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Subject: AGRARIAN COUNTER-REFORM IN MEXICO
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/* Written  6:50 am  Nov 22, 1992 by [e-mail] in igc:carnet.mexnews */
/* ---------- "AGRARIAN COUNTER-REFORM IN MEXICO" ---------- */
THE NEW SHAPE OF THE COUNTRYSIDE:
AGRARIAN COUNTER-REFORM IN MEXICO*

David Barkin
Departamento de Produccion Economica
Universidad Autonoma Metropolitana
Unidad Xochimilco, Mexico City


     Rural Mexico has changed dramatically. After more than fifty years of
land distributions and peasant mobilizations, the typical village is no longer
a cohesive and closed social unit (if it ever was) and peasants working in a
system of rain fed agriculture are no longer the main source of maize for the
nation.(1)

     As the country begins to grapple with the implications of its integration
into the North American Free Trade Area (NAFTA), rural Mexico is poised to
change again. The Salinas government has promulgated a new legal framework for
agrarian relations and opened the countryside to the virtually unfettered
operation of private capital, both domestic and foreign. This paper offers a
discussion of the changes which have taken place and those that are about to
occur.

     In the coming months and years, the majority of people in Mexico's rural
society will have to profoundly modify their behavior. They will have to
reevaluate their relationships with urban and industrial Mexico, with their
groups in local communities, their neighbors, and even with their own
relatives. Only a small elite will be able to take advantage of the many
productive opportunities offered by Mexico's integration into the largest
economic bloc in the world via NAFTA, and the promised avalanche of foreign
investment in rural production, which has not materialized. Unfortunately, the
government offers little hope for the majority of rural residents, small-scale
producers, migratory workers and semi-proletarianized day laborers, who have
neither the natural nor the financial/technical resources to enable them to
thrive in this brave new world of integrated modernity. These groups will have
to forge a different strategy of their own, if they are to survive.

     In spite of repeated predictions of the imminent demise of the Mexican
peasantry -its disappearance and its absorption into the burgeoning
proletariat-, this sector of society has proved itself remarkably resilient.
In the face of a systematic onslaught during decades by increasingly
aggressive and technically competent policy makers and a political system that
effectively maintains the rural population disenfranchised, these
"traditional" farmers persist in planting their milpas, and in preserving
their cultures. Many are also teaching university scholars how to protect the
environment. This paper briefly examines the evolution of Mexican rural
society and explores some of the ways in which it may adapt to the neo-liberal
reorganization which is coming in the wake of the foreign trade "opening"
(reduction of trade barriers) in the late 1980s and the comprehensive
modifications of agrarian legislation enacted early in 1992. It ends by
proposing an alternative strategy for rural development, a strategy designed
to confront the counter-reforms of the recent past.


THE INSTITUTIONAL CONTEXT

     The agrarian reform mandated by Article 27 of the 1917 Constitution was a
revolutionary response to the demands of "Tierra y Libertad", shouted on the
battlefields by peasant insurgents. The land distribution program began in
earnest 17 years later (1934), with the accession of Lazaro Cardenas to the
Presidency. By 1990, more than one-half of the country's total rural area had
been distributed to ejidatarios and colonists (SARH-CEPAL 1992). The more than
3 million beneficiaries, who make up the "social sector" in Mexican
agriculture, were a major factor contributing to the country's political
stability; as recently as 1990, they accounted for more than one-half (55%) of
the total domestic maize production. They control 20 million hectares of
arable land (more than one-half of the total) and are engaged in an
increasingly intense struggle, as the neo-liberal policies of modernization
through international economic integration threaten their very survival (SARH-
CEPAL 1992).(2)

Institutional stability and rural growth

     Until recently, a basic feature of rural Mexico was its remarkable
stability. The modern revival of the ejido in rural Mexico led to the
construction of the strongest pillars of corporatist state control over
society. Once begun, the land distribution policy offered important rewards to
virtually all sectors of Mexican society: the fortunate peasants who received
their inalienable plots with permanent usufruct rights enjoyed a new measure
of freedom. This undoubtedly motivated them to labor diligently to make their
lands produce and improve their families' welfare; the nation enjoyed a
newfound sense of security as the yields on peasant-tilled and commercial
crops rose dramatically. Mexico discovered that it could achieve food self-
sufficiency with rising nutritional standards;(3) the nation's burgeoning
urbanized labor force was assured of unlimited supplies of cheap food, which
had the additional effect of facilitating the imposition of wage restraints
during the decade of the 1960s and contributing to the high profit rates that
spurred investment throughout the economy. All these factors contributed to
the "Mexican miracle," which was widely celebrated at the time. Rising food
production reinforced domestic prosperity, and together with rapid import
substituting industrialization and the growth of the service sectors
(medicine, education and the bureaucracy), a broad internal market was created
(see Barkin [1990, chapter 5] for a more detailed discussion of this process).

     Government development policies also broadened the scope of the market.
They created new industries and brought isolated regions into the national
economy through extensive irrigation programs emulating the highly acclaimed
U.S. Tennessee Valley Authority (TVA) (Barkin and King 1970). Agricultural
exports began to diversify as foreign brokers joined with local elites to
introduce new crops and finance more intensive fruit and vegetable production
in the nation's most promising irrigation districts. In the nation's tropical
rain forests, development went unbridled, causing great harm to the jungle,
and introducing extensive cattle grazing to feed the middle classes's new
found appetite for meat; all too soon this strategy proved very costly, not
only in terms of its ecological impacts, but also because of its low economic
returns to many of the investors involved in the wholesale forest destruction.

The erosion of peasant support

     Throughout the countryside, these commercial ventures created a new sense
of movement, of economic growth, while their protagonists imperiously trampled
on the rights and the resources of the rightful claimants to the nation's
wealth. Captive peasant communities struggled to free themselves from the yoke
of local bosses (caciques). Myriad indigenous groups struggled to maintain
their identity and survive in the rapidly changing global marketplace in which
they found themselves.

