The Mexican government cut public spending

The Mexican government cut public spending, government spending on agriculture plummeted and programs to support poor farmers were cut. In 1998 over 1000 irrigation projects were stalled. Farmers access to credit was cut by two thirds, with administration shifting from private to public sector. Poor farmers because of their low profits and high risks were unable to borrow. Another major reform was the abolishment of CONASUPO, the agency bought staples from farmers at guaranteed prices and processed the products or sold them at low prices to processors and consumers (Villarreal,2010). Spending on social programs fell by 6%. In 1998 the National Solidarity Program (PRONASOL) was introduced, to provide support to poor communities, but were biased towards urban areas, where families could benefit from food subsidies up to $145 annually compared to $10 in rural areas. The Mexican government established the Program of Direct Support for the Countryside, (PROCAMPO), in 1993. PROCAMPO provided income support to farmers over a 15-year transitional period through hectare-based direct payments to producers. However, budget austerity caused by Mexico’s 1995-peso crisis resulted in budget cuts for the program (Villarreal,2010). Export agriculture became a way for the economy to emerge quickly from the debt crisis. Agricultural exports grew rapidly. Under debt negotiations Mexico cut tariffs from around 40% to 10%. Agriculture required high levels of mechanization, inputs, credits, access to markets, intermediary corporations to trade grain. NAFTA was blamed for exposing Mexican farmers, especially corn producers, to competition from heavily subsidized U.S. agriculture(McBride and Sergie,2018).. CEPR economist Mark Weisbrot estimates that NAFTA put almost two million small-scale Mexican farmers out of work and both legal and illegal immigration more than doubled after 1994 peaking in 2007(McBride and Sergie,2018). By the time NAFTA began in 1994 poverty was higher among poor farmers, than it had been in 1984.
NAFTA was designed with the hope that freer trade would bring stronger and steadier economic growth to Mexico, providing new jobs and opportunities for its growing workforce and discouraging illegal migration from Mexico. The trade policies did not benefit sustenance farmers, but provided substantial support to commercial farmers. Agricultural production in Mexico was mainly centered on large scale farms, factory style livestock and capital-intensive food processing putting pressure on small scale farmers (Villarreal,2010). Small farms in rural areas were unable to acquire credit, due to high default rate on agricultural loans. Without government subsidies they were unable buy machinery, equipment and technology. Thus, millions of farmers were driven out of land and work. On 31 January 2003 over 100,000 farmers took to the streets of Mexico City in protest against the free trade onslaught that the people of Mexico have been subjected to. There was a vast disparity between rural and urban market. NAFTA encouraged migration from rural to city and across borders. Compesino movement in Mexico gained momentum, in protest due to the reneging of promises made by the Mexican government. Small farmers in Mexico could not compete with the “Americans’ heavily subsidized and mechanized farms They were fighting against emigration, unemployment and for security