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Voluntary Report - public distribution

**Date:** 4/22/2003

**GAIN Report Number:** MX3054

MX3054

**Mexico**

**Agricultural Situation**

**Weekly Highlights & Hot Bites, Issue #22**

**2003**

**Approved by:**

![](media/image1.wmf)William L. Brant

#### U.S. Embassy Mexico City

**Prepared by:**

Jorge Sánchez

**Report Highlights:**

SECRETARIAT OF THE ECONOMY PREPARES FOR U.S. COMMERCIAL LEADERS\*MEXICAN
AVOCADO EXPORTS GROWING STRONG\*RISE IN U.S. YELLOW CORN PRICES\*
AGRICULTURAL PACT PROMISES TO HALT MIGRATION TO THE U.S.\*FOX
ADMINISTRATION HAS COMMITTED TO PROTECTIONIST MEASURES\*UNITED NATIONS
ON A MISSION TO REDUCE AGRICULTURAL SUBSIDIES\*A NEW START FOR THE RURAL
SECTOR\*IMPASSE ON AGRICULTURAL TRADE NEGOTIATIONS\*GREEN GROUPS WORRY
ABOUT FAST-TRACKING BIOSECURITY LEGISLATION\*GOM REITERATES THE RISKS
INVOLVED IN RENEGOTIATING NAFTA\*RENEGOTIATING WOULD BE THE
WORST\*TAMAULIPAS FARMERS, WELL COMPENSATED\*CORN FARMERS DEMAND
INCREASED SUPPORT\*U.S. MULTINATIONALS PRESUMABLY DOMINATE THE MEXICAN
MARKET

Includes PSD Changes: No

Includes Trade Matrix: No

Unscheduled Report

Mexico \[MX1\]

\[MX\]

Welcome to Hot Bites from Mexico, a weekly review of issues of interest
to the U.S. agricultural community. The topics covered in this report
reflect developments in Mexico that have been garnered during travel
around the country, reported in the media, or offered by host country
officials and agricultural analysts. Readers should understand that
press articles are included in this report to provide insights into the
Mexican \"mood\" facing U.S. agricultural exporters. Significant issues
will be expanded upon in subsequent reports from this office.

DISCLAIMER: Any press summary contained herein does NOT reflect USDA's,
the U.S. Embassy's, or any other U.S. Government agency's point of view
or official policy.

SECRETARIAT OF THE ECONOMY PREPARES FOR U.S. COMMERCIAL LEADERS

On April 17, 2003, Secretary of the Economy Fernando Canales said he
would seek solutions to agricultural trade problems concerning tuna,
chicken and pork, as he will meet with commercial leaders from the
United States after Holy Week. (Source: *La Jornada*, 4/17/03)

MEXICAN AVOCADO EXPORTS GROWING STRONG

On April 16, 2003, Ricardo Salgado, President of the Avocado Producers,
Packers, and Exporters Association, informed the press that the state of
Michoacán generated over US\$60 million in avocado exports to the United
States. In 2002, Michoacán exported 29,920 tons of avocados to the
United States, added Mr. Salgado. Business leaders and investors are now
planning a large-scale export strategy that would place approximately
120,000 tons of avocados in the global market. (Source: *Excelsior*,
4/17/03)

## RISE IN U.S. YELLOW CORN PRICES

On April 18, 2003, agricultural analysts and producer groups announced
that yellow corn prices in the United States had risen since last week.
The rise in prices will take its toll on poultry producers in Mexico.
(Source: *Reforma*, 4/18/03)

AGRICULTURAL PACT PROMISES TO HALT MIGRATION TO THE U.S.

The final version of the National Agricultural Pact, ready for
President's Fox's and farming groups signature on April 28, 2003,
promises to abate rural sector poverty and halt illegal migration of
Mexico's rural sector farmers to U.S. cities. (Source: *Reforma, Milenio
Diario*, 4/18/03)

# FOX ADMINISTRATION HAS COMMITTED TO PROTECTIONIST MEASURES 

The federal government committed to implement new protectionist
mechanisms in support of domestic production and, reportedly, avoid
unfair trade practices by the United States and Canada. According to the
final draft of the National Agricultural Pact, the Fox Administration
promised to slow down U.S. and Canadian agricultural imports. (Source:
*Milenio Diario*, 4/18/03)

UNITED NATIONS ON A MISSION TO REDUCE AGRICULTURAL SUBSIDIES

On April 16, 2003, the Secretary General for the United Nations (UN),
Kofi Annan, asked the governments of the main developed nations to
significantly reduce agricultural subsidies. Annan designated
Under-Secretary Louise Frechette, of the UN Economic and Social Council
(ECOSOC) to head global efforts to eliminate agricultural subsidies and
create better conditions for developing nations. (Source: *El
Universal*, 4/17/03)

