NAFTA & Globalization Destroying
Canadian & Mexican Farmers

The
AGRIBUSINESS
EXAMINER
December 2, 2002 #205
Monitoring Corporate Agribusiness
From a Public Interest Perspective

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CANADIAN STUDY SHOWS
"STRUCTURAL ADJUSTMENT" OF AG POLICIES
REAP DEVASTATING EFFECTS FOR FARMERS

The term "structural adjustment" is most commonly used to describe the
onerous "free market" programs imposed on highly-indebted developing nations
by the World Bank and International Monetary Fund as conditions for
receiving further loans. But a new Canadian Centre for Policy Alternatives
(CCPA) study finds that Canada's agricultural industry has also been
structurally adjusted, with the same disastrous results that similar
programs have inflicted on poor countries around the world.

Written by Darrin Qualman and Nettie Wiebe, the study --- The Structural
Adjustment of Canadian Agriculture --- concludes that "two decades of
structural adjustment have devastated farm families and rural communities."

The authors describe the various ways that Canadian agriculture has been
transformed to meet market demands and promote the interests of large
agribusiness corporations at the expense of farmers and farm communities.

"Many Canadians think that the IMF and World Bank impose their structural
adjustment programs only on debt-ridden Third World nations. But the
Canadian government has restructured agriculture and rural Canada by using
policy tools remarkably similar to those of the IMF/World Bank. These tools
include the WTO, NAFTA, deregulation, privatization, cuts in government
subsidies, increased foreign investment, and a much greater emphasis on
production for export."

The study finds that these policies are almost identical to the main
components of an IMF-style structural adjustment program, and that the
intent is also the same: to accelerate the transfer of wealth from local
farmers to transnational corporations. Each of these policies is examined,
and their detrimental effects on farmers and their communities starkly
detailed.

"Structural adjustment programs around the world have served to concentrate
wealth in fewer hands, drive small farmers into bankruptcy, and force
migration from rural areas to the cities. All of these effects are
discernible in Canadian agriculture.

"Between 1981 and 2001, the number of farms in Canada declined from 318,361
to 246,923, a drop of 22%. In just the past five years (1996 to 2001),
Canada lost 11% of its farmers. The farm income crisis has decimated many
rural communities. The profits in the food production system are
increasingly going to transnationals with head offices in distant (and
mostly foreign) cities.

"The farm crisis in Canada and around the world is caused by the
corporate-driven extraction of wealth from the rural areas. Structural
adjustment removes the barriers to such extraction and accelerates the
outflow of profits and wealth."

Qualman and Wiebe accuse the Canadian government of using the tools of free
trade agreements and other neocon policies to "turn the country's farm
families over to the market. Since the 1980s, Ottawa has systematically
imposed a radical restructuring on Canadian farmers and rural Canada. The
result has been a seven-fold increase in exports, a transfer of the
agri-food processing sector to foreign transnationals, the decimation of
rural communities, and the worst farm income crisis since the 1930s."

The study warns that the toll of this structural adjustment goes far beyond
the impoverishment of many farm families and the loss of their communities.
"It includes human, cultural, and environmental costs which all Canadians,
no matter where they may live, must pay. Structural adjustment of this
magnitude forces everyone to adjust to greater economic instability, less
democratic control, depletion of natural resources, and an increased
dependence on a few corporate giants for jobs, investment, and even food.

"For Canadian farm families --- as for peasants and farmers everywhere ---
structural adjustment often means being adjusted out of their way of making
a living by growing food. It's an adjustment right out of their way of
life."

Darrin Qualman is executive secretary of the National Farmers' Union (NFU)
and a research associate with the CCPA. Nettie Wiebe teaches at the
University of Saskatchewan and is a former NFU President.

MEXICAN FARMERS FACE DISASTER,
MASS MIGRATION WHEN NAFTA TARIFFS
ON U.S. FARM PRODUCTS LIFTED IN JANUARY

MARK STEVENSON, ASSOCIATED PRESS: Anti-globalization activists
warn that millions of Mexican farmers will stream into the United States when
Mexico lifts tariffs on U.S. farm products in January.

