Investments Wanted for Mexico’s Agricultural SectorBy Sofía Hanna | Tue, 09/14/2021 - 11:52
Mexico seeks to promote investment projects in the agricultural, fishing and aquaculture sectors, mainly in the country's southeast since it is a region with high productive potential. The Minister of Agriculture and Rural Development, Víctor Villalobos Arámbula, urged Mexico's businessmen to create investment projects that will both the region and themselves.
In an official announcement by the Ministry of Agriculture and Rural Development (SADER), Villalobos said that, historically, investments have prioritized the north-central region of the country but the Ministry will focus on the south to increase responsible and inclusive production. Investment in the region and better management of public goods are expected to lead to growth. The Ministry will seek to support export-oriented projects and promote the cultivation of rice and perennials of high product quality in the south-southeast, with a focus on circular and agroecological agriculture.
Foreign direct investment (FDI) in Mexico’s agricultural sector has continued to grow exponentially from its lowest point in 2018 when it amounted to US$16.67 million. "The Mexican agricultural sector received a flow of FDI of about US$81 million in 2020. This figure represented an increase of about 54.9 percent, compared to the investment received by the sector in 2019", according to Statista. Mexico saw the highest flow of FDI of the decade in 2013 when it amounted to about US$132 million. In 2019, the production value of agricultural crops in Mexico exceeded MX$675 million (US$33.9 million), which represented an increase of about 5.4 percent year on year.
Despite the opportunities, the US and Canada have expressed concerns about investing in Mexico if the country does not make substantial improvements in its rule of law. To invest, companies need an environment of institutional certainty, explains BBVA. US Trade Representative Katherine Tai said that agricultural problems include risk-based science and regulation of biotech products in Mexico. Mexico’s government, in turn, stated that it would emphasize a Mexican energy policy that "respects US investment" and is in line with the objectives of climate change, according to a USMCA press release.
On the other hand, Spain has highlighted its interest in strengthening its role in Mexico through CAMESCOM, which stated that its members are planning long-term investments in the Latin American country as they remain committed to adapt to current challenges. CAMESCOM has sought to continue developing aspects of the bilateral relationship to promote trade and investment between Spain and Mexico, as discussed in a previous MBN article.