COVID-19 Could Cause Major Disruption in Agro Supply Chains

The Ministry of Agriculture and Rural Development (SADER) signs one agreement after another seeking changes in the agricultural system in favor of small-scale farmers. However, many rural communities remain left out or even negatively affected by government action.

In some areas of the country, insecurity is an ever-bigger threat to agricultural production. Particularly in Guerrero, violence has had far reaching impacts on the rural economy.

In other news, Mexico has reported the first cases of the COVID-19 virus. If supply chains are disrupted, agriculture could be one of the most affected sectors if the virus spreads across the country.

Ready for more? Here is the week’s most important news!

SADER’s Agenda

At a press conference this week, Minister of Agriculture and Rural Development Víctor Villalobos and Deputy Minister Víctor Suárez stressed the importance of an integrated agricultural knowledge model that connects the farmers’ experience with scientific knowledge. They also stated this was a major goal of this administration.

This week SADER published the rules of participation in the basic foods guaranteed-prices program.

The Ministry signed a collaboration agreement with UNAM seeking to strengthen the legal framework concerning protections against bovine tuberculosis.

During a visit to Villa Victoria in the State of Mexico, SADER Deputy Minister Víctor Suárez endorsed the commitment of local farmers and technicians to work together to increase the production of corn and other grains to come closer to self-sufficiency.

Minister Víctor Villalobos also signed a collaboration agreement with FOVISSSTE to work together to increase access to the housing credit program for the ministry’s employees.

Regional Agricultural Production

In Jalisco, local producers are expecting to exceed 40 tons of corn production per hectare using the Atider technique.

Mezcal production in the Sierra de Guerrero fell by 80 percent this year as a result of community relocation. Adam Coria Farfán, representative of the Sierra de Guerrero producers, ascribes these relocations to “problems we all know.” The region has seen heavy insecurity in recent times.

In Tenabo, Campeche, not even 10 percent of local corn farmers have benefited from the government’s guaranteed-prices purchasing scheme. Farmers continue to sell to “coyotes.” The ejido commissioner explains that the government program benefits large instead of small producers. The promised local government warehouse for corn was never built. This is another case which demonstrates that the government scheme is achieving far from what is promised to do.

Imports and Exports

Mexico still imports 95 percent of its consumed soy. A researcher at the National Research Institute for Forestry, Agriculture and Livestock (INIFAP) has developed soy varieties with better yield and better resilience in adverse conditions. These varieties could increase domestic production from 500,000 to 1,000,000 tons. Domestic production is far less costly than importing. Experts say a guaranteed price could be an incentive to increase Mexican production.

Strawberry exports from Mexico to the US rose 44 percent in 2019. Prized for its bright red color, characteristic aroma and juicy texture, the product is consumed fresh in large amounts and used in prepared foods such as jams, cakes and smoothies.

Earlier this week, a hacking attack on the Ministry of Economy disrupted the electronic processing of tomato exports. With the annual peak in tomato exports in February and March, the electronic system is vital in ensuring products are not stalled at the border for hours.

Other news

Ángel García-Lascurain, National President of the Mexican Institute of Finance Executives (IMEF), stated this week that although it is still too early to discern the effect that the spreading of COVID-19 will have on the Mexican economy, the sectors that could be affected most are automotive, agriculture and tourism.

Soy futures at the Chicago stock exchange rose this Wednesday. Earnings remained limited as the market awaits increased purchases from China. On Tuesday, Beijing announced tariff exemptions for almost 700 products imported from the US.