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Edtted by:

Jonathan Fox and LIbby HaIght


FIrst edItIon, 20l0
I3BN l-933549-86-6
CopyrIght C Woodrow WIlson InternutIonul Center lor 3cholurs
EdItors: Jonuthun Fox und LIbby HuIght
PublIshers:
Woodrow WIlson InternutIonul Center lor 3cholurs
Centro de InvestIgucIn y DocencIu EconmIcus
UnIversIty ol CulIlornIu, 3untu Cruz
ThIs book wus mude possIble thunks to support lrom the WIllIum und
Floru Hewlett FoundutIon.
The reseurch ndIngs und InterpretutIons expressed In thIs book ure
the exclusIve responsIbIlIty ol the uuthors.
The totul or purtIul reproductIon ol thIs work Is welcomed, cItIng the
source.
The work Is bIlInguul und lully uccessIble onlIne ut:
www.wIlsoncenter.org/MexIcunRurulDevelopment
www.wIlsoncenter.org/DesurrolloRurulMexIcuno
www.subsIdIospuruludesIguuldud.org
EdItorIul coordInutIon: AlIcIu AthI
DesIgn: DeIkon estudIo grco, 3.A. de C.V.
DesIgn -InterIor und prIntIng: CenIo y FIguru
PrIntIng: UrIbe Impresos
Cover photogruph: EnrIque Prez 3., ANEC
PrInted In MexIco.
TabIe ot contents

PRBIACB AND SVNTHBSIS OI RBSBARCH IINDINGSt IARM SUBSIDV


POLICV TRBNDS
Jonuthun Fox und LIbby HuIght
CHAPTBR 1
Mexcan agrcuIturaI goIcy: MuItgIe goaIs and conBctng nterests
Jonuthun Fox und LIbby HuIght
c l
WhIch ugrIculturul progrums reuch low-Income communItIes
:or o|- b-r..
c 2
AgrIculturul spendIng In IndIgenous munIcIpulItIes
:or o|- b-r..
c 3
Lurge puyments ol gruIn murketIng subsIdIes go to trunsnutIonul corporutIons
.||, ..|:
c 4
FollowIng NAFTA, tortIllu prIces dId not dIrectly reect InternutIonul corn prIces
r.. '.o
c 5
3elected recommendutIons lrom the Covernment's NutIonul CommIssIon lor the knowledge
und use ol bIodIversIty (CONABIO) study: OrIgIn und DIversIcutIon ol Corn: An AnulytIcul
RevIew"
NAbl
c 6
EvuluutIng EvuluutIons
,o.:|. ox .d .||, ..|:
CHAPTBR 2
AgrcuIturaI subsdy grograms: The ratonaIe and rratonaIty
ot a goorIy-desgned goIcy
MuurIcIo MerIno
CHAPTBR 3
AgrcuIturaI subsdes n Mexco: Who gets what7
John 3cott
c 7
Does Procumpo lImIt mIgrutIon to the U3
Ar-do J-J-|. .d ,o| 'o::
CHAPTBR 4
Why Iook a gR horse n the mouth7 Benecary gercegtons
ot the Procamgo grogram
MuurIcIo Muldonudo

c 8
The experIence ol WIxurIturI (HuIchol) IndIgenous communItIes In
JulIsco wIth Procumpo
.Jr..o .do.do
CHAPTBR S
Farm subsdy recgent Ists: A case ot cIear or ogague
transgarency7
LIbby HuIght und Jonuthun Fox
c 9
Non complIunce wIth Procumpo Rules ol OperutIon: IndIvIduuls
who receIved more thun l00,000 pesos (sprIng-summer 2009)
A. ,o._J.. J..
CHAPTBR 6
StakehoIder oversght ot ASBRCA's tarm subsdy gro-
grams
FelIpe HevIu de lu Juru
c l0
MonItorIng producers lrom ubove"
-.|- -v.. d- . ,.r.
CHAPTBR 7
1s decentraIzaton the answer7 Lessons trom !LIANZA
PARA EL #AMPO
BrIun Pulmer-RubIn
c ll
TrImmers vs. tructors
br.. .-rJ|.
CHAPTBR 8
The mgacts ot U.S. agrcuIturaI goIces on mexcan
groducers
TImothy A. WIse
CHAPTBR 9
The Iong-term vew: Comgarng the resuIt ot Mexco's
1991 and 2007 AgrcuIturaI Censuses
Hctor Robles Berlungu

NAFTA's trade openIng was wIdeIy expected to Iead MexIco to Increase Its corn Imports,
whIch wouId shIh agrIcuIture away from corn and dIspIace many hundreds of thousands
of smaII-scaIe corn producers. ThIs predIctIon framed MexIco's agrIcuIturaI subsIdy pro-
grams for the next l5 years; trade compensatIon and adustment programs spent at Ieast
S20 bIIIIon doIIars on dIrect transfer payments to farmers between l994 and 2009. As
expected, corn Imports Increased substantIaIIy, but corn Is stIII MexIco's most Important
crop - In terms of the voIume of productIon, the numbers of producers and the area har-
vested. Yet at the same tIme, many farmers have Ieh agrIcuIture. What happened ThIs
report focuses on how MexIco's post-NAFTA agrIcuIturaI trade compensatIon poIIcIes ac-
tuaIIy worked In practIce, wIth a focus on corn.
To understand these poIIcIes, thIs report brIngs together economIc, InstItutIonaI and poIItI-
caI anaIyses of these compensatory farm poIIcIes, over the Iong term. The dIverse studIes
that foIIow address three maIn sets of questIons: how were farm subsIdIes dIstrIbuted
How dId agrIcuIturaI poIIcIes and InstItutIons actuaIIy work In practIce To what degree
were the subsIdy programs transparent and accountabIe To focus on these questIons
In detaII, thIs report does not do ustIce to key reIated Issues, such as the extraordInary
dIversIty of MexIco's corn producers and markets, corn's cuIturaI and nutrItIonaI sIgnI-
cance, the specIc ImpIIcatIons of the recent spIke In InternatIonaI corn prIces, changes In
patterns of peasant organIzatIon, or the envIronmentaI chaIIenges InvoIved In protectIng
the bIodIversIty of MexIcan maIze. Because of thIs study's focus on corn and compensa-
tory subsIdy poIIcIes, anaIysIs of agrIcuIturaI trade patterns In generaI or government
poIIcIes toward agro-exports are aIso beyond Its scope. Yet Interested readers wIII nd
many references to dIverse studIes that do address these Issues.
Now that NAFTA's ImpIementatIon phase Is over, the future dIrectIon of MexIcan agrIcuI-
turaI poIIcy Is the subect of IncreasIng pubIIc debate. The goaI of thIs report Is to Inform
thIs dIscussIon - IncIudIng the roIe of U5 farm poIIcy. The studIes that foIIow reect the
IndIvIduaI vIew of each Independent anaIyst, and they draw on omcIaI data, program
evaIuatIons, IntervIews wIth poIIcy-makers, reIevant schoIarIy work, and eId research
wIth producers. The authors have dIverse poIIcy perspectIves, and therefore we dId not seek
consensus regardIng specIc poIIcy recommendatIons to draw from the anaIyses. The report
begIns wIth a short synthesIs of the maIn ndIngs, foIIowed by In-depth reports on the poII-
cy research - some of whIch are avaIIabIe In more extensIve versIons on-IIne at the proect's
bIIInguaI websIte: www.wIIsoncenter.org/MexIcanRuraIDeveIopment.
ThIs study was made possIbIe thanks to a grant from the CIobaI DeveIopment Program
of the WIIIIam and FIora HewIett FoundatIon, and reects coIIaboratIon between the
Woodrow WIIson InternatIonaI Center for 5choIars' MexIco InstItute, the UnIversIty of
CaIIfornIa, 5anta Cruz and researchers from CIDE, the Centro de InvestIgacIn y DocencIa
EconmIcas.

Jonathan Fox
LIbby HaIght
MexIco CIty and 5anta Cruz
Pretace

Synthess ot
research ndngs:
Farm subsdy goIcy trends
}cnathan Fc and Lbby Haght
ThIs study ol MexIco's lurm subsIdy progrums nds lour muIn sets ol conclusIons, regurdIng
lurm employment, trunspurency und uccountubIlIty, Procumpo, und other A3ERCA subsIdy
progrums.
Ftrst, Mextcan agrtcultural spendtng tncreased substanttally stnce 200l, almcst dcu-
bltng tn real terms by 2008. Yet farm emplcyment fell stgntcantly. Even In the l990s,
the shure ol MexIco's budget thut went to ugrIculture wus the hIghest In LutIn AmerIcu. DIrect
cush puyments to lurmers ulone totuled U3$20 bIllIon sInce l994 (In 2009 dollurs). Yet MexIco
stIll lost 20% ol Its lurm obs between l99l und 2007, wIth the totul number lullIng lrom l0.7
mIllIon In l99l to 8.6 mIllIon In 2007. A compurIson ol the l99l und 2007 ugrIculturul censuses
shows thut the totul obs lost In lumIly lurmIng lur outnumbered those creuted In export ugrI-
culture. AgrIculture's shnrc ol MexIco's obs overull ulso lell substuntIully, lrom 23% In l990 to
l3% In 2008. At the sume tIme, the rurnI shure ol MexIco's populutIon wus stIll ut 23.5% In
2008, huvIng declIned much more slowly. Il one upplIes the OECD's brouder crIterIu lor rurul-
Ity," us much us one thIrd ol the populutIon remuIns rurul. ThIs growIng gup between MexIco's
shrInkIng ugrIculturul employment und u persIstently lurge rurul populutIon reveuls the grow-
Ing degree to whIch mIllIons ol lumIlIes ure sepuruted, wIth the correspondIng unquuntIuble
socIul und culturul costs. The sharp ccntrast betveen Mextcc's tncreased publtc spendtng
tn the ccuntrystde and the fall tn agrtcultural emplcyment shcvs that the rural cb
crtsts ts nct due tc a lack cf publtc spendtng, but rather that rural emplcyment has
nct been a prtcrtty.
5eccnd, Mextcc's cpen gcvernment and acccuntabtltty refcrms have been unevenly
applted tn the agrtcultural sectcr. Furm progrums' vust reuch und complexIty pose muor
chullenges to stute cupucIty, but trunspurency und uccountubIlIty relorms huve the potentIul
to Improve publIc sector perlormunce. Yet MexIco's lurm subsIdy progrums' long lIsts ol some-
tImes InconsIstent gouls muxImIze the dIscretIon ol polIcymukers und the Inuence ol vested
Interests. In complIunce wIth MexIco's mInImum omcIul stundurds lor open government, the
two lurgest dIrect puyment progrums ut rst uppeur to be very trunspurent, wIth detuIled re-
cIpIent lIsts thut ure now uccessIble on-lIne. ThIs dutu Is sumcIently publIc to reveul thut muny
publIc servunts ure ulso lurm subsIdy recIpIents. On bulunce, however, the lIsts remuIn opuque.
InsumcIently precIse omcIul dutu leuds to substuntIul conlusIon regurdIng how muny uctuul
producers receIve puyments. MeunwhIle, MexIco's muny othcr subsIdy progrums lull short ol
even the uppeurunce ol trunspurency, IncludIng the puyments to lurge rms und the muor
ugrIculturul Investment progrums thut ure decentrulIzed to (und dIscretIonully currIed out by)
stute governments. Moreover, the luck ol consIstent producer regIstrutIon or unIed lIsts ol
subsIdy recIpIents ucross the dIerent progrums prevents unulysts lrom knowIng the totnI
umount ol lundIng thut uny specIc producer or prIvute rm uctuully receIves. In uddItIon,
ugrIculturul ugencIes luck eectIve publIc uccountubIlIty mechunIsms. Only the Procumpo pro-
grum hus u nomInul system ol locul smullholder udvocutes, but In pructIce they represent the
ugency to the producers ruther thun vIce versu. More generully, neIther stute nor lederul ugrI-
culturul ugencIes huve chosen to lorm bulunced purtnershIps wIth representutIve low-Income
producer orgunIzutIons to bolster publIc sector uccountubIlIty und perlormunce. The seccnd
ccnclustcn ts that vhtle Mextcc's largest farm substdy prcgrams appear tc be qutte
transparent, tn practtce they lack bcth transparency and acccuntabtltty.
Thtrd, the Prccampc prcgram, destgned tc ccmpensate lcsers frcm free trade and
extended unttl 20l2, ts by far the agrtcultural prcgram that reaches the mcst lcv-
tnccme prcducers. Procumpo Is stIll MexIco's lurgest sIngle ugrIculturul progrum, und It dIs-
burses unnuul puyments to upproxImutely 2.5 mIllIon recIpIents, prImurIly non-IrrIguted corn
growers wIth lewer thun 5 hectures. Procumpo Is cleurly the most pro-poor ol MexIco's nutIonul
lurm progrums. 3muller lurmers receIve modestly lurger umounts per-hecture, lollowIng u
slIdIng scule. Yet thIs does not meun thut the dIstrIbutIon ol Procumpo puyments Is progressIve,
becuuse It Is desIgned to puy more to those who huve more lund. There hus been no eectIve
Subsdzng 1neguaIty

cup on the umount ol unnuul puyments thut one IndIvIduul or compuny cun receIve. In uddItIon,
In pructIce, uccordIng to two dIerent nutIonul surveys, most ol the very poorest producers
(those wIth less thun 5 hectures) ure In pructIce completely cxcIuJcJ lrom Procumpo, In spIte ol
huvIng been umong the Intended benecIurIes. At the sume tIme, Procumpo prIvIleges better-
o IrrIguted producers wIth double unnuul puyments, even though the progrum wus desIgned
to be bused on lund-holdIngs ruther thun productIon. In uddItIon, Procumpo's shure ol the ugrI-
culturul budget hus been shrInkIng over tIme, us hus the purchusIng power ol Its per-hecture
puyments - In luvor ol less pro-poor lurm progrums. In uddItIon, the costs to MexIcun producers
ol domestIc corn prIces drIven down by below-cost Imports lrom the UnIted 3tutes were lurger
thun the uveruge per-hecture puyment under Procumpo. FInully, whIle Procumpo puyments
huve u modest Impuct on reducIng mIgrutIon, ulmost hull ol Procumpo lumIlIes huve sent mem-
bers to the U3. In summary, even Mextcc's mcst tnclustcnary, prc-pccr farm prcgram
fcr ccrn grcvers excludes much cf tts target pcpulattcn and benets better-c grcvers
dtsprcpcrttcnately.
Fcurth, almcst all cf Mextcc's many cther, less vell-kncvn farm substdy prcgrams
are even mcre sharply btased tc favcr medtum and large-scale prcducers. MexIco's
second und thIrd-lurgest ugrIculturul progrums subsIdIze murketIng support" und lurm pro-
ductIvIty Investments. Both prIvIlege northern stutes und ure desIgned to grunt dIscretIonury
uccess to well-o producers. Notubly, the thIrd lurgest progrum, Ingreso ObetIvo, subsIdIzes
gruIn productIon dIrectly - In spIte ol the government's omcIul lree murket dIscourse. ThIs
progrum oers puyments to u smull number ol lurger growers thut cover the dIerence between
InternutIonul und domestIc prIces lor gruIn sold. ThIs drIves down the crop prIce receIved by
othcr producers, thereby reInlorcIng the downwurd pressure ol subsIdIzed Imports on pro-
ducer prIces In generul. In uddItIon, substuntIul murketIng subsIdy puyments go dIrectly to
lurge trudIng und processIng rms, IncludIng trunsnutIonul corporutIons, lIke CurgIll und
Musecu. Overull, uccordIng to u recent World Bunk economIc unulysIs, ugrIculturul spendIng
Is so regressIve thut It cuncels out ubout hull the redIstrIbutIve Impuct ol rurul development
spendIng.. wIth more thun hull ol spendIng concentruted In the rIchest decIle." The extreme
ccncentrattcn cf ncn-Prccampc agrtcultural prcgrams amcng the already-prtvtleged
fev prcduces tncreased tnequaltty.
1

1
Mexcan
agrcuIturaI goIcy:
MuItgIe goaIs and
conBctng nterests
}cnathan Fc
l

5NIVERSITY OF #ALIFORNIA 3ANTA #RUZ
Lbby Haght
5NIVERSITY OF #ALIFORNIA 3ANTA #RUZ
)NTERNATIONAL "UDGET 0ARTNERSHIP
11hanks very much to ^leandro Ortlz for hls able asslstance wlth data analysls and maps, and to ohn Scott and ^ndrew
Selee for comments on earller verslons. 1ranslatlons from Spanlsh are the responslblllty of the authors.
1
Mexcan agrcuIturaI goIcy

The MexIcun government's lurm polIcy Is shurply bIused uguInst low-Income producers. 3enIor
ugrIculturul polIcymukers ure very explIcIt ubout gIvIng lurge growers prIorIty. They relegute
peusunt lurmers to socIul wellure progrums, ruther thun consIderIng them to be upproprIute
turgets lor economIc development. Indeed, MexIco's AgrIculture 3ecretury recommended to
congress thut hIs mInIstry should cut lundIng lor Its only progrum thut ostensIbly turgets
Investment support to low-Income producers becuuse other producers suggest thut we sepu-
rute those who ure economIcully vIuble lrom those who should be uddressed wIth more ol u
socIul wellure upprouch."
2

