Agriculture. Agriculture presents the greatest problems for the Mexican economy. It is in the rural areas that most of the country's poor can be found. Only about 12 percent of the land can be farmed, and only about half of that is actually cultivated. Although more than 23 percent of the labor force is engaged in agriculture, it produces less than 8 percent of Mexico's gross domestic product (GDP), the total value of its goods and services produced in a year.
Subsistence agriculture is dominant in central and southern Mexico, where most farmers grow basic food crops of corn and beans on small plots of land. By contrast, in the north, large, modern irrigated farms produce specialty fruits and vegetables (especially strawberries, melons, cucumbers, and tomatoes), most of which are exported to the United States. Cotton, coffee, and sugarcane are also major commercial crops. Livestock are raised in the drier, nonirrigated areas.
In addition to the small family holdings and large commercial farms were the numerous ejidos, or communal farms. These first came into existence in the early 1900's, when the government broke up many of the haciendas, or great estates, and distributed parcels to landless farmworkers, who collectively worked the property. A reform in the early 1990's, designed to increase farm productivity, allowed ejido lands to be rented, divided, or jointly operated with corporations.
Manufacturing and Mining. Manufacturing employs only about 11 percent of the workforce, although it accounts for about 23 percent of Mexico's GDP. The chief manufactured products include motor vehicles, processed foods, iron and steel, chemicals (including petrochemicals), synthetic fibers, and electrical machinery.
Exports of minerals are a major source of income. Oil is the most important, providing about 30 percent of Mexico's total export earnings. More than 75 percent of the oil is exported to the United States, Mexico's principal trading partner. The oil industry is controlled by PEMEX (Petróleos Mexicanos), a government agency. Mexico has, in all, about 7 percent of the world's proven oil reserves. The largest fields are in the coastal waters and mainland of the Gulf of Mexico.
Tourism and Other Industries. Tourism and other service industries form the fastest-growing sector of the economy, contributing about half of the GDP. Tourism is, after oil exports, Mexico's largest source of foreign exchange. Some 6 million tourists come to Mexico each year.
Fishing is an industry of long standing. Shrimp and other shellfish, sardines, tuna, and pompano are the most valuable commercial catches. There is a small forestry industry, with mahogany and other tropical hardwoods, pine, and oak the main trees cut for lumber.