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The resiliency of Mexican small farmers in times of rapid economic change

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Title:
The resiliency of Mexican small farmers in times of rapid economic change
Creator:
Raveczky, Viola Catherine
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Language:
English
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vii, 89 leaves : ; 28 cm

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Subjects / Keywords:
Farmers -- Mexico ( lcsh )
Economic stabilization -- Mexico ( lcsh )
Agriculture and state -- Mexico ( lcsh )
Agriculture -- Economic aspects -- Mexico ( lcsh )
Agriculture and state ( fast )
Agriculture -- Economic aspects ( fast )
Economic stabilization ( fast )
Farmers ( fast )
Mexico ( fast )
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bibliography ( marcgt )
theses ( marcgt )
non-fiction ( marcgt )

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Bibliography:
Includes bibliographical references (leaves 84-89).
General Note:
Department of Political Science
Statement of Responsibility:
by Viola Catherine Raveczky.

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University of Colorado Denver
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Auraria Library
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All applicable rights reserved by the source institution and holding location.
Resource Identifier:
41470931 ( OCLC )
ocm41470931
Classification:
LD1190.L64 1998m .R38 ( lcc )

Full Text
THE RESILIENCY OF MEXICAN SMALL FARMERS IN TIMES OF
RAPID ECONOMIC CHANGE
by
Viola Catherine Raveczky
B.A., University of Colorado at Denver, 1992
M.A., University of Colorado at Denver, 1998
A thesis submitted to the
University of Colorado at Denver
in partial fulfillment
of the requirements for the degree of
Master of Arts
Political Science
1998


This thesis for the Master of Arts
degree by
Viola Catherine Raveczky
has been approved
Date


Raveczky, Viola Catherine (M.A., Political Science)
The Resiliency of Mexican Small Farmers in Times of Rapid Economic Change
Thesis directed by Professor Joel Edelstein
ABSTRACT
Land reform and agricultural development are issues which have been critical
in the debate of Mexicos economic stability since before the 1900s. A consistent
element in the countrys history of agricultural development has been the oscillation
between policies of progressive distribution and austere measures that redirect
resources away from small land holders toward large-scale agro-export producers.
Whether the state is practicing a projectionist model of economic development and
directly intervenes in the formation of agriculture or the Mexican economy is open
and the market dictates the direction of this sector, the agrarian sector inevitably has
come to a point of crisis demanding a change in agricultural policies. Neither
orientation of the economy has been able to address fundamental structural problems
that have hindered equitable agricultural development.
What follows is a comprehensive analysis of how the changes that have
occurred in Mexicos economic model have impacted the structure of farming, which
include land ownership, access to and control over resources, as well as consumption
and production patterns. This will include a study of policies and their effects under
both the projectionist model of economic development and the neoliberal approach,
which will provide the reader with an historical perspective in which the current crisis
can be better understood. Studying this brief history will demonstrate fundamental
structural problems, created by a continuous pattern of bi-model development which
have existed throughout both periods of reform and counter-reform. It will also be
studied whether or not these problems have been exacerbated as agriculture becomes
increasingly more integrated with the international economy.
The purpose of the study is to determine whether neoliberalism has been able
to provide Mexico with a structure of agricultural development that will lead to
broad-based sustainable development. This will be done by studying the agricultural
sector, specifically analyzing the experiences of small and medium farmers during the
in


recent globalization of the economy to examine how they have adjusted to these
changes. The findings will demonstrate whether neoliberalism has provided these
farmers who have been displaced by the model with opportunities which incorporate
them into the successes of the economic changes of the last few decades.
IV


ACKNOWLEDGEMENT
I would like to acknowledge my Advisor for his gentle and persistent encouragement,
and untiring patience with me through this process. Most of all I would like to
sincerely thank him for his kind friendship which gave me the support and confidence
necessary to complete this project.
It is also important that I acknowledge the support, understanding and encouragement
of family and friends.


CONTENTS
CHAPTER 1. HISTORICAL DEVELOPMENT OF MEXICOS ECONOMY
(LATE 1800s THROUGH THE EARLY 1990s)..............................1
Neoliberalism Defined......................................5
Trends In Mexican Economic Development.....................8
Late Eighteen Hundreds...............................8
Import Substitution Industrialization...............10
Mexicos Return to Market Driven Policies...........12
Conclusion................................................16
CHAPTER 2. HISTORICAL DEVELOPMENT OF MEXICOS
AGRICULTURE......................................................17
Late Nineteenth Century...................................19
Post-Revolutionary Mexico.................................21
Green Revolution..........................................25
Neoliberal Era............................................31
Conclusion................................................32
CHAPTER 3. CAMPESINOS RESPONSE TO A CHANGING ECONOMIC
ENVIRONMENT......................................................34
Dairy Producers...........................................36
Com Farmers...............................................43
VI


History of Agricultural Policies in Maize Production .43
How Com Farmers Are Responding........................49
Sugar Industry..............................................53
Melon Fanners...............................................60
Coffee Producers............................................62
Conclusion ................................................ 65
CHAPTER 4. EMPLOYMENT TRENDS IN MEXICO: 1980s.....................69
Employment Trends During The 1980s..........................70
Mexicos Social Health......................................75
Conclusion..................................................78
CHAPTER 5. CONCLUSION.............................................79
BIBLIOGRAPHY......................................................84
vii


CHAPTER 1
HISTORICAL DEVELOPMENT OF MEXICOS ECONOMY
(LATE 1800s THROUGH THE EARLY 1990s)
The struggle to find an economic model that not only allows all members of
society to be productive participants able to sustain their livelihood, but also
maintains long-term economic stability with respect for, and without exhausting,
natural resources is a continuous process. Current trends in this process of economic
development have evolved into a system which can be understood only on an
international level, making it almost impossible for countries like Mexico to function
independent of this global system. The economic lives of nations have become
inextricably linked as they participate in the international economy. As this paper will
show, the repercussions of an increasingly globalized system have both social and
political implications as they transcend all sectors of society and greatly influence the
development of agriculture, the organization of labor, capital, and property, and the
existence of entrepreneurial relations. Of particular interest to be studied is the
relationship between Mexicos economic development and its agricultural sector and
the implications this has on Mexico as a whole.
Land reform and agricultural development are issues which have been critical
in the debate of Mexicos economic stability since before the 1900s. A consistent
element in the countrys history of agricultural development has been the oscillation
between policies of progressive distribution and austere measures that redirect
resources away from small land holders toward large-scale agro-export producers.
This oscillation comes from the tensions that exist between nationalist forces of
populism and policy makers closely aligned with international and national capital.
Whether the state is practicing a protectionist model of economic development and
l


directly intervenes in the formation of agriculture or the Mexican economy is open
leaving the market to dictate the direction of this sector, the countryside inevitably has
come to a point of crisis demanding a change in agricultural policies. Neither
orientation of the economy has been able to address fundamental structural problems
that have hindered equitable agricultural development. As this study will show, these
problems have manifested themselves in many ways: the unequal development
between small-scale farmers producing subsistence crops and produce for the
domestic market and large scale commercial farmers producing export crops for the
international market; the disproportionate patterns of land ownership; and the
corporatist structure which retains the locus of control over credit, technology, storage
and distribution facilities, in the hands of the state. This has created what Tom Barry
calls bi-model or dual development, referring to Mexicos two tiered agricultural
sector. One tier is comprised of large-scale commercial farmers who generally have
irrigated and more fertile land, produce large surpluses, and depend on hired labor to
harvest their crops. These farms often utilize machinery and have more access to the
market and resources such as credit, technology, and storage facilities. The other tier,
represented by a majority of farmers, is made up of plots which are substantially
smaller than larger commercial farms, less fertile, and depend mostly on rain for
irrigation. These peasants cultivate basic grains, produce little to no surplus, and rely
on family labor. Bany states, bi-model classification accurately conveys the
polarized character of Mexican agriculture (Barry, 1995:27-28).
Since the mid 1960s changes in agricultural policy have gradually been
oriented towards the internationalization of Mexican agriculture, which intensified
this bi-model development. As the structure of rural Mexico has come to reflect
neoliberal policies and Mexico has integrated itself more with the global economy,
these transitions have created circumstances that challenge the viability of recent
trends in economic development. As a growing sector of the countrys population is
2


marginalized from the benefits of neoliberalism, Mexicos political stability is
jeopardized, a factor on which the countrys economic model is greatly dependent.
What follows is a comprehensive analysis of how the changes that have
occurred in the economic model have impacted the structure of farming, which
includes land ownership, access to and control over resources, as well as consumption
and production patterns. This will include a study of policies and their effects under
both the protectionist model of economic development and the neoliberal approach,
which will provide the reader with an historical perspective in which the current crisis
can be better understood. Studying this brief history will demonstrate fundamental
problems, created by a continuous pattern of bi-model development which has existed
throughout both periods of reform and counter-reform. It will also be studied whether
or not these problems have been exacerbated as agriculture becomes increasingly
more integrated with the international economy.
The purpose of the study is to determine whether neoliberalism has been able
to provide Mexico with broad-based sustainable agricultural development.1 This will
be done by studying the agricultural sector, specifically analyzing the experiences of
small and medium farmers during the recent globalization of the economy to examine
how they have adjusted to these changes. The findings will demonstrate whether
neoliberalism has provided these farmers who have been displaced by the model with
opportunities which incorporate them into the successes of the economic changes of
the last few decades.
To accurately examine the current situation it is important to understand the
means through which this can be studied. The two perspectives, structuralism and
regionalism are different lenses to look through when trying to understand and
1 The term broad-based development comes from an economic model in which there is greater balance
between urban and rural development (Barkin, 1994:33) and resources are directed to support small-
scale producers (Green, 1995:194). Competitiveness of the economy is based on improved education,
infrastructure, secure employment, and technology.
3


analyze the effects of Mexicos economic liberalization on agricultural development.
In the case of Mexico, the structuralist would place greater emphasis on the top-down
approach of policy making and implementation. Here, community members, farmers,
and other social agents are on the receiving end of the neoliberal agenda and seen as
objects or victims of these policies. The theoretical framework of the regionalist,
however, views people as actors who participate in the process of these economic
changes, whether their action is an unconscious act of compliance or cooperation, or a
conscious willingness to resist or take a passive role, they affect the outcome of policy
implementation. A regionalist would analyze the problem by examining how small
farmers and rural communities respond to state initiatives and how their action or
passiveness aids in the translation of policy to reality. As the existing research on the
above problem has been approached through the framework of regionalism and
structuralism both perspectives will be used throughout this work.
To best study the argument of this paper, the work will be organized in the
following manner: this introduction will outline the premise of neoliberalism and
highlight the trends of Mexicos economic development, following will be a chapter
on the historical development of Mexicos agriculture, which will demonstrate that
present policies are an extension of initiatives which have shaped agricultural
development in the past. The research will then be divided into two areas of
discussion.
The third chapter examines the effects of recent global economic trends on
small farmers and a study of options available to them as well as economic strategies
they are using to adjust to these changes. The role peasants have played in this process
of policy implementation will be briefly analyzed as their actions are also important
determinants in the outcome of state initiatives. Through this discussion it will be
determined whether the current economic model has provided small farmers with
alternative opportunities which allow them to benefit from and actively participate in
4


the economic growth or whether it has excluded the rural sector from this process.
Mexicos employment trends from the 1980s forward will be the focus of the fourth
chapter to study what options the new model has created for farmers who can no
longer survive off of agriculture alone. Finally this study will conclude with a
discussion of alternative approaches practiced by campesinos and the implications for
state intervention in farm policy.
Neoliberalism Defined
Neoliberalism has its roots in theories of liberalism proposed by Adam Smith
and John Locke who both viewed individualism and private property as fundamental
to economic life. The individual and private property, free from state manipulations
are the best unit for a progressive and growing system. Their philosophy upholds
market solutions as the most effective way to approach social problems and economic
development (Faulks, 1993:186-188 and Rosen and McFadyen, 1995:15). According
to Smiths theory, if individuals whose private interests are motivated by profit,
pursue these interests without the artificial direction of the state, not only is economic
growth inevitable but the public good is met as well (Caporaso and Levine, 1992:42-
44). Neoliberalism rests on the above principles, referring to economic policies
implemented globally in the last two decades.
Part of this transition to the neoliberal model calls for privatization of the
economy on a massive scale. Public activity defined as state-owned industries and
major sectors of the economy which include financial institutions, communication,
and transportation are sold to either national or foreign capital, as it is believed these
sectors efficiency and competitiveness are improved when privatized. As in the case
of Mexico where the state was often subsidizing inefficient and noncompetitive
production, the closure or sale of parastatal firms therefore, can also serve the purpose
5


of reducing fiscal waste. To be effective and most productive, this privatization must
also be followed by policies of deregulation.
To attract the private capital necessary for the above economic changes, it is
important that an environment of security and stability be created. As the neoliberal
theory rests on the concept of a negative state, the nature of this environment requires
deregulating state controls over the economy. For countries like Mexico, which have
traditionally placed their faith in the government and state intervention, this
ideological shift means large scale economic restructuring to remove the states
control from this sphere. More specifically these measures of deregulation include
eliminating price controls, reducing trade barriers, and easing restrictions on foreign
investments. This approach not only ensures investor confidence and stimulates
foreign and national investment necessary for economic growth, but it also allows the
market to become the guiding force behind the economy, replacing the artificially
planned state-led structure.
A self-regulating market according to the neoliberal model creates optimal
conditions for production in which a country can trade based on the theory of
comparative advantage (Green, 1995:46). The economic outcome is growth and
stability if a country produces and trades what it has the greatest cost advantage (or
the smallest cost disadvantage) (Green, 1995:115). For countries lacking advanced
technology and industry this theory translates into using primary goods and in some
cases cheap labor as a means on which to base their trade. According to the model, it
makes economic sense when Mexico for example, concentrates on what it naturally
produces with efficiency and little capital input and of which it has an abundance.
Market solutions which are the most effective means to approach fiscal policy,
are also viewed by the neoliberal theory as the most effective way of counteracting
social problems. As the economy overall becomes more efficient and productive,
growing and expanding with increased trade and investment opportunities,
6


unemployment dissipates allowing the economically active population to participate
and therefore strengthen the domestic market. In this new environment which alters
the fundamental role of the state, there are far reaching implications in regards to
social policy. With pressure for a state to be fiscally more conservative, programs and
support for food policy, education, transportation, and health are eliminated. The
states responsibility shifts to international lending institutions, the market demands
of other countries, and the needs of private capital, giving decision making power
over its domestic market and social policy to those who are far removed from the
consequences of their decisions. Under the neoliberal strategy the infrastructure
necessary to deal with the repercussions which could result from the imperfections of
a rapidly changing economy are eliminated.
According to the argument of neoliberalism, however, it is unnecessary for the
state to intervene on behalf of its population as the benefits of the market will be
distributed through an increase in employment opportunities, an improved standard of
living, and an increase in consumer access to cheaper products. This stronger
domestic market will result in a healthier economy overall. In Mexico, for example
neoliberalism claims the removal of trade barriers will bring in consumer goods
which are both cheaper and of better quality in comparison to what is domestically
produced (Barkin, 1991:30). Greater foreign or national investment will help those
sectors which are privatized to become more efficient and competitive. With private
capital and imported technology in areas such as agriculture, the model assumes
productivity will be increased and the quality of agricultural goods will be improved
creating greater employment opportunities in this sector. As a result, when neoliberal
policies are used to restructure the economy, integrating countries like Mexico with
the global market, it is evident, based on the predicted outcomes of the model, that the
successes will trickle down to all sectors of society. Mexicos past attempt to reduce
the role of the state and place a high priority on foreign capital, privatization, and an
7


outward oriented economy, however, did not produce these predicted successes.
Simultaneous with Mexicos period of liberalization was growing destitution and
unemployment, which made political eruption imminent.
Trends In Mexican Economic Development
Late Eighteen Hundreds
Mexicos previous experience liberalizing its economy during the late 1800s
up until the 1930s was characterized by modernization of both agriculture and
manufacturing. Mexico pursued an economic policy which opened its doors to
foreign investment and became export-oriented as a means of increasing capital and
generating economic growth. In order to encourage the development of the export
sector, state policies were more favorable to large-scale units of production in
industry, commerce, and agriculture. As a result of increased foreign capital and a
strong export sector, liberalization had a significant effect on Mexicos development.
New industries grew and manufacturing became more modernized, causing a near
tripling of industrial production. This modernization was accompanied by the
mechanization of agriculture which led to nearly doubling of export agriculture
(Cockrofit, 1990:89). Through capital intensive production, both industry and
agriculture were able to reduce production costs by eliminating the need for labor
(Cockroft, 1990:89). This successful growth in the economy, however, was
weakened by the very nature of the liberal model and occurring along side rising
poverty and social dislocation.
As major sectors of the economy had come to be dominated by foreign capital
and inputs, it became increasingly more difficult for the country to maintain its
sovereignty and decision making power over the economy. Infrastructure essential for
development such as railroads, telegraph and credit institutions became foreign
8


