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NAFTA, Agriculture, and the Environment in Mexico

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

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NAFTA, Agriculture, and the Environment in Mexico

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  1. 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

  2. Objective/Question • 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”

  3. 3 Key Issues • Pesticide residues on Mexican produce exported to the U.S. • Pesticide poisonings of Mexican farm workers • Damages to the physical environment

  4. Methods 1 • 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

  5. Data • Data from 3 largest producers in the state • AARC, AARSP, & AARFS • Under umbrella growers’ org. CAADES (Confederacion de Asociaciones Agricolas del Estado de Sinaloa)

  6. Methods 2 • 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

  7. Findings • “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”

  8. Policy Implications • “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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