Mexico Farm Subsidies (Subsidios al Campo): Public participation to improve the situation of small farmers

Branch of Government:
Non-State

Open Budget Survey / Public Participation in the Budget Process Score (Out of 100): 2015: 44 – 2017: 35

Stage in Fiscal Policy Cycle

Formulation Implementation Audit

Summary

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This case was produced by Fundar from México and it was one of the three recipients of the 2017 GIFT Public Participation in Fiscal Policy and Budget Making Award.

Subsidios al Campo (“farm subsidies”) is a public participation case led by a public interest group, a peasant organization, and a group of academics and technical experts that uses Mexico‘s Freedom of information laws to obtain official data on the recipients of agricultural subsidies, which is analyzed and disseminated widely through a user-friendly website (www.subsidiosalcampo.org.mx).

The goal of the project was to generate easily accessible information and inform the public debate on Mexico‘s farm subsidies programs. In addition to making data available in its online database, the project analyzed the subsidy information and used it to advocate for more equitable subsidy allocations and, more broadly, changes in rural policy in Mexico. By creating and maintaining its online public database, Subsidios al Campo improved the transparency of government farm subsidies, and its analyses of this data indentified a disproportionate, and inequitable, concentration of subsidy recipients in the wealthiest 10 percent of farmers. The analyses helped explain how this happened, and the advocacy supported by this evidence contributed to reforms in the subsidy programs.

The effects of this public participation case were shaped by other factors that reinforced its messages about concentration of benefits and inequality and that provided additional stimulus for change. Within the Ministry of Agriculture, there were attempts at reforming the way in which farm subsidies were allocated and, more broadly, at changing the overall purposes of agricultural policies. There were also calls from the Ministry of Finance to improve and make more transparent agricultural expenditures. External pressures also played a role: at the time, the World Bank and the InterAmerican Development Bank were negotiating loans to the Mexican government, and some of the conditions that were put forward were related to improvements in the allocation of farm subsidies. For several years, external evaluators and experts have insisted on the inadequacies and shortcomings of agricultural policies, and some of their findings have been discussed within Congress. The campaign and later enabling enviroment for participation interacted with these contributing factors, and it proved essential in providing detailed information and sound analysis to back some reform attempts.

Farm subsidies is an example of innovative advocacy, which made use of new tools and strategies to make data usable, generate rigorous analysis, involve various organizations, work with the media, and engage accountability institutions. As with any other public participation case, its outcomes were shaped by the capacity and incentives of the relevant accountability institutions, and by the openness of the government to new evidence that has lead to policy redesign.

Basic Facts

Subsidios al Campo involved the main phases of the fiscal policy cycle at the federal level. With regard to the formulation phase, proposals were generated in the design of the budget programs of the agricultural sector with a national scope. As a result of this public participation case, the Ministry of Agriculture in Mexico established maximum and minimum limits for farm subsidies, directly affecting the implementation of the agricultural policy in the country. Finally, as a consequence of the impact on the media generated by the Subsidios al Campo campaign, the Supreme Audit Institution carried out various audits of agricultural programs that ended with sanctioning processes for Ministry officials who had received agricultural subsidies.

Why

Fundar is an independent Mexico City-based civil society think tank that has used different strategies to advocate for greater accountability in the public sector, encourage budget transparency, and expose several cases of illegal use of public money. The Asociación Nacional de Empresas Comercializadoras de Productores del Campo (ANEC) is a grassroots organization made up of small agricultural producers that has advocated for changes in agricultural policies. Though these organizations have different goals and strategies, they came together to create a coalition to change the terms of the public dialogue and participation on agricultural policies and budgets by publicizing evidence of the distortion in the distribution of farm subsidies. Both Fundar and ANEC thought it necessary to move the discussion from an emphasis on the size of the budget for the rural sector to one on the distribution and use of those resources.

