A computable general equilibrium analysis of Mexico's agricultural policy reforms
Since the late 1980s, Mexico has liberalized its agricultural sector, moving from a system of price supports, producer subsidies and consumer subsidies to a less distorting scheme in which market forces play a greater role. Coinciding with these agrarian and food policy reforms, the government has i...
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| Format: | Artículo preliminar |
| Language: | Inglés |
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International Food Policy Research Institute
2001
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| Online Access: | https://hdl.handle.net/10568/158001 |
| _version_ | 1855531942768803840 |
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| author | Harris, Rebecca Lee |
| author_browse | Harris, Rebecca Lee |
| author_facet | Harris, Rebecca Lee |
| author_sort | Harris, Rebecca Lee |
| collection | Repository of Agricultural Research Outputs (CGSpace) |
| description | Since the late 1980s, Mexico has liberalized its agricultural sector, moving from a system of price supports, producer subsidies and consumer subsidies to a less distorting scheme in which market forces play a greater role. Coinciding with these agrarian and food policy reforms, the government has implemented the PROCAMPO system of direct payments to farmers. There is a general consensus that a direct payment program has the potential to be more efficient than a system of subsidies and supports. At the same time, there is widespread agreement that other policies need to be put in place to assure protection of the economically vulnerable segments of the population. Within this context, this paper uses a computable general equilibrium (CGE) model to analyze the regional, household and economy-wide effects of switching from the old system of price supports and subsidies to the new system of PROCAMPO payments. A CGE model of Mexico is constructed with four rural regions and one urban region and a high disaggregation of the agricultural and food sectors. It also includes 15 households, defined according to region and income level to permit a rich analysis of distribution effects. The initial experiment consists of removing the PROCAMPO payments from the base year (1996) and adding back the subsidy and support scheme as it existed in 1993, the year before PROCAMPO began. Then two policies are tested under an exchange rate depreciation to see how each policy regime reacts to adverse shocks. The simulations demonstrate that in a static situation, lump sum payments are preferred to the system of subsidies and price supports. In the event of a negative external shock, the simulations suggest that the old system performs better in terms of output and rural incomes. However, urban households are worse off, and their size in total population may make this an unattractive policy." |
| format | Artículo preliminar |
| id | CGSpace158001 |
| institution | CGIAR Consortium |
| language | Inglés |
| publishDate | 2001 |
| publishDateRange | 2001 |
| publishDateSort | 2001 |
| publisher | International Food Policy Research Institute |
| publisherStr | International Food Policy Research Institute |
| record_format | dspace |
| spelling | CGSpace1580012025-11-06T06:55:08Z A computable general equilibrium analysis of Mexico's agricultural policy reforms Harris, Rebecca Lee computable general equilibrium models agrarian reform food policies equilibrium theory models subsidies Since the late 1980s, Mexico has liberalized its agricultural sector, moving from a system of price supports, producer subsidies and consumer subsidies to a less distorting scheme in which market forces play a greater role. Coinciding with these agrarian and food policy reforms, the government has implemented the PROCAMPO system of direct payments to farmers. There is a general consensus that a direct payment program has the potential to be more efficient than a system of subsidies and supports. At the same time, there is widespread agreement that other policies need to be put in place to assure protection of the economically vulnerable segments of the population. Within this context, this paper uses a computable general equilibrium (CGE) model to analyze the regional, household and economy-wide effects of switching from the old system of price supports and subsidies to the new system of PROCAMPO payments. A CGE model of Mexico is constructed with four rural regions and one urban region and a high disaggregation of the agricultural and food sectors. It also includes 15 households, defined according to region and income level to permit a rich analysis of distribution effects. The initial experiment consists of removing the PROCAMPO payments from the base year (1996) and adding back the subsidy and support scheme as it existed in 1993, the year before PROCAMPO began. Then two policies are tested under an exchange rate depreciation to see how each policy regime reacts to adverse shocks. The simulations demonstrate that in a static situation, lump sum payments are preferred to the system of subsidies and price supports. In the event of a negative external shock, the simulations suggest that the old system performs better in terms of output and rural incomes. However, urban households are worse off, and their size in total population may make this an unattractive policy." 2001 2024-10-24T12:53:02Z 2024-10-24T12:53:02Z Working Paper https://hdl.handle.net/10568/158001 en Open Access application/pdf International Food Policy Research Institute Harris, Rebecca Lee. 2001. A computable general equilibrium analysis of Mexico's agricultural policy reforms. TMD Discussion Paper 65. https://hdl.handle.net/10568/158001 |
| spellingShingle | computable general equilibrium models agrarian reform food policies equilibrium theory models subsidies Harris, Rebecca Lee A computable general equilibrium analysis of Mexico's agricultural policy reforms |
| title | A computable general equilibrium analysis of Mexico's agricultural policy reforms |
| title_full | A computable general equilibrium analysis of Mexico's agricultural policy reforms |
| title_fullStr | A computable general equilibrium analysis of Mexico's agricultural policy reforms |
| title_full_unstemmed | A computable general equilibrium analysis of Mexico's agricultural policy reforms |
| title_short | A computable general equilibrium analysis of Mexico's agricultural policy reforms |
| title_sort | computable general equilibrium analysis of mexico s agricultural policy reforms |
| topic | computable general equilibrium models agrarian reform food policies equilibrium theory models subsidies |
| url | https://hdl.handle.net/10568/158001 |
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