AGRIGliOJRAI. STUDY ' DEVELOPMENT AND EQUITY IN TROPICAL MEXICO: THIRTY YEARS OF THE PAPALOAPAN PROJECT Sara J. Scherr and Thomas T. Poleman DEPARTMENT OF AGRICULTURAL ECONOMICS-: New York State C ollege of Agriculture and Life Sciences A Statutory College of the State University Cornel! University, Ithaca, New York-14853 NEW YORK STATE COLLEGE OF AGRICULTURE AND LIFE SCIENCES A STATUTORY COLLEGE OF THE STATE UNIVERSITY CORNELL UNIVERSITY ITHACA, NEW YORK 14853*0398 U.S.A. Department of Thomas T. Polcman Agricultural Economics Professor of Warren Hall In tern at ion al Food Economics January 1983 I first visited the Lower Papaloapan Basin, the gateway to the tropical Southeast of Mexico, in 1954. It was then an isolated, little developed region dominated by rain forest, empty savannah, and great rivers.which periodically overtopped their banks. The newly created ... Papaloapan River Basin Commission had begun an ambitious program of development, but the early results, which I later documented in a small hook,!./ were not promising. When Sara Scherr, a student with long personal experience in Mexico, sought a research topic in 1975? I suggested that she evaluate what had happened subsequently. To my surprise and gratification, a great deal had occurred. The Lower Papaloapan had been transformed, with a booming commercial agriculture, busy highways, and modern towns newly evident. The first half of the 1970s had been a particularly buoyant time for both the Papaloapan Commission and the region's economy. Over five years have passed since Ms. Scherr's study was completed and with them a turbulent period for Mexico. The sexenio of President Jose Lopez Portillo saw the oil boom in the Southeast reach its zenith. The country's economy began a dizzying acceleration, and great hopes for a more equitable course of development were entertained. These dreams were dashed in 1982. Following repeated devaluations of the peso, aus­ terity has become the watchword. It was originally planned that Ms. Scherr's study would be published by the Papaloapan Commission. However, completion of the Spanish text in 1978 coincided almost to the day with a helicopter crash which took the lives of the Commission's dynamic leaders, Ing. Jorge L. Tamayo and Ing. Guillermo Hernandez Castro. Plans for publication were abandoned— as, indeed, were most of the activities in which the Commission was engaged. Although the Lower Papaloapan now finds itself closely linked to both the national economy and the new centers of gas and oil production, little was done to exploit the new opportunities. With the advent last month of the administration of President Miguel de la Madrid, the Mexican government will once again reassess its approach to the tropical Southeast and it is appropriate that we issue a shortened version of Ms. Scherr’s study. Some of the changes in the Papaloapan took place as a direct;consequence of governmental Initiatives, some 1/ The~Papaloapan Project: Agricultural Development in the Mexican Tropics (Stanford University Press, 1964). despite them, and some irrespective of them, from Ms. Scherr's evalua­ tion of local "success stories" many guidelines emerge as to the most effective role a government strapped for funds can play. We are greatly indebted to those who made the study possible. '.'Sara'' Scherr’s first year of research in the Basin was underwritten by a Ful- bright Fellowship. Her final two months of field work and subsequent visits by her and myself to Mexico were made possible by a generous grant to Cornell University from the Tinker Foundation. While at Cornell, Ms. Scherr's work was funded by a Liberty Hyde Bailey Fellowship, adminis tered by the New York State College of Agriculture and Life Sciences, and by the Department of Agricultural Economics. Help from the Papaloapan Commission was^unfailing. Xngs. Tamayo and Hernandez offered more assistance than we might legitimately have sought. Friends in the Departamento de Fomento Agropecuario, in particular Ing. Jose Rodriguez Vallejo and Lies. Hector Duarte Penalosa, Victor Valle Aroche and Benjamin Pineda M. , deserve special thanks. Srita. Sarita Flores R. was helpfulness personified. Lillian Thomas, my secretary, typed the original manuscript and made our travel and business arrangements. She also edited this version and, with Joseph Baldwin, drew the many graphs and charts. The maps were drafted in Cuidad Aleman by Gilberto Carrasco Sanchez, Beda Olmedo F., Nestor Olmedo Luna and Pablo Virgen Pelayo. The present typescript was prepared by Wendy Barrett and Diana Atkinson. Thank you all. TABLE OF CONTENTS Page CHAPTER 1. THE ECONOMIC GROWTH "MIRACLE" AND THE EQUITY PROBLEM 1 Agricultural Structure in the 1970s 1 The Equity Problem Employment ■ ■ Agricultural Employment q Urban Migration in Industrial Employment 10 Agricultural Policies of the Echeverria Administration 10 CHAPTER 2. THE PAPALOAPAN BASIN 17 Settlement and History 17 The Coming of the Spaniards Mexican Independence Conditions in the Papaloapan Basin in the 1940s Regional Differences 25 Industrial Region 28 Lowlands Region 29 The Flood Problem 