NAFTA AND U.S. CORN SUBSIDIES: EXPLAINING THE DISPLACEMENT OF MEXICO'S CORN FARMERS

By Rick Relinger

This paper intends to explicate the causal relationship between U.S. federal subsidies for domestically produced corn and the post-NAFTA rural to urban migration in Mexico. While corn production has been central to the Mexican economy for centuries, it cannot economically compete with highly subsidized corn produced in the United States. In 1994 the implementation of the North American Free Trade Agreement (NAFTA) liberalized the markets of Canada, the United States, and Mexico, effectively eliminating nearly all trade barriers. Consequently, corn produced in Mexico now competes directly with American corn in North American markets. Competition with artificially distorted U.S. corn prices has driven unsubsidized corn produced in Mexico out of its customary domestic market as Mexican consumers began to purchase American corn. Mexican corn farmers were no longer able to make a sustainable living due the plummeting demand for their produce and accordingly migrated from rural farms to urban centers in search of employment. Therefore, American corn subsidies are primarily responsible for the rural to urban population shift in Mexico that manifested following the NAFTA deal in 1994.

Introduction

Since the 1994 implementation of NAFTA, massive rural to urban migration took place within Mexico as agrarian farmers moved to metropolitan centers. This tri-lateral free-trade agreement between the Canada, the United States and Mexico was unprecedented, particularly the relationship between the United States and Mexico, as states with such drastically different levels of development merged their economies. This paper will examine which factors are responsible for this massive internal migration within Mexico following the integration of the North American economies. There are two highly divergent explanations for the Mexican migration and subsequent urbanization that followed the signing of NAFTA, which I will detail in the literature review. The determination of the culpable factors for this migratory flow is crucial because the accepted interpretation will significantly influence how states will approach free-trade agreements and their inclusion of rules pertaining to the trade of agricultural commodities in the future. This study is particularly pertinent as the looming Panama and Colombia free trade agreements, modeled after NAFTA, are currently being debated by the United States Congress.

The paper’s underlying hypothesis is that American corn subsidies, which led to the flooding of Mexican markets with American corn following the signing of NAFTA, is the primary factor responsible for the post-1994 internal displacement of rural farmers in Mexico. The trade agreement effectively eliminated all trade barriers and placed Mexico’s domestically produced corn in direct competition with highly subsidized corn imported from the United States. Consequently, Mexican corn farmers, who comprise the majority of the country’s agricultural sector, experienced drastic declines in the domestic price of their product and thus faced increasing difficulties to attain a sustainable living. Hence, we observe high levels of migration into Mexico’s cities in the latter half of the 1990’s, and the beginning of the 21st century, as these displaced farmers abandoned their previous livelihood in search of employment.

Accordingly, this report investigates the relationship between American corn subsidies and rural to urban migration in Mexico. Specifically, the study will evaluate the migratory population shifts in Mexico and American agricultural subsidies with respect to data on quantities of U.S. crop exports to Mexico, measures of Mexican internal crop production, levels of domestic crop prices, and rates of agricultural employment. To discern the specific impact of American corn subsidies, trends in the statistics delineated above regarding corn will be juxtaposed with avocado produce, which is contrastingly not subsidized by the American government. To preview this paper’s findings, it is evident that the subsidization of American corn drastically lowers both the price of corn and levels of employment in the agricultural sector, triggering the out-migration of rural corn farmers to Mexico’s cities. This report will commence with a literature review that situates the study’s research in context of the historical discourse between proponents of free-trade deals and critics that call for the responsible regulation of trade expansion. Next, it will describe the rationale that guides the hypothesized relationship between federal subsidies for American corn and Mexican internal displacement and further explicate methods of statistical measurement. Lastly, the paper will detail the research findings and propose additional issues for future research.

Literature Review

Due to the enduring political controversy surrounding reports of undocumented immigrants entering the United States via Mexico, the majority of research regarding NAFTA’s impact on migration concerns emigration to the United States. Instead, this study intends to examine Mexico’s internal migration. There are two eminent theories which intend to explain the intra-Mexico migratory shifts associated with NAFTA that have endured from pre-NAFTA negotiations to contemporary debates regarding the trade agreement’s legacy. While the theories are highly divergent, both anticipate a rise in migration. Proponents of NAFTA assert that any migratory catalyst would be the rational economic incentive offered by NAFTA’s urban job creation, while individuals advocating for labor, human rights and environmental protections claim that the trade-agreement’s inclusion of agricultural trade forced economic displacement due to rural unemployment.

