A Review Of Recent Changes In Mexican Agricultural Policy: Implications For Small Scale Bean Production

Until the early 1980s, Mexican economic policy was characterized by import substitution industrialization. Agriculture's role was to provide a cheap and abundant food supply for the urban sector, and to generate foreign exchange through exports. While Mexico achieved food self-sufficiency by the early 1960s, conflicting policies succeeded in undermining basic grain production and exacerbating an existent dichotomy between traditional and rainfed production. Austerity measures imposed during the 1980s resulting from the collapse of world oil prices further undermined small-scale production. These effects are viewed in the context of the bean subsector, characterized by a bimodal system of production; while the majority of Mexican bean producers are small-scale farmers, most beans are produced on commercial, mechanized farms. Although bean production was affected by mounting inflation during the '70s and '80s, in which static producer prices overrode government subsidies, large scale winter producers benefitted from two-part pricing, begun in the 1980s. Under the Salinas administration, producer prices for beans have risen in recent years, and the Mexican government is embarking on a new rural development program. More importantly, the advent of the North American Free Trade Agreement spells profound changes for the bean subsector. During the 15 year interim period in which tariffs for beans will be phased out, the Mexican government must decide either to invest in increasing the bean sector's productivity, or merely ensure that Mexican consumers have a cheap supply of beans--regardless of whether they are imported or domestically produced.