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.

This chapter provides an overview of the performance and the structural characteristics of the Mexican economy. It is divided into two main sections. The first section describes the performance of the Mexican economy over the past two decades and the current situation and prospects. While great progress has been made to achieve macroeconomic stability the rate of growth of gross domestic product (GDP) per capita remains insufficient for a rapid catching-up to the levels of other OECD members (Figure 1.1). The second section therefore discusses some framework conditions that are of key importance to raise growth potential of the Mexican economy and which would at the same time improve productivity in the agricultural and fisheries sectors.

Mexico’s agricultural sector is characterised by positive economic growth that is slower than the growth of the wider economy, great disparities in farm types from subsistence to highly commercialised, and inefficient use of some natural resources such as land and water. Economic development in rural areas of Mexico is a critical priority, but also an enduring challenge that has thwarted decades of efforts. Extreme poverty is mainly found in rural areas — a reflection that such areas are disconnected from commodity, financial and labour markets, as well as of low productivity and a lack of public services such as education

Since the beginning of the 1990s, Mexico has undertaken an important shift towards market-oriented policies. In particular, there were four major changes in agricultural policies: (1) steps towards commodity market liberalisation, (2) introduction of a new payment tied to historical entitlement to support income, (3) steps toward deregulation of inputs markets, with greater support for introducing and using technical improvements, and (4) reform to the land tenure system. Many agricultural policies, before and after the start of the reform period, are to spur economic development in rural areas and to limit migration on the one hand, and to increase productivity of individuals and of the sector on the other.

The OECD provides estimates of the support generated by agricultural policies. These data include estimates of the transfers from consumers and taxpayers to producers, from taxpayers to consumers, and from taxpayers to the overall sector that can be presented on an absolute or on a relative basis, depending on the purpose. The data can be disaggregated according to the basis of payments — whether linked to production, to land or to some other criterion — to understand better how the reforms have led to a reinstrumentation of support. This chapter presents these data for Mexico in order to assess the changing level and composition of support provided to producers, to consumers and to the sector overall during the reform period.

This chapter deals with agricultural policies and their impact on the evolution of the commodity markets in Mexico between 1995 and 2005. The aim is to assess how the different policy reforms undertaken in Mexico may have affected the markets of key agricultural products by identifying the contribution of policies to key market outcomes: production, consumption and trade. First, a brief overview of agricultural markets in Mexico is presented. Then, analysis based on simulations carried out with the Mexican module of the OECD AGLINK model is provided to show how policy changes have affected commodity markets.

There are several reasons to expect that agricultural policies have an impact on rural poverty in Mexico, and this view is widely held. First, the high incidence of poverty in rural areas and the fact that agriculture is a rural activity means that the two overlap in spatial terms. Consequently, many poor people are involved in agriculture, and a part of total agricultural output is provided by poor land-owners and poor labourers. Second, the historical role of the land tenure system in Mexico to redistribute wealth is closely connected to the agricultural sector for which land is a critical input: the process of dividing land holdings has an impact on agriculture, and the evolution of agriculture affects returns to land. These associations give rise to an expectation that agricultural policies can, should or do alleviate poverty in rural areas. Thus, while the focus of this study is on agricultural policies, and previous chapters have discussed their effects on the agricultural sector and commodity markets, in this chapter the effects of agricultural policies on rural poverty is explored in terms of the incidence of support.

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.

This study provides an assessment of the effects of agricultural policy reforms in Mexico since 1990 on the basis of the shared goals and policy principles of OECD Ministers. These goals and principles constitute a framework of policies that address a range of societal needs that can be met by the agricultural sector with the least cost and least unintended consequences. Typical unintended consequences of agricultural policies that fall short of these principles are distorted markets, economic inefficiencies, inequitable redistribution of incomes, and unsustainable use of resources. At the international level, unintended implications are distorted world markets and trade. The focus of this study on the agricultural sector, and more specifically on production agriculture, limits the scope of the conclusions and recommendations. Many further reforms in agricultural policy must be taken in tandem with improvements in policies of other sectors or nation-wide.

Bordered by the Pacific Ocean, the Gulf of Mexico and the Caribbean Sea, Mexico has a rich biological diversity in its marine areas and inland waters. Along Mexico's coastline, tropical and subtropical marine currents favour the existence of a wide variety of fishery resources, many of which command high commercial values. The regions in which marine fishing takes place in Mexico are characterised by a high diversity in terms of bio-geographical factors and social aspects, reflecting strong regional differences. Figure 9.1 provides an overview of the marine biodiversity in different areas of the marine environment of Mexico. The coastal lagoons, reservoirs and ponds of the inland areas support important wild capture and aquaculture production activities.

The Mexican fisheries sector has witnessed a number of significant institutional changes since 1990 which have deeply influenced both the state of fish resources as well as stakeholders’ incomes. This chapter reviews developments in Mexican fisheries management policy, focusing on institutional arrangements and fisheries policy formulation. The first part of the chapter reviews the evolution and present status of the institutional arrangements, while the second part provides an assessment of the key issues confronting the policy development process. A more detailed review of fisheries management arrangements in terms of the types of fisheries management instruments being used is provided in the following chapter.

As discussed in Chapter 10, there have been several changes in policy direction since that period with increasing emphasis on resource sustainability as well as industry development. Today, CONAPESCA has the responsibility for setting management measures, monitoring compliance with the measures, evaluating the success of the management, and proposing alternative strategies. This chapter reviews the effectiveness of fisheries management since 1990. This is done with reference to the types of management instruments that are used in wild capture fisheries, the current status of the key fish stocks, changes in stock status in recent years, and the enforcement of regulations. Key issues that are addressed are measures to control fishing effort (particularly with respect to the artisanal fleet), stock recovery planning, fisheries management plans, the choice of management instruments, and the adequacy of stock assessment and socio-economic analysis.

Aquaculture is a relatively recent industry in Mexico and is still considered to be at a development stage. However, there is a high degree of optimism about the prospects for growth in the sector, particularly for high value species such as shrimp. Mexico is wellendowed with coastal lagoons (156 710 km2), rivers and inland lakes, many of which are characterized by high productivity and are suitable for aquaculture. According to the National Fisheries Chart, a total of 64 species were cultured in Mexico in 2003 (Table 12.1).Most of these are freshwater fish, followed by freshwater and marine molluscs, although marine crustaceans (shrimp) is the main high value species.

According to OECD´s classification, rural conditions are found in communities or locations with population density lower than 150 habitants per square kilometre, and which are located more than an hour distance to the closest urban area. In Mexico, 34% of population lives in communities of less than 100 habitants/km2, and of this percentage, 91% live more than an hour distance from urban areas of at least 100 000 habitants. Ten percent of total population in Mexico lives more than four hours from the closest urban area (World Bank, 2004). In 2004, 61% of the Mexican population in extreme poverty lived in rural communities. These and many other statistics of population and social development show that rural development has to be a central public policy for all government programmes, both at federal and state levels.

This study provides an assessment of fisheries policy in Mexico since 1990 against the objectives set for the sector by the government of Mexico. These objectives have shifted significantly over the period from 1990 to the present as the governments and their policy priorities have changed. Meanwhile, the fundamental concern for policy development is that the fisheries sector be placed on a sustainable basis with respect to resource utilisation, generation of resource rent, economic profitability, and sustainable livelihoods for fishing communities. The reforms that have been instituted over the period have sought to address parts of these concerns, but from different perspectives and with different priorities underlying policy actions. The conclusions and recommendations presented in this chapter seek to provide some guidance to policy makers on the effectiveness of the current fisheries policy framework and the priorities for future policy developments.