During the period of ISI [import-substitution industrialization], Mexican agriculture, rural environment, and peasantry provided the cheap food, abundant labor, raw materials, and capital crucial to the development of industry.
David A. Sonnenfeld, 199255
In response to wartime needs, Avila Camacho shifted the focus from land reform to agricultural production. to increased agricultural prices, more government credit, and government spending on highways and irrigation, agricultural production increased by 52 percent between 1940 and 1944. Wartime agriculture was tailored toward meeting Allied industrial needs, not feeding Mexico’s population.56
In response to wartime food shortages and the generally low yields throughout Mexican agriculture, the government invited the Rockefeller Foundation to establish an agricultural research program in Mexico. Rockefeller researchers accepted the offer and developed a package of new technology, often referred to as the Green Revolution. It combined agricultural mechanization, extensive irrigation, and the use of hybrid seeds, inorganic fertilizers, and pesticides. Production of wheat, the crop to benefit most from the Green Revolution, increased from nearly 400,000 tons in 1940 to 2.1 million tons in 1970. The Rockefeller effort was so successful at raising yields that one of its chief scientists, Norman Borlaug, received the Nobel Peace Prize in recognition of his plant breeding efforts.57
Due to limitations imposed by climate, soil, and topography, few existing farms could profit from Green Revolution technology. This technology was most widely applied on newly irrigated land in northwestern Mexico where the government attempted to emulate the success of the Tennessee Valley Authority. Agricultural investment increased from 13.3 percent of total investment in 1939 to 19.5 percent in 1950. Between 1945 and 1955, agricultural production increased by 5.8 percent a year, and in the following decade it increased by 4 percent a year.58
A commercial revolution accompanied the Green Revolution as increasing amounts of machinery and other inputs were required to maintain production. Fertilizer use rose from 1,800 metric tons in 1940 to 533,700 in 1970. By 1960, Mexico had 39,000 farm tractors, more than any other Latin American country, including Argentina, which had roughly twice as much agricultural land as Mexico. In 1947, to tap into this market, International Harvester opened an implement manufacturing plant in Saltillo.59
During the immediate postwar period, Mexican agriculture fed a rapidly increasing and urbanizing population and provided exports that financed the import of industrial machinery. The government established low corn prices so that industrial wages would not have to be raised to cover food Costs.60
Mexico’s success at feeding its urban population and exporting agricultural products to finance industry came at the expense of the environment. Increased irrigation led to soil salinization as the salt carried in by irrigation water remained in the soil when the water evaporated. Eventually, more than a million irrigated acres were lost due to such salinity. Insecticides killed not only pests but predators that preyed on them. Pests soon developed immunity to the insecticides used to control them. Farmers responded to this immunity by making as many as twelve insecticide applications a season. They also shifted from older pesticides such as DDT to newly developed compounds. As farmers increased the volume of insecticides applied and switched to more costly compounds, insecticide purchase and application became the largest single cost of cotton production. Farmers found themselves on what has been called the “pesticide treadmill,” involving ever increasing pesticide costs. Once the process began, farmers could not simply quit applying pesticides, since with insect predators eliminated by the pesticide, pervasive pests would wreak havoc. Finally, while yields rose, the Green Revolution led to a sharp decline in energy efficiency. Crops produced
With the new technology required enormous amounts of energy to manufacture and power farm equipment and to produce pesticides and fertilizer.61
Agricultural policies after the Cardenas administration consistently favored large growers. Only two days after his inauguration, Aleman expanded the maximum legal size of land holdings to 100 hectares (247 acres) of irrigated land or 200 hectares of seasonal rain-fed land. Between 1940 and 1950, the area of privately owned, irrigated land nearly doubled, while there was only a 23 percent increase in irrigated ejido land. To encourage mechanization, which only larger farms could afford, the government exempted agricultural equipment from import duties and provided ample financing to facilitate its purchase. Water supplied by government irrigation projects was so heavily subsidized that water payments failed to recover distribution costs, let alone the initial cost of the dams and canals. Special subsidies reflected wheat farmers’ political influence. Not only did the government subsidize the cost of shipping wheat to markets in central Mexico but it set a domestic wheat price above the international price, resulting in the transfer of some $20 million a year to wheat growers.62
The farmers who benefited most from the Green Revolution were the ones who most closely resembled U. S. farmers. They owned large farms, were better educated, had access to credit, and sought out new technology on their own. The marketing of cotton, Mexico’s leading export between 1949 and 1969, was controlled by the U. S. agribusiness giant Anderson Clayton, which provided more credit for cotton than did the National Ejido Bank for all ejidatarios. In 1969 these large farms produced the bulk of Mexico’s main agricultural exports—cotton, tomatoes, sugar, and melons. By 1970, 2 percent of Mexican farmers produced half of the value of agricultural and forest
Products.63
Ejidatarios and small private farmers were unable to plunge into the lucrative agricultural export market, so they concentrated on producing crops such as corn and beans whose price was deliberately kept low as a favor to urban interests. “Guaranteed” agricultural prices frequently became maximum prices, which benefited urban consumers at the expense of farmers. The reduced farm size, isolation, poverty, and frequent illiteracy of the small farmer formed an insurmountable obstacle to Green Revolution technology.64
Despite its post-1940 neglect by policy makers, the ejido remained an important element of Mexican agriculture. In 1960, 34 percent of agricultural production, as measured by value, came from the ejido. Yield per acre for corn and beans produced on ejidos was virtually the same as the yield on large private farms.65
Ejidatarios and small private farmers paid a high price for the success of postwar Mexican agriculture. They remained dependent on government credit, which corrupt officials often delayed. Excessive staffing at the government agricultural credit agency led historian Stephen Niblo to comment, “It is very difficult to avoid the conclusion that the agricultural bureaucracy was, in effect, an employment-generating scheme for the urban middle class.” Ejidos became a captive market for government agencies whose administrators could dictate the prices ejidatarios paid for fertilizer, insecticides, seeds, and other inputs. Adjusting for inflation, the 1971 corn price was below that of 1940. In response to low prices, corn growers shifted land from producing corn to cattle, which required less labor, thus exacerbating unemployment. As early as the 1950s, some were simply abandoning their ejidos seeking employment in the United States.66
In terms of output, Mexican agriculture after the Cardenas administration was quite successful. By 1965, Mexico had become self-sufficient in basic foods. Between 1950 and 1966, agricultural exports almost tripled in value. In large part, this success was due to high levels of government support for commercial agro-exporters. to government investment in irrigation, especially in northern Mexico, the area cultivated increased by 1.5 percent a year between 1940 and 1970.67
The generally positive results from the Mexican agricultural sector masked a dual system of large highly capitalized private farms with high productivity per worker and small farms with limited Capital and low productivity per worker. As a result, average agricultural productivity was well below that of workers in other sectors. In 1940, almost two-thirds of the population worked in agriculture, but they produced only 18 percent of GDP. In 1970, the 30 percent of the population working in agriculture produced only 11 percent of GDP. Productivity per worker on many small farms declined due to reduced government support and large families whose children inherited ever smaller, less efficient plots.68
World History
