SMALL-SCALE CORN AND LIVESTOCK MEXICAN FARMERS

Farm Management,

The Agriculture of Mexico After Ten Years of Nafta Implementation

The inclusion of the agrarian sector in the North American Foreign Trade Agreement (NAFTA) has created controversy since the beginning of negotiations. Mexico’s official vision has been that free trade, as well as agricultural reforms initiated in the country in the late eighties would transform the sector and increase national income; NAFTA opponents, on the other hand, claim that the Agreement has resulted in food dependency, massive rural migration and aggravated poverty. This paper present the main results of our econometric research on the true outcomes of nearly ten years into the NAFTA and around fifteen years of agrarian reforms, in terms of prices, trade and domestic agricultural production. Our findings suggest that the much-expected transformation of the Mexican agricultural sector has not occurred.

Impacts of Policy Reforms on Labor Migration From Rural Mexico to the United States

Using new survey data from Mexico, a dynamic econometric model is estimated to test the effect of policy changes on the flow of migrant labor from rural Mexico to the United States and test for differential effects of policy changes on male and female migration. We find that both IRCA and NAFTA reduced the share of rural Mexicans working in the United States. Increased U.S. border enforcement had the opposite effect. The impacts of these policy variables are small compared with those of macroeconomic variables. The influence of policy and macroeconomic variables is small compared with that of migration networks, as reflected in past migration by villagers to the United States. The effects of all of these variables on migration propensities differ, quantitatively and in some cases qualitatively, by gender.

El Tratado de Libre Comercio y la agricultura mexicana: un enfoque de equilibrio general aplicado.

This paper presents the main results obtained from an applied general equilibrium model of Mexico, which tries to identify the impact on agricultural production and consumption of a North American Free Trade Agreement. It also discusses the limit and potentialities of such models.

The effects of agricultural domestic and trade liberalization on food security: Lessons from Mexico

The paper is dedicated to examine the implications of agricultural trade liberalization within the North American Free Trade Agreement (NAFTA) for food security in Mexico. Since NAFTA implementation has almost 20 years of existence, the Mexican experience is relevant to draw lessons for other emerging economies in South East Asia involved in regional free trade agreements. Taking into consideration agricultural heterogeneity in Mexico at both production and regional levels, the main objective of the paper is to evaluate empirically the effect of NAFTA and domestic reforms on Mexico´s agricultural prices, production, trade and food security with special attention to Mexico´s non-competitive crops under NAFTA: grains and oilseeds and maize (the major food staple of Mexico). The study shows that some of the official expectations about the effects of NAFTA have not been realized: e.g. domestic production of maize has increased. In order to explain unexpected trends, I propose that particular reactions of subsistence household farmers to market-price changes and subsidies to commercial farmers producing staples explain unforeseen trends. With respect to food security during NAFTA, I find that per capita food consumption in Mexico has increased, partially at the expense of “import dependency” and “self-sufficiency”. However, what causes concern is that income inequality and poverty prevails, meaning that food security has not been granted for all Mexicans. I conclude that food production and security can increase in Mexico by “reforming the reforms” in a market oriented and globalized context by a long run effective policy design that favors the provision of public goods and that integrates social policies with productive policies for rural households with a competitive potential.agriculture, trade, food security, maize.

Regional Growth Linkages between Villages and Towns in Mexico: A Village-wide Modeling Perspective

This paper measures linkages between farm and non-farm activities in rural Mexico using a multiplier model based on social accounting matrices (SAMs) from survey data for five villages at differing income levels and in different agro-ecological and market zones. We extend this analysis to a "mini-region" that includes three villages and their larger administrative center. By applying a constrained SAM multiplier model, the paper examines how economic shocks in rural areas affect non-farm incomes in rural villages, in neighboring rural towns and in larger regional cities. Two exogenous shocks on non-farm activity are examined: pure income transfers; and increased agricultural productivity. Experiments assume a perfectly inelastic supply of agricultural goods, as in "semi inputoutput" and "economic base" models. Results show that most farm-nonfarm diversification is between villages and regional urban centers. The largest linkages are with markets outside, rather than within, villages: an experimental $100 increase in exogenous income is linked with a$2 increase in non-farm production but a $51 increase in demand for imported goods. This is evidence of "agriculture-demand-ledindustrialization" and explains growth of regional urban centers, which now accounts for most of Mexico's urban growth. Our analysis highlights the complex economic interactions between villages and towns in what probably is a mutually beneficial relationship broadly consistent with comparative advantage. Results suggest that increasing the income of village households can stimulate growth of the rural non-farm commercial activity in towns and small cities. Comparisons across villages suggest that investments in rural infrastructure can facilitate these commercial linkages between villages and towns.Rural and Regional Economics, Development Economics, Community/Rural/Urban Development,

Does Agricultural Liberalization Reduce Rural Welfare in Less Developed Countries? The Case of CAFTA

Conventional economic wisdom and findings from aggregate economy-wide models suggest that removing tariffs on agricultural imports is detrimental to rural welfare in less developed countries. This paper explores the rural welfare effects of own-country agricultural liberalization under CAFTA using a disaggregated rural economy-wide model that nests within it a series of micro agricultural household models. Our simulation findings suggest that CAFTA would reduce nominal incomes for nearly all rural household groups in El Salvador, Guatemala, Honduras and Nicaragua. However, compensating variations that take into account rural economy-wide adjustments to policy shocks are mostly negative, implying that current agricultural protection policies are disadvantageous for most rural household groups.International Relations/Trade,

Natural Resource Dependence in Rural Mexico

The relationship between poverty and natural resources is complex and the empirical evidence to date, mostly from studies of forest activities and poverty, is inconclusive. The main purpose of this paper is to empirically identify the effects of household characteristics and of inequality at the village level on natural resource extraction and dependence. To do so we use data from the Mexico National Rural Household Survey (ENHRUM). Our results show that in rural Mexico natural resource extraction is predominantly an activity carried out by poor households. The same is true for dependence. We also show that there are important differences across Mexico in terms of both participation and dependence on resource income. These differences are most evident when one compares the south and north of the country. We also show that when relatively rich households participate in resource extraction their natural resource income is considerably higher than that of the poor.Resource extraction, Dependence, Poverty, Mexico, Community/Rural/Urban Development, Environmental Economics and Policy, International Development,

Productive Efficiency in Agriculture: Corn Production in Mexico

Using a stochastic production frontier model and data for 2002 from a representative sample of Mexican rural households, in this paper we first study empirically whether or not small and medium farmers produce corn efficiently. The results show that corn production is inefficient, nation-wide and for both commercial and subsistence farmers. Our findings also show that this is even more so for subsistence producers and for the Center and the South-southeast regions of rural Mexico. In addition, we find that subsistence farmers use less prod uctive inputs (seeds and agrochemicals) with respect to commercial farmers. Based on these results, we then apply a regression model to inquire about the factors explaining inefficiency. We get that farmers facing natural disasters, that produce corn for subsistence using diverse seed varieties of the grain in plots with less than 1 hectare and indigenous, are more inefficient than other farmers. The results also indicate that households located in communities with marketing facilities and that have benefited from infrastructural investments, produce corn in a less inefficient manner. The detailed nature of the data used allows us to have results that differentiate rural regions as well as commercial and subsistence corn producers, and hence, to suggest focalized policies for rural development.Crop Production/Industries, Productivity Analysis,