The Ideu thut ugrIculturul polIcy should gIve up on InvestIng In low-Income producers Is reIn-
lorced by economIsts' vIew thut MexIcun ugrIculture sector hus too much employment, consId-
erIng Its shure ol the economy. In the eurly l990s, NAFTA udvocutes recognIzed thut openIng
to Imports ol subsIdIzed U3 gruIn would dIspluce hundreds ol thousunds ol smull lurmers, who
were expected to nd obs In Industry or urbun servIces. As It turned out, MexIco's cItIes gener-
uted much less employment thun wus predIcted (UchItelle 2007). Insteud, much ol the rurul
populutIon thut economIsts consIdered to be surplus ended up workIng In the U3. MexIco's rute
ol outmIgrutIon Increused shurply between l99l und 2000, lrom un estImuted 337,000 to
530,000 unnuully (Pussell und 3uro 2005). Not coIncIdentully, MexIco's totul number ol ugrI-
culturul obs lell 20% between l99l und 2007, uccordIng to the ugrIculturul census (3cott, thIs
volume).
Nevertheless, the government spent substuntIully on the gruIn und oIlseed sector durIng thIs
perIod, IncludIng nt Icnst US$20 bIIon (In 2009 dollurs) In dIrect lurm subsIdy puyments sInce
l994.
3
In uddItIon, the ugrIculturul shure ol MexIco's budget wus the hIghest In LutIn AmerIcu
durIng the l990s, the most recent perIod lor whIch compurutIve dutu ure uvuIluble (Cmez
OlIver 2007). ThIs report usks: where dId these subsIdIes go The government's publIc Inlor-
mutIon uccess relorms muke It possIble to see the broud putterns. Yet It remuIns dImcult to
determIne who gets whut" wIth precIsIon becuuse ol the government's presentutIon ol the
omcIul lurm subsIdy dutu, whIch understutes the degree to whIch publIc resources ure concen-
truted In lew hunds (HuIght und Fox, thIs volume). Moreover, omcIul dutu sources ull Ignore
one ol the muIn problems wIth Procumpo, the lurm subsIdy progrum thut Is supposed to reuch
smullholders - the muorIty ol low-Income producers turn out to be excluded lrom Its modest
benets (see Tubles 2 und 3, below). At leust one puttern Is very cleur, however: the prIncIpul
crIterIu lor ullocutIng lurm subsIdIes huve not Included the promotIon ol ugrIculturul employ-
ment.
l. ACRICULTURAL AND RURAL DEVELOPMENT
POLICY CONTEXT
The dIsplucement ol MexIco's peusunt lurmers Is lur lrom new. PublIc spendIng In ugrIculture
hus long luvored medIum und lurge producers, und the polIcy relorms ol the l990s uppeur to
huve uccentuuted thIs underlyIng trend. MexIco's most sustuIned perIod ol pro-peusunt rurul
economIc polIcy wus durIng the Crdenus presIdency ol the l930s, when the ugrurIun relorm
redIstrIbuted u substuntIul shure ol commercIul lurmlunds und Invested In the productIve
cupucIty ol the new socIul sector. Aher the bulunce ol power wIthIn the rulIng purty shIhed,
however, ugrurIun relorm wus put on the buck burner. BegInnIng In the l940s, government
ugrIculturul spendIng wus concentruted In lurge Investments In IrrIgutIon Inlrustructure us
well us subsIdIzed credIt und Inputs, whIch prImurIly beneted commercIul lurms In northern
MexIco (BurkIn und 3urez l982). PublIc Investment In ugrIculturul reseurch und technology
wus ulso bIused uguInst smullholders - us In the well-known cuse ol MexIco's Creen Revolu-
tIon, whIch prIorItIzed IrrIguted wheut over ruInled corn (HewItt de Alcnturu l976). Meun-
whIle, MexIco's ruInled ugrIculture Is wIdely seen to huve subsIdIzed MexIco's rupId mId-cen-
tury urbunIzutIon und IndustrIulIzutIon through unluvoruble terms ol trude. DurIng whut wus
once culled the MexIcun MIrucle," the decudes-long growth ol the IndustrIul lubor lorce dId
Indeed encouruge workers to mIgrute to the cItIes, but thIs process wus reInlorced by u push
luctor us well - the exclusIon ol ruInled smullholders lrom the benets ol publIc Investment.
2 Secretary Franclsco Mayorga: Looklng at rural development, there we have a Subsecretarlat and l would say that today
lt's a blt superuous glven that there are so many other agencles have soclal programs such as the Mlnlstry of Soclal
0evelopment, the Natlonal lndlgenous 0evelopment Commlsslon, Popular Health [lnsurance], etc. ln addltlon, the producers
keep proposlng that we separate those who are economlcally vlable from those who should be addressed wlth more of a
soclal welfare approach. So my proposal, respectfully, and here obvlously you the leglslators, the 1reasury Mlnlstry and the
Presldent have the last word, ls to shrlnk the Rural 0evelopment Subsecretarlat to shlh resources to the areas that we see
as weaker." Comunlcacln Soclal - Cmara de Senadores (2009)
3 1hls total ls llmlted to the two largest dlrect farm payment programs, Procampo and lngreso Obetlvo. 1o calculate total
spendlng, lndlvldual annual payments over the hlstory of Procampo and lngreso Obetlvo were deated to thelr 2009 peso
value. 1helr 2009 value was then converted to dollars uslng the average exchange rate to Mexlcan peso to US dollar over
the year 2009. See Craph 1 below for more general agrlcultural budget trends.
Subsdzng 1neguaIty

By the eurly l970s, the MexIcun government's polItIcul legItImucy wus wIdely questIoned In
the countrysIde. PolIcy relorms begun to extend uccess to subsIdIzed credIt, Inputs, support
prIces und rurul Inlrustructurul Investments to more peusunt producers (CrIndle l977, Cor-
dIllo l988u, l988b). ThIs upprouch wus pursued most strutegIcully durIng the oIl boom, wIth
the MexIcun Food 3ystem (l980-l982). DurIng most ol thIs l97l-l982 perIod ol Increused
government rurul development spendIng, subsIdIes lor lurm credIt outweIghed Input und prIce
subsIdIes (CordIllo l990). But these pro-peusunt relorm InItIutIves only uttempted, wIth lIm-
Ited success, to Incorporute more smull lurmers Into the exIstIng system, whIch remuIned bI-
used In luvor ol well-o growers.
4

By the l980s und l990s, MexIco's ugrIculturul structure wus composed ol lour muIn groups -
l) u smull number ol well-endowed commercIul growers, who control most ol the IrrIguted
croplund, 2) u lurger segment ol smull commercIul lurmers, 3) u lurge muorIty ol subsIstence
und sub-subsIstence producers who must rely on o-lurm lumIly wuge lubor to complement
theIr tIny ruInled lundholdIngs, us well us 4) u lurge group ol lully lundless wuge luborers.
5

Most smull-scule ugrIculturul producers luck sumcIent uccess to credIt, Inputs, murkets und
ugro-ecologIcully upproprIute technology to be uble to Increuse theIr productIvIty und generute
more employment. Nevertheless, 63% ol MexIco's ugrIculturul employment Is stIll on lurms ol
less thun 5 hectures, uccordIng to the 2007 ugrIculturul census. Yet the lurge commercIul pro-
ducers, especIully those In the northern stutes, receIve u vustly dIsproportIonute shure ol gov-
ernment lurm subsIdIes, us shown In Mup l (see ulso 3cott, thIs volume).
Mag 1:
Cl0ClAPlIC C0NClNTlATI0N 0l AClICUlTUlAl SPlNLINC B SACAlPA, B STATl, 2006
MS lUlAl Pll CAPITA
* Progrems nclude Procempo, Progen, Merketng Support, Lesel y lurel Allence.
Source. Scott ,Creph 1S, ths volume)
4 For more detall, see Fox (1992). For a retrospectlve of the past 40 years of Mexlcan rural development pollcles, see
Hewltt de ^lcntara (2007).
5 Lstlmates of Mexlco's farmworker populatlon range from 3.2 to 3.6 mllllon (data from 1999-2001, ln Sallnas ^lvarez
2006: 48). ln part because so many farm-workers are also smallholders, few analysts attempt to estlmate how the agrlcul-
tural populatlon ls dlvlded, but Puyana and Romero suggest that ln 1993, 45% were producers and 55% were farm-workers
(2008: 25).
4.2
9.1
8.8
10.5
5
15
1.9
4.4
2.5
1.8
5.2
5
2.2
1.1
1.1
1.1
1.1
1.1
1.5
1.5
1.5
4
1.1
1
1
1
1.7
0.6
5
5.4
1.7
Ceographlc dlstrlbutlon of maor agrlcultural
support pollcles* admlnlstered by S^C^RP^.
(2006)
(pesos per caplta for rural populatlon)
$ 5,136 - $ 4,000
$ 3,999 - $ 3,000
$ 2,999 - $ 2,000
$ 1,999 - $ 1,000
$ 999 - $ 213
1
Mexcan agrcuIturaI goIcy

The polurIzutIon ol MexIcun ugrIculture between those wIth und wIthout IrrIgutIon Is u dIrect
result ol u long hIstory ol stute InterventIon. Covernment Inlrustructure polIcy determIned
whIch producers receIved IrrIgutIon In the rst pluce, und contInued mussIve subsIdIes lor
wuter use reproduced the InequulIty between those wIth und wIthout IrrIgutIon. Among ull ol
MexIco's lurm subsIdIes, wuter und electrIcIty ure umong the most concentruted In u lew
northern stutes, us shown In Mup 2. (World Bunk 2004: 83-84 und 3cott, thIs volume). PumpIng
lor IrrIgutIon Is the most heuvIly subsIdIzed use ol electrIcIty In MexIco, encourugIng hIghly
unsustuInuble use putterns.
6
In publIc debute over lurm polIcy, these mussIve IrrIgutIon subsI-
dIes ure rurely mentIoned -- In purt becuuse they do not uppeur explIcItly In the budget us cush
trunslers, whIch ure the muIn locus In thIs report.
Mag 2:
Cl0ClAPlIC C0NClNTlATI0N 0l IllICATI0N SPlNLINC, B STATl, 2006
MS lUlAl Pll CAPITA
Source. Scott ,Creph 16, ths volume)
ThIs Is the context lor MexIco's essentIully two truck upprouch to rurul development, In whIch
economIc polIcIes turget ugrIculturul spendIng muInly to lurger, IrrIguted growers. The vust
muorIty ol low Income producers, In contrust, ure uddressed Insteud wIth socIul polIcIes, In-
cludIng low quulIty busIc educutIon und errutIc heulth cure, us well us wellure puyments such
us the well-known OportunIdudes progrum (orIgInully luunched us Progresu In l997). MexIco's
pIoneerIng condItIonul cush trunsler (CCT) socIul progrum substuntIully ruIses the Incomes ol
5 mIllIon low-Income lumIlIes In relutIve terms (Levy und Rodrguez 2005). WIdely-emuluted
uround the world, MexIco's lurgely rurul CCT progrum Is desIgned to Invest In humun cupItul
by condItIonIng regulur cush puyments to benecIury lumIlIes on theIr Increused use ol publIc
educutIon und heulth servIces. These trunsler puyments Increuse lumIly Income by un uveruge
ol 30%. One ol OportunIdudes' muor InnovutIons Is thut lumIly uccess to the progrum Is de-
6 See ^vlla et al (2005). 1he world ank fnds that farmers pay on average 29% of the cost of electrlclty for lrrlgatlon,
addlng up to MX$ 8.0 bllllon ln 2006 alone (2009: 27). 1he report adds that poor farmers typlcally do not pump groundwa-
ter." 1hese negatlve envlronmental lmpacts are magnlfed by the government's large-scale subsldy of agrlcultural use of
dlesel fuel.
17.8
4.4
5
2.7
1.4
4.2
7.1
1.5
2.5
5.2
2.1
6.6
0.7
1.9
1
0.6
0.6
0.9
0.8
5.4
5.5
5.6
1.9
0.5
4.1
1
0.9
2.7
7.5
5.8
0.9
Ceographlcal dlstrlbutlon of publlc resources
for subsldlzlng lrrlgatlon. lncludlng resources
ln lnfrastructure for lrrlgatlon. (2004)
(pesos per caplta for rural populatlon)
$ 1,642 - $ 701
$ 700 - $ 501
$ 500 - $ 301
$ 300 - $ 201
$ 200 - $ 101
$ 100 - $ 0
Subsdzng 1neguaIty

termIned by technIcul crIterIu, through u meuns test ruther thun beIng subect to polItIcul dIs-
cretIon -- though thIs upprouch wus threutened In the lull ol 2009 by congressIonul eorts to
turn progrum munugement over to governors (e.g., Duz Cuyeros 2009)
The CCT strutegy does not uttempt to encouruge ob creutIon. Insteud, Its goul Is to lIh lumIlIes
out ol poverty by dIrect cush trunslers In the short term und by ImprovIng theIr chIldren's ju-
turc ob prospects In the longer term. However, thIs upprouch hus not turned Into the mugIc
bullet" lor poverty ullevIutIon thut some huve cluImed. Recent revIews ol the evIdence by both
the InternutIonul Food PolIcy Reseurch InstItute

und the World Bunk nd thut whIle CCT so-
cIul progrums Increuse the demund lor publIc servIces, the persIstent under-supply ol quulIty,
uccessIble heulth cure und educutIon remuIns u muor construInt on the strutegy's potentIul
humun cupItul Impuct.
7

MexIco's prImury untI-poverty strutegy Is cleurly progressIve In terms ol who benets, espe-
cIully when compured to most other socIul progrums - OportunIdudes puyments ure chunneled
prImurIly to the poorest. Yet OportunIdudes' Impuct on InequulIty Is undermIned by lurm sub-
sIdy polIcy, whIch both uccentuutes InequulIty through Its bIus towurds lurger growers und
excludes most ol the poorest smullholder gruIn producers, us 3cott's chupter shows.
8
Indeed, u
recent World Bunk publIc expendIture revIew lound ugrIculturul spendIng Is so regressIve thut
It cuncels out ubout hull the redIstrIbutIve Impuct ol rurul development spendIng" (2009b: x).
WhIle MexIco's untI-poverty strutegy hus relIed prImurIly on Income trunsler progrums sInce
the lute l990s, the recent globul economIc downturn hus reveuled the lImIted reuch ol the
nutIonul sulety net. Between 2006 und 2008, the shure ol the rurul populutIon consIdered In
ucute poverty - those who eurn less thun enough to buy u mInImul dIet - Increused lrom
24.5% to 3l.2% - und thIs wus bcjorc the worst ol the current economIc crIsIs wus lelt. The
shure ol the urbun populutIon In ucute poverty ulso grew lrom 7.5% to l0.6%. In other words,
ucute poverty Is three tImes us extensIve In rurul us In urbun ureus, In relutIve terms. Aher
severul yeurs ol Improvement In the omcIul IndIcutors ol ucute poverty, us ol 2008 It wus ul-
most us wIdespreud us It wus In l992.
9
The lederul government's socIul polIcy evuluutIon ugency (Conevul) estImuted the sIze ol the
uddItIonul shure ol the populutIon thut would huve lullen below the ucute poverty lIne, hud It
not been lor Its sulety net progrums (muInly In rurul ureus). WhIle u totul ol l9.5 mIllIon
MexIcuns were lound to be In ucute poverty In 2008, Conevul lound thut un uddItIonul 2.2 mIl-
lIon would huve oIned them In the ubsence ol lederul socIul progrums. ThIs estImute IndIcutes
thut MexIco's sulety net progrums kept only ten percent ol the poorest populutIon ubove the
ucute poverty lIne.
l0

2. FROM 5UPPORT PRICE5 TO DIRECT
FARM PAYMENT5
In the context ol persIstent rurul poverty, MexIco's post-NAFTA lurm subsIdy progrums luced
the chullenge ol uttemptIng to meet u long lIst ol gouls - some reluted to compensutIng com-
mercIul producers' expected losses due to the trude openIng, whIle other gouls Involved creut-
Ing subsIdIzed ulternutIves to the government's longstundIng polIcy ol oerIng to buy gruIn
dIrectly lrom producers. The new lurm subsIdy progrums lollowed the logIc ohen proposed by
lree trude udvocutes. AccordIng to muInstreum economIc theory, whIle trude lIberulIzutIon
produces more wInners thun losers, trude udustment cun be mude luIr by progrums thut com-
pensute the losers. ThIs prIncIple Is more ohen udvocuted In theory thun uctuully currIed out
In pructIce. In the cuse ol MexIcun lurm subsIdIes, however, the government JJ muke u sub-
stuntIul, sustuIned Investment In compensutory puyments durIng the l5 yeurs lollowIng NAF-
TA. ThIs report wIll uddress who got compensuted, und how. Other studIes In thIs report lol-
low the money" lrom dIerent perspectIves, but rst, uddItIonul polIcy context Is necessury.
7 See ^dato and Hoddlnott (forthcomlng) and Flszbeln and Schady (2009). For the vast omclal evaluatlon llterature, see
www.oportunldades.gob.mx.
8 For an analysls of lessons from Oportunldades for Procampo, see wlnters and 0avls (2009). Note the strlklng gender
dlerences between the two programs, wlth Oportunldades targetlng mothers and Procampo reachlng prlmarlly male
landholders.
9 lf one conslders hlgher poverty llnes, then the composltlon of the populatlon consldered to be ln poverty becomes
conslderably more urban (Coneval 2009, oltvlnlk and 0amlan 2003). Conslder, however, that the urban-rural comparlsons
are based on omclal poverty llnes that are conslderably hlgher for urban than for rural areas, whlch may understate rural
poverty levels.
10 See Coneval (2009). Note that thls omclal assessment ls llmlted to lncome, and does not take lnto account Opor-
tunldades' lntended longer-term lmpacts on poverty through health and educatlonal lmprovements, whlch ln turn depend
on access to adequate publlc servlces. So far, Oportunldades evaluatlons lndlcate slgnlfcant health lmprovements and
lncreased schoollng, but llmlted educatlonal lmpact (^dato and Hoddlnott, forthcomlng).
1
Mexcan agrcuIturaI goIcy

Though MexIco's ugrIculturul spendIng hus hud Its ebbs und ows over the yeurs (see Cruph l,
below), the government hus spent vust sums on subsIdy puyments to lurmers -- IncludIng ut
leust U3$20 bIllIon In dIrect puyments to lurmers sInce l994, us noted ubove. But where dId
they go The World Bunk's recent revIew ol MexIcun ugrIculturul spendIng concludes thut
more thun hull goes to the rIchest l0% ol producers (2009b: x, 62, see ulso 3cott, thIs volume).
Indeed, the World Bunk even lound thut lurm subsIdIes huve been tIlted upwurds so shurply
thut they uctuully muke rurul InequulIty worsc (2009b: 62).
Gragh 1
ANNUAl AClICUlTUll MINISTl SPlNLINC 19912009
llP0lTlL Pl0ClAMMATIC BULClT, IN MIllI0NS 0l 200S PlS0S
Source. Agrculture Mnstry lnjormcs Jc Lnborcs, 19S92000, consulted et the Ssteme de Informecn Agroelmentere
y Pesquere ,SIAP) of the Secretere de Agrculture end the lnjormc Jc In Cucntn PbIcn FcJcrnI ,www.epertedos.
hecende.gob.mx, consulted AugustLecember, 2009).
The restructurIng ol stute InterventIon In ugrIculture hud begun well belore NAFTA. The l982
debt crIsIs wus lollowed by u wuve ol deregulutIon und prIvutIzutIon, IncludIng the dIsmun-
tlIng ol the MexIcun government's gruIn trudIng ugency, Conusupo. ThIs stute enterprIse hud
long pluyed un Importunt polItIcul role In munugIng potentIul conIct between dIerent Inter-
ests, IntervenIng throughout the productIon-consumptIon chuIn lor stuple loods.
ll
From the
productIon sIde, the ugency both oered un omcIul purchuse prIce lor busIc gruIns und wus the
IntermedIury between domestIc und InternutIonul murkets, ostensIbly oerIng protectIon
lrom the vugurIes ol InternutIonul murket swIngs, subsIdIzed competItIon und the potentIul
rIsk thut exportIng countrIes mIght use lood us u weupon In InternutIonul relutIons. Yet the
benets lrom support prIces went prImurIly to those wIth enough lurmlund to produce mur-
ketuble surpluses, whIle u muorIty ol MexIco's lundholders ure uctuully subsIstence or sub-
subsIstence producers - us hus long been the cuse.
l2
Indeed, lew recognIzed ut the tIme thut
even muny murket-orIented smullholders lucked uccess to the support prIces, In pructIce.
l3

