How do proagro and nafta affect the maize market in a self-consumption region?: the case of the huasteca hidalguense

Abstract

The program to support agricultural areas (Proagro, from its Spanish acronym) and the commercial release agreed in the North American Free Trade Agreement (NAFTA) are the most important policies that affect the agricultural sector in Mexico. In order to measure the effects of Proagro and NAFTA on the maize (Zea mays L.) market in the Huasteca Hidalguense, a model of simultaneous equations was estimated, consisting of a supply equation, a demand equation, two price transmission equations and a balance identity; time series were used from 1994 to 2017. The results indicate that Proagro is an effective agricultural policy instrument, because it encourages the production of corn in the Huasteca Hidalguense; therefore, it is recommended to continue with this subsidy and even increase it so that the positive effect can be greater. Also, the effects of NAFTA were very limited, because the maize produced in the region is for self-consumption.