The Current Situation and Key Issues
While the price of a ton of maize has ignited recent protests, it’s only one aspect of a larger agricultural crisis in Mexico. Farmers are expressing concerns about security, water access, exploitative intermediaries, and unfair competition from the United States. Since 2015, national maize production has dropped by 3.7%, while imports have increased by 78%. By 2025, a good national harvest is expected, but import records are likely to be broken, with 16.8 million tons of yellow maize already purchased for $3,573 million.
Protests Across 18 States
Thousands of people are protesting in 18 states, capable of disrupting critical points within Mexico’s 130 million population. These demonstrations prompt reflection on the broader issues facing agriculture. Maize, beyond being a food source, symbolizes deeper problems that the government has yet to address.
Government’s Role and Proposed Solutions
Julio Berdegué, the Secretary of Agriculture and Rural Development, has extensive experience but faces budget constraints in addressing the crisis. In initial negotiations, he offered $850 per ton to help farmers reach a total of around $6,000. This proposal was rejected, with farmers demanding at least $1,000 more per ton—over 30% of the Chicago Mercantile Future market price.
Chicago as a Price Reference: Pros and Cons
Industry players have long used Chicago’s market prices as a reference for maize. This mechanism reflects the reality that maize can be purchased at lower prices from other sources, though Mexican producers seek higher prices due to their white maize’s suitability for local tastes. An increase in maize prices would impact the country’s inflation, affecting various industries using maize as an input.
Import Restrictions: A Double-Edged Sword
Some protest signs call for restricting US maize imports, citing unfair competition. However, Mexico is deficit in this strategic and symbolic commodity, needing around 23 million tons annually. Restricting imports would harm the relationship with the US, our primary trading partner, and negatively impact the Corn Belt region’s economy, which includes states like Indiana, Kansas, Iowa, Michigan, and Nebraska.
Addressing Underlying Issues
Lifting roadblocks requires more than the government’s initial offer. The issues of insecurity, water access, aging rural producers (average age over 50), and climate change effects—including floods and droughts—must be tackled. These challenges extend beyond the agricultural sector and require substantial financial investment.
Key Questions and Answers
- What are the main issues facing Mexican agriculture? Key concerns include low maize prices, water access, exploitative intermediaries, and unfair competition from US imports.
- Why is Chicago’s maize price used as a reference? It reflects lower international prices, though Mexican producers seek higher prices due to local preferences for white maize.
- What are the implications of restricting US maize imports? It could harm relations with the US, our primary trading partner, and negatively impact the economy of the Corn Belt region.
- What other challenges does Mexican agriculture face? Issues include insecurity, water access, aging producers, and climate change effects such as floods and droughts.
