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News Article

Agro Industry Focuses on Technology, Diversification

Wed, 05/09/2018 - 11:16

Mexico has a privileged position in the global food market but incorporating new technologies and innovation such as transgenic seeds could triple or even quadruple production levels, according to a panel of experts at Mexico Business Forum 2018 at the Sheraton Maria Isabel hotel in Mexico City on Wednesday.

The panel’s moderator, Juan Carlos Anaya, began by providing some facts about the alimentary industry. Mexico is the 10th-largest producer of food in the world, the third-largest in Latin America after Brazil and Argentina and the 10th-largest exporter globally. “We produce 60 percent of what we consume and, if there were the need, we could be self-sufficient in our food supply,” he said. The main products Mexico exports are sugar, tequila, coffee and avocados.

Anaya went on to introduce Ramón Paz, Chairman of the Board at Avocados from Mexico, with the fact that, for every 10 avocados produced in the world, three are Mexican. In the context of the NAFTA negotiations, Paz acknowledged the reliance the avocado industry has on the agreement, as the US imports 85 percent of its avocados from Mexico. “Given that the US accounts for 55 percent of the world’s avocado imports, this is significant, and we have a big opportunity due to the closeness of our markets,” he said. But he admitted that market diversification has a strategic value.Mexic

Diego Antonio Martínez, Chairman of the Executive Board at Aneberries, agreed that diversification is something the Mexican industry must look into, and in terms of berries, the association is also looking at opening doors to new markets such as Chile and Peru that do not necessarily have Mexico’s privileged conditions. However, he highlighted the difficulties in entering new markets, saying the country must be well-profiled in advance. “We had a difficult situation in China whereby we expected it to be a lucrative market for berries,” he explained. “On the contrary, the country has little appetite for fresh food so we struggled to open the door to that market.”

Mexico, however, is continuously increasing its food production. Luis Musi Letayf, Vice President of Legislation and Standardization at the Mexican Meat Council, said that beef demand grew 1.4 percent in 2017 and demand for chicken increased 3 percent. “As economies grow stronger, the consumption of animal protein also increases and Mexico has a growing demand,” he said. He stressed the need for more sustainable and viable methods of cattle farming given the huge quantities of water it uses.

Javier Valdés, Director General of Syngenta Latin America North, agreed that all agricultural activity must be both sustainable and viable, and pinpointed transgenic seeds as a potential way to ensure the future of the industry. He used the example of the cotton industry in Mexico, which has all but disappeared due to the high costs per hectare, which makes the industry unviable. “Transgenic seeds can triple or quadruple production,” he said. “This technology would allow cotton to return to Mexico because it would make it much more viable.” He said that, in Chiapas, corn production per hectare is 3 million tons. Applying technology, production can be increased to 8 million tons per hectare.

Martínez stressed the importance of integrating technology to not only diversify markets but also to diversify strains of seeds. “In Mexico, we have one breed of raspberry and one breed of cranberry for example,” he said. “In other markets, they are breeding new seeds, and to keep up we need to follow suit and invest in agricultural genetics.”

Mexico’s agriculture industry is flourishing, and even with the risk of a defunct NAFTA, it shows no sign of slowing down. “In 1994, Mexico produced 400,000 tons of avocados. Today, the country produces almost 2 million tons,” said Anaya. Paz argued that the US’ reliance on Mexican agriculture means there is little risk it will jeopardize this relationship in the NAFTA negotiations.

In the meantime, the main agricultural industries are focusing on growing production. With 90 percent of Mexico’s berries exported, mainly to the US, Martínez feels confident. “We have a significant space to grow,” he said. Through technology, Valdés sees great opportunity for Mexico. “In the case of corn, by increasing productivity by 1 percent you provide a 5 percent increase on return for the producer,” he said. “This means that if we boost production 5 percent, we can get a 25-30 percent greater return.”