Mexico is the second-largest economy in Latin America. Despite being a large, upper-middle-income country, Mexico continues to have high rural poverty levels and wide social and economic disparities. While only about 25 per cent of the population lives in rural areas, they represent roughly two thirds of the extremely poor.
Disparities are more marked in rural areas, where 61 per cent of the indigenous population is extremely poor, compared with only 19 per cent of the non-indigenous rural population. Although at least 6.7 million Mexicans speak one of the country’s 89 indigenous languages, indigenous peoples are poorer than the non-indigenous population.
Mexico's agriculture sector is facing increasing vulnerabilities and a degraded natural resource base. Rural people are constrained by limited human and social assets, inadequate production-related investments and value-adding infrastructure, scarce financial resources and services, weak public-sector technical assistance and poor access to markets. These constraints result in low productivity, depressed consumption and incomes, and poverty.
A key factor in the sector’s performance is a lack of smallholder access to financing. Although Mexico has various national development banks, access to rural finance remains a challenge. Recent government data indicate that fewer than 3 of every 10,000 poor rural households have access to credit.
Crops that are key to the smallholder economy, such as coffee and seasonal white corn, are frequently exposed to shocks such as climate-related events or market imperfections. The country also faces vulnerability to climate-related disasters exacerbated by inappropriate agricultural practices.
In Mexico, IFAD loans give priority to climate change, with special emphasis on adaptation strategies for smallholders, and to activities that support economic opportunities for indigenous peoples, rural young people, and poor rural households headed by women.
In its efforts to reduce poverty, IFAD addresses the slow productivity growth in agriculture and the smallholder and farmer (campesino) sector, the slow progress on reducing rural poverty and food insecurity among rural households and the regressive public spending on agriculture and poor quality of the fraction invested in smallholder farmers and campesinos.
Key activities include:
- helping smallholder farmers and campesinos significantly increase their productivity by strengthening their assets, organizational and other capacities, and increasing their access to goods and services markets, and to public services; and
- contributing to the Government’s efforts to make public spending on smallholder farmers and campesinos more efficient and equitable, particularly with regard to coordination, design, service quality and relevance, impact and sustainability over time, beneficiaries’ organizational capacity, social participation and transparency, and synergies with social policy.
- Mexico is a middle- to high-income country with the second-largest economy in Latin America and the Caribbean.
- A key factor in the agricultural sector’s performance is a lack of access by smallholders to financing.
- Since 1980, IFAD has invested a total of US$185.2 million in 10 programmes and projects related to agricultural development in Mexico, benefiting 143,205 households.