ANEC was aware of the high concentration of subsidies among the big agricultural producers, but its message was not reaching beyond a small specialized group of analysts and social organizations. Moreover, ANEC knew that its message was frequently dismissed as anecdotal and based on its ideological view of what agricultural policy should be. Fundar, therefore, was a fitting ally: its researchers had become expert in using Mexico‘s Freedom of information laws (FOI) to access public data and translate what appeared to be uninteresting official data into powerful information with great potential for influencing public policy debates. Fundar‘s transparency and accountability team was also interested in achieving social accountability beyond mere access to government information to show how FOI laws could be used to influence policy decisions.  The coalition between ANEC and Fundar was unusual. Building a partnership between a specialized think tank, with a reputation for sound analysis and evidence-based advocacy, and a vocal organization with direct interests in agricultural policies was not going to be an easy task, given their different styles, purposes, and audiences.

Authorizing Environment

The transition to active democracy in the late 1990s and early 2000s in Mexico came with a wide range of expectations and promises: from economic growth to a cultural shift to a political system that was based on transparency, accountability, and participation, known as the TAP triad. With this change in culture, openness and access to information became one of the main axes of the government, and the transparency necessary for an accountable form of governance started to materialize with the enactment of the Transparency Law and the creation of the Access to Information and Transparency Institute in 2002. For the first time in decades, the exercise of the right of access to information allowed Mexico to start documenting its history, including human rights violations during the dirty war of the 1970s and to begin to question and discuss budgetary policies of the government, as was the case of Subsidios al Campo.

Who and How

Once the coalition between Fundar, ANEC and a group of researchers of the University of California, Santa Cruz (UCSC) was formed, several operational decisions had to be made, including the allocation of resources, the gathering of information, and, later, the way in which the data on farm subsidy recipients would be organized and made public. The first step was to use transparency mechanisms recently implemented in Mexico to obtain information on the lists of agricultural subsidy recipients. However, the problem was not only obtaining the lists (the Ministry of Agriculture had up-to-date lists) but also transforming government data files into formats that could be fed into the technology platform. The process required 30 information requests to obtain the information — and 16 appeals after information was denied or incomplete — and over a year of patient work to clean up the datasets, convert them into detailed data formats, and develop a user-friendly website to present the information to the public.

In October 2008, the website www.subsidiosalcampo.org.mx went online. This tool systematizes and presents official data on the size, beneficiaries, and distribution of farm subsidies in Mexico. Through the website, it is possible to obtain detailed information on subsidies and recipients (initially data was presented for the Procampo and Ingreso Objetivo programs, to which data from four more programs were added to the website in 2010). The information available on the website includes amounts of money received by individual recipients, as well as aggregate information by municipality, state, or region. It is also possible to compare information from different years, across states, and between programs.

Subsidios al Campo made a difference in terms of the extent of the information available on agricultural subsidies, its systematization within a single platform, and the possibility of carrying out specific searches by person or locality, and making geographical and temporal comparisons. From the beginning, and for all the members of the coalition, it was clear that providing access to detailed information would serve two purposes: it would foster better informed public discussion, and it would create opportunities for evidence-based advocacy. It was expected that providing more information would allow for analyses of the underlying biases in rural policy and empower excluded actors. However, those inputs and opportunities would only lead to a more informed debate on farm subsidies and have an impact on policy and budgetary decisions if the information provided by the website was used by the media, civil society organizations, and accountability institutions. Thus the logical next step for the members of the coalition was to promote the use of the website and to carry out analyses that would make sense of the information. For this reason, Fundar and ANEC analyzed and presented powerful information on the concentration of subsidies, and more important, they deployed a deliberate strategy to train journalists in the use and interpretation of the data on the website.

One of the main assumptions of the theory of change behind Subsidios al Campo was that once the information on farm subsidies was made public and accessible, it would be possible for peasants organizations and civil society groups to use this information to demand changes in policy — and that the government would react to those demands with improvements in policy decisions. This assumption implicitly relied on the idea that accountability institutions (the internal and external control agencies: the Ministry of Public Administration, and the Federal Supreme Audit Institution, respectively) and Congress would perform their oversight function better with more information, which would lead to improved policy and budgetary decisions. Further, it was assumed that the federal government (specifically, the Ministry of Agriculture) would respond to demands from these institutions and from civil society organizations.

