land use and land tenure change in the - El Colegio de Chihuahua

E.4.Article 27 and Land Reform19Article 27 and the Agrarian Reform Law of 1992, in the context of NAFTA and continuedliberalization policies by the Mexican government, had the stated aim of ending public sector interventionand dependency in the agricultural sector, reversing the decreasing size but increasing number oflandholdings, and stimulating modernization of agriculture with the cooperation of private (includingforeign) capital. The primary components of this law included an end to redistribution of land (that hasbeen blamed for reducing approximately $517 million of Mexican exports to the U.S. and 80% of U.S.tomato imports). (http//www.fas.usda.gov/htop/highlights/1998/98-04/fvimp97/98fvimp.html )It is important to note that Mexican agricultural policy is driven not only by a search for foreigntrade through exports, but also by the needs of an expanding domestic market. Much of the expansion invegetable, meant and dairy production is driven by demands from Mexico’s rapidly growing urban areas.As a result of economic instability and staggering national debt, Mexican support for the agriculturalsector has been dramatically restructured in the last two decades. In an effort to make the sector moreresponsive to international competition and trade opportunities, recent administrations have altered ordiscontinued previous policies that offered considerable protection to the sector. Most of the government’sagricultural parastatals have been privatized. This has meant that Mexican producers are now facing marketprices for many agricultural products and services such as fertilizer, commercial seeds, extension, cropinsurance and credit. The system of price guarantees for many commodities has been changed, so thatproducer prices for crops such as barley, wheat sorghum and other crops are closely aligned withinternational market prices. Although the price of maize and beans remains somewhat protected, they aregradually being adjusted to reflect the competition.. In 1980s, public investment in agriculture fell by morethan 80% and rural credit by more than half. Subsidies on inputs such as fertilizer have been phased out.In response to large increases in the number of agricultural loans in default and bank seizures offarmland during the 1980s economic crisis, the government reformed the rural credit system. The publicagricultural credit bank, BANRURAL, is now operating on commercial principals, with the effect thatcredit availability has declined dramatically in recent years, particularly for those producers with limitedcollateral or financial security.In an effort to cushion some of the negative implications of these policy reforms for rural producers,the government has initiated a new agricultural program, PROCAMPO, that provides a direct payment ofan established amount per hectare to each producer of basic crops (wheat, sorghum, maize, rice, barley,soya, cotton, sunflower, safflower and sesame). Although this program was intended to provide somesupport to the small-scale peasant producers of central and southern Mexico who were likely to be mostaversely affected by increased competition from imported U.S. grains, many large-scale commercialproducers are finding that the program enable them to continue the production of otherwise unprofitablecrops. Thus PROCAMPO may be providing an incentive for large-scale producers in the northern states tocontinue to devote large areas of land to crops in the PROCAMPO program, rather than convert this land toother uses.The economic crisis has directly affected agricultural producers who have south private credit. In1993, estimates of farm loans in default ranged from 41.3 billion to 4 billion and banks were seizingfarmers’ property, as the agricultural sector was squeezed by trade liberalization/competition, reducedsubsidies, and a slow economy.E.4.Article 27 and Land ReformArticle 27 and the Agrarian Reform Law of 1992, in the context of NAFTA and continuedliberalization policies by the Mexican government, had the stated aim of ending public sector interventionand dependency in the agricultural sector, reversing the decreasing size by increasing number oflandholdings, and stimulated modernization of agriculture with the cooperation of private (includingforeign) capital. The primary components of the law included an end to redistribution of land (that has been