Moreover, support prIces ulso treuted unequully endowed producers equully, by oerIng them the
sume prIce per ton, regurdless ol wIdely vuryIng productIon und murketIng costs. ThIs meunt
hIgher prots per ton lor producers wIth better uccess to trunsportutIon, credIt und murketIng
lucIlItIes.
l4
Nevertheless, In spIte ol these construInts on support prIces' socIul Impuct, they
hud become u hIgh-prole symbol ol the government's commItment to the peusunt economy.
In l989, the government wIthdrew lrom oerIng support prIces und opened up InternutIonul
trude In most gruIns und oIlseeds, wIth encourugement lrom the World Bunk und well belore
NAFTA.
l5
Corn und beuns were the exceptIon. They were sumcIently sensItIve lor the govern-
11 On the role of Conasupo, see ^ppendlnl (1992), arkln and Surez (1982), Mltchell (2001), Ochoa (2000) and nez-
Naude (2003), among others. On the hlstory of food pollcy ln Mexlco, see also ^ustln and Lsteva (1987), Fox (1992) and
Hewltt de ^lcntara (1994).
12 For typologles of producers derlved from agrlcultural census data, see Par (1977) and CLP^L (1982). 1he more recent
farm censuses have not been subected to comparably comprehenslve analysls. For the most recent data, see Robles er-
langa (thls volume) and Scott (thls volume).
13 One of the few large-scale surveys that addressed the questlon of producer access to omclal support prlces was car-
rled out by the Central ank's ^grlcultural lnvestment Fund, FlR^. ^mong FlR^ borrowers - already relatlvely prlvlleged
farmers, by defnltlon - only 46% reported that they recelved the government's ostenslbly guaranteed" producer prlce or
lts equlvalent for thelr corn and bean crops (Patron Cuerra and Fuentes Navarro 1982, clted ln Fox 1992: 118).
14 1he support prlce's lnherent blas ln favor of larger producers was sllghtly oset by a complementary program that
subsldlzed smallholders' cost of brlnglng thelr crops to government purchaslng centers, known as P^CL (Fox 1992).
15 1he world ank role lncluded a $300 mllllon agrlcultural structural adustment loan ln 1988, followed by a $400 mllllon
91
^SLRC^ (con Procampo) Procampo ^llanza para el campo Sagarpa
92 93 94 95 96 97 98 99 00 01 02 03 04 05 06 07 08 09
0
70,000
50,000
60,000
40,000
30,000
20,000
10,000
Subsdzng 1neguaIty

ment to contInue to oer support prIces -- though purchusIng polIcy lor corn then luvored
lurge IrrIguted growers In northern MexIco (De Itu 2003). Yet the government's ubrupt wIth-
druwul lrom regulutIng most gruIn und oIlseed murkets leh u lurge gup thut the prIvute sector
wus not reudy to ll. InuentIul producers lound themselves unuble to nd buyers lor theIr
crops. Under thIs pressure, the government stepped In uguIn to provIde order" to nutIonul
gruIn murkets. The MurketIng 3upport und 3ervIces Agency (A3ERCA In 3punIsh) wus creuted
In l99l, rst to help commercIul producers who hud dImculty murketIng theIr crops, und then
to dIstrIbute compensutory puyments to gruIn producers In generul, IncludIng the low-Income
subsIstence producers who hud not been reuched by the prevIous support prIce polIcy.
A3ERCA wus tusked wIth uddressIng two very dIerent turget populutIons: u relutIvely smull
number ol geogruphIcully concentruted mIddle und lurger producers whose gruIn leeds MexI-
co's urbun populutIon, und u much lurger number ol hIghly dIspersed peusunt producers.
A3ERCA pursued two muIn purullel polIcIes to deul wIth these two groups. The most well-
known progrum Is the Progrum ol DIrect Puyments to the CountrysIde. Procumpo, us It Is
known In 3punIsh, oered u dIrect trunsler puyment thut wus omcIully open to ull producers
who hud been growIng gruIn durIng the perIod ImmedIutely precedIng the l993-l994 regIs-
trutIon process. Procumpo puyments ure ullocuted on u per hecture busIs. In 200l, the per-
hecture puyments were mude slIghtly hIghly lor producers wIth less thun 5 hectures.
A long-term overvIew ol lederul ugrIculturul spendIng on gruIn, IncludIng both Conusupo's lust
severul yeurs ol lederul budget und A3ERCA, shows thut whIle the lorm ol stute InterventIon
chunged, the overull umount spent unnuully sInce 2000 wus compuruble to l988 levels (see
Cruph 3, below). A3ERCA repluced Conusupo us the MexIcun stute's prIncIpul gruIn polIcy In-
strument. In the context ol the dIsmuntlIng ol Conusupo, Procumpo's InItIul omcIul rutIonule
Involved un equIty urgument, Insolur us It promIsed to reuch the most low-Income producers
to u much lurger degree thun the crop support prIce: A lundumentul uspect ol the progrum Is
the InclusIon ol more thun 2 mIllIon subsIstence producers who were ut the murgIn ol prevI-
ous support systems" (3ARH l993: 5). Procumpo's muny other gouls Included: IncreusIng com-
petItIveness, IncreusIng rurul Incomes, modernIzIng murketIng systems, encourugIng shIhs to
hIgher vulue crops, encourugIng economIc certuInty, delIverIng subsIdIes to smullholders pre-
vIously excluded by the prevIous crop support prIce system, und promotIng conservutIon ol
soIl, wuter und lorests. Yet Procumpo's combInutIon ol multIple gouls mude It dImcult to
uchIeve uny ol them consIstently, us detuIled In MerIno's study In thIs report.
l6
These multIple
gouls reected u polItIcul compromIse ut the progrum's loundIng, us dIscussed below.
At the sume tIme, both lurger und smuller-scule producers were ulso beIng uected by u wIde
runge ol other muor chunges In the puttern ol stute InterventIon In the gruIn economy, Includ-
Ing u shurp reductIon In the provIsIon ol subsIdIzed lurm credIt und other Inputs, us well us the
l992 constItutIonul relorm thut encouruged the IndIvIduul tItlIng und the possIble sule ol
ugrurIun relorm lunds (whIch uccounted lor hull ol MexIco's lurmlund).
l7
3Ince both thIs muor
ugrurIun polIcy chunge und the regIstrutIon ol producers lor Procumpo were currIed out ut the
sume tIme, those smullholders who leured thut the new IndIvIduul lund tItlIng cumpuIgn
threutened theIr holdIngs were ulso wury ol regIsterIng theIr lunds lor Procumpo. ThIs skeptI-
cIsm contrIbuted to u long-term problem ol under-coveruge ol smullholder uccess to the Pro-
cumpo progrum. Indeed, lurm subsIdy polIcy wus desIgned to encouruge cjJntnros to tItle
theIr lunds, und Procumpo omcIuls gruduully Increused theIr InsIstence thut enrolled producers
present theIr IndIvIduul lund tItles us u condItIon lor contInuIng to receIve Procumpo puyments.
l8

DurIng Procumpo's desIgn phuse, polIcymukers overcume eorts by ugrIbusIness Interests to
buse puyments on the pust volume ol productIon, und Insteud bused them on lund In cultIvu-
tIon - both lor equIty reusons und In order to present the progrum us decoupled" lrom produc-
tIon decIsIons.
l9
ThIs decIsIon promIsed to benet smullholders, though ut the sume tIme, the
progrum desIgn would stIll benet lurger growers much more thun smuller lurmers, sImply
becuuse those wIth more lund would receIve hIgher overull puyments. AccordIng to Custuvo
CordIllo, under-secretury ol ugrIculture when Procumpo wus desIgned:
The orIgInul proposul lor decoupled subsIdIes lor MexIco Included u cup ol 20 hectures, thInkIng
thut In thIs runge the support would reuch upproxImutely 90% ol corn producers. ThIs proposul
loan ln 1991. Soon thereaher, ln 1994, the world ank provlded an addltlonal $85 mllllon loan to lnvest ln small-scale,
ralnfed graln producers, who faced the posslblllty of extenslve unemployment and sharply falllng wages," accordlng to the
omclal loan document (world ank 1994: 6). Soon aherwards, however, the ^grlculture Mlnlstry declded lnstead to fold the
proect lnto lts conventlonal lnvestment program, whlch focused on better-o producers (Fox 2007a: 156).
16 On the tenslons between multlple goals, see also CL0RSS^ (2007) and Shwenteslus Rlndermann (et al 2007). For
example, Sadoulet, 0e anvry and 0avls argue that lf Procampo were prlmarlly lntended to compensate for trade llberallza-
tlon, then lt should have made payments to producers based on amounts of prevlous sales, whereas lf lt were prlmarlly an
antl-poverty program, lt should have been targeted to the poor (2001: 1054).
17 On the 1990s changes ln land reform pollcy, see, among others, Cornellus and Myhre (1998), Fox (1994), Randall (1996)
and 0e anvry, Sadoulet and Cordlllo (1997).
18 ^s Maldonado's study fnds, at least ln the Slerra Norte de Puebla, thls admlnlstratlve tlghtenlng led to a steady ellml-
natlon of lndlgenous smallholders from the program (thls volume).
19 On early pollcy debates over per volume vs. per land payments, see Lpez Presa (2002) and Merlno (thls volume).
1
Mexcan agrcuIturaI goIcy

wus strongly reected In l989-90 by ull those who were benetIng most lrom the support prIces...
The progrum's luck ol u cup on the sIze ol lundholdIngs thut could be covered, or uny condItIon-
ulItIes In terms ol sustuInuble development, wus enough to muIntuIn the InequulIty In uccess to
publIc resources thut the support prIce system hud produced." (CordIllo 2009).
Procumpo's extru double puyment lor IrrIguted producers reected u sImIlur chunge lrom the
orIgInul polIcy proposul.
20
By the tIme the uctuul progrum mude Its wuy through the polIcy
process, Procumpo lucked un eectIve cup on the umount ol lunds thut un IndIvIduul could
receIve. Its InItIul operutIng rules, publIshed In l996, stuted thut puyments hud to be lImIted
to l00 hectures ol IrrIguted lund, or up to 200 hectures ol ruInled lund (relerrIng ulso to con-
stItutIonul lImIts on lundholdIngs lollowIng the ugrurIun relorm), leuvIng open the possIbIlIty
ol puyments exceedIng these lImIts In the cuse ol lund rentul (3ugurpu l996). Aher uutono-
mous peusunt orgunIzutIons guIned some representutIon In Congress, the 2002 Budget Decree
reIteruted the orIgInul puyment cups. In pructIce, however, these puyment ceIlIngs were rurely
enlorced. In 2009, u new polIcy debute begun to consIder the possIbIlIty ol uctuully begInnIng
to cup Procumpo puyments, und new rules ol operutIon estublIshed thut puyments were to
now be lImIted to M$l00,000 per lurmer per hurvest cycle (therelore twIce us hIgh unnuully
lor IrrIguted producers, or upproxImutely U3$l6,600). In spIte ol thIs hIstory ol Ineectuul
cups, Il the progrum hud munuged to uctuully reuch ull elIgIble smullholders, und Il the umounts
ol per hecture puyments were lurge enough, Procumpo stIll promIsed to be more equItuble
thun the prevIous support prIce strutegy. The degree to whIch Procumpo wus uble to meet
these gouls turned out to depend on Its InstItutIonul desIgn und cupucIty, us well us u cleur
polItIcul bIus In the InItIul regIstrutIon process, us wIll be seen below. [EdItor's note: by August,
20l0, u revIew ol the sprIng-summer puy ment lIsts IndIcuted thut the Procumpo puyments cups
were beIng respected, though the publIc dutu does not reveul how much some producers muy
huve been receIvIng lrom other progrums].
3. PROCAMPO POLITIC5: COMPROMI5E5 AND
CON5TITUENCIE5
Procumpo met Its poItcnI gouls. Its broud coveruge ol MexIco's dIverse urruy ol gruIn produc-
ers guve the progrum u lurge constItuency. As lormer polIcymuker CordIllo reculled, whut wus
needed wus u exIble Instrument to udupt to the dIversIty ol rurul producers" (2009). Insolur
us the progrum wus desIgned In l993 to buer the expected socIul und polItIcul costs ol NAF-
TA, It Is remurkuble thut MexIcun lurmers dId not luunch u lurge-scule nutIonul protest uguInst
the trude openIng untIl eurly 2003. Peusunt orgunIzutIons lInked to the rulIng purty, notubly
the NutIonul Peusunt ConlederutIon (CNC), becume stukeholders In the government's com-
bIned trude openIng/compensutIon puyment strutegy becuuse they were uble to Inuence the
decIsIons regurdIng whIch producers were Included In the Procumpo ut Its loundIng, us MerI-
no's study shows (thIs volume). In other words, In l993-l994 the government wus uble to use
clIentelIst dIstrIbutIon ol lurm puyments to oset potentIul opposItIon to the restructurIng ol
ugrIculturul polIcy.
Muny yeurs luter, Procumpo retuIns substuntIul support lrom producer orgunIzutIons und pol-
Icymukers, outlustIng Its orIgInul mundute to cover the l5 yeur perIod ol NAFTA Implementu-
tIon. In 2007, MexIco's presIdent unnounced thut Procumpo would contInue lor 5 yeurs (through
20l2), essentIully postponIng the polIcy debute over the progrum's luture untIl the next ud-
mInIstrutIon. The governors' ussocIutIon ulso strongly bucked the stutus quo In lurm subsIdy
polIcy (CONACO 2008). Both ussocIutIons ol lurge growers und some ol the lurgest polItIcul
purty-umlIuted orgunIzutIons ol smull producers, lIke the CNC, closed runks uguInst chunges In
subsIdy polIcy und In luvor ol IncreusIng the resources under governors' dIscretIonul control
(Prez 2009u, 2009b). In contrust, the uutonomous, non-purtIsun wIng ol the peusunt move-
ment culled lor lurm subsIdy polIcy relorms thut would luvor lower-Income producers, Includ-
Ing lull coveruge ol smullholders, more ol u slIdIng scule ol puyments to luvor smullholders,
und IncentIves lor envIronmentully sustuInuble ugrIculturul pructIces (CONOC 2009u, 2009b).
Procumpo hus ulso long receIved sIgnIcunt support lrom multIluterul lunders, whose louns
combIne economIc support wIth polItIcul buckIng.
2l
The Inter-AmerIcun Development Bunk
weIghed In rst, lounIng U3$500 mIllIon lor Procumpo In 200l (IDB 2006). In 2009, the IDB
renewed Its support wIth the rst U3$750 mIllIon trunche ol u U3$2.5 bIllIon credIt lIne, und
the World Bunk oIned In wIth prepurutIons lor u U3$449 mIllIon loun plunned lor 20l0. These
recent louns were uccompunIed by u serIes ol studIes und recommendutIons thut conden-
20 Personal emall communlcatlon, Custavo Cordlllo, Feb 21, 2010
21 lndeed, the world ank's omclal ratlonale for lts proposed 2010 loan to support Procampo makes expllclt reference to
the program's long-term polltlcal loglc: the Procampo program was very successful ln meetlng lts prlmary obectlve, whlch
was to glve the Mexlcan government a polltlcally sustalnable way to accede to the N^F1^ and undertake a far-reachlng
reform of agrlcultural support pollcy" (world ank 2009b: 5).
Subsdzng 1neguaIty

tIully proposed to the government u much more pro-poor orIentutIon to ugrIculturul spendIng
(e.g., Tuylor, Ynez-Nuude y Conzlez 2007).
22
Indeed, the IDB loun Is explIcItly lImIted to cov-
erIng only Procumpo puyments up to ten hectures per producer, recognIzIng thut the progrum
Is Intended to Improve the condItIons ol low Income producers" (IDB 2009: 7). MexIcun ugrIcul-
turul polIcymukers uccepted the loun, but not the ImplIcIt recommendutIon ol u polIcy chunge
In luvor ol u puyment cup. The World Bunk hus tuken u sImIlurly subtle upprouch, proposIng
to support Procumpo whIle notIng equIty concerns - though expressed dIerently. AccordIng
to the publIc summury ol the World Bunk's proposed new loun lor Procumpo, there Is room lor
Improvement" In Procumpo's equIty Impucts, und the loun proposul recommends thut the pro-
grum's rules ol operutIon ensure IndIgenous peoples benet to the muxImum extent leusIble
lrom the proposed proect" (World Bunk 2009b: 7).
23
[EdItor's note: ThIs World Bunk plunned
loun wus cuncelled In August, 20l0].
WhIle Procumpo's orIgInul desIgn reected u compromIse between technIcul und Interest group
logIcs, Its luunch In pructIce wus ulso murked by electorul polItIcIzutIon. The InItIul regIstru-
tIon ol producers wus currIed out durIng the l993-l994 presIdentIul cumpuIgn, punctuuted by
the Jun. l, l994 ZuputIstu rebellIon. As MerIno's study In thIs volume documents, begInnIng In
l993, Procumpo's loundIng dIrector, Jos OctuvIo Lpez Presu, experIenced strong pressures
lrom both peusunt orgunIzutIons lInked to the rulIng purty und 3Inulou ugrIbusIness to nego-
tIute" whIch producers would get to end up on the benecIury rosters. The dIrector reported
thut he uttempted to redIrect the negotIutIons uwuy lrom MexIco CIty, to the locul dIstrIct
level, whIle ulso holdIng electIons lor 45,000 locul producer representutIves, lrom 85,000 vIl-
luges, who would purtIcIpute In the desIgn ol the progrum lIsts und provIde communIty-bused
oversIght. ConIct over control over the subsIdy regIstrutIon process proved costly. Lpez Presu
reculled thut ut leust ll ol those elected locul leuders were kIlled durIng thIs perIod. As the
l994 presIdentIul electIon cumpuIgn heuted up, pressures to polItIcIze uccess to the progrum
Increused. In response, In the nul weeks ol the cumpuIgn, Lpez Presu omcIully remInded ull
ol the progrum's eld stu ol theIr oblIgutIons us publIc servunts, notIng thut uny uttempt ut
polItIcul munIpulutIon ol the progrum should be reported ImmedIutely. In response, the 3ecre-
tury ol AgrIculture hud hIm red wIthIn 24 hours (see MerIno, thIs volume).
Cleurly, senIor lederul omcIuls colluboruted wIth rulIng purty producer orgunIzutIons ut Pro-
cumpo's loundIng to Inuence whIch producers hud uccess to the progrum. Moreover, thIs
mussIve extensIon ol polItIcIzed uccess to lurm subsIdIes took pluce ust belore u presIdentIul
electIon In whIch the secret bullot wus not guurunteed, especIully lor rurul cItIzens (Fox 2007u:
ll2-l37). 3Ince uccess to the progrum wus strIctly closed to new purtIcIpunts soon uher Its
loundIng, thIs polItIcIzutIon ut Procumpo's orIgIns muy huve bIused the substuntIul under-
coveruge ol the elIgIble smullholder populutIon documented below.
3ubsequent electIons Involved less overt polItIcIzutIon ol uccess, but electorul use ol Procumpo
persIsted nevertheless. In the 2000 electIons, the most relIuble nutIonul survey lound thut
Procumpo recIpIents were more exposed to vote-buyIng eorts thun non-recIpIents (ApurIcIo
und Corrochuno 2005: 385). In the run-up to the 2006 presIdentIul electIons, voter surveys
currIed out by the CIvIc AllIunce, the non-purtIsun publIc Interest group, In regIons consIdered
vulneruble to electorul ubuses lound thut 7.8% ol those surveyed reported thut uccess to Pro-
cumpo puyments wus subect to polItIcul condItIons (couccIn") - less thun stute government
socIul progrums but more thun OportunIdudes (Almudu MIreles 2007, cIted In Fox und HuIght
2009: 82). ThIs cItIzen perceptIon ol condItIoned uccess wus encouruged by Procumpo's proce-
durul requIrement thut regIstered producers must stIll verIly theIr elIgIbIlIty lor theIr puyment
every yeur wIth government uuthorItIes. Remurkubly, however, u lurge-scule UnIted NutIons-
sponsored publIc opInIon survey ut the tIme ol the 2006 electIons lound thut 69.5% ol Pro-
cumpo recIpIents suw the puyment us u rIght ruther thun us u luvor, whIle only l.8% reported
huvIng been pressured to vote lor u specIc purty (PNUD 2007: l79, l89).
24
22 1he publlc lnterest group Fundar submltted an lnformatlon request to the 1reasury Mlnlstry for thls study. 1reasury de-
clared the document confdentlal and Fundar fled a complalnt (recurso") to the lF^l. 1he lF^l commlssloners ruled ln favor
of the requester and dlrected the 1reasury Mlnlstry to release the document, whlch was sent ln hard copy. See resolutlon
0000600045109 @ www.lfal.org.mx (zoom).
23 ecause Procampo was not deslgned wlth any speclal provlslons to target or asslst lndlgenous farmers, the world
ank's publlc summary of lts drah loan proposal goes on to speclfy that lt wlll be deslgned to lnclude a soclal assessment
whlch wlll have the followlng obectlves: (l) to assess the extent to whlch the proect can beneft lndlgenous populatlon, (ll)
to ldentlfy barrlers that may be preventlng lndlgenous peoples to recelve benefts, and (lll) to propose an actlon plan to ad-
dress ldentlfed barrlers and propose alternatlves to ensure thelr partlclpatlon. ^ soclal assessment wlll be prepared uslng
as much as posslble recent studles and focuslng on the states where the maorlty of the lndlgenous populatlon llve, con-
sultatlon wlll be conducted at natlonal level wlth partlclpatlon of lndlgenous peoples' leaders and other key stakeholders."
(world ank 2009a: 7). 1hls proposal follows the world ank's lndlgenous peoples pollcy mandatlng lnformed partlclpatlon,
whlch has rarely been applled to lts Mexlco proects (Fox 2003, 2007a). ^s of uly, 2010, lt was not clear whether the Mexl-
can government would accept the world ank's proposed soclal assessment.
24 Lven thls small percentage stlll reects an absolute number of voters that ls not far from the margln of dlerence be-
tween the two leadlng presldentlal candldates ln the 2006 electlons (dependlng on the actual number of Procampo reclpl-
ents and the survey's margln of error). More generally, conservatlve estlmates of the share of the 2006 electorate subect
to vlolatlons of the freedom to vote through manlpulatlon of soclal programs, known as coaccln," confrmed that the slze
of the vulnerable populatlon was larger than the margln of dlerence ln the electlon (Fox and Halght 2009).
1
Mexcan agrcuIturaI goIcy

