Mexico’s Investments Driving Beef, Crop Export
|Llewellyn Jones||Oct 29, 2018|
Mexico is increasingly subsidizing its agricultural industry as well as investing in its shipping infrastructure.
Together, it’s helping to drive the country’s beef and vegetable exports to the U.S. according to a 2017 paper by researchers from the University of Florida.
In 1987, Mexico exported no beef to the U.S., but 28 years later it now exports over 392 million pounds of beef, which accounts for over 11 percent of all U.S. beef imports.
The subsidized exports from Mexico and a cheap peso added to America's growing agricultural trade deficit with its NAFTA partners, which may be a point of contention during recent trade deal renegotiations.
From No Subsidies to Heavily Subsidized
The flood of state money into agricultural programs is a recent phenomenon as Mexico had no subsidies when NAFTA went into effect in 1994. In 2000, only 790 hectares were designated protected agricultural production areas.
In 2016, Mexico protected 40,862 hectares, and agricultural support programs under the Mexican secretary of agriculture’s office, SAGARPA, totaled almost $15 billion between 2013 and 2016.
Under Mexico’s 2013-2018 National Development Plan, the country’s agricultural sector was specifically targeted for investment to “reduce poverty and influence regional development” with marketing, safety, health, and research programs.
Transportation Infrastructure Investment
A December 2016 USDA report listed substantial investment in the country’s highway system, cold storage network, packing and inspection capacity, and border entry process that would facilitate growth in the growing meat export trade.
The investments allowed Mexican meat processors like the Sinaloa-based SuKarne to better compete with American companies by reducing transaction costs and improving timeliness and food quality.