During the NAFTA negotiations, proponents of the free-trade deal predicted that it would attract foreign direct investment in Mexico. As a result, this growing sector of foreign-owned factories (commonly referred to as “maquiladoras”) would create an influx of relatively high-paying manufacturing jobs in Mexico’s developing urban centers. Weintraub argued that NAFTA’s creation of jobs would motivate rural farmers to abandon their livelihood and migrate to cities like Mexico City, Monterrey, Tijuana etc. (Weintraub 1994). Joined by other early NAFTA advocates, Weintraub alleged that the rationale that would guide farmers choosing to migrate would be the promise of sustained higher-wage employment (Hufbauer 1993, Acevedo 1992). This theory maintains that the prospect of an improved economic status will persuade corn farmers to desert their prior occupation. Thus, migration is attributed to the rational pursuit of better wages and more stable employment. They acknowledged neither the possibility of declines in domestic corn prices nor the escalation in rural unemployment.

Conversely, Nader predicted that rather than migrating due to the prospect of better jobs, corn farmers would be effectively displaced due to the economic collapse of the domestic corn market. Lacking economic alternatives, they would migrate to cities in search of employment due to NAFTA’s devastation of profit-prospects for domestic corn farmers. The reported findings estimate that “800,000 farming families will be driven off their communal lands because of competition with low cost American agriculture” (Nader 1993). Nader’s pre-NAFTA report reaches similar conclusions as Koechlin and Larudee, among others, who determined that American-produced corn would outperform Mexican-grown corn in its conventional market (Koechlin 1993). Profits that sustain corn farmers in Mexico would quickly diminish and “set off a new wave of migration to Mexican cities.” The theory proposed that urban manufacturing jobs would not catalyze this anticipated rural to urban migration, as promised by NAFTA proponents. Rather, the number of alleged jobs to be created by foreign direct investment would be nowhere near sufficient to employ a displaced farming workforce, much less enable these workers to support their family. Consequently, the majority of migrants leaving the farming sector will be unable to find stable employment in metropolitan areas, resulting in both higher urban and rural unemployment rates.

However, calculations from other early NAFTA research indicated that rapid growth in Mexico’s manufacturing sector would be adequate to employ all migrants leaving the agricultural sector. DeLong found that although there may have been an initial rise in Mexico’s unemployment rates, employment would soon rise beyond pre-NAFTA levels and provide more productive, efficient and higher-paying jobs (DeLong 1996). Similar studies go further to suggest that NAFTA’s encouragement of foreign direct investment necessitates the migration of rural Mexicans to large cities to meet the new labor demand (Poitras 1994, Lustig 1997).

Today, NAFTA has dictated North American trade policies for over fifteen years. Researchers from both perspectives have since conducted contemporary studies to demonstrate the validity of their initial predictions. Nadal analyzes the impact of NAFTA’s liberalization of the corn market on social marginalization within Mexico’s states (Nadal 2002). Among the study’s findings, it is reported that out-migration is highest in Mexico’s highest corn-producing regions, specifically Oaxaca, Michoacán, Veracruz, Guanajuato and Puebla to name a few. This study attributes the migratory flow to declining corn prices, despite the rising prices for tortilla’s, of which corn is the main ingredient. However, Nadal suggests that rural corn farmers who refused to migrate and abandon their livelihood resorted to increasing their production as coping method against declining corn prices. This apparent increase in low-scale corn production further contributed to contracting corn prices as output continued to expand. The study concludes that NAFTA both facilitated the overproduction of domestic corn and fueled out-migration from Mexico’s most prolific corn-producing states.