4. PROCAMPO'5 COVERACE: BOTH REACHINC


AND MI55INC THE POOR
Procumpo Is the most progressIve ol MexIco's nutIonul gruIn support progrums, reuchIng more
low-Income lurmers thun uny other. The progrum reuched ut leust l.6 mIllIon low Income pro-
ducers In 2005, those wIth less thun 5 hecutures (CEA 2006: 84), ol u totul ol upproxImutely
2.5 mIllIon unnuul puyments (dependIng on the yeur und the source). As Tuble l shows, uc-
cordIng to un unulysIs ol 200l Procumpo dutu, 6l.5% ol purtIcIpunts hud less thun 2 hectures,
und 86% ol purtIcIpunts hud less thun 5 hectures (Ruscn, Hernndez und 3uluzur 2006: l22).
Ol the totul umount ol lund covered by Procumpo, 2l.6% belonged to producers wIth less thun
2 hectures und 47.5% wus In holdIngs ol less thun 5 hectures. In uddItIon, uccordIng to the
most comprehensIve omcIul evuluutIon, u slIght muorIty ol purtIcIputIng producers Inter-
vIewed dId not produce hurvests lurge enough to sell u surplus on the murket (CEA 2006: 97).
Procumpo cleurly reuches subsIstence und sub-subsIstence producers to u sIgnIcunt degree.
TabIe 1
LISTlIBUTI0N 0l Pl0CAMP0 PAlTICIPANTS B SIl 0l lANLl0lLINCS 2001
3Ize ol lundhold-
Ing
Number ol regIs-
tered plots by sIze
ol lundholdIng
% ol totul regIs-
tered plots
Totul number ol
hectures regIs-
tered
% ol totul hect-
ures covered by
Procumpo
Averuge sIze ol
lundholdIng
Less thun l hu 7l4,366 l7.43 379,594 2.78 0.53
l+ to 2 hu l,805,l9l 44.04 2,56l,4l6 l8.79 l.42
2+ to 3 hu 499,047 l2.l7 l,39l,436 l0.2l 2.79
3+ to 5 hu 5l0,889 l2.46 2,l42,026 l5.7l 4.l9
5+ to l0 hu 395,77l 9.65 3,006,2l4 22.05 7.60
l0+ to 20 hu l22,545 2.99 l,850,997 l3.58 l5.l0
20+ to 30 hu 23,550 0.57 599,254 4.40 25.45
30+ to 40 hu 9,767 0.24 354,964 2.60 36.34
40+ to 50 hu 7,046 0.l7 33l,97l 2.44 47.ll
More thun 50 hu ll,069 0.27 l,0l5,06l 7.45 9l.70
TOTAL 4,099,24l l00.0 l3,632,933 l00.0 3.33
Source. lescn, lernndez end Selezer ,2006. 122) usng omcel Procempo dete for 2001.
ThIs dutu does not speuk to the Issue ol how comprchcnsvc the progrum's coveruge Is, how-
ever. Both government polIcy evuluutIons und Independent unulysts tend to ussume thut the
Procumpo progrum uctuully reuches the vust muorIty ol MexIco's gruIn producers, sInce they
were presumubly elIgIble to sIgn up when the progrum begun. Yet the progrum's omcIul evulu-
utIons do not uttempt to meusure the degree to whIch Procumpo reuches Its turget populutIon:
gruIn producers. Procumpo contInues to exclude u muorIty ol MexIco's lowest-Income lurmers,
those wIth less thun 2 hectures ol lund - lor reusons thut ure not cleur. 3cott's unulysIs ol
OportunIdudes' 2004 household survey dutu nds thut In low-Income rurul loculItIes, Pro-
cumpo only reuches 7% ol those wIth less thun l hecture, l9% ol those wIth l-2 hectures, und
39% ol those wIth 2-5 hectures (see Tuble 2). These survey results ulso show thut the Opor-
tunIdudes progrum reuches u much lurger - though stIll very Incomplete - shure ol low-In-
come, ohen IndIgenous lurmers. To contextuulIze thIs ndIng, Tuble 3 shows the results ol u
dIerent survey, bused on u representutIve nutIonul sumple ol gruIn producers In generul,
whIch lound thut only 49.9% ol them receIved Procumpo puyments In 2007. Independently,
these two surveys show thut Procumpo excludes the poorest ol the poor. ThIs puttern Is ren-
dered InvIsIble by the omcIul progrum dutu.
25
ThIs Is u sIgnIcunt exumple ol how the luck ol
omcIul trunspurency In progrum ImplementutIon undermInes Inlormed publIc dIscussIon ol
how to Improve Procumpo's socIul Impuct.
25 1he 2007 agrlcultural census apparently dld not address thls lssue, at least not ln the results that had been publlcly
released as of the end of the 2009. For analysls of fndlngs and some of the llmltatlons of the census, see Robles erlanga
(thls volume).
Subsdzng 1neguaIty

TabIe 2
Pl0LUCll ACClSS T0 Pl0CAMP0 IN lUlAl l0CAlITIlS C0\lllL B 0P0lTUNILALlS, B
SIl 0l lANLl0lLINC +
<l HA l-2 HA 2-5 HA 6-l0 HA ll-20 HA 20+ HA
Households thut
receIve Procumpo
puyments
7 l9 39 47 44 42
Households thut re-
ceIve OportunIdudes
puyments
46 58 56 5l 35 38
Households reported
us IndIgenous
3l 33 l7 6 6 8
Source. Scott, ths volume ,Teble S), besed on lNCASll, 2004 ,e household survey of loceltes covered by 0portundedes,
n /S4,/94). 0f the households surveyed, 2S+ were lendholders, end 2S+ of them were n Procempo.
Procumpo's rules do Include some meusures thut tIlt benets slIghtly to low-Income produc-
ers. In 200l, Procumpo revIsed Its puyments lor producers wIth less thun u sIngle hecture,
roundIng them up to the equIvulent ol one lull hecture. In 2003, Procumpo ulso begun to puy
u modest per-hecture bonus lor producers wIth less thun 5 hectures. By 2006, 60% ol the lund
covered by Procumpo wus reportedly In plots ol under 5 hectures, und therelore receIved thIs
prelerentIul rute." (CEA 2006:79).
26
Procumpo ulso creuted u cupItulIzutIon optIon, whIch cre-
uted un ulternutIve to Interest-beurIng credIt by ullowIng smullholders - prImurIly those wIth
less thun ve hectures - to receIve ve yeurs ol puyments In udvunce, bused on u government-
upproved proposul lor u productIve proect. FollowIng the 2009 modIcutIons to the rules ol
operutIon, In uddItIon to cuppIng puyments ut M$l00,000 per hurvest cycle, smuller ruInled
lurmers wIth less thun 5 hectures now receIve M$l,300 (uround U3$l00) per hecture - un
umount thut recovered the orIgInul l994 vulue ol Procumpo puyments lor the rst tIme sInce
the progrum's luunch. Overull, Procumpo puyments uccounted lor 32% ol the Income ol those
low Income producers who hud uccess to the progrum.
27
TabIe 3
Pl0CAMP0 C0\llACl 0l ClAIN lAlMllS, 200/
Furmers who receIved Procumpo In 2007 (ull crops) 44.8%
CruIn lurmers who receIved Procumpo In 2007 * 49.9%
Lowest Income tercIle 2007 43.2%
MIddle Income tercIle 2007 49.0%
HIghest Income tercIle 2007 57.6%
CruIn lurmers In 2007 who reported receIvIng Procumpo In 2002 52.7%
* MuIze, wheut, burley, rye, or sorghum
Source. lncueste Neconel e logeres lureles de Mexco, or lNllUM, 200S. N 1,/S2 households n 14 Mexcen stetes.
The lNllUM semple wes desgned by INlCI to be representetve of loceltes wth between S00 end 2,S00 nhebtents,
representng S0+ of the populeton omcelly consdered to be rurel. Thenks very much to Prof. ld Teylor of the Unversty
of Celforne, Levs for sherng the dete end to ustn legen for the dete enelyss
The most comprehensIve omcIul evuluutIon recognIzed thut Procumpo wus not desIgned to
be, nor cun It be, un Instrument lor redIstrIbutIng resources In the ugrIculturul sector" (CEA
2006: 76). However, thIs cluIm Is bused on the evuluutors' ImplIcIt ussumptIon thut the pro-
grum's purumeters ure xed. Indeed, the evuluutIon does not uddress the Issue ol puyment cups
lor lurge growers. 3Imple chunges In the progrum's rules ol operutIon could In luct permIt the
progrum to be sIgnIcuntly redIstrIbutIve, Il puyments were lImIted to once per yeur (elImInut-
Ing prIvIleges lor IrrIguted producers), Il producers wIth less thun ve hectures receIved u sub-
stuntIully lurger per-hecture puyment (u slIdIng scule prIncIple ulreudy estublIshed), und Il
puyments were cupped ut u certuIn smuller number ol hectures (us ImplIed by the IDB's recent
$2.5 bIllIon credIt lIne lor Procumpo). As ol mId-20l0, however, polIcymukers hud stIll ruled
out u more redIstrIbutIve upprouch to Procumpo becuuse ol whut the World Bunk's recent ug-
rIculturul budget revIew culls u crucIul polItIcul-economy Issue. the pressure ol rent-seekers
und Interest groups to Inuence progrums und theIr desIgn" (2009b: 77). MerIno's study relers
to thIs sume dynumIc us the cupture und dIversIon ol publIc resources" (thIs volume).
26 Note that thls fndlng ls slgnlfcantly hlgher than Rascn, Hernndez and Salazar's fndlngs (2006), an lssue that may
be related to systematlc problems wlth double-countlng of producers ln the Procampo roster, as detalled ln Halght and Fox
(thls volume).
27 See CL^ 2006: 202. 1hls report also has a detalled hlstory of changes ln rules of operatlon.
1
Mexcan agrcuIturaI goIcy

Nevertheless, Procumpo Is stIll the most progressIve ol MexIco's lurge-scule lurm subsIdy pro-
grums, Insolur us It reuches low Income producers to the greutest degree (see 3cott, thIs vol-
ume). Compured to MexIco's other ugrIculturul progrums, Procumpo's geogruphIc coveruge Is
ulso less bIused towurd northern stutes. Robles Berlungu's dutu unulysIs In Box l shows thut
most productIon-orIented ugrIculturul spendIng does not reuch low-Income munIcIpulItIes. In
Box 2 he shows whut thIs bIus meuns lor IndIgenous munIcIpulItIes." Mup 3 shows the geo-
gruphIc dIstrIbutIon ol ull Procumpo progrum puyments In 2008. Mup 4 shows the geogruphIc
dIstrIbutIon ol the TrudItIonul Procumpo" progrum In 2008, whIle Mup 5 shows the geogruph-
Ic dIstrIbutIon ol the ubove-mentIoned Procumpo CupItulIzutIon progrum, whose greuter
southern locus Is consIstent wIth Its estublIshed obectIve ol turgetIng smuller lurmers.
Mag 3
Cl0ClAPlIC LISTlIBUTI0N 0l All Pl0CAMP0 Pl0ClAM PAMlNTS
PllClNTACl B STATl, 200S
Source. lleboreted wth dete from www.subsdoselcempo.org.mx besed on the omcel dete from the rolls of recpents of
ASllCA.
0.9
5.2
5.6
7.2
7.9
7.5
0.2
4.5
1.5
0.7
7
0.5
5.8
0.9
2.6
4.6
4.8
0.6
7.5
0.7
1
1.2
1.4
4.4
0.5
5.2
5.1
5.2
0
1.1
0.9
5.6
Ceographlc dlstrlbutlon of payments made
by PROC^MPO. (2008)
(as percentage of total dlstrlbutlon)
10% - 6.1%
6.0% - 4.1%
4.0% - 2.1%
2.0% - 1.1%
1.0% - 0.0%
Subsdzng 1neguaIty

Mag 4
Cl0ClAPlIC LISTlIBUTI0N 0l TlALITI0NAl Pl0CAMP0' Pl0ClAM PAMlNTS, 200S
PllClNTACl B STATl
Source. lleboreted wth dete from www.subsdoselcempo.org.mx besed on the omcel dete from the rolls of recpents of
ASllCA.
Mag 5
Cl0ClAPlIC LISTlIBUTI0N 0l Pl0CAMP0 CAPITAlIlS' Pl0ClAM PAMlNTS, 200S
PllClNTACl B STATl
Source. lleboreted wth dete from www.subsdoselcempo.org.mx besed on the omcel dete from the rolls of recpents of
ASllCA.
1
5.1
6.2
7.6
7.6
8.5
0.1
5.2
1.6
0.6
7.8
0.5
6.5
1.1
2.8
5.8
4.2
0.5
5.1
0.5
0.9
0.9
1.5
4.7
0.6
2.4
5.7
4.1
0
1.2
1
5.5
Ceographlc dlstrlbutlon of payments made by
PROC^MPO 1radlclonal. (2008)
(as percentage of total dlstrlbutlon)
10% - 6.1%
6.0% - 4.1%
4.0% - 2.1%
2.0% - 1.1%
1.0% - 0.0%
0.5
5.5
2.6
5.6
9.5
5.5
1
1.4
1.1
1.2
5.2
0.4
5
0.2
1.9
8.9
8
2.2
18.1
1.6
1.7
2.7
0.9
2.7
0.4
7.5
2.4
0.4
0
0.2
0.5
5.9
Ceographlc dlstrlbutlon of payments made by
PROC^MPO Capltallza. (2008)
(as percentage of total dlstrlbutlon )
+10% - 6.1%
6.0% - 4.1%
4.0% - 2.1%
2.0% - 1.1%
1.0% - 0.0%
1
Mexcan agrcuIturaI goIcy

BCX l:
WHICH ACRICULTURAL PROCRAM5 REACH
LOWINCOME COMMUNITIE5
28
Hctcr Rcbles Berlanga (UAM-Xcchtmtlcc)
Only some ol MexIco's muny rurul development progrums turget low-Income munIcI-
pulItIes. The MexIcun congress' rurul development reseurch center hus developed un ex-
tensIve dutubuse thut oers u geogruphIc und gender breukdown ol the dIstrIbutIon ol
the 2007 rurul budget, whIch Includes socIul, Inlrustructurul, nuncIul, lubor-reluted und
envIronmentul spendIng us well us economIc Investments (denomInuted competItIve-
ness"), though It does not Include heulth und educutIon. ThIs eort wus InspIred both by
the 3ustuInuble Rurul Development Luw's eort to encouruge coordInutIon ucross pro-
grums und by the 6l.5% growth In overull rurul spendIng between 2000 und 2009.
ThIs dutu cleurly shows thut MexIco's poorest munIcIpulItIes receIve only u modest shure
ol publIc lunds lor ugrIculture - only 6.9% ol 2007 spendIng wus ullocuted to those wIth
very hIgh" murgInulIty levels, wIth unother 30.6% goIng to those consIdered ol hIgh"
murgInulIty, though together they uccounted lor 57.5% ol the productIon unIts receIvIng
support. In spIte ol 3ugurpu's long lIst ol progrums, only Procumpo, Progun (trunsler puy-
ments lor lIvestock owners) und Coee 3upport huve u sIgnIcunt presence In low-In-
come munIcIpulItIes. Moreover, the per cupItu umounts spent by these progrums tend to
be too smull to permIt the cupItulIzutIon ol productIon unIts. The ugrIculturul progrums
thut ure consIdered to promote competItIveness" tend to be lImIted to ulreudy-cupItul-
Ized producers In northern MexIco.
When one tukes Into uccount the omcIul denItIons ol theIr turget populutIons," ugrIcul-
ture progrums ulso vury wIdely In terms ol theIr degree ol coveruge ol potentIully elIgIble
producers. Procumpo hus the hIghest degree ol coveruge, wIth u totul ol 67.l%, IncludIng
l0.7% enrolled In the Procumpo CupItulIzes" progrum, whIch ullows udvunce puyment
ol 5 yeurs ol cush trunslers to support un Investment proect. The ugrIculturul progrum
wIth the next-hIghest degree ol coveruge ol Its potentIully elIgIble populutIon Is the Col-
lee 3upport Progrum, ut 60.4%, lollowed by the Progun lIvestock progrum wIth only 6.6%
coveruge. A3ERCA's vurIous murketIng support progrums, IncludIng Ingreso ObetIvo, ull
reuch well under l% ol producers.
28 1hls box summarlzes the detalled fndlngs presented ln Robles erlanga (2010a)
Subsdzng 1neguaIty

