Producing food in the countryside and in the sea is a good business, and a great opportunity that Mexico takes advantage of because it is a source of jobs and wealth. Mexico has the clear potential of providing its people and the world with quality food alternatives, in the best and most competitive conditions of the market.
The responsibility of the food industry is to provide the population with the necessary nutrients in the required quantity and quality. Addressing this challenge requires taking into account that in the coming decades—in Mexico and around the world—the food demand will grow substantially by the sum of two phenomena: population growth and the overall improvement of living standards. The challenge is even greater if it becomes apparent that no further areas can be incorporated to agricultural croplands, that water availability is decreasing and that climate change is a reality with still unpredictable consequences.
Experts, researchers, authorities and institutions involved in food production are studying scenarios and preparing possible solutions. National experience shows that these solutions have to do mainly with the organization and association of small and micro producers, the use of innovation, knowledge and technology, generating economies of scale to revitalize the role of producers, value chains and agro logistics to bring down post-harvest losses, and building efficient systems of distribution. Other solutions are the promotion and modernization of family farming, support for small producers with timely and inexpensive financing, technical assistance, and modern irrigation systems, improved seeds, fertilizers, and facilitating domestic and international market access, among others.
Situated between the two main oceans of the world, and gifted with great diversity and natural wealth, the Mexican territory contains nearly 198 million hectares, 11,500 kilometers of coastline and more than three million square meters of seas. Thanks to these geographical characteristics, we are the 14th largest country on the planet in terms of our extension. For its natural vocation, topography, humidity, soil and communication facilities, the Mexican territory includes regions with different levels of development and agricultural and fishing potential that in sum present the nation with a mosaic of challenges and opportunities.
Although corn—closely linked to our history and culture—is the basis of our local diet and the most important crop in the country, many other products—hundreds of them—are served at the tables of Mexicans and even reach far away countries, placing the name and presence of Mexico around the world.
More than 500 agricultural products—cereals, oilseeds, fruits and vegetables, ornamental plants, fodder and crops for industrial use—, dozens of livestock, fishing and aquaculture products, and the increasingly important products of the food industry, form the supply of the sector as a result of the work of nearly seven million men and women working in the fields and seas of Mexico.
The food industry is a strategic pillar of the economy, generating over 8% of the country’s GDP and, in the last two years, has proven to be the most dynamic sector in terms of growth. Throughout 2015, the annual growth trend in the agricultural GDP is at about 5%, which explains why it is in the process of consolidating itself as one of the engines of the national economy. Mexico is on track to become a power in terms of production and export of agrifood. We are the 12th food producer in the world, the 11th in livestock products, the 13th in agricultural crops, and the 17th in fishing and aquaculture.
Our country is the number one world exporter of avocado, beer, guava, mango, papaya, and, of course, tequila; number two in asparagus, tomato, lemon, and watermelon; and we occupy prominent places in other products such as honey, nuts, and pumpkins.
Export capacity has grown substantially, to the degree that our agricultural trade balance, traditionally in deficit, has accumulated a surplus of over 1.1 billion dollars up to September. Products such as beef and live cattle recorded an increase in foreign sales of more than 34% this year. Organic and gourmet products are a fast growing niche in the international food market and are therefore an area of opportunity, particularly for small producers. The production of organic food concentrates the elements of new agriculture, implying technical modernization and good practices, productivity, safety, agro logistics and fair trade. In this regard, there are big opportunities offered by the organic and gourmet product markets in the USA that will surely benefit with Mexican products.
A good example is coffee production, an activity that represents half of the area devoted to cultivating organic products in this country, and which is basically run by small producers, among them 22 ethnic groups, mainly in the states of Chiapas and Oaxaca. As a result, we are the number one producer and world exporter of organic coffee. Organic production—not only agricultural, but also livestock and aquaculture, as well—is consolidating as a viable, profitable and sustainable possibility, and its products are increasingly appreciated by larger groups of consumers in Mexico and around the world.
The figures prove it: Mexico has gone from growing little more than 21,000 hectares of organics ten years ago, to more than 500,000 today, and from 13,000 farmers we now have 170,000 working in this activity.
