Bomb ticks in the countryside.

Farmers mobilize as livlihood thratened by U.S. competitors, unfettered by trade restrictions and boosted by multi-billion-dollar subsidies.

As he takes a break from settling into his new office, United States Ambassador to Mexico Tony Garza can gaze out his window at the Angel of Independence at what might be a rather unsettling sight.

Over the last several weeks, farmers have camped underneath the Angel, blocked roads near the border and around Mexico City and stormed the lower house of Congress in a desperate appeal to the government for urgent development aid and protection against subsidized imports.

Under terms of the North American Free Trade Agreement (Nafta), tariffs on all agricultural products, with the exception of corn, beans and milk, were dropped on Jan. 1. In the weeks leading up to the tariff removals, a shock wave penetrated the countryside, alarming Mexican farmers who do not enjoy the same technology and official aid as their Nafta competitors.

Farming in Mexico is, in many cases, a communal affair or a matter of subsistence, but for its northern neighbors it is a big business. In the U.S. and Canada, modern farmers use the most advanced equipment and latest scientific knowledge to greatly increase production output. Machinery to harvest crops has virtually replaced human labor there, but not so in Mexico. While livestock in the United States and Canada may be raised in factory farms--where chemicals, synthetic food and automated machinery maximize animal reproduction and size-- livestock in Mexico are often grazed exclusively in natural pastures, producing fewer and smaller animals.

Perhaps the greatest disadvantage faced by the nation's agricultural sector is the now tariff-free North America and the most hotly contested aspect of this issue is the disparity in the amount of subsidies farmers in the three nations receive. Though Mexican farmers receive substantial subsidies and tax breaks from the government--and will soon receive more--these pale in comparison to the gargantuan subsidies given to corporate farming operations in the United States. In the case of sheep, for example, U.S. producers can receive up to 30 times as much in subsidies as their Mexican counterparts. Further widening this gap, U.S. President George W. Bush last year approved increased funding for subsidies to American farmers, to be phased in over the next five years.

While the family farm has virtually disappeared in the United States and Canada, the traditions of communal and small-scale farming are still popular in Mexico, despite the efforts of recent free-market-minded presidents to make it easier for marginalized farmers to sell their land. These communally farmed lands (ejidos), as well as other small producers, have depended heavily on government aid and cannot compete equally in the international market.

Nonetheless, many Mexicans believe the system is worth preserving for the opportunities it provides rural communities. This ancient method, at best, allows these communities to support themselves and prevents the countryside from being overrun by monolithic corporate farms.

Former President Carlos Salinas de Gortari, who signed Nafta for Mexico in 1993, took measures during his last year in office to bolster the agricultural sector and soften the effects of unfettered competition.

Part of his solution included offering credits, financing and support beyond the subsidies farmers already received.

But the peso crisis of 1994-95 made this unfeasible and his successor, Ernesto Zedillo, eliminated this aid.

Throughout the congressional session lasting from the summer to the end of 2002, Mexican farmers and lawmakers sympathetic to their cause called for a variety of different measures to lessen the impact of duty removals. The more tenacious advocates called for a suspension and possible revision of the Nafta chapter relating to agricultural products and livestock, while others focused on increasing funding for the rural sector.

In August, members from the three major political parties were reportedly considering the hard-line option to temporarily suspend Nafta's agriculture provisions, but no decision to help farmers was reached. Further exasperating farmers' concerns, top United States officials--even as the U.S. Congress was pushing through a multi-billion dollar farm subsidy bill--responded in November that they had no intention of renegotiating Nafta.

As the years' end grew nearer with no solution reached, farmers took desperate measures to solicit action by the government. Toward the end of the congressional session, farmers from across Mexico and members of the farm group known as El Barzon began staging demonstrations in front of Congress. They demanded broad measures be taken--either a revision or suspension of Nafta or a sufficient increase in subsidies for the countryside in the 2003 budget.

In December, brazen farmers drove their tractors through the gates of Congress and pushed their way--on foot and horseback--into the building, joined by hundreds of angry teachers, who were demanding increased money for schools.

While the farmers failed in their bid to suspend Nafta, they did get some relief. The budget for 2003 earmarks 117 billion pesos for the countryside, 71 billion of which will be spent on production and 46 billion to alleviate rural poverty.

In comparison, U.S. farmers will receive 19 billion dollars of subsidies entirely aimed at production in 2003. In Mexico, this represents a 50% increase in spending on production programs for agriculture, the largest increase ever. Additionally, Finance Secretary Francisco Gil Diaz announced in January that agricultural producers will also enjoy a subsidy of 2.76 pesos per liter of diesel fuel.

Apparently dissatisfied with these measures, many farmers continue to protest. In Ciudad Juarez, demonstrations included fasting and protesting at the bridge leading into El Paso, Texas, as well as inspecting commercial trucks in order to detain agricultural imports. Around Mexico City, farmers blocked the highway to Cuernavaca and threatened to do it again if their demands to modify Nafta agrarian provisions were not met.

Congressionally speaking, the matter is far from settled and debates in both legislative houses rage. Jaime Rodriguez Lopez, an Institutional Revolutionary Party (PRI) deputy and president of the Commission of Agriculture and Livestock, told BUSINESS MEXICO that an initiative is on the table to ask President Fox to use special powers to give farmers temporary relief.

An accord "has been put forward in both houses to petition the president to apply Article 131 of the Constitution, which allows him to enact emergency measures, which could include prohibiting the entrance of agricultural products into the country," Rodriguez said.

Fox also has the option of enacting Nafta's Chapter 8, whereby the terms of the agreement can be revised in an emergency. "All parties recognize the gravity of the situation facing the countryside and several proposals are before Congress now," Rodriguez said. "They include providing aid to help producers, programs to waive taxes and a program of real control on the border to prevent contraband. By Feb. 5 at the latest, we'll have the proposals that Mexico will follow."

Agriculture Secretary Javier Usabiaga, on the other hand, lays blame for the rural crisis on farmers for not producing enough. "As a government, we have done everything within our reach, but we haven't found enough of a response on their part," said Usabiaga, who in a December poll published in Reforma daily, received the lowest public approval rating of all Fox's Cabinet members.

What is certain is that, whoever is to blame, this new level of competition with the United States and Canada will take a bite out of Mexico's GDP until farmers here adapt to a new business environment, whether by employing modem technology or finding new niches to exploit.

President Fox, whose family owns a ranch, has openly courted foreign investment in other sectors of the economy, so it would make sense that he would hope to involve international investors in this area as well.

Some say this would drive the final stake through the heart of the nation's dying small-scale farming operations and ejidos. One way or the other, there is no more time for indecision, and the near future will decide the fate of Mexico's countryside and all those who work it.

Traviss Thomas is a Mexico City-based freelance writer.