owned, leaving Mexicos economic progress and the organization of its economy to
the dictates of those who did not have to bear its repercussions (Cockroft, 1990:87-
89). As more than three fourths of the development of this infrastructure and
production was fueled by foreign capital, it was important that policy decisions
regarding all levels of society represent and cater to foreign interests (Barry, 1995:17).
Mexicos previous model of liberalism was based on cheap labor and policies
that supported large-scale producers, which could guarantee greater profit and
economic growth. Increased landlessness prevailed at a time when employment
opportunities in areas such as mining and agricultural sectors offered destitute wages
and slave-like conditions. A repressive state apparatus enable these disparities to
continue for nearly four decades unchallenged.
While Mexico opened itself up to foreign investment and its economy became
export-led, independent artisans and small-scale producers who could not compete
with the larger commercial and industrial interests were marginalized and excluded
from the successes. State policies further challenged small-scale producers ability to
compete by giving exclusive access of resources like water and land rights to large
land owners who were better equipped to produce for export (Barry, 1995:16 and
Cockroft, 1990:92).
Export industries such as mining, forestry and agriculture helped to maintain
growth, however, depending on raw materials and primary goods to boost the
economy put Mexico in a vulnerable position. The stability of the model was
challenged in 1907 when the value of silver, one of the countrys strongest exports,
dropped considerably (Cockroft, 1990:89 and 96). Mexico was facing a serious
balance of payments crisis while peasants and labor were becoming increasingly
restive. Mexicos liberal model had produced economic success while
simultaneously creating a politically volatile situation. In 1910 the countrys growing
discontent erupted into a national rebellion and from this point on until 1934 the
9


economy experienced considerable instability. During these three decades the
economic chaos was mired by revolution, strikes, and power struggles, as well as an
inconsistent policy ranging from economic nationalism to one which embraced
foreign capital (Cockroft, 1990:115).
Import Substitution Industrialization
Mexicos economic model was once again challenged in the early 1930s as
the country deeply felt the impact of the Depression occurring in the United States.
The devastating results were obvious. Mexico depended on the U.S. for 69% of its
imports while 60% of Mexicos exports were absorbed by U.S. markets. Social
tension in Mexico were escalated by the tripling unemployment caused by this
economic slow down (Cockroft, 1990:23). At this time it was becoming evident that
Mexico could no longer rely on its northern neighbor for its market nor its needed
industrial supplies and consumer goods.
The social and economic tensions further aggravated the hostile sentiment felt
by many capitalists toward foreign capital. The contradictions of the liberal model
reflected by this period of depression brought a gradual end to Mexicos openness and
began the countrys period of expanded state involvement in the economy along with
a growing nationalist and protectionist tendencies. To ease the severity of the world
economic crisis and to protect Mexican ownership and control over property, state
regulated development evolved out of the economic chaos.
This dramatic shift in the economic structure was characterized by decreasing
dependency on foreign markets, promoting industrial development, and large-scale
agrarian reform. The state and Mexicos national bourgeoisie shared negative
sentiment for foreign investment which led to the nationalization of many industries
crucial to the countys economic development. The state furthered its involvement in
the economy by initiating protective measures to facilitate the growth and
10


development of its local industries. Such measures included tariff barriers, import
taxes and quotas as well as large subsidies to developing Mexican enterprises.
Mexico was eager to begin state-led industrialization as international terms of
trade indicated that for the country to rise above underdeveloped status, it was
imperative to begin modernizing its economy through industrialization. The value of
agricultural commodities and other primary goods was consistently declining
compared to the rising prices of industrial products (Barry, 1995:25). This newly
interventionist state steered the economy towards the production of manufactured
goods for the domestic market.
As a result of the above policies, this period of Import Substitution
Industrialization (ISI) was marked by growth in the domestic and increased industrial
output. State-led development even went as far as increased spending on social
services such as transportation, education, health care, and food subsidies. These
successes, however, were grounded in an economy propped up by massive loans to
support overspending by the state and an inefficient manufacturing sector.
In 1973 with the rise in the price of oil, petrodollars circulating in international
financial markets became readily available to countries like Mexico in the form of
loans with low interest rates. Mexicos discovery at this time of new oil reserves
created a false hope and the country began to accumulate astronomical amounts of
foreign debt both to modernize its oil industry and maintain ISI development (Green,
1995:20-21). The state provided Mexican industry protection from competitive
imports which maintained inefficient production at high costs to consumers. While
parastatal firms were receiving subsidies and other forms of financial support from
the state, they were producing shoddy products which were difficult for Mexico to
export. ISI has replaced dependency on the U.S. for consumer goods for a
dependency on increasingly expensive capital inputs and heavy machinery. A trade
deficit remained a critical issue in this economic equation.
11


Debilitating the economy even further were the problems of unemployment
and inflation. The capital intensive nature of Mexicos industrialization model made
it difficult to absorb enough labor to bring the countys unemployment problem under
control. An inflationary approach combined with massive borrowing was used to deal
with the problem of over spending by the state on inefficient parastatal firms and
social services.
Once again crisis on the international level set off the increasingly explosive
environment in Mexico. In 1979 the price in oil jumped significantly creating
inflation on a global level. This sparked an increase in interest rates in the First
World causing their economies to go into recession, markets Mexicos export sector
desperately needed (Green, 1995:23). In 1982 Mexicos economy reached a state of
crisis. To add to this environment of global recession, high interest rates, and the fall
of commodity prices, circumstances were worsened by those who, fearing an
economic collapse, pulled their capital out of Mexico. In the midst of this chaos
Mexicos economy reached a turning point.
Mexicos Return to Market Driven Policies
It is important to understand that Mexicos transition from state-led
development to a model of market-driven policies happened in the context of a severe
debt crisis which was made more complicated by increased interests rates and the
decrease in the availability of capital. To bring stability to the crisis, the U.S.
Treasury and the International Monetary Fund (IMF) strongly encouraged Mexico to
adopt policies to restructure the countrys chaotic economy. Under pressure to
implement new policies, during the 80s the De la Madrid administration opened up
the economy, liberalized trade, reprivatized industries, and made economic policies
more favorable to foreign capital (McCaughan, 1993; 160). One step in this direction
was Mexicos decision to join the General Agreement on Tariffs and Trade (GATT)
12


in 1996. Not only did Mexico lower its tariffs, but it became much more flexible on
its requirement for import licenses. All imports in 1982 required such a license,
however in 1988 those goods needing an import license dropped to only 22 percent
(Russell, 1994:178). Privatization played a major role in this new model as well.
When De la Madrid came into office in 1982, the government owned 1,155
corporations, but by 1988 the public sector only had 446 state-owned industries
remaining (Russell, 1994:182). Another component in the countrys new strategy was
the Pact of Economic Solidarity, an agreement formed in December 1987 between
labor, business and government. This agreement included the following: a decrease
in government spending, an increase in the cost of goods and services provided by
the government, an increase by 38 percent in private sector wages (accounting for
inflation this translated into less income than they earned in 1996), and finally the
government imposed price controls on some consumer goods (Russell, 1995:180).
When Carlos Salinas came into office in 1988, his policies of restructuring
further intensified the process started under De la Madrid. Like his predecessor,
Salinas policies also relied on export promotion in the areas of manufactured goods
and commercial agriculture, the investment of foreign capital and the liberalization of
trade policy (Bejar and Pichardo, 1993:36-37). The Pact of Economic Solidarity was
also continued and privatization was pursued even more aggressively. By 1993,
government owned industries which were privatized or liquidated were equal to over
80 percent of those previously subsidized by the state (Russell, 1995:191). These
strategies allowed Mexico to boast of its economic growth and recovery. In 1989, the
gross domestic product had risen by 3.3 percent, manufacturing by 7.2 percent, and
private investment by 8.3 percent (Russell, 1995:219). These positive trends
continued up through the early 90s. Policies which produced economic growth,
however, did not translate into an improved standard of living for the average
Mexican.
13


The surge of imports combined with intense and fast paced privatization
dramatically affected unemployment. For example, between 1986 and 1989 textile
imports significantly rose from $126 million to $527 million, an increase which
pushed 30,000 people out of work in this industry (Russell, 1995:181). In the
industrial sector privatization was responsible for an estimated 400,000 people losing
their employment between 1983 and 1993 (Russell, 1995:191). In the beginning of
Salinas term the government increased spending in the areas of education and health.
Manufacturing wages (impacting about 20% of labor force) also experienced a slight
increase. However, concentration of wealth and resources continued to grow
(Russell, 1995:278-279). By the end of 1990, while the bottom 20 percent of the
population received 3 percent of gross domestic product(GDP), 41 percent of national
income went to the top 10 percent of the population (Russell, 1995:279).
The Salinas administration also embarked on the negotiation of the North
American Free Trade Agreement (NAFTA), which cements Mexicos integration into
the global economy. A key component of the neoliberal model, NAFTA intends to
eliminate barriers to investment as well as tariffs, quotas, and other restrictions on
trade among Canada, the U.S. and Mexico. Although trade has become more
liberalized in different sectors over the last few decades, these negotiations create
more permanent trade rules, making it impossible to restructure trade barriers in the
future if necessary (Russell, 1995:349). It is anticipated that the security of barrier-
free borders will provide an environment attractive to investors: Mexico will gain
better access to technology, benefit from increased foreign investment, and experience
growth in its economy. It is also hoped this integration will impact Mexico through
greater job creation as well. And some figures indicate Mexico is already meeting up
to these expectations. According to the countrys low unemployment rates, NAFTA
appears to have fulfilled the expectations of this job growth. The state of Mexico for
example, experienced 96 percent employment for its economically active population
14


(Nafta Works, 1997:5). This success continued in the following year throughout the
country. From July to October 1997, the open unemployment rate did not exceed 4.1
percent (Nafta Works, August November 1997:1), while formal sector employment
has been credited for creating more than 430,000 jobs in the first half of 1997
(NAFTA Works, August 1997:4). These numbers reflect the ability of economic
policies to maintain the general level of employment. However, a closer look at the
notion of unemployment reveals a clearer picture.
When surveys are conducted to measure rates of employment the choice of
criteria by which people are considered employed creates a very broad meaning of the
term, unemployed. For example, those who have made unsuccessful attempts at
finding work for more than two months are no longer considered part of the
economically active population and would not be represented in the above statistics.
If one has worked one hour in the week prior to the survey, whether paid or as an
unpaid family worker, or if one has not looked for work nor has worked but reported
they would begin work within four weeks- both would qualify as being employed
during the reference period (Rendon and Salas, 1993:114). These numbers not only
do not count the seasonably unemployed, but they amount to artificially inflating the
employed population (Rendon and Salas, 1993:114). This manner of reporting
creates a gross misrepresentation of Mexicos reality and does not adequately measure
labor market problems.
The above examples attempt to demonstrate the benefits NAFTA has brought
to Mexico. Other reports, however, show a different side to the debate, giving the
free trade agreement a track record filled with many contradictions. Public Citizens
Global Trade Watch found that 1,850,000 Mexican laborers lost their jobs in 1995,
while 1,000,000 Mexicans entered into the labor market (McGinn, 1997:31-32). The
social indicators for the countrys children have not improved since NAFTAs
implementation. According to UNICEF, 9 million children live in extreme poverty,
15


which has led to a 100 percent increase in the number of children living and working
on the streets of the capital since NAFTA was enacted (McGinn, 1997:31-32).
Results of NAFTAs performance vary widely providing an unclear picture of Mexico
and making it hard to determine its true impact. Without an enforceable social charter
to ensure the rights of labor, it is questionable whether the gains of multinational
corporations will be passed on to the average Mexican citizen. Statistics exist to
substantiate arguments and predictions stated by both sides of the debate. As the state
has been stripped of its power to address and prevent the continuation of gross social
injustices, it is questionable whether the inequality that has marked Mexicos history
will continue to plague the country.
Conclusion
The above discussion of Mexicos economic history demonstrates how
policies have swung on the economic pendulum between the use of the state to guide
the economy and the importance of an unregulated market. The repercussions this has
had on the countrys agricultural sector will be the focus of this paper. Keeping in
perspective the increasing globalization of the world economy as well as Mexicos
debt crisis, it is evident that structural changes which have occurred in the countrys
economy not only reflect policy shifts that have taken place on a national level, but
are also indicative of changes in the international economy. It is in this context that
this study turns to the historical development of agriculture under both models of
economic development.
16


CHAPTER 2
HISTORICAL DEVELOPMENT OF
MEXICOS AGRICULTURE
The agrarian question continues to be an unsettled problem which has
challenged Mexico's stable political image. The volatility of conditions in rural Mexico
have reached an eruptive point many times in the country's history. The structure of
agricultural in Mexico which defines the role of the state, land ownership, crop
composition, and consumption patters is reflective of national and global economic
trends. As peasant communities are representative of a large percentage of the
population, the repercussions these economic patterns have on the agricultural sector
can be extrapolated to Mexico as a whole.
In the campesino way of life, land and its use have very profound meaning. A
small plot of land can be a vital source of survival not only providing income through
the sale of its products, but also providing the basic needs for a family such as shelter
and food. Farming is less about an agricultural activity and more about preserving a
way of life, a familys traditions and a familys history. As the same campesino families
cultivate the same area of land for generations, a strong sense of identity is created and
shared among a community. These issues strongly influence the way peasants relate to
their land (Barry, 1995:5). Maize, a basic staple in the Mexican diet and a crop grown
by 78 percent of Mexicos farmers (de Janvry, Sadoulet, and Gordillo de Anda, 1995:
1349 and Barry, 1995:103) also influences this relationship. Indigenous ancestors
believed this crop and the earth had great religious significance, a value influencing
campesinos today. For these reasons, many campesinos not only identify with their land
as a source of survival but this identity is experienced on an even deeper level as their
17


connection has spiritual relevance as well. This relationship is fundamentally altered as
privatization introduces the notion that land is a commodity to be bought, sold, and
exploited for its resources (Nugent, 1991:4). Throughout Mexicos process of
economic development, campesinos have been uprooted from their identity with their
community and from their source of livelihood.
The modernization of Mexico's economy and its integration into the global
system are an impetus for an agricultural structure in which output is both intensified
and oriented towards international consumers. Small farmers are seen as a hindrance to
this process and have been slowly uprooted from their traditional role. They often lack
the resources to develop their land's productive potential while larger estates are given
preferential treatment in the allocation of state subsidies and support. Through rural
violence many peasants often suffer from the dispossession of their lands by illegal
means. In this way landlessness and the dislocation of peasants in Mexico have been a
continual social, political, and economic tension which have many times challenged the
countrys image of political stability. The rural struggle has not only been an economic
and political one, but it has also been a struggle to preserve a cultural identity and a way
of life.
Throughout the following pages, the historical development of Mexico's
agricultural sector will be outlined and in this analysis a pattern of distorted
development will become evident. Some have called this functional dualism,
sustaining profits for large-scale agriculture while destitution and social dislocation
experienced by small farmers increase (Sonnenfeld, 1992:35). As Mexico has
become more integrated with the global economy through its neoliberal approach, the
issues of land ownership, allocation of resources, and production and consumption
patterns have often evolved and changed to coincide with the economic trends
occurring on both a national and international level. The origins of the structural
problems hindering Mexico's agricultural sector today have their roots in the liberal-
18


economic period of the late 1800s during which the country embraced foreign capital
and privatization in attempts to modernize its economy. The following analysis of
Mexico's agricultural trends will study the changes and restructuring of the economy
to determine the implications that both state-led development and market-driven
strategies have had on agriculture and small fanners. As Mexico continues to search
for a viable economic direction, it is necessary to understand the weaknesses and
limitations of past models to gain historical perspective and understand the
implication of present policies. This chapter will outline agricultural strategies which
have been implemented under each model. In studying the outcome of these policies
the question of neoliberalism's viability as an economic model will be addressed.
Late Nineteenth Century
Nineteenth century Mexico was marked by similar issues of control over land
which currently divide the country. This period of post-independence helped to create
the structure of agriculture which has become a nemesis of Mexico today. Although
the roots of the agrarian question can be found in the period of conquest and before,
for the purpose of this paper the study will begin with the late 1800s, which marks a
period in Mexico's history of significant political and economic change.
The constitution of 1857 set in motion a policy of land distribution and
economic relations intended to strengthen the domestic market and expand the
number of private property owners. To spur economic growth, the agenda called for
the expropriation of clerical and indigenous communal land which were believed to
hinder the development of an economically stable state (Barry, 1995:15). Although
these laws were met with peasant resistance and little movement in land tenure
followed, with the emergence of Porfirio Diazs dictatorship (1876-1910), these
trends were reversed. The political atmosphere under his regime had a significant
impact on land concentration. The mass dispossession of land was motivated by
19


