Mexico Approves Permanent Price Guarantees for Dairy and Agricultural Products

The Chamber of Deputies in Mexico has recently approved a significant reform to establish permanent price guarantee schemes for key agricultural products such as maize, beans, milk, and rice. This legislative change seeks to provide a stable income for primary producers by ensuring minimum purchase prices that cover production costs and offer a fair profit margin.

With 410 votes in favor, the reform modifies articles 79 and 80 of the Sustainable Rural Development Law. The legislation aims to constitutionally embed these price guarantee schemes, which have previously operated on a temporary basis, thus providing long-term economic security for agricultural producers.

For the dairy industry, the formalization of the price guarantee is a critical measure against market price volatility and competition from imports. By guaranteeing a minimum income for raw milk, dairy producers can plan investments in infrastructure and technology, enhancing herd efficiency and quality.

The implementation of this permanent scheme will largely fall to organizations such as Liconsa, Mexico's main social milk buyer. This requires Liconsa to strengthen its operational and financial capacity to absorb committed production volumes and ensure timely payments.

The reform is aligned with Mexico's broader policy of food self-sufficiency. By ensuring the profitability of domestic grain and milk production, it encourages increased planting and production, reducing dependence on imports and strengthening national food sovereignty.