Agriculture and USMexico Border Region

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• Agriculture and US-Mexico Border Region

XVI Border Legislative Conference, Santa Fe,
N.M., October 19, 2007
Secretaría de Agricultura, Ganadería, Desarrollo
Rural, Pesca y Alimentación
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Agenda

• Market integration
• Mexican policies to promote agribusiness
• Migration and agriculture
• Further integration issues
• Final remarks

Secretaría de Agricultura, Ganadería, Desarrollo
Rural, Pesca y Alimentación
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Market Geography

• Geography
• 10 border states
• 2,000 miles of border
• Population 92 million

Secretaría de Agricultura, Ganadería, Desarrollo
Rural, Pesca y Alimentación
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Food Culture

• US Consumers
• Spend 18 billion USD a year on Mexican Food
• Spend 1 billion USD a year on tortillas
• Spend more on salsa than on ketchup
• Mexican Consumers
• Increased consumption in fast food in US
  franchises
• Both
• Fresh Fruits, Vegetables and Organics can be
  considered superior goods (higher income of
  consumers implies higher demand in those goods)

Secretaría de Agricultura, Ganadería, Desarrollo
Rural, Pesca y Alimentación
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Market Integration

• Since NAFTA
• Mexican agrifood exports to US have increased
  129
• US agrifood exports to Mexico have increased
  189

Secretaría de Agricultura, Ganadería, Desarrollo
Rural, Pesca y Alimentación
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Mexican policies to promote Agribusiness

• Federal Government
• As a result of government macroeconomic policies,
  Mexico offers an attractive business environment
• Low country risk level
• Investment grade economy
• Low inflation rates
• Sound public finances
• Historic levels of monetary reserves

Secretaría de Agricultura, Ganadería, Desarrollo
Rural, Pesca y Alimentación
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Mexican policies to promote Agribusiness

• SAGARPA
• Animal Health

Secretaría de Agricultura, Ganadería, Desarrollo
Rural, Pesca y Alimentación
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Mexican policies to promote Agribusiness

• SAGARPA
• Med fruit fly eradication campaign

Free Low prevalence Low control
Secretaría de Agricultura, Ganadería, Desarrollo
Rural, Pesca y Alimentación
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Mexican policies to promote Agribusiness

• Undersecretariat of Agribusiness Development
• Market Oriented Program
• Determine strategic products
• Realign productivity programs
• Shift production from traditional to strategic
  commodities
• Public-private joint ventures
• Consulting Services
• Investment Promotion
• Market Analysis Services

Secretaría de Agricultura, Ganadería, Desarrollo
Rural, Pesca y Alimentación
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Mexican policies to promote Agribusiness

• By
• Planning with a long-term perspective
• Focusing on the high value crops
• Restructuring and aligning the programs within
  SAGARPA
• Investing in the key infrastructure
• Mexico will
• Increase competitiveness and exports
• Attract foreign direct investment to the sector
• Increase agricultural trade

Secretaría de Agricultura, Ganadería, Desarrollo
Rural, Pesca y Alimentación
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Agriculture and Rural Migration

Source SAGARPA
Secretaría de Agricultura, Ganadería, Desarrollo
Rural, Pesca y Alimentación
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Further integration issues

• Further harmonization of agricultural policies
  in North America.
• Developing compatible sanitary, phytosanitary
  and food security policies to strengthen a common
  trade region.
• A North America wide agreement is needed to
  address
• biosecurity and agricultural supply chain
  issues.
• Fostering research, innovation and promotion of
  North American products.

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Final Remarks

• The competitiveness of the North American
  agrifood market depends on the free flow of
  agricultural products within the region.
• The harmonization of sanitary policies is
  necessary to facilitate the flow of agricultural
  products.
• Agricultural business and labor depend on each
  other.
• Mexico needs its rural labor force to increase
  the level of development and well-being of its
  agricultural sector.
• SAGARPA will promote the high market value and
  labor intensive agricultural production.

Secretaría de Agricultura, Ganadería, Desarrollo
Rural, Pesca y Alimentación