Diazs attempt to gamer the support of the landed elite and foreign capital for the sake
of economic growth. Although divesting the peasantry of their holding was
institutionalized prior to Diaz, it was under his repressive regime that land grabbing
was so ruthlessly carried out.
Under Diaz, key sectors of the economy such as mines, plantations, and
railroads became owned and controlled by foreign capital. The construction of
railroads was undertaken to better accommodate and support the development of
Mexico's export sector. The development of this infrastructure increased the value of
surrounding lands. To appease economic interests, the last few decades of the 19th
century saw legislation which set in motion the pattern of large concentration of land
for a few and the dispossession of a mass number of the indigenous population.
During his regime, land concentration was accelerated, depriving the rural population
of 90% of its holdings (Barry, 1995:16 and Sonnenfeld, 1992:31). Those who
supported the regime were granted land concessions through laws which surveyed
what were considered to be vacant public lands, and made vast territories available for
sale. Although peasants had tilled their land for generations, if they could not
demonstrate ownership with a legal title, their parcels were deemed vacant and
expropriated (Keen, 1992:217). This process formalized the colonial hacienda which
now had access to a large population of landless peasants who could serve as a rural
workforce for the new agrarian bourgeoisie.
The illegal dispossession of land reached extreme conditions. Many haciendas
failed to use their large plots efficiently leaving vast tracts lie idle. This led to the
stagnation of basic grain production, depleted Mexico's food resources, and caused
widespread hunger and destitution.
The triumph of the liberal-economic structure which depended on more
foreign capital created severe poverty, landlessness and growing dissent. As laborers
received wages of hunger and worked in slave-like conditions to create an
20


environment attractive to foreign capital these grueling conditions intensified social
unrest. To ensure stability and security for investors, the Diaz regime repressively
quelled this rising dissent. This period of rural poverty and mass displacement of
people from their livelihood and identity finally culminated into a social revolution.
The Mexican Revolution led to an overthrow of this system only to replace it with an
authoritarian state whose approach to the order and stability necessary for economic
progress was just as counterproductive. Revolutionary leaders had called not only for
massive redistribution of expropriated lands but had demanded increased peasant
autonomy and control over resources as a goal to address social injustices (Barry,
1995:138). By granting local control to campesinos themselves, not only would this
remedy past abuses but it would give power to those who were motivated by the
interests and needs of the poor.
The fundamental crisis in Mexico, resulting from political and economic
practices of the 1800s which led to the gross concentration of land, was not
completely ended after the Revolution. A consequence of the pre-Revolutionary
agenda was the polarization between those with access to land and its productive
resources and those dispossessed of this right. Although the Revolution partially
addressed this, the changes were just enough to pacify and quiet dissent but not to
overturn patterns of unequal development between peasant agriculture and large-scale
commercial farms that led to crisis in the countryside. By continuing to receive
preference in the allocation of fertile land and resources, the landed elite came to
represent structures of power which remained in place after the Revolution.
Post-Revolutionary Mexico
A significant change in rural Mexico occurred due to the Revolution, laying
down the foundation for far reaching reform which followed decades after. Although
the constitution of 1917 declared the redistribution of previously confiscated village
21


and peasant land holdings, it was not until the presidency of Lazaro Cardenas (1934-
1940) that some of the demands of the Revolution were realized. The Cardenas
reforms were motivated by a set of beliefs which valued the importance of small
industrial and farming communities and saw the role they played in production for the
nation's domestic needs (Foley, 1991:44 and Barry, 1995:27). During this period the
state emphasized the development of small farmers whose economic function, as
envisioned by Cardenas, was to provide enough agricultural goods for both domestic
consumption and export production. It was hoped that the ejido sector would produce
the export-agriculture necessary to bring in the foreign exchange to fuel industrial
development (Barry, 1995:22). Although this was Cardenas intent, in reality it was
the large-scale commercial farmers who were able to produce enough export crops to
bring in the necessary capital for industrial development.
Granting access to land was one of the crucial components aimed at solving
the rural and agricultural crisis preceding the Revolution. Many haciendas were
broken-up and, while the government owned these lands, they were donated to those
previously divested of their property rights. Altogether peasants received about 45
million acres (Keen, 1992:284) with each ejido plot intended to be worked
collectively (Nugent, 1991:96 and Barkin, 1994:30). An important component of the
reforms, which ensured the productivity of ejidos, was the assistance provided by the
state in the form of credit and technical support. This redistribution directly affected
the number of landless laborers which declined "from 68 percent to 36 percent of the
rural workforce (Barry, 1995:22-23). However progressive the redistribution of land
was, the limitations of the Cardenas reforms only brought temporary support to ejido
development. These changes were a way to alleviate the desperation and misery of
rural Mexico, however a critical aspect of reform, granting local autonomy and
control over resources, was not included to ensure the states political control over
this sector. Failure to grant this important revolutionary demand hindered the success
22


of the Cardenas reforms by increasing the role of the state and disempowering
campesinos. Peasants were not granted control over the institutions of credit,
technology and other forms of support which would have ensured these resources
were accessible to the typical small farmer (Barry, 1995:24). As a result of these
incomplete reforms during the years following Cardenas the existing pillars of
agrarian power maintained the structures which perpetuated the dual development
occurring in the countryside.
The case of coffee plantations in Soconusco, Chiapas is indicative of the
inadequacies of land reform initiated under Cardenas. Although about 50 percent of
plantations were impacted by expropriations and credit increased substantially in
Soconusco during the mid-1940s, the most productive coffee plantations remained in
private hands (Benjamin, 1989:207). Large land holdings were surrounded by
underproductive and undercapitalized ejidos which contributed, by means of cheap
labor to the prosperity of private growers (Benjamin, 1989:207). Bi-modal
agriculture continued, represented by a small prosperous coffee plantations and large,
impoverished ejidatarios.
Although a major factor behind the revolution was access to land, imperative
to the completion of its goals was the assurance that those who worked the land not
only had right to ownership but also had access to and control over resources which
would have enhanced their development. It was important peasants controlled
institutions of credit and technical support, distribution and storage facilities and had
water rights as well. Peasant autonomy and control over the process of production as
well as local self government were important elements left out of the reformed
agrarian communities (Barry, 1995:18 and Cockroft, 1990:103 and 134). Apolitical
structure was created which was necessary to forge support for the state. This built
the foundation out of which evolved a state apparatus that could quiet dissent and
mobilize society to create the political stability which enabled economic development.
23


To facilitate the expropriation of agroexport estates against the strong objectives of
agrarian power structures, Cardenas created a state/campesino alliance which
incorporated all beneficiaries of the reforms and channeled campesino organizing
efforts through a national federation aligned with the state and the ruling party (Barry,
1995:22 and Cockroft, 1990:131). This alliance, which also included labor, allowed
the government to better organize and have more control over these sectors of society.
These changes became a double-edged sward for campesinos.
On the one hand this corporatist structure allowed the Cardenas reforms to
return dignity as well as resources to agrarian communities. On the other hand,
however the role of the state was increased and campesino organizations could not be
counted on as a vehicle through which peasants could effectively have a voice and
wield their power (Barry, 1995;23-24). The corporatist structure denied them
political space necessary to make their interests part of the states agricultural agenda.
The limited reforms continued, supported by this alliance of social sectors, and were
hidden behind the rhetoric of a government which still had the interests of the
campesinos and land reform in mind. In theory land reform was represented by the
ruling party, but as the changes that followed show, the reality decade after decade
was the continuation of the bi-modal agricultural structure which provided extensive
state support to large-scale commercial farmers while ignoring small farmers. This
dualism was a functional strategy for the economic model. It developed a sector
which became efficient enough to bring in foreign capital to spur industrial growth.
Although dualism appeared to be successful, the polarity between large agribusiness
operations and the marginal ejido sector became a major impediment to a more
dynamic and sustainable agricultural structure. This growing disparity prevented
Mexico from maintaining self-sufficiency in basic grains, hindered the countrys
productive potential, and led to a social deficit in rural Mexico creating instability and
increasing unrest.
24


Green Revolution
The focus on agricultural production after the 1940s significantly changed the
characteristics of the Mexican fanning sector as a model of modernized export-
oriented development began to take hold in the countryside. Those following
Cardenas focused less on populism and more on promoting industrial capitalism.
Using the corporatist structure as a vehicle of political control the state was better
prepared to promote this capitalist development (Barry, 1995:25). This new focus
which included large-scale commercial production coincided with the beginning of
the Green Revolution. In an attempt to expand production and productivity of
agricultural goods, in 1943 Mexico adopted the Green Revolution which intensified
output through the use of hybrid-seeds, fertilizers, pesticides, and increased
mechanization of agricultural production (Barkin, 1990:17 and Cockroft, 1990:165).
In addition, the Green Revolution spurred the development of rural infrastructure such
as dams, electrical-generation facilities, and roads (Sonnenfeld, 1992:32). This
radically altered the process of farming. Increased government investment in rural
infrastructure such as irrigation districts, in addition to the distribution of rain-fed
land to campesinos significantly increased the land under cultivation (Sonnenfeld,
1992: 31-32 and Barkin, 1990:16). The "Mexican Miracle" was created which
allowed the country to increase its agricultural output four times and enabled it to
complete food self-sufficiency by the mid-1960s (Sonnenfeld, 1992:29 and Barkin,
1990:11). In the late 60s and 70s there was a major shift in Mexicos crop
composition. With improvements in refrigeration and transportation, Mexico was
able to take advantage of the expanding U.S. market and began growing high-valued
fruits and vegetables for export.
This successful growth in agricultural production was important in supporting
Mexicos process of industrial development. The rural economy was crucial in
providing Mexico with foreign exchange needed to invest in industrialization and
25


these new agricultural policies were fundamental to the strengthening of the economic
model. Export-crops brought in the necessary foreign reserves and the government's
policy of low prices for basic grains provided a cheap source of food for low-wage
urban workers. With modernization taking place in the countryside and agricultural
development becoming export-oriented, foreign capital was a dominant player in
these changes. In 1966 U.S. corporations invested $107 million in agricultural
development, a figure which had more than doubled by 1978 to $229 million
(Sonnenfeld, 1992:36).
Even though Post-Revolutionary Mexico's economy was shaped by the
process of industrialization and a state that was actively involved in the direction of
the economy, this model was also unable to find a solution to Mexico's rural problem
on a long term basis. The agricultural policy during Cardenas was a dramatic shift for
the benefit of rural Mexico as is demonstrated by an increase in the amount of land
under cultivation as well as the number of peasants who had access to land and the
resources necessary for its development. These reforms augmented by the
implementation of the Green Revolution, led to a substantial increase in Mexico's
basic grain production. The increase in area cultivated for basic grains alone
demonstrates this shift. In 1940 less than 4 million hectares were dedicated to maize,
which jumped to almost 8 million hectares in 1965 (Barkin, 1990:21). It is important
to note that although these changes in agriculture saw positive results in output, as the
Green Revolution was better suited for large-scale producers, it was these farmers and
not small-scale peasants who benefited from these improvements. The agricultural
structure which supported this temporary improvement in production levels was based
on unequal development and unequal distribution of resources, which fundamentally
flawed the changes occurring in the countryside. Similar to the rural crisis preceding
the revolution, the late 1970s was also marked by a large concentration of land, a rural
labor force in desperate conditions, a dependence on foreign capital for inputs, and the
26


disintegration of rural communities. By 1970 land concentration reached levels
similar to pre-revolutionary times: 2 percent of farms used 76 percent of the land
while 51 percent of farmers cultivated only 0.6 percent of land (Cockroft, 1990:177).
While many peasants were finally awarded the opportunity to participate in the
rural economy, agrarian policies once again began to create the same severe
conditions which existed prior to the Revolution. Peasants were becoming dislocated
from their source of livelihood and identity. The government's agrarian policies
reflected the dual strategy of pre-Revolutionary times, investing in and supporting
agribusiness while ignoring small farmers. The resources for both physical and
institutional infrastructure provided by the Green Revolution were better suited for
large landholders who had a greater ability to adapt to the changes required by
international demands of agriculture. By the mid-1970s, a consistent pattern of
government support tunneled to large commercial farmers increased marginalization
of many peasant communities.
Instead of being motivated to feed its own population, the rural economy in
Mexico began producing for profit and catering to more affluent international
markets. Modernization and this intense promotion of export crops negatively
impacted Mayan producers in Chiapas. Coffee production in their communities
diverted resources from traditional subsistence crops. As land and labor were not
utilized for basic foods, these Mayan coffee producers became increasingly dependent
on their cash crops to purchase the basic grains in which they were once self-
sufficient (Hernandez Castillo and Nigh, 1998:141). The export orientation of
agriculture which catered to international consumers meant a shift in crop
composition from basic grains to high-valued fruits and vegetables. Land cultivated
for basic grain production in the early 1940s was 3/4 of the total area fanned. By
1980 this dropped to less than 50 percent of the total area while land used for non-
essential goods and livestock increased (Barkin, 1990:20). The governments policy
27


of low price-guarantees for staple crops eliminated the incentive for basic grain
production (Foley, 1995:62 and Barkin, 1990:21). Since 1965 Mexico's ability to
feed its population gradually declined (Barkin, 1990:20) creating greater dependency
on foreign markets to provide staple crops. The total amount of grain imported
during the 1960s reached 689,000 tons which jumped to a total of 60 million tons
between 1980 and 1989 (Russell, 1994:194).
This transformation in the countryside provided little in the way of viable
options for displaced Small fanners who depended on the sale of basic grains. These
farmers faced greater difficulty assimilating in the new world system and competing
with larger more resourceful producers both nationally and internationally. Without
incentive to produce basic grains for the domestic market and unable to develop their
agricultural potential for export crops, many small farmers were left with few options
in making the transition into the global market. Forced by the necessity of survival,
many abandoned their land and migrated to urban areas in search of better
opportunities. During the 1960s alone, 3 million migrated from rural Mexico to the
cities (Cockroft, 1990:172), while during the 1980s 300,000 to 400,000 people yearly
left the countryside (Russell, 1994:194). Marginalized from the opportunities and
successes of the internationalization of agricultural, many producers abandoned their
land to integrate into the wage-labor sector. With the increased mechanization of
agriculture, job opportunities in the rural economy, however have greatly diminished.
The rapid development of the export-sector was unable to absorb enough of Mexicos
economically active population. In the following chapters it will be discussed
whether wage-labor is a viable option for rural Mexico.
The repercussions of integrating Mexican agriculture into the global economy
are more complex than just the displacement of small farmers. The environmental
problems left behind by intensified production of export crops challenged the
agricultural structure and began to erode the successes. Specific problems such as
28


water salinization, desertification, deforestation, and pesticide abuse have contributed
to the agricultural crisis which existed under Mexico's model of economic
development (Sonnenfeld, 1992:30). Soil erosion alone has destroyed 15 percent of
Mexico's agricultural lands while 225,000 hectares have been lost annually to
desertification. In 1980, Mexico's livestock industry was partially responsible for the
loss of 530,000 acres of forest (Sonnenfeld, 1992:42). As forests help to maintain the
supply and quality of water and soil while controlling runoff, deforestation further
exacerbates the ecological problems facing Mexico. In many regions throughout the
country, water supply has also been seriously threatened. Along the U.S.-Mexican
border in places like Juarez and Mexicali, availability of water has not only been
affected by overuse of underground supplies but these supplies are also threatened by
chemical contamination (Sonnenfeld, 1992:39-40). Pesticides, fertilizers and
livestock waste have highly polluted sources of water, creating the potential for major
health problems in Mexico. It is evident in the face of these problems, that Mexicos
agricultural policies were pursued without considering the long-term social and
environmental consequences that have occurred.
Like the Green Revolution, other programs and efforts to address the crisis in
the countryside have led to similar failures. During the 1970s President Luis
Echeverria (1970- 1976) made attempts to improve the conditions of small farmers
through the Public Investment for Rural Development (PIDER). PIDERs role was to
improve yields in rain-fed agriculture by providing technology, credit and extension
services while also emphasizing marketing support for the newly developed crops
(McDonald, 1996:78). The programs focus, to incorporate commercial crops into
peasant communities, was criticized by some for threatening these communities with
heavy debt while actually benefiting landed elites, local banks, and middlemen
(Cockroft, 1990:200). Other efforts during Echeverrias term which were intended to
benefit peasants but actually resulted in undermining their needs, were his attempts to
29