     The rural population -peasants, indigenous groups, colonists- was not
passive in the face of attacks by influential provincial bosses and an
inequitable national policies. The official Peasant Confederation
(Confederacion Nacional Campesina, or CNC) offered little hope for local
groups attempting to protect themselves, but other competing organizations
responded to the spontaneous dissatisfaction with the forms progress was
taking in rural Mexico. Peasant organizations were joined by urban supporters
to counteract the policies which benefitted the urban rich.

     Once food self-sufficiency was achieved and celebrated in a presidential
discourse in 1962, official price structures and other official policies
turned more strongly against basic food production.(4) Peasants had few
productive alternatives; lacking access to credit and the full range of
material inputs and technical skills required to diversify their production,
they were forced to submit to the decisions which froze or lowered basic price
support levels for basic foods for more than a decade. At the same time, the
expanding package of government rural support programs was directed toward
stimulating commercial crop production in the nation's best endowed regions.

     Repeatedly, during the decades 1970-1990, peasants expressed their
discontent with the package of state policies and repression which was rapidly
eroding the gains of past eras. In two departures from the historical trend,
special, short stopgap programs were enacted to respond to their demands and
the growing problem of food imports: in 1973, the food regulatory agency,
CONASUPO, created a compensatory policies to stimulate basic food production
among peasant groups and to provide welfare assistance to the neediest (Fox
1992); in 1980, the President briefly captured the world's imagination with an
innovative program, the SAM, which claimed to be strengthening the peasant
sector and regain food self-sufficiency, which had been sacrificed to demands
to maintain food prices low during the previous 15 years. Political intrigue
and outright corruption proved its undoing and paved the way for a much more
serious attack against the small-farmers (Austin and Esteva 1987; Zepeda
1988).

The response to crisis

     With the "discovery" of the debt crisis and the imposition of a draconian
stabilization program in 1982, the official support programs for the peasantry
(input subsidies and more adequate prices) went the way of almost all
government programs oriented towards the less privileged. The initial waves of
cuts in spending left the agricultural extension agents sitting in their
offices for lack of an operations budget, and the marginal peasant producers
without credit. Further reorganizations led to massive reductions in
government personnel and a gradual withdrawal from the countryside. By the
early 1990s, producers were told that they would be responsible for hiring
their own advisors and the newly privatized banking system was assigned the
task of financing production and the official agricultural credit bank further
restricted its lending to risky borrowers. As the criteria of profitability
permeated the economy, it became obvious that basic food production and the
traditional producer were not good credit risks. With the opening of domestic
markets to imports in every area except maize and beans, the magnitude of the
attack against the small farmer, and even many medium sized grain producers,
became evident throughout rural society.(5)

     The case of sorghum is particularly revealing. It was introduced as a
promising alternative crop into Mexico (where it was previously unknown) by
private capital in the mid-1960s and promptly adopted by wealthier farmers in
the northern parts of the country as a way of escaping from the imperious
official price controls on maize. In spite of being of the same family as
maize, yields on the new hybrid seeds were greater; it was well adapted to
harsher climates than maize; the cultivation process could be mechanized; and
there was no incentive for the "midnight harvests" which plagued maize farmers
(whose crop did not require processing to be consumed), as the grain was
destined exclusively for animal feed. With the growth of "factory-raised"
chickens and intensive hog-fattening operations, the demand for feed burgeoned
and sorghum cultivation responded. "Mexico's second green revolution"
(referring to sorghum, DeWalt and Barkin n.d.) is an excellent example,
however, of the socioeconomic impacts of such an innovation as it diffuses
through society. Although Ralston-Purina offered guaranteed prices for the
sorghum, only a venturesome few began sowing the grain; it proved a great
commercial success and rapidly spread to a widening circle of farmers,
occupying as much as one-quarter of the nation's best maize lands by the
mid-1970s.

     As might be predicted by an outside analyst, once the crop became a
popular product, its profitability fell and the state entered to control the
market. The initial innovators moved on to sow other commercial crops
(especially vegetables), while the remaining sorghum farmers attempted to
develop a balance between various commercial and subsistence crops.
Repeatedly, however, the remaining sorghum farmers were frustrated by
unfulfilled official promises of adequate credit, delivery of fertilizers and
other inputs and market guarantees. With the opening of local markets to
imports in 1990, sorghum growers joined with soybean producers in major
protest actions in many parts of rural Mexico. These generally futile attempts
to obstruct the present government's program of international integration are
illustrative of the difficulties which the majority of Mexico's small farmers
are facing in the new policy environment.

     The opening of markets and the privatization of credit and technical
assistance were not the only major policy changes of recent years. A program
of "agro-maquilas" offered the highly capitalized agro-industrialists from the
southwestern USA unparalleled opportunities to produce fruits and vegetables
under highly profitable conditions in Mexico's most productive irrigation
districts. The opening of local markets to imports of farm equipment went hand
in hand with the gradual deregulation of biotechnology and the seed industry.
In sum, Mexican agriculture is in the throes of a neo-liberal restructuring
which is designed to bring unparalleled economic opportunities to those
prepared to take advantage of the moment.

The remaking of the Constitution for international integration

     These changes appear to have been a prelude to one of the most far
reaching of the institutional changes in rural Mexico: the rewriting of the
Mexican Constitution's Article 27. In November 1991, the President announced
his intention to send a draft of his proposal for a new text for this
cornerstone of rural society to the congress. In just two months, the draft
was approved by both houses of Congress, rubber stamped by the legislatures of
all 31 of the states, and became part of the Constitution in January 1992.
Shortly thereafter, enabling legislation (La Ley Reglamentaria) was
promulgated after a perfunctory debate in the Congress. Perhaps the most
remarkable thing about this process, was the tepid reaction that this far
reaching legislation aroused among the peasantry; as might be expected, the
various opposition groups, within the formal political system and without,
organized protests and mobilized small coteries of experts on rural affairs to
offer their opinions about the destructive nature of the proposal. In the
final analysis, however, President Salinas exercised his considerable power to
recast the legal framework within which rural development and struggle will
take place in the coming years.

