Going Beyond Immigration Policy
Agricultural policy connects to the immigration problem through trade policy. The North American Free Trade Agreement (NAFTA), which took effect in 1994, promised to allow Mexico to “export goods, not people.” NAFTA not only opened Mexico’s borders to U.S. meat, with pork exports increasing over 700 percent from their pre-NAFTA levels. The treaty also gave U.S.-based multinational firms greater freedom to invest in Mexico, where Smithfield dramatically expanded its operations. Through its joint-venture partners, the firm is now the largest hog producer in Mexico, with more than 15 percent of the market.
Still waiting for the immigration connection? Smithfield’s Mexican hog operations put a lot of small-scale hog farmers out of business, as producer prices fell 56 percent in real terms. More importantly, U.S. exports of below-cost corn flowed south in a torrent thanks to NAFTA. U.S. exports increased over 400 percent while real prices in Mexico declined by two-thirds. These shocks to rural Mexico pushed an estimated 2.3 million people out of agriculture between 1993 and 2008, among them former corn and hog farmers desperate for work.
