RAPUATO, Mexico, Dec. 15 — A decade
of hemispheric economic upheaval finally turned Eugenio Guerrero's life
upside down last Saturday. That morning, he tried to auction off the pig
farm that has supported his family and some 50 others for two generations.
"It's true," read a flier that announced
the sale. "We are closing and auctioning everything."
From now on Mr. Guerrero, 41, will dedicate
himself to selling paint.
The changes he has been forced to confront
are being felt all over Mexico as the country struggles to keep its balance,
one foot in poverty, the other seeking a toehold in prosperity through
the North American Free Trade Agreement.
Mr. Guerrero said he had barely been able
to keep afloat since the treaty began abolishing trade barriers between
Mexico, the United States and Canada nearly 10 years ago. Credit ran dry
after a national economic crisis devastated banks in 1995. The Mexican
government ended most agricultural subsidies, sending his costs through
the roof. Pork prices plunged as cheaper imports from the United States
flooded Mexican markets.
Now, Mr. Guerrero's last defense is being
dismantled. Under Nafta, on Jan. 1 tariffs on almost all agricultural
imports from the United States will end.
The looming deadline has consumed the attention
of a nation where a quarter of the population lives in rural areas, and
produced warnings about the possibility of unrest and increased migration
across the Mexican countryside and into the United States, as millions
of peasants are forced to abandon their tiny fields.
In recent weeks, hundreds of thousands of
Mexican farmers and their supporters have blocked highways and border
crossings. They have temporarily shut down gas and electricity installations,
and even burst into Congress on horseback.
President Vicente Fox's government is short
of cash and has offered little more than moral support. "In the world
today, all sectors have to adapt to the new competitive conditions," the
president said. "Agriculture cannot be the exception."
Meanwhile, some, like Mr. Guerrero, grope
for ways to hold on to a middle-class way of life, if not their farms.
For him, Saturday was the start of another life.
That morning, Mr. Guerrero, the father of
two adolescent sons, held an auction to begin selling off half of his
2,000 pigs. There was no way, he said, that the family business could
compete against large-scale pork producers in the United States, who now
hold 40 percent of the Mexican market.
In the United States, a pig can be raised
and sold in Iowa for a fifth of what it would cost to raise and sell one
in Irapuato. Since Nafta took effect, a third of Mexico's 18,000 swine
producers have gone out of business, according to the Mexican Hog Farmers
Mr. Guerrero said he had laid off all but
five of his workers. Most told him they would emigrate to the United States
illegally in search of a new start.
Mr. Guerrero, however, decided to start over
at home. He closed Saturday's auction with the sale of a hulking black
and white male that went for 40 percent less than he was asking. A few
hours later, more resigned than rejoicing, he presided over the grand
opening of his new paint store.
"Mexico will not be a country of producers,
it is going to become a country of salesmen," he lamented. "The problem
with that is we are putting our independence at risk. We are becoming
a country that depends on foreigners for food."
Mr. Guerrero said he accepted the survival-of-the-fittest
laws of free trade. "But Mexico entered the free trade game with serious
disadvantages," he added. "Naturally, we are the losers."
It was widely predicted before Nafta took
effect on Jan. 1, 1994, that free trade would create a new world of economic
winners and losers. Mexico has become the world's ninth largest economy
and a powerhouse in the export of manufactured goods. Hundreds of thousands
of jobs were created, most of them in assembly plants called maquiladoras.
Food imports from the United States have
doubled, from $3.6 billion a year to $7.4 billion. But the food trade
has also boomed in the opposite direction.
Exports to the United States, mostly products
made by large Mexican and transnational food processing corporations,
have increased from $2.7 billion to nearly $5.3 billion. Among the most
notable winners are companies like Grupo Bimbo, Mexico's largest food
company, which has taken advantage of cheap grain imports.
Other winners are Maseca, which has become
the world's largest producer of cornmeal and tortillas, and Sigma, which
imports cheap pork parts and poultry pastes from the United States to
make sandwich meats.
Fruit and vegetable farmers, who benefit
from longer seasons of sunshine and cheaper labor than their American
competitors, have also increased their exports to the United States under
But many observers say the losses outweigh
the gains. Mexico's most difficult challenge has been the fate of some
25 million people who live in the countryside.
Although agriculture represents less than
5 percent of the gross domestic product, about one in five working Mexicans
are directly involved in it. The overwhelming majority are poor subsistence
farmers, who work plots as small as two acres. However, midsized farmers
are also being devastated.
Poultry farmers, too, are expected to be
hit hard when remaining tariffs are lifted on Jan. 1. Currently Mexico
places a 48 percent tariff on poultry.
As much as Nafta ignited an economic evolution,
said analysts, it has also set off a kind of social landslide as the government
struggles, in the span of a decade, to move millions of people from farming
into other ways of life. The impact is likely to be felt on both sides
of the border.
Some 700,000 people are expected to lose
jobs in farming and other food industries next year, warned Armando Paredes
Arroyo, president of the National Agriculture Commission. Many may join
the estimated 300,000 Mexicans a year who make the illegal journey to
the United States. Most are peasant farmers.
Farm leaders pointed to President Bush's
farm bill, which promised $180 billion in spending over the next 10 years,
as an example of unfair trade practices by the United States. A typical
farmer in Mexico receives $722 a year in government subsidies, officials
say, while the average American farmer will receive more than $20,000
under the bill signed by President Bush.
President Fox, however, rejected calls to
renegotiate or suspend Nafta. The government says the farming crisis is
linked in large part to the legacy of government corruption and mismanagement
by the Institutional Revolutionary Party, which controlled Mexico for
In the budget approved last week, the Mexican
government pledged $10.2 billion in spending on agriculture next year,
an increase of about 4 percent over last year. However, farmers complain,
only $4.5 billion will go directly to subsidies.