Neoliberalism and Commodity Production in Mexico

11. The Impact of Neoliberal Policies on Rural Producers in Oaxaca, Mexico

225 E l e v e n TheImpactofNeoliberalPoliciesonRural ProducersinOaxaca,Mexico JamesB.Greenberg My wife comes from Juquila, a coffee-producing region of Oaxaca, so I hear little things from the family, like coffee prices were so bad this year that it didn’t even pay to harvest the beans or that two of the people who died in the World Trade Center came from Panixtlahuaca, a Chatino village of small coffee growers . When I first did fieldwork among the Chatino, only a handful of them lived outside the district, let alone in America. Now my wife tells me that the line in front of the telegraph office of people picking up remittance checks is blocks long every Saturday, market day. These little incidents combined with the fact that we haven’t been able to get decent coffee from her village in years—which had some of the best coffee I have ever tasted—are merely symptoms of the profound problems that are transforming rural livelihoods in Mexico. In this chapter I argue that such problems are closely tied to the sea change we know as neoliberalism. These policies entail a fundamental reversal in the state’s relationship with smallholders. Where the Mexican Revolution sought to protect the interests of peasant smallholders, the neoclassical view is that small farms are inefficient. In line with these views, the government has sought to restructure land tenure in the countryside and to change the ways agricultural 226 JamesB.Greenberg production is financed (Hausermann and Eakin 2008:110–111). The intent of these policies is to modernize and increase production, as well as drive noncompetitive producers into other pursuits (Martínez-Torres 2004:172–175). In this chapter, using Chatino and Mixe coffee growers as examples, I try to show how neoliberal policies have changed the way credit is provided to small producers and how this has changed their livelihoods. Specifically, I attempt to show how such changes have contributed to the outflow of migrants from these areas and estimate the levels of expulsion. Although I have picked the Chatino and Mixe, because they are the groups I have worked with and know best, in many ways they are typical small coffee producers. Coffee is grown in 4,500 communities in twelve states (Calo and Wise 2005:15). Sixty percent of coffee producers live in indigenous communities, and most farm less than two hectares of coffee (Davidson 2005). Credit Relations with Small Producers, 1949–1989 Following World War II, in response to higher market prices, coffee production expanded tremendously. In 1949 Mexico’s president Miguel Aléman (1946– 1952) formed the ­ Comisión Nacional del Café to modernize Mexican production and facilitate lines of credit to growers from banks. There were, however, obstacles to expansion. Agrarian reform limited the expansion of surviving plantations . Peasants who worked ejido, or communal, lands had no collateral they could offer banks. Relying on social capital, Don Guillermo Rojas (1897–2004) and thirty large coffee exporters in the city of Oaxaca with access to foreign capital began to offer credit to peasants who would plant coffee on their land. These exporters drew upon their social networks among both the Mixe and the Chatino to advance credit to trusted local merchants, compadres, and kin who acted as their buyers. Typically, the exporter would advance money to large merchantbuyers , who usually had well-stocked stores that carried the range of goods peasants needed. Some would, in turn, advance goods to itinerant peddlers to trade in more remote ranchos and communities. Local buyers would advance goods (and occasionally cash) to peasant coffee producers against their promise to deliver a specified number of bags of coffee at harvest (at a price generally fixed well below the expected market price). Interest was often charged on loans as well. If a grower were to default on a loan, not only would he be cut off from further credit, but—since these buyer-merchants were often friends, kinsmen, or compadres —the news would spread and the debtor would be blacklisted (see Carter and Alexander’s and Sesia’s chapters, this volume, for further discussion of buyers’ use of advances to capture produce). In 1958 the Mexican government created the Instituto Mexicano de Café (INMECAFE) to promote domestic consumption of coffee and increase the 227 The Impact of Neoliberal Policies on Rural Producers in Oaxaca, Mexico productivity of coffee production. Initially, INMECAFE regulated exports and taxes...