Fox Signs Rescue Package to Help Mexican Farmers

MEXICO CITY —  Unveiling a plan to save the country’s beleaguered farms, the Mexican government said Monday that it would ask the United States and Canada to accept new restrictions on their exports of white corn to Mexico under the North American Free Trade Agreement.

The rescue package, signed at a ceremony led by President Vicente Fox, grew from months of negotiations and tumultuous protests in which farmers blocked highways, herded animals into government buildings and dumped produce in downtown Mexico City to dramatize their vulnerability to bigger, better-funded U.S. competitors.

Canada and the United States have expressed strong reservations over any changes to NAFTA, which took effect in 1994 and has brought a surge of American food into Mexico with the phaseout this year of tariffs on nearly all farm imports.

Tariffs are to remain on corn, beans, sugar, oranges and powdered milk until 2008. But Mexicans producing corn and beans -- basic staples of the Mexican diet -- complain that the U.S. farm bill passed last year includes $52 billion in subsidies that put them at an unfair disadvantage.

The government said it would ask for a suspension of white corn import quotas except in cases where local supply has run out. Mexico imported 6 million tons of the grain last year -- one-third of it white corn -- in addition to 19 million tons it produced.

As part of a review of NAFTA, the government also agreed to investigate the effect of bean imports to Mexico and decide whether to impose safeguards or anti-dumping measures.

Mexican officials emphasized that their consultations with the United States and Canada would be conducted within the rules of NAFTA and would probably produce no change in trade rules until at least next year.

The government pledge to seek an alteration of the trade agreement brought mixed reviews from farming representatives who gathered at the National Palace to join Fox, Cabinet officials, members of Congress and state governors in signing the 62-page pact.

“Rest assured that a decision of this kind has the backing of the entire nation,” said Alfonso Ramirez Cuellar, the leader of a farmers group.

Others said Mexico should have undertaken a broader challenge of NAFTA’s rules and come through with more generous financial supports for Mexico’s farms, which support a quarter of the nation’s population but produce less than 5% of the gross domestic product.

“For us, the document is not a national farm accord, even though it is called that,” said Carlos Ramos Alba, representing a group called the Countryside Cannot Stand Any More. “It is a document to initiate a process to help us achieve the aims that were not included.”

The pact calls for $267 million in new spending, on top of this year’s $10.25-billion farm budget, to help modernize agricultural systems so that Mexican farmers, most of whom are poor and own an average of less than 12 acres each, can compete against foreign competitors.

Among other things, the money would pay for farm credits, irrigation and improved seeds; better roads, housing, schools and health services; subsidized electricity rates; and a commission to oversee land disputes and other problems.

Although farmers were not entirely satisfied, Fox achieved a political victory in getting opposition parties to back the accord and all major rural organizations to sign it, defusing the farmer’s plight as an issue in midterm congressional elections in July.

The pact, he declared, “is the fruit of a broad process that is inclusive, respectful and pluralistic ... and is supported by a president who is open to society and listens to its demands.

“We are going to use this very same spirit to face the other big issues on the national agenda.”