THE MEXICAN HOG INDUSTRY: MOVING BEYOND 2003



brewing byproducts, and other alternative ingredients. Some of these
products need to be imported, so the opening of borders and the
improvement of transportation facilities would definitely help Mexican
producers in this area as well.

(4) Improve Sanitary Controls. It is almost impossible for the Mexican
hog sector to be competitive when it still faces diseases that have been
eradicated in Canada and the United States. A high-priority campaign to
eradicate CSF in Mexico would help to reduce costs for Mexican producers
and facilitate trade. Changes in laws, improved practices concerning the
movement of animals, and stricter control of backyard producers need to be
implemented, and these measures should be based on technical criteria.

(5) Expand Agricultural Finance. Competitiveness requires improvements
in productive facilities and therefore investments in new sites of operation,
feeding systems, artificial insemination, and so on. The government’s new
approach to agricultural finance through FIRA (
Fideicomisos Instituidos en
Relacion con la Agricultura)
is helping producers to invest and improve
their facilities, but still more resources are required.

F. Conclusion

The problems that Mexican hog producers face require innovative solutions,
some of which may go against established convention. Government and
producers need to work together in order to increase the sector’s
competitiveness, but erecting new barriers to trade creates inefficiencies and
leads to higher costs. It is important that all parties recognize that free trade
is in the best interest of the consumer, and that
it is virtually impossible for
Mexican hog producers to compete in an open market for final products
when the market for raw materials and other inputs are kept artificially
high via continuing import restrictions
.

In the immediate future, Mexico is not likely to match Canada and the
United States in terms of being a competitive grain producer. But it is not
necessary for Mexican hog producers to duplicate every element in the
balance sheets of U.S. and Canadian hog producers, nor is it even necessary
for Mexican producers to match the production costs of their Canadian and
U.S. competitors. The Mexican hog sector simply needs to get its
production costs below the sum of foreign production costs plus freight costs

16



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