Alternatively, research conducted by NAFTA advocates arrives at competing conclusions. Studies highlighting the success of foreign direct investment for job creation have found that NAFTA has been the driving force behind rapid job growth in Mexico’s urban centers. Hufbauer finds that growth in the export-oriented manufacturing sector more than doubled urban employment since 1993 (Hufbauer 2005). Further, the study claims that the trade agreement’s contribution to the expansion jobs in the export-oriented manufacturing industry enticed Mexican farmers to move into metropolitan areas. Similar reports assert that rural to urban migration following NAFTA was an inevitable “modernization of Mexico’s economy,” which shifted from rural agriculture to urban manufacturing (Sanchez 2000, Cameron 2005). Hufbauer, joined by other pro-NAFTA academics, suggests that the promise of dramatic improvement in the lives of farmers, through maquiladora employment, encourages rural residents to migrate to urban centers.

Yet, Martin’s findings contradict the conventional claims of proponents of free-trade. His research examines the impact of comparative advantages in the crop trade on migratory shifts (Martin 2001). Federal subsidies granted by the United States government ensure that American corn producers maintain a substantial comparative advantage over their Mexican counterparts. The report states that freer trade, as a consequence of NAFTA, promotes the increase of corn exports to Mexican consumers. This export expansion effectively coerces Mexican corn farmers out of the domestic market and threatens to fundamentally alter the rural economy. The study’s conclusion exhibits that the trade-agreement’s elimination of trade barriers has resulted in a comparative advantage for American producers which has jeopardized the livelihood of rural farmers. Accordingly, this paper’s hypothesis intends to link these ramifications of U.S. corn subsidies on Mexico’s agricultural economy with the internal displacement and out-migration of Mexico’s corn farmers.

Hypothesis

An abundance of research regarding NAFTA’s effectiveness in Mexico has been concerned with urban job creation and the growth of the manufacturing sector. However, this study aims to clarify the responsible factor for Mexico’s migratory shift that occurred following the trilateral trade agreement’s implementation under the auspices of Mexico’s economic modernization. This paper posits that the introduction of highly subsidized American corn, a consequence of the merger of the North American economies, is the principal culprit for Mexico’s rural to urban migration by former corn farmers. Subsequently, the task of this study is to determine whether U.S corn exports to Mexico influenced levels of migration within Mexico.

The theoretical basis for this hypothesis is Mexican-grown corn’s traditional centrality to the country’s agricultural economy and culture for thousands of years. The approval of NAFTA exposed corn grown by Mexican farmers to direct competition with American-grown corn. Upon the effective elimination of trade barriers, an observable swell occurred in the levels of migration from the countryside to metropolitan areas in Mexico. Although rural to urban migration has been an ongoing process in the country since the 1950’s, current research indicates that this form of “migration grew…352 percent between 1980 and 2002” (Meré 2007).

The study posits that this migratory wave, following the liberalization of NAFTA, is a consequence of asymmetrical competition in the North American corn market. The trade imbalance, created by billions of dollars in yearly subsidies for American corn, encourages American agribusiness to increase amounts of corn exports into the Mexican market. As evident in the following chart, corn produced in the United States is disproportionately advantaged by subsidies from the federal government, ranging in the billions of dollars.


(Environmental Working Group 2009)

Consequently, this paper anticipates that competition for Mexican consumers with low-cost American corn drove down domestic corn prices. Thus, domestic agricultural production is predicted to have declined because corn production was less profitable for Mexican producers. As a result, Henriques suggests that the number of employed corn farmers, who account for nearly half of the country’s agricultural workers, declined as it became increasingly difficult for local producers to attain a sustainable profit (2004). His paper follows that the prospect of unemployment, paired with minimal alternatives for rural employment, forced rural inhabitants to migrate to find work.

The predicted relationship between price-distorted American corn and levels of rural to urban migration will be measured by comparing the regional agricultural markets of corn and avocados. Both crops are produced in large quantities in the United States and Mexico. Yet the American corn industry is the largest annual recipient of billions of dollars in subsidies, while American avocado producers are not entitled to any subsidies. Thus, the comparison between these agricultural products, which represent both extremes in crop price distortions, will help expose the impact of corn subsidies on internal migration in Mexico. The statistical comparison of the two crops will be fourfold: examining the quantities of each exported from the United States to Mexico, the levels at which each crop is produced in Mexico, the domestic price at which each are sold for in Mexico, and rates of Mexico’s agricultural employment.

