Globalization Effects in Family Farms: a Case of Mexican Dairy Production

The globalization of the socioeconomic system has been a widely debated topic in the last two decades. Many disciplines agree that globalization is a concept that emerges from the new international division of labour. It is common today see a trend to regionalism which is based in the creation of regional trading blocks as a need to become more competitive in world markets and to capture others. In this way many countries or regions take advantage from theirs competitive and comparative advantages in many areas of commerce. In 1994, the U.S. established the North American Free Trade Agreement (NAFTA) with Canada and Mexico, as a first step in the integration of the Americas. This union took place despite the fact that Mexico is still a semi-industrialized country compared to the U.S. and Canada. The market integration had a supposing that Mexico would improve technology to get an industrialized country and the same time create jobs and reduces the migration to U.S. Moreover such situation has not changed in the recent time. The creation of regional trading block established regulations based in the release and the opening of market frontiers. The tariff barriers were gradually reduced allowing the free importation of goods produced in international market, which has been attractive in agricultural sector to Canada and U.S. due to Mexico historically an importer country of milk. This process has exposed Mexico producers to face a high competitiveness in the market. The NAFTA was to Mexico the globalization consolidation pointed out by a fast liberation of their market. With respect to the Mexican agricultural and dairy sectors, globalization has meant an increase in foreign trade, food imports, and arrival of transnational enterprises which has introduced a system of intensive dairying, though not all at once. However, it also has meant elimination of subsidies to force competitiveness of products for domestic consumption, reduction of budgets of programs of production support and development, and reduction in the number of assistance programs for the poorest sectors in rural areas, which have brought a reduced of profit in the agricultural sector.