organize campesinos into associations and unions to increase their efficiency on a
local and national level. Corporatism, however, undermined Echeverrias progressive
agrarian efforts. When organizing by campesinos was directed at changing the top-
down structure of state agencies or other attempts toward land reform they were met
with repression. While the constraints of these corporatist relationships denied
peasants sufficient space to use their power and demand change, this relationship
between campesinos and the state was not strong enough to overcome opposition to
reform from private sector. Unlike Cardenas era, Echevema had to contend with a
more powerful private-sector which may have limited the scope of his reforms (Barry,
1995:37-38).
Toward the end of the 1970s the issue of national food self-sufficiency once
again demanded attention. Com imports were rising and Mexico was becoming more
dependent on the U.S to feed its population. The government responded to this
deficit in basic grains by implementing the Mexican Food System (SAM) which
provided an incentive for com producers offering higher grain prices and subsidized
inputs. The initiation of this program in 1980 resulted in a dramatic turn around for
basic grain production. As Mexico reduced com imports by 1.4 million tons from
1980 to 1981, once again it became evident that with the appropriate policies the
country was capable of feeding its population (Barry, 1995:40-41). While SAM was
successful in terms of agricultural output, these policies did not address fundamental
problems of unequal development in Mexico. The rural poor were once again
marginalized from acquiring the skills, technical support, and credit necessary to help
them achieve self-sufficiency as campesinos. As has historically been the case in
Mexico, the power of mid-sized and large-scale producers was reinforced by the
distribution of SAMs resources, sixty percent of which were allocated to irrigation
districts (Cockroft, 1990:298). As Barry comments, SAM was an implicit
recognition that agricultural modernization had not touched campesino farmers and an
30


acknowledgment that the agricultural crisis identified in the late 1960 had not gone
away (Barry, 1995:40-41). This failure to restructure agriculture was continued
throughout Mexicos economic shift of the 1980s. Although agricultural policy
changes during the 80s and 90s are discussed at length in the following chapter,
some general trends are worth noting in the context of this discussion.
Neoliberal Era
Both the Green Revolution and state-led development of Mexico's economy
paved the way for the internationalization of the country's agricultural sector and this
process of economic integration was made complete by the neoliberal reforms which
began with the Mexican crisis in 1982. As the previous chapter explained, this crisis
caused a major restructuring in the shape of Mexico's economy, which had far
reaching implications in rural Mexico. Policy changes occurring on a broad
macroeconomic level were reflected in the countryside, reinforcing structural
problems of unequal development, marginalized campesino farmers, and intensified
land concentration, hunger, unemployment and urbanization.
Just as the state reduced its role in the economic sphere during the 80s, its
support in Mexico's agricultural sector was reduced as well. Subsidized credit fell
from 1.3 percent of gross domestic product to 0.1 percent between 1982 and 1991. In
1980 the share of government investment in the countryside was 19 percent. By 1989
however, this had fallen to only 5 percent (Russell, 1994:194). This reduction in
rural spending led to a decline in the production for basic grains which was
compensated for by the influx of low-cost grain imports. Farmers in most sectors
faced the elimination of both agricultural subsidies as well as price guarantees while
simultaneously being pressured to compete against these agricultural imports (Foley,
1995:60 and Barry, 1995:104). The reduction in rural spending required by economic
31


restructuring, actually cost 4.8 billion in agricultural imports in 1990 (Russell,
1994:194-195).
Consistent with economic policies of privatization and increased foreign
investment and motivated by the belief that private investment would create a more
efficient and productive farming sector (Barry, 1995:47), in 1992 Mexico legalized
the sale of the ejido. Mexico's most sacred revolutionary accomplishment which laid
the foundation for progressive agrarian reform was ended. Small farmers who have
witnessed support being tunneled to the large agro-export sector while their assistance
diminished, whose crops can not be sold domestically in the face of cheaper grain
imports have found themselves in an increasingly more desperate condition. The
ability to sell or rent their parcels of land to corporations and foreign interests may be
more appealing than the continuation of destitution. The ejido which preserved a way
of life, reinforced cultural identity, and provided basic necessities of food and shelter
now stands the chance of being lost.
Conclusion
It is evident from the above study that similarities exist between the liberal
and ISI models as they relate to agricultural development. Both models encouraged
the growth of large-scale agriculture by funneling resources such as credit, technical
assistance, and other forms of support to this sector while ignoring small and
subsistence fanners. Although there have been many attempts to address the crisis in
the countryside, these policies and reform efforts have not targeted the fundamental
and underlying causes of the problem. This study shows the inadequacies of
Mexicos approach to state intervention and neoliberalism, both of which reinforced
the bi-modal structure of agriculture, having dramatic consequences on small farmers.
While the state could have had an effective role in the rural economy, it proved to be
inefficient in both its unequal distribution of resources, which did not target small
32


farmers, and its cooptive relationship with peasant organizations which denied them
autonomy and control over the means of production. The neoliberal model, too, has
continued to encourage this problematic agricultural structure. Increased trade
liberalization and deregulation of the state were yet again shortsighted measures
which deepened the desperation of peasants who were already facing less support
from the government and struggling to compete with imported basic grains.
This modernization in the countryside has been carried out at the expense of
the peasantry. This structure appears to be functional for the neoliberal agenda by
facilitating the development of a strong export sector and attracting foreign capital.
When closely analyzed, however, it is apparent that the consequences and hardships
endured by those dislocated and marginalized become fertile ground for social
disruption and greater political instability. It is evident that the more intertwined
Mexico is with the international economy, the more domestic policy and consequently
these reform efforts are influenced by international capital. In this environment the
state has less freedom to address issues of social inequality and eradicate the power
structures which perpetuate these conflicts in rural Mexico. The following chapter
studies whether the conditions, which throughout the country's history have
consistently resulted from poor agricultural planning, continue to persist under the
neoliberal policies of the 80s and 90s.
33


CHAPTER 3
CAMPESINOS RESPONSE TO A CHANGING
ECONOMIC ENVIRONMENT
The ripples of Mexicos macroeconomic shifts have profoundly changed the
rural landscape in which traditionally campesinos have had a strong role. With such
rapid transformation and restructuring taking place in the economy, Mexicos small
farmers are now struggling to find their new place. This chapter assesses how this
new opening has affected the livelihood of rural Mexico, and examines farmers
adaptive strategies of farmers which have evolved as their survival has become more
precarious. While the following chapter will explore alternatives outside of
agriculture, this chapter studies alternatives available within the agricultural sector.
In studying the changing environment for small farmers across varying
agricultural sectors, several relevant questions emerge. As campesinos are faced with
greater difficulty in continuing with their traditional means of survival, has their
resilience and determination enabled them to develop new strategies which
successfully integrate them into the rapidly emerging economic order? Has the
neoliberal model excluded the majority of small farmers, replacing the infrastructure
of support on which many depended with hostility, uncertainty and continued
poverty? What new niches have farmers created for themselves? The answers to
these questions remain elusive as it is too soon to draw firm conclusions about the
neoliberal model in the Mexican countryside. However, the limited research
available, which documents the experiences and current condition of small farmers,
does permit some tentative conclusions about the future sustainability of the
neoliberal model.
34


In this chapter options employed by small fanners in different agricultural
sectors are analyzed. In particular, this study will include the experiences of peasants
who make up dairy producers, com farmers, cane growers, melon producers, and
coffee growers. These producers were chosen to demonstrate the similarities that
exist across the diverse sectors in agriculture. The com sector is important to this
study not only because it represents such a large percentage of farmers but also
because basic grains have had a strong role in the development of agricultural
policies. Melon and cane growers were chosen as they provide clear examples of
fundamental problems in agricultural development with regard to the lack of peasant
autonomy. The experiences of coffee and dairy producers were included because they
provide examples of the development of viable alternatives within the neoliberal
model.
The farmers represented in the study, with the exception of dairy producers,
are generally small-scale producers with little to no access to resources such as
irrigation, credit, technology, and marketing support. Most com producers, for
example, plant on an average of 2.3 hectares, use primitive technology, and produce
very low yields (de Janvry, Sadoulet, and Gordillo de Anda, 1995:1349). Those in the
dairy sector are mid-level fanners with an average of 50 cattle and most are
mechanized (McDonald, 1997:322). As this study will show, whether these
producers are small or medium growers, they all face problems associated with the
globalization of Mexicos economy: a change in state policies and the
implementation of NAFTA. These case studies document the important political and
social issues of changing rural livelihood as a consequence of economic crisis and
restructuring. They speak to the resilience and determination of many farmers to
continue doing what has been done in their families and communities for generations.
They also demonstrate how innovative these rural actors have been as they struggle to
stay within the margins of society.
35


Dairy Producers
Dairy farmers in general are somewhat unique in relation to others represented
in this study as they are not small subsistence peasants nor large-scale farmers
engaged in export-oriented production. These dairy farmers are mid-level capitalist
producers participating in an industry which requires heavy investment in fixed
capital (such as) specialized buildings and machinery (and) dairy herds (McDonald,
1997:324). As dairy farmers adjust to the rapidly changing economy, however, they
face similar concerns of farmers throughout the Mexican countryside, diminishing
resources and other government support and an increasingly precarious survival.
The history of the dairy industry, like that of other agriculture sectors, mirrors
what is happening in Mexico on a macroeconomic level. Dairy farmers experienced
relative stability through the 1960s and 1970s, a period during which the government
was closely linked with milk production through price controls and other forms of
agricultural support. Mexicos economic instabilities since the early 1980s, however,
have dealt a serious blow to dairy farmers who were challenged with increased
inflation, a drop in government support, and a decrease in the wholesale price of milk
(McDonald, 1997:324). In 1989, for example, Guanajuato dairy farmers were
receiving $.36 per liter for their product which dropped to $.24 per liter in 1996
(McDonald, 1997:325). The income of dairy producers has been further diminished
by the devaluation of the peso in 1994, which contributed to a drop in the domestic
consumption of milk by 34% (McDonald, 1997:324). The 1980s up until the present
have also been marked by scarce credit and rising costs of production (McDonald,
1997:321).
The survival of the dairy industry is one of even greater uncertainty as it is
faced with the changes brought by NAFTA. James McDonald addresses the possible
impact more open trade will have on the industry. Unlike some agricultural sectors
whose competition with international producers will be slowly phased in over a
36


number of years (maize for example, has a phase-in period of over 15 years), dairy
producers are being pushed into the international economy at a pace much faster than
many other farmers, making it difficult for them to respond and adjust (McDonald,
1996:88). Reduced trade barriers will most likely result in an increase in the amount
of imported powdered milk, a product against which Mexican dairy farmers have
difficulty competing. To begin with, powdered milk is cheaper for consumers to
purchase than fresh milk and dairy processors prefer the powdered form as it gives
them greater production flexibility. With Mexico already being the worlds leading
powdered milk importer, NAFTA will give North American dairy producers even
greater access to Mexicos domestic market, threatening dairy farmers even more
(McDonald, 1997:325).
There are other challenges dairy farmers face, indicating how vulnerable they
can be and how necessary it is for the government to support them during these
economic transitions. A major complaint of dairy fanners is the organization and
structure of production and processing which often places them in a vulnerable
position and at the mercy of middlemen. These middlemen who have the equipment
to cool, store, and transport milk, purchase small amounts of the fresh product from
farmers and deliver it to a processing plant. In a study of small commercial dairy
farmers in north-central Guanajuato, every farmer surveyed voiced their concerns
with middlemen who took advantage of them by not paying them enough for their
milk, not paying them on time, or not paying them at all (McDonald, 1997:322).
Dairy producers are also vulnerable to the fluctuations of periodic surpluses and short
falls in the domestic production of milk. When there is too much milk and the
processing plants are not buying, this glut becomes a loss the dairy farmers are forced
to incur. It is evident that like many agricultural producers, Mexicos dairy farmers
are facing a myriad of problems. The conflicts brought on by the economic
restructuring have resulted in a decrease of dairy farms in Guanajuato between 1993-
37


1994 of 40 percent (McDonald, 1997:322). It is in this context that this paper now
looks at the survival strategies of dairy farmers.
Milk producers are engaging in a number of activities in response to an
increasingly more hostile environment, from acts of resistance and protest, to
strategies which, instead of resisting the changes are attempts to accept the
environment and try to adjust to it. The strategies in which small farmers are
engaging include forming cooperatives, diversifying and cultivating export crops in
addition to milk production, remaining independent and slowly trying to modernize,
or abandoning dairy farming all together and turning to wage labor for survival.
Public demonstrations of resistance were reported in the border state of Chihuahua
where dairy farmers had attacked and vandalized trucks which were carrying imported
fresh milk. The government of Chihuahua which was sympathetic to producers
concerns went as far as increasing the taxes on this imported milk (McDonald,
1996:89). In Chihuahua and Guanajuato dairy farmers have been known to publicly
dump their milk at government buildings to protest their difficult situation. Many
dairy farmers on the other hand, are turning to cooperatives, an option which has the
potential to be successful.
McDonald documents the formation and operation of two dairy cooperatives
in Guanajuato to discuss both the problems encountered by these dairy farmers as
well as what he sees as the role of the state in the transformations taking place in rural
Mexico. Dairy producers who participate in regional marketing cooperatives have
found a number of advantages. By pooling their resources cooperative members not
only can purchase farm inputs in large quantities at a discount, but they also benefit
from the collateral and capital they have to apply for loans to purchase machinery
necessary to refrigerate, store, and transport their product. Purchasing this heavy
machinery means dairy producers no longer have to depend on a middleman to
provide these services. Producing milk independently increases dairy farmers profits
38


not only because they are able to sell directly to processing plants but cooperatives
can sell their refrigerated milk in bulk, which has a greater wholesale value
(McDonald, 1997:327). Although this strategy appears to be a good alternative for
the dairy industry, the following case studies document the experiences of two
cooperatives and underscore the potential problems which can also be encountered.
The Dolores Hidalgo Milk Producers Association, which was formed in
August of 1994, experienced success in the initial stages of organizing. As was
explained in the preceding paragraph, participating fanners benefited with reduced
input costs in the technology and machinery distributed among its members. As the
Mexican government has made credit more available to farmers who form joint
ventures, the Dolores Hidalgo group was able to secure a loan, half of which was
covered by a state rural development program (McDonald 1997:328). After
successfully combining their resources and investing in the necessary equipment, the
next crucial step was securing a contract with a dairy processing plant.
Entering into a contractual agreement is a critical concern for cooperatives in
this industry. Without having a guaranteed market for their product and accumulating
debt for production costs, these farmers are in a vulnerable position, facing the
possibility of losing their investment. At the time of McDonalds study the Dolores
Hidalgo group was in such a position. The two processing plants they had
approached only wanted to contract with producers of high volume and turned the
cooperative down, leaving Dolores Hidalgo farmers without a contract for their
product (McDonald 1997:328). In 1997, however, McDonald followed up with these
dairy producers and found they had recently secured a written contract with a large
multinational processing plant, giving them access to U.S. markets. Dolores
Hidalgos experience is unique. According to McDonald it is more common for
cooperatives to enter into verbal contracts at most, leaving the cooperative in a
39


tenuous situation as they are not guaranteed the processing plant will honor its verbal
agreement (McDonald 1997:327).
Similar to the above case, farmers in the Northeast Guanajuato Milk
Producers Union found forming a cooperative an appealing option. These farmers
created the association so they could combine their resources and decrease their
economic risks associated with milk production. Unfortunately the group was
characterized by members mistrust of one another, which inhibited the organization
of the association. When it came to providing titles to their property to secure a bank
loan, out of the 80 members, only 9 were willing to sign over their property to the
bank (McDonald, 1997:328). Additionally, some of the members expressed concern
with high interest rates, which is justified considering most loans are offered at a
variable interest rate and fluctuations in Mexicos financial markets could be
devastating for them (McDonald, 1997:327). Reluctance of members to participate
due to mistrust and high interest rates eventually lead to a disbanding of the group.
The experiences of the farmers in these two groups is rather unique. These
mid-sized capitalist dairy producers who pool their resources have the potential to
improve their technology, become more efficient and competitive, and most
importantly secure a place for themselves in the market. Small-scale producers, a
majority of which make up Guanajuatos diary industry, do not have the capital nor
the assets which would facilitate the organization of a strong cooperative. According
to the states branch of SAGAR (Secretariat of Agriculture, Livestock and Rural
Development), these dairy farmers are rapidly experiencing dislocation and going out
of business (McDonald, 1997:329). As was indicated earlier in the chapter, in 1993s
production cycle the number of dairy farmers fell 40 percent (McDonald, 1997:322).
The plight of Guanajuatos producers is not an isolated experience as similar struggles
exist in other regions of Mexico as well. The survival of Michoacans small-scale
dairy farmers is also becoming more insecure.
40


