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Agricultural and Fisheries Policies in Mexico

Recent Achievements, Continuing the Reform Agenda

image of Agricultural and Fisheries Policies in Mexico

This report analyses the effects of Mexico’s ambitious reforms to agricultural and fisheries policies since 1990 and makes recommendations for further reforms. The evaluation is based on criteria for good agricultural and fisheries policy as agreed to by OECD countries. Such criteria, if implemented, would support economically healthy sectors that contribute to the wider economy, respect natural resources and use inputs effectively without resorting to distorting subsidies.

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Inputs, natural resources and institutions

Many agricultural policies in Mexico focus on inputs to the sector, defined widely to encompass infrastructure, as well as finance, technology and energy. Some of these policies have already been addressed. The first part of Chapter 3 showed the size of transfers provided on the basis of input use, and the size and composition of support to the sector overall, including for research and technology. The second part of Chapter 3 assessed how subsidies tied to inputs are redistributed by interactions of agents in the market place – economic behaviour, such as farmers increasing the use of an input on the basis of which they receive a subsidy – as measured by welfare gains, showing that energy subsidies, for example, generate very little welfare for commercial farmers, none for subsistence farmers and do little or nothing for hired labourers. The preceding chapter showed that input subsidies oriented towards production are regressive with respect to income, so they do not tend to equalise income or alleviate poverty directly. Below, programmes supporting inputs are considered again, with a view to highlighting likely impacts, many of which are possibly unintended consequences, on input markets and on natural resources.

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