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Weekly Roundups

The Week in Agribusiness: 2020 PEF Overlooks Industrial Agriculture

By Gabriela Mastache | Fri, 11/22/2019 - 13:05

The 2020 Federal Expenses Budget shows an important reduction in resources for the agribusiness sector, even though Mexico’s agricultural trade balance still registers a surplus. Meanwhile, lemon production in Sinaloa opens a new window of opportunity for the local industry.

 

In case you missed it, this is what made the headlines over the week!

  • Farmers say the 2020 Federal Expenses Budget does not consider the needs of the Mexican agricultural sector. According to the new budget, support for the agricultural sector will not be through subsidies but through a new national credit institution called Financiera Nacional Agropecuaria. Farmers claim this new scheme will increase financing interest rates up to 16 percent, while in the past rates were at 6.5 percent for women and 7 percent for small producers.
  • Moreover, the 2020 budget shows no resources for areas such as crop production and livestock breeding and focuses mostly on guaranteeing prices for basic alimentary products and on the production for the wellbeing program.
  • According to experts, the new policy for the Mexican agricultural sector takes a heavy toll on medium-sized producers. In the past, producers of cultivated land under irrigation of up to 100ha were eligible for governmental support. However, according to new regulations, support is now limited to producers of 6ha.
  • According to SADER, between January and September 2019, Mexico’s agricultural and agroindustrial trade balance registered a surplus of US$7.3 billion, which is US$2.25 billion above what was registered in the same period in 2018. Moreover, exports registered a 9.1 percent increase in the same period compared to 2018.
  • Northern states have long advocated for the production of grains. However, volatility in grain prices and increases in technology costs for their production have reduced these crops’ profitability. In this scenario, lemon offers an interesting option for crop conversion in the north, especially in the state of Sinaloa.
Gabriela Mastache Gabriela Mastache Senior Journalist and Industry Analyst