Mexico: Crop Update
15 January 2007 High-Tech Textiles
After 14 years of the North America Free Trade Agreement (NAFTA), Mexican textile exporters say that Mexico’s geographical proximity with the US is the only advantage that exists with that country, according to an article in El Financiero. Therefore, a movement has begun to consider alternative ways of integration that take into consideration regional security. For textile and clothing industry entrepreneurs, the next step will be to further extend origin accumulation agreements and to exploit strategic areas such as the manufacture of antiviral, antifoam, and antiterrorism clothing. The Mexican Managerial Council of Foreign Trade believes that they should work more on the integration of the North American region, considering security to be a high-priority.
Maize Availability To Sink
The Trade and Agricultural Policy Institute pointed out that maize availability in the international market would be one of the main problems for the current and coming year, as US corn exports will fall at least 50% compared with 2006, according to some reports. For Mexico, the situation is serious, because it is the main buyer of US maize.
Mexico in the last few years has imported approximately 6 million tons of grain and more than 2 million tons of cracked maize.
Commercial Opening To Affect Dry Bean, Maize Growers
The commercial opening of dry beans and white and yellow corn foreseen by the North America Free Trade Agreement (NAFTA) for 2008 will affect more than 4 million small Mexican producers, as production costs are higher than in the US.
In Mexico the production of one ton of maize costs approximately 4,000 pesos, and it is marketed also around 4,000 pesos. In the US, growers expend 1,000 pesos to obtain one ton of maize, allowing them to market it at 2,500 pesos.
NAFTA — signed by Mexico, the US, and Canada — will allow the US farmers to export dry beans and maize to Mexico,"leaving the small Mexican producers outside of the market," according to Dr. Cristina Steffen-Ridmann of the Metropolitan Autonomous University (UAM), in a interview cited by AMEPA. She revealed that 55% of the nation’s farmers depend directly on the production of these grains, which would mean a still bigger impoverishment in the Mexican countryside.
The US dedicates annually approximately 10% of its Gross Domestic Product (GDP) to the agriculture sector, while Mexico uses only 3% of its GDP, she said. She added that US farmers possess commercial advantages due to the low cost it requires for them to produce grains as well as structural advantages such as climate, mechanization, and land ownership, which represent smaller input costs. Also, US producers have credits whose interest rates are 12%t lower than Mexicans’.
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