Jose G. Vargas-Hernandez
Mexico
THE
ECONOMIC AND SOCIAL IMPACT OF RECENT DEVELOPMENTS ON RURAL AND AGRICULTURAL
POLICIES AND INSTITUTIONS IN MEXICO
ABSTRACT
The aim of this paper is to explain and analyze conditions,
implications and impacts that have had rural and agricultural policies and
institutions in Mexico on growth and rural welfare under the framework of the
neoliberal economic development model during the last sixteen years. By achieving
this purpose, we also can identify several disfunctionalities between the
existing agricultural economic structure and the implementation process of the
recent changes on agricultural policy reforms. We contend that these severe
disfunctionalities have been created, induced or at least further deepened by
the recent changes on macroeconomic strategy and policies and institutional
structure.
Our work hypothesis states that most of the existing
disfunctionalities in the rural and agricultural sector in Mexico, have had
until now a direct influence on the low levels of effectiveness and
productivity of farm economy, and thus, affecting the equity of social
development and the stability of the political system.
We start by describing the most outstanding events within a
historical perspective and analyzing the implications and impacts of state
policy and institutions that led to the consecutive models of rural and
agricultural development after the Mexican revolution. The Agrarian Reform
distributed land and met partially the challenges of the landless. The
import-substitution industrialization (ISI) favored more the manufacturing
sector and the urban dwellers and neglected the rural and agricultural sector.
Although production of basic grains and other foodstuffs achieved
self-sufficiency by the sixties, shortages started to appear during the
seventies mainly due to an increasing population and lack of investments in
farming. Increasing imports solved the food crisis. The new project called “shared
development” failed to attract private investment to the agricultural
production. A turning point in rural and agricultural policy after the Mexican
crisis of 1982, under the framework of imposed structural adjustment and
economic stabilization policies, brought commercial liberalization and
international competition to the sector through constitutional reforms of land
tenure and the opening of the North American Free Trade Agreement.
We
resume the analysis by identifying in the agricultural economic structure of
Mexico, the main factors that blockade growth and productivity. We categorize
those factors in two types. A first type of factors are grouped is the physical
and geographical environment, considered as limiting factors and obstacles that
are difficult to change because they are part of the nature endowment. The
second set of factors refers to the agricultural and institutional policies
that are more dependent on political will. We show that in the case of Mexico
they have been erratic. After analyzing the overall impact of these policies
and institutions on economic growth, social welfare and equity and political
instability, we turn to offer some considerations for the formulation of
alternative policies. Finally, we make some concluding remarks.