Hogging the Gains from Trade in Mexico

In this excerpt from Chapter 8 of my book, Eating Tomorrow, I recount one of the most compelling stories I came across in researching the book. It captures how the multinational pork giant Smithfield, now owned by a Chinese firm, took advantage of trade, investment, labor, environmental, and immigration policies, after the North American Free Trade Agreement (NAFTA), to expand its low-wage factory farming model on both sides of the U.S.-Mexico border. It is published with permission from The New Press and with thanks to photojournalist David Bacon, who covered the issue so well for The Nation. (Links to sources are in footnotes.)

Just up the Veracruz coast, farmers have lived their own NAFTA nightmare, and not just on the Mexican side of the border. The Perote Valley is now home to some of Mexico’s largest hog slaughterhouses, which expanded with all the perks that came with the trade agreement. U.S.-based Smithfield Foods, then the largest pork producer in the world, took control in 1999 of Granjas Carroll, a large industrial hog operation that had expanded operations in the valley in 1993. Between them, they turned the local economy into a living laboratory for all that is wrong with NAFTA, and with the agriculture, labor, immigration, and environmental policies that benefit agribusiness on both sides of the border.

The first blow to the local economy came with new industrial-scale hog operations. Local farmer David Ceja grew up on a farm with pigs, chickens, and cows, which were the family’s savings banks when it needed cash. “Sometimes the price of a pig was enough to buy what we needed,” he told Nation reporter David Bacon, “but then it wasn’t. Farm prices were always going down.”[i] They couldn’t get a decent price for their pigs, as Granjas Carroll undersold local producers. Part of that came from local production and part came from imports, which multinationals like Smithfield now exported to Mexico tariff-free.

Pork exports grew a destabilizing 700 percent after NAFTA, and hog producer prices in Mexico fell by more than half.[ii] “We lost 4,000 pig farms,” Alejandro Ramírez of the Mexican Confederation of Pork Producers told The Nation. He estimated that Mexico lost 20,000 direct jobs in the industry and as many as 120,000 when you count indirect jobs lost in related industries.[iii]

Wouldn’t those new industrial hog operations increase the local demand for maize and soybeans, the two main ingredients in feed mixtures? Not under NAFTA. The…