Data and Methods

In order to test the contribution of American corn subsidies to the economic displacement of Mexico’s rural farmers, the study design compares the impact of corn and avocado exports on factors which have been identified as predictors of out-migration (Massey 1997). Although an abundance of research and commentary exists on the social and economic impacts of NAFTA, there is an absence of research compiled specifically to examine the effect of American corn subsidies on Mexican rural-to-urban migration. This void meant that the featured data for this project had to be gathered from a variety of sources. Hence, the varied factors relevant to the thesis require an assortment of datasets: ranging from export quantities to agricultural production, and crop prices to employment rates.

The paper first uses a dataset on the quantities of agricultural exports from the United States to Mexico composed by the United States Department of Agriculture’s (USDA) Foreign Agriculture Service. The datasets employed in this study feature the yearly quantity of exports (in thousands of dollars) for both corn and avocados from 1991 to 2004. These statistics are subsequently compared with additional USDA Foreign Agricultural Service datasets regarding the level of domestic agricultural production in Mexico. Similarly, these statistics measure both the levels of production of corn and avocados (in metric tons) from 1991 to 2004. This comparison will reveal the impact of subsidized and non-subsidized crops (corn and avocados respectively) exported from the United States on amounts of agricultural production in Mexico. If amount of corn exported to Mexico increases, beginning in 1994, and the level of corn cultivated in Mexico declines over the same period, it will indicate that federal subsidies for American corn are a likely source of a weakened Mexican corn market. Yet, this causation will be confirmed if avocado exports either remain steady or increase while domestic production of avocados fails to decline.

Next, the study relies upon two datasets on Mexico’s domestic agricultural prices of corn and avocados in Mexico. The first dataset, which was published by Mexico’s National Institute of Statistics and Geography, presents the average rural price for corn (measure in dollars per ton) from 1991 to 2000 (White 2003). The latter dataset, which was gathered by the Avocado Commission, presents the yearly price for avocados (measured in cents per pound) from 1991 to 2004. Both statistics will then be compared with the aforementioned data on corn and avocado export quantities. A statistical analysis between the two datasets will illustrate the influence of federal subsidies for United States crops exported to Mexico on the domestic prices at which they are sold in the Mexican agricultural market. An increase in corn exports to Mexico, accompanied by a decline in the domestic corn prices will verify the causation of American corn subsidies on the Mexican corn prices and thus, on the income of rural corn farmers. This causal relationship will be reinforced if domestic prices of avocados fail to decline, as quantities of avocados exported either remain steady or increase.

The report concludes with a dataset on the number of corn producers and workers employed in Mexico also compiled by the government’s National Institute of Statistics and Geography. This data tracks the number of people employed in the corn sector during the years of 1991, 1993, 1995, 1997 and 2000. These yearly totals will be measured against levels of both corn exports from the United States to Mexico and Mexico’s domestic corn prices. These comparisons will exhibit the impact of highly-subsidized American corn exported into Mexico and the corresponding changes in domestic corn prices on levels of agricultural employment. By examining American corn’s impact on Mexican agricultural employment, the study will explicate the relationship between the implementation of NAFTA’s neo-liberal economic policies and the corresponding rural to urban population shift within the country.

Before discussing the results it is important to note that while this paper has a thorough research design, it does contain a few limitations. Due to the absence of data specific to the migration of corn farmers, this study’s primary limitation is its use of alternative factors that influence out-migration (such as levels of production, crop prices, and employment rates) to determine the impact of corn subsidies on internal displacement. Another limitation is the research design’s inability to account for additional factors, beyond U.S. corn subsidies, that may influence the migration of Mexico’s corn farmers. Potential factors include NAFTA’s elimination of Mexico’s social programs, and the introduction of more efficient farming technologies. Finally, the report’s data analysis assumes Mexico’s corn farmers as a single unit that is equally impacted by the examined economic factors. However, there are varied types of corn producers in Mexico (corporate agribusiness, small-scale ejidos, subsistence farmers etc.) that may experience economic changes differently. Each of these limitations is important to consider when examining this paper’s findings.

Results

As delineated in the previous section, this study begins with a comparison between U.S. corn exports to Mexico and their impact on Mexico’s corn production, followed by a parallel comparison of the North American avocado market. In Graph 1, it is evident that prior to the 1994 implementation of NAFTA yearly quantities of corn exported from the United States were well below $200 million. Yet, as expected, the free trade-agreements elimination of tariffs and non-tariff barriers triggered a substantial increase in U.S. corn being sold in the Mexican agricultural market. By 2004, U.S. corn exports to its southern neighbor, comparatively advantaged by federal subsidies, have increased twenty-fold since 1993.

