Image credits: Wilfero
News Article

Government, Savior of the Little Guy

By Jan Hogewoning | Mon, 07/06/2020 - 12:22

On June 26, the government published a document outlining its program for agriculture for the period 2020-2024. The program is an extension of the National Development Plan for 2019-2024 that marks López Obrador’s vision for the state’s role in advancing the livelihood of ‘left-behind’ Mexicans. This new program reemphasizes the state’s primary responsibility in this matter. The program makes a specific mention to article 25 of Mexican Constitution, which instructs that the State “is responsible for the stewardship of national development to guarantee that it is comprehensive and sustainable, that it strengthens the sovereignty of the nation and its democratic regime and that, through competitiveness, promoting economic growth and employment and a fairer distribution of income and wealth, allows the full exercise of freedom and dignity of individuals, groups and social classes.”

A key word here is ‘sovereignty’, which has been central to the narrative of this government in framing the country’s food policy goals. López Obrador wants the agricultural system to allow communities, towns, regions and the country to be essentially independent from external inputs, or at least approach this ideal. Being able to meet our own demands, it propagates, will drive out the inequality and lack of freedom that has been the outcome of previous policies. It goes on: “The market does not replace the state, so economic development is geared towards achieving welfare. The state ensures that no one is left behind, no one is left out. The backwardness of millions of people, community members and ejidatarios is eradicated on the principle that for the good of all, first come the poor. Government action is articulated around a new public ethic based on trustworthiness and honesty.” The document states: “Neoliberalism has negative consequences for the well-being of the people of Mexico. The development model implemented in the last 30 years drove a high concentration of income, which limited the progress of justice and economic development with well-being … It is a priority to recover the functions and stewardship of the state that allow promoting development, justice and well-being to pay off the enormous social debt that we have with rural men and women.”

Agricultural policy has been central to facilitating López Obrador’s populist message. The government has extensive government sponsored programs for farmers and rural communities, including the guaranteed price scheme for basic crops, the pesticide supply program and the Sembrando Vida tree planting initiative. In April this year, the president used the Sembrando Vida initiative to announce the creation of another 200,000 jobs amid the expected economic impact of the COVID-19 crisis. While the exclusionary impact of the NAFTA agreement over 25 years is well documented with small farmers finding it harder to compete with larger domestic and American enterprises, it is important to also analyze the effectiveness of such programs and the risk of another form of dependence developing, dependence on the state. A much-heard criticism is that too much money is being thrown at them, while the farmers are not receiving the actual technical assistance to create systems that can truly sustain and feed communities. The Sembrando Vida program promised mass mixed forest land creation, but as with similar programs in the past, the survivability of planted trees remains low. The pesticide program is only useful if the pesticide is applied to produce optimal crops without over-wearing the land. The supply of pesticides over time is not guaranteed, again. Lastly, the guaranteed price scheme is essentially subsidizing farmers but not generating real income from the market, or building the local economies to foster resilience. This creates a dependency on the state that can only continue as long as the state keeps picking up an expensive tab. If subsidies disappear, farmers are left back at point 0. The MasAgro program, developed in collaboration with the International Center for Wheat and Maize Development, is an exception that does aim to equip farmers with accessible technology.

While the new USMCA trade agreement has altered little in the market dynamics, it is clear Lopez Obrador is betting on the government's purses to save the little guy. 

The data used in this article was sourced from:  
Official Publication of the Government (DOF), Mexico Business News
Photo by:   Wilfero
Jan Hogewoning Jan Hogewoning Journalist and Industry Analyst