US Corn Subsidies Are Devastating Mexican Farmers
OXFAM REPORT:
U.S AGRICULTURAL POLICIES
DESTROYING LIVELIHOODS OF MILLIONS
OF SMALL MEXICAN CORN FARMERS
ELIZABETH BECKER, NEW UORK TIMES: The more than $10 billion that American taxpayers give corn farmers every year in agricultural subsidies has helped destroy the livelihoods of millions of small Mexican farmers, according to a report released on August 27.
Prepared in advance of critical trade talks next month, the report by Oxfam International argues that the subsidies given American corn farmers allow them to sell their grain at prices far below what it costs to produce. That has led to cheap American corn flooding the Mexican market and pushing the poorest Mexican farmers out of business, the report said.
"There is a direct link between government agricultural policies in the U.S.. and rural misery in Mexico," according to the report entitled, "Dumping Without Borders: How U.S. agricultural policies are destroying the livelihoods of Mexican corn farmers."
More:
http://www.organicconsumers.org/corp/corn_subsidies.cfm~~~~~May 05, 2010
How NAFTA Produced Mexican Migration
Mexico lost a million jobs, by the government's own count, in 1995. That experience was repeated in 2000–2001, when recession in the United States, and the decline in consumer purchasing, led to the layoff of over four hundred thousand workers in the maquiladoras. NAFTA became an accelerant, pouring gasoline on the fire of economic reform.
Instead of creating prosperity, it displaced workers and farmers at an ever greater rate.
The economic reform process required the Mexican government to dissolve the CONASUPO stores. Mexican subsidies to farmers were ruled illegal, although the U.S. continued paying huge subsidies to its largest growers under the provisions of the U.S. farm bill, while buying enormous quantities of farm commodities. At the same time, CONASUPO's state-run stores were held a barrier to the entry of private companies into the retail grocery business.
The ability of U.S. producers to grow corn cheaply using intensive industrial methods affected Mexican growers long before NAFTA. In the 1980s Mexico became a corn importer, and according to Sandoval, large farmers switched to other crops when they couldn't compete with U.S. grain dumping. But with no price supports, hundreds of thousands of small farmers found it impossible to sell corn or other farm products for what it cost to produce them. And when NAFTA pulled down customs barriers, large U.S. corporations dumped even more agricultural products on the Mexican market. Rural families went hungry when they couldn't find buyers for what they'd grown. It's no accident that the Zapatista National Liberation Army, based in poor indigenous communities in Mexico's southernmost state, Chiapas, planned the beginning of an armed rebellion for the day NAFTA took effect. The Zapatistas knew what would happen to indigenous communities in the southern countryside. And the final elimination of tariffs on white corn, beans, and other farm goods on January 1, 2008—the implementation of NAFTA's final chapter—was greeted by demonstrations across Mexico.
Mexico couldn't protect its own agriculture from the fluctuations of the world market. A global coffee glut in the 1990s plunged prices below the cost of production. A less entrapped government might have bought the crops of Veracruz farmers to keep them afloat, or provided subsidies for other crops. But once free market strictures were in place, those farmers paid the price instead. Veracruz campesinos joined the stream of workers headed for the Smithfield plant in North Carolina and points beyond.
Poor people in the cities fared no better. Although a flood of cheap U.S. grain was supposed to make consumer prices go down, the opposite occurred. With the end of CONASUPO and price controls, the price of tortillas more than doubled in the years that followed. Higher prices intensified urban poverty, increasing the pressure to migrate. One company, Grupo Maseca, monopolized tortilla production. On its board of directors are Federico Gorbea Quintero, president of Archer Daniels Midland México, and Ismael Roig, ADM's vice president for planning and business development. (ADM is one of the United States' largest corn producers and processors.) Carlos Hank Rhon, whose family formerly controlled CONASUPO, is now also a Grupo Maseca director. Meanwhile, Wal-Mart has become Mexico's largest retailer.
More:
http://www.beaconbroadside.com/broadside/2010/05/how-nafta-produced-migration.html~~~~~ U.S. Imports Bury Family Farms
TIM WEINER / New York Times 26feb02
MANZANILLO, Mexico -- For many generations, corn has been the sacred center of civilization in Mexico, the place where the grain was first cultivated some 5,000 years ago.
Gods and goddesses of corn filled the dreams and visions of the great civilizations that rose and fell here before the Spaniards came five centuries ago. Today the corn tortilla is consumed at almost every meal. Among the poor, sometimes it is the entire meal.
But the modern world is closing in on the little patch of maize, known as the milpa, that has sustained millions of Mexicans through the centuries. The powerful force of American agribusiness, unleashed in Mexico by the North American Free Trade Agreement, may doom the growing of corn as a way of life for family farmers here, agronomists and economists say.
Lorenzo Rebollo, a 53-year-old dirt farmer, works two and a half acres of corn and beans here on the slopes of the eastern state of Michoacán, in Mexico's central highlands, where corn was first grown as a food crop, archaeologists say. Mr. Rebollo is one of about 3 million Mexicans who farm corn and support roughly 15 million family members.
