Why Mexican Farmers Are Hopeful About López Obrador’s Win

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By Timothy A. Wise, Policy Research Director at Tufts University’s Global Development and Environment Institute. Originally published at Triple Crisis

The victory of Andrés Manuel López Obrador and his Morena party in Sunday’s Mexican elections has stunned international observers. The center-left insurgency received an estimated double the votes of its nearest rival in a multi-party presidential race, winning more than 50 percent of the vote, several important governorships including the first woman to run Mexico City, and an absolute majority in the House of Representatives and the Senate. However the final tally ends up, López Obrador has a resounding mandate for change.

Many observers have interpreted the results as a vote against rampant corruption; given the pervasive graft and influence-peddling in Mexico, López Obrador’s clean, austere reputation was certainly a factor for voters. But economic factors also motivated many voters, especially farmers. The majority of Mexicans have been left behind in a failing strategy to hitch the country’s fortunes to open trade with the United States under the North American Free Trade Agreement (NAFTA).

As one recent reportsummarized, “Poverty is worse than a quarter century ago, real wages are lower than in 1980, inequality is worsening, and Mexico ranks 18th of 20 Latin American countries in terms of income growth per person in 21st century.” It is hard to imagine worse outcomes in a country with privileged and historic access to the largest capital and consumer markets in the world—the U.S.

Among those rejoicing now over López Obrador’s victory are Mexico’s farmers, who have been largely abandoned by the government while unregulated imports of below-cost maize, wheat, pork, and other agricultural goods flooded Mexican markets under NAFTA. (See my report.) After the agreement took effect in 1994, maize farmers endured a 400-percent increase in imports of U.S. maize priced 19-percent below its costs of production, resulting in a punishing 66-percent drop in producer prices. Producers of other farm goods faced similar pressures, forcing many to become migrant workers in the strawberry fields of multinational growers or migrate to the U.S. without documentation.

Many placed their faith in López Obrador after he endorsed the Plan de Ayala 2.0, a radical platform put forward in early 2018 by a revitalized farmers’ movement. Echoing the platform, López Obrador on the campaign trail called for a return to self-sufficiency in maize and other basic food crops, a reduction in import dependence on the U.S., a shift away from chemical-intensive industrial agriculture and genetically modified crops toward more sustainable practices, and a decisive reorientation of government farm subsidies toward small and medium-scale producers. No wonder rural communities turned out in droves for Morena.

What Farmers Expect

A mobilized farmers’ movement will expect and demand action on key planks in their platform to revitalize rural Mexico. Soon after López Obrador takes office on December 1, they expect quick action on several key issues:

  • Food self-sufficiency. López Obrador has promised to have farm subsidies directed to small and medium-scale farmers (those with fewer than 50 acres), a radical shift from programs that have overwhelmingly favored large farms. He can make good on that promise by shifting ProAgro subsidy payments to those farmers and making credit and crop insurance available to them.
  • Support prices for key crops. López Obrador has promised minimum support prices for key food crops, to give farmers stable and remunerative prices so they can invest in their farms and raise productivity. He can act immediately on that promise.
  • Expanding public procurement.One proven way to support local farmers and provide healthier foods is to expand public purchases for schools and other public institutions.
  • Redirecting funds to support native maize farmers.The MasAgro Program, a government-funded effort to increase small-scale maize and wheat production, is ineffective and seeks to replace native maize varieties with commercial seeds on some 12 million acres of maize land. That is at odds with López Obrador’s pledge to support native maize and tortillas. Reforming MasAgro would be a good place to start.
  • Investing in national seed research and production. López Obrador can address transnational monopolization of Mexican seed markets by restoring the nation’s capacity to breed and produce its own seeds. Successive neoliberal governments have reduced support for INIFAP, the national agricultural research institute.
  • Withdrawing Mexican government support for genetically modified (GM) maize. The current government has supported Monsanto and other seed companies in their campaign to grow GM maize in Mexico. Citizen groups and the courts have prevented the controversial move citing threats to Mexico’s native maize varieties. (See my earlier article.) López Obrador can end the controversy by withdrawing government approval of the companies’ permits.

 

Whither NAFTA?

In the campaign, López Obrador was careful, never threatening to pull out of NAFTA and vowing to continue negotiations to improve the current agreement. Since his election, he has vowed to stay the course on negotiations. That won’t sit well with his farmer base. Massive, unregulated imports of cheap U.S. commodities, dumped on the Mexican market at prices below the costs of production, are incompatible with López Obrador’s commitments to food self-sufficiency, food sovereignty, and investments in small farms and native crops. There are a number of measures he can take immediately:

  • Slap retaliatory tariffs on maize and other key food crops. López Obrador can announce his intentions to include maize among the products on which Mexico retaliates after President Trump’s unilateral duties on aluminum, steel, and perhaps cars. That would send a strong message that he stands with his maize farmers, and it would give producers relief from dumping-level prices while the government puts in place its full policies for food and agriculture.
  • Impose countervailing duties for U.S. dumping. Mexico can justify duties on U.S. crops dumped at below the cost of production. Maize has been coming into Mexico at 12-percent below production costs, justifying a commensurate tariff on imported maize.
  • Regulate GM maize imports under the Cartagena Protocol. Mexico can more closely regulate imports of U.S. maize, which is almost all GM, by invoking the Cartagena Protocol on Biosafety, which allows importers to require strict labeling and other control measures.

