Agriculture and US-Mexico Border Region Secretaría de Agricultura, Ganadería, Desarrollo Rural, Pesca y Alimentación XVI Border Legislative Conference, Santa Fe, N.M., October 19, 2007

Market integration Mexican policies to promote agribusiness Migration and agriculture Further integration issues Final remarks Agenda Secretaría de Agricultura, Ganadería, Desarrollo Rural, Pesca y Alimentación

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

Secretaría de Agricultura, Ganadería, Desarrollo Rural, Pesca y Alimentación 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 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 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 Mexican policies to promote Agribusiness SAGARPA: Animal Health

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

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.

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