Wise, T.A. (2011). Mexico: the cost of U.S. dumping (excerpts)

1. Wise, T.A. (2011). Mexico: the cost of U.S. dumping (excerpts)

2. U.S. dumping on Mexico after NAFTA • 1997-2005: 9 years – • Mexican farmers on average lost more than $1 billion per year • Corn farmers suffered more than half the losses

3. NAFTA did not change U.S govt policy : Subsidies to support agriculture at the same level as before, continued

4. U.S. exports to Mexico: • Under NAFTA, exports of 8 key agricultural commodities--corn, soybeans, wheat, cotton, rice, beef, pork, and poultryincreased dramatically • Soybeans: "low" increase of 159% • Pork: astonishing increase of 707% • Corn, (the most sensitive product given that 3 million Mexican farm families grow it), increases of 413% (since the early 1990s).

5. "dumping margin”: the percentage by which U.S. export prices were below its costs of production • Dumping margins ranged from: • 12% to 38% for the five crops • Between 5% and 10% for the meats (calculated on the basis of their access to below-cost feed grains) • U.S. corn was on average dumped at 19% below production costs.

7. Corn farmers suffered the highest losses due to dumping margins of 19% • 3 million Mexican producers were affected by the import surge • 9 year period: Losses to Mexican corn farmers totaled $6.6 billion • Yearly loss of more than $700 million • Losses were a crushing blow to struggling small farmers

8. Mexico's Own Non-action Or Bad Agricultural Policies: • Until 2008, the Mexican government had the right under NAFTA to impose relatively steep tariffs on high corn imports, part of the agreement's supposed transition to open borders. • But it never enforced the so-called tariff-rate quota that allowed such measures, • Abandoned its producers to unfair competition with their US competitors who were highly subsidized • In 2000, the Mexgovernment could have counteracted U.S. dumping with tariffs, when dumping margins reached 50%.

9. Instead, Mexico resorted to agricultural subsidies. • Subsidizing Inequality documents: Extreme inequalities in the distribution of Mexico's agricultural subsidies, which disproportionately help the country's largest industrialized farmers compete with their U.S. counterparts. • Some programs are designed to reach small-scale farmers - the Procampo subsidy program--put in place as part of the transition to NAFTA to cushion losses for small-scale farmers and to help them become more competitive • But they had a regressive impact: Subsidizing Inequality shows that Procampo excluded the vast majority of the poorest farmers and allowed some of the largest farms to get two payments a year per hectare.

10. The average payment of 858 pesos to Mexico's small-scale corn farmers was more than gobbled up by the 958-peso losses to dumping. • Instead of helping Mexico's farmers compete, Procampo payments partly compensated for U.S. dumping. • Mexico now imports almost half of its basic grains, including more than one third of its corn. • This has prompted new demands in Mexico for the country to regain its lost self-sufficiency in corn production.

11. MILIONS AGAINST MONSANTO - HELP ! 10 min ap2009 http://www.youtube.com/watch?v=vj-G6VhUynY Mexico's poor suffer as food speculation fuels tortilla crisis 8 min http://www.theecologist.org/trial_investigations/1051194/mexicos_poor_suffer_as_food_speculation_fuels_tortilla_crisis.html