# 

# A NEW START FOR THE RURAL SECTOR 

Farming group leaders, in addition to the political party opposition,
consider the National Agricultural Pact to be a salvation to the
millions of poor rural countryside farmers. Additionally, the Fox
Administration has received acclamation by these groups for admitting to
having incongruent farming policies and launching new strategies for the
betterment of national agriculture. (Source: *El Universal*, 4/18/03)

# IMPASSE ON AGRICULTURAL TRADE NEGOTIATIONS

The Agricultural Trade Negotiation Round held in Doha, Qatar, on
November of 2001 by World Trade Organization (WTO) member countries
continues in a state of impasse, as no consensus has been reached on
tariff reductions, quotas, export credits, etc. Negotiations will
continue in Cancun during the latter part of July this year. (Source:
*El Financiero*, 4/16/03)

GREEN GROUPS WORRY ABOUT FAST-TRACKING BIOSECURITY LEGISLATION

Amidst much protest by environment groups to recent biosecurity
legislation, the Mexican Senate is looking to implement fast track
legislation on genetically modified organisms (GMOs). Members of the
Green Environmentalist Political Party (PVE) accused the Senate Science
and Technology Committee of attempting to satisfy corporate interests
and increase GMO seed sales with a swift passing of the proposed
biosecurity legislation. (Source: *La Jornada*, 4/16/03)

# GOM REITERATES THE RISKS INVOLVED IN RENEGOTIATING NAFTA

On April 17, 2003, Gonzalo Altamirano, Chief of Government
Administration of the Secretariat of Government Affairs, announced that
President Fox's Administration is well aware of the risks involved in
asking for a revision of NAFTA's agricultural chapter with the United
States and Canada in the protection of white corn and dry beans.
(Source: *Reforma*, 4/17/03)

# RENEGOTIATING WOULD BE THE WORST

On April 17, 2003, renowned economist José Manuel Suárez said he was
convinced that the worst thing Mexico could do was to ask the United
States and Canada to renegotiate NAFTA's agricultural chapter. Mr.
Suárez characterized President Fox's government as one that was being
demagogical and dishonest during the National Agricultural Pact
negotiations, because the Fox Administration was not ready or willing to
renegotiate NAFTA and probably never will. (Source: *Milenio Diario*,
4/17/03)

# 

# 

# TAMAULIPAS FARMERS, WELL COMPENSATED 

The federal government handed 460 million pesos (US\$42 million) to the
northeastern state of Tamaulipas farmers for losses caused by drought
conditions and water payment debts settled with the United States
announced Secretary of Agriculture Javier Usabiaga and Governor Tomás
Yarrington. (Source: *Reforma*, 4/18/03)

# 

# CORN FARMERS DEMAND INCREASED SUPPORT

  ----------------------- -----------------------------------------------
  On April 18, 2003, the  
  Mexican Corn Production 
  Confederation asked the 
  federal government to   
  ensure that corn        
  production be made      
  economically viable,    
  ready for trade, and    
  able to satisfy         
  sanitary and            
  phytosanitary           
  commercial standards    
  that are of paramount   
  importance to national  
  security. (Source:      
  *Reforma,* 4/18/03)     

                          
  ----------------------- -----------------------------------------------

U.S. MULTINATIONALS PRESUMABLY DOMINATE THE MEXICAN MARKET

Laura Juárez Sánchez, a reseacher for the Laborer University of Mexico
(UOM), recently published a book that argues that U.S. multinational
corporations (MNCs) completely control imports of the three main grains
in the Mexican diet: white corn, dry beans and sorghum. Ms. Juárez also
argues that U.S. MNCs purchase soy, meat, rice and corn syrup from the
United States, which systematically drive most domestic producers out of
the market. (Source: *La Jornada*, 4/18/03)

**REPORTS SUBMITTED RECENTLY BY FAS/MEXICO CITY**

+-------------+--------------------------------------------+----------+
| ##          | ###### Title                               | **Date** |
| #### Number |                                            |          |
+-------------+--------------------------------------------+----------+
| MX3052      | Sugar Reference Price to Pay Sugarcane for | 4/14/03  |
|             | MY 2002/03                                 |          |
+-------------+--------------------------------------------+----------+
| MX3053      | Hot Bites Issue #21                        | 4/16/03  |
+-------------+--------------------------------------------+----------+

# 

We are available at **http://www.atomexico.gob.mx** or visit our
headquarter\'s home page at **http://www.fas.usda.gov** for a complete
selection of FAS\' worldwide agricultural reporting.

**FAS/MEXICO EMAIL**

To reach us at FAS/Mexico City, email us at:

**[AgMexico@fas.usda.gov]{.underline} and/or
[ATOMexico@fas.usda.gov.]{.underline}**