In an informal interview with McDonald he addressed the situation of
Michoacans dairy industry. Although these farmers are large dairy producers, their
production process is very primitive in nature and lacks the heavy machinery used by
mid-sized capitalist farmers. A lack of technology, however, is a minor obstacle these
producers face. More serious concerns are a decrease in the wholesale price of milk,
competition with powdered milk imports, the price increase in farm-inputs, and most
detrimental to their survival, the dependence on purchased cattlefeed. McDonald
noted this last obstacle was causing them to go through a death by inches. As they
were becoming indebted to those who sold them the commercial feed they had no
other alternative but to slowly sell their cattle. (Personal Interview: 12/19/97).
McDonald argues this death by inches could be avoided if the state provided
support during the farmers transition from a state centered agricultural model to one
which is driven by the free market (McDonald, 1997:330). To ensure the survival of
Mexicos domestic producers in a competitive international market, one progressive
state program in Jalisco assisted dairy fanners in organizing cooperatives and
pm-chasing necessary machinery and farm inputs. The two largest dairy processors in
Jalisco have a policy of only purchasing milk from cooperatives, thus providing these
farmers with a stable market (McDonald, 1997:327). The state program facilitates
cooperatives ability to be more modem and efficient producers. All these conditions
combined have led to the survival of most dairy cooperatives in Jalisco (McDonald,
1997:327).
The neoliberal model encourages the privatization of property, a process
generally carried out by individuals or corporations. Instead of the dairy industry
undergoing privatization in this sense, neoliberalism has pushed farmers to form
cooperatives, creating collective as opposed to private organization of property and
the means of production. The development of these forms of social property,
facilitated by the transition to a market economy, has the potential to be a solution
41


which enables these fanners to be active players in the national economy. The degree
of success of these organizing efforts may be influenced by the nature of cooperatives.
Instead of forming joint ventures with private capital, these dairy producers are
dependent on their own resources as well as the collateral of each of the individuals
coming together to form the cooperative. The experience of cane growers discussed
later in this study is an example of the difficulties which can be encountered when
farmers are dependent on foreign or national capital. Private investors are more
inclined to form a joint venture with large-scale producers who also have resources
with which they can invest. Small-scale producers who pose a greater risk to
investors and lack the resources have greater difficulty attracting private capital.
Cooperatives present a great opportunity for both the state and market to
create the competitive yet inclusive and equitable development of an industry. While
neoliberalism is encouraging greater efficiency, competitiveness, and creating
investment opportunities, the state also has an important role to play. The state of
Jalisco is a great example of an appropriate point of state intervention. By forcing
foreign processors to negotiate contracts with producer associations the state has
guided components of a market economy to work more equitably. Forming
cooperatives appears to be disadvantageous for smaller producers who lack the
resources to create competitive, strong cooperatives. To address this problem, the
state could facilitate the creation of cooperatives made up of small- and medium-level
dairy producers by offering incentives to mid-sized farmers who participate in these
relationships. Small scale farmers could also receive support, in the form of credit for
example, to have something to offer in this partnership. These collective forms of
organizing could be a viable option if the state provided the necessary direction and
assistance to make up for the markets inadequacies.
42


Com Farmers
In comparison to other agricultural sectors discussed in this paper, maize has a
very unique place in Mexican society. It has not only historically been revered as a
symbol of life and fertility, but as a basic staple in the Mexican diet, the production
and consumption of maize is central to the livelihood of most rural Mexicans. In
1990, com accounted for 1/3 of total agricultural production and was grown by 78%
of ejidatarios (Barry 1995:103). Net surplus producers only made up 1/3 of these
fanners, forcing the majority of com growers, (85%) to supplement family income
through other economic activities. The following examines how agricultural policies
have shaped the com sector and how these farmers are adjusting to the economic
restructuring occurring in Mexico.
History of Agricultural Policies in Maize Production
The provisioning system of this agricultural commodity has been marked by
conflicting interests between producers who require high grain prices and consumers
who want to ensure affordable costs of grain and tortillas. This conflict is further
complicated by the millions of Mexican fanners who are both producers and
consumers of com and need to be ensured they have an advantageous price for their
crop as well as access to low-cost grain when it is locally scarce (Hewitt de Alcantara,
1994:1). Given the pressure the government has felt by the urban poor and employers
who are interested in maintaining low wages, the prevailing policy has been more
favorable to urban consumers. As a result, during the 1970s producers were receiving
a price support which was not sufficient to cover their inputs (Hewitt de Alcantara,
1994:2).
Although subsidized inputs and services compensated for these low support
costs, farmers still were unable to cover costs of production. In addition, these
43


supports did not target rural sectors which really needed assistance, instead tunneling
them towards large commercial agriculture. As low guarantee prices provided little
incentive to grow com, these subsidized fertilizers and other farm inputs were utilized
by large-scale fanners for other prosperous activities. Throughout most of the 70s,
about seventy-five percent of marketed com supply, therefore, was being provided by
medium and small-scale farmers (Hewitt de Alcantara, 1994:2). Recognizing the
need to support those farmers who supplied the nations maize, during the 1960s and
1970s the government extended these subsidies to help fanners who tilled unirrigated
land and fanned smaller holdings. Agricultural subsidies increased from 13 billion
pesos annually in 1970 to 49 billion pesos in 1981 (Hewitt de Alcantara, 1994:7).
Com producers not only benefited from cheaper inputs, crop insurance and other
subsidies, but in 1981 the real support price of com experienced an increase. These
farmers were also supported by Conasupo, the state agency which purchased com at
the support price and distributed the product to urban areas. Producers received
protections through this agency as Conasupo maintained strict controls over maize
imports, protecting producers from unfair competition. During the early 1980s,
consumers were also receiving support through subsidies and programs like SAM
(Mexican Food System) which ensured low-income families had access to basic food
products at controlled prices.
With Mexicos discovery of oil in the 1970s, and its access to the petro dollars
available on the international market, the government was able to maintain and
expand these policies of support for both small and large scale producers as well as
consumers. Once the economic crisis hit in 1982, however, the states ability to
continue with these measures was severely limited. A program of austerity was
imposed, during which SAM and other redistributive food policies were discontinued.
This later measure had dramatic implications on the nutritional level of the Mexican
diet. During 1982 consumers were paying 11 pesos for a kilo of tortillas in Mexico
44


City which by 1989 had shot up to 750 pesos per kilo (Hewitt de Alcantara, 1994:9).2
During times when maize is locally scarce, com producers are also dependent on the
market for the purchase of this basic grain and therefore, are also negatively affected
by this sharp rise in prices.
Although the economic turmoil demanded the government withdraw its
support from the agricultural sector, between 1983 and 1986 com producers did
receive an increase in the guarantee price for maize which was relatively equal to the
change in the consumer price index (Hewitt de Alcantara, 1994:10). This price
increase, however, was not enough to compensate for Mexicos program of austerity.
Small- and subsistence-farmers who lack resources to adjust were especially hit hard.
These farmers were impaired by the reduction of subsidized inputs and their
increasingly limited access to credit. During this time period, subsidies dropped 13%
per year while agricultural credit decreased 40% between 1980 and 1985 (Hewitt de
Alcantara, 1994:10). This environment became more hostile in the late 80s when the
price support dropped and farmers were forced to confront increased competition
from foreign producers. In 1987,43% of com farmers were operating at a loss and the
governments continued austerity pushed this number to 65% in 1988 (Hewitt de
Alcantara, 1994:12). This crisis made com production no longer a profitable option,
resulting in a drop in national cultivation of maize and demanding even more imports.
Similar to actions taken during the 1970s, the government recognized the need
to address the crisis experienced by com fanners. This was reflected in the policies of
the 1990s which protected com farmers and dramatically impacted the production of
this sector. Maize production during the 1990s was marked by an increase in the
guarantee price for com as well as policies which provided com farmers with some
protection from imported grains. This crop once again was seen as an attractive
2 It is unclear whether these are in constant pesos or if these numbers have been adjusted for inflation.
45


option for producers. These policies stimulated an increase in production so that
63.3% of irrigated land in 1996 was dedicated to maize, compared to less than 33%
prior to 1990 (Fritscher Mundt; 1996:288). It is important to note however, that these
policies were not aimed at the plight of the countrys small farmers who received
minimal supports during this period. Their limited access to credit and the
appropriate inputs left 61.4% of com growers operating without a profit in 1991
(Fritscher Mundt; 1996:292). With the possibility of the free trade agreement
looming on the horizon, the prospects for this sector as a whole once again looked
bleak.
The protectionist policies of the early 1990s were inconsistent with the
philosophy behind the free trade agreement Mexico was negotiating with the U.S. and
Canada. However, it was hoped that Canada, which was protecting vulnerable sectors
of its agriculture, was setting a precedent that could be followed by the Mexican
government (Mundt; 1996:295). Canadas decision to excluded both milk and poultry
products from the trade agreement would have justified Mexico implementing similar
policies with its most sensitive products, allowing the country to maintain the self-
sufficiency it had gained in the mid-1990s in basic grains. With the implementation
of the agreement, however, com producers were not granted similar concessions and
the liberalization of this sector was set into motion gradually eliminating quotas and
tariffs over a 15 year period (Mundt; 1996:296). Part of the agreement also calls for
Mexico to import 2.5 million tons of com from the U.S. tariff free. In order to
prevent oversaturating its grain market, the Mexican government has adopted new
policies to discourage the production of com by Mexican farmers. As a result, price
supports were decreased by 13.3% for the 1993-94 cycle and 6.6% more for the
following 1994-1995 cycle (Mundt; 1996:296). Mexican com producers will now be
at a great disadvantage when competing with imported grains. Their competitiveness
is not only hindered by limited support from the state but they are also competing
46


against a heavily subsidized U.S. com industry. U.S. com farmers benefit from a
government provided marketing program and their access to improved technology,
credit and other government subsidies give them a far greater competitive advantage
over their Mexican counterparts (Barry, 1995:89 and 266). Between 1983 and 1987
for example, Mexico dedicated 15% of its Gross Sectoral Product (GSP) to
agricultural subsidies compared with U.S. agriculture which received 38% of its GSP
(Hewitt de Alcantara, 1994:4).
It is difficult to ascertain the logic in Mexican agricultural policies which are
devoid of any consistent long-term planning. While both the U.S. and Canada are
providing necessary support for the survival and continued expansion of certain
agricultural sectors, Mexico is turning its back on and implementing policies which
are counter productive to the continued survival of a rural sector rich with productive
potential. As com farmers encounter diminishing opportunities, their options for
survival are equally as dismal. Although these misguided policies have created a
hostile environment for Mexicos rural sector, there are some contending arguments
found in the literature which challenge the notion that neoliberalism will be such a
devastating force for com producers to confront.
Some scholars have painted a bleak picture for com producers. With the
passage of NAFTA it was predicted that com farmers would encounter near
extinction as they were displaced by cheaper subsidized grains from the U.S. (Calvan,
1991). Falling price supports for maize create an even more critical situation as this
limits the resources necessary to hire agricultural labor. The reduction in guarantee
prices have led to stark predictions for the many rural Mexicans who depend on
agricultural employment to supplement their incomes. It has been estimated that as
many as 800,000 agricultural workers will be displaced by decreased productivity in
this sector (de Janvry, Sadoulet, and Gordillo de Anda, 1995:1351). As of 1991
maize producers accounted for 78% of Mexicos farmers (de Janviy, Sadoulet, and
47


Gordillo de Anda, 1995:1349 and Barry, 1995:103), which could present a serious
crisis if such a large sector of agriculture were to be marginalized.
There are contending views within the literature, however, with regard to the
severity of impact these neoliberal policies will have on Mexicos rural
demographics. Critics argue the predictions of com farmers disappearing are
overestimations which do not take into account the characteristics of Mexicos com
producers. By analyzing the profile of these farmers and differentiating between
those who produce for the market and those who grow com solely for their own
consumption, these authors determined that a majority of com farmers do not depend
on the market for the sale of their product and will not feel the direct impact as
producers (de Janvry, Sadoulet, and Gordillo de Anda, 1995:1349). In the three states
under study, Michoacan, Veracruz, and Sinaloa, the percentage of farmers who are
dependent on the sale of their com was documented to be 39.8%, 42.9%, 27.8%
respectively (de Janviy, Sadoulet, and Gordillo de Anda, 1995:1356). The sellers
as compared to farmers who do not sell their com on the market, generally have
access to more land and credit, most likely belong to producer and marketing
associations, and use more modem technology in cultivating their crops (de Janvry,
Sadoulet, and Gordillo de Anda, 1995:1352). Unlike most com producers, sellers
have the resources which make the option of diversifying their crops or modernizing
to increase competitiveness more of a reality. Although the percentage of those
directly impacted is small and these producers generally have the resources which
allows them to adjust, the impact that is being felt by a sector comprised of 78% of
the countrys farmers can not be overlooked.
Many com growers will be affected by an increase in input costs and/or by the
displacement of agricultural workers in the com sector. Even subsistence farmers
who do not market their crops are being negatively impacted by the instability of the
rural economy, which continues to worsen under the neoliberal model. Subsistence
48


farmers depend on off-farm income for the purchase of indispensable inputs, such as
fertilizers and herbicides. When household members emigrate, although this
generates necessary income, it creates a scarcity of family labor making it more
difficult to harvest crops (Hewitt de Alcantara, 1994:19). The stability of Mexicos
rural economy as a whole, of which sellers and nonsellers are an integral part, is
affected by Mexicos economic opening and these repercussions will be felt by all
farmers. Without an appropriate farm policy to address the needs of farmers, this
situation could become critical. By examining how com farmers have historically
reacted in the face of adversity and which strategies they have utilized, it becomes
apparent how difficult it has been for farmers to integrate into this new economic
landscape creating tensions which could ultimately jeopardize the political stability on
which Mexicos economy is very dependent.
How Com Farmers are Responding
Com farmers responded to the recession of the 1980s by adopting complex
survival strategies and/or by organizing themselves in attempts to resist as well as
influence policies detrimental to their livelihood. Many campesinos pushed for
higher support prices for their com and actively engaged in acts of civil disobedience
to press for change. By occupying Conasupo warehouses and blocking strategic
highways, some farmers were successful in gaining important concessions, however,
these were usually not sufficient to address the fundamental problem: producing com
was no longer economically viable (Hewitt de Alcantara, 1994:16). The following
section highlights options to which com growers have turned in adjusting to the
changing agricultural climate as well as their attempts to influence unfavorable
agricultural policy.
As the state withdrew its resources from rural Mexico, many of the institutions
on which campesinos had become dependent for credit and other forms of support
49


disappeared. Com producers filled in these gaps by creating their own institutions of
support. In states like Jalisco, Chihuahua, Nayarit, and Chiapas they organized their
own credit-cooperatives and insurance funds. One point of contention for many
campesinos was the lack of storage facilities for locally grown grains. Historically
Conasupo had funneled com from the rural com producing communities to the more
urban areas, leaving these rural families without com when harvest time was over. To
be better prepared during these times when com was locally scarce, producers also
built their own storage installations (Hewitt de Alcantara, 1994:16).
In addition these farmers have begun to coordinate programs to assist them as
they diversify their agricultural crops. As de Janvry indicates, however, those who
have been successful in incorporating high-value fruits and vegetables for export, in
general have more of their land irrigated as well as greater access to credit, land and
machinery (de Janvry, Sadoulet, and Gordillo de Anda, 1995:1359). For those
campesinos who do not have these resources, diversifying is not an accessible option.
Although it is unclear how many com fanners have resorted to non-agricultural
activities to supplement farm income, the literature does indicate an increasing pattern
of participation in the labor market as well as seasonal migration (de Janvry, Sadoulet,
and Gordillo de Anda, 1995:1350 and Hewitt de Alcantara, 1994:17).
These attempts to redesign their strategies of livelihood have been met with
some challenges. When they formed their marketing cooperative, com producers in
Jalisco encountered difficulties as processing industries were more likely to prefer
foreign supplies. Farmers who were expanding their agricultural production to
include grapes and livestock were finding themselves unable to compete with
imported products (Hewitt de Alcantara, 1994:17). While these options demonstrate
to some degree an acceptance of what was happening in the countryside, still others
engaged in protests and acts of civil disobedience in attempts to secure improvements
in agricultural policies which directly affected their livelihood.
50


