Adjustment in Mexico's Crop Sector to Some Policy Changes Implemented in the 1990's

This paper contains analysis of potential effects of changes in the structure of farm support resulting from policy change in Mexico undertaken over the period 1989 to 2002. The analysis is based on observed changes in the level and composition of support as measured for the PSE. This information is used together with a model of Mexico's crop sector, the PEM, to derive predictions of policy effects and their implications for adjustment. These predictions are then compared with data revealing trends in crop production, yields, farm employment and purchased input use. The paper concludes that policy changes were a significant contributory factor to crop sector adjustment, but that other factors must have been at play as well.

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