NAFTA, Agriculture, and the Environment in Mexico

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NAFTA, Agriculture, and the Environment in Mexico. David G. Abler and Daniel Pick American Journal of Agriculture and Economics 75 (August 1993). 794-798 Alejandra Juárez Econ. 539. Objective/Question. Examine the impact of NAFTA on Mexican horticulture production and the environment - PowerPoint PPT Presentation

Text of NAFTA, Agriculture, and the Environment in Mexico

  • David G. Abler and Daniel PickAmerican Journal of Agriculture and Economics 75 (August 1993). 794-798

    Alejandra JurezEcon. 539

  • Examine the impact of NAFTA on Mexican horticulture production and the environmentEnvironmental and farm groups criticize NAFTAWhy horticulture?aside from grains, NAFTAs effects on agriculture are likely to be the largest hereenvironmental issues are the most visible for horticulture, at least in the eyes of many U.S. environmental groups

  • Pesticide residues on Mexican produce exported to the U.S.

    Pesticide poisonings of Mexican farm workers

    Damages to the physical environment

  • Why Sinaloa?Accounts for 50-60% of total Mexican horticulture exportsSinaloas share of U.S. market 15-20%Sinaloas principal competitor is FloridaFlorida is more chemically intensive than SinaloaChemical use is not the only indicator of environmental problemsPoor worker safety health problemsExtent of pesticide residues on food and water

  • Data from 3 largest producers in the stateAARC, AARSP, & AARFSUnder umbrella growers org. CAADES (Confederacion de Asociaciones Agricolas del Estado de Sinaloa)

  • Conducted a time-series, cross-sectional analysis of tomato, pepper, and cucumber land use and supply response in Sinaloa (1967-87)Aggregated 3 crops into single commodity (TPC)Model: producers allocate land between TPC and other crops based on expected relative returnsExpected prices were obtained via regressionsFertilizer and labor prices were dropped from the allocation equation because they were not statistically significant

  • Current prices do not have a significant effect on supply, apart from their effect through land allocation decisions

    50% increase in TPC land14% increase in technology 33% increase in TPC supply

    land will be farmed more extensively, not more intensively. The reason is that TPC land supply in Sinaloa is too elastic to provide large incentives to substitute chemicals for land

  • the environmental effects of NAFTA in horticulture are likely to be harmful for Mexico, but only to a minor degree, and actually beneficial for the U.S. (to the extent that production is transferred to Mexico)

    environmental problems need not justify rejection of NAFTA

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