The existence of a network of 11 free-trade agreements with 46 countries, with a potential market of over 1.155 billion people—equivalent to 58% of the world GDP—, and the recent signing of the Trans-Pacific Protocol (TPP) for Economic Cooperation, encourage the search for new opportunities and better conditions for the sale of agricultural, livestock and fishing products from Mexico to the world markets.
Due to its importance, is should be stressed that the increase in more than ten percentage points of the national participation in the supply of major grains and oilseeds—rice, beans, wheat, soy and sorghum—, passing from 58.2% in 2011 to more than 69% in 2014, it puts us within six points to reach our goal of food security, set in accordance with international standards at 75%.
Of course, neither the increase in production nor the accelerated expansion in exports is the result of chance. First of all, it is the realization of the efforts of workers, employers, providers of services, distributors, and all those who intervene in agrifood production: close to 6 million men and women cultivate over 22.2 million hectares of soil; more than 760,000 people work in breeding different types of livestock and poultry, whose activities are spread across more than half of the national territory; and almost 300,000 are devoted to fishing and aquaculture. The use of technology in seeds, crops and irrigation, or the care and feeding of animal species is fundamental for increasing productivity.
We have also made progress in introducing technology to irrigation surfaces, and as we complete the first half of this Administration, we have modernized 410,000 hectares out of a target of 460,000, and with the rehabilitation of Pemex’s Pajaritos plant in Veracruz, starting next year the national supply of fertilizers will cover up to 80% of consumption, which today depends basically on imports.
In terms of credit, the implementation of structural reforms will allow us to provide financing to small producers in the countryside—who before were almost always excluded from this benefit—, with lower requirements and single-digit rates, especially in the case of projects headed by women, to whom a preferential rate of 6.5% is granted. This year funds of 55 billion pesos have been delivered by Financiera Nacional de Desarrollo Agropecuario, Rural, Forestal y Pesquero (FND, National finance institution for agricultural, rural, forestry and fishery development).
The strength of the productivity and competitiveness of the agricultural sector is based on the international recognition of the sanity and safety of our products, as a result of the activities of regulation, consultation and surveillance that are carried out by Servicio Nacional de Sanidad, Inocuidad y Calidad Agroalimentaria (Senasica, National Food Sanity, Safety and Quality Service).
Thanks to the responsible efforts of both producers and authorities, Mexico is free from classical swine fever, foot-and-mouth disease, cattle screwworm, Venezuelan equine encephalitis, rabbit viral hemorrhage, swine vesicular disease, African horse sickness, and avian salmonellosis; and in the case of pests that attack crops, we are free of Mediterranean fruit fly, cactus moth, citrus canker, Pierce disease in avocado, citrus leprosis, khapra beetle and the red palm mite, among other pests.
The sanity and safety system promotes good practices in the production and consumption of healthy, high quality and nutritious food, and has backed the entry of Mexican products to 150 countries in all five continents.
Other strategies are applied to boost productivity and the modernization of the countryside, including the promotion of value chains in agrifood production, the association of farmers to create economies of scale and added value, which is very relevant if it is taken into account that 80% of Mexican farmers have small plots of land (of less than five hectares).
A relatively new field which we’re advancing towards is agro logistics, conceived as the integration of the activities in the supply chain, necessary to adapt the product offering with the market demand, for which it is necessary to coordinate production, processing and distribution in a way that ensures having a product of quality and safety in the right place, on time, and at a lower cost.
These expressed comparative and competitive advantages are attractive to any investor seeking to consolidate a participation in the increasingly global agricultural market. Undoubtedly, the population growth and rising living standards that humanity is experiencing, makes the Mexican countryside an extraordinary destination for productive investment. Mexico has the clear potential to offer its population, and the world, quality food choices in the best and most competitive market conditions.
All this brings us to the fulfillment of the provisions of the National Development Plan, which conceives “a strategy to build the new face of the countryside and the food industry, with a focus on productivity, profitability and competitiveness, which is also inclusive and incorporates the sustainable management of natural resources”, and reminds us of the social dimension of the issue: rural development and the flourishing of agriculture will only be meaningful to the extent that it generates welfare for those who live and work around them. Mexico’s countryside still concentrates the highest levels of backwardness and marginalization. To close these gaps, government and society must work closely together in a way that prosperity can reach the rural population, and becomes a factor of peace and national progress.