Mexico’s Record Spending on Food From Abroad Has Experts Worried

Mexico is facing a worsening agriculture situation that some fear will lead to widespread malnutrition and an increase in illegal migration to the United States.

In the past 12 months, Mexico spent a record $3.5 billion on food and feed from other countries to offset its losses in domestic production.

By one estimate, at least 80% of the budget of Conasupo, the central food-buying agency for the government, is dedicated to foreign purchases.

In recent weeks, the government has asked Washington for another $500 million in agriculture credit, having already exhausted the $1.1-billion in credit granted last October. It may be that the United States will provide only $135 million more, which would force Mexico to obtain the rest elsewhere and at less favorable rates.

“Mexico can’t afford this for very long,” a U.S. diplomat in Washington said. “Frankly, we are becoming quite concerned.”

Billions Owed

The Department of Agriculture Commodity Credit Corp., the chief credit provider, is now owed $2.252 billion by Mexico.

“Mexico is in the midst of an agriculture crisis of major dimensions,” said an American agronomist here who did not want to be identified.

“I think we are facing an agriculture disaster,” said Cassio Luiselli, a former top farm official in the government of President Jose Lopez Portillo. “Agriculture has been essentially stagnant for 20 years. Overall, the trend is now very dramatic.”

The expenditure of scarce funds on foreign agriculture products comes at a time when the 7-month-old government of President Carlos Salinas de Gortari is being pressured to repay foreign bankers, who are the creditors for about $60 billion of Mexico’s $100-billion debt.

The agriculture crisis will deepen unless debt payments can be substantially reduced, officials say, since Mexico will not have the resources to revamp its farming sector and therefore will need to continue buying foreign food.

Many Difficulties

Mexico is struggling to meet its debt payments, support the peso, control inflation and prevent capital flight.

“They will hit the financial wall in the next three or four months,” said Adolfo Aguilar Zinser, a Harvard-trained Mexican economist at the American University in Washington. “The agriculture problem is a heavy burden with deep social and political implications.”

Government reports indicate that 30 million Mexicans are undernourished and that per capita food intake has declined 20% since 1981. Fifty-nine percent of rural people suffer from malnutrition, and at least 4 million of those to the point of lethargy, government reports say.

The consumption of high-protein foods has dropped alarmingly in recent years, according to the government. Beef consumption fell 45% from 1982 to 1988, and consumption of beans--the principal protein source for most Mexicans--dropped 34%.

Further complicating the situation is the expectation that a baby boom will push Mexico’s population, now 80 million, past the 100-million mark by the turn of the century.

Migration Feared

Some experts worry that the millions of peasants working poor farm lands will abandon them for lack of government support, prompting those people to migrate to the United States. Others of them may flee to one of Mexico’s larger cities, where they are likely to become beggars or be employed in marginal jobs.

Violent social outbursts are feared should the government be forced to lift the current price ceilings on key food products while keeping one on the minimum wage, now about $4 a day. Mexicans have lost about 50% of their buying power in the past six years.

The main problem, in the view of Mexican economists, has been the government’s failure to support the farming system, which had been self-sufficient until the mid 1970s.

Public funds dedicated to the farming sector have declined from 19% in 1980 to 5% today. The result has been a 15% drop in cultivable land and a weakening of key food-growing efforts.

According to figures provided by growers associations and the government, Mexico’s milk herd declined 26.5% from 1985 to 1988 as farmers slaughtered their stock because official government prices were not covering the cost of producing milk. This year, Mexico will spend $480 million for foreign powdered milk, more than double what domestic milk would cost. Of the 180 pasteurization plants that operated in 1985, only 41 exist today.

Similarly, Mexico’s pig herd declined 50% from 1983 to 1988, according to the government. Last year the country became unable to keep up with the need for eggs, importing 44% of the total consumed.

Change in Policies

The administration of the previous president encouraged growing crops for export, particularly to the United States. Last year, Mexico for the first time imported more food than it exported.

The Salinas government has yet to disclose its plans for saving the countryside, but Jorge de la Vega Dominguez, Salinas’ agriculture minister, has promised that major expenditures will be made to achieve self-sufficiency in food production.

“Much of its depends on how well we do with the foreign bankers,” a Mexican official said.