Graph 1


(Generated from data compiled by the USDA’s U.S Trade Exports and Production, Supply, and Distribution)

* The 1997 drop in U.S. exports was due to a drought in the U.S. and to the Mexican currency crisis, which increased the competitiveness of Mexico’s corn exports (Fanjul 2003).

On the other hand, Mexico’s domestic corn production peaked in 1993 but suffered an acute decline of 2 million metric tons in 1994. However, production recovered to its pre-NAFTA level by 1999 and continued to grow through the beginning of the 21st century. This growth in domestic production contradicts the study’s prediction that an increase in U.S. corn exports to Mexico would have an adverse effect for Mexico’s domestic production. Rather, it is apparent that growth in Mexican corn production grew alongside an increasing flow of U.S. exports. What explains this unexpected occurrence? Upon further examination, sustained production was not the work of communal Mexican corn producers but was instead propelled by corporate agribusiness. Immediately following NAFTA, the number of large-scale corporate-owned farms multiplied, while small-scale producers declined (Zahniser 2004). Additionally, U.S. owned agribusiness has expanded its overall share of Mexico’s domestic corn production following the implementation of NAFTA. It is important to note the significance of agribusiness’ expansion in Mexico’s corn market, as it is more efficient in crop production than small-scale producers and thus, requires less employment (Henriques 2004).

Despite more market volatility due to the dependency on climate conditions, U.S. avocado exports to Mexico also increased over the same time span. The instability of the avocado market is noticeable as declines in U.S. avocado exports to Mexico corresponded with reductions in Mexico’s domestic production. The observable increase in avocado exports (Graph 2) was expected because U.S. exporters gained broader access to the Mexican market as NAFTA liberalized the trade of agricultural products.

Graph 2.


(Generated from data compiled by the USDA’s U.S. Trade Exports and Production, Supply, and Distribution)

The steady growth in Mexico’s avocado production corresponds with the study’s predicted market adjustments to NAFTA. Avocado production in Mexico expanded by more than 150,000 metric tons from 1991 to 2004. Since American-grown avocados do not receive subsidies from the federal government, U.S. avocado exports do not benefit from a comparative advantage in the Mexico’s avocado market. Therefore, as U.S. exports of both corn and avocados to Mexico increased following 1994, avocado production expectedly did not decline. Yet, Mexico’s domestic corn production similarly sustained steady growth, despite U.S. grown corn’s comparative advantage due to government subsidies. If corn production remained steady, it is necessary to examine changes in crop prices for both corn and avocados sold in Mexico.

Graph 3 illustrates the profound impact of the post-NAFTA increase in U.S. corn exports on the price of corn sold in Mexico. Although corn prices experienced a slight decline prior to the trade agreement, the value of corn dropped approximately 25% in 1994 alone. Despite a minor two-year recovery, the price of corn continued to plummet and reached 50% of its pre-NAFTA levels by the end of the decade.

Graph 3.


(Generated from data compiled by the USDA’s U.S. Trade Exports and the Institute of Statistics and Geography)

Evidently, this dramatic price decline is a consequence of U.S. corn exports flooding the Mexican agricultural market. Advantaged by billions of dollars in farm subsidies, U.S. corn prices are artifically low. Consequently, the entrance of U.S. corn into Mexico’s corn market, which escalated in 1994, resulted in a dramatic decline in the average domestic price charged for corn. Small-scale corn farmers, who make up 72% of Mexico’s corn producers, experienced a staggering reduction in their profits (Henriques 2004).

Conversely, the post-NAFTA increase in U.S. avocado exports to Mexico results in a very slight increase in the price of avocados sold to Mexican consumers. Graph 4 shows that the availability of American avocados in Mexico, following agricultural trade liberalization, has no observable impact on the Mexico’s avocado prices. Instead of plummeting domestic crop prices, which occurred in the corn market, avocados sold in Mexico maintained their pre-NAFTA price.

Graph 4.


