To help Mexican farmers compete with big, subsidized U.S. producers under the North American Free Trade Agreement, the Mexican government in 1994 launched a cash-transfer program called "Procampo." Its objective, officials said at the time, was to give impoverished, subsistence farmers the temporary financial boost they needed to become efficient, market-savvy producers.
Sixteen years later, Procampo still hands out more than $1.3 billion a year to some 2.7 million farmers. However, instead of combating poverty, government subsidies magnify rural inequalities.
Research by the independent think tank FUNDAR, an OSI grantee dedicated to budget and policy analysis, shows that Procampo and a sister-program are funneling big subsidies to prosperous producers, including senior government officials and the relatives of notorious drug traffickers.
The data collected, analyzed, and posted on Fundar's innovative website, Subsidios al Campo en Mexico, sparked a series of front-page reports in the newspaper El Universal. Among those reaping benefits was the minister of Agriculture, along with his father and siblings, despite regulations prohibiting officials from deriving advantages from the programs they administer.
Also making headlines were revelations that subsidies went to farms owned by relatives of top traffickers from the Juárez, Sinaloa, and Gulf cartels, now engaged in a brutal armed struggle with the Mexican military and police.
With Mexican lawmakers and the media demanding action to stop the abuses, the minister of Agriculture ousted two top officials and promised to clean up the registry, while continuing to defend his own family's right to subsidies. Fundar argues that purging the registry of a few names fails to address the core problem.
Procampo, which, according to Fundar, should help the poorest campesinos, has become mainly a bonus program for well-connected landowners and big producers. Ten percent of beneficiaries get more than 57 percent of the subsidies while 80 percent, or about 4 million people, get only 27 percent of the funds.
According to Fundar's Executive Director Miguel Pulido and investigator Ana Joaquina Ruiz, the program also suffers from a lack of adequate controls on public expenditures or respect for its own regulations. The outcome, they write in an article in El Universal, is "undeserved privileges for those who have the most and unfair treatment of the neediest."