BCX 2:
ACRICULTURAL 5PENDINC IN INDICENOU5
MUNICIPALITIE5
29
Hctcr Rcbles Berlanga (UAM-Xcchtmtlcc)
ApproxImutely one In lour ol rurul MexIcuns ure IndIgenous cItIzens who lIve In whut ure
consIdered IndIgenous munIcIpulItIes." These rurul munIcIpulItIes ure dened us those
where more thun 40% ol the populutIon lIves In households In whIch one ol MexIco's 62
omcIully recognIzed IndIgenous lunguuges ure spoken. 3Ix mIllIon IndIgenous people
lIves In these munIcIpulItIes, uccountIng lor upproxImutely 60% ol MexIco's totul IndIg-
enous populutIon, uccordIng to the nutIonul stutIstIcs ugency (INECI). IndIgenous ugrur-
Iun relorm communItIes control 2l.9% ol the lund In the relorm sector, und IndIgenous
smullholders uccount lor one quurter ol the totul number ol MexIco's lurms.
To whut degree do MexIco's ugrIculturul subsIdIes reuch IndIgenous lurmers The MexI-
cun congress' rurul development reseurch center's comprehensIve dutubuse shows thut
most ol whut does reuch IndIgenous munIcIpulItIes Is socIul wellure und locul Inlrustruc-
ture spendIng, but not spendIng lor ugrIculture. For exumple, OportunIdudes und the
DIconsu vIlluge lood stores huve wIdespreud coveruge ol IndIgenous munIcIpulItIes. Ag-
rIculturul spendIng, In contrust, lulls short. Even though Procumpo wus desIgned to reuch
the smullest lundholders, only l2.4% ol ugrIculturul spendIng wus reported us reuchIng
IndIgenous munIcIpulItIes." CIven thut the populutIons ol muny munIcIpulItIes In thIs
omcIul cutegory ure muorIty non-IndIgenous, und those lurmers ohen huve more lund,
thIs gure Is u substuntIul over-estImute ol whut uctuully reuches IndIgenous lurms. The
Coee 3upport Progrum Is the muIn exceptIon to thIs trend. IndIgenous munIcIpulItIes
receIve un even smuller shure ol rurul development spendIng desIgnuted us envIronmen-
tul, only 6.2% ol these lederul resources. In turn, IndIgenous munIcIpulItIes receIve even
less ol the lederul lundIng lor credIt lor rurul development uctIvItIes - only 0.l% ol thut
budget.
5. THE CONTEXT FOR COMPEN5ATORY
PAYMENT5: CORN PRICE TREND5
Belore lurther unulysIs ol the compensutory puyment progrums lor corn lurmers, It Is Impor-
tunt to recull the rutIonule lor thIs omcIul polIcy: the predIcted drop In the prIce ol corn. Cruph
2 sums up three muor prIce trends lor corn, begInnIng severul yeurs belore the trude openIng,
In l988. The gruph shows constunt corn prIces In terms ol 2008 pesos. One lIne shows the
prIce ol Imported corn, converted Into pesos, prIces lull belore NAFTA, rIse uguIn In l995 be-
cuuse ol the lute l994 devuluutIon, then the downwurd trend contInues untIl the 2007 spIke
In InternutIonul prIces. The trend lor the uveruge rurul corn prIce," un omcIul IndIcutor thut
reects u nutIonul uveruge ol the dIverse prIces producers receIve In the prIvute murket, shows
thut rst, untIl the devuluutIon, trude protectIon kept the producer prIce well ubove the prIce
ol Imported corn. At the sume tIme, however, the two prIces moved In tundem. Aher the de-
vuluutIon, the lull In the InternutIonul prIce pulled domestIc producer prIces down, u trend
thut contInued untIl the InternutIonul prIce spIke In 2007.
The next lIne suggests the Inuence ol stute InterventIon In nutIonul corn murkets, sInce the
omcIul support prIce trucks the domestIc producer prIce very closely, uppurently us the result
ol Its regulutory eect on the prIvute murket. 3ubsquently, uher the elImInutIon ol Conusupo
und the support prIce, the stute contInued to Intervene In the nutIonul corn murket through
the Ingreso ObetIvo (Income Turget) crop subsIdIes. WhIle the stute no longer purchuses crops
dIrectly, thIs progrum's Impuct In the murket Is sImIlur to thut ol u support prIce - though only
lor some commercIul producers. For thIs reuson, Cruph 2 presents the support prIce, lollowed
by the Ingreso ObetIvo prIce, In u sIngle lIne.
29 1hls box summarlzes fndlngs ln Robles erlanga (2010b)
1
Mexcan agrcuIturaI goIcy

Gragh 2
INTllNATI0NAl PlIClS, Pl0LUCll PlIClS, ANL C0\llNMlNT PlIClS l0l C0lN,
19SS T0 200S
Sources. Imported corn prces. Annuel lATUS seres for U.S. Corn lxports to Mexco. lxchenge rete dete from 1994 2009,
Informes de Coberno lederel, Mexco. Covernment support prces from Ssteme de Informecn Agroelmentere de
Consulte ,SIAC0N), modulo egrcole. Preco de Cerente de Crenos Bscos. Covernment crop support prces. Informe de
Coberno lederel Mxco, 19S61994 end Preco Pegedo el Productor' Informe de Coberno lederel, 19942009. Preco
Ingreso 0betvo, http.//www.eserce.gob.mx/scse/progremes/progremes.espsecconngreso, Leros 0nceles 200: 2009.
6. THE REINTERVENTION OF THE 5TATE:
FARM 5UB5IDIE5 A5 PRODUCTION INCENTIVE5
Becuuse Procumpo's per-hecture upprouch decoupled" subsIdy puyments lrom the volume ol
productIon, the progrum wus wIdely huIled by lree-murket udvocutes. In pructIce, however, It
turned out thut Procumpo puyments remuIned lInked to productIon In two muor wuys. FIrst,
producer uccess to the puyments Is dIrectly condItIoned on contInued use ol the lund lor crop
productIon, hence the government's ongoIng monItorIng ol lund use und the requIrement thut
producers reupply every yeur. In thIs sense, the logIc ol the progrum wus not lImIted to the
Ideu ol compensutIng those who hud been growIng gruIn belore NAFTA, but ulso munduted
theIr contnucJ productIon. The second wuy In whIch Procumpo puyments ure stIll lInked to
productIon Is through Its seusonul puyments. Procumpo puys IrrIguted producers lor both ol
theIr unnuul crop cycles (und therelore double whut Is receIved by ruInled producers wIth the
equIvulent umount ol lund). Becuuse the mInorIty ol MexIcun lurmers who huve IrrIgutIon cun
grow two hurvests, they ure ut leust twIce us productIve us the muorIty thut depends on ruIn-
lull, lor the sume gIven umount ol lund. The double-puyment upprouch therelore undermInes
the subsIdy's ostensIble goul ol decouplIng puyments lrom productIon. ThIs polIcy decIsIon
ulso shurply uccentuutes the socIul bIus Inherent In the progrum's uncupped per hecture puy-
ment upprouch.
1
9
8
8
1
9
9
0
1
9
9
2
1
9
9
4
1
9
9
6
1
9
9
8
2
0
0
0
2
0
0
2
2
0
0
4
2
0
0
6
2
0
0
8
0%
5,500
4,500
4,000
5,000
3,500
3,000
2,500
2,000
1,500
500
1,000
Corn export prlce from US to Mexlco (constant 2008 pesos/ton). Prlces do not lnclude
transportatlon costs.
Natlonal average producer prlces (preclo medlo rural," constant 2008 pesos/ton)
Covernment producer prlces for domestlc whlte corn (guaranteed prlces" untll 1993,producer
prlces" startlng ln 1994 and lncome target" prlces beglnnlng ln 2003 (lngreso Obetlvo program)
Subsdzng 1neguaIty

A3ERCA's other muor strutegy Involves u complex puckuge ol murketIng subsIdy progrums
thut turn out to huve lIttle to do wIth lree murkets.
30
TheIr shure ol the ugrIculturul budget hus
Increused steudIly over the pust decude (see Cruph l). Between l99l und the eurly purt ol 2000
thIs upprouch wus very ud hoc, us Its coveruge ol dIerent crops und stutes vurIed wIdely. The
government rst mude subsIdy puyments dIrectly to crop buycrs, notubly IncludIng lurge nu-
tIonul und trunsnutIonul ugrIbusIness trudIng rms (dIscussed lurther below). BegInnIng In the
eurly 2000s, u portIon ol thIs progrum wus reorIented to puy the dIerence between domestIc
und Imported prIces dIrectly to lurger producers, under the nume Ingreso-ObetIvo. ThIs sub-
sIdy Instrument Is known us u decIency puyment" In the U3. Euch yeur, A3ERCA predIcts un
InternutIonul turget prIce, chooses select producers wIth substuntIul murketuble surpluses,
und puys them the dIerence on u per-ton busIs. ThIs puyment Is, In eect, u support prIce,
whIch Is why Cruph 2 depIcts the hIstory ol stute InterventIon In corn murkets In terms ol u
contInuous lIne thut Includes both Conusupo's oor prIce und A3ERCA's turget prIce. These
commercIul lurmers' per-ton puyments ulso serve us u bonus on top ol theIr Procumpo puy-
ments. AccordIng to omcIul A3ERCA recIpIent lIsts, between 2000 und the eurly purt ol 2009,
only 4 northern stutes concentruted 72.6% ol the totul puyments lrom Ingreso ObetIvo
(3Inulou, 3onoru, TumuulIpus und ChIhuuhuu, In thut order).
3l
By protectIng u lew lurge grow-
ers lrom huvIng to compete wIth cheuper Imports, the Ingreso-ObetIvo progrum encouruged
Increused domestIc productIon, us dIscussed lurther below.
32

Both Ingreso-ObetIvo's quIet expunsIon ol selectIve post-NAFTA protectIonIsm und Procum-
po's productIon Inducements ure ut odds wIth the wIdely held vIew thut the MexIcun stute hus
wIthdruwn lrom the rurul economy. WhIle the stute cleurly both reduced und chunged the
nuture ol Its InterventIon uher the l982 debt crIsIs, It dId not wIthdruw by uny denItIon - on
the contrury, the A3ERCA experIence Is un exumple ol u brouder trend In whIch new levers ol
publIc polIcy Intervene even more deeply" In the countrysIde thun belore (Fox l995). For ex-
umple, under the prevIous support prIce polIcy, Conusupo sImply receIved crops ut theIr net-
work ol wurehouses. WIth Procumpo, In contrust, the lederul government needs to know ex-
uctly who grew whut und how much lund they huve In productIon, down to theIr rst und lust
numes. In the cuse ol murketIng support puyments, the stute ulso needs to keep truck ol how
much producers sell on the prIvute murket, ut whut prIce und to whom. In uddItIon, the stute
ulso set Itsell the tusk ol contnung to monItor behuvIor on more thun two mIllIon Procumpo
plots, to ensure thut producers on the rolls stIll comply wIth the requIrement to keep pluntIng
euch yeur In exchunge lor the per-hecture crop subsIdIes. Overull, thIs upprouch drumutIcully
Increuses the chullenges posed to stute cupucIty. ThIs study therelore puys specIul uttentIon to
the quulIty ol the omcIul roster ol lurm subsIdy recIpIents, us un IndIcutor ol the stute's InstI-
tutIonul cupucIty to meet these new chullenges. As documented In HuIght und Fox (thIs vol-
ume), the ostensIbly trunspurent omcIul subsIdy recIpIent lIsts turn out to huve muor lImItu-
tIons thut prevent u cleur uccountIng ol totul puyments to IndIvIduuls.
LImIts to InstItutIonul cupucIty und complIcutIons In the omcIul dutu were reveuled In u serIes
ol InvestIgutIve reports In one ol MexIco's leudIng newspupers, LI UnvcrsnI. The Issue ol who
gets whut lrom Procumpo wus rst covered In-depth In July, 2009, und uguIn In Februury,
20l0.
33
The coveruge locused on who exuctly hus been receIvIng Procumpo puyments, reveul-
Ing the lumIly numes ol ulleged drug trumckers und publIc servunts workIng In the ugrIcul-
turul sector thut uppeur In the omcIul rosters. PublIc debute quIckly turned to the legItImucy
ol these puyments. DelensIve omcIuls ohen cIted theIr lImIted InstItutIonul cupucIty to eec-
tIvely monItor ull ol Procumpo's recIpIents us un excuse lor why some puyments ure mude to
people who mIght not quulIly lor the progrum. 3ACARPA promIsed to pluce renewed emphusIs
on revIewIng the recIpIent lIst, verIlyIng thut ull recIpIents do Indeed meet quulIcutIon re-
quIrements, und updutIng the InlormutIon In the omcIul recIpIent lIsts, though wIth lew tun-
gIble results us ol mId-20l0. The ensuIng publIc debute reveuled unother muor lImItutIon to
the omcIul dutu, whIch Is the InubIlIty to know wIth uccurucy exuctly how muny dIstInct lurm-
ers ure receIvIng puyments. The government chooses to orgunIze Its subsIdy dutu by regIstered
puyment ruther thun by IndIvIduul recIpIent, whIch ullows lor both over-countIng und under-
30 1he focus here ls on ust one of these marketlng support programs, lngreso Obetlvo, both because lt ls the largest and
because the others make much less data publlc (see Halght and Fox for detalls on opaclty of other subsldy programs). wlth
the exceptlon of the work of CL0RSS^ (2004, 2007), Lchnove Huacua (2009) and Steen Rledemann (2007), ^SLRC^'s
marketlng subsldles have recelved remarkably llttle lndependent research attentlon. Lconomlc analysts at the multllateral
development banks, however, conslder them to contradlct Mexlco's commltment to market-frlendly agrlcultural pollcles
(world ank 2009b). 1he l0 commlssloned a detalled study that was extremely crltlcal of the program on both eco-
nomlc and equlty grounds (Sumner and alagtas 2007). 1he 1reasury Mlnlstry denled a publlc lnformatlon request for thls
document, but on appeal the lF^l Commlssloners declded ln favor of the requestor, the publlc lnterest group Fundar. 1he
1reasury Mlnlstry complled wlth the mandate to release the document. See lF^l Resolutlon 0000600044909, http://www.
lfal.org.mx/resoluclones/2009/2160.pdf.
31 1hls fgure ls based on analysls of ^SLRC^ omclal reclplent llsts for lngreso Obetlvo, 2000-2009 (through September,
2009, downloaded September 30th, 2009 from http://www.^SLRC^.gob.mx/artman/publlsh/artlcle_1424.asp). 0ata pub-
llshed on Subsldlos al Campo en Mxlco www.subsldlosalcampo.org.mx, where concentratlon calculatlons are avallable.
32 ^her 2007 lncreases ln lnternatlonal graln prlces, the scope of the lngreso Obetlvo program narrowed, but other dls-
cretlonary graln productlon subsldles then grew, notably the contract farmlng program for sorghum, wheat and yellow corn
(Lchnove Huacua (2009).
33 1he uly, 2009 serles of reports can be seen at http://www.elunlversal.com.mx/grafcos/especlal/LU_procampo/hlstorlco.
html, and the February 2010 serles ls avallable at http://www.elunlversal.com.mx/grafcos/especlal/LU_procampo/.
1
Mexcan agrcuIturaI goIcy

countIng the ubsolute number ol uctuul lurmers purtIcIputIng In the progrum (see lurther
dIscussIon In HuIght und Fox, thIs volume). Whut Is cleur Is thut polIcymukers' ohen-cIted
number ol 2.7 to 2.8 mIllIon purtIcIpunts In Procumpo Is u substuntIul over-estImute. However,
despIte the prevIous commItments to revIew und verIly the omcIul dutu on Procumpo recIpI-
ents, the MInIster ol AgrIculture contInued to use thIs Inuccurute gure to descrIbe the pro-
grum. For exumple, he cIted thIs gure whIle delendIng the luct thut he, hIs lumIly und hIs
busInesses huve receIved over M$ ll mIllIon In lurm subsIdIes sInce 2005 (ArvIzu 20l0).
These Increused chullenges to stute cupucIty huve not been uccompunIed by InstItutIonul uc-
countubIlIty relorms thut would hurness the potentIul ol stukeholders und cIvIl socIety orgu-
nIzutIons to contrIbute to publIc sector perlormunce. The UnvcrsnI InvestIgutIon ulso reveuled
A3ERCA's lImIted InstItutIonul commItment to respond to cItIzen demunds thut the progrum
respect Its own operutIng rules. One 20l0 news report showed thut the AprIl, 2009 rules ol
operutIon not respected In the 3prIng-3ummer 2009 puyment cycle, nor were 3ACARPA und
A3ERCA's commItments to cleun up" the puyment rosters lullled (Hernndez 20l0).
WhIle Procumpo hus uttructed the most publIc uttentIon becuuse ol Its hIgh prole und broud
coveruge, MexIco's other muor lurm support progrums ulso luck lunctIonIng InstItutIonul
chunnels through whIch producers or publIc Interest groups cun IdentIly problems und pro-
mote uccountubIlIty (HevIu de lu Juru, thIs volume). ThIs Includes the AlIunzu ugrIculturul In-
vestment progrum, operuted by the stute governments (Pulmer-RubIn, thIs volume). Even In
the cuse ol Procumpo, whIch wus luunched wIth u lurge-scule cumpuIgn to elect producer rep-
resentutIves known us vocnIcs," there Is lIttle eld-bused evIdence ol lunctIonIng uccountubIl-
Ity mechunIsms. The omcIul evuluutIons do not uddress the Issue. The vocnIcs" ure nomInully
tusked wIth beIng un Interluce between Procumpo purtIcIpunts und A3ERCA, but In pructIce,
theIr role runges lrom weuk to non-exIstent. Most ohen, they represent the ugency to the pro-
ducers ruther thun vIce versu (Muldonudo, thIs volume, HevIu, thIs volume). The muIn exceptIon
to thIs puttern occurs In some IndIgenous communItIes, where the role ol the vocnI hus been
Incorporuted Into exIstIng communIty sell-governunce structures (Muldonudo, thIs volume).
LookIng beyond locul progrum operutIons, there Is lIttle evIdence thut lederul ugrIculturul
ugencIes huve sought bulunced purtnershIps wIth MexIco's broud runge ol non-purtIsun
regIonul producer orgunIzutIons thut huve demonstruted commItment to promotIng un
eectIve, uccountuble publIc sector. For exumple, consIder the experIence ol the Tosepun
TItutunIske cooperutIve In northern Pueblu, detuIled In Muldonudo's study (thIs volume).
34
For
ulmost three decudes, thIs broud-bused regIonul orgunIzutIon ol IndIgenous smullholders hus
consIstently sought to purtner wIth publIc sector ugencIes to Improve the eectIveness ol untI-
poverty progrums, und Procumpo wus no exceptIon. Yet the orgunIzutIon's eorts to cooperute
were rebued, IncludIng Its untI-corruptIon InItIutIves, und muny ol Its members who hud
InItIully munuged to regIster lor the Procumpo were luter dropped lrom the rolls.
7. PO5TNAFTA ACRICULTURAL TREND5
Whut huve post-NAFTA ugrIculturul polIcy prIorItIes been In pructIce, us seen through long
term budget trends und productIon outcomes Aher MexIco's ugrIculturul spendIng lell shurp-
ly lollowIng the l982 debt crIsIs, It grew steeply In l994, u yeur thut combIned presIdentIul
electIons und NAFTA ImplementutIon. Procumpo lundIng wus generous ut rst, wIth per hect-
ure puyments InItIully vulued ut upproxImutely U3$l00. AgrIculturul spendIng then lell shurp-
ly uher the l995 peso crIsIs, IncludIng both Procumpo's overull budget und the per-hecture reul
vulue ol the puyments (Cruphs l, 3 und 4). As Conusupo wus dIsmuntled, A3ERCA's budget
grew, us A3ERCA's murketIng support progrums und Procumpo took Its pluce (Cruph 3).
34 See also http://www.tosepan.com/
Subsdzng 1neguaIty

Gragh 3
C0\llNMlNT SPlNLINC 0N ClAIN SUBSIL Pl0ClAMS. C0NASUP0 ANL ASllCA,
19SS2009 200S PlS0S
Sources. lnjormcs Jc Lnborcs, Agrculture Mnstry, 19S92000, consulted et Ssteme de Informecn Agroelmentere y
Pesquere ,SIAP) de le Secretere de Agrculture ,SACAlPA) end lnjormc Jc In Cucntn PbIcn FcJcrnI, consulted et www.
epertedos.hecende.gob.mx, AugustLec., 2009. lor Conesupo budget dete, Anexos estedstcos, lnjormcs Jc 0obcrno,
19SS2000

BegInnIng wIth the Fox udmInIstrutIon's rst yeur, In 200l, ugrIculturul spendIng begun to
clImb steudIly buck up, ulmost doublIng In reul terms by 2009. Procumpo contInued to huve
the lurgest progrum budget wIthIn A3ERCA (Cruphs l und 3). ThIs growth In spendIng wus
drIven In purt by the clout ol lurm Interests In the legIsluture, und In purt by peusunt protests
thut peuked In eurly 2003 wIth the movement culled The CountrysIde Won't Tuke Any More".
35