     Three significant changes were introduced with this legislation. The most
widely commented upon modification is the new ease with which ejidos or groups
of ejidatarios can now enter into commercial agreements to finance production
on their lands. Although there are nominal limits on the area any one group
may control, the very nature of corporations would make these restrictions
inoperative in even the most rigid and honest of legal systems.(6) The most
widely denounced of the changes is the facility by which individual
beneficiaries of the land reform program may now alienate title to their land,
by direct sale, mortgage or other commercial figure; this creates the
possibility for a reconcentration of land holdings throughout Mexico. The
third innovation is the decision to not permit communal lands to be sold or
mortgaged in the new setting, but rather to permit long term leasing
arrangements, with the approval of as few as one-third of the members of the
community. This change is particularly important because a major part of the
total land distributed under the agrarian reform program was given in communal
title to the community as a whole; virtually all of the ejidal holdings in
forests, rain forests, pasture lands, etc., exist under communal arrangements
and can now be freed up for private appropriation under this new regime.

     These profound changes in the agrarian legislation must be understood in
the context of the single most important initiative of the present
administration: the creation of a trinational North American Free Trade Area.
For quite some time, in entrepreneurial circles, the ejidal system has been
seen as a major stumbling block in promoting the free flow of capital among
Mexico's partners. With the legal strictures removed, the Salinas
administration hopes to attract large inflows of private investment capital to
reshape agricultural production as a major dynamic force in rebuilding the
Mexican economy. The negotiations of the free trade agreement made this
patently clear: aside from a relatively protectionist regime for maize and
beans, the rest of Mexican agriculture will be subjected to the ruthless
discipline of the free market after a relatively short adjustment process.
Although there are numerous escape clauses and restrictive procedures, an
analysis of the reactions of the major transnational players in the
agricultural sector suggests that safeguards such as cuotas on the imports of
basic food grains and dried milk will play a relatively minor role in
protecting small and even medium size Mexican producers from intense
competition by well capitalized foreign counterparts.

The limits of institutional diagnosis and control

     Analysts are often fond of assuming that their aggregate evaluations of
policy changes can provide an adequate assessment of social reactions. This is
particularly true in Mexico, where the overwhelming concentration of political
power in the hands of the President often conveys the impression that he
possesses an unfettered ability to impose otherwise unacceptable political
commitments on vast segments of the population. However, the power to
anticipate popular reactions to the exercise of presidential fiat depends not
simply on the strength and ability of the chief executive, but also on correct
information about the prevailing situation. At the national, regional and
local levels, any capacity to predict policy outcomes is perforce a function
of a theory of the Mexican state, the political process and demographics. But,
more than ever before, contemporary policy makers are wearing ideological
blinders, cut from the cloth of their neoliberal doctrines, which leads to
incorrect or partial diagnoses of current problems.

     As a result, there is a growing gap between the "official story" and
reality, as perceived by important social groups. This is best illustrated by
a relatively simple issue: the importance of urban areas in Mexico's
population. The national statistical office (INEGI) certifies, on the basis of
the 1990 population census, that Mexico is a predominantly urban country, with
76% of the population living in areas of more than 15,000 people. But,
Mexico's social reality does not correspond to this statistical image. A very
substantial part of Mexico's urban labor force actually works to provide
sustenance for rural relatives and to guarantee their ability to "stay down on
the farm". This is also true of a large number of migrants to the USA, whose
remittances end up in rural households; such is the magnitude of this
phenomenon, that in many communities in central Mexico which send migrants
aborad, the dollar is actually less expensive than in the capital city because
of the seemingly limitless quantities of bank notes which arrive from the
North.

     This definition of the degree of a country's "urbanness", for example,
has misled policy makers. The current attack against traditional, low
productivity rural producers is beginning to encounter opponents and even
resentment from people living far from these areas. With agricultural credit
increasingly restricted -only 16% of the maize producers received any form of
credit in 1990, compared to 38% who did so during the previous 5 years (SARH-
CEPAL 1992)- it is no wonder that many urban residents are asking who is to
blame for the stagnation in agricultural yields in rainfed agriculture during
the past two decades. Small-scale farmers are in the difficult position of
trying to bridge the broad chasm between their aspirations of local food self-
sufficiency and the reality of insufficient jobs and very low wages for most
workers. Urbanites bemoan the threat of further waves of rural migrants, while
farmers are forced into the urban underground economy to eke out a living
because the government's offer of insignificant social welfare programs
creates no new productive opportunities for rural communities.

     In other situations, erroneous figures deceive the policy makers while
they protect adn even reward the perpetrators of fraud. Capital flight is a
particularly egregious example of this problem. During the height of the
country's economic instability in the years 1973-1983, foreign trade provided
a mechanism for transferring funds out of the country or evading taxes. The
agricultural sector lends itself well to transactions where the erroneous
(over or under) valuation of products by fractions of a cent per pound can
represent sizable commissions for astute and unethical intermediaries. In the
specific case of Mexico, this problem of the misreporting of trade amounted to
more than 12.5% of total value of foreign trade during the 1979-1985 period
(Barkin 1990:chapter 4). Unfortunately, policy makers consistently denied the
existence of any problem and continue to be unprepared to face its
consequences. Because this practice also contributes to a serious
underestimation of the country's savings capacity (since the incomes of its
practitioners are deliberately misstated), analysts and policy makers alike
misjudge the nation's savings potential, which in turn determines its
potential for future growth; they also tend to underestimate the present and
future potential of agricultural production, since its contribution to foreign
earnings is understated. In the 1990s, when the business community is
attempting to design strategies to defend itself against the government's
policy of "fiscal terrorism" (as they characterize it) while the government
remains inflexible in its defense of the stability of the peso, it is likely
that many people are again resorting to the misreporting of the value of
foreign trade as a way of evading domestic taxes and hedging against adverse
economic changes in Mexico.(7)

     In Mexico today, the dangers arising from an incorrect assessment of the
country's economic and political health are especially great. While taking
advantage of the generous profit opportunities which the regime has created,
the world's capitalist community is rushing to congratulate Mexico for its
successes while overlooking its weaknesses. Large segments of the academic
community, at home and abroad, also are uncritically celebrating as the
country announces its progress in stifling inflation, reducing unemployment,
increasing exports, and raising wages, as it marches headlong on the road
towards the first world. The optimistic analyses pour out even while there are
widespread indications of profound social problems, such as a shrinking
internal market, growing income disparities, increased criminality, more
migration to the USA, new sources and undreamt of effects of contamination,
more underemployment and profound lack of public confidence in policy and
policy makers.