Throughout the 1980s peasants demands in general revolved around
improving the inadequate price supports offered by Conasupo. In 1985 these price
supports offered com producers 53,000 pesos per ton of com. As the cost of
production was 70,000 pesos per ton, producers were registering a loss (Hernandez,
1994:27). Farmers in Chihuahua, organized under the National Peasant
Confederations (CNC)-affiliated league, took direct action in December 1985 and
occupied 62 grain reception centers to demand an increase in these price supports
(Hernandez, 1994:28). The movement expanded and incorporated ejidatarios in the
northern part of the state, creating the Peasant Democratic Movement. The conflict
became highly politicized and began receiving the support of different sectors in
Chihuahua. Finally in January of 1986, after tense discussions, Conasupo agreed to
raise the support price for com to 70,000 pesos per ton (Hernandez, 1994:29). This
victory inspired campesinos in Nayarit and Chiapas to rally together and pressure the
state for similar concessions.
In January 1986 organized under the Union of Ejidos (UELC), ejidatarios in
Nayarit began pressuring the state government not only for increased price supports
and greater access to financing, but they also demanded healthcare for rural families
in the region. Following the successful example of Chihuahuan campesinos,
members of the UELC occupied Conasupo warehouses in four towns to demonstrate
the seriousness of their demands. After fruitful negotiations, they were granted many
concessions. When it came down to backing the agreement with action, unfortunately
the state refused to carry through and not only were payments to producers frozen but
the resources approved during negotiations also were not delivered (Hernandez,
1994:29).
The organizing efforts in Chiapas were met with a similar fate. Discontent
was growing among com producers in Chiapas with regards to the inadequate price
support they were receiving from the state. As they learned of the concessions
51


Chihuahuan producers received, ejidatarios in Chiapas began demanding a payment
of 70,000 pesos per ton of com as well (Hernandez, 1994:30). By April 1986,300
storehouses in 21 Chiapan municipalities were occupied. As the months continued
with the state refusing to participate in any negotiations, the campesinos resorted to
blocking highways, a measure undertaken by protesters in other areas of the country.
To this final action the state responded with repression, jailing seven leaders of the
movement. Unfortunately this discourse had dragged out into the beginning of the
planting season without any resolution and campesinos had to return to their farms to
plant the next years crop. The movement was disbanded and efforts to improve
conditions for com producers in Chiapas were momentarily discontinued (Hernandez,
1994:30).
In the years that followed these peasant organizations recognized the need to
find alternative tactics of dealing with the unfavorable changes happening in the
agricultural sector. Pressuring the government for increased price supports was
becoming more difficult, the government was less willing to comply with even
minimal concessions, and the probability of the government repressing acts of protest
was more likely (Hernandez, 1994:33). Com farmers in these states turned to
producing other agricultural goods for the market while others concentrated on
growing crops for family consumption, resorting to off-farm activities for necessary
income.
Com farmers responses to the economic crisis have varied from collective
organized strategies aimed at resisting agricultural policies and pushing for changes to
a more individualized response which accepts the transitions occurring in rural
Mexico. These farmers are resilient actors determined to maintain their role in the
rural economy. The potential for this sector to be the future basis for food security in
Mexico has already been demonstrated. The experiences of com producers detailed
above, however, suggest their place as com producers, one which they have
52


s>
historically struggled to maintain, is even closer to being taken away as Mexico
becomes more integrated with the economy of the U.S. through NAFTA. The
following section creates a picture in which the role of cane growers also continues to
be challenged under this new economic order.
Sugar Industry
The historical antecedents of cane growing in Mexico have mirrored the larger
macroeconomic changes which have taken place in the country. It is an industry
historically marked by instability and difficulty as policies have gone back and forth
between the state and private capital controlling the direction of the industry. Prior to
the 1970s, sugar mills were controlled by private capital. As a result of the states
freeze on sugar prices from 1948-1970 and a drop in the global price of sugar, the
industry was faced with a severe crisis in the early 1970s (Chollett, 1994:126-127 and
Chollett, 1995:25-26). As the economic base of rural Mexico was very dependent on
the sugar industry and continued destabilization threatened high unemployment and
political instability (Chollett, 1994:127), the state responded to this crisis by
nationalizing failing sugar mills and increasing its control over sugar production and
cultivation. Although the state increased its hegemony in the sugar sector, state
ownership of the sugar mills, and its control of production and prices did not resolve
the crisis but left the industry corrupt, overemployed, and inefficient (Chollett,
1995:28). Responding to the economic instability facing Mexico in the early 1980s,
in 1988 the government once again turned to private capital and privatized the sugar
industry.
In order to fully recognize what the changes in the late 80s meant for small
farmers, it is important to understand the relationship between cane growers and the
state during the decades prior to the reprivatization of 1988. The environment in
which they grew their cane and their relationship with the state shaped their current
53


ability to respond to current economic changes. Not only did caneros depend on
benefits provided by the state, such as a guaranteed price for their crop, health
insurance and social security, historically cane growers were also used to relating to a
paternalistic environment. Up until the reprivatization period, sugar mills controlled
the entire production process, dictating the size of land to be planted in cane and the
calendar for planting, tending and harvesting the crop (Nunez Madrazo, 1995:59).
The mill was also responsible for financial resources on which cane growers
depended for their harvest and acted as the intermediary between banking institutions
and growers (Nunez Madrazo, 1995:59). The relationship between sugar cane
organizations and cane growers functioned on a similar philosophy of paternalism.
These associations were responsible for planning harvests, getting loans, and
negotiating contracts (Nunez Maderzo, 1995:61). It was a relationship which
hindered the capacity building of cane growers and instead was conducive to and
reinforced their dependency. This defeating political culture inhibited the
development of skills necessary to be the entrepreneurs demanded by neoliberalism
for success.
Neoliberal ideology suggests that by bringing in private capital to control the
production of sugar, the industry would become more modem, leading to even greater
efficiency. The results of privatization, however, have been varied. Some mills have
increased productivity while others have suffered losses and eventually closed down.
Closing mills has had a devastating impact on caneros who depended on these mills
for the purchase of their crop. Cristina Nunez Madrazo studies how these changes
have impacted the industry in the state of Veracruz. She points out that in some cases
capital has been invested in renovating mechanical conditions and general upgrading
of facilities, which resulted in increased production for some mills of 23.4% between
1984 and 1992 (Nunez Madrazo, 1995:57). The work of Donna Chollett also
provides evidence that after being resold, a few mill owners were in fact investing
54


appropriately with the intent of increasing productivity (Chollett, 1995:30). These
improvements, however, seem to be the exception to the experience of sugar mills
overall.
By 1991 out of 64 sugar mills, only 21 were operating at a profit..., 16 had
net losses, and the remainder were breaking even (Chollett, 1995:30). Due to the
inexperienced and incompetent nature of many new mill owners as well as a
reluctance of some to invest in the modernization of antiquated mill equipment, many
mills have gone bankrupt and eventually closed down (Nunez Madrazo, 1995 and
Chollett, 1994). Mill closures along with new owners efforts to reduce the
workforce have meant 8,000 full-time mill workers have been displaced in the
country (Nunez Madrazo, 1995:57). These conditions have led to a drop in sugar
production by 20 percent between 1986 and 1992. As mills closed down and caneros
had no one to whom they could sell their product, 100,000 hectares of land were
abandoned (Chollett, 1995:31). One is left to only speculate what happens to the cane
growers who depend on the mill for both the purchase of their crops and the benefits
of health insurance and social security which mills historically have provided. Before
discussing available options for cane growers, it is helpful to understand the obstacles
cane growers are up against as a result of Mexicos economic changes.
As the states role in sugar production has diminished since the late 1980s,
one notable change directly affecting cane growers is the dissolution of benefits
historically guaranteed to them by the state, such as social security, health insurance,
low interest loans, and guaranteed prices for their crops. While the state provided
these supports in part to ensure political control and popular legitimacy of the
dominant party, private mill owners who were not motivated by these interests, have
often left these benefits to the responsibility of cane growers (Singelmann and Otero,
1995:7 and Chollett, 1994:133). Another challenge facing campesinos, is their
weakened ability to influence the power structures through collective organization.
55


As both producers unions and the mills historically were controlled by the state, when
conflicts occurred peasants could channel their grievances towards one entity.
Currently, however, control of the sugar industry is divided, with the state directing
the price of sugar and the private mills regulating issues of production. Consequently,
campesinos efforts, have to be divided in their focus as they struggle to maintain
their place against the rapid transformation taking place in rural Mexico. Fighting a
battle on two fronts has diminished their political power (Chollett, 1995:34).
In principle, the changes in the sugar sector should result in greater efficiency.
As mills become more productive, caneros should benefit through a rise in their
incomes. Privatizing mills gives owners the freedom to be able to establish contracts
that promote greater productivity in cane cultivation instead of being motivated by
political favors. Contracts which cut costs while improving efficiency will result in
greater profits for cane growers (Singelmann and Otero, 1995:13). However, the
majority of the literature indicates cane growers have not experienced improved
incomes and in fact have been marginalized in the process of economic transition. As
interest rates and inflation increased coupled with rising production costs, caneros
began incurring high levels of debt (Singelmann and Otero, 1995:14-15). In one
region under study, between 1990 and 1991 out of 1323 caneros, 58% had received
net profits while the other 42% were left with debts at the end of the year (Chollett,
1994:147). Small cane growers face another obstacle. As many firms are choosing to
contract only with those who have parcels of at least 2-3 hectares this has made it
difficult for caneros to find firms with whom they can contract the sale of their cane
(Nunez Madrazo, 1995:58). These disadvantages are forcing many caneros to reduce
the amount of cane grown or stop production and seek other alternatives.
Donna Chollett studies the responses of cane growers to the changes which
took place during the late 1980 in the sugar industry. Her research was done in the
zone of Ingenio Queseria, which had the only mill in the state of Colima. As the state
56


withdrew from the sugar industry throughout Mexico and mills were either closed or
taken over by private capital, she notes that caneros were facing restriction of access
to production resources, benefits, and facing increased socioeconomic
differentiation (Chollett, 1994:133 and 139). The resulting changes from
privatization were marked by a decrease in the income received from sugar cane
between 1985 and 1991. Caneros earned an average of 63% of their income from
sugar between 1985-86. This declined by about 31% in the 1990 to 1991 cycle
(Chollett, 1994:155). In response to an atmosphere of growing hostility, caneros in
Queseria adopted a number of strategies.
Chollett documents four alternatives for caneros which included abandoning
cane altogether, changing the way cane was traditionally used, renting their ejidos,
and/or appropriation of agricultural inputs. Contrary to the expectations of the
neoliberal model which suggests decreased state involvement and privatization create
greater efficiency and profitability, the approach caneros have taken to adjust to the
transitions taking place in the economy have failed to augment productivity
(Chollett, 1994:150). As some caneros have abandoned cane production and turned
to cultivating subsistence crops or are selling cane to be used as cattle feed, the
number of caneros decreased, and the amount of sugar delivered to the mill under
study fell. After 1988, the number of producers dropped an average of almost 5%
(Chollett, 1994:150). Abandoning cane production has left the mill in Queseria with
declining amounts of sugar to be processed. In 1985-1986, 616,689 tons of cane were
delivered to the mill which fell to 470,000 tons in 1990-1991 (Chollett, 1994:151).
Although her research does not document the percentage of caneros who have turned
to these strategies, the diminished amount of cane delivered to the mill is telling.
Leading to a greater drop in the hectares dedicated to cane were caneros
decision to use their land, traditionally cultivated in cane, to grow other more
lucrative crops. Many caneros have found grazing cattle as a profitable alternative,
57


while others either use the fertilizer provided by the mill for their own subsistence
crops or to sell. These three strategies have meant less cane is being processed.
Unfortunately her work does not answer several relevant questions. What are caneros
doing who abandoned cane? Are these strategies mentioned viable alternatives which
have allowed fanners to live above poverty or are caneros continuing to fall into
destitution?
Chollett reports, based on a recent return to the area, that economic change in
Queseria has evidently produced mixed results. Some cane growers have gone back
to Queseria and most of the land dedicated to cultivating cane is back in cane again,
indicating that the area appears to be recovering from the crisis. The solution for
those who were unable to adjust, however, has been out-migration or poverty.
Although people seem to be doing better than during the time of her study, she
cautioned a lot of people are simply struggling to survive (Personal
Correspondence, 1/21 and 31/98).
Other studies of how caneros are adapting to the changes in the sugar industry
demonstrate these fanners are actively resisting privatization and the disappearance of
benefits. In one study of farmers in Colima, growers acted with resistance to the entry
of mill owners and resorted to protesting their decreased earnings and the
deteriorating condition of the mills (Chollett, 1995:32). In 1990 Colima cane
producers, accompanied by others around the county, went on strike to protest their
deteriorating conditions (Chollett, 1995:32). Some came together to create their own
political space by creating an independent producer organization in Colima which
they used to help organize demonstrations as well as organize the sale of their cane in
open markets. They also participated in other acts of protests by dumping their crops
on the capital to send a strong message about declining prices (Chollett, 1995:36).
Even though this was a commodity on which their livelihood depended, the price they
58


were receiving was so low that dumping their crops was not much different then
being paid for producing them.
Cane growers have also responded by changing to subsistence crops,
maintaining just enough land in cane to continue receiving benefits from the mills.
This is not a viable option, however, because it creates a net loss for growers who
then incur a debt to the mills (Singelmann and Otero, 1995:18). Some would suggest
the most viable opportunity is to continue demanding and pressuring for a return of
their own supports (Singelmann and Otero, 1995:19).
As mills close down the government has implemented some programs to help
farmers adjust. In the state of Michoacan, the government attempted to create new
employment opportunities in small-scale businesses, such as a gas station or a factory
which specialized in fertilizer bags. These efforts will most likely not be able to
absorb the thousands displaced by mill closures. For the few farmers who attempted
to start such a business, mill closures in their communities left high unemployment.
Consequently, cash flow was very limited and many businesses had to close.
Although privatization does not appear to be favorable to caneros, it does have
the potential of creating a stronger sugar sector. The industry is no longer hindered by
political constraints of offering favors to workers or cane growers to ensure their
support. On one hand, state involvement provided benefits to farmers. However this
was done in a way that was unfavorable for the industry. Engaging in contracts or
providing job opportunities for the sake of legitimizing the dominant party created an
inefficient and overemployed industry. The general consensus in the literature,
however, is that although the conditions of cane growers are becoming increasingly
more difficult and they are facing more challenges, caneros are continuing to survive,
even if this survival is more precarious. The reality is that an alternative and more
viable means for these fanners has not emerged. Many caneros have been producing
cane for generations and lack the skills to integrate into Mexicos saturated labor
59


market. They are constrained by these limitations as well as a lack of transitional
support which may be motivating factors behind their strong resistance.
Melon Farmers
Melon farmers have had similar experiences under the neoliberal oriented
economy. Although this quick overview of what is happening in the melon sector
does not provide any examples of specific strategies these producers are engaging in
to cope with the changing national policies, the experiences of melon farmers in the
Tierra Caliente region in the state of Michoacan have interesting implications for the
future of this industrys farmers. As a major component of ejido reform, small
farmers are encouraged to create joint ventures and establish relationships with
private capital as a means of integrating into the shifting economic topography. To
better assess the potential of small-melon farmers to interact in this new environment,
it is important to understand the nature of the relationship that the state historically
has had with previous ejido producer associations. Similar to the experience of sugar
farmers, this relationship has shaped melon growers ability to respond and adjust to
an open and competitive system.
The histoiy of cantaloupe production in the Tierra Caliente region is
somewhat unique as these farmers were afforded economic and organizational
support by the state, opportunities to which ejidatarios in other regions did not have
access (Stanford, 1994:175). State involvement and institutional backing facilitated
the organization of ejidos into producer associations, unions, and collectives and
promoted their participation in both national and international markets (Stanford,
1994:175). The government was instrumental in forging relationships between these
producer organizations and U.S. companies, providing fanners with credit,
negotiating contracts with U.S. companies and ejido associations to ensure better
prices, and implementing policies to enforce compliance of these contracts. During
60


the period of these protectionist policies, from 1970 to 1990 cantaloupe production in
this region expanded until it became the dominant agricultural export in the later part
of this period. By 1979, 87.6% of ejidatarios in the region had access to irrigated land
(Stanford, 1994:175). Ironically, although these farmers had resources and strong
organizations supported by the state, they still faced a myriad of problems with the
changing economy.
In 1980, due to a shift in the national agricultural policy toward supporting
basic grains, for a short period bank credit was redirected from export crop production
to regaining food self-sufficiency (Stanford, 1994:194). At this time of economic
turmoil for the nation, the state also withdrew its support and eliminated all permit
requirements, which historically had obligated U.S. companies to purchase melons
from ejido associations. In addition, the melon industry in this region was hindered
by overproduction, mismanagement of credit by ejido organizations, and poor credit
repayment (Stanford, 1994:195). The new agricultural policy which called for the
removal of protectionist structures proposed ejidatarios replace these structures by
forming joint ventures with and acquiring financial support from private investors.
The paternalistic relationship between melon producers in the region of study and the
state has left many barriers with which these farmers to contend.
Melon producers had become so dependent on the state to establish contacts
with foreign companies that they had not developed the capacity and lacked the
experience to independently engage in the international economy. Farmers were very
vulnerable to the changing economy and lacked the autonomy and control over
resources necessary to adjust. As a result of changing policies, melon producers in
Tierra Caliente experienced a decline in export production between 1988 and 1990
which negatively impacted on the number of hectares cultivated in melon (Stanford,
1994:197). During this same period, the survival of producer associations suffered.
In the 1987-88 season 43 ejido associations controlled and harvested 6988 hectares.
61


