NAFTA dumping on Mexican farmers
One of the most dramatic effects of deregulated trade has been an increase in agriculture dumping. In agriculture, dumping takes place when an agribusiness firm exports a crop—say, corn—at a price that is below what it costs the farmer to produce it. Dumping gives agribusiness an advantage in the importing country's market—and often puts that country's farmers out of business, making that country more dependent on imports for its food supply. Trade rules at the World Trade Organization (WTO) and regional trade agreements like the North American Free Trade Agreement (NAFTA) limit what countries can do to protect their farmers from dumping, including policy tools like tariffs or certain types of subsidies.
A few years ago, IATP published a report looking at dumping by U.S.-based agribusiness on world markets for five major crops: corn, soybeans, wheat, rice and cotton. We found a sharp increase in dumping following the enactment of the WTO's Agreement on Agriculture and the 1996 Farm Bill—which stripped away the last remnants of supply-management programs and encouraged U.S. farmers to over-produce.
Earlier this year, Tim Wise at the Tufts University's Global Development and Environment Institute released a new report looking even deeper into the damaging effects of dumping. In this case, the effects of dumping eight U.S.-produced agricultural products on Mexican agriculture after the passage of NAFTA. The numbers are astounding. Prices paid to Mexican farmers were depressed nearly $1 billion a year from 1997–2005 due to dumping. You can find more details at GDAE's website.
Or, check out the video interview we did with Tim at a major meeting of Mexican farm groups last month.
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