     In rural Mexico, the lack of understanding of the real situation is
especially troubling. The government has imposed a single economic policy,
narrowly guided by the principles of the free market and rooted in an absolute
faith in the power of the international marketplace to discipline errant
participants. Although the theory requires that the participants "play on a
level field", Mexican policy makers seem to ignore the importance of the
profound economic, cultural and productive differences among the competitors
within Mexico and even more so with those from abroad. The profound
modifications in the agrarian situation in recent years, resulting from the
lowering of trade barriers, the deregulation of domestic commodity markets and
the recent creation of a land market, create a dramatically different playing
field. But, the Mexican peasants are unprepared to play by the new rules.


THE MAKING OF A MODERN RURAL SOCIETY

     The Mexican government has created a new set of policies designed to
encourage the operation of a modern rural economy. These policies relegate
most rural producers to the welfare system, while concentrating government
resources, and those of the private sector, in those regions and among those
producers who show promise as successful players in local and international
markets.(8) A report describing present agricultural policy succinctly
illustrates the intentionality of the government's present rural development
strategy:

     "Only 700,000 maize producers -28% of the total- who cultivate 2.9
million hectares classified as having 'productive potential' and equivalent to
39% of the maize area, will be able to continue planting this grain, according
to the Program for the Productive Conversion of the SARH [the agriculture
ministry], which will begin to be implemented in December of this year...
     "In contrast, some 5 million producers of this basic  grain [NB: the
number should be 2 million farmers] -72% of the     total- who cultivate 4.3
million hectares classified as marginal or risky rainfed lands, have no future
planting this food crop...At present, only one in eight producers receives
credits from Banrural [the government rural agricultural credit bank], leaving
about 4 million hectares without financial assistance. The majority of grain
producers...will have to search for alternatives in other crops, reorganize
their land holdings, joining with other producers to make them larger and more
efficient to cultivate, associate with private capitalists, or become wage
laborers in rural or urban areas...
     "To these new guidelines, must be added the changes in maize prices. With
the implementation of the NAFTA, the support price for white maize will have
to be reduced 58% over a 15 year period, to reach international levels;
subsidies for production costs will be replaced with direct payments to
producers who have less than 7 hectares and produce less than 10 tons." (La
Jornada, 1 October 1992, p. 28)

     But such a strategic program will not go unchallenged. Mexico is a big
and rich country, and many social groups are becoming increasingly strident in
their demands for more recognition, for a greater ability to participate in
the fruits of international integration. Within the institutional framework
outlined above, they are searching for their own ways to negotiate a better
deal. As we shall see, in rural Mexico, success depends on their ability to
generate their own solutions to pressing regional, national or international
problems, or to threaten to create severe problems which the government would
prefer to avoid.

     A simple taxonomy of some of the most significant players in rural Mexico
offers a way of organizing our analysis of some of the profound social
differences which set the limits for state action in rural Mexico:

1) Commercial agriculturalists in the private sector
     a) in irrigation districts
     b) other
2) Organized ejidos (members of regional or national organizations)
     a) producing for export
     b) producing for the domestic market
3) Cattle ranchers*
4) Individual or locally organized basic food producers
     a) commercial scale production for the market
     b) subsistence production with limited sales to markets (ejidos and
minifundia)
5) Indigenous communities*
6) Forest ejidos*
7) Farm workers
     a) migratory (domestic and international)
     b) those based in a single region

* special considerations about these groups are beyond the scope of this paper

The poor who stayed behind

     During the past three decades, as government policy systematically
discriminated against poor rural communities, it became clear to peasant
leaders and farmers alike that they could not prosper by remaining in the
countryside. Even during the height of the campaigns to support peasant
producers (in 1973 and 1981), prevailing living standards in rural Mexico did
not improve significantly, although during these two short periods the
financial risk of producing grains was dramatically reduced. With the
imposition of the neo-liberal stabilization program in 1983, food producers
fared less badly than urban workers, experiencing a 30% decline in their
purchasing power, compared to the 50% fall recorded in minimum wages (Barkin
1992:314).

     Statistics indicate that living standards and incomes are lower in rural
areas, life expectancy is shorter, illness more frequent and jobs more
difficult to obtain. And yet, about one-quarter of the population remains in
rural areas and a substantial number of others go from their towns to work in
rural areas or work in urban jobs to support the families who remain behind.

     What is the explanation for this behavior? It is no longer possible to
talk of ignorance or even of cultural barriers to migration: throughout the
country people from all strata of rural society have moved, whole communities
have been abandoned, as peasants and indigenous groups make the trek to the
cities and towns or venture to cross the international border in El Norte.
Yet, many return, and still others continue to send substantial amounts of
money to sustain their families and permit some of them to continue to till
their subsistence plots and tend their small herds of animals. Although it
would be virtually impossible to estimate wit precision the volume of these
remittances, the Bank of Mexico estimates that international transfers amount
to perhaps as much as $5 billion, making a substantial contribution to the
country's balance of payments.

     This information suggests that the data on living conditions in the urban
areas probably overstates the advantages enjoyed by the urban poor. In spite
of better networks of clinics and schools, public assistance programs and the
ease of entering the underground economy, urban working and living conditions
for the lower strata are deplorable. Obviously, by staying in the rural areas
and by sending resources for family support, millions of people believe that
they and/or their families will be better off on the farm.

     This is the social fact that confounds the policy makers. Rural Mexico
survives, and important groups are actively struggling to defend their
integrity as members of communities and often as distinct ethnic groups. In
the face of rural economic hardship and opportunity, people leave, sometimes
permanently, but more frequently for short periods, to earn money and/or to
enjoy an adventure. When conditions change they often return.(9) Today, more
than one-half of all maize farmers cultivate less than 4 hectares (SARH-CEPAL
1992:Tables 1.1, and 1.1a). This figure not very different than the 53% of
rural families who were classified as not producing enough for their own
subsistence in 1970 (CEPAL 1982); these are the same farmers that the present
government would like to remove from the countryside (see quote of government
policy in late 1992 above).

