Draft Paper – Not to be cited without author’s permission
But we should do well to take such an apparently close relationship between subsidies and dumping at face value, as subsidy payments are made in response to low prices, and low prices lead to dumping. It appears that even in the case of maize in Mexico, the simple cancellation of US subsidies might not make dent in the cheap price of imports. According to studies summarized by Tim Wise at Tufts, the removal of US subsidies would be unlikely to lead to more than a 4% increase in maize prices, hardly enough to make a dent in the situation Mexican maize producers.
On the other, there is a high degree of concentration in the Mexican maize market.89 Just nine maize importing companies in Mexico accounted for half of all imports in 2001. These “Mexican” companies included some of the biggest international players, like Archer-Daniels-Midland (ADM) and it’s Mexican partner (Maseca), Cargill, Arancia (Corn Products International), Pilgrims Pride, and Minsa, which is jointly owned by an American investment bank.90 At the same time, Cargill, ADM and Zen Noh control 81% of maize exports from the U.S. With the recent privatization of grain marketing in Mexico, Cargill, Arancia, Maseca and Minsa have also become the principle buyers of maize from Mexican farmers, and Minsa and Maseca dominate the processing, distribution and retailing of tortillas — the principle staple of the Mexican diet, which are made from maize. Perhaps because the entire maize commodity chain is so concentrated
in the hands of so few companies, Mexican consumers have failed to benefit from cheap imports, as shown in Figure 6, as the price paid by Mexican consumers soared by more than 300% in the first five years of NAFTA. 91
Figure 6. Real consumer prices for tortillas in Mexico. After Nadal, 2000.
Precio Real de la Tortilla, México, 1994-1999 (datos de Nadal, 2000)
The tripling of maize imports since NAFTA, with as much as one third of all maize being imported, has also brought with it the widespread contamination of native varieties—the genetic and cultural heritage of 9,000 years of indigenous and peasant communities in Mexico. Transgenes have moved to native varieties by cross-pollination from illicit plantings of genetically engineered (GE) maize from the US, with still unknown but very worrisome potential impacts. 92
Overall, the impact of NAFTA on the rural poor in Mexico has not been postive. In ten years 1,175,000 people have displaced from Mexican agriculture, with notable increases in malnutrition and ballooning numbers of school drop-outs.93 The six billion pesos in agroexport earnings under NAFTA claimed by the Fox Administration went to just 7% of Mexico’s farmers. By 2003 Mexican peasants could take it no more, coming together in the El Campo No Aguanta Más coalition (literally, “the countryside can’t take any more of this”). January 31 saw the biggest single farmer protest in Mexico City since the