrollo (CONACYT/National Development Council), and Dr Luis Lago of the Cuban Centre for Genetic Engineering and Biotechnology is also collaborating with a view to making a comparative analysis of the subject between the two countries.

Conclusions

To end this review of some of the real impacts of the use of biotechnology in Mexican agriculture, I shall go back to the question posed at the outset: do the biotechnologies applied to date represent a help or a hindrance for the future of Mexican agriculture? The answer clearly cannot be categorical. In some aspects there has been progress, whereas in others, there has been stagnation or regression, which has been caused not by biotechnology itself, but by the circumstances in which Mexican agriculture has found itself immersed.

The rural economy of Mexico has been excluded from national priorities over the last dozen years. Development strategy has been based on leaving the course of the economy to the play of market forces, and the State has withdrawn from any active role in many sectors of manufacturing, finance and services. Under this model, the agricultural sector has lost its vital place as a source of domestic supply, and policy has turned increasingly to the notion of comparative advantage as a way of meeting the country's needs in food and raw materials. The result has been a drop in profitability and a steady decapitalization of the agricultural sector. This has taken place at considerable social cost, as can be seen from the deterioration of rural living standards, growing impoverishment, and rising migration.

Mexico's current financial difficulties offer a new context within which to redefine a series of policies, including those relating to domestic food production. Current exchange rates are a threat to the advantages that local producers have enjoyed in the domestic market. On the one hand, it is becoming essential to offer some support to domestic production, a fact that opens up possibilities for encouraging the spread of agricultural biotechnology. On the other hand, the devaluation of the peso also represents a constraint on the importation of certain biotechnology processes including, for example, the cloned materials used in flower culture.

These considerations lead me to make the following methodological proposals for discussion:

· Establish permanent monitoring of the world scene with respect to the progress of biotechnology as applied to agriculture and the environment.

· Give close attention to those productive processes where biotechnology has been applied, to assess whether or not to adopt such methods here. Measure the results obtained in terms of increased yields, productivity, market penetration, employment generation, etc.

· Analyze emerging sectors as possible new fields for investment in biotechnology. Two potential areas in particular are the enhancement and conservation of the environment, and the contribution that biotechnology can make to ensuring sustainable agriculture.

· Develop rural policy priorities in consultation with the producers themselves, taking account of their experience, and encourage them to communicate their successes.

References

· Arroyo, G. coord. 1988. Biotecnología: ¿Una salida para la crisis agroalimentaria? Colección Agricultura y Economía, Plaza y Valdés/Universidad Autónoma Metropolitana (UAM), UAM-Xochimilco, México, MX. 391 pp.

· _____ 1989a. La biotecnología y el problema alimentario en México. Colección Agricultura y Economía, Plaza y Valdés/Universidad Autónoma Metropolitana (UAM), UAM-Xochimilco, México, MX. 235 pp.

· _____ 1989b. La pérdida de la autosuficiencia alimentaria y el auge de la ganadería en México. Colección Agricultura y Economía, Plaza y Valdés/Universidad Autónoma Metropolitana (UAM), UAM-Xochimilco, México, MX. 367 pp.

· Casas, R.; Chauvet, M. 1994. La biotecnologia: Recapitulacion sobre sus impactos en la agricultura y el medio ambiente. 480. Congreso Internacional de Americanistas (CIA). 4–9 July, CIA, Stockholm/Uppsala, Sweden. 40 pp.

· Castañeda, Y. 1991. Opciones biotecnológicas para la crisis de la agroindustria azucarera: Melazas y proteína unicelular. UAM-A, MX. Revista Sociológica, 16(mayo-augusto), 183–211.

· Chauvet, M. 1993. Auge, crisis y reestructuración de la ganadería bovina de carne en México. Tesis de Coctorado. Facultadad de Economía, Universidad Nacional Autónoma de México. México, MX. 216 pp.

· Chauvet, M. et al. 1992. La biotecnología aplicada a la producción ganadera en México. In Casas, R.; Chauvet, M.; Rodriguez, D. ed., La biotecnología y sus repercusiones socioeconómicas y políticas. Universidad Autónoma Metropolitana (UAM-Azcapotzalco/Instituto de Investigaciones Económicas, Instituto de Investigaciones Sociales), Universidad Nacional Autónoma de México (UNAM), México, MX. pp. 181–200.

· Dabat, A. 1993. El mundo y las nacines. Centro Regional de Investigaciones Multidisciplinarias, Universidad Nacional Autónoma de México (UNAM), México, MX. 225 pp.

· Junne, G. 1992. Le grandes enterprises face à la révolution biotechnologique. Cahiers d'Economie et Sociologie Rurales, no. 24–25, Institut National de la Recherche Agronomique (INRA), Ivry, France. pp. 143–159.

· Llambi, L. 1994. Globalización y ruralidad. Necesidad de un nuevo paradigma. Ponencia presentada en el Seminario Nuevos Procesos Rurales en México. Teorías, estudios de caso y perspectivas, Taxco, Guerreo 30 de mayo. MX. 24 pp.

· Massieu, Y. et al. 1992. Aplicaciones de la biotecnología a la floricultura en México: Efectos e el empleo. In Casas, R.; Chauvet, M.; Rodriguez, D. ed. La biotecnología y sus repercusiones socioeconómicas y políticas. Universidad Autónoma Metropolitana (UAM-Azcapotzalco/Instituto de Investigaciones Económicas, Instituto de Investigaciones Sociales), Universidad Nacional Autónoma de México (UNAM), México, MX.

· ----- 1994. Biotecnología y mercados de trabajo: El caso de la floricultura. Tesis de Doctorado, Universidad Nacional Autónoma de México (UNAM), México, MX. 322 pp.