In Sinaloa, at the end of September of each year, in an exercise of planning and ordering of agricultural markets, the members of the State Council for Sustainable Rural Development meet, with the aim of authorizing the planning of crops for the next agricultural cycle , in this case, autumn-winter 2021-2022.
According to the Sustainable Rural Development Law of the State of Sinaloa, the state council is chaired by the governor and, where appropriate, by the secretary of Agriculture and Livestock, and is made up of federal, state and municipal officials, as well as representatives of agricultural organizations of the social and private sector, irrigation modules, producers, state agro-industrial marketing organizations, agricultural production branches, rural development districts, educational and research institutions and non-governmental organizations.
Said crop planning is carried out mainly based on the amount of water available in the dams, for this, previously, the irrigation districts estimate the area to be sown for each crop, according to the volumes of water assigned to them by the National Commission. del Agua (Conagua).
The other three variables in agricultural planning are productive potential, market behavior, and government subsidies.
In the case of markets, what producers take into account are the results of the previous cycle and the expectation of sowing and prices for the next cycle.
For example, this year 72 thousand hectares of beans were planted, which is a normal area, so prices were acceptable and remained around 20 thousand pesos per ton, but this same price will encourage a greater area for the next cycle.
Otherwise and continuing with the cultivation of beans, in 2010 and 2014 146 thousand hectares and 122 thousand hectares were planted, respectively, an area greater than what the market demands, so prices collapsed and for the next year, the acreage dropped by half.
In the particular case of vegetables, being an export crop, the sowing area is basically determined by the expectations that each company has about the United States market and taking into account possible threats such as seasonality in the case bell pepper, cucumbers and zucchini. The area sown with vegetables can fluctuate between 40 and 50 thousand hectares per cycle.
Last year, due to the low availability of water in the dams, the members of the State Council for Sustainable Rural Development approved the reduction of crops with high demand for water, such as corn, so that the authorized area considering water rescue was 470 thousand hectares and 480 thousand hectares were planted, achieving a commercialization with excellent prices of around 6 thousand pesos per ton, which will pressure to sow more surface this year.
While 15,000 hectares of yellow corn were approved and only 3,000 hectares were planted. Of chickpea, 20 thousand hectares were approved and 40 thousand hectares were planted.
As can be seen, there is a difference between the approved crop planning and the one that is actually sown, and this is because it is inductive planning, that is, there is no formal mechanism that guarantees that the agreed area is sown for each cultivation, which does not allow the grain market to be fully ordered, because each producer is free to plant the crop of his choice, taking into account the restrictions on the allocation of water to his module by the corresponding district.
For the next autumn-winter 2021-2022 agricultural cycle, around 8.5 billion cubic meters of water are available in the Sinaloa dams, which represents 56.5 percent of the storage capacity, an area similar to the previous cycle.
In conclusion, the catchments for the remainder of September and the month of October will be very important to see if we are going to have to restrict crops with high water demand such as corn, in certain irrigation districts of the state and on the other hand We must be attentive to the development of the markets for basic grains and the behavior of economic variables such as the exchange rate to have a better idea of the possible behavior of market prices.