"The Symbol of Stability"–
NAFTA reaches into the lives of farmers in Southern Mexico
by Jamie WilsonManuel was born in the small village of San Caralampio in southern Mexico. He, like his father before him, grew up in a one–room house with a dirt floor and a tin roof. Manuel, and his brother, twenty–eight and thirty years old respectively still live and work with their parents and two sisters. Everyday the same crops are grown, the same clothes are worn and the same meals are prepared. For Manuel and millions of other Mexicans living in rural areas, this is life.
The traditional society that he lives in revolves around two things: family support and the production of corn. While their lifestyle does not include the same technological advances as the West does, they do enjoy a rich culture and a strong sense of independence.
For two days, I spent my time with Manuel and his family as they showed me around their village and explained the difficult circumstances of their lives. My face must have displayed my feeling of sympathy because everyone started to smile. When I asked why, Manuel said, "You don't understand, I am grateful for what I have. Life here is fair. At least it was."
What he was trying to explain to me was that there have been many changes to his community over the last few years. Mexico is at a crucial stage in its transition path. NAFTA set a course for this developing nation to enter the international market of the developed world. The move from a traditional farming society to a free market industrialized society is painful for those who live in rural Mexico and it does not happen over night.
Three aspects of NAFTA that have had the greatest impact on rural Mexico are: the introduction of genetically modified seeds, chemicals and fertilizers (packaged together into "tech–packs"), the privatization of the National Company of Popular Subsistence (Conasupo) and lifting of trade barriers.
NAFTA seeks to eliminate protectionism and inefficient production through the privatization of government enterprises. This is designed to improve Mexico's balance of payments and help service its massive debt. Fundamentally, it allows Mexico to exploit its comparative advantage in labour. As a result, the majority of farmers will be forced to make a life changing decision. We will find that there isn't much of a decision to make.
First, we must deal with the privatization of the National Company of Popular Subsistence. The Conasupo was a government subsidy program, which created economic stability in rural Mexico by purchasing a guaranteed quantity of corn at a guaranteed price. Functioning as a "middleman", the government built warehouses throughout Mexico, similar to that of franchises, whereby local growers would sell their corn. The corn was then delivered to larger markets with no further costs to the farmers.
With the birth of NAFTA, Conasupos were privatized ending the government subsidy. By removing the market for corn, the government caused a chain reaction that, in the end, eliminated the incentive to farm for income. With no income, farmers are forced into a difficult decision. They can either stay in the countryside to fight a daily struggle for survival or they can migrate to the cities in search of work.
This brings us to our second problem originating from NAFTA. Once integrated into the free trade area, there are a number of conditions that must be met. The one that we will focus on is the elimination of trade barriers. There are two immediate impacts felt by doing so. The local government loses potential tariff revenue and the local producers lose their protection from foreign competition. As a result, there is a flood of cheap American corn rushing into Mexico with devastating consequences. American corn is available at "rock bottom" prices due to the superior technology and economies of scale of the American agribusiness. By flooding a more expensive Mexican market, American corn is more attractive and is driving the price of domestic corn down.
While this is an improvement for consumer prices, it is devastating to producers. This is in fact the desired effect. The philosophy being that if you cannot compete, while providing consumers with a good at the market price, you should not be producing at all. Simple principles like this one may seem logical in theory but in reality local farmers can't produce corn at the new market price, so farming for income is no longer an option. Once again, they are forced into a difficult decision. They can either stay in the countryside to fight a daily struggle for survival or they can migrate to the cities in search of work.
Those that choose to stay in the countryside, find a new hope in the words and promises of Novartis, Monsanto and Pioneer. Here we have the introduction of genetically modified seeds, chemicals and fertilizers. As we have established above, Mexican farmers don't have a prayer when it comes to competing with American or Canadian agribusiness. Therefore, local farmers need to utilize whatever tools are at their disposal. This is where foreign genetics and fertilizer companies have found a new home. These companies sent representatives all over rural Mexico to promote their latest products. To improve marketing, Novartis created premixed packages of terminator seeds and chemical fertilizers (tech packs) and the other companies quickly joined in.* They also guaranteed results. Crop yields were promised to triple with the continued use of these packages. There was only one problem: farming communities were living in poverty. Even if they wanted to, people like Manuel could not afford this new technology.
This is where the Mexican government stepped in. Recognizing the massive increase in poverty in rural regions, the government designed a new farmers aid program. With the help of the Inter–American Development Bank and the World Bank, the Mexican government is able to offer the farmers very enticing loans contingent on purchasing of the "tech–packs". For the first three years, these "tech–packs" lived up to their billing. In subsequent years however, soil acidity had become a serious problem. Filled with frustration, Manuel says, "They do what they always do" referring to multinationals. "They promise to triple our crop production. What they don't tell you is that after a few years, your soil is acid. The worst part is we have seen this before." Multinationals have been manipulating rural communities for years. Whether it is a "tech–pack" promise or a scheme to patent indigenous corn, multinationals always seem to get their way.
