Anti-Inflation Plan May Put Health and Agri-Food Exports at Risk

Earlier this week, President  López Obrador, along with the Ministry of Finance and Public Credit (SHCP), presented an agreement to fight inflation. Within the framework of the agreement, 10 points were established, including a Universal License that the Federal government will extend to private companies to exempt them from all formalities or permits. The exceptions include permissions from the National Health, Safety and Quality Service (SENASICA) and the Federal Commission for Protection Against Health Risks (COFEPRIS), as well as the general import tax. However, some industry insiders see the move as a potential health hazard.

“Companies will be entrusted with the responsibility of ensuring that the goods they trade meet health, safety and quality standards,” said Rogelio Ramírez de la O, the Minister of Finance. In a comment, The Mexican Union of Manufacturers and Formulators of Agrochemicals (UMFFAAC) warned about the serious health risks of suspending the regulation on food imports overseen by SENASICA and COFEPRIS. Luis González, President, UMFFAAC, said that “plant health is a pillar for agricultural production, a sector that last year alone exported more than US$44 billion, representing almost 9 percent of the GDP.” He added that Mexico is currently free of 1,000 regulated pests, which ensures the country meets international quality and safety certifications. This certainty would now be put at risk under this measure. 

Meanwhile, Juan Cortina Gallardo, President, the National Agricultural Council (CNA), agreed that the decision to leave the surveillance in the hands of private companies would violate international trade agreements. As a result, Mexico would cease to be a safe country, and exports of agro-products could be affected. "I am extremely concerned that we exempt SENASICA and COFEPRIS from food safety surveillance because it puts not only health and safety at risk but also the whole issue of exports," he told El Universal.

In addition, suspending health regulations puts domestic producers at risk, as large companies could stop buying their products locally to buy them cheaper abroad. “If corn costs around MX$7.50/kg (US$0.37/kg) in Mexico, and MX$5.50/kg (US$0.27/kg) in the US, it is evident where buyers will purchase it,” González said.

UMFFAAC stated that while it understands the need to take measures to control inflation of basic food basket products, the federal government must continue to guarantee the health of crops in these food products, since delegating responsibility for surveillance to companies is risky for Mexican agriculture, the financial situation of domestic producers and consumer health.

President Lopez Obrador also claimed that companies would have to assume responsibility in case anything goes wrong in this regard: "They will have to take responsibility, sanctions are already established in the laws…This is a matter of confidence.”