Although Mexican agriculture is still regulated by nontariff barriers and domestic price controls, there has been some movement toward liberalization during the 1980's. There was less regulation of wheat and sesameseed in 1986 and 1987 than in previous years, for example. To simulate a gradual reduction in government intervention of the agricultural sector, a likely result of the current GATT negotiations, this report modeled a 50-percent reduction in Mexico's producer price subsidies over 5 years. Preliminary results indicate a substantial effect on the production and trade of corn and sorghum, but a relatively small effect on soybeans.