Table 1: U.S. Assistance to Mexico by Account,
FY2009 Total, U.S. $ millions
Account
FY2009
Child Survival & Health
2.9
Development Assistance
11.2
Economic Support Fund
15.0
Foreign Military Financing
International Military Education & Training
International Narcotics Control & Law Enforcement
Non-proliferation, Anti-terrorism
& Related Programs
Total
299.0
0.8
454.0
3.9
786.8
Sources: U.S. Department of State, Congressional Budget Justification for
Foreign Operations FY2008-FY2011, FY2009 Supplemental Appropriations
Act (P.L. 111-32).
considered poor and up to 18 percent live in extreme poverty, unable to meet their basic food needs.23
Reducing migration pressures will require development
and job creation throughout Mexico, but poverty and international migration are particularly concentrated in the
countryside. Although about a quarter of all Mexicans live
in rural areas, 60 percent of Mexico’s extreme poor are rural and 44 percent of all of Mexico’s international migration
originates in rural communities (see Figure 2).24
This means that more than half of rural Mexicans live
in poverty and 25 percent live in extreme poverty.25 As one
expert states, “Rural poverty is one … of the principal “pushfactors” in Mexican migration to the United States” and thus
should be the primary focus of development efforts aimed at
reducing migration pressures.26
After decades of declining support among international
assistance agencies,27 agriculture and rural development is
now re-emerging as a vital development focus. The World
Bank’s 2008 World Development Report states, “Agriculture
continues to be a fundamental instrument for sustainable
development and poverty reduction.”28 Research has also
found that agriculture is one of the best returns on investment in terms of poverty-reduction spending.29 For example,
each 1 percent increase in crop productivity in Asia reduces
the number of poor people by half a percent. This correlation
also holds for middle-income countries such as Mexico.30
Among the options for agricultural development, support
for smallholder farmers is the most promising path for poverty reduction. The World Bank states, “Improving the productivity, profitability, and sustainability of smallholder farming
is the main pathway out of poverty in using agriculture for
development.”31 And smallholder farmers in Mexico are
especially in need of assistance. After decades of declining
4 Briefing Paper, December 2010
support from the Mexican government and increased competition from subsidized U.S. producers under the North
American Free Trade Agreement (NAFTA), small-Mexican
farmers have found it increasingly difficult to make a living.
NAFTA and Mexican Small Farmers
After defaulting on its foreign debt in August 1982, the
Mexican government began a major shift in its development
strategy from a protectionist, state-run model that nurtured
domestic consumption and industrialization to a more market-based model focused on cutting government spending
and encouraging exports, all with the aim of reducing debt,
inflation, and currency instability.32 Although the reforms of
the 1980s were aimed at stabilizing the economy, the shift
in economic model was wrenching for Mexicans. The 1980s
saw falling wages, a decline in living standards, job displacement, and lowered prospects for economic mobility
The impact on small farmers was particularly harmful. In
addition to a reduction in state support, small and mediumsized producers faced the cumulative impact of long-term
drought, multiple economic crises, increased competition
from U.S. producers, falling agricultural commodity prices
and increases in the price of agricultural inputs, and reduced
access to credit. Mexico’s rural population decreased from
58 percent in 1950 to 25 percent in 2005. While many of the
rural poor migrated to Mexico’s overcrowded cities, others
opted for the United States.33
The 1994 North American Free Trade Agreement (NAFTA) was the culmination of the economic liberalization that
began in the 1980s. NAFTA was touted as a Mexican job-creFigure 2: Rural Versus Urban Immigration
80
Rural
Urban
75%
70
56%
60
50
44%
40
30
25%
20
10
0
Percenta