Of course, López Obrador can also call President Trump’s bluff on ending NAFTA. The farmers’ movement has called for Mexico to withdraw from the agreement unless there are meaningful improvements, and not the kind Trump wants. Mexico may well have less to lose from such a move than the U.S. Mexican farmers certainly wouldn’t shed many tears if their new president could once again protect them from dumped U.S. exports.

For once, Mexican farmers have a lot to look forward to.

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14 comments

  1. The Rev Kev

    Sounds like another case of Mark Blyth’s ‘Trumpism’ at work here. As pointed out at the end of the article, one wonders what would happen if López Obrador got on the horn with President Trump and said: “You know Don? You are absolutely right about NAAFTA. It is bad for you and it is bad for us. Let’s get together so that this sucker can go down for once and for all!”
    Of course that would not be good for the automotive industry for example and they have a lot on their plate at the moment already with all the tariffs and counter-tariffs that Trump triggered. I suppose Mexico would have to do a holistic cost-benefit statement on whether to save or renegotiate NAAFTA which would take into account subsidised cheap food imports from the US for a start as well as other problems brought in by that treaty such as GM foods.
    Be interesting if the Mexicans make a move on all this leading up to the US mid-term elections and put Trump under the gun. Would that put Trump into the position of trying to defend NAAFTA? This could get interesting.

    Reply
  2. Scott1

    Sustainable development in food in Mexico is a fine bit of news. This would appear to conform to the policies of the latest UN Secretary General. Food is the number one factor for peace.
    Civilization depends on excess energy and there is a will in South America to get the revenge of living well. I am thinking of Uruguay, for it came to my notice when kicking the TPP salesmen out. Uruguay went to 95 percent renewable & energy capture systems in 10 years.
    Where we see the breakdown of civilization in our world it is not addressed and won’t be until there is a second UN made with an armed forces of its own that enforces human rights.
    From the first I’ve seen Trump’s wall as being built to keep us in.

    Thanks

    Reply
  3. PlutoniumKun

    This is very good news if he can make these changes quickly. Mexico has a wonderfully rich food culture, in many ways its one of the homes of world cuisine, when you think of how many worldwide crops originated from millennia of careful plant husbandry by farmers there and further south.

    The problem of course is that the ‘grand bargain’ Mexico signed up for with Nafta was to lose its agriculture and gain lots of car plants. In the short term I doubt if GM and the others will shift manufacturing northwards it would be far too expensive. But a lot of Mexican car plant workers will no doubt not be happy to hear from their government that it doesn’t matter if they lose their jobs as they can go back to farming. This is something the opposition will no doubt exploit.

    If he does actively work to undermine Nafta then I think the big question is whether industry will stay in Mexico and accept the new tariff costs in the hope that in a few years things can be reversed, or if there will be a significant wave of plant closures. If there is a recession in the next 2-3 years there may be a temptation to GM and others to cut Mexican plant capacity, which could be pretty devastating for the economy.

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  4. Norb

    I wonder if America’s failed overseas adventures have opened the possibility for a reversal of globalization. If not a reversal, a changing of priorities. If the goal for nations is stability and peace, striving for autarky is the only way to go. It has become absolutely clear that the promises made by globalizations promoters have not materialized and produced instability in the form of raised inequality, rampant corruption, and ecological degradation. Loss of local culture was another under appreciated side effect of globalization that now seems to offer strong political capital to opposition groups.

    Reorienting the distribution of numerous systems seems to finally be gaining strength. Price controls and a rational industrial policy are a way to accomplish those goals. Between the looming Brexit crisis, Russia’s longterm plans to become less integrated with the west, the BRI working toward peaceful integration of diverse national economies, and Trumps bumbling attempts to reconcile his promises to an angry working class base, it seems momentum is building for a change in ideology.

    People around the world are not standing for the violent imposition of the current economic orthodoxy. If political movements can coalesce around a peaceful nationalism, based on new guarantees of fair distribution, I don’t see how that can be stopped. Nations that adopt that stance will have a clear advantage over those that don’t. Chaos promotes waste, while a rational distribution based on lowering inequality leads to sustainability and security.

    The best outcome on the international scale would be a peaceful rebirth of local culture. The failure of globalization- the spread of capitalism worldwide- opens up an awakening for a new purpose for human activity.

    Capitalism will eventually fail because it has no cultural purpose as its goal- it survives as a parasite feeding off local cultures. Capitalists don’t create in any meaningful sense, they focus on consumption. The vast majority of what is created is useless. The moment the citizenry are able to recognize that fact, they fall back to cultural heritage- to long term social themes that worked for local survival.

    On the positive side, our current times might be know as The Great Unwinding. Which is better than cutting the Gordian Knot.

