Introduction to Mexico’s Agroalimentary Sector
The agroalimentary sector in Mexico, accounting for 14.3% of the national GDP (equivalent to 5 trillion pesos), faces a challenging landscape marked by budgetary limitations and escalating geopolitical friction, according to an analysis by César Rafael Ocaña Romo, director of NexusAgronegocios.
Budgetary Constraints
Despite its economic significance, the federal budget allocated to the primary sector is limited. The Presupuesto de Egresos de la Federación 2025, amounting to 9.1 trillion pesos, allocates approximately 70% to current expenditure, participations, and pensions, leaving only 25% for actual investment. This situation restricts critical areas such as infrastructure, innovation, and productive stimuli.
- For 2026, while net expenditure is projected to grow, the agricultural and rural development function will only increase by 0.9%, whereas CONAGUA is expected to decrease by -1.16%.
Regional Disparities
The concentration of the national GDP in specific territories, with four states (Ciudad de México, Estado de México, Jalisco, and Nuevo León) generating 40%, leaves the remaining entities with less investment and infrastructure. The agroexporting regions, though competitive, operate as “islands” in this context.
Geopolitical Tensions
The agroindustrial sector is at the heart of global geopolitical friction. Mexico faces tariffs on products like tomatoes, fruits, and vegetables, livestock sanitary closures, suspensions of avocado exports for security reasons, and disputes over restrictions on genetically modified corn and glyphosate. Issues such as migration and fentanyl have become an umbrella for tariff, migratory, and regulatory measures.
The global trade dynamics have shifted from efficiency to security, energy, food, and technology, exposing points of vulnerability between Mexico and the United States. However, the U.S. trade deficit presents an opportunity for Mexico. Its proximity and export experience can meet U.S. demand for fruits and vegetables, complemented by grain imports.
The T-MEC Agreement
The T-MEC, with its stringent rules, addresses sensitive agendas in labor, environmental, health, and automotive matters. Consistency in adhering to standards and anticipating risks are crucial for maintaining a place in supply chains.
Internal Reforms and Water Scarcity
Further complicating matters are internal reforms such as judicial and electoral ones, which increase risk and generate doubts about the independence of the judiciary and post-electoral uncertainty, prompting productive sectors to diversify investments abroad.
Lastly, water is the critical variable. Droughts affect grains, fruits, vegetables, and livestock, increasing hydrological stress. The lack of a public policy for the agrocommercial sector is a serious problem, as Ocaña emphasizes: “Without water, there is no possible agro or market.”
Despite these challenges, Mexico has a strategic geographical advantage that allows it to consolidate an agro-industrial portfolio complementing the productive windows of the United States and Canada, potentially strengthening public policy in the field, generating employment, and fostering development.
Key Questions and Answers
- What is the economic significance of Mexico’s agroalimentary sector? It accounts for 14.3% of Mexico’s national GDP, equivalent to 5 trillion pesos.
- How do budgetary constraints affect the sector? The federal budget allocated to the primary sector is limited, with only 25% available for actual investment.
- What are the regional disparities in Mexico’s agroexporting regions? Four states (Ciudad de México, Estado de México, Jalisco, and Nuevo León) generate 40% of the national GDP, leaving other entities with less investment and infrastructure.
- How do geopolitical tensions impact Mexico’s agroindustrial sector? Mexico faces tariffs, sanitary closures, export suspensions, and disputes over genetically modified corn and glyphosate.
- What does the T-MEC agreement entail for Mexico’s agroindustrial sector? The T-MEC includes stringent rules addressing labor, environmental, health, and automotive matters.
- How do internal reforms affect the sector? Judicial and electoral reforms increase risk and generate doubts about judicial independence, prompting sectors to diversify investments abroad.
- What role does water play in Mexico’s agroindustrial sector? Water scarcity affects various agricultural products and livestock, increasing hydrological stress.
