Third-World Imports Besiege Mexico Farmers

For Rodrigo Hernandez, ground zero in the war over globalization is not Genoa or Seattle, but a stretch of freeway slicing through a desolate swamp. It’s where he and hundreds of other farmers last month dumped 400 tons of pineapple they couldn’t sell.

For 12 hours, pineapple farmers blockaded the road. The action was just one of several recent protests across Mexico by farmers who are angry, frustrated and driven to desperation. Their corn, oranges, cotton and sugar have been clobbered by cheaper U.S. imports, and many campesinos see free trade as the culprit.

But there is a different note to the pineapple growers’ lament. The invading produce is coming not from the high-tech agro-combines of North America but from another Third World country: Thailand. A deluge of canned pineapple imports--4,474 tons last year versus 692 tons the previous year--has sent prices plummeting, leaving Hernandez and about 2,000 other Mexican growers struggling to survive.

“This was a good business a couple of years ago. Now the entire countryside is going broke. The big fish are eating the little ones,” said Hernandez, referring to the relationship between overseas producers and Mexican growers.

Mexican farmers are under siege from all sides in the rapidly globalizing commodities market, with imported pineapple being just one example. Rice from Uruguay, bananas from Guatemala and hides from India have gained better access to Mexico as free trade spreads.

Farmers, ill-prepared for the competition, are becoming increasingly militant. Two weeks ago, hundreds blockaded entrances at Mexico’s largest port city, Veracruz, in a demonstration against imported rice and fruit. Last month, sugar farmers laid siege to the economy ministry here, shutting down the offices. And in June, farmers in Sinaloa state took over oil plants and highway toll booths to protest increased tolls and reductions in government subsidies.

But few regional farm economies are more devastated than this area of southeastern Mexico, where 100,000 people depend on pineapple for their living. Prices dropped to just $15 a ton last season from $120 a ton in 1998. After spending an average of $20,000 an acre over the 18-month growing season, many farmers reaped just $5,000 an acre. It is hardly surprising that farmers left nearly half of the harvest in the field to rot, to save the expense of picking it.

The causes of the crisis range from extreme over-planting to the overcapacity of canneries and a weakened economy. But growers here place blame on imports of canned Thai fruit that is priced so low, despite 23% duties, that local growers and canners cannot compete in the domestic market. Mexico has never developed an export trade in the fruit; less than 5% of its pineapple goes abroad.

Devastating Effects on Region

Mexico is not the only victim of low-price imports. The Hawaiian pineapple industry has been decimated by cheap Asian fruit. Although the $65-million-a-year Mexican pineapple industry is relatively small, the effects of competition have been devastating for this region of southern Veracruz state.

Children are being pulled out of Isla schools to replace hired farm labor. Burglaries and cattle rustling are on the rise. The bus that leaves every Thursday morning from nearby Loma Bonita for Ciudad Juarez on the U.S.-Mexico border is jam-packed. Many passengers will cross illegally into the United States to flee the economic hardship.

And with pineapple prices expected to remain depressed for another year, the misery index here will only rise. Those prospects have led to dark humor among farmers, some of whom say that what they really need is a Subcommander Marcos, the Mexican guerrilla leader in Chiapas state, to lead a rebellion.

“If things get any worse, I’ll have to go the ‘other side’ [the United States] just to maintain us,” said Hernandez, 45, who has a wife and two children, ages 6 and 8. He has had to sell his 25-acre farm and house to pay his debts. “There is no other recourse.”

Though industry planning might have prevented some problems, the root of the crisis is in Mexico’s lack of a farm policy dealing with trade. Membership in the North American Free Trade Agreement and the World Trade Organization has forced the country to lower barriers that protected agriculture, but the adjustment was made more painful because Mexico was caught unprepared. Programs that are as second nature to U.S. farmers as crop research and subsidized loans simply aren’t available.

“You don’t see any public coordination at any level, regional or federal. There is no information on what pineapple producers can produce or what prices might be next year. Everyone is on their own,” said Enrique Dussel, an economics professor at National Autonomous University of Mexico who specializes in agro-economics.

Gross Over-Planting Creates Surplus

More evidence of agriculture’s ills surfaced last week when the Mexican government seized 27 sugar mills that it had privatized in the 1990s. Among the industry’s problems: cheaper U.S. corn sweeteners, which have flooded the market since the free-trade provisions of NAFTA took effect.

Better information might have reined in the gross over-planting of the crop harvested last season, which created a surplus just as Mexico was diving into recession. Big profits in the mid-1990s caused everyone from taxi drivers, school teachers and police officers to plant pineapple, said longtime grower Gonzalo Amador.

Amador and other big farmers in the area accuse the government of having joined NAFTA and the WTO without consulting them, the very farmers such deals would most directly affect.

Rural development expert Tomas Martinez, of the Postgraduate College in Chapingo, the nation’s top agriculture school, said Mexico’s NAFTA negotiators incorrectly assumed that Mexico would remain a low-cost competitor on a global stage, aided by a weak peso.

“We are now living in a macroeconomic situation that we never dreamed of,” Martinez said.

Mexico Economy Secretary Luis Ernesto Derbez told reporters last month that the farm policy inherited by President Vicente Fox is a shambles and that crafting a new one was one of Fox’s biggest challenges. Derbez promised to unveil a program soon to help coffee growers, a plan that will include subsidized credit and planning.

The Agriculture Ministry is working on a comprehensive plan to help pineapple growers that may include technical and marketing assistance, even debt renegotiation. The government says it also is stepping up an attack on contraband Thai pineapple, which some Mexican canners are illegally labeling as their own because buying it costs less than canning Mexican fruit.

Growers Suffer From Knowledge Gap

But pineapple farmers also must become more market-savvy, Agriculture Undersecretary Victor Manuel Villalobos said.

“It’s a complex situation. There is a lack of knowledge of what the market wants in terms of size of the fruit and when to deliver it. Farmers know how to produce but not to sell, and that’s what we want to organize,” Villalobos said. The new program “won’t have an immediate effect though. Next year there will be a greater impact,” he said.

Poor farmers such as Hernandez only dimly understand the economics involved in global commodities. What Hernandez does know is that until two years ago he made a good living growing and selling pineapple, seeing his standard of living slowly but steadily rise.

Profit was good enough to finance the purchase of his farm, support several relatives and spur dreams of better lives for his children. But in spring 2000, those dreams evaporated when pineapple prices collapsed as huge quantities of canned Thai pineapple began to show up on store shelves.

The upshot for Hernandez, one of 1,500 residents in a communal farm area called Ejido Dobladero in the country’s pineapple-growing region, is that financially he is underwater.

“We have no money to continue struggling, no money to buy fertilizers or pesticides. There is no work, so 75 people, mostly young, from the ejido have gone to El Norte in the last two months.

“We have lost everything,” he said.