(Generated from data compiled by the USDA’s U.S. Trade Exports and the Avocado Commission)

The average price per pound of avocados sold in 2004 was within two cents of the 1993 value. What key factor explains such different price reactions to increasing levels of crop exports from the United States? Unlike the corn industry, American-grown avocado prices are not distorted by yearly subsidies from the federal government. Accordingly, avocados exported from the U.S. do not benefit from a substatial comparative advantage when sold in Mexico. While American avocados clearly do not adversely impact prices in Mexico’s avocado market, highly subsidized American corn sold in Mexico undoubtedly reduces the domestic price of corn. The dramtic decline in profits which small-scale corn farmers depend on for survival can largely be attributed to the price manipulation of American corn subsidies. Thus, the following analysis of the impact of both increasing U.S. corn exports and declining domestic corn prices on employment levels of Mexico’s corn farmers, will illustrate the culpability of Mexico’s post-NAFTA rural to urban migration.

Graph 5 exhibits the impact of U.S. corn exports flooding Mexican markets on the employment levels of corn farmers in Mexico. Prior to NAFTA, the number of corn producers in Mexico exeeded four thousand.

Graph 5.


(Generated from data compiled by the USDA’s U.S. Trade Exports and the Institute of Statistics and Geography)

Following NAFTA, the level of U.S. corn exports to Mexico increased by twenty times. Over that same period, the number of corn producers declined by one-third of its pre-1994 level. This finding is highly significant as unemployment is one of the best indicators of imminent migration (Pissarides 1990). Facing unemployment, Mexico’s rural corn farmers were forced to migrate to cities to find new jobs and sources of income.

The decreasing number of active corn producers in Mexico directly follows the declining average price for corn sold in Mexico, as illustrated by Graph 6. Immediately following NAFTA’s trade liberalization, corn prices fell $160 per ton. Within the next year, the Mexican corn industry suffered a loss of nearly six hundred corn producers. This unambiguous cause and effect relationship between declining domestic corn prices and increasing unemployment in Mexico’s farm industy demonstrates the profound impact of federal subsidies for U.S. corn on out-migration from rural Mexico.

Graph 6.


(Generated from data compiled by Mexico’s National Institute of Statistics and Geography)

As NAFTA liberalized the trade of agricultural commodities between the North American countries, federally subsidized U.S. corn entered Mexico’s markets in increasingly larger quantities. Although production of domestic corn remained high, corporate agribusinesses expanded their share over the Mexican corn production. The entrance of artificially low-cost corn from the United States forced the domestic price of corn sold in Mexico to plummet. As a result, Mexican farmers experienced lower incomes, making it increasingly difficult to maintain basic living standards. Thus, many rural corn farmers were forced to abandon their livelihood. With no economically viable alternative, corn farmers from rural regions were internally displaced from their homes and moved to urban centers in search of employment.

Conclusion

As the study’s results demonstrate, billions of dollars of federal subsidies for American-grown corn are largely responsible for the economic displacement of Mexico’s corn farmers. The impact of U.S. corn subsidies has severely transformed the lives of people who have no influence on U.S. policies. This economic vulnerability of Mexican farmers was initiated through the approval of the North American Free Trade Agreement. The inclusion of the agricultural sector within the agreement’s broader agenda of trade liberalization exposed Mexicans employed in agriculture to U.S. domestic economic policies. (It is important to note that U.S.-Canada side of the agreement contrastingly maintains significant restrictions to protect the Canadian agricultural sector). Although these subsidies produced an increase in the corporate ownership of corn production, a decrease in corn prices, and dwindling numbers of employed corn farmers–not to mention the displacement and forced migration of Mexican corn farmers–Mexican voters have no voice in congressional deliberations regarding the approval of federal subsidies for American-grown corn.

This paper’s findings, and their centrality to economic vulnerability, must be acknowledged when considering the possibility of engaging in either bilateral or multilateral free trade agreements (FTAs). Currently, developing countries are refusing to reinitiate the World Trade Organization’s Doha Round negotiations. Their governments are duly wary of the potentially disastrous consequences of a liberalized agricultural sector in an asymmetrical system of global trade, as exemplified by U.S. corn subsidies and the displacement of Mexico’s corn farmers (Anderson 2007). It is important that leaders of developing countries approach the recommendations of western trade negotiators cautiously, and consider the ramifications of agricultural liberalization for the welfare of their country’s citizens.

