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The Mexican Government Cut Public Spending

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Government spending on agriculture plummeted and programs to support poor farmers were cut. 1998 over 1000 irrigation projects were stalled. farmers access to credit was cut by two thirds, with adminstration shifting from private to public sector. Poor farmers because of their low profits and high risks were unable to borrow. Another major reform was the abolishment of CONASUPO, Mexico’s primary agency for government intervention in agriculture. The agency bought staples from farmers at guaranteed prices and processed the products or sold them at low prices to processors and consumers. Spending on social programs fell by 6%.

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In 1998 the National Solidarity Prograqmme (PRONASOL) was introduced, to provide support to poor communities, but were biased towards urban areas, where families could benefit from food subsidies up to $145 annually compared to $10 in rural areas. The Mexican government established the Program of Direct Support for the Countryside, Programa de Apoyos Directos Para el Campo (PROCAMPO), in 1993. PROCAMPO provided income support to farmers over a 15-year transitional period through hectare-based direct payments to producers. However, budget austerity caused by Mexico’s 1995-peso crisis resulted in budget cuts for the program.

Export agriculture became a way for the economy to emerge quickly from the debt crisis. Agricultural exports grew rapidly. Hunger and poverty increased. Under debt negotiations Mexico cut tariffs from around 40% to 10%. Agriculture required high levels of mechanizations, inputs, credits, access to markets, intermediary corporations to trade grain. NAFTA was blamed for exposing Mexican farmers, especially corn producers, to competition from heavily subsidized U. S. agriculture. CEPR economist Mark Weisbrot estimates that NAFTA put almost two million small-scale Mexican farmers out of work and both legal and illegal immigration more than doubled after 1994 peaking in 2007.

By the time NAFTA began in 1994 poverty was higher among poor farmers, than it had been in 1984. NAFTA was designed with the hope that freer trade would bring stronger and steadier economic growth to Mexico, providing new jobs and opportunities for its growing workforce and discouraging illegal migration from Mexico. Trade policies did not benefit sustenance farmers, but provided substantial support to commercial farmers. Agricultural production in Mexico was mainly centered on large scale farms, factory style livestock and capital-intensive food processing putting pressure on small scale farmers.

Small farms in rural areas were unable to acquire credit, due to high default rate on agricultural loans. Without government subsidies they were unable buy machinery, equipment and technology. Thus, millions of farmers were driven out of land and work. On 31 January 2003 over 100, 000 farmers took to the streets of Mexico City in protest against the free trade onslaught that the people of Mexico have been subjected to. The small-scale farmers were demonstrating against the scrapping of all import tariffs on maize, beans, sugar and powered milk, which had come into effect on the 1st of January under NAFTA. There was a vast disparity between rural and urban market. NAFTA encouraged migration from rural to city and across borders. Compesino movement in Mexico was in protest due to the reneging of promises made by the Mexican government. Small farmers in Mexico were not able to compete with the “Americans’ heavily subsidized and mechanized farms. They were fighting against emigration, unemployment and for security support and equality between rural and urban. The poverty rate among Mexico’s indegenious people increased because of lack of education and poor health. Young farmers from rural communities were migrating to richer countries, this came at a cost to families. Migrating was preferable due to steady weekly wages, even though the wages were not much. In 2006, $23 billion was sent through officials banking channels back to Mexico.

On 01 May 2006 thousands of immigrant workers stayed away from work on “Day without immigration’ in protest against exploitation. They were targets of the US immigration and Customs enforcements (ICE) police, and faced deportation, for holding false social security numbers. These immigrants were paying part of their wages into a U. S social security account of which they had no chance of accessing. Crossing borders was not easy. The American dept of Homeland security has awarded Boeing defense company $67 million to create a virtual fence along 28 miles stretch of Arizona.

15 July 2020

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