By Kaleigh McGregor-Bales, Opinions Contributor
Raj Patel worked for the World Bank and World Trade Organization (WTO) and has been protesting against them ever since. On Feb. 3, Patel spoke at St. Mary’s University. He is an activist, academic and author of the book Stuffed and Starved that exposes the many flaws of the global industrial food system.
In particular, he discuses how free trade agreements such as the North American Free Trade Agreement (NAFTA) have decimated the world’s rural farmers. By definition, free trade agreements allow transactions to occur across borders without the interference of the government. In theory, in free trade economies there are no trade barriers, no policies that distort prices and there is free access to the market for all.
However, according to Patel, these agreements are causing rural farmers worldwide to suffer unacceptable high rates of unemployment and loss of culture and way of life.
NAFTA merged the economies of two rich countries, the United States and Canada, with the much poorer country Mexico, into an integrated economy where national borders do not impact trade. NAFTA specifically included trade in agriculture so that Mexican and American farmers were competing in the same market.
Patel believes that NAFTA is not a free trade economy and the contradictions in policy have devastated rural Mexico. Specifically NAFTA has devastated Mexican corn farmers.
While American corn has infiltrated the Mexican market, Mexicans have failed to sell corn in the United States because the price of American corn is artificially low. Despite the elimination of tariffs that NAFTA prescribes, the U.S. has protectionist policies in place to ensure that Mexican farmers cannot establish successful markets in the U.S. The government of the U.S. subsidizes its corn so that the market price is less than the cost of production. The Mexican government also gives subsidies however these subsidies do not reach the poor farmers, but are given to the two largest flour producers.
Before NAFTA, corn production was the source of livelihood for three million Mexicans. Corn cultivation as an agricultural practice began 5,000 years ago in Mexico and its production and consumption are important for Mexican culture.
The result of the open market and the artificial cost of corn is that poor Mexican farmers cannot support themselves by farming corn anymore.
Economic theory assumes that when producers are not succeeding they can switch products. The cultural importance of corn in Mexico contributes to a refusal to abandon corn production. More pressing, though, is the reality that Mexican farmers do not have the resources to switch crops.
The farmers who cannot switch products increase their corn production to compensate for the lower price in a desperate effort to make a living income. Still more farmers are left unemployed and desperate. This has lead to immigration to the cities, illegal immigration to the U.S. and suicide rates increase.
NAFTA attracted large agri-businesses into Mexico. These companies’ profits have sky rocketed while according to the Mexican Agricultural Ministry, in 2001 rural poverty reached 81.5 per cent.
The complex underlying political climate contributed to how the poor Mexican farmers were neglected.
In his book, Stuffed and Starved, Raj Patel explains that Mexico did have certain policies to protect its national markets. The Mexican government imposed a quota on corn imports from the U.S. When the U.S. exceeded the quota the Mexican government decided not to charge the duty that amounted to US$2 billion.
Presumably the Mexican government, similar to many governments in the Global South fear challenging the will of the U.S. because the country is so powerful and holds clout in the World Trade Organization and World Bank who both provide loans to the developing country.
In many cases the country also cannot contradict the will of the U.S. because of the stipulation in the tied aid they receive.
The U.S. exploited their power to control global food markets at the expense of rural farmers globally. The U.S. government uses free trade rhetoric to justify the resulting decimation. When discussing trade liberalization there is constant contradiction in the discourse of corporations and the government.
On one hand, trade liberalization is praised because it will decrease the cost of food, increase efficiency and even that the wealth in the U.S. will spread across the border, bringing prosperity to Mexicans. On the other hand American corn farming and food corporations are highly subsidized by the government, which contradicts the definition of free trade.
The American government will preach neoliberalism one hour and protectionism the next, meanwhile developing countries know they will face repercussions if they do anything to contradict the U.S.
The livelihood of rural Mexicans was the sacrificial lamb of NAFTA. Fifteen years after NAFTA came into effect, profits have soared for a few large transnational food conglomerates while small scale rural farmers are becoming poorer and more desperate.
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