Facing a lack of credit, only 12 organizations cultivated melon and the number of
hectares farmed dropped to 2023 hectares the following season (Stanford, 1994:198).
Their productivity was further inhibited by a drop in the number of packing houses
owned and controlled by these associations, which went from 23 packing houses in
1987 to 13 in 1989 (Stanford, 1994:198). Without backing from the state, they were
no longer a strong political and economic force, and they lacked the organizational
capacity to integrate themselves into the international market.
By 1990 large commercial producers were dominating the market and the
management of packing houses (Stanford, 1994:198). Joint ventures, like so many
other resources and rural development programs, worked for the benefit of these
large-scale growers. Melon fanners have encountered a similar problem cane and
dairy farmers faced when forming their cooperatives: processors and U.S. companies
only want to purchase from large-scale farms which also have capital to invest. Small
farmers are usually not capable of providing this collateral and are much more of a
risk for foreign investors (Stanford, 1994:201). Creating joint ventures with foreign
companies, the case of Tierra Caliente has indicated, is not a realistic approach for
melon producers. Like the other sectors in this study, melon farmers who lack
adequate resources are struggling to survive amidst the restructuring occurring in
agriculture. The next section demonstrates how, given the appropriate support, small
farmers are able to survive and successfully integrate into the changing economy.
Coffee Producers
Small-scale coffee producers in Las Margaritas, Chiapas participated in an
organic farming project which provided them with the means necessary to integrate
themselves into and become competitive in the international economy. Where as
some sectors throughout this study have received minimal state support, a non-
governmental organization provided the resources necessary for the projects
62


implementation. La Selva, an ejido union which received a grant from the Inter-
American Foundation in 1992, administered a program to support organic coffee
farming in the region. Two main goals motivated La Selvas initiatives: helping
coffee producers better their circumstances economically through improved coffee
production while conserving natural resources, and building the organizational
capacity of participating groups (Contreras-Murphy, 1995:29). Through La Selvas
training, technical support, and marketing research it was hoped these coffee growers
would not only develop the skills and knowledge for organic farming but would also
be able to take advantage of the demand for organic coffee in the international market.
A total of220 farmers from 30 communities initially participated in the
project, with this number eventually growing to include roughly 1,000 coffee
producers (Contreras-Murphy, 1995:30). Although organic fanning techniques are
very labor intensive they demand minimal farm inputs making small fanners who lack
resources prime candidates to participate. The project was delivered to the
community through a training of trainers approach. Tecnicos chosen by coffee
farmers in Las Margaritas participated in centralized trainings after which they were
responsible for facilitating similar informal trainings with farmers in their
communities (Contreras-Murphy, 1995:29). During these workshops, participants
learned techniques of organic composting, harvesting and intercropping for secondary
food and cash crops. An important component of the project was La Selvas on going
support. Following adoption of these new techniques agronomists would visit the
villages practicing organic farming to monitor and be available if problems arose.
The farmer-to-farmer approach used by La Selva not only encouraged the transfer of
technology but it also built the leadership and capacity within participating ejidal
communities.
To evaluate the impact of the program nine focus groups were facilitated with
a total of 100 small-scale farmers from 11 of the participating communities. Results
63


indicated that participants felt more in control of the process of farming due to their
increased knowledge and skill base (Contreras-Murphy, 1995:31). As organic
farming depends less on chemical inputs and more on natural methods and
understanding the cycles of nature, farmers felt more connected and in-tuned to the
cultivation process and as a result renewed their bond with the land (Contreras-
Murphy, 1995:32). Essential to the programs success was the niche these fanners
created for themselves in the international market for organic coffee, resulting in sales
to Holland, Germany, and the U.S. This method also allowed farmers to increase
their yields of coffee. Those organically growing their coffee were averaging 7.2
quintales per hectare, while only 6.5 quintales per hectare was harvested by non-
participants (Contreras-Murphy, 1995:31).
Although statistics are not available to evaluate whether the program has
resulted in a significant change for the community, some general conclusions can be
drawn from Las Margaritas experiences. The case of coffee farmers in Chiapas
demonstrates that small farmers can still have a productive role in Mexicos
agricultural economy and have the capacity to be competitive producers in the
international market. This example also serves to define the role of the state in the
midst of an increasingly more competitive and hostile agricultural environment. The
state should be involved with providing resources and the technical and
organizational support necessary to develop leadership and build capacity within the
communities to facilitate future self-sufficiency. To encourage the survival of similar
programs, as the case of Las Margaritas farmers makes clear, state support is not the
only element necessary for future sustainability.
Political uncertainty in the region was the greatest impediment to the
programs success. The context in which coffee production was taking place
presented another set of circumstances with which farmers had to contend. Chiapas
has historically been marked by rampant political corruption and high tension around
64


land issues, both of which have often led to violence in the region. This tumultuous
past was pushed to a breaking point with the implementation of NAFTA. The
development of the organic coffee farmers program was hindered by political strife,
violent oppression, and economic turmoil which had been a part of Chiapas reality
for decades. The uprising in the state created obstacles for farmers, many of whom
left their homes, abandoned their fields, and fled the violence. As a result much of
the harvest did not reach the warehouse and at least half of the crop was lost
(Contreras-Murphy, 1995:33).
This experience demonstrates how some of neoliberalisms strategies can
work against the model. These farmers had found a potentially successful alternative
which allowed them to become integrated into the changing economy, yet as a result
of political and economic instabilities, intensified under neoliberalism, the survival of
the program was seriously jeopardized.
Conclusion
Many similarities exist between the different agricultural sectors represented
in this study. The historical development of dairy, com, cane, and melon producers
was marked by state support in and control over the production process. For most of
the 60s and 70s, this relationship between the state and farmers was characterized by
subsidized inputs, credit and other agricultural support as well as price controls,
which often became a point of contention for maize growers. For campesinos
growing cane and melons the states involvement during this period extended to
negotiating and enforcing contracts, organizing the harvest cycle, establishing
marketing contacts as well as making necessary connections with financial
institutions. In each sector control over resources and nearly every detail of the
production process was not in the hands of farmers themselves. This paternalistic
relationship hindered the development of producers self-sufficiency by not
65


encouraging the acquisition of the skills necessary in a free-market economy. State
intervention was not only lacking because it did not build the capacity of farmers to
be competitive but resources and support, as this study demonstrates, were tunneled
into large-scale agriculture. Ignoring small and subsistence producers was a serious
impediment to Mexicos agricultural development as it continued the bi-model
structure which persists under neoliberalism.
With the economic opening of the 80s, Mexicos agricultural sector
experienced growing inequalities. Privatization which took place in the sugar sector
resulted in the closure of many mills and the elimination of benefits on which caneros
had come to depend. The withdrawal of the state also meant the dissolution of credit
and other agricultural subsidies for all sectors with the exception of com. Guarantee
prices for this sector were implemented in an erratic, inconsistent pattern making it
difficult for any long-term development and stability to occur. Large-scale com
farmers were afforded an increase in guarantee prices through the early 80s in the
governments attempt to address the countrys crisis in food self-sufficiency. This
minimal support was ended in the late 80s only to be provided for a short period
again during the early 90s. From this point forward, com producers have
experienced a sharp reduction of these price guarantees in the face of an influx of
competing imports. To adjust to these changes, the government has encouraged
farmers in these sectors to replace the institutions and support normally provided by
the state by forming joint ventures. As the research shows, the difficult realities
farmers in each sector have to face is the fact that private capital as well as processing
industries are more likely to invest in larger producers who are not seen as financial
risks.
The varied response of farmers in these four sectors indicates their
determination not to abandon farming as well as their ability to influence the
implementation of agricultural policies. Caneros and com producers have come
66


together to create their own institutions of support such as producer associations,
credit-cooperatives and insurance funds. Other activities producers have engaged in
to resist change included demonstrations, dumping products, and other acts of civil
disobedience. While com and dairy producers were more aggressive in their
resistance, occupying warehouses or attacking tracks carrying imported products,
caneros made their concerns known by organizing strikes. By publicly dumping their
products, milk and cane producers often sent a clear, strong message that price
supports were not sufficient to cover the costs of production. With the few exceptions
among com growers, these actions rarely resulted in the inclusion of farmers needs in
the national agrarian agenda.
Some survival strategies, which did not provide farmers with an economically
viable option were also not successful. These alternatives included diversifying
crops, supplementing minuscule farm incomes with wage labor, renting ejidos, or
abandoning agricultural life altogether and migrating to the urban areas or the U.S.
This study found that none of these options has turned out to be viable for farmers.
The examples of dairy and coffee producers, however, do present examples that have
the potential, given the right conditions, to be sustainable solutions.
Dairy fanners who formed cooperatives were afforded many benefits and
advantages which helped to reduce costs and risks associated with dairy farming.
Collectivizing the property of these farmers, although somewhat counter to
neoliberalisms approach of privatization, has the potential to empower producers and
create more integrated development. Although milk producers came up against some
obstacles, with the appropriate support as the example of Jalisco shows these
problems can be overcome. The organic fanning project in Chiapas, although not
initiated by the state is yet another example of how state involvement could support
small fanners transition to a more open economy. Coffee growers not only found a
productive niche for themselves, but the nature of the project also facilitated the
67


development of the skills and knowledge necessary for their survival. The fanner to
farmer approach helped to transfer technology to the community level while also
building the leadership and capacity of individual farmers. The case of farmers in
Chiapas, however, also demonstrates the crucial importance not only of appropriate
support, but also of political and social stability. Both of these factors could be
ensured with a development model which integrates state guidance with market-
driven policies.
As this brief history demonstrates, instead of being driven by a long term
vision which respects the integrity of small fanners and recognizes the important role
they play in the rural economy and the nations food basket, agrarian policies have
been erratic and inconsistent in responding to crisis. The conflict campesinos find
themselves in right now is a product of this panic short-sighted planning. Policies of
Mexicos past have not facilitated development of the skills necessary for fanners to
be efficient, modernized and competitive actors in the international market. Mexico
has not capitalized on the strengths found in campesinos such as their traditional
farming techniques, knowledge, and potential as a source of labor and skills. As the
state withdrew its support, production in the above sectors decreased and seriously
challenged the survival of farmers. Opportunities for these producers are limited.
They have resorted to acts of resistance as well as resourceful attempts at survival,
neither of which have proven very successful. There is not a major displacement or a
mass exodus of small fanners from rural Mexico. The following chapter addresses
the question of neoliberalisms ability to maintain employment levels and to offer
options outside of farming.
68


CHAPTER 4
EMPLOYMENT TRENDS IN MEXICO: 1980s
Stability in employment patterns is a good indicator of whether liberalizations
benefits of economic growth and foreign investment have filtered down to reach the
marginalized and poor in Mexicos society. Stable employment is not only a
mechanism through which living standards for the average person can be improved,
but it also generates a stronger, healthier economy. Mexicos experiment with
economic liberalization throughout the last two decades has led to substantial changes
in employment trends. Adding to the numbers of those entering into the workforce,
many small farmers displaced by this economic model are searching for other means
of survival through wage-labor. Trends in Mexican employment are documented in
this chapter to determine how successful these economic changes have been in
providing Mexicans with stable employment opportunities. This chapter will also
provide a clearer picture of where the campesinos who are forced to participate in
wage-labor can go and what, if any, viable employment alternatives neoliberalism has
created for them. Mexicos social health is also explored to indicate the context in
which changes in the countrys rural economy and labor market are taking place.
In 1990 rural agricultural workers made up the majority of the labor force in
Mexico with 80 percent of these farmers living in poverty (Russell, 1994:274). With
such a high percentage of the workforce dependent on agriculture and a
disproportionate amount of farmers unable to survive off their land, it is obvious that
the impoverishment and growing inequality in rural Mexico could have a dramatic
impact on the county as a whole. As Mexicos campesinos are marginalized and find
it increasingly more difficult to survive on their farm incomes, it becomes even more
important that they are able to integrate into Mexicos wage-labor and benefit from
69


the predicted successes of neoliberalism. The impact neoliberalism has had on the
countrys employment sector, can be better understood by analyzing Mexicos
employment problems.
The challenges faced by Mexicos labor market are not only defined by the
high numbers of un- and underemployed workers, but also by the quality of
employment available to the majority of Mexicans. To begin with, while 1 million
Mexicans enter the economically active population annually, since 1993 the economy
was only creating 300,000 to 400,000 jobs a year in the formal sector (Martin,
1993:94 and 108 and Heredia, 1996:94). Adding to this scarcity of employment are
the numbers of peasants leaving rural Mexico in search of economic opportunities in
urban areas.
In order to consider the possible options for displaced small farmers, it is
useful to analyze the employment trends in Mexico from the beginning of economic
liberalization. Analysis of these trends will indicate whether those who no longer
have a place in rural Mexico will be able to integrate themselves into the national
economy. The research which follows, suggests the picture for rural Mexicans
continues to be gloomy, filled with much of the same economic instability and
unsustainablility.
Employment Trends During the 1980s
With the opening of Mexicos economy and greater integration into the global
market, those domestic small-scale producers turning to wage-labor add a greater
burden on Mexicos already weak employment structure. Since the early 80s,
manufacturing employment has deteriorated. Liberalized trade, which has allowed
imported industrial products to displace domestically produced goods, has resulted in
the reduction of the manufacturing sector (Rendon and Salas, 1993:112 and Rendon
and Salas, 1997:21). Although foreign investment has been an important component
70


to the neoliberal model, instead of being tunneled into employment-producing
activities, it is usually invested in the stock market or in the purchase of already
existing enterprises, neither of which are productive nor create manufacturing jobs.
There is general agreement throughout the literature that as of the early 1980s, the
manufacturing sector has seen a decrease in job opportunities as well as a drop in
wages. Although wages in this sector tend to be higher, real wages have continued to
decline during the 80s. In 1982 they were only three-fourths of their 1980 levels. By
1991, they had only recovered to 77 percent (Martin, 1993:106). Minimum wages
were also falling during this time. They fell sharply in Mexicos urban areas during
the 1980s, so that by 1991 they had decreased to 42% of their 1980 value (Martin,
1993:106). With respect to manufacturing as a source of employment, in 1979, while
19 percent of the labor force was employed by this sector, by 1995 this had fallen to
15 percent (Rendon and Salas, 1997:21). Although this is just a 4 percent drop, given
the environment in which this is occurring, it can have far reaching implications. As
was indicated earlier, in terms of job creation Mexico already lags behind by about
600,000 jobs a year, made worse by declining agricultural employment. As one of the
very few sustainable opportunities, manufacturing employment is slowly shrinking.
This sector is unable to maintain employment levels, nor can it absorb any of the new
labor force, and it is very unlikely it will be a means by which displaced small farmers
can integrate themselves into the economy. The remaining options are equally as
dismal.
Through the 1980s, due to expanding industries and increased urbanization,
the neoliberal model did create a growth of employment opportunities in both the
commerce and service sectors (Rendon and Salas, 1993:111). Although these areas
expanded, the growth was not enough to offset the numbers of displaced Mexicans
and unlike manufacturing employment these tertiary activities provide low-wage
labor. As the end of the 80s neared another strong trend in Mexicos employment
71


became apparent. By the early 1990s, due to a lack of opportunities in wage labor and
formal sector employment, out of necessity two-thirds of the labor force began
participating in the informal economy (Heredia, 1996:35 and Martin, 1993:108). Jobs
in this sector which include self-employment, unpaid family work, and other work
that is not paid wages or a salary in the formal labor market, do not provide stable nor
secure jobs (Martin, 1993:108). Those employed in the informal economy make up
60 percent of the work force, (Martin, 1993:108) lack benefits, and are not organized
or protected by unions. These small economic units of one or two people generally
have high mortality rates and are less profitable then employment in the formal
economy (Rendon and Salas, 1993:113). As Mexico does not offer unemployment
insurance many are forced by necessity to join the informal sector as a survival
strategy.
Mexicos workers have seen expanded manufacturing jobs in the growing
Maquila factories, which have continued to generate employment since 1980. These
border industries, predominately U.S. owned, depend on cheap Mexican labor to
assemble components, imported duty-free, into finished products which are then
reexported from Mexico. U.S. duties are paid only on the value added to the finished
goods. In the last decade the maquila manufacturing sector quadrupled, providing a
total of 500,000 jobs (Martin, 1993:119). This sectors continued growth, however
has not translated into enjoyed economic success for Mexico nor has it proven to be a
viable employment opportunity.
Nearly all these export-oriented assembly plants are located on the northern
Mexican border, requiring individuals and often entire families to uproot themselves
from their communities and migrate north. This is another example of unequal
development created by the economic policies of the last decade and a half. Regional
distribution of employment in the maquila industry is in northern Mexico while
agricultural employment and tourism, generally providing lower paying and unstable
72


jobs are located in the south (Rendon and Salas, 1997:21). Although Mexico enjoys
the benefit of job creation, once again the quality of what most Mexicans encounter
questions the success of these border industries. Mexican workers find minimal
security of employment with little room for advancement. Many complain of poor
health conditions resulting from pollution and the lack of health and safety regulations
(Baswell, 1998:2 and Green, 1995:136 and McLemore, 1997:1A). It is questionable
how much maquiladoras will benefit Mexico as a whole when they are under foreign
control and depend nearly 100% on imported components. Mexican-produced inputs
used in the maquila process only account for one to two percent, demonstrating how
few backward linkages have been created to domestic Mexican industries (Barkin and
Rosen, 1997:25). With an ever increasing labor pool, wages are not likely to rise.
The majority who integrate into the globalized agricultural economy do so not
as participants who benefit through the sale of crops, but as wage-laborers on a
seasonal basis. If campesinos, who can no longer survive from traditional farming,
are unable to integrate themselves into the non-agricultural sector, another alternative
for their survival is to join the estimated 4.5 to 5.6 million peasants who search for
seasonal agricultural employment. With 80% of peasants unable to subsist on their
land alone, many depend on work such as weeding, planting, and harvesting on larger
farms to supplement their incomes (Barry, 1995:82). Typical day laborers make up
the migrant flow of both individuals and families who follow cash crops, sometimes
going from state to state hoping to find enough work to survive until the next harvest.
Agricultural workers are also hired in their own villages by contractors and
transported to the neighboring farms to work. Contractors from these estates come to
the villages and choose from crowds of women and men who, in a desperate effort to
compete for the minuscule pay, will bid down their wages against the abundant
reserves of unemployed peasants (Barry, 1995:84).
73