    The pain and suffering that is on the horizon to implement this process explains the panic from those higher up on the social hierarchy- those on the bottom will actually feel less pain. That is the tipping point, and it seems humanity is realizing that point.

    Reply
    1. Jonathan Holland Becnel

      I agree.

      I think of all the emerging markets and those yet to be invaded by our Capitalist hordes as the new battlegrounds. Like the fight between the Conscience Whigs and Democrats\Whig\FreeMason over Slavery in our new territories after we straightup jacked Mexico in ’48. Thats where we should organize against and fight for the Human Rights and right to self determine. Its disgusting how many cultures are pulverized.

      Reply
  5. Oregoncharles

    Must be a pleasure to post good news, for once.

    Mexico could be a pioneer in re-ordering global relations. They might start with discarding NAFTA, just as Trump suggested. In any case, I hope the renegotiation will now start again from scratch.

    Reply
    1. drumlin woodchuckles

      Such a discardment would be better for the lower class of both countries. Part of the unwinding would be repatriating our factory-production-in-exile in Mexico . . . back to the US. Another part of it would be the mutual re-protectionization of both country’s agricultural economies. We could stop Mexican fruits and vegetables from polluting the American economy. Mexico could stop American corn from polluting the Mexican economy. Millions of NAFTAstinian refugees currently in America might get a Mexico fit to return to and make a living in.

      As a sweetener and a moral-emotional inducement, if the MexiGov decided to demand that Ireland extradite Carlos Salinas de Gortari back to Mexico to stand trial for various economic and corruption crimes, that America would exert maximum pressure against Ireland to induce Ireland to do that very thing. Mexamerican solidarity for economic justice.

      Reply
  6. Eureka Springs

    If they have managed to preserve the old corn genetics, then sign me up as an importer today. I miss the flavor of corn tortillias of old Mexico and the truly sweet field corn of the US. Even younger peeps will immediately taste and feel the difference and buy if given the chance.

    Reply
  7. Jonathan Holland Becnel

    Im still skeptical of Obrador.

    He reeks of Obama and Trudeau style Neoliberalism.

    Reply
    1. Yves Smith Post author

      You are not familiar with his history. He grew up poor and a radical. No parallel whatsoever with Obama or Trudeau. And he is not neoliberal. He does not favor labor “reforms” but higher wages for lower income workers.

      However, one big problem with his world view is his first executive job was as mayor of Mexico City, where he had budget constraints, as anyone running a municipal or state government does. So he unfortunately also was imprinted by that experience and believes in fiscal orthodoxy even at the national level.

      So unlike neoliberals, he believes in economic justice and wants to have more ambitious social spending. But he does not want to run deficits. So he has conflicting objectives, and it isn’t clear how he will reconcile them. This is not bait and switch, but IMHO self delusion as to what he can get done under his self-imposed constraints.

      Reply
  8. Hope?

    wouldn’t hold my breath for any fundamental changes by amlo in mexico.
    1) in mexico it is really dangerous to try to shake things up. if the drug cartels won’t kill you, then cia will or the mexican oligarchs. the value of life in mexico is close to zero. record number of killings of politicians in these elections. no way US = cia and/or companies would allow anything like social justice start to find its way into the mexican society. just have a look how they are treating venezuela and brazil.
    2) it may be that the nervousness of the oligarchs about amlo is because the thing is just a game between different fractions of oligarchs. amlo may be backed by a different set of oligarchs. oligarchs decide about things in this neoliberal hell, not politicians. the people? irrelevant.
    3) amlo is not free of nepotism or corruption he has nominated a quite dodgy dude for the senate https://www.animalpolitico.com/2018/02/morena-plurinominales-senado-napo/ Napoleón Gómez Urrutia fled to Canada for corruption charges. amlo nominated him for the senate. the kicker? members of senate are not possible to charge. however, it may be that this is pure attack oppo. https://www.bloomberg.com/news/articles/2018-06-29/a-self-exiled-ex-fugitive-is-making-mexican-billionaires-nervous

    Reply
  9. EMtz

    There is something much deeper at work here. Campesinos regard themselves as stewards of the land and have a deep, cosmological link to all that lives on and in it. This goes back for thousands of years. It’s in their DNA.

    In contrast, agribusiness sees food production as a way of commoditizing the land for profit. This has drained a giant aquifer in one of the richest produce growing areas of the country. Plus, surface water has been polluted by chemical runoff. Policies here are going to turn on issues related to water, especially as the effects of climate change take hold, and I feel strongly that factory farming will not come out the winner.

    There is a different feeling here in Mexico since the election, one of unity. AMLO is laying out a whole host of programs to lift up the poor, protect the elderly, train young people for meaningful work so they’ll have choices beyond going to work for the cartels, and much more.

    These programs stand independently yet also are fully integrated by a philosophy grounded in dignity, solidarity, respect and no small amount of practicality. I have great hope for my country. The fourth transformation that many have held in their hearts may actually happen. It won’t be easy, but it is possible.

    Reply

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