Here are a selection of the columns I have been writing for over a year now for the Finance Section of Mexico City daily, The News.The News

Food Riots

Over the past few weeks, we’ve been seeing the kinds of images that would have been difficult to imagine even two years ago: angry protestors from Haiti to Ethiopia to Egypt, taking to the streets over rising food prices, their often meager budgets no longer able to cover the cost of feeding their families.

The notion of food riots, of shortages and soaring prices, seems  frankly bizarre after so many years of hearing about Europe’s butter mountains, or the billion-bushel stockpiles of wheat in the United States. But it is only too real. While we have yet to see demonstrations over food in Mexico so far this year, even President Felipe Calderon has commented on the phenomenon. “This food challenge is one of the biggest threats that could roll back advances in terms of the fight against poverty,” he said in Lima, Peru, earlier this week.

While Mexican farmers need the benefits of better prices for their crops, the impact of those on urban Mexicans is not going to be good.  “On the one hand prices are better now with this rise in prices reflecting the real costs for the producers,” said Ana de Ita, director of the Centre for Studies for Change in the Mexican Countryside. “But on the other hand, there is also a large control of the market by the multi-national buyers.”

Just about all of Mexico’s cereal output runs into the bottleneck of Mexico’s food monopolies. The Archer Daniels Midland- Grupo Maseca (Gruma) consortium controls 73 per cent of Mexico’s corn flour market, with Minsa and U.S. agribusiness giant Cargill most of the rest. Earlier this year, wheat farmers accused Altex (which supplies Bimbo), Gruma and Gamesa of colluding to pay less than market value for their crops.

 We’ve become familiar with the explanations for the food shortfalls and corresponding price increases – higher demand in developing nations with expanding economies, the soaring price of petroleum, and how the U.S. government’s misguided new ethanol policy is sucking millions of tons of yellow corn out of the food market. But agricultural policies themselves may also be to blame.

This week, two Canadian agricultural experts pointed to 15 years of declining government investment in agricultural research as one of the main reasons for such big gaps in the world food supply today.The current crisis was predicted at least ten years ago, according to Emile Frison, director of Biodiversity International. While government funding for agricultural research used to account for 12 per cent of official development assistance in the 1980s, it is now only 2.9 per cent.

For his part, Robert Zeigler of the International Rice Research Institute reproached governments for their neglect of infrastructure spending on agriculture, such as irrigation. “You can’t just build an irrigation system and then forget about it,” he remarked.

This kind of shortsighted thinking has been particularly notable in Mexico. Both the PRI and PAN  governments have been cutting farmers loose since the signing of NAFTA, doling out a few pesos here and there to Mexican peasants, the bulk of the nation’s farmers, but eschewing the harder work of long-term planning and technical assistance. Mexico’s farmers have been paying for it for a long time. Now it’s our turn.

Agriculture in Mexico

 In 1986, U.S. president Ronald Reagan’s agricultural secretary John Block said, “The idea that developing countries should feed themselves is an anachronism from a bygone era. They could better ensure theirfood security by relying on U.S. agricultural products … available in most cases at a lower cost.”

Now that both food prices and transport costs have risen sharply, those words have come back to haunt many developing nations, but oddly enough, Mexico is not among them. With international bodies and national governments all over the world talking about the food crisis, Felipe Calderon and his ineffectual agriculture secretary, Alberto Cardenas, have come up with disappointing prescriptions for a complicated problem.

Rather than boost agricultural production in a meaningful way, they will keep forcing Mexico’s peasantry to compete with cheaper often subsidized imported grains, while giving a few extra pesos to the country’s poorest households through their unofficial vote-buying program, Oportunidades.

As National Autonomous University of Mexico economist Jose Luis Calva pointed out in a recent editorial, Mexico once experienced excellent growth in agriculture. Between 1945 and 1961, it expanded at a rate of 5 per cent annually. It fell to 2.9 per cent due to a decrease in investment until 1971, but took off again thanks to the Sistema Alimentario Mexicano for another four years. Since then, it’s as if Mexico’s rulers, whatever their political affiliation, have been following Block’s suggestions to the letter.

Since the early 1980s, says Calva, average growth in agricultural production has been only 1.5 per cent; that is less than Mexico’s demographic growth. As a result, Mexico will spend more than $25 billion on food imports this year.

Cardenas, the former governor of Jalisco has not been without his share of criticism over his inept proposals. The opposition parties in the Senate have been fulsome in their disparagement of the way Cardenas runs his ministry. Hector Padilla Gutierrez, president of the legislature’s Agriculture Commission said last week that “Cardenas is failing us. There is not even a medium-term strategy, and in (his) declarations, we only find the manipulation of statistics for effect, but that don’t show the depth of the reality.”

In fact, there is nothing new in Cardenas’s bid to boost agricultural production. Tariffs on grains have already been removed, so the promise to ‘liberalize’ their import is meaningless. What’s more a 20-billion-peso program to support purchases of farm equipment, and another to maintain irrigation, were approved and budgeted for last year.“The same policies that were applied by past governments, and the current government, are being applied again,” said Calva. And agricultural production actually fell almost 1.3 per cent in the last trimester compared to the same period in 2007. Calderon and Cardenas, he added, “are maintaining the same policies that brought about an abysmal performance in agriculture.”

According to Gutierrez, Congress signed over more than eight billion pesos in farm subsidies to the Secretariat of Agriculture last year, but apparently, this largesse has mostly ended up in the pockets of a few wealthy farmers groups. Farming for the majority of rural Mexicans still means growing crops for their own consumption, underdevelopment and the lure of undocumented emigration.

For Calva, the government proposals are not merely “insultingly null and void. What alarms me,” he said, “is the deception. We are talking about a campaign that is truly cosmetic, to give the appearance of doing something when they are doing nothing.”

One Response to “Columns

  1. Sarah December 1, 2011 at 4:07 pm #

    Hi Augusta,

    I wanted to reach out to you in regards to the topic of the ‘work family’, a term, a Vancouver based online dating company, has coined to ensure our growing company keeps its cohesion and family-feel.

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    Thank you for taking the time out of your busy day to consider this story. If you require further details about the company or this story, please feel free to contact me at 778-724-1290.


    Sarah Gooding

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