The vulue ol Procumpo puyments In reul terms wus not restored, however (Cruph 4), und Pro-
cumpo's shure ol the lurm budget lell. Indeed, Procumpo's per hecture puyments lor the smullest
lurmers (those wIth less thun 5 hectures) lost 29.4% ol theIr peso vulue between l994-2009,
even uher the AprIl 2009 modIcutIons Increused theIr per hecture puyment. Cruph 4 depIcts the
chungIng reul vulue ol per hecture Procumpo puyments lor the 3prIng-3ummer hurvest cycle,
lor puyments to 5 hecture or smuller plots, IncludIng the slIdIng scule puyment modIcutIons
ol 2003 und AprIl 2009. ThIs per hecture puyment wus chosen lor thIs IndIcutor becuuse It
represents the hIghest per hecture puyment uvuIluble through Procumpo. In contrust, sInce
2000 the budgets lor murketIng supports und the AlIunzu Investment subsIdy progrum both
grew (Cruph l). The rst progrum beneted ulmost exclusIvely commercIul lurmers, whIle the
second beneted prImurIly commercIul lurmers. At the sume tIme, Procumpo contInued to
reuch low Income lurmers, us noted ubove.
35 See artra, Cobo and Carca (2003), Lsteva and Marlelle (2003) and Snchez ^lbarrn (2007), among others.
0
10,000
20,000
30,000
40,000
50,000
60,000
^SLRC^ (non-Procampo) Procampo CON^SUPO (Federal transfers)
1
9
8
8
1
9
9
0
1
9
9
2
1
9
9
4
1
9
9
6
1
9
9
8
2
0
0
0
2
0
0
2
2
0
0
4
2
0
0
6
2
0
0
8
1
Mexcan agrcuIturaI goIcy

Gragh 4
ClANCINC llAl \AlUl 0l Pl0CAMP0 PAMlNTS 0\ll TIMl, 19942009
PAMlNTS IN C0NSTANT 200S PlS0S l0l PAlCllS 0l S lAS 0l llSS,
SPlINC/SUMMll SlAS0N
Sources. Procempo peyment dete from ASllCA end Procempo operetonel documents end rules of opereton, 19942009,
http.//www.eserce.gob.mx/ertmen/publsh/ertcle_1S6.esp Leneton besed on. 19SS200/. INlCI. Ssteme de Cuentes
Neconeles de Mxco.http.//dgcnesyp.neg.gob.mx/cgwn/bdents.exe/NI\A0S00100060011000100010#AlB0l,
Indcedores econmcos de coyunture / Producto nterno bruto trmestrel / Bese 199: / ndce de precos mplctos / Por
gren dvsn de ectvded econmce / ndce / Unded de Medde. ndce bese 199: 100.e precos bscos y de mercedo
ndce de precos mplctos Unded de Medde. ndces bese 199: 100 end SlCP Crteros Cenereles de Poltce
lconmce, 2009, p. 90.
AguInst thIs buckdrop ol chungIng ugrIculturul polIcIes, whut huppened to corn uher NAFTA
The orIgInul debute ubout NAFTA produced u wIde runge ol predIctIons, but both udvocutes
und crItIcs ugreed on two muIn poInts. FIrst, they predIcted thut the corn openIng would en-
couruge u shurp drop In ugrIculturul employment - sInce most ugrIculturul obs were In corn.
36

3econd, unulysts predIcted thut MexIco's productIon ol corn would ulso lull In the luce ol
cheuper Imports, und us u result corn Imports would Increuse. The dutu thut lollows shows
thut some ol these expectutIons were lullled, whIle others were not.
Furm employment dId drop, us expected - contInuIng u long term trend. Two mIllIon workers
leh ugrIculture between the l99l und 2007 ugrIculturul censuses - l9% ol the lurm lubor
lorce, IncludIng unpuId lumIly lubor (3cott, Tuble l0A, thIs volume). Plus, the ugrIculturul
shure ol MexIco's totul employment contructed even more shurply, droppIng lrom 23% In l990
to l2% In 2008. Yet corn productIon went up, even though MexIco's producer prIce dropped,
drIven down by lullIng Import prIces.
The wIdely-held vIew Is thut whIle MexIcun trude negotIutors munuged to successlully resIst
U3 pressures to Include oIl In NAFTA, Insurmountuble U3 pressures oblIged corn to be In-
cluded In the lree trude ugreement. ThIs wus not the cuse. It turns out thut MexIcun trude
negotIutors ucceded to IncludIng corn In exchunge lor the U3 openIng Its murket to luture or-
unge uIce Imports (Muxeld und 3hupIro l998). ThIs meunt thut they essentIully truded the
36 See Levy and van wlnbergen (1992), Hlnoosa and Roblnson (1992) and Roblnson, urfsher, Hlnoosa-Oeda and
1hlerfelder (1991). Note that 0e anvry, Sadoulet and Cordlllo contended that those most aected would be small-scale
surplus-produclng farmers, predlctlng that only about half of malze producers wlll be aected by a change ln the sale
prlce" (1995: 1351). ^s the Ncw ork T|mcs reported at the tlme, then- Undersecretary of ^grlculture Luls 1llez sald that
.wlthln a decade or two. about half of the rural populatlon wlll most llkely be forced to move" (Colden 1991). Llsewhere
he wrote: rural to urban mlgratlon.... ls a n|nly Jcs|roblc phenomenon, lnsofar as the rural populatlon can be absorbed by
the lndustrlal and servlce sectors..." (1llez 1994: 27, emphasls added). Noted mlgratlon speclallsts who were N^F1^ optl-
mlsts predlcted that ln the medlum term, the Mexlcan economy would generate enough obs to reduce mlgratlon pressures
(Cornellus and Martln, 1993, Martln 1993).
1
9
9
4
1
9
9
5
1
9
9
6
1
9
9
7
1
9
9
8
1
9
9
9
2
0
0
0
2
0
0
1
2
0
0
2
2
0
0
3
2
0
0
4
2
0
0
5
2
0
0
6
2
0
0
7
2
0
0
8
2
0
0
9

C
o
n
s
t
a
n
t

p
e
s
o
s
,

2
0
0
8
1,500
1,800
1,600
1,700
1,400
1,300
1,200
1,100
1,000
Subsdzng 1neguaIty

luture ol the country's muIn stuple crop lor u commodIty thut hus yet to become sIgnIcunt In
MexIco's ugrIculturul exports. Indeed, IntervIews wIth MexIco's leudIng ugrIculturul trude ne-
gotIutors show thut MexIco's corn openIng wus not un unuvoIduble condItIon Imposed by the
U3, but ruther wus u delIberute choIce by the MexIcun government.
37
Moreover, uher the ugree-
ment went Into eect, the MexIcun government moved quIckly to compress the corn trude
openIng Into ust u lew yeurs, by not upplyIng the l5 yeur trunsItIon perIod ullowed by NAFTA.
38

EconomIsts recull thut the government's goul wus to control urbun lood prIces, to buer con-
sumers' huge drop In purchusIng power In the uhermuth ol the l995 peso crIsIs.
FollowIng NAFTA und the l995 peso crIsIs, nutIonul producer prIces lor corn lell substuntIully.
Though MexIco's domestIc corn prIces hud been kept ubove InternutIonul prIces becuuse ol
trude protectIon, theIr ups und downs hud long closely lollowed InternutIonul prIces (Ynez
Nuude und BurceInus 2004: 2l). Though InternutIonul prIces drove domestIc prIces down lol-
lowIng NAFTA, they hud been drIvIng MexIcun corn prIces down lor muny yeurs (see Cruph 2).
However, the long term trend IndIcutes thut exchunge rute chunges muy huve hud more Im-
puct on MexIcun producer corn prIces, even wIth trude protectIon. Whut chunged uher NAFTA
wus the gnp between domestIc producer prIces und InternutIonul murket prIces. As predIcted,
the gup nurrowed und domestIc prIces becume much more closely ulIgned wIth InternutIonul
prIces (see Cruph 5, ulso Torres Roo 2007: 29-30, Contrerus CustIllo und Cmez UrIbu 2009: 97).
MeunwhIle, the Impuct ol the producer prIce drop wus uccentuuted by the lute l990s' lull In the
peso purchusIng power ol Procumpo's per-hecture compensutIon puyments (see Cruph 4 ubove).
In uddItIon, MexIcun gruIn producers were sIgnIcuntly uected by U3 lurm polIcIes thut led
to below-cost exports. AccordIng to WIse's study In thIs volume, between l997 und 2005, the
estImuted cost ol thut U3 dumpIng wus lurger thun the totul vulue ol Procumpo trunsler puy-
ments. He shows thut corn producers were by lur the most heuvIly uected, wIth U3$6.2 bIl-
lIon In losses, un uveruge ol U3$94 per hecture, whIch Is more thun the uveruge Procumpo
puyment durIng thut perIod.
Gragh 5
CAP BlTWllN L0MlSTIC ANL INTllNATI0NAl C0lN PlIClS, 19/6200S
PllClNTACl LIlllllNCl
Sources. Internetonel corn prces from Annuel lATUS Seres for US corn exports to Mexco. Netonel producer prces
,preco medo rurel') from Ssteme de Informecn Agroelmentere de Consulte, SIAC0N. Lete from 19/6/9 from
Centro de lstedstce Agropecuere, Consumos Aperentes de Productos Agrcoles ,192S199/), Mez, 199S, p. 10:
Yet contrury to unIversul expectutIons, MexIcun corn productIon ncrcnscJ durIng the post-
NAFTA yeurs (Cruph 6).
39
At the sume tIme, MexIco's gruIn Imports huve ulso Increused sub-
stuntIully (see WIse, thIs volume). WhIle ugrIculturul Imports dIspluced some domestIc crops,
In the cuse ol corn, both Imports und productIon huve Increused over the pust l5 yeurs. Overull
37 ^s the archltect of thls pollcy, Luls 1llez, put lt: lt ls necessary to lnclude corn, gralns ln general, to make productlve
many chalns that ln Mexlco are not productlve: graln-based foods llke meat and foods made from lndustrlally-processed
corn" (lntervlew clted ln Lasala lanco, 2003:87).
38 1hls llttle known declslon was frst hlghllghted by 0e lta (2003), Nadal (1999), Rodrguez Maldonado and Surez Car-
rera (1998) and Surez Carrera (2005). Recent econometrlc analysls concludes that the ellmlnatlon of lmport permlts,
comblned wlth the Mexlcan government's declslon to apply zero lmport fees and not to lmplement the agreed lmport duty
ellmlnatlon tlmellne, are the maln factors that explaln the reductlon of domestlc prlces for malze producers" Contreras
Castlllo and Cmez Urlbe (2009: 95).
39 whlle thls study does not address the wlde range of N^F1^ lmpacts on agrlcultural productlon and marketlng, see, for
a range of perspectlves, ^vlla, Puyana and Romero (2008), Loyns, Mellke, Knuton and nez Naude (2001), Puyana and
Romero (2008a, 2008b), Rlvera, Chavez and whlteford (2009), nez and arcelnas (2003).
10%
18%
12%
15%
35%
37%
25%
5%
4%
15% 15%
26%
36%
45%
51% 51%
54%
31%
10%
12%
23%
24% 24%
26%
17%
19%
17%
19%
26%
32%
38%
37%
13%
1
9
7
6
1
9
7
8
1
9
8
0
1
9
8
2
1
9
8
4
1
9
8
6
1
9
8
8
1
9
9
0
1
9
9
2
1
9
9
4
1
9
9
6
1
9
9
8
2
0
0
0
2
0
0
2
2
0
0
4
2
0
0
6
2
0
0
8

1
Mexcan agrcuIturaI goIcy

consumptIon Increused shurply. Remurkubly, by the end ol the NAFTA trunsItIon perIod, MexI-
co wus lurgely sell-sumcIent In whIte corn lor tortIllus, whIle Increused yellow corn Imports
went prImurIly to lIvestock producers (see WIse, thIs volume).
40
Gragh 6
NATI0NAl C0lN Pl0LUCTI0N, 19S0200S
Source. Ssteme de Informecn Agroelmentere de Consulte ,SIAC0N, Mdulo Agrcole, www.sep.gob.mx, consulted Sept. 2009
WhIle MexIco's corn productIon Increused sInce the lute l980s, the ureu plunted wIth corn dId
not chunge drumutIcully. The rIse In domestIc productIon wus drIven prImurIly by sustuIned
Increuses In corn productIvIty (Cruph 7). Averuge nutIonul corn yIelds more thun doubled be-
tween l990 und 2007, reuchIng 2.8 metrIc tons/hecture (Robles Berlungu, thIs volume). The
Increuse In yIeld Is expluIned purtly by the substuntIul Increuse In IrrIguted productIon (Cruphs
7, 8).
4l
DrumutIc regIonul dIerences In productIvIty persIst, u legucy ol uneven dIstrIbutIon ol
quulIty lund und uccess to wuter, but the muorIty ol MexIcun corn contInues to be produced
on ruInled lund (Cruph 8). Among non-IrrIguted lurmers, however, productIvIty contInues to
vury wIdely, dependIng on theIr uccess to credIt, technology und relIuble ruInlull.
40 lndeed, US 0ept of ^grlculture researchers found that ln the late 1990s and early 2000s, Mexlcan consumer prlces
lncreaslngly favored meat (Zahnlser and Coyle 2004: 11). US farm pollcy favored Mexlcan meat productlon through subsl-
dlzed exports of anlmal feed, as well as US meat exports, whlch also reect subsldlzed graln (wlse, thls volume).
41 For the evolutlon of the lrrlgated share of corn productlon over tlme, see also CL0RSS^ (2007) and de lta (2003). 1he
lrrlgated share frst began to grow substantlally durlng the 1991-1995 perlod, when most gralns and ollseed lmports had
opened up but corn was stlll protected.
1
9
8
0
1
9
8
2
1
9
8
4
1
9
8
6
1
9
8
8
1
9
9
0
1
9
9
2
1
9
9
4
1
9
9
6
1
9
9
8
2
0
0
0
2
0
0
2
2
0
0
4
2
0
0
6
2
0
0
8

1
o
n
s

(
m
l
l
l
l
o
n
s
)
25
20
15
10
5
0
Subsdzng 1neguaIty

Gragh 7
C0lN Pl0LUCTI0N ANL IllL, 19S0200S
Source. SIAC0N, www.sep.gob.mx, consulted Sept., 2009
In spIte ol the predIctIons ol the theory ol compurutIve udvuntuge, very lew corn producers
shIhed Into other crops (Ceron Monroy 2008, CEA 2006). These dIlemmus contInue to chul-
lenge reseurchers, who huve yet to nd u consIstent explunutIon. Luck ol smullholder uccess to
Investment credIt Is certuInly relevunt. CompurIson ol the l99l und 2007 ugrIculturul cen-
suses shows thut the number ol productIon unIts wIth uccess to lormul credIt dropped by more
thun 75%, to lewer thun l50,000 (Robles, thIs volume). One reuson lor the dImculty expluInIng the
persIstence ol corn muy be thut the reusons lor contInued productIon vury sIgnIcuntly by
type ol producer. Becuuse ol the wuy omcIul productIon dutu Is presented, It Is not eusy to
determIne whut kInds ol producers ure responsIble lor most ol the productIon Increuse. As u
result, reseurchers huve yet to determIne whut lructIon ol the Increused productIon comes lrom
lurger commercIul growers, smuller, surplus-producIng lurmers und subsIstence peusunts.
Gragh B
C0lN Pl0LUCTI0N. lAINllL ANL IllICATlL, 19S0200S
Source. SIAC0N, www.sep.gob.mx, consulted Sept., 2009
0
1
2
3
4
5
6
7
8
9
100
1
9
8
0
1
9
8
2
1
9
8
4
1
9
8
6
1
9
8
8
1
9
9
0
1
9
9
2
1
9
9
4
1
9
9
6
1
9
9
8
2
0
0
0
2
0
0
2
2
0
0
4
2
0
0
6
2
0
0
8
^rea planted leld
3.5
3
2.5
2
1.5
1
0.5
0
H
e
c
t
a
r
e
s

(
m
l
l
l
l
o
n
s
)

1
o
n
s
/
h
e
c
t
a
r
e
0
5
10
15
20
25
1
9
8
0
1
9
8
2
1
9
8
4
1
9
8
6
1
9
8
8
1
9
9
0
1
9
9
2
1
9
9
4
1
9
9
6
1
9
9
8
2
0
0
0
2
0
0
2
2
0
0
4
2
0
0
6
2
0
0
8
Ralnfed lrrlgated
1
o
n
s

(
m
l
l
l
l
o
n
s
)
1
Mexcan agrcuIturaI goIcy

The 2007 ugrIculturul census produced the surprIsIng ndIng thut the totul number ol corn
productIon unIts" dId not lull, compured to the l99l census. ThIs suggests thut peusunt smull-
holders contInued to be heuvIly Involved In corn productIon, In spIte ol Its decreused prot-
ubIlIty. MeunwhIle, the Increuse In ugro-export obs wus not us sIgnIcunt us muny expected
(3cott, thIs volume). The overull drop In ugrIculturul obs wus concentruted lurgely In unpuId
lumIly lubor. 3pecIcully, unpuckIng the overull l9% drop In lurm obs between l99l und 2007,
3cott's unulysIs ol the ugrIculturul census dutu shows thut unpuId lumIly lubor dropped 58%,
whIle puId seusonul lurm lubor rose l5l% (by u lull 245% lor women). ThIs puttern suggests
thut lumIly lurm employment hus been drumutIcully hollowed-out," wIth older lundholders
contInuIng to lurm theIr whIle theIr sons und duughters huve to leuve home to nd work, us
seusonul ugrIculture workers, In the cItIes, or the U3. ThIs InterpretutIon Is consIstent wIth the
Increused unnuul out-mIgrutIon rute durIng the l990s
42
Anulysts dIer In theIr explunutIons ol the wuys In whIch peusunt producers respond to chung-
Ing producer prIces. 3ome unulysts propose models ol peusunt economIc behuvIor thut ussume
thut subsIstence und sub-subsIstence producers, becuuse ol theIr luck ol net surplus produc-
tIon und ohen remote locutIon, ure not dIrectly lInked to murket sIgnuls (De Junvry, Fuls-
chumps und 3udoulet l99l). These unulysts posIted thut smull und medIum-sIzed commercIul
corn growers would be the group thut would be most uected by NAFTA, representIng up-
proxImutely hull ol the corn producers (De Junvry, 3udoulet und CordIllo l995: l35l). Indeed,
prIces ure not the only luctor thut determInes whether peusunts grow corn. Muny unulysts
huve lound thut peusunts contInue to produce corn lor domestIc consumptIon us u household
survIvul strutegy to preserve some degree ol uutonomy, In the luce ol rIsk, uncertuInty und
lImIted employment ulternutIves. ThIs explunutIon ol persIstent smullholder corn productIon
us u delensIve strutegy Is reInlorced by the culturul emphusIs on both consumIng und preser-
vIng nutIve vurIetIes ol corn.
43