30 30 Tuxtlas Region Colonization Region 31 32 Highlands Region 33 Highlands Economy CHAPTER 3. THE PAPALOAPAN. COMMISSION 35 35 History 35 The Mandate Presidential Policies, 1947-1970 37 37 1947-1952 41 1953-1958 Summary of Works through 1970 42 43 Programs of the 1970s -iii- Page CHAPTER 4. CHANGES IN THE PAPALOAPAN BASIN 45 Absorption into the National Mainstream 45 Trade and Services 49 Expansion of Land Farmed and Production 49 The Industrial Region 51 The Lowlands Region 51 The Tuxtlas Region 55 The Colonization Region 58 The Highlands Region 61 Assistance to Agriculture in the Basin 63 Economic Diversification and Employment 64 The Industrial Region 66 The Lowlands Region 66 The Tuxtlas Region 70 The Colonization Region 70: The Highlands Region 70 Demographic Changes 71 Urbanization and New Zones of Influence ’ 75 Welfare Improvements 75 Income Changes 79 Educational Improvements gl Summary gi CHAPTER 5. ECONOMIC DYNAMISM IN THE BASIN— FOUR CASE STUDIES 85 The Zones of Study 35 Data Collection ; 87 CHAPTER 6. TUXTEPEC: THE NEW CENTER OF THE PAPALOAPAN BASIN 89 The Nature of the Changes, 1945-1975 92 Communications 92 Population 92 Agriculture 96 Incomes and Employment 96 Living Standards 101 Cultural Change 101 Traditional Tuxtepec 103 Railroad and Revolution: 1900-1920 103 Era of Green Gold: 1920s 103 Stagnation: 1930s and 1940s 104 -iv- Page The Papaloapan Commission and Two Decades of Development 105 Flood Control 1^5 Road Communications for the City 105 Opening the Hinterland 105 Agricultural Change 107 Economic Diversity -LUO A Summary of Progress Through 1970 108 The "Boom" of the 1970s H O Sources of Urban Change 112 Beginnings: The Adolfo Lopez Mateos Sugar Mill 112 Government Investments 112 Industrial Expansion H 4 The Influence of Roads 115 Urban.Employment.............."....... ........................ HO Sources of Rural Change 118 The Importance of Sugar Cane 118 Private Cattle Expansion 119 Public Policies for Poorer Farmers 121 Production Credit for Improving Incomes and Technology 121 Ejidal Livestock Credit 122 Commodity Credit 12^ Agricultural Labor Demand 12^ Summary: The Value of Integrated Rural Development 130 Basic Requirements 121* Employment Stimulation 120 Urban Investments 121 A Network of Regional Centers 132 Appendix 6-A. Agricultural Production in Tuxtepec Zone, 1960-1970 134 CHAPTER 7. ISLA AND LOCAL INITIATIVE 135 The Nature of the Changes 135 Population 135 Communications 138 Agriculture 138 Economic Diversification l44 Living Standards i4^ Sources of Isla's Development: The Early Years, 1900-1945 146 Isla's Founding l4^ Introduction of Pineapple 1^8 Immigration l43 -v- Pa%e Settlement, 1945-1965 148 New People 149 Communications 149 Progress in Ranching 150 Progress in Pineapple Production 150 Isla as a Free Municipio 151 Municipal Activity 151 New Roads 152 Pineapple 152 Ranching 155 Other Agricultural Credit Programs 158 Changing Labor Demand in Isla 158 New Lands 159 Seasonality 159 Labor by Class 161 Summary: The Potential of Local Initiative 162 Importance of. Local Sources of Capital 162 Technology and Education : 164 Success of Credit cum Processing 164 Repeating the Isla Experience 164 Appendix 7-A. Income Changes in Isla 167 CHAPTER 8. ABASOLO AND GOVERNMENT INTERVENTION IN AGRICULTURE 168 The Nature of the Changes 169 Population 169 Communications 169 Agriculture 173 Economic Diversification 173 Living Standards 176 The Sources of Abasolo's Changes:Political Unification 178 The Establishment of Abasolo 178 Unification in the 1970s 177 Sources of Abasolo's Changes: The Public Credit Project 180 The Plan Benito Juarez 180 ■ The Coordinated Development Project 180 Agricultural Credit 182 Ranching Credit 183 Present Status of the Program 184 Improved Marketing 184 -vi- Employment Patterns in Abasolo 187 Land Clearing 187 Changes in Intensification and Seasonal Distribution of Labor 187 Type of Holding 187 Labor Patterns by Class 188 Summary: Rural Prosperity and Change 190 Transfer of Resources 190 Success in Cattle Enterprises 190 Program Flexibility and Politics 191 The Problems 191 Application of the Abasolo Model 192 CHAPTER 9. IXTLAN AND THE TUXTEPEC PAPER MILL 194 The Nature of the Changes 194 Population ............................ 194 Communications 197 Agriculture 197 Economic Diversification 203 Living Standards 208 Sources of Changes: Personalism in Politics 211 The Early History of Ixtlan 211 Economic Changes After the War 212 Their Present Political Outlook 212 The Personal Link in the 1970s Program 213 Sources of Change: Projects to Stimulate Employment 214 History of the Forest Complex 214 Solution of the Paper Mill Supply Problem 216 Agricultural Programs and other Government Aid 220 Changing Labor Patterns in Ixtlan 222 In Logging Communities 222 Other Communities 222 The Effects of Small-Scale Industry 225 The Effect of Agricultural Intensification 225 Summary:EconomicDiversificationforthe Highlands 225 The Future of Agriculture 225 Opportunities Outside Agriculture 226 Labor-Intensive Inputs with Capital-Intensive Processing 226 Applicability of the Ixtlan Model 227 -Page CHAPTER 10.