     But conditions are not the same as they were two decades ago. People
stay, they cultivate their mini-plots, and attempt to maintain the integrity
of their communities and their families. But with falling wages and incomes,
and fewer official support programs, many more are forced to look elsewhere
for work. Women have entered the rural labor market massively and, for lack of
alternatives, they are forced to take their children with them; dangerous and
unhealthy working conditions only compound the problems of poverty. Even when
there are men present, women need to supplement the family income, or bridge
the gap until their spouses are able to send money. On-farm production is
rarely more than a supplement to the family diet, but offers the few elements
of variety and even luxury which the typical rural family can enjoy.

     The government has stepped in, creating a highly publicized anti-poverty
program, Solidarity, which has received good international press. As with
similar past programs in Mexico, it has high visibility and the extensive
government network of political control ensures its presence in virtually
every community in the country. Solidarity offers some patch-work programs for
short term improvements in local infrastructure, but few programs for
systematic improvements in the productive system or to create jobs; the new
campaign to create Solidarity Enterprises, like a similar program tried some
two decades ago, frequently lacks the organizational skills and structure as
well as the technical foundations needed to guarantee the survival of these
new ventures beyond the present administration.

     Both the government and independent analysts expect these people and
their communities not to survive. High level officials commonly predict that
there will a massive exodus from the countryside in the coming years with the
rationalization of production support programs. The Undersecretary of
Agricultural Planning has repeatedly spoken of 13 million emigres. These
analysts argue that economic opportunities are declining, both absolutely and
relatively in comparison to the new ones which will be created in the
agricultural regions with greater potential and in the rest of the economy as
foreign investment pours in. To attempt to support these communities, they
argue, is to "throw good money after bad" as one recently said to a group of
foreign investors concerned about the present social climate in Mexico.

     Other knowledgeable scholars of rural Mexico, however, have expressed
concern about this policy package (e.g., Calva and Gomez 1992).(10) Like the
critics of the policies affecting small and medium-sized industrial and
commercial enterprises in urban areas, these analysts point to basic flaws in
the official scenario. Perhaps the greatest problem is that even if foreign
investment arrives in massive quantities, there is little evidence that it
will create a sufficient number of jobs match the number of new entrants into
the labor force, about 1.2 million annually, and to absorb both the ranks of
the underemployed in the cities and those cast off the land in the rural
areas. For the latter, an increase in intensive fruit and vegetable production
in the irrigation districts is unlikely to create a significant number of
permanent jobs for agricultural day-laborers; instead it will increase the
demand for temporary migrants, a segment of the labor force whose ranks are
growing rapidly with underemployed emigres from the grain producing areas of
the country.

     For the ones who are left behind, the existing policy scenario offers few
options. We explore some of these in the last section of this paper.

The local beneficiaries of international integration(11)

     The present economic program of modernization and integration offers the
prospect of a bright future for a sizable segment of the population. Foreign
investment will flow into the country to create numerous new enterprises, both
in agriculture and industry. This new investment will install the most modern
work processes and produce very high valued products for the international
markets; we might even anticipate that part of their production will be
directed to local markets where it will drive out less modern producers unable
to compete, either because of low productivity, inadequate capitalization, or
their inability to survive the intense marketing battles.

     The winning groups will be dispersed throughout the rural Mexico. There
will be some concentration in the northern irrigation districts, but many
investors will chose to improve productive infrastructure elsewhere in the
country to get around the labor bottlenecks which frequently occur in the
North. This is already evident throughout the country, as local producers are
beginning to enter into various kinds of production agreements with Mexican
and foreign interests to produce under contract for export and local specialty
markets. This is not a new phenomenon in Mexico. It goes back decades, as some
of the studies cited in note 10 indicate.

     Furthermore, technological advances will offer opportunities for other
farmers to take advantage of special programs to increase productivity in
basic food producing sectors. The recent achievement of food self-sufficiency
based on important advances in yields, resulting from the use of new seed
varieties and agrochemicals, is evidence of the official decision to promote
domestic food production without tying it to the traditional producing groups
who, in their view, would hold back the pace of modernization. Similarly, for
those organized groups of ejidos willing to engage in production agreements
with the private sector, generous flows of resources will be available to
promote technological change in which members of the "social sector" can
participate. Past experience suggests, however, that private investors are
generally unwilling to sustain long-term commitments as market, production and
technological conditions change.(12)

     There is no doubt that the new, more flexible, institutional structure
will offer profitable opportunities for important groups of farmers. The most
significant development in this regard is the increase in organizing efforts
by the many regional peasant groups who, in turn, are members of national and
provincial coalitions. The new negotiating strategy of the agriculture
ministry clearly demonstrates its preference for dealing directly with the
coalitions, rather than with individual producer groups. Although the
producers' groups are presently experiencing substantial difficulties in
obtaining financing and because of uncertainties surrounding the new
contractual forms, it seems obvious that these obstacles will be reduced
through a negotiating procedure which will be intensified, as the pressures of
the NAFTA process intensifies.(13) This expansion of the arena for negotiation
and the active participation of local groups in complex discussions about the
way in which they will be included in the modernization/integration process
offers an important new channel for well-organized local groups to attempt to
obtain privileged access to new productive opportunities in the new
environment.(14)


TOWARDS AN ALTERNATIVE STRATEGY

     Mexico's economy will become even more distorted in the coming years, as
the present development strategy matures. Important segments of the population
are being excluded, and the country's wealth is being revalued: resources
under peasant control are being devalued while those in the hands of the rich
are becoming more important. No thought is given to preserving the country's
rich heritage for posterity. Mexico enjoys a natural cornucopia with an
incomparable indigenous past, a historic anti-colonial struggle, and a
brilliant abundance of cultural and artistic creativity. But, all this has no
value in the new politico-economic model unless it can be sold on
international markets or to fickle tourists.