The benefits of seasonal farm work come only from the ability to scrape by
with enough to survive. Employment is temporary, wages are low, and both social
security and strong unions are nonexistent. There is often little compliance with
minimum wage and overtime regulation in seasonal farmwork. The use of child labor
is also very common (Barry, 1995:83). The inherent instability which comes from
migrating from crop to crop has deplorable implications. Migrant families can often
be found during peak times without any housing, making sidewalks, train stations,
and plazas their place of sleeping and daily living, sometimes using tar-paper and card
board for shelter (Barry, 1995:84). After carrying out back breaking work all day in
the hot sun, many seasonal farm workers come home to these makeshift
arrangements, which obviously lack amenities such as proper sewage and electricity.
Such a tenuous space in the economy may not sound attractive, but it offers
more hope for survival than their own farms. It is not, however the solution to rural
poverty, nor is it a viable alternative for small farmers. The intensified neoliberal
approach has marginalized peasants from their traditional role in the rural economy as
producers and as a result many are turning to migratory agricultural work, equally a
position on the edges of Mexicos rural economy. Poverty is continued as families
trade one condition of misery, becoming landless or land-poor, for a position in
society which offers underemployment, meager wages, and continued destitution. In
this new role peasants are finding it increasingly difficult to subsist by wage-labor.
Moreover, they are losing their identity and integrity as a result of displacement from
their land and communities.
As this study demonstrates, a large sector of society has been unable to
integrate itself into the economy to participate as productive members. Forty percent
of Mexicos workforce remains idle and consequently is living in continued
desperation and destitution (Chevalier and Buckles, 1995:129). This inevitable
74


restlessness and tension have social and political repercussions which jeopardize the
economic model.
Mexicos Social Health
The fragility of the countryside appears much more alarming when it is put
into context with the social volatility that is occurring throughout Mexico. Social
instabilities and the class contradictions which existed under the inward oriented
state-led policies have not been resolved with the neoliberal strategy. Inequality and
the overall social health of the country have worsened. One indicator of these
contradictions is the condition of Mexicos labor-force, which has shouldered the
burden of the countrys economic austerity. During the 1980s with real wages
declining by half, it is no surprise that nearly 50 percent of workers were living below
the poverty line (Grinspan and Cameron, 1995:42). While buying a pound of poultry
in 1982 took 45 minutes working at minimum wage, in 1989 buying the same amount
of chicken required almost 3 hours of work (Russell, 1994:271-272). Salaries did not
improve in the 1990s either. The current minimum wage of 30.2 pesos a day is not
sufficient enough to purchase one-third of what is contained in the basic basket of
goods (Gomez, 1998:6). It is anticipated that purchasing power will fall by 5.4% by
the end of 1998, making the future outlook for Mexicos working class just as dismal.
In the beginning of 1998 at a time when Mexico was praised by the IMF for having a
healthy economy, the government decreased its budget for social development and the
amelioration of poverty by almost $400 million (Cevallos, 1998:1).
The pressure of those living on the margins of society will most likely increase
under these conditions. With more than half of Mexicos population still living in
poverty (Cevallos, 1998:2) the desperation and frustration felt by many has
manifested itself in the crime wave sweeping through the country. After the economy
contracted by about 7% in 1995, the country experienced an increase in crime by 36.6
75


percent (Mexico NewsPak, 1998:6). Between 1995 and 1996, robberies shot up by 50
percent nationwide. In Mexico City, the number of crimes committed per day jumped
from 360 in 1993 to 550 in 1996, nearly 50 percent of which were violent offenses
(Corchado and Iliff, 1996:6-7). Although there has always been criminal activity in
Mexico, in the past street crime, which included mostly muggings and robberies, were
not marked by the level of violence seen today. In some urban areas, for example
homicides are becoming more common. Ciudad Juarez reported 144 homicides in
1991 which more than doubled in 1995 to 294 (Corchado and Iliff, 1996:6-7). The
increase in crime can be attributed to many disruptions which are tearing away at the
countrys social fabric.
The pervasive corruption which exists at virtually all levels of society and the
increased disenchantment with a political system dominated by one party for nearly
seven decades, has fueled social unrest. Moreover, for a large part the economy offers
only survival in hunger, malnutrition, pain, and suffering. It is survival without
dignity. This anguish and frustration has built as people are denied a place in the
economy to be productive and instead have been faced with idle unemployment or
wages of hunger. Crime becomes a way of survival and a way of articulating the
suffering and anger. Mexicans are experiencing a great sense of insecurity and
increased social tensions under the neoliberal model.
The destitution that existed during the state-led approach persists under the
market oriented economy of today. Neoliberalism has been unable to alleviate the
human suffering so prevalent throughout Mexico. The state-run Education, Health
and Nutrition Program (Progresa) reported that the last 15 years has not seen a change
in the living conditions of those in extreme poverty (Cevallos, 1998:1). Since the
early 1980s, basic services and infrastructure for family development have persisted
in the same dismal conditions as they did before the economic shifts of this period
(Cevallos, 1998:1). This has had a devastating impact on health and education.
76


Deaths attributed to nutritional deficiencies jumped from 1.5 percent of pre-school
mortality in 1980 to 9.1 percent in 1988 (Russell, 1994:276). The average education
levels in the 90s was 7.2 years nationally, 4.9 years in rural Mexico and a meager 2.9
years in Chiapas (Cevallos, 1998:1). The presidency of Carlos Salinas (1988 1994)
implemented the program Solidaridad to address some of these declining social
indicators.
In 1991, as Salinas response to critics of neoliberalism Solidaridad was
implemented. Through this program spending on both education and health care rose
by 17.3 percent and 10.1 percent respectively (Russell, 1994:278). Although Mexico
has seen a rise in education and health facilities, many have strongly criticized the
program as being implemented in communities to gamer political support for the
dominant party (Morris, 1992:33 and Russell, 1994:288 and Smith, 1992:10). Funds
were distributed before elections and projects were put on hold only to be completed
after election results as a way to manipulate and buy votes. Solidaridad was an
attempt to hide the necessity for structural reform while legitimizing the ruling party.
This approach was flawed by its political motivations which were aimed at securing
power and control within selected communities. This program demonstrates the role
the state can play in ensuring resources are directed appropriately to promote
community development, projects which are autonomous from the state and the
agendas of political parties. These projects have the potential to be successful and
address the fundamental causes of poverty if they come from within and are directed
by the communities that most need the resources.
As was indicated earlier in this chapter, the trends in social spending initiated
under Solidaridad were reversed in 1998 by a drop of 400 million. Not investing in
human potential, Mexico runs the risk of social disruptions as circumstances become
more volatile. The reality of excessive violence and political tensions in southern
Mexico are an indicator of this increased volatility. In Chiapas the number of people
77


killed and injured as a result of political strife and increased militarization of
paramilitary groups continues to rise as of 1996 (Iliff, 1998:3-4). Amnesty
International has also stated concerns with the rise in arbitrary detentions, torture and
disappearances throughout the country since 1994 (Cevallos, 1998:9). The fabric of
Mexicos society is being challenged by the continued marginalization and increased
immiseration of the countrys poor, the pervasive corruption affecting all levels of
society, the disruptions taking place in die countryside, and the political tensions
which are growing more violent in Mexicos southern states.
Conclusion
With the changing economy of the 1980s it is apparent that social inequality is
still pervasive throughout Mexico. The neoliberal model has been unable to maintain
levels of employment and job creation occurring in the informal and maquila sectors
have not improved the living conditions of the majority of these sectors participants.
As a result of economic and political tensions, Mexicos social health is in serious
crisis which appears to be reaching an alarming state of volatility.
78


CHAPTER 5
CONCLUSION
It is evident that policies implemented throughout Mexican agriculture prior to
the economic opening of the 80s created instability and contributed to the destitution
experienced in the countryside. Agricultural policies were often misguided and
support was inefficiently directed, many times with the intent of gaining political
control. Resources and subsidized inputs were funneled towards large-scale
commercial producers instead of supporting and creating greater competitive and
productive capacity in the countrys millions of small farmers. Although subsidizing
and protecting a portion of the agricultural sector did provide necessary supports to
enhance production, some fundamental issues were not addressed, resulting in
unequal development in rural Mexico. Credit, technical support and other resources
were not funneled towards the most underdeveloped sectors and farmers were not
granted autonomy and control over these resources. Both of these issues limited
campesinos ability to integrate into the opening of the economy. Change in this
inefficient system was inevitable and redefining the role of the state was necessary.
Rapidly pushing unprepared farmers into a competitive and open market without any
state support as occurred from the 80s forward, however, has not proved to be the
panacea to the Mexican agrarian question either. The policies of the neoliberal model
have intensified the process of dual development in Mexico. As the state withdrew
from the economic sphere, farmers were faced with less credit, technical support, and
other forms of assistance which made their survival increasingly more precarious.
In this analysis of the dairy industry, com, cane and melon farming, as well as
coffee production, the research in each section demonstrates the continuation of
79


fundamental structural problems which have hindered the integrated development of
rural Mexico. The agricultural sector under both models of economic development
has been marked by unequal distribution of resources and support, the marginalization
of small and subsistence farmers, and the lack of peasant autonomy and control over
productive resources. As this process of distorted development worsens under the
neoliberal model, this study explored who was left out of this process of economic
opening and integration and what options the model has left these farmers the space to
create.
The campesinos studied throughout this work have adopted a number of
strategies as they attempt to integrate into the international economy. In this process
many farmers have resisted unfavorable policy changes and organized to press for
inclusion of their needs in the implementation of agricultural policies. Contrary to the
predictions of many scholars, the literature is rich with evidence that these farmers are
not going to allow themselves to disappear from the rural landscape and abandon that
which they and their families and communities have done for generations. The
resiliency and determination of these producers is in part because for them farming is
more than just a means by which they provide for their families. Being an agricultural
producer impacts the way farmers relate to their land and their communities. It is a
way of life embedded in their structures of social life such as kinship ties and religion
(Chevalier and Buckles, 1995:263). Their resilience can also be attributed to survival
strategies which attempt to supplement limited farm production. Minimal off-farm
income by family members a who have migrated to find work also allows for the
meager subsistence of the agricultural poor (Chevalier and Buckles, 1995:125).
Those who make up the rural under- and unemployed also serve a purpose for the
changing economy. They create a downward pressure on rural and urban wages
benefiting urban employers and commercial agricultural producers (Chevalier and
Buckles, 1995:127). By renting their land and harvesting crops for large-scale
80


producers they are also providing a source of cheap labor and production products.
The survival of small-scale fanners living in destitution is both an effect and function
of the neoliberal model.
The continued marginalization of Mexicos peasantry is an unfortunate reality.
Although they are persistent in maintaining their role as farmers, this perseverance is
in part due to the fact that viable alternatives have not emerged under the market-
driven economy. In general the research indicates that farmers are struggling to
survive and are being pushed further into desperate poverty and suffering.
Although diversifying their crops, supplementing farm production with wage-
labor, or abandoning their crops altogether has only continued conditions of instability
for these producers, a few good alternatives have emerged. The survival of several
dairy farms was ensured through the formation of cooperatives. Although they were
faced with the difficulty of signing contracts with processing plants, this and other
issues were addressed through policies enforced by the state. In areas such as Jalisco,
where the state played a role in the organization of cooperatives, the outcome was
continued viability of this sector. Coffee producers had a similarly positive
experience with their organizing efforts as well. With the support provided by a non-
governmental agency, these farmers were not only surviving and competitively
participating in the global market, they were also strengthening the productive base of
their communities. Although the experiences of both sectors did face some conflict
limiting the extent of their successes, they do provide evidence of alternatives that
could work in favor of small farmers in a neoliberal economy. Both examples also
indicate the role the state could have in a market-driven economy.
While an open economy can create incentives for greater efficiency and
increased foreign investment, the state can provide corrective measures to address the
imperfections of the market. The problems of neoliberalism which allow resources to
gravitate towards larger units of production and place smaller unprepared farmers at a
81


greater disadvantage should not be allowed to increase social dislocation. The
following recommendations for agricultural policies would provide the direction and
support necessary for small-scale producers to integrate into the economic opening.
State support should provide peasants with the knowledge, skills and equipment
which allows them to compete at the international level. Information, training and
resources need to be delivered in a way that respects the integrity and the existing
expertise of small farmers. Another component winch would strengthen the process
of integration into the international market would be to provide marketing support and
encourage farmers to cultivate marketing and other entrepreneurial relationships to
ensure their survival. To ensure the development of vulnerable sectors, limited
protection from imported products should be included in the countrys economic
strategy as well. If protective trade barriers are to be removed as in the case of some
products such as com, a gradual phase-out of these barriers should occur to give
producers the time to become more efficient competitive producers.
In the case of cooperatives and producer associations, incentives should be
offered to processing plants and foreign companies to encourage them to enter into
contractual partnerships with these organized producers. Without a market for their
product, the success of these cooperatives is jeopardized. Small-scale farmers who do
not have the resources to form cooperatives should receive assistance to purchase the
machinery or acquire the collateral necessary to purchase the machinery or acquire the
collateral necessary to participate in this alternative. Another option to assist small
fanners would be to provide incentives to mid-level producers to enter into
partnerships with small producers. These policy suggestions would make forming
cooperatives more accessible to small-scale farmers as well as create some of the
conditions in the environment necessary for their survival.
State support is not the only element necessary for future sustainability of
Mexicos small fanners. As the case of coffee growers in Chiapas demonstrates,
82


other crucial variables which determine their survival are political and social stability.
An environment made up of high political tensions can undermine the organizing
efforts of producers. As these farmers come together to organize into cooperatives
the literature indicates that successful collective action requires that a majority of
those who participate have both practical knowledge of the benefits and intended
outcomes as well as expectations that others will join the group (White and Runge,
1995:1693). It is also clear that a collective model which evolves from local
initiatives and approaches to the problem have a better chance at survival than a top-
down approach where cooperative forms of organization are imposed from outside
entities. Having a history of positive organizing as well as values of reciprocity,
collective action, and interdependence also facilitate in the development of strong
cooperatives (Hernandez Castillo and Nigh, 1998:142 and White and Runge,
1995:1693).
Not only are these suggestions possible under the neoliberal economic
structure, but they are approaches both the U.S. and Canada have incorporated into
their economies. As was stated earlier in this study, Canada has maintained some
protections over vulnerable sectors in its economy and U.S. farmers receive many
subsidies and supports Mexican producers have been denied. The collective approach
discussed in this study with limited state support to ensure small farmers survival,
would allow a more equitable and inclusive process of Mexicos integration into the
global economy. While maintaining a market driven economy, the states role should
be one that guides the components of the market to work more equitably. Although
the provision of resources and support are costly the consequences of pushing farmers
into greater destitution could be far more costly. Without measures such as these, as
the discussion on Mexicos social health indicates, continued social and economic
turmoil threaten to undermine the model politically.
83


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