Draft Paper – Not to be cited without author’s permission
Figure 3 shows how the average price Mexican maize farmers receive on the domestic market has dropped by more than 50% since 1990, except for a brief rise due to the
massive devaluation of the peso in 94-95.
Figure 4. Real maize subsidies in Mexico. After Wise, 2004b.
Before NAFTA, maize represented just 2.9% of Mexican farm imports, while in recent years it has fluctuated between 20
Figure 4 shows
farmers, which of course is markedly different from the picture of American maize subsidies over the same time period, when subsidy levels reached as high as 47% of farm
(the figure for Mexico is about 13%, of a much lower average income80), and
American maize was dumped abroad at prices ranging from 20 to 33% below the cost of production.81 How were Mexican farmers to compete?
The simplest way to conceptualize what this means is that Mexican peasant farmers found themselves with prices that were too low to turn a profit growing maize, and few buyers at any price (as state marketing agencies were privatized and the new private companies preferred buy in bulk from US exporters, who were often their close commercial associates), and little or no credit to plant for the market anyway.
Surprisingly, given this panorama, fully half of Mexico’s farmland is still planted to maize, reflecting more a lack of other options than anything positive in economic terms
about growing maize.82 farmers still grow maize.83
Almost three million mostly poor peasant and indigenous
How is that possible? Laura Carlsen, an analyst at the Americas Policy Program of the Interhemispheric Resource Center who specializes in rural Mexico, tells us that Mexican peasant farmers themselves are subsidizing national maize production. By subsidies, she means the wages brought or sent home from unpaid family labor, from small-scale commercial activities, and from the more than $9 billion in annual remittances sent home by Mexicans working in the United States:
The remittances have a dual role. First, the money sustains agricultural activities that have been deemed nonviable by the international market but that serve multiple purposes: family consumption, cultural survival, ecological conservation, supplemental income, etc. Second, by sending money home, migrants in the U.S. seek not only to assure a decent standard of living for their Mexican families but also to maintain the