     Clearly, the economies of North America are integrating. For Mexico, this
integration will mean more trade and more employment; production will continue
to increase in certain privileged sectors, like automobiles and consumer
products for export. But, productive imbalances and social polarization are
increasing. At the same time, there are fewer institutions prepared to deal
with the problems that the new strategy is creating and the people that it is
leaving behind. The present strategy is based on the presumption that foreign
investors will bring sufficient resources to Mexico to pay to correct the
problems, but this seems like a major gamble.

     In my previous writings, I proposed a "War Economy" as a complementary
strategy for rural development (Barkin 1990). Building on the experience of
Great Britain during World War II, this strategy suggests that a concerted
effort to mobilize idle domestic capacity for food production among small-
scale producers in Mexico would contribute to stimulating the growth of the
domestic market for consumer goods by the country's workers and peasants. The
simulation exercises conducted in conjunction with this proposal demonstrated
the substantial linkage effects of this approach in generating income and new
employment opportunities throughout the economy. The peasant based food self-
sufficiency strategy offered by this proposal, however, now seems
insufficient, in the light of a further intensification of the official
assault against peasants in rainfed agricultural areas. Because of important
shifts in the world market, occasioned by the competition to subsidize food
exports among the advanced industrial countries, basic food production itself
has been devalued; it no longer can offer a viable option for economic
advancement for most people in rural Mexico. In the face of the narrowly
focused model of industrial modernization, there is a critical need for a more
diversified productive base, taking advantage of abundant and varied natural
resources and the enormous reserve of inherited knowledge stemming from
Mexico's cultural diversity. Such an approach requires programs to
productively employ an important part of Mexico's population that still
struggles to remain in the countryside.(15)

     This approach must offer a new development strategy which explicitly
redresses the imbalance between rural and urban areas. In one way or another,
this involves the repopulation of the rural world. To do this, ways must be
found to help rural communities diversify their economies, to rebuild their
patterns of diversified production which have long been an integral part of
their survival strategies. In this new context, traditional food production
will become one of a number of enterprises in which the peasant community
engages as part of  its overall strategy not simply to survive, but to defend
its social and cultural integrity while improving their standards of living.
In the new world economy, in the process of integration, they must find
additional productive activities as well as forms of paid employment that
offers greater income, because food production alone will no longer allow them
to live!

     In Mexico, one way to begin this process is to work with individual
communities and regional groups to identify small projects which would help
them to interact with the resources they have, in as creative and productive a
way as possible. We are working with groups who can contribute to the
essential task of protecting endangered species as a way of generating
additional incomes in traditional food producing communities. The incomes
generated by using conservation funds to employ local people and to construct
appropriate tourist facilities to stimulate visitors will allow them to
continue to strengthen important environmental programs and to diversify their
traditional productive activities as a means of defending their communities.
Two examples of communities working to protect endangered species are in
nesting areas of the Monarch butterfly and the marine turtle.

     A similar approach involves an abandoned "geyser", which is spewing brine
over the lands of a nearby commercial farming community. In this case, we are
thinking about what is necessary to transform this "nuisance" into something
productive. It seems odd to even consider the notion of an abandoned
"geyser" -a Mexican "Old Faithful" which was never harnessed. It was created
by the Federal Electricity Commission (CFE) in its search for exploitable
geothermal resources; but the engineers did not consider it important enough
to harness for power generation. (They do not even assess fields which have a
potential of less than 20 megawatts.) So, for more than a quarter century it
was simply cordoned off and left to contaminate the land. A proposal is being
developed so that the community might participate directly in transforming the
site into a tourist attraction, a spa, a training area for sporting
activities, and even a museum for alternative energy sources. This is a
complex activity, because the community requires outside assistance to develop
a proposal and to determine its feasibility, and the CFE must acknowledge that
it has abandoned the geyser and give the land back to the community. Another
example, under consideration in Mexico, involves a group attempting to create
an agroindustrial park powered with geothermal energy, as part of a plan to
diversify rural production and reduce losses from spoilage and inadequate
marketing channels.

     These are examples of the way in which people are attempting to confront
the growing imbalance between rural and urban development, and the resulting
polarization in the countryside. They offer ways in which people can begin to
use the natural resources at hand to protect not only the resources themselves
but the very economic viability and social integrity of communities whose
existence is in question. The three examples cited above are only that -
examples of approaches which we think will encourage others to look for
different projects with the same goal: to diversify the productive base so
that rural communities can continue to exist, even to thrive, and to continue
to produce food as part of a broader strategy for rural development. This
strategy draws part of its inspiration from the need to protect the rich
heritage of natural diversity which is so important in Mexico, using
strategies which also encourage the preservation of the extraordinary reserve
of cultural diversity which has managed to survive in spite of the systematic
attack to which it has been subjected during the past centuries.(16)

     Policy makers today are unwilling to "dale tiempo al tiempo" (give time a
chance, as the popular Mexican expression has it), to allow society to adjust
to the process of international integration which is linking nations and
cultures. They forget the lesson of another popular saying: that "simply by
waking up earlier, the sun won't rise sooner." ("No por mucho madrugar,
amanece mas temprano.") That is, Mexico -the country, its people, its culture-
will not magically change its course, its very essence, simply because the
President orders its industrial structure modified, its resources sold or
leased, or foreign goods imported on a massive scale. The country is beginning
to realize the nature of the changes underway; most Mexicans will not
acquiesce easily.

     It is still too soon to predict the modifications that the people will
demand. It is likely, however, that the neo-liberal dreams of today's ruling
elites will not survive the vigorous rejection of Mexico's diverse, but
impoverished peoples.


                          BIBLIOGRAPHY

Appendini, Kirsten (1992). De La Milpa a los Tortibonos: La Restructuracion de
la Politica Alimentaria en Mexico. Mexico: El Colegio de Mexico. (in press)

Austin, James and Gustavo Esteva (eds.) (1987). Food Policy in Mexico: The
search for self-sufficiency. Ithaca, NY: Cornell.

Barkin, David (1990). Distorted Development: Mexico in the world economy.
Boulder, CO: Westview.

_____(1992). "La politica de precios y la produccion de maiz en Mexico:
Respuestas a la crisis", in Hewitt de Alcantara (1992).

Barkin, David and Timothy King (1970). Regional Economic Development: The
river basin approach in Mexico. New York and Cambridge: Cambridge.