Although this paper demonstrates the catalytic role of subsidies for American corn in the out-migration of Mexico’s corn farmers, additional research is required. While this study examines Mexico’s corn workers as a homogenous entity, these farmers are a heterogeneous group. Future studies which differentiate categories of Mexicans employed in corn production would contribute to this paper’s findings. Specifically, it would be valuable to analyze how U.S. corn subsidies respectively impacted the migration of corn farmers working on small-scale communal farms, known as ejidos, and those employed by high-production agribusinesses. Additional research is required on the consequences of NAFTA’s elimination of Mexico’s social service programs pertaining to agriculture. A study of the free trade agreement’s dismantlement of CONASUPO, the state enterprise designed to maintain the stability of the agricultural economy and employment, would further the understanding of other culpable factors in the economic displacement of the country’s corn farmers. Nevertheless, it is evident that by lowering both the domestic price of corn and employment levels of corn farmers, federal subsidies for American corn are primarily responsible for the post-NAFTA rural to urban migration of Mexico’s corn farmers.

References

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27 responses to “NAFTA AND U.S. CORN SUBSIDIES: EXPLAINING THE DISPLACEMENT OF MEXICO'S CORN FARMERS

  1. Pingback: NAFTA AND U.S. CORN SUBSIDIES: EXPLAINING THE DISPLACEMENT OF MEXICO’S CORN FARMERS | BreakTheMatrix·

  2. This is an enlightening article and makes a lot of things more clear to me. I have been researching this topic for a while and this is a good article. Thank you.

  3. Our NEIGHBORS to the south are important to our own ability to remain a viable Nation going forward. Their well being should be as important to us as is our own. The fact that we are mostly governed by a mechanism paid for by White European Immigrants and that they are Brown skinned somehow makes it easier to desensitize US to their plight. I am disgusted by the amount of GREED in our Modern Age and even more so by the widespread lack of compassion of one Human for another. I am not one of the Smartest guys in the room BUT even I understand that we are on a course that is KILLING our PLANET. If enough people can wake up to this fact maybe we can affect some positive change that will lead to a better destination than GONE?

    Americans have no true concept of how our so called Free Market system affects the lives of hundreds of millions of our fellow citizens on this small planet. There is nothing FREE about it. We have all been lied to and manipulated by our Rulers, who give ONLY lip service to democracy and equal rights. The RICH do not pay appreciable taxes anywhere near the ratio based on their income as compared to the middle class. The RICH are the beneficiaries of the subsidies that are funded by the middle class’ tax burden. Our government was BOUGHT many years ago and is not one of the people for the people but one of the contributor/lobbyist for the RICH. They OWN the system and are the recipients of of the majority of the benefits or profits. Nearly all profits have been Privatized but absolutely ALL losses are socialized by this so called Free Market Capitalism. More and more the individual and the small business owner are marginalized by this type of system. This GREED can ONLY lead to future ANARCHY because the FEW retain most of the benefits. These Rich and Powerful idealouges the world over are insensitive to and out of touch with the harsh reality that the ordinary person attempts to live within. There will be a day and a night, when ALL of their gold, cash, and shiny things will not sate their profound hunger or thirst. A system that continually takes from the lower order and gives little in return is one where the fatted upper order is so grossly encumbered by their MASS that they cannot do for themselves, so they can only perish… Most of the Rich and Powerful have reached their lofy position because they are standing on a HEAP of people they have trod over,. Maybe not completely by intention but we all know that the road to a negative place in the universe is paved with GOOD ones? Think about it.

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  6. I am interested to know if you have researched the effect of the Mexican subsidy of basic agricultural goods in the “Procampo” program. That is the replacement for the old CONASUPO subsidy program. I understand that because of that subsidy Mexican Farmers can grow most of the white corn required for human domestic consumption although the yellow corn is mostly from the USA and is used mainly to feed livestock.

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  15. What is the problem with a mass migration to urban centers? Every developed country in the world had to go through the same moving pains to get were they are now. One of the main characterists of a developed country is very few food producers and very large urban populations. Very interesting article. Thank You.

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