Results and Impact

Subsidios al Campo public participation case had two important achievements. The first was credibility: in a country where the first instinct of an accused politician or a public official is to question the validity of the information or the motivations of the source, the data and the analysis provided remained uncontested. Since the data came from government information — it was processed and made accessible by the coalition, but not transformed in any way — it was not possible to doubt its reliability.

The second achievement was related to the original purpose of the campaign, which was to raise awareness about the distribution and impact of farm subsidies: ―the Subsidios al Campo website has shown that there is considerable investment in the rural areas, with meager results in overcoming inequality. The Ministry of Agriculture reacted by initiating a cleanup of the recipient list and modifying the policy‘s operating rules. The cleanup proved difficult to implement, but at least it was now possible for some people within the ministry to defend a process of reform for Procampo and other programs with the new evidence that came out of the Subsidios al Campo project.

As a result of the renewed discussion, in April 2009 the new operating rules were announced and included a significant change: they established both a minimum amount of 1,300 pesos for small producers (those with less than five hectares) and a ceiling of 100,000 pesos for single producers. This change had a direct influence on the distribution of farm subsidies in Mexico.

The effects of the campaign did not end with increased public awareness. The stories about concentration helped efforts to establish maximum and minimum limits for farm subsidies. Moreover, ―the website is now a tool to verify the enforcement of those limits (Ruiz, 2010). More directly, they reinforced the calls from Congress and within the policy community for cleaning up the recipient list, introducing a single identification number for producers, and enforcing the operating rules. Congress called on the two Ministers of Agriculture who have been in office since 2008 to testify before committees following revelations based on Subsidios al Campo information. In addition, the Chamber of Deputies requested more transparency from the Ministry of Agriculture in its 2011 budget proposal, and the ministry created an accountability website to provide some information on farm subsidies ―despite finding strong resistance both among some members of Congress and within the ministry.

Lessons Learned

The distribution of farm subsidies in Mexico is still regressive; Subsidios al Campo has not managed to completly redirect agricultural policy. However, this does not mean that Subsidios al Campo has not succeeded. As explained earlier, its initial objective was to inform the public debate on agricultural policies, so that the public knew about the effects of farm subsidies and how they are distributed.

The website has been a notable success. In less than three years, it was used for over 4 million searches, according to the website’s counter. The website has become a source of information for news and analysis at the federal and state level. Current efforts to build on this user base by some members of the coalition include promoting its use in local universities and among rural organizations in the states. It has become a public good, which can be used for single searches of individual beneficiaries or for sophisticated statistical analyses. The website did not give new information to members of the policy community, but it provided solid evidence, based on official data, in an accessible way. It is no longer the biased opinion of interested actors, or anecdotal evidence. It is an argument based on official information that is available to the general public.

Subsidios al Campo improved the transparency of Mexico‘s farm subsidy programs, identified the problem of unequal concentration of benefits, and explained the reasons — political, administrative, and policy design — behind this problem. In doing so, it undoubtedly improved the policy debate, not only with its sophisticated arguments but also because it introduced new actors to the debate. It has been less effective in improving policy, because of active resistance by the government, and in improving accountability. As with any other campaign, its outcomes were shaped by the capacity and incentives of the relevant accountability institutions, and by the openness of the government to new evidence that may lead to policy redesign.

SAI assessment of the agricultural policy (in Spanish):

http://www.asf.gob.mx/Trans/Informes/IR2009i/Tomos/Tomo3/2009_0356_a.pdf

The Ministry of Agriculture created a new section on its website (www.sagarpa.gob.mx/src) that contains aggregate information on the recipients of several programs, as well as a recipient list.

