The impact of Transnational Corporations on cultivation patterns, food supply, agricultural technology and the income of Mexican producers. Agribusiness transnational corporations started to flock to Mexico early in the 1970’s, attracted, among other things, by its rapidly expanding domestic market, a policy which accepted foreign capital, stable exchange rates and free currency convertibility, the availability of certain raw materials and protected markets for industrial products. Agribusiness crops required by the transnational corporations replaced staple crops on some of the best land because guarantee prices for the latter were low and remained unchanged over long periods of time.
Whether or not economic development in the host country’s agriculture is encouraged seems to depend on the channels of supply used and on market structure and agricultural commodity pricing, which have a direct bearing on farmer’s income. Their ability to provide technical assistance to farmers usually gives transnational corporations a clear advantage over national firms in the same industry, since it facilitates the creation of supply networks and expand their markets. In Mexico, there seems to have been increase in skills, reflected in the effort of the transnational corporations.
Transnational corporations.
The first general conclusion confirms that the direct foreign investment trends do not emerge in a vacuum, as a whole series of work on the subject seem to imply.
Transnational corporations have had a very positive effect on agricultural supply levels and on the use of modern inputs by non-peasant farmers, mainly in areas that were already producing cash crops before their arrival in the country.
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