Barkin, David and Blanca Suarez (1983). El Fin del Principio: Las semillas y
la seguridad alimentaria. Mexico: Oceano/CECODES.

_____(1985). El Fin de la Autosuficiencia Alimentaria. Mexico: Oceano/CECODES.

Bonfil Batalla, Guillermo (1987). Mexico Profundo: Una civilizacion negada.
Mexico: Grijalbo/CONACULT.

_____(1992). "Por la diversidad del futuro", Ojarasca, Number 7, April 1992,
pp. 12-18.

Calva, Jose Luis (1988). Crisis agricola y alimentaria en Mexico, 1982-1988.
Mexico: Fontamara.

Calva Tellez, Jose Luis and Gerardo Gomez Gonzalez (1992). La Agricultura
Mexicana Frente al Tratado Trilateral de Libre
Comercio. Mexico: Juan Pablos/Chapingo.

Centro de Investigaciones Agrarias (1974). Estructura Agraria y Desarrollo
Agricola en Mexico. Mexico: Fondo de Cultura Economica.

CEPAL (1982). Economia Campesina y Agricultura Empresarial. Mexico: Siglo XXI.
(This study was directed by Alejandro Shejtman).

Collier, George (1992). "The revival of peasant agriculture after energy
development in southeastern Mexico: An unexpected outcome of Dutch Disease".
Paper presented at the 1992 meetings of the Latin American Studies
Association, Los Angeles; processed.

Cordoba, Jose (1992). Nexos.

DeWalt, Bille and David Barkin (n.d.). Mexico's Second Green Revolution: A
macrolevel/microlevel perspective. (book manuscript submitted for publication)

Esteva, Gustavo, et.al. (1983). The Struggle for Rural Mexico. South Hadley,
MA: Bergin and Garvey.

Fox, Jonathan (1992). The Political Dynamics of Reform: State power and food
policy in Mexico. Ithaca, NY: Cornell. (in press)

Hewitt de Alcantara, Cynthia (1976). Modernizing Mexican Agriculture:
Socioeconomic implications of technological change, 1940-1970.  Geneva:
UNRISD.

_____ (ed.) (1992). Reestructuracion Economica y Subsistencia Rural: El maiz y
la crisis de los ochenta. Mexico: El Colegio de Mexico/UNRISD.

Sanderson, Steven (1986). The Transformation of Mexican Agriculture.
Princeton: Princeton.

SARH-CEPAL Proyecto (1992). Primer Informe Nacional Sobre Tipologia de
Productores del Sector Social. Mexico: SARH (Subsecretaria de Politica
Sectorial y Concertacion), June; processed.

Wolf, Eric (1955). "Types of Latin American peasantry." American
Anthropologist, 57:452-471.

_____ (1982). Europe and the People Without History. Berkeley, CA: University
of California.

Zepeda, Jorge (ed.) (1988). Las Sociedades Rurales Hoy. Zamora, Mich: El
Colegio de Michoacan.


                            END NOTES

* Prepared for delivery to the seminar of the Program in Agrarian Studies,
Yale University, November 6, 1992. Comments are welcome; please address them
to the author at Apartado 33E, 58020 Morelia, Michoac n, MEXICO or via
electronic mail: econet or internet: [e-mail]. I would like to
thank Scott Robinson from Mexico and Sid Shniad from Canada for their
generosity and helpful suggestions on an earlier draft of this article.

1. See Eric Wolf's classic article on the closed corporate peasant community
(1955), which shaped anthropological studies in rural Latin America for
several generations, for a discussion of peasant society before the era of
modernization and internationalization.

2. A note on data sources is in order.  It is extremely difficult to obtain a
systematic series of economic data in Mexico on any particular subject over a
long period of time. This is the result of changing criteria for data
collection, dissatisfaction with initial results, corruption at various levels
in the chain of command, or simple inefficiency. Detailed census material for
1980, for example, was never published; throughout the country, the systems
for data collection are sufficiently informal that different departments
within the same ministry often publish differing data about the same
phenomenon, even when they received their information from the same
originating source!  Another frequent problem is access to the information:
in general, reliable information is not readily available, even for a price,
although contacts and informal arrangements can release materials that money
cannot buy. Rather than present a detailed discussion of these problems or the
data sources, I will limit myself to offering a general qualitative picture of
the themes discussed in this paper and refer the interested reader to a number
of basic sources:  Centro de Investigaciones Agrarias (1974) offers a baseline
study of the evolution of rural production during the crucial period up to
1960; Esteva, et.al. (1980) provides a sympathetic history of peasant
struggles; Hewitt de Alc ntara analyzes the 'second generation effects' of the
implantation of the green revolution; Austin and Esteva (1987) compiled an
interesting set of essays of the innovative but flawed Mexican Food System
(SAM); Barkin and Su rez' (1985) study on the evolution of the cereal grains
sector traces the premeditated campaign to weaken the foundations of basic
food production in Mexico, while Sanderson (1986) extends their thesis of the
internationalization of agriculture; finally, Appendini (1992) synthesizes a
voluminous literature on particular aspects into a revealing and well
documented history of food policy formulation and rural social structures in
the most recent period.

3. During the 1940-1960 period average yields on maize doubled from 600 kg. to
1.2 tons per hectare in spite of the fact that almost no money was spent for
research on varieties and techniques applicable to peasant dry land
agriculture, where most of the grain was produced.  Instead, the Mexican
government chose to support the international effort to increase yields for
wheat produced on irrigated lands with a costly package of chemical and
mechanical inputs; this well-financed effort led to the release of several
green revolution varieties, and yields rose from 1 ton per hectare in dry land
conditions to 4 tons or more in irrigated areas where the full panoply of
support was available (for a critical review of this experience, see Hewitt
1976, and Barkin and Su rez 1983).

4. Even during the 1940-1960 period, macroeconomic policies operated to
systematically channel resources from peasant agriculture to the rest of the
economy.  But the distribution of lands under the reform program and the
associated productivity gains created sufficient dynamism in rural Mexico to
counteract the gradual decline in the rural terms of trade. For more details
on this process see Barkin and Su rez (1985), and most especially their
chapter on CONASUPO's price policies, as well as the more recent work by Solis
(1991) on maize price policies.