Principles of Public Participation in Fiscal Policy

The Subsidios al Campo public participation case is aligned to the next GIFT Principles:

  1. Accessibility and openess. The subsidios al campo website facilitated the dissemination of Budget information regarding the agricultural sector in open data formats. This allowed to publish maps and to convert official datasets into easily accessible information, maps, and graphics.
  2. Inclusiveness and Respect for self-expression. This case allowed grassroots organization made up of small agricultural producers to advocate for changes in agricultural policies. In this way, small producers who had never received transfers were include in the discussions and design of these policies.
  3. Depth. The Supreme Audit Institution adopted many of the findings, and language, of the Subsidios al Campo campaign, not only from the data on the concentration of subsidies, but also from the analyses carried out in 2009. This audit identified several problems with the performance of agricultural policy, both in terms of defective implementation and infringement of rules. A number of problems resulted from the inability of the government to verify the eligibility of subsidy recipients in particular.

Country Context

Mexico is a federal presidential republic. From 1921 until 2000, the President of Mexico came from a single political party, the Partido Revolucionario Institucional (PRI). This one-party hegemony created a semi-authoritarian system in which the president and his party ruled with little accountability. The transition to a functional democracy started to take shape in 1997, when the PRI lost the majority of seats in the Chamber of Deputies. In 2000 Vicente Fox, from the right-wing Partido Acción Nacional, became the first chief executive in more than 70 years who did not represent the PRI.

The democratic trend toward strengthening the Mexican system of checks and balances has grown stronger over the past 20 years, and it forms the background against which public participation cases should be seen. Indeed, this shift to a competitive democracy explains a good part of the budget transparency advances in Mexico that allowed the Subsidios al Campo project.

The change in regime, the existence of a divided congress with an opposition that can overrule the executive, and pressure from civil society and the press allowed the enactment of four laws that had a direct impact on the budget information published:

  • Federal Law of Transparency and Access to Information
  • Federal Law on Budget and Treasury Responsability
  • General Law on Government Accounting
  • Federal Law on Audit and Accountability

Published on 25 March 2006, the Federal Law on Budget and Treasury Responsibility had as one of its main objectives the promotion of a culture of informing, disclosing, and evaluating the results of public financial activities at the federal level. This law improves the regulation of formulating, negotiating, and approving the federal budget; it establishes the need for fiscal responsibility and requires transparency in a range of areas from trusts and donations of the state to subsidies and modifications to the system of regulating information and expenditures.

In addition, in 2007 the Mexican government proposed two reforms to the Constitution that were key to advancing advance toward greater budget transparency, government control, and accounting. First, Article 79 of the Mexican Constitution was reformed to strengthen the role of the Supreme Audit of the Federation (ASF). This reform allowed the ASF to monitor federal resources exercised by nonfederal entities such as states, municipalities, autonomous agencies, and parastatal entities. This constitutional reform resulted in the issuance of the Law on Audit and Accountability in 2009, which extends the powers of ASF and establishes some mechanisms for public participation in the control of public resources.

The other constitutional reform was the modification of Article 73, which obliged congress to act to harmonize the accounting systems and the presentation of financial, budgetary, and patrimonial information of the three levels of government. As a result of this reform, the congress enacted the General Law on Government Accounting, which establishes the general principles for harmonizing the accounting systems of the various branches and levels of government and created the Accounting Harmonization Council to implement those principles and establish catalogs of accounts and harmonized budgets.

In the first two editions of the Open Budget Index (OBI) in 2006 and 2008, Mexico’s score fell in the middle range. Then, from 2009 onward, the Mexican Ministry of Finance (MoF) started taking transparency seriously and working for the publication of relevant information for public budget discussions. The publication of this information was reflected in an improvement of 9 points for the 2012 OBI in which Mexico scored 61 and crossed the threshold of publishing “sufficient” information, according to the OBI’s performance categorization. This trend has continued, and in 2015 Mexico’s OBI score was 66 points..