Why this is important to Wisconsin businesses: The sector remains a leading employer in rural areas, but climate change and competition from imports, among other factors, are causing agricultural productivity to suffer, creating opportunities for Wisconsin companies' expertise.
Agriculture remains a very important sector for Mexico. Despite the sector’s declining contribution to the GDP and shrinking share of the labor force, about half of Mexico’s rural population was employed in the sector in 2014. Poverty in rural areas in Mexico is high and has been increasing. In 2015, 61 percent of the rural population (with an average annual income of 3,800 pesos, or just over $200) was classified as poor, compared to a nationwide poverty rate of 45 percent.
In 2015, small farms represented approximately 73 percent of total production units. Indeed, small and midsize producers employ a majority of the rural population, but their potential to provide a decent livelihood for themselves and to constitute a viable base for expanding economic activity in rural areas is limited by a variety of constraints, including the rising cost of factor inputs, land possession issues, adverse climatic conditions, increasing competition from low-cost imports, structural rigidities, and some public policies, which although designed to benefit small and midsize producers, have not had the intended impact. There is a need for public policy and private action (possibly public-private partnerships) to address the root causes of the continued economic marginalization of smallholders, and of agriculture generally, in order to enhance the sector’s resilience and ensure food security.
Mexico is the homeland of avocado and corn (or maize), with both having long histories that are deeply ingrained in Mexico’s culture and lifestyle. Agriculture remains the livelihood for an estimated 8 million rural farmers (about 7 percent of the nation’s total population), who produce much of Mexico’s agricultural and food produce (agro-foods) for export and domestic markets on landholdings no bigger than about 12 acres. Mexico is among the world’s leading agro-foods producers: ranked first in avocados, lemons and limes; third and fourth, respectively, for grapefruit and corn; fifth for beans, coconut oil, oranges and poultry; and sixth for sugar. However, due to various factors both domestic and international, including trade and related policy reforms, Mexican agricultural production has suffered.
According to OECD data from the period 2009 through 2015, total agricultural employment in Mexico declined by 28 percent; agricultural wages have also declined during recent decades, while wages in other sectors have generally increased. Domestic agricultural production appears to have suffered during the same period: In a single year, the Mexican production of corn and other grains fell by half due to factors including competition from imports. As a result, millions of low-income farmers lost their income and livelihood.
Mexico’s wine industry is also worth taking a look at when speaking of agriculture. The Mexican Secretariat of Agriculture (SAGARPA) reports that the country has 31,500 acres being used for grape cultivation. The states with the largest grape production in Mexico are Sonora, Zacatecas and Baja California. The other states that have vineyards include Aguascalientes, Coahuila, Durango, Guanajuato and Queretaro. Total production of grapes in Mexico during 2016 was 282,552 tons, an increase of 14.5 percent from the prior year. The most important vineyards in Baja California Mexico are in Valle Guadalupe, Valle de San Vicente and Valle de San Antonio. The three valleys have a considerably large number of companies, the following being some of the most known and important: Cavas Valmar, Casa de Piedra, Chateau Camou, Casa Domecq, Freixenet de Mexico, La Redonda, Monte Xanic, Rivero Gonzalez, Santo Tomas, Viña de Liceaga, Viñas Pijoan and Vinisterra. Vineyards usually have their own providers, and can buy their tools and materials either from direct suppliers, private companies or distributors.