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Mexico Continues to Promote Avocado Production, but Environmental Concerns Persist.

Mexico reported a record harvest of avocados in 2017, with production approaching 2 million tons. The agriculture ministry (Secretaria de Agricultura, Ganaderia, Desarrollo Rural, Pesca y Alimentacion, SAGARPA) announced the statistics in early February, coinciding with one of the highest consumption periods in the US around the football championship known as the Super Bowl. According to SAGARPA, production has increased by an average of 5.7% annually between 2007 and 2017.

The increased production coincides with the expansion of planted area, which has grown by 6.5% annually over the past several years. In 1980, planted area amounted to only about 67,000 hectares, but increased to close to 95,000 ha in 2000 and more than 220,000 in 2017. With the rapid growth in planted area, SAGARPA projects total production could surpass 3 million tons by 2030.

Forests under threat

There is a significant downside to the rapid expansion of avocado groves: Conservation advocates warn that environmentally sensitive areas have been cleared to make way for the new plantings (SourceMex, Sept. 21, 2016).

Michoacan, which accounts for about 77% of all avocado production in Mexico, is the state under the greatest threat of environmental degradation. This is evident in the Monarch Butterfly Biosphere Reserve, where authorities recently discovered an unauthorized avocado grove in the heart of the protected area. To plant avocado trees, the perpetrators cleared about 37 ha of pines and other trees crucial to the survival of the wintering butterflies.

However, avocado producers said this was an isolated case. "We have been accused of deforestation, but the information that we have, which comes from the government statistics institute (Instituto Nacional de Estadistica y Geografia, INEGI) is that 85% to 90% of the surface planted with avocados was previously used for other agricultural activities," said Ramon Paz, a spokesperson for the industry group, Asociacion de Productores y Empacadores Exportadores de Aguacate (APEAM).

The APEAM official said his organization is intent on protecting, not destroying, forests. "We are making every effort to ensure that our product not be identified with the practice of deforestation," Paz said in an interview with the daily business newspaper El Financiero.

Paz noted that the avocado industry employs tens of thousands of people in Michoacan, and the majority of the product is grown by small-scale producers. According to the APEAM official, 80% of the 23,000 producers in the state cultivate groves of 5 ha or less.

"We are talking about 100,000 families who have found a dignified way to make a living," Paz said. "They are not migrating, and they no longer live in poverty. In fact, many are no longer susceptible to being recruited by criminal organizations."

Still, the concern about deforestation is real because of the lucrative nature of exporting the fruit to the US. "There is no scarcity of producers who are cutting forests to plant avocados," columnist Eduardo Torreblanca Jacques wrote in El Financiero. "The matter is so grave that the state government has sent out a warning that Michoacan could lose all its forested area within 10 years."

According to Torreblanca, state authorities are taking important steps to try to halt deforestation and the loss of other crops, including the destruction of unauthorized plantations.

Two other policies have also been implemented. One is an agreement with producers who abandoned other crops like corn to plant avocadoes to reincorporate about 30% of the previous crop. Producers are also asked to contribute a payment of 7 pesos (US$0.37) per ha to build up a fund to promote conservation and restore forests. Under this plan, avocados from the state would carry a label of "environmentally sustainable."

While Michoacan produced the lion's share of the avocados grown in Mexico in 2017, four other states also contributed significantly to the total output. Jalisco accounted for almost 9% of the total, Mexico state for slightly more than 5%, Nayarit for about 3%, and Morelos for just under 2%, according to SAGARPA statistics.

Focus remains on exports

Even though states like Michoacan are taking steps to halt environmental degradation, the push to increase exports continues, with efforts encouraged by SAGARPA and APEAM. The reason is that avocados remain a strong source of revenue for Mexico. According to statistics from several government entities, exports of avocados brought revenues of US$2.3 billion to Mexico in the 2015-2016 marketing year, with the total in 2016-2017 estimated at US$2.5 billion. Mexico accounted for about 45% of the avocados exported globally in 2017.

Mexico exported almost 895,000 tons of avocados in the 2016-2017 marketing year to 26 countries. The US was the primary destination, accounting

for 77% of the total. Japan and Canada followed with 7% each, while slightly less than 2% each went to Spain, France, and the Netherlands.

The growth in Mexico's avocado production has been accompanied by more aggressive marketing, particularly in the US and especially during the Super Bowl game. A large share of the shipments to the US occurs in January, as supermarkets and other stores stock up on avocados to sell to consumers to prepare guacamole for the Super Bowl.

Jaime Rodriguez Lopez, a SAGARPA delegate in Michoacan, estimated that shipments of avocados to the US for the 2018 Super Bowl were expected to approach 100,000 tons, up about 20% from the 83,000 tons shipped in 2017.

According to Rodriguez Lopez, the major beneficiaries from the strong US demand are avocado producers in the Michoacan communities of Uruapan, Tancitaro, Tacambaro, and Salvador Escalante.

While marketing campaigns continue to target the US and other traditional destinations, producers are constantly looking for new markets, Dubai and China among them. In September of 2017, the economic development institute (Instituto Nacional de Economia Social, INAES) reached an agreement with the government of Dubai to ship 18 tons of avocados from Nayarit state to the Middle Eastern country. The avocados will be supplied by the Nayarit-based private company La Casa del Aguacate, which has shipped Mexican avocados to Japan, Spain, Canada, the Netherlands, and Singapore.

Avocados from Jalisco are also finding new markets. In December 2017, Mexico and China announced that Chinese agricultural health officials had completed the inspection of avocado groves and packing facilities in Jalisco state, opening the door for exports to the Asian country. The avocados for shipment to China will come from groves located in the communities of Tonila, Tuxpan, and Zapotlan El Grande.

The Chinese inspectors also visited avocado groves and packers in Salvador Escalante, Tancitaro, and Uruapan in Michoacan state. The three locations could potentially supply product to China in the near future, SAGARPA officials said.
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Author:Navarro, Carlos
Publication:SourceMex Economic News & Analysis on Mexico
Geographic Code:1MEX
Date:Feb 28, 2018
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