One bad idea deserves another: PROCAMPO and PEMEX

Deregulation and privatization… both pushed on — or in — Mexico … seem more and more to have created more problems than they resolved.

PROCAMPO (Programa de Apoyos Directos al Campo) was set up in 1994 when the government pulled the plug on the ejidos (cooperative farms) and smallhold farmers, forcing them to become supposedly “competitive” with business interests.  Before 1994, small farmers could count on the government as the buyer of last resort for basic commodities — corn, beans, chilies, tomatoes, mangoes, etc. — which would allow them to stay on their farms, even in bad years.  In 1994 — anticipating NAFTA — the Salinas de Gortari administration made a radical break with the Revolution, and even the “Institutional Revolution” in redefining food production not as a matter of national security but as simply one more business interest.

To ease the transition to a market-based agriculture, and to avoid the social disruption that would inevidably follow wholesale abandonment of the countryside, PROCAMPO was charged with providing financial assistance to individual farmers, and to rural communities.

Surprise, surprise.  The assistance has not been going not to the small farmers (who are continuing to flee the rural regions), nor has it meant more food in the Mexican markets (not Mexican-grown food anyway).  Instead, as Ignacio Alvarado Álvarez and  Evangelina Hernández reported in El Universal (27 July 2008):

Since its creation in 1994, the federal government has invested 171 billion pesos which have achieved exactly the opposite of what was intended.  Millions of farmers are poorer now than when the program started, and there is no evidence to show any  benefit to the major producers, who received  nearly 80 percent of PROCAMPO funding, analysts say.

Besides unfulfilled purposes, since its conception, the beneficiaries of PROCAMPO subsidies have included politicians, governors, high level bureaucrats, narcotics dealers and their families.

The present administration is scrambling to contain the damage, suddenly discovering that nearly 12,000 agricultural payments under the program are “irregular” — or, rather, illegal.

At PEMEX, where the deregulators have been picking away at the state oil company any way they can, corporate security (which is not a well-regulated business in this country) officials were recently arrested in connection with on-going scandals over pipeline thefts.  NarcoGuerra Times tries to tie the thefts to “los Zetas” (but then, every scandal in Mexico that can’t be blamed on “la Familia” is laid at their feet by the present administration) although, at most, they are subcontractors to the security contractors.  This one is harder for the Calderon Administration to blame on previous PRI administrations:

After taking office in 2006, Calderon, an ardent privatizer in the Bush mold, had Pemex contract SY Coleman in Arlington, Virginia to provide security for the pipelines and fields in Veracruz. Since then the Zetas have been draining the lines with impunity. According to Pemex, illegal extraction of fuel tripled between 2006 and 2008, going from 136 incidents in 2006 to 396 three years later.

Coleman, a subsidiary of big dog defense contractor L3 Communications, was headed by Rumsfeld crony Jay Garner until he took a leave-of-absence in 2003 to run the Office of Reconstruction and Humanitarian Aid in Iraq. The Texas-based tech provider L3 also happens to have the contract for the high-tech fence going up along the US/Mexican border.

NarcoGuerra seems to go a little off the rails in assuming that because the high level PEMEX security people are usually retired military officers (as are the security officials in any oil company, or any large corporation) and the oil theives are supposedly “los Zetas” (who are accused of every organized criminal enterprise in Mexico, much as “The Mafia” was in the United States for many years) — and that the Zetas at one time included some former special forces guys — that all this somehow means the Mexican military is involved in the wholesale theft.  Nope.  As with PROCAMPO, it just means that deregulation puts the foxes in charge of the henhouse.