In thIs context, note thut muny government polIcymukers hold u very dIerent vIew ol the
persIstence ol peusunt corn productIon lor household use. As u recent lurge muguzIne dIspluy
udvertIsement by the stute government ol ChIupus put It, corn produced lor household con-
sumptIon perpetuutes poverty." (Ncxos, Dec. 2009, p. 89). ThIs vIew ussumes thut smullholder
corn Is the cnusc ol poverty, but most unulysts who do eldwork would contend thut the
cuusul urrow goes the other wuy - thut persIstent corn productIon Is u rcsponsc to poverty, und
to producers' luck ol uccess to less rIsky economIc ulternutIves.
To muke the trunsItIon lrom corn to less well-known crops requIres relIuble uccess to upproprI-
ute Inputs, murkets und technIcul support - ull ol whIch ure In very scurce supply lor low-In-
come producers. Prudent rIsk munugement ohen leuves them wIth the corn they know well.
In uddItIon, lor smullholders, membershIp In uutonomous, representutIve producer orgunIzu-
tIons Is usuully necessury - though lur lrom sumcIent -- lor relIuble uccess to uorduble Inputs
und crop murkets, not to mentIon uccess to government support progrums (Echnove und 3tel-
len 2003, Pulmer RubIn, thIs volume). Yet those representutIve smullholder orgunIzutIons thut
huve survIved - most were lormed In the l970s und l980s, when relormIsts In the lederul
government oered some degree ol support - ure burely holdIng on In whut hus long been u very
InhospItuble polIcy envIronment (Fox 2007u).
Recent models ol peusunt economIc behuvIor oer uddItIonul explunutIons lor persIstent corn
productIon. In thIs vIew, becuuse ol the lInkuges between producer prIces lor corn, the cost ol
lubor und the cost ol rentIng lund In remote ureus, when producer prIces lull, better-o produc-
ers ure less lIkely to employ locul lubor und more lIkely to rent theIr lund, whIch encouruges
the rurul poor to Increuse productIon even though theIr overull Income lulls (Dyer, Boucher
und Tuylor 2006). Other unulysts ol the peusunt economy udd thut sub-subsIstence producers
ohen sell theIr hurvest to meet ImmedIute needs und then buy corn buck luter In the yeur wIth
wuge Income (Burtru l994). 3ome net buyers ure therelore ulso sellers. In summury, unulysts
lrom dIverse perspectIves ugree contInued corn productIon by smull-scule ruInled producers Is
wIdely seen us u lorm ol sell-delense or socIul Insurunce.
For commercIul producers, the reusons lor Increused corn productIon muy be much sImpler -
A3ERCA progrums oered substuntIul economIc IncentIves (Ynez-Nuude und Tuylor 2006).
ContInued uccess to Procumpo puyments requIres sustuIned crop productIon - und the pro-
grum Is therelore u condItIonul cush trunsler (though not us dIrectly tIed to volume ol produc-
42 ln 2008, Mexlco's mlgrants were stlll dlsproportlonately of rural orlgln (51%) and reported thelr occupatlon as agrlcul-
tural (49.5%), accordlng to the regular government-sponsored exlt survey of border crossers (Lncuesta LMlF Norte, cuadro
2.2.07, www. conapo.gob.mx)
43 See arkln (2006), Corts vzquez and 0az Hlnoosa (2005), 0yer and nez-Naude (2003), Luna Flores (2004) and
nez-Naude (2007), among others. 1he many feld-based studles that stress the consumptlon loglc behlnd household
productlon lnclude ^rslan and 1aylor (2009), ^ppendlnl, Corts and 0az Hlnoosa (2008), ^ppendlnl, Carca arrlos and 0e
la 1eera Hernndez (2008), 0az Hlnoosa (2008), Lsteva and Marlelle (2003), Reyes Cuzmn, Cuerra Navarro and Caldern
Ponce (2005), and Rlvera, Chavez and whlteford (2009) among others.
Subsdzng 1neguaIty

tIon us ure the MurketIng 3upport progrums). Moreover, omcIul evuluutIons lound thut lew
producers were uctuully uwure thut they hud the rIght to chunge crops - so lew dId (CEA
2006). Yet though Procumpo's IncentIves huve consIstently reuched more thun two mIllIon
recIpIents, A3ERCA's MurketIng 3upport progrums oer much more generous uddItIonul In-
ducements to lewer thun l50,000 producers, In the cuse ol Ingreso ObetIvo. An even smuller
group ol commercIul buyers, processors und other lurge ugrIbusIness entItIes ure subsIdIzed by
A3ERCA's other MurketIng 3upport sub-progrums, such us those dIscussed In Box 3.
BCX 5:
LARCE PAYMENT5 OF CRAIN MARKETINC
5UB5IDIE5 CO TO TRAN5NATIONAL
CORPORATION5
Ltbby Hatght (UC5C/IBP)

In uddItIon to Its two dIrect puyment progrums lor lurmers, Procumpo und Ingreso-
ObetIvo, A3ERCA ulso operutes numerous uddItIonul lurge-scule murketIng support
progrums. They prImurIly benet lurge corporutIons thut buy, sell und process gruIn,
under the rubrIcs ol Insurunce, storuge, lutures murkets, trunsportutIon, export subsI-
dIes, leedgruIn lor runchers und contruct ugrIculture. A3ERCA hus operuted such corpo-
rute lundIng progrums sInce Its loundIng, whIch consIstently uccount lor u sIgnIcunt
shure ol Its unnuul budget (omcIul dutu lImItutIons prevent determInIng the precIse
percentuge). In recent yeurs, thIs urruy ol lIttle-known murketIng subsIdy progrums hus
receIved u growIng shure ol A3ERCA's non-Procumpo budget (see Cruph 2 ubove).
Moreover, muny ol the commercIul lurmers who supply these lurge-scule IndustrIul proces-
sors ure themselves recIpIents ol both the Procumpo und Ingreso-ObetIvo subsIdIes, whIch
meuns thut the sume gruIn Is In eect subsIdIzed by u multItude ol dIerent progrums,
whIle the vust muorIty ol smuller lurmers receIve eIther ust Procumpo or nothIng ut ull.

The publIc versIons ol these progrums' lIsts ol benecIurIes ure sIgnIcuntly more opuque
thun A3ERCA's dutu on recIpIents ol other lurm subsIdIes (see HuIght und Fox, thIs vol-
ume). The progrums' lrugmented nuture ulso complIcutes eorts to see how murketIng
subsIdIes ure uctuully dIstrIbuted. Repeuted publIc InlormutIon requests were necessury
to begIn to reveul the degree to whIch puyments were concentruted In lurge corporutIons.

Even trunsnutIonul corporutIons receIve lurge murketIng subsIdIes. Recent coveruge ol
ugrIculturul subsIdIes In the nutIonul newspuper, LI UnvcrsnI, hIghlIghted thut CurgIll
hus receIved over 500 mIllIon pesos In MurketIng 3upport puyments between 2005-2009
(Hernndez und Alvurudo 20l0, see ulso Rumrez 2009). InterestIngly, CurgIll responded
to thIs coveruge by delendIng the luct thut theIr subsIdy puyments do not trunslute Into
uny dIrect benet" lor the corporutIon, but ruther ure pussed ulong to lurmers due to the
luct thut CurgIll puys u hIgher prIce lor the crops they purchuse (LI Scmnnnro, 20l0).
In other words, CurgIll cluIms thut thIs progrum reImburses the compuny lor hIgher
prIces puId to lurmers, und therelore It does not prot lrom the subsIdy.
UltImutely, CurgIll's delense ol theIr subsIdy puyments IndIcutes thut A3ERCA's Murket-
Ing 3upport progrums ure busIcully lunctIonIng lIke u prIvutIzed CONA3UPO. Ruther thun
lettIng the murket dIctute prIces, A3ERCA Is both puyIng lurmers dIrectly to compensute
lor dIerences In domestIc und InternutIonul prIces through Ingreso ObetIvo, whIle ulso
puyIng purchusIng compunIes dIrectly to buy ut hIgher prIces thun the murket otherwIse
IndIcutes. Insteud ol the government runnIng the gruIn murket ut urtIcIully hIgh prIces,
the government Is now puyIng prIvute corporutIons to do so - und puyIng us muny us
three dIerent subsIdIes lor the sume gruIn (Procumpo, Ingreso ObetIvo und MurkIng
3upport). CIven thut such lurge sums ure concentruted In u relutIvely smull number ol
prIvute gruIn purchusers, uctIng not unlIke un olIgopoly, In uddItIon to the overt ucknowl-
edgement thut these puyments Intervene dIrectly to Inuene gruIn prIces, It Is uncleur
how A3ERCA's MurketIng 3upport progrums ure more lree-murket-orIented" thun the
prevIous stute-owned system.
Tuble 4 shows the lurge puyments chunneled to U3 und MexIcun trunsnutIonul corpo-
rutIons In 2008 ulone. Becuuse ol lImIted publIc uccess to both corporute ownershIp
1
Mexcan agrcuIturaI goIcy

und subsIdy dutu, It Is extremely dImcult to know wIth certuInty whether or not these
ure the totnI umounts ol puyments thut these compunIes receIved under these subsIdy
progrums. As u result, Tuble 4 represents only the mInImum umounts ol explIcItly docu-
mented corporute puyments lrom A3ERCA's MurketIng 3upport progrums lor one yeur.
TabIe 4
PAMlNTS T0 TlANSNATI0NAl C0lP0lATI0NS Tll0UCl MAlllTINC SUPP0lT SUBSIL
Pl0ClAMS, 200S
Compuny Nume Amount puId In A3ERCA MurketIng
3upport subsIdIes, 2008 (M$)
COMPAA NACIONAL ALMACENADORA 3A de CV* 3l8,932,285.46
CARCILL de MEXICO 3A de CV l96,634,344.68
MIN3A 3A de CV l63,03l,660.49
BACHOCO 3A de CV ll6,222,ll6.3l
ADM MEXICO 3A de CV l6,977,99l.90
* Note. Ths s not en exheustve lst. Compnn NnconnI AImnccnnJorn SA Jc CV s e subsdery of MASl
CA, though t s not the only MASlCAreleted compeny recevng subsdes through these progrems. Informe
ton on BIMB0's subsderes wes uneveleble et the tme of ths report, end therefore BIMB0 s not ncluded on
ths current lst.
The totuls presented Include ull uppeurunces ol these compunIes In A3ERCA's recIpIent lIsts lor the com-
bInutIon ol MurketIng 3upport progrums (excludIng Ingreso ObetIvo). These Include: Apoyos 0rcctos n
Cobcrturns Jc Prccos Jc ProJuctos y Lspcccs LIcgbIcs, Apoyo n In Pgnorncn JcI Mnz BInnco, Lsqucmn
Jc Comprns AntcpnJns Jc Mnz BInnco, Apoyos n In AgrcuIturn por Contrnto Jc Mnz AmnrIIo y Sorgo,
Apoyo n FIctcs Jc 0rnnos y DIcngnosns, und Apoyo n In Lxportncn Jc 0rnnos y DIcngnosns,
It s noteble thet, ncluded n the overell totel lsted ebove, CergllMexco receved MS11,166,S6S under e pro
grem of cxport subsJcs jor whtc corn.
Source. ASllCA omcel recpent lsts eveleble et, http.//www.ASllCA.gob.mx/subhomes/NuestrosProgremes.esp, under
the heedng Progreme de Atencn e Problemes lstructureles ,Apoyos Compensetoros)'. lech subprogrem presents t's
own recpent lsts, end were downloeded seperetely. lles were downloeded Lecember /10, 2009. Totels were celcu
leted combnng the emounts lsted n eech subprogrem's recpent lsts wheren the ebovelsted nemes eppeer. See elso
ASllCA ,200S).
In terms ol Its Impuct on productIon, us mentIoned, the Ingreso ObetIvo progrum specIcully
oers u select, smull group ol commercIul growers bonus puyments thut mude up the dIer-
ence between the domestIc und InternutIonul prIce lor key gruIns, most notubly corn (untIl
2007-2008, when the InternutIonul prIce lor corn spIked, the progrum's budget lell und puy-
ments shIhed to cotton und other crops). Remurkubly, thIs progrum, when corn pluyed the
lurgest role In support puyments, dIrectly subsIdIzed u much lurger lructIon ol the corn crop
thun Conusupo used to buy, even In Its heyduy.
44
Bctwccn 2000 nnJ 2005, lngrcso-Dbjctvo sub-
sJzcJ n juII 70% oj nntonnI mnrkctcJ grnn nnJ oIsccJs, uccordIng to the most comprehen-
sIve omcIul evuluutIon (A3ERCA 2006).
45
In other words, u smull mInorIty ol well-o producers
receIved sustuIned protectIon lrom InternutIonul competItIon, whIle most dId not.
44 For example, between 1980 and 1988, the share of the natlonal corn crop purchased by Conasupo varled from 11% to
25% (Conasupo 1989)
45 1hls evaluatlon was orlglnally made publlc on ^SLRC^'s webslte, but lt ls no longer avallable, Moreover, unllke most
om clal external" evaluatlons, lts authorshlp ls not speclfed.
Subsdzng 1neguaIty

Mag 6
Cl0ClAPlIC LISTlIBUTI0N 0l INCllS0 0BlTI\0 SUBSIL Pl0ClAM
PllClNTACl B STATl, 2006
Source. lleboreted wth dete form www.subsdoselcempo.org.mx besed on the omcel dete from the rolls of recpents of
ASllCA.
The Impuct ol the Ingreso ObetIvo progrum goes beyond subsIdIzIng lurger commercIul grow-
ers und keepIng nutIonul gruIn productIon ut unprecedented levels. By desIgn, uccess to the
progrum wus conned to u relutIvely smull number ol producers.
46
AccordIng to un In-depth
economIc unulysIs commIssIoned lor the MexIcun government by the Inter-AmerIcun Devel-
opment Bunk, becuuse ol Its huge scope, the Ingreso ObetIvo depressed the corn prIces re-
ceIved by MexIco's other producers. TheIr model lound thut elImInutIon ol the progrum would
Increuse the Income ol non-purtIcIputIng producers by 6%, whIle suvIng both consumers und
the government more thun two bIllIon pesos (3umner und Bulugutus 2007: 44).
47
TheIr nd-
Ings reveul u sturk conIct ol Interest between u smull number ol Ingreso-ObetIvo benecIu-
rIes und the rcst ol MexIcun corn growers.
48
Indeed, thIs progrum put Procumpo In the posI-
tIon ol huvIng to compensute both lor the Impuct ol InternutIonul prIce competItIon nnJ u
domestIc decIency puyment concentruted In u smull sub-set ol well-o lurmers. The Treu-
sury MInIstry ImplIcItly recognIzed some ol the Issues wIth Ingreso ObetIvo, recently renumed
(ulong wIth the remuInIng MurketIng 3upport sub-progrums) us Apoyos CompensutorIos."
46 1he program rolls peaked at approxlmately 144,000 reglstrants ln 2006, but the omclal program roster presented
to the publlc allows lndlvldual producers to reglster more than once, so the total number of actual lndlvlduals covered ls
uncertaln. See further dlscusslon of problems wlth ^SLRC^'s lack of full publlc dlsclosure of who gets what from farm
subsldles ln Halght and Fox (thls volume).
47 Prevlous technlcal work by other multllateral agencles had underscored the extremely regresslve nature of the dlstrlbu-
tlon of marketlng support payments, but had not made the dlrect connectlon to reduced graln prlces for non-partlclpants
(world ank 2004, OLC0 2006).
48 ln response to a publlc lnformatlon request from the publlc lnterest group Fundar, the Mexlcan Flnance Mlnlstry
declared thls study confdentlal, based on the clalm that publlc dlssemlnatlon would rlsk damaglng relatlons wlth the
l0. 1he request was appealed to the lF^l, whlch asked the l0 for lts assessment of the Flnance Mlnlstry clalm. ln the
absence of a prompt reply, the lF^l ruled ln favor of the release of the document to the requestor, and the Flnance Mlnlstry
complled. 1he l0 belatedly replled to the lF^l's query, ln support of the Flnance Mlnlstry's clalm. See the lF^l resolutlon
0000600044909, http://www.lfal.org.mx/resoluclones/2009/2160.pdf.
14.5
14.4
54.7
4.4
0
2.5
0.5
4.1
0.8
0
1.1
0.6
0
0
0
2.9
0.1
1.8
0.2
0
0
5.9
0
0
0.7
0
1.6
0
0
10.9
0.1
0.4
Ceographlc dlstrlbutlon of payments made by
lngreso Obetlvo. (2006)
(as percentage of total dlstrlbutlon)
35% - 15%
14% - 12%
11% - 10%
9% - 4%
3% - 0%
1
Mexcan agrcuIturaI goIcy

8. WHERE DO CORN CON5UMER5 FIT IN


Assessments ol the wInners und losers lollowIng NAFTA ure lurther complIcuted by unex-
pected prIce trends on the consumer sIde. EconomIsts expected thut cheuper Imports would
keep urbun corn consumer prIces down. In thIs context, the government ended subsIdIes lor
urbun corn consumers, rst by elImInutIng generulIzed tortIllu subsIdIes In the mId-l990s und
then by endIng u lurge-scule, meuns-tested lree tortIllu progrum In 2003.
49
Urbun lood subsI-
dIes contInue to be delIvered vIu the longstundIng mIlk progrum und through u component ol
the OportunIdudes socIul wellure progrum (l5% ol Its purtIcIpunts ure In cItIes).
Yet NAFTA's openIng to cheuper Imported corn dId not turn Into u cleur wIn lor MexIco's corn
consumers. Urbun tortIllu prIces huve Increused ut u much hIgher rute thun the prIce ol Im-
ported corn, us shown by compurIsons ol InternutIonul corn prIces und domestIc tortIllu prIce
trends (ZuhnIser und Coyle 2004, und 3Immons, Box 4, below). ThIs IndIcutes thut corn mur-
kets contInue to be Imperlect," even In lurge urbun ureus The persIstence ol these murketIng
problems Is remurkuble, In lIght ol A3ERCA's long-term emphusIs on murketIng supports"
(dIrect puyments) to prIvute rms, ustIed wIth the goul ol encourugIng competItIve murkets.
DIverse reseurchers nd thut persIstent ImperlectIons In locul, regIonul und nutIonul corn mur-
kets remuIn very sIgnIcunt (IMCO/World Bunk 2007, Robles Vsquez und Curcu BurrIos,
2008). DIsconnects between domestIc und InternutIonul prIces lollowIng the 2007 spIke ruIsed
uddItIonul questIons ubout how uctuully-exIstIng corn murkets work In MexIco (De Itu 2008,
Curcu Ru und Kelemun 2007, Hernndez Nuvurro 2007). On bulunce, the government's l5
yeurs ol turgetIng opuque murketIng subsIdIes to u smull number ol lurge lurmers und prIvute
rms uppeurs to huve lullen lur short ol the polIcy goul ol encourugIng more emcIent und com-
petItIve nutIonul gruIn murkets.
In terms ol consumer prIces, the muIn benecIurIes ol cheuper Imported corn uppeur to huve
been those urbun consumers who could uord IndustrIully-produced meut. AccordIng to stun-
durd economIc theory, Il MexIco hud u sIngle, competItIve nutIonul corn murket thut cleured,"
trunslutIng Import prIces consIstently throughout the country, net rurul corn consumers - thut Is,
lundless lurmworkers und sub-subsIstence producers -- should benet lrom cheuper Imports.
Yet thIs does not uppeur to huve huppened. FIrst, the relutIonshIp between cheuper Imported
yellow corn und rurul consumer prIces Is not cleur, sInce rurul consumers contInue to huve such
u strong prelerence lor MexIcun whIte corn. Aher ull, MexIcun consumers ure well uwure thut
Imported yellow corn Is unImul leed. 3econd, lower Imported corn prIces ut the border do not
necessurIly trunslute Into lower prIces In remote rurul consumer murkets, becuuse ol Imper-
lect, lrugmented murkets und hIgh trunsportutIon costs.
MeunwhIle, the government stIll pluys u role In buerIng the potentIul conIcts ol Interest
over corn prIces between producers und consumers by mukIng low-cost corn und other stuple
loods uvuIluble to low-Income rurul consumers through communIty-munuged vIlluge stores,
especIully In southern MexIco. DIconsu, one ol the lust InstItutIonul remnunts ol Conusupo,
supplIes these 23,000 vIlluge stores wIth busIc loods ut prIces thut Include u subsIdy lor the
cost ol trunsportIng the commodItIes to remote ureus. These stores provIde u sulety net ol lood
securIty lor the net corn buyers who muke up u muorIty ol the rurul populutIon (Cuerru Ford
et ul 2005u, 2005b, see below). In response to the 2003 The CountrysIde Won't Tuke Any
More" protest, DIconsu ulso stopped supplyIng the vIlluge stores wIth Imported unImul leed
und Insteud begun provIdIng MexIcun whIte corn on u lurge scule. These vIlluge stores' sules ol
busIc stuple loods bolsters locul lood securIty und keeps consumer prIces down, coverIng un
estImuted 90% ol vIlluges (Ynez-Nuude 2007).
DIconsu stores ure hIghly geogruphIcully turgeted to low Income rurul communItIes. In 2005,
67.3 percent ol stores were In vIlluges ('loculItIes') consIdered to be eIther hIgh or very hIgh
'murgInulIty'. Il one ulso Includes vIlluges consIdered to be ol 'medIum murgInulIty', where
two-thIrds ol the populutIon eurned less thun twIce the mInImum wuge, then 86 percent ol
stores were locuted In low-Income communItIes (HuIght 2006). The rurul lood store system
ulso hus the most eectIve, broud-bused, communIty-bused oversIght system ol uny nutIonul
socIul or economIc progrum In MexIco, through u pIoneerIng, lurge-scule experIment In whut
hus come to be culled contruloru socIul," or socIul oversIght." In spIte ol wuves ol eIther
hostIlIty or IndIerence lrom senIor polIcy-mukers over the pust decude, the DIconsu store
network hus survIved lurgely becuuse ol Its broud-bused constItuency ol orgunIzed benecIu-
rIes, who ure umong the poorest ol the poor (Fox 2007u).
49 0urlng lts frst decade, the tortllla program had been wldely consldered to be lnemclent, as well as a tool of electoral
cllentellsm, but the fnal omclal evaluatlon concluded that lt had lmproved substantlally once lts management had been
transferred to Llconsa ln 1999 (Soto Romero 2004). ln addltlon, government nutrltlon experts found that the program had
substantlal posltlve lmpacts (Shamah Levy et al 2003). 1he pollcy declslon to ellmlnate the program was apparently not ln-
formed by the government's then-new external evaluatlon process (see Fox and Halght, ox 6 and Conzlez ^rreola, 2010).
Subsdzng 1neguaIty

