(June 9) Aside from fruit and vegetable production, the state of Mexican agriculture is perilous, according to a report issued May 29 by the U.S. Foreign Agricultural Service.

In a 16-page profile of Mexican agriculture, the FAS agricultural attaché’s office in Mexico City noted that half of Mexico’s producers grow crops on farms of 12 acres or less. What’s more, the FAS report said the majority of those farmers grow grains, oilseeds and legumes, which are the least profitable crops for Mexican growers.

“The data presented … demonstrate that Mexico does indeed face significant challenges in transforming its agricultural sector,” the FAS report said.

While Mexico spends 9% of its national budget on agriculture, many of the programs are designed to keep farmers on small plots of ground. The FAS noted that one leading Mexican agricultural leader said 15% of Mexico’s farms are globally competitive, 35% could be and 50% will never be.

Mexico’s agricultural exports account for 6.7% of its total exports, compared with 9.2% for the U.S. and 22.6% for Australia. Agricultural imports in Mexico account for 7.8% of total imports, compared with 4% in the U.S. and 6% in Canada.

An important statistic cited in the report is the great influence of horticultural production.

Fruit cropland accounted for just 5.9% of area but 16.7% of production value. Other horticultural products — primarily vegetables — took 2.5% of cropland but commanded a production value share of 17.2%. By contrast, cereal grain production accounted for 42% of production area but only 21% of production value.

The FAS said Mexican agriculture faces the following structural challenges:

  • a tenuous land ownership system.
  • high cost of credit.

  • weak banking system.

  • high producer costs.

  • linked policy approach to agriculture and rural development problems.

  • lack of transportation infrastructure.

  • lack of technology.

  • lack of education.

  • no job relocation programs.

  • lack of market information.

  • lack of irrigation.

  • poor water quality.