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sovereignty without corn

In this administration, sovereignty is appealed to at the slightest provocation. That we import most of the gasoline we consume because it is cheaper in the United States? It will be necessary to recover “sovereignty” by building a refinery that is costing at least double what was initially promised. That the private sector contributes to the generation of electricity in the country? Let’s recover “sovereignty” by changing the laws and the very structure of the market to strengthen (in theory) CFE even if we damage the country’s competitiveness and growth potential. That the president does not want to go to international summits? Well, let us claim sovereignty in the determination of Mexican foreign policy. That we do not produce all the food consumed in the country? Let’s appeal to sovereignty and add the term food to justify harmful protectionist policies for the Mexican agricultural industry.

What will Mexican sovereignty look like if in a few months we stop receiving yellow corn from the United States? How sovereign will we be if we destroy the country’s livestock potential?

On the last day of 2020, a decree was published prohibiting the federal government and its agencies from buying, using, importing, or distributing glyphosate or any agrochemical that contains it in the Mexican market. The same decree establishes that the biosafety authorities must, no later than January 31, 2024, revoke and not grant permits for the release into the environment of genetically modified corn seeds. It includes the revocation and abstention in the granting of permits for the use of modified corn grain for feeding the population.

The issue has been gaining relevance because the application date is getting closer. The decree has a big problem. It does not specify what would happen to imports of transgenic corn that are not intended for human consumption. Ambiguity opens the door to various interpretations and, therefore, to various conflicts.

In Mexico we import yellow corn for fodder in the livestock sector, as cattle feed, an important export sector. In white corn —the one we use for tortillas and human consumption— Mexico is self-sufficient, less is demanded than what is produced, but this is not the case for yellow corn. The decree assumed that between 2020 and its entry into force, Mexico would produce more yellow corn and would not need to import it. Serious mistake in the approach. That just hasn’t happened.

The local production of yellow corn has remained practically the same as a percentage of the total supply of the grain in the last 10 years. In the most recent agricultural cycle, the supply of yellow corn was just over 22 million tons. Local production was close to 3.18 million and imports were above 16.67 million. In other words, 75% of the total supply of yellow corn is imported mainly from the United States, and that proportion has only increased since the decree was published. There is no domestic production that can replace imports of this grain.

The vast majority of yellow corn, 80%, goes to the livestock sector where it is used as fodder. But 15%, a percentage no less, is used in the starch industry for the production of flour and fructose.

With these data, the implications of the measure should already be evident. If Mexico prevents the importation of these inputs for the livestock sector, the ability to produce beef, pork, chicken, eggs, and milk is immediately damaged. The decree has a destructive potential for the national industry that we have not weighed in its fair dimension.

Since last year, President Lopez Obrador has been concerned —and rightly so— about the increase in food prices. If this decree were to be implemented as planned starting next year, prices would immediately react to a brutal shortage of livestock products. There is no more expensive good than what you do not have.

The decree would affect national production that not only remains in Mexico for local consumption, but is also exported. Just a piece of information to illustrate the point: more than a third of the beef that the United States imports comes from Mexico.

With the provisions of the decree, the country’s agricultural sector would be seriously damaged, food would become more expensive and investments would be stopped in a sector that has developed strongly in recent years, including the years of the pandemic. But in addition, it already opened the door to another commercial conflict.

In the conversations that have taken place on the subject with its trading partners, Mexico has indicated that the ban only refers to corn for human consumption and that it is willing to postpone the decision until 2025. The United States has already made it clear that it does not agree agree with that stance and are willing to escalate the issue. Tom Vilsack, secretary of agriculture of the United States and the office of the commercial representative, the USTR, consider that the measures to which Mexico commits are not enough.

Mexico’s justification in the decree mentions “some research” that suggests possible risks from the use of glyphosate, without solid arguments. The United States alleges that Mexico is making a decision that is not based on scientific arguments, as the TMEC establishes that this type of decision must be made. In contrast, food sovereignty and self-sufficiency are mentioned, which have nothing to do with the health risks indicated in Chapter 9 of the trade agreement.

Several agricultural organizations in the United States and some congressmen have requested that a dispute resolution process on the issue begin as soon as possible, beginning with a stage of consultations that could lead to the formation of a panel and the potential imposition of trade sanctions.

Much has been said about the potential of near shore for Mexico, the possibility it has of changing the face of the country and of increasing growth and employment for Mexicans. However, at the same time laws are being changed and decrees are issued that damage the productive capacity of the country and put us in serious trade conflicts.

What will the country look like without a strong agricultural industry? How will Mexicans live with significantly less access to meat, milk and eggs? What will that food sovereignty be like?

PS I thank Ana Gutierrez, IMCO Foreign Trade Coordinator, for her support for this column.

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