5. Perhaps the most telling evidence of the effectiveness of the policies
against the poor was the massive increase in migration to the USA.  Although
the numbers are speculative, it is generally acknowledged that more than 5
million undocumented Mexican workers are presently working there, in addition
to the 3 million or so whose migratory situation was legalized as a result of
the Immigration Reform and Control Act of 1986.

6. Once corporate participation in rural landownership is permitted, the
possibilities increase for individuals to overcome legal strictures on land
holdings. Several corporate shells could be created to enter into agreements
with local landowners in a particular region in order to secure de facto
control over a land area far greater to that permitted in the legislation,
much in the same way that some corporate entities circumvent the intent of the
laws against corporate farming in some mid-western states in the United States
of America.

7. Even in 1992, members of the economic cabinet continue to insist that there
is a severe shortage of domestic savings, while the international press
reports on the large volumes of resources which are being siphoned off for
personal and corporate accumulation abroad. This is further compounded by the
rapidly growing repatriation of corporate profits accruing to foreign direct
investment, another mechanism by which domestic savings is transferred abroad.
Ironically, to counteract the perceived problem of insufficient domestic
savings, the present regime argues that more foreign investment and loans are
needed, further complicating the future spiral of insufficient domestic
savings and corrective policy measures which encourage capital flight. In an
uncharacteristically blunt evaluation of the presemt strategy, the chief
economic advisor to the President reported that the Mexico will require more
than US$150 billion in directly productive foreign investment during the next
decade, if the projected growth rates and employment targets are to be
attained; he expressed concern about the willingness of foreign capital to
make such a commitment in Mexico, given investment opportunities elsewhere
(Cordoba 1992).

8. A recent declaration by the agriculture ministry (SARH) succinctly
characterizes the government's intentions. "Only 700,000 maize producers 28%
of the total- who cultivate 2.9 million hectares classified as having
'productive potential' and equivalent to 39% of the maize area, will be able
to continue planting this grain, according to the Program for the Productive
Conversion of the SARH, which will begin to be implemented in December of this
year...
     "In contrast, some 5 million producers of this basic grain [NB: the
number should be 2 million farmers] -72% of the total- who cultivate 4.3
million hectares classified as marginal or risky rainfed lands, have no future
planting this food crop ...At present, only one in eight producers receives
credits from Banrural [the government rural agricultural credit bank], leaving
about 4 million hectares without financial assistance. The majority of grain
producers...will have to search for alternatives in other crops, reorganize
their land holdings, joining with other producers to make them larger and more
efficient to cultivate, associate with private capitalists, or become wage
laborers in rural or urban areas...
     "To these new guidelines, must be added the changes in maize prices. With
the implementation of the NAFTA, the support price for white maize will have
to be reduced 58% over a 15 year period, to reach international levels;
subsidies for production costs will be replaced with direct payments to
producers who have less than 7 hectares and produce less than 10 tons." (La
Jornada, 1 October 1992, p. 28)

9. Collier (1992) is studying the phenomenon in great detail in highland
Chiapas. He found that in spite of the massive emigration in the 1970s of
people taking advantage of new job opportunities, many have returned to
implant a modern intensive (and environmentally degrading) cultivation system
for maize as opportunities elsewhere have evaporated.

10. In addition to the reference cited in the text, the Centro de
Investiagciones Economicas, Sociales y Tecnologicas de la Agroindustria y la
Agricultura Mundial at the Universidad Autonoma de Chapingo has stimulated a
critical discussion of the impacts of NAFTA on different primary producing
sectors in Mexico. Dr. Manuel A. Gomez Cruz, Director or the Center has
compiled many publications with the detailed sectoral studies.

11. This discussion does not consider the entrepreneurial and financial
beneficiaries who are in a class by themselves.  It goes without saying that
the benefits will also be unequally distributed among the members of this
group, and that, as a result, there are likely to be important internal
struggles among them.

12. The showcase example of Vaquerias, a joint venture between a leading flour
products firm, Gamesa (now a Nabisco subsidiary), and local ejidatarios, was
widely publicized as an example of such joint ventures. The project, formally
started in 1990, was a 12-year program of joint investments and production
which would then become exclusive property of the farmers.  In September 1992,
DICAMEX, the Mexican firm created to represent the private investors,
announced that it was modifying its terms of participation in the arrangement
"on mutually acceptable terms" which have not yet been made public.

13. It is interesting that some of these negotiations are taking place in
unusual circumstances.  Not only are the regional coalitions actively
participating in the various groups organizing events to express their concern
and even opposition to the NAFTA (where they are clearly using these platforms
as another forum for negotiating their claims), but they also have begun to
find ways of expressing their opinions through the analyses of many younger
scholars who are voicing their positions in international fora. Because some
peasant leaders are themselves academics, some have also gained direct access
to these fora, as was the case of the recent meetings of the Latin American
Studies Association (Sept., 1992), when a number of the organizers of panels
on problems of rural Mexico invited important actors or spokespeople in rural
Mexico to participate as speakers.

14. It is important to note that this process of local producer groups and
their regional or national coalitions participating in the domestic and
international negotiations to create new opportunities for their members is
being actively supported by international foundations and foreign based NGOs
who have assumed an effective advocacy role in the domestic political system.

15. This short paragraph owes a great deal to Guillermo Bonfil's insightful
argument that a recognition of the vitality of Mexico's indigenous past is
essential for a solution to the country's present problems (1987, 1992). The
search for these solutions is the basis for our present research agenda. In
one of his last articles (1992) he vividly expresses the problems created by
the confrontation between the trend towards neo-liberal globalization and the
possibility, indeed the necessity, of a different, more plural world, if
humanity and the earth itself are to survive. This current of thought has
become increasingly influential in Mexico and elsewhere in the third world,
where people of many different persuasions and approaches are developing these
ideas as social analysis, action programs, and political platforms.

16. See Bonfil's (1987) important book with regard to Mexico, and Eric Wolf's
different approach (1982) to the problem of the role of cultural diversity in
world development and the threats which the internationalization of the
economy represents for both nature and people.