My first reaction was to wonder how Manuel could allow himself and his community to fall into this trap. I assumed that desperate times called for desperate measures. It seems that there was more to the story. "When they don't get their way, they simply flood the market and push us to submission. We had no choice." Combined with the terminator seeds, the "tech–packs" rendered Manuel's farming community completely dependent and more importantly, defenseless. There is now nothing that he or anyone is his village can do. The strong sense of independence that used to be present was now gone. "Before, we could plant our corn, harvest our corn, and at the end of the season, we could take the seeds from the existing stock and plant them for next season. Terminator seeds self–destruct, and the soil is so bad that there are very few crops that can survive." It is important to note that the consequences of using "tech–packs" were know in advance by the companies that sold them. Therefore, the results must have been all part of the plan. In light of the prospect of farming with depleted soil and the constant costs of purchasing a patented product, farmers have been forced into a difficult decision. They can either stay in the countryside to fight a daily struggle for survival or they can migrate to the cities in search of work.
In order to maximize the benefits from trade, each country involved must utilize its comparative advantage. This explains why Mexico is looking to expand its unskilled labour industry. Assembly factories and maquiladoras are located in major cities and along the Mexican–American border. The influx of workers arriving from the countryside provides plenty of unskilled labour for these low wage jobs. An added bonus for the employers is that the supply of workers is increasing exponentially, which pushes wage rates even lower. Yes, the hard working labourers combined with decreasing costs (due to falling wages) does equate to increasing revenue for assembly owners. No, this does not trickle down to the poor. There is no prospect for better work either because the skills, capital and the conditions needed to elevate one–self to higher income jobs are unattainable for the converted farmer. Therefore the conditions in the cities are not much better than those in the country.
A major problem with free trade is that social welfare is misrepresented in most economic models. Increased revenue due to the exploitation of a country's comparative advantage is easy to measure in dollars and cents unlike measuring externalities such as the breaking of culture, the strains of migration or the loss of independence.
Profit distribution and reinvestment are essential to the well being of the population but this is rarely emphasized. Revenue will be generated but it is unlikely that it will be shared. The pattern of the past has shown that an increase in income due to trade will not be used for social welfare. Foreign companies are unlikely to support local communities, and the local elite are not much better. They will keep the newly generated money for themselves or invest it in the more stable market to the north.
With all this in mind, Manuel knows he has to choose between two impossible situations. He is not ignorant of his reality. As I am leaving he has one final request. "Find us a market for our corn! It's good corn."
Jamie Wilson is a student at McGill University, Montreal, and a volunteer with the Social Justice Committee
*"Terminator" seed production has been shelved by major producers, and the seeds are not commercially marketed. Information is available at sites like Pesticide Action Network – editor This article talks about three aspects of NAFTA that have had the greatest impact on rural Mexico, one of which (the article states) is "the introduction of genetically-modified seeds, chemicals, and fertilizers (packaged together as "tech–packs") ... .Novartis created pre–mixed packages of terminator seeds and chemical fertilizers ... and the other companies quickly joined in."
In fact, the planting of genetically–modified seeds has been banned since 1998 in Mexico. (It is generally believed that the genetically–modified corn that is now contaminating Mexican corn fields in the states of Oaxaca and Puebla arrived in Mexico in shipments of corn for the preparation of tortillas, and that, since there was no indication that it was genetically–modified, farmers saw no reason not to use some of this corn as seed for planting.) Furthermore, Terminator seeds are not yet commercialized. According to the ETC Group (formerly RAFI), "In August 2001, the U.S. Department of Agriculture announced that it had licensed its patents on Terminator seeds to Delta and Pine Land Seed Company, the world's largest cotton seed company. Delta and Pine has publicly stated its intention to commercialize Terminator seeds." Also according to the ETC Group, Monsanto and AstraZeneca have promised not to commercialize Terminator seeds; however, since making this promise both of these companies have been merged with other companies.
This article was in fact referring to hybrid or improved seeds. Although hybrid seeds are not usually suitable for saving, as they do not breed "true", they do not pose risks to the genetic make–up of other plants. They are, however, environmentally damaging in that commercial varieties of hybrid seeds for major crops such as corn often require the extensive use of chemical inputs and irrigation – with the consequent pollution of soil and water that we are familiar with in Canada. As Canadian home gardeners are well aware, this does not mean that (some or many)hybrid seeds cannot be grown organically.
By leading to the neglect of traditional seed varieties, hybrid seeds can also become a social cause of loss of biodiversity. Because of forceful promotion by government and agri–business and because of their short–run advantages (higher yields and less labour), hybrid seeds, as our article states, are often readily accepted by peasant farmers. However, in a number of countries including Mexico, some peasant farmer organizations are now engaged in systematic efforts to recover and protect their traditional seed varieties.
Poverty and genetically modified corn in Mexico
The main threat to the cultivation of corn comes, in the short term, from the conditions of extreme poverty in the countryside according to Alejandro Nadal, a researcher at the College of Mexico. He was discussing the threats to biodiversity posed by the contamination of Mexico's native varieties of corn and of "teocintles" (the wild relatives of domesticated corn).
Noting that one and a half million corn producers are in a marginalized situation, he said that campesinos who select corn varieties have a sophisticated knowledge of seeds that based on their actual agricultural practice and understanding of soils and climatic conditions.
"The social pressures and extreme poverty that are the causes of migration are key factors in the loss of information regarding the management of genetic resources."
This discussion took place at a conference entitled "In Defence of Corn," organized by Mexican campesinos and ecologists. One of the central themes of the conference is the presence of genetically modified corn in fields that were been planted with traditional corn varieties in the mountainous regions of the states of Oaxaca and Puebla. Preliminary findings in the cornfields suggest a low density but a relatively wide dispersion of the genetically-modified interlopers. It is feared that this contamination may also exist in other regions of Mexico.