His grown sons have left for the United States to make a living, and Mr. Rebollo says he may be the last man to farm this patch of earth. It is the same story all over Mexico: thousands of farmers pulling up stakes every year, heading for Mexico City or the United States. Some grew coffee or cut sugar cane. But most grew corn.
Roughly a quarter of the corn in Mexico is now imported from the United States. Men like Mr. Rebollo cannot compete against the mechanized, subsidized giants of American agriculture.
"Corn growing has basically collapsed in Mexico," Carlos Heredia Zubieta, an economist and a member of Mexico's Congress, said in a recent speech to an American audience. "The flood of imports of basic grains has ravaged the countryside, so the corn growers are here instead of working in the fields."
The facts are stark. Since Nafta took effect eight years ago, imports of corn to Mexico from the United States have increased nearly eighteenfold, according to the United States Department of Agriculture. The imports will probably keep growing for the next six years as the final phases of Nafta take effect.
In the United States, corn growers receive billions of dollars a year in subsidies from Congress, much of it going to huge agribusiness operations. That policy fuels huge surpluses and pushes corn prices down.
Free trade and Mexico's own farm policies "threaten the ability of Mexican farmers to continue to grow corn," said Alejandro Nadal, a professor at the Colegio de México and the author of a study on the issue.
In Mexico, Nafta did away with many traditional subsidies and generous price supports. Some contend it is doing away with small farmers. About 90 percent of Mexico's corn farmers work fields of five acres or less, and their survival instincts are driving them farther and farther up Mexico's mountainsides as they strive to grow enough to get by.
"We work the land all our lives," Mr. Rebollo said. "But the farmers are growing more and getting less."
More:
http://www.mindfully.org/Farm/Corn-Subsidized-Imports26feb02.htm
~~~~~
2007–2008 world food price crisis
~snip~
Agricultural subsidies
The global food crisis has renewed calls for removal of distorting agricultural subsidies in developed countries.<57> Support to farmers in OECD countries totals 280 billion USD annually, which compares to official development assistance of just 80 billion USD in 2004, and farm support distorts food prices leading to higher global food prices, according to OECD estimates.<58> The US Farm Bill brought in by the Bush Administration in 2002 increased agricultural subsidies by 80% and cost the US taxpayer 190 billion USD..<59> In 2003, the EU agreed to extend the Common Agricultural Policy until 2013. Former UNDP Administrator Malloch Brown renewed calls for reform of the farm subsidies such as the CAP.<60>
More:
http://en.wikipedia.org/wiki/2007%E2%80%932008_world_food_price_crisis#Agricultural_subsidies
As something to remember for later, see this grotesque aspect of our subsidy program from the Wiki article:Distorted global rice market
Japan is forced to import more than 767,000 tons of rice annually from the United States, Thailand, and other countries due to WTO rules. This is despite the fact that Japan produces over 100% of domestic rice consumption needs with 11 million tonnes produced in 2005 while 8.7 million tonnes were consumed in 2003–2004 period. Japan is not allowed to re-export this rice to other countries without approval. This rice is generally left to rot and then used for animal feed. Under pressure, the United States and Japan are poised to strike a deal to remove such restrictions. It is expected 1.5 million tonnes of high-grade American rice will enter the market soon.<6>
Unbelievable!
~~~~~
Obama’s Farm Subsidy Cuts Meet Stiff Resistance
By DAVID M. HERSZENHORN
WASHINGTON — Among the audacious proposals in President Obama’s budget was a plan to save more than $9.7 billion over a decade by putting strict limits on farm subsidies that are disbursed regardless of market conditions or even whether the land is actively farmed.
But Mr. Obama’s grand ambitions have run into political reality.
The budget outlines approved by the House and Senate on Thursday night do not include limits on farm subsidies at all, and even champions of change say that if the president’s plan can be revived, it will have to be scaled back so significantly that the savings could amount to just several hundred million dollars.
Some of the fiercest critics of farm subsidy programs say the new administration overreached in offering a proposal that could have cut off payment not just to large corporate agribusinesses, but also to medium-sized family farms that might not even be profitable, setting off a huge alarm in the powerful farm lobby.
The White House plan would have prohibited so-called direct payments to farms whose annual gross receipts exceeded $500,000 — a large sum on the surface, but one that did not take account of whether those receipts yielded any real profits.
Within days, the National Farmers Union, which represents roughly 250,000 farm families, forcefully denounced the president’s plan and urged Congress to oppose it. The group’s board also raised the issue at a meeting with officials at the White House
While Mr. Obama’s Democratic allies on Capitol Hill adopted much of his budget template, the farm subsidy limits never got off the ground.
In the House, farm-state lawmakers told the Budget Committee chairman, Representative John M. Spratt Jr., Democrat of South Carolina, that they would not support any budget plan that tinkered with hard-fought agreements they struck in passing last year’s omnibus farm bill.
And in the Senate, Kent Conrad, Democrat of North Dakota, chairman of the Budget Committee and an ardent defender of agricultural interests in his state, quickly discarded the president’s proposal.
Even some of the toughest critics of farm subsidies would not endorse the president’s approach.
More:
http://www.nytimes.com/2009/04/04/us/politics/04farm.html
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