- The Washington Times - Monday, September 8, 2003

ZAPOTLANEJO, Mexico — Javier and Jaime Hernandez fear their dairy farm won’t survive, not even with the thick green pastures their 50 cows have to feed on in the summer.

Not even with the new government program that pays half their diesel-fuel costs, or the credit a big milk distributor extended to help them build a stainless-steel refrigeration unit.

The two brothers, farmers in the southwestern Mexican state of Jalisco, know the odds are against their family business because they’ve seen what it’s like on “the other side,” as many Mexicans call the United States.

As illegal immigrants, and then in Jaime’s case as a legal U.S. resident, the brothers worked for giant dairy operations in California. They labored for the same type of big American business whose surging exports to Mexico are prompting Mexican farmers, especially those who produce staples such as grains, meat and milk, to complain that prices for their products are being depressed and they are being wiped out as a result.

Throughout rural Mexico, millions of small farmers are struggling to stay afloat and compete against an American agricultural juggernaut whose efficiency and government support far outstrips Mexico’s.

The 1994 North American Free Trade Agreement opened Mexico to U.S. imports by phasing out tariffs that were once triple-digit for many products. Last year, Mexico surpassed Japan to become the top destination for U.S. beef, with the volume of shipments nearly five times greater than 10 years ago. Pork imports from the United States have nearly doubled since 1994. U.S. chicken imports have also soared, making Mexico the third-biggest U.S. chicken-export market.

U.S. corn imports now account for about 30 percent of Mexico’s market. Three decades ago, Mexico’s rice farmers supplied all the country’s needs. Today about 80 percent of rice consumed in Mexico is imported. Almost all of that comes from the United States.

The numbers are good news for U.S. agribusiness, but ruinous for Mexican farmers who can’t compete, have no unemployment insurance and few alternatives for work elsewhere.

Previous Mexican governments, the first Bush administration and the Clinton administration promised free trade and other economic reforms would provide more jobs in Mexico. But at least 2.7 million farm jobs have been lost since Mexico entered NAFTA with the United States and Canada.

As a result, Mexico has emerged as a key player in a fierce worldwide debate over the impact that farm exports from rich countries have on their poorer trading partners.

The fight is expected to climax tomorrow when World Trade Organization ambassadors meet in Cancun to negotiate more reductions to barriers on global trade and investment. Developing countries such as Mexico are urging the United States, the European Union and Japan — all leading supporters of free trade — to accommodate poorer countries whose farmers remain shut out of foreign markets, yet are hurt by the aggressive promotion of exports from richer countries.

The much-higher yields in U.S. grain crops and other staples might be the decisive factor that dooms many Mexican producers, but farmers in Mexico are dismayed by the billions of dollars in annual government subsidies American farmers receive, along with price supports that promote U.S. farm exports, and payments for taking land out of production.

Last year, apart from subsidies, U.S. agribusiness received an estimated $26 billion in public services, including free university research, government research and marketing assistance, and infrastructure benefits.

In contrast, Mexican producers benefited from only $710 million in government support, according to the Organization for Economic Cooperation and Development.

The Hernandez brothers don’t know if Mexico’s new emergency $2.1 billion farm bill — compared with the 2002 U.S. farm bill of $180 billion — will help them catch up with U.S. technology.

Since NAFTA, the volume of farm trade between Mexico and the United States has doubled. In 2002, Mexico imported $7.9 billion in farm products from the United States and exported $6.1 billion.

The explosive growth of supermarkets in Mexico is contributing to the promotion of U.S. meat. Wal-Mart’s 600 stores in Mexico, which operate under various names, are key sources for imported meat and now control half of supermarket sales.

Jose Luis Calva, a top Mexican farm economist, said the free-market theory behind Mexico’s dive into globalization was that small farmers wouldn’t compete with imports. They would melt away, into manufacturing, tourism, whatever the market provided.

“The thinking was that if they couldn’t make it on the land, they’ll find something else to do,” said Mr. Calva. “It was a way of wiping out inefficient small farmers.”

But Mexico’s farm population today is about the same as the United States’ during the Great Depression, Mr. Calva said. “We are going to need many decades more to move that many people from the farm into other jobs.”

Farm families still constitute as much as a quarter of Mexico’s 100 million people, compared with 2 percent of the population in the United States.

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