The government has said the import opening will make Mexican farms more
competitive, bring new investment to the countryside and give factory jobs
to those who now eke out a living on antiquated, overpopulated farms. But
President Vicente Fox has come under pressure to rip up free trade accords
and spend more subsidy money to protect Mexican farms. Fox, a free trade
supporter, has begun to concede that the opening could create problems.

Trying to help Mexican farmers, who fear they will be wiped out when most
agricultural tariffs are lifted in January under terms of the North American
Free Trade Agreement (NAFTA), Fox last week announced a $10.25 billion plan
to offset U.S. farming competition.

Fox said . . . . he was sending the legislation to Mexico's Congress for
speedy approval. The plan is aimed at providing subsidies along with levying
tariffs on U.S. farm exports that Mexican farmers say are sold below
production cost in Mexico since the Bush administration approved a $180
billion U.S. farm-subsidy bill this year.

International trade law recognizes the rights of nations to impose
protective tariffs when goods are being dumped on their markets below cost,
though imposing tariffs in this case would go against the spirit of the
NAFTA agreement, as do the subsidies in both countries.

Under the terms of NAFTA, the tariffs that remain ten years after the United
States, Mexico and Canada signed the accord will be lifted in January. Only
duties on corn, dairy and sugar will remain. As the date nears, Mexican
farmers are pressing the government for help.

"For the Mexican countryside, this is going to be devastating," farm
activist Luis Hernandez said. He predicted "an increase in migration, in
bankruptcies, violence and drug-growing" as Mexican farmers turn to the only
crops that can be profitable for them.

Farmers have already slaughtered cows and dumped pineapples on Mexico City
streets, seized highways and blocked bridges to defend a way of life on the
hardscrabble farms where corn was first domesticated 4,000 years ago.

Today, Hernandez said, those farms largely serve as "vast parking lots for
the unemployed." And there are many: While urban Mexican families have an
average of 2.4 children, women in poor rural communities continue to have an
average of four to five. That growth --- coupled with gradually disappearing
farm jobs --- is the main engine for the exodus. In 1990 Mexico had 9.8
million farmers; in 2000, there were only 8.6 million.

Many go to Mexico's burgeoning cities. Others leave for the United States,
and could help swell migration from 300,000 a year to 500,000 a year by
2030, according to Mexico's National Population Council.

The farms migrants leave behind are tiny. Seventy percent of farmers have
fewer than 12 acres. Many are communal plots that lack clear titles, making
it hard for farmers to modernize, get loans, or combine smaller plots into
viable farms. As a result, many don't live off their crops, and haven't for
years.

"A lot of people who call themselves farmers really aren't," says Ricardo
Celma, Mexico representative of the U.S. Grains Council. "They're taxi
drivers with some land." Mexico does have highly productive commercial
farms, especially in the north of the country, but they pay laborers as
little as $2 a day and sometimes employ children. With farmers in such
straits, NAFTA is an easy target --- even though most of the tariffs to be
removed in 2003 already are as low as two percent.

Some people are threatening social unrest unless NAFTA is overturned. The
radical farm group El Barzon is among those that say NAFTA creates unfair
competition and could cause widespread poverty that will result in acts of
desperation.

Fox's $10.25 billion agricultural-spending plan is about four percent higher
than had been expected, but the National Council of Agriculture and the
National Confederation of Farmers said that the announcement was too little
too late. Agricultural council president Armando Paredes said at least $48
billion would be needed. Mexican farmers grumble that the United States has
a much larger budget for farm subsidies.

Yet while U.S. subsidies are an easy target, they may not be the real
problem. Mexico's corn subsidies average $150 a ton, well above the $85 that
U.S. farmers are paid.

The problem is that most Mexican farmers produce so little they cannot get
by even with subsidies. Mexico's 8.6 million farmers produce about
one-seventh as much as their three million U.S. counterparts. "No country in
the world could provide jobs for this many people in the farm sector," said
Humberto Jasso, of Mexico's Economy Secretariat. "We have to provide
non-farm jobs in rural areas, and that's an area where NAFTA can help."

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