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

Alejandra Juárez

Econ. 539

Examine the impact of NAFTA on Mexican horticulture production and the environment

Environmental and farm groups criticize NAFTA

Why horticulture?• “aside from grains, NAFTA’s effects on agriculture

are likely to be the largest here”• “environmental 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 exports• Sinaloa’s share of U.S. market

15-20%• Sinaloa’s principal competitor

is Florida• Florida is more chemically

intensive than Sinaloa “Chemical use is not the

only indicator of environmental problems”• Poor worker safety health

problems• Extent of pesticide residues

on food and water

Data from 3 largest producers in the state• AARC, AARSP, & AARFS

Under 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 returns Expected prices were obtained via regressions Fertilizer 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 land 14% 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”