Voluntary Report - public distribution

**Date:** 5/8/2006

**GAIN Report Number:** MX6035

MX6017

**Mexico**

**Agricultural Situation**

**Weekly Highlights and Hot Bites #17**

**2006**

**Approved by:**

![](media/image1.wmf)David J. Williams

U.S. Embassy

**Prepared by:**

Luis Chavez, Benjamin Juarez, and Jeff Nawn

**Report Highlights:**

-   Mexico Seeks Negotiation To Exclude Corn & Bean From NAFTA

-   Food Health Protection In Mexico Is Fragile: Mexican Agri-food
    Industry

-   Science To The Rescue FOR Mexican Sugar Industry

-   Corn's Genome Map Deciphered

-   Presidential Candidates Now Focused On Agriculture

-   Central American Sugar Growers Take Their Chances With Ethanol

-   Mexican Government To Adjust Anti-Dumping Procedures

Includes PSD Changes: No

Includes Trade Matrix: No

Unscheduled Report

Mexico \[MX1\]

\[MX\]

Mexico Seeks Negotiation To Exclude Corn & Bean From NAFTA

Addressing a group of farmers and agricultural associations, Mexican
President Vicente Fox promised to elevate the National Agreement on
Agriculture to a decree, which would make the objectives set by the
agreement obligatory for government officials to enforce. Fox announced
that there is a serious effort to negotiate with the United States and
Canada to exclude corn and beans from complete liberalization in 2008.
According to President Fox, the Ministries of Agriculture (SAGARPA) and
Economy (SE) will negotiate Mexico's interests in this matter. In a
related action, Rep. Rafael Galindo stated that the GOM sent a formal
request to the USTR to exclude corn and beans from NAFTA in 2008. A
number of Mexican agricultural associations also demanded that SE carry
out detailed investigations on the impact of NAFTA on sensitive
products. (EXCELSIOR & LA JORNADA, APR. 29)

Food SAFETY Protection In Mexico Is Fragile: Mexican Agri-food Industry

According to Mexican growers and food industry representatives, Mexico
suffers from a weak food safety protection system. Rep. Gonzalo Aleman,
a member of the Lower House's Special Commission on Livestock, commented
that food safety measures taken by the Mexican government are very lax
in comparison to those in the United States, Japan, and the European
Union. Poultry, beef, and seafood industry representatives agree, and
claim that while very strict requirements are enforced on Mexican
exports, foreign agri-food products come into Mexico with minimal
constraints and hardly any inspections by SAGARPA or the Ministry of
Health. As an example, Rep. Aleman explained that after the first case
of bovine spongiform encephalopathy (BSE or "mad-cow disease") in the
United States, "Mexico inspected over two thousand meat plants, but only
kept inspectors in 13 of them." (REFORMA, MAY 01)

Science To The Rescue FOR Mexican Sugar Industry

Investigation centers like CINVESTAV and Colegio de Postgraduados
Chapingo have discovered roughly 200 industrial uses for sugarcane.
These opportunities vary from food to paper to alternative fuels, and
symbolize a sign of hope for NAFTA's full implementation of agricultural
commodities in 2008. Research has also helped reduce crop losses due to
plagues or droughts. With an investment of two years and \$50 million
pesos (US\$ 4.5 million), the research centers have worked with growers'
associations and the GOM to provide alternate uses and markets for these
products. (LA PRENSA, MAY 01)

Corn's Genome Map Deciphered

Mexican scientists have finally completed the genomic map for corn, and
have filed for a patent on the gene sequence. This research could
generate revenues of up to U.S. \$500 million, according to the research
center CINVESTAV. Total investment in this project was reported to be
U.S. \$15 million. Rafael Rivera, director of CINVESTAV, stated that
Mexican tortilla giant Maseca has shown interest in the research, as
have other global corporations. The genome map will help reduce
production costs of new varieties, improve the plant's growth and
maturation, and help develop stronger and better varieties. The research
center will now focus on mapping out the genome sequences of peppers,
avocados, sugarcane, beans, and other products strategic to Mexican
agriculture. (DIARIOMONITOR, MAY 01 & EXCELSIOR, MAY 02)

Presidential Candidates Now Focused On Agriculture

The Presidential candidates of Mexico's three main political parties
have offered proposals on several agricultural-related topics such as
sugar. Felipe Calderon said he would support the sugar industry by
promoting the production of ethanol. He also promised to establish a
national rural development program and to reduce fertilizer costs.
Andres Manuel Lopez offered support to the cocoa, citrus, and coconut
growers, and would make credit available to underprivileged farmers and
cattlemen. Finally, Roberto Madrazo offered to help sugar mills start
all over again by demanding compliance with the sugar import quota
established by NAFTA. (EL UNIVERSAL, MAY 02)

Central American Sugar Growers Take Their Chances With Ethanol

Sugar fields that used to support Caribbean economies are undergoing a
radical transformation. Noisy sugar mills that used to produce only
sugar are being replaced by modern ethanol-producing distilleries.
"Sugarcane growers are convinced that ethanol is the fuel of the future,
and cane is our green oil," states Bernardino Diaz, from the Dominican
Republic's Sugarcane Growers Federation. The two key factors promoting
this shift are that sugar production is no longer attractive because of
European agricultural subsidies, and that the United States is replacing
traditional fuel additives (such as MTBE) with ethanol. Thanks to trade
agreements, exports of ethanol from most Caribbean nations to the United
States are tariff-free. (EL UNIVERSAL, MAY 02)

\* This article does not mention Mexico, but is part of a series of
articles on alternative fuels generated as a result of the Mexican
bio-fuel law.

Mexican Government To Adjust Anti-Dumping Procedures

Mexico's Ministry for the Economy (SE) will carry out adjustments to the
procedures established in the Foreign Trade Law regarding anti-dumping
investigations in accordance with a request from the World Trade
Organization (WTO). The request came after the United States questioned
the procedures followed by SE in a dumping investigation on U.S. rice.
Prompted by a WTO ruling in favor of the United States, Mexico will
adjust its law on issues regarding time frames, legal alternatives, and
penalties. (EL UNIVERSAL, MAY 03)

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

+----------+-----------------------------------------------+----------+
| # NUMBER | # TITLE                                       | # DATE   |
+----------+-----------------------------------------------+----------+
| MX6034   | Weekly Highlights and Hot Bites #16           | 4/28/06  |
+----------+-----------------------------------------------+----------+
| MX6033   | Citrus Semi-Annual                            | 4/27/06  |
+----------+-----------------------------------------------+----------+
| MX6032   | Mexico Announces the Continuance of           | 4/25/06  |
|          | Compensatory Duties on Beef Imports           |          |
+----------+-----------------------------------------------+----------+
| MX6031   | Weekly Highlights and Hot Bites #15           | 4/21/06  |
+----------+-----------------------------------------------+----------+
| MX6030   | Dried Fruit Annual                            | 4/11/06  |
+----------+-----------------------------------------------+----------+
| MX6029   | Sugar Annual Report                           | 4/10/06  |
+----------+-----------------------------------------------+----------+
| MX6028   | Oilseeds and Products Annual                  | 4/10/06  |
+----------+-----------------------------------------------+----------+
| MX6027   | Weekly Highlights and Hot Bites #14           | 4/7/06   |
+----------+-----------------------------------------------+----------+