BCX 4:
FOLLOWINC NAFTA, TORTILLA PRICE5 DID
NOT DIRECTLY REFLECT INTERNATIONAL
CORN PRICE5
Ertca 5tmmcns (Untverstty cf Chtcagc)
For over ten yeurs, the prIce ol tortIllus In MexIco CIty rose shurply, whIle the prIce ol
corn Imported lrom the UnIted 3tutes remuIned ulmost ut, In constunt peso terms.
NAFTA's promIse ol lower consumer prIces lor MexIcuns proved elusIve. Yet In recent
yeurs, us the prIce ol Imported corn begun to Increuse, tortIllu prIces dId not keep puce.
3Ince 2004, the prIce ol corn Imported lrom the U.3. hus Increused neurly l00%, whIle
tortIllu prIces huve gone up only 35%, uccordIng to the lederul government's prIce dutu
lor MexIco CIty. ThIs recent trend In corn prIce Increuses Is ohen lInked to InternutIonul
demund und subsIdIes lor ethunol.
Covernment polIcy uppeurs to be u key luctor uccountIng lor why tortIllu prIces huve not
unIlormly lollowed InternutIonul prIces. Aher u rupId spIke In tortIllu prIces In lute 2006
und eurly 2007, the Culdern udmInIstrutIon quIckly Intervened, estublIshIng u volun-
tury prIce puct." PurtIcIputIng lurge-scule retuIlers und processors ugreed to cup tortIllu
prIces ut 8.5 pesos/kIlo und corn our prIces ut 5 pesos/kIlo und the puct hus been re-
newed ut leust twIce. Indeed, the heud ol the UnIn NucIonul de IndustrIules de lu Musu
y lu TortIllu cluImed thut the government spent MX$4 bIllIon In subsIdIes to corn proces-
sors, In u lIttle-known progrum desIgned to keep retuIl prIces down durIng 2007 und
2008 (Conzlez 2009). In spIte ol un omcIul Ideology ol deregulutIon, stute InterventIon
contInues to pluy u sIgnIcunt role In MexIcun corn murkets.
Gragh 9
PlICl TllNLS l0l IMP0lTlL C0lN ANL T0lTIllAS
Sources. Annuel dete on the velue of U.S. corn exports to Mexco wes converted to pesos usng nomnel exchenge retes
lsted et. http.//www.ers.usde.gov/Lete/lxchengeletes/Lete/NomnelMonthlyCountrylxchengeletes.xls. Bese yeer for ell
dete s 1990. Tortlle prces ere ennuel evereges.
Sources. Unted Stetes Lepertment of Agrculture ,ennuel velue of corn exports to Mexco), Secretere de lconome de
Mxco ,Mexco Cty tortlle prce dete), end Benco de Mexco ,tortlle prce ndex). lor omcel prce dete on tortlles, see.
http.//www.economesnm.gob.mx/
0
1
2
3
4
5
6
7
8
9
1
9
9
0
1
9
9
1
1
9
9
2
1
9
9
3
1
9
9
4
1
9
9
5
1
9
9
6
1
9
9
7
1
9
9
8
1
9
9
9
2
0
0
0
2
0
0
1
2
0
0
2
2
0
0
3
2
0
0
4
2
0
0
5
2
0
0
6
2
0
0
7
2
0
0
8
1ortllla Prlces (Mexlco Clty) lmported U.S. Corn Prlces
P
e
s
o
s
/
k
l
l
o
1
Mexcan agrcuIturaI goIcy

9. CORN POLICY AND ENVIRONMENTAL


IMPACT5
The relutIonshIp between nutIonul corn polIcIes und locul envIronmentul Impucts Is not well-
understood.
50
Procumpo's orIgInul decree urgued thut dIrect puyments should encouruge con-
servutIon, restorutIon und reduce erosIon und pollutIon. The rules ol operutIon mentIoned the
possIbIlIty ol gettIng puyments lor ecologIcul proects," subect to EnvIronment MInIstry up-
provul. AccordIng to u MexIcun congressIonul reseurch center report, however, In reulIty... the
ecologIcul proects... ure no more thun u lew relerences In omcIul documents... The externul
evuluutIons... muke no relerence to uny envIronmentul components or IndIcutors, sImply be-
cuuse they do not exIst" (Peu Curzu 2009: 6). In pructIce, In spIte ol the nomInul omcIul regu-
lutIon ol chunges In lund use, lor exumple lrom lorest to pusture, uccordIng to the uuthor ol
thIs volume's eld survey ol producer perceptIons, In ull ol the omces ol 3ACARPA or stute
rurul ugencIes, uny ecologIcul Issue Is consIdered un IrrItutIon."
5l
The ugroecologIcul Impucts ol Procumpo huve receIved lIttle uttentIon lrom progrum evuluu-
tors und scholurs, but the most rIgorous studIes so lur IndIcute thut the progrum encouruges
delorestutIon In bIodIversIty hotspots (3chmook und Vunce 2009). Procumpo requIres lund be
cropped contInuously, whIch undermInes the sustuInubIlIty ol ugroecologIcul methods thut
trudItIonully leh lunds lullow (KlepeIs und Vunce 2003). Moreover, the wIdespreud producer
perceptIon thut the Procumpo progrum prohIbIts chungIng crops lurther lImIts rotutIon.
The luture ol MexIcun corn Is lIkely to be strongly Inuenced by seed polIcy decIsIons. The
MexIcun debute over luture seed technology hus been domInuted by the questIon ol whether to
permIt experImentutIon und use ol genetIcully-modIed orgunIsms (CMOs). ThIs Issue Is espe-
cIully controversIul becuuse ol MexIco's hIstorIc role us the source ol domestIcuted corn und us
u muor resource In terms ol corn bIodIversIty. Advocutes cluIm thut CMOs ure essentIul to
Increuse productIvIty, whIle crItIcs express concerns thut CMOs threuten corn bIodIversIty.
WhIle the pluntIng ol CMO corn hus been prohIbIted sInce l998, u recent scIentIc ussessment
concluded thut unIntended trunsgene ow Into MexIcun lundruces hus been conrmed." (PI-
eyro Nelson et ul 2008: ll). These specIulIsts ulso lound thut thut conventIonul technIques
lor meusurIng the presence ol trunsgenes In nutIve vurIetIes produces lulse negutIves," leud-
Ing them to conclude It Is urgent to estublIsh rIgorous. crIterIu lor bIomonItorIng ut centres
ol crop orIgInutIon und dIversIcutIon" (2008: ll). Nevertheless, MexIco's AgrIculture und En-
vIronment MInIstrIes recently decIded to permIt experImentul pluntIng ol CMO corn on 22
lurms In lour northern stutes. Yet the government's NutIonul BIodIversIty CommIssIon hus
expressed skeptIcIsm, strongly recommendIng the contInuutIon ol the morutorIum (3ee Box 5).
Debute contInues over whether the recent upprovul ol experImentutIon permIts Is consIstent
wIth the 2005 BIosulety Luw on CMOs.
52
To put the potentIul contrIbutIon ol CMO corn In context, MexIcun uveruge corn yIelds huve
Increused by more thut 63% sInce l980 - on uveruge (CEDR33A 2007). In other words, MexIcun
corn producers huve demonstruted substuntIul room lor Increused productIvIty bused on non-
CMO Improved seeds. Much ol thIs Improvement uppeurs to Involve IrrIguted corn. MeunwhIle,
reseurch to Increuse the yIelds und resIlIence ol nutIve seeds under ruInled condItIons hus not
receIved substuntIul government uttentIon In recent decudes.
50 For lnltlal overvlews, see 0e lta (2003) and Nadal and wlse (2004)
51 Maurlclo Maldonado, personal emall communlcatlon, Nov. 18, 2009
52 On the pollcy debate, see CLC (2004), Lloyd (2009), Mc^fee (2008) and Massleu 1rlgo (2009), among others.
Subsdzng 1neguaIty

BCX 5:
5ELECTED RECOMMENDATION5 FROM THE
COVERNMENT'5 NATIONAL COMMI55ION FOR
THE KNOWLEDCE AND U5E OF BIODIVER5ITY
#/.!")/ 345$9 c/2)'). !.$
$)6%23)&)#!4)/. /& #/2.
!. !.!,94)#!, 2%6)%7d
Takec Katc et al (CCHABIC)
l0: ReInstullutIon und muIntenunce ol the morutorIum on the IntroductIon ol trunsgenIc muIze In
MexIcun terrItory Is recommended untIl: l) the centers ol orIgIn und dIversIty ure precIsely
IdentIed, 2) Inlrustructure necessury lor the control ol trunsgenIc muIze Is In pluce, 3) the de-
gree ol trunsgenIc contumInutIon ol muIze vurIetIes throughout the country Is determIned, 4)
reseurch relevunt to the Impuct ol trunsgenIc muIze In MexIco Is currIed out, und 5) progrums
lor the protectIon, conservutIon und Improvement ol muIze ruces ure developed.
ll. The Luw on BIosulety ol CenetIcully ModIed OrgunIsms must be modIed: current concepts
ol centre ol orIgIn, centre ol dIversIty und the urtIcles reluted to them must be substuntIully
chunged becuuse they do not ugree wIth the scIentIc evIdence..
l5: To protect the genetIc dIversIty ol muIze, It Is necessury to protect more thun two mIllIon
smull scule or murgInulIzed lurmers In the country. They ure the guurdIuns ol the nutIve germ-
plusm ol muIze: they retuIn, muIntuIn und even modIly the genetIc dIversIty present In theIr
terrItorIes through exchunge, gene ow, und the testIng ol new seeds. They must be supported
through subsIdIes, technIcul ussIstunce und rurul development progrums.
Source. leto et el ,2009. 12)
Note. Ths s the document's omcel lnglsh trensleton. Ths report beceme publcly eccessble onlne n enuery 2010,
three months ener t wes omcelly releesed ,Serukhn 2009)
l0. RURAL POVERTY AD 5U5TAINABLE
FAMILY FARMINC: THE MI55INC LINK
IN ACRICULTURAL POLICY
In conclusIon, MexIco's luck ol u pro-poor ugrIculturul polIcy uppeurs to reect IneectIve rep-
resentutIon ol low-Income producers In the polIcy process. 3ome ol MexIco's lurgest, trudItIon-
ully purtIsun peusunt orgunIzutIons huve ullIed themselves wIth ugrIbusIness Interests In lu-
vor ol preservIng current lurm subsIdy polIcIes und IncreusIng governors' dIscretIonury lundIng
(Prez 2009, Merlos, Arteugu y ArvIzu 2009). 3Ince 200l, domInunt rurul Interest groups huve
closed runks und successlully Inuenced congress to steudIly Increuse overull ugrIculturul
spendIng, wIthout chungIng the polIcIes thut ullocute most ol the lunds to the weulthIest pro-
ducers. MeunwhIle, uutonomous peusunt orgunIzutIons guIned uddItIonul representutIon In
Congress durIng the 2003-2006 term, und peusunt protest In 2003 Increused theIr leveruge to
promote u legIslutIve InItIutIve to creute essentIully u Furm BIll lor MexIco.
53
ThIs bIll Involved
long-term budgetIng und polIcy plunnIng, und relorm ol muor progrums, such us Procumpo, to
Increuse theIr pro-poor locus und responsIveness to lurmer needs. Aher upprovul In Congress
In 2006, the legIslutIon stulled In the 3enute. LookIng buck, durIng thIs perIod rurul legIslutors
ol dIverse persuusIons were uble to Increuse upproprIutIons lor ugrIculture, but the pro-smnII
lurmer contIngent dId not munuge to chunge the wuy lunds were spent.
LookIng outsIde the Federul DIstrIct, muny uutonomous regIonul orgunIzutIons huve long ut-
tempted to represent the rurul poor In the polIcy process, ut both nutIonul und locul levels (Fox
2007u). For decudes, these non-purtIsun membershIp orgunIzutIons huve sought to lorm purtner-
53 1he Ley de Planeacln para la Soberana y Segurldad ^llmentarla y Nutrlclon.
1
Mexcan agrcuIturaI goIcy

shIps wIth open-mInded publIc sector omcIuls to encouruge more eectIve communIty eco-
nomIc development und publIc servIce delIvery, most notubly ut the regIonul level. Yet they
huve rurely lound wIllIng purtners In the publIc sector, und MexIco's trunsItIon to u competI-
tIve electorul system dId not open new doors, In spIte ol the chunge In the purty In power.
These orgunIzutIons' eorts to compete lor polIcymukers' uttentIon wIth entrenched vested
Interests luce enormous chullenges. In muny rurul regIons, the luck ol guurunteed lreedom ol
ussocIutIon, eectIve publIc securIty und the udmInIstrutIon ol ustIce shurply lImIts the cu-
pucIty ol low-Income cItIzens to exercIse voIce to delend theIr Interests und encouruge greuter
publIc sector uccountubIlIty.

AguInst thIs buckdrop ol under-representutIon ol cnmpcsno Interests In the ugrIculturul polI-
cy process, muny lumIly lumers emIgrute whIle others persIst. The result Is u growIng gup
between u shrInkIng shure ol the populutIon employed In ugrIculture und the sIze ol the rurul
populutIon overull. To un ever-IncreusIng degree, thIs rurul populutIon survIves on remIttunc-
es, wuge lubor und government trunslers. As noted, overull ugrIculturul employment dropped
substuntIully durIng the post-NAFTA perIod, lrom l0.7 mIllIon obs In l99l to 8.6 mIllIon In
2007, uccordIng to the two most recent ugrIculturul censuses. AgrIculture's shure ol MexIco's
obs overull ulso lell substuntIully, lrom 23% In l990 to l3% In 2008 - us predIcted by both
udvocutes und crItIcs ol NAFTA ut the tIme. At the sume tIme, the rurnI shure ol MexIco's
populutIon wus stIll ut 23.5% In 2008, huvIng declIned much more slowly. In 2005 the census
ugency consIdered 24.7 mIllIon people to be rurul, countIng only those lIvIng In communItIes
ol under 2,500 InhubItunts (other unulysts urgue lor u l5,000 cuto). In contrust, Il one upplIes
the OECD crIterIu ol rurulIty bused on populutIon densIty, the predomInuntly rurul" populu-
tIon rIses to 32.7 mIllIon (FIguerou 3undovul 2008: 8). In other words, MexIco's rurul populu-
tIon contInues to represent somewhere between one quurter to one thIrd ol the nutIonul pop-
ulutIon, dependIng on one's denItIon. ThIs growIng gup between MexIco's shrInkIng
ugrIculturul employment und u lurge rurul populutIon thut Is IncreusIngly supported by breud-
wInners who must eurn Income lur lrom home reveuls the growIng degree to whIch mIllIons
ol lumIlIes ure sepuruted, wIth the correspondIng unquuntIuble socIul und culturul costs.
In thIs context, It Is Importunt to recognIze thut Procumpo hus unlullled potentIul to begIn to
uddress rurul out-mIgrutIon. There wus no polIcy decIsIon to turget Procumpo Investments to
hIgher out-mIgrutIon ureus, und there Is no correlutIon between the geogruphIc dIstrIbutIon ol
Procumpo lunds und stute out-mIgrutIon levels. Yet more ne-gruIned econometrIc unulysIs
nds thut when the dIstrIbutIon ol Procumpo lunds Is dIsuggreguted to the munIcIpul level,
tukIng Into uccount Impuct on locul lubor murkets, the progrum does help to reduce out-mIgru-
tIon (Cuecuechu und 3cott, Box 7 und 20l0).
54
In spIte ol thIs Incrementul Impuct, however,
lurge-scule surveys nd thut 43.6% ol Procumpo purtIcIpunts surveyed hud u lumIly member
who mIgruted sInce l994 (CEA 2006: ll5).
In u context In whIch rurul Income comes prImurIly lrom outsIde the rurul sector - lrom wuge
remIttunces und government trunslers -- the prospects lor the rurul economy to be uble to
support more ol the rurul populutIon stIll depend prImurIly on ugrIculturul obs. In spIte ol
longstundIng hopes lor productIve rurul non-ugrIculturul employment, they huve not been
lullled on uny scule. The luture ol most ugrIculturul employment, In turn, depends on the lute
ol MexIco's lumIly lurms, Insolur us very smull lurms -- those wIth less thun 5 hectures - stIll
uccount lor two-thrJs ol MexIco's ugrIculturul employment (3cott, thIs volume). In other
words, euch peso In lurm subsIdIes thut goes to lurger lurmers generutes less employment
thun Il the sume peso went to smuller lurmers. Yet us thIs report shows, MexIco's lurm subsI-
dIes muInly go to lurger lurmers. As u result, us long us MexIco's ugrIculturul polIcy excludes
the goul ol mukIng more smull lumIly lurms economIcully vIuble, the outcome wIll be persIs-
tent poverty und more out-mIgrutIon.
54 Conzlez-Konlg and wodon reach slmllar concluslons.
Subsdzng 1neguaIty

BCX 6:
EVALUATINC EVALUATION5
}cnathan Fcx (UC5C) and Ltbby Hatght (UC5C/IBP)
In the lute l990s, the MexIcun government uttructed worldwIde uttentIon lor Its use ol
hIghly prolessIonul externul evuluutIons to ussess Its new ugshIp socIul progrum, then
known us Progresu. BegInnIng In 200l, the MexIcun government begun to requIre ull
lederul progrums subect to rules ol operutIon" to commIssIon externul evuluutIons,
whIch were delIvered to congress. BegInnIng In 2003, ugencIes were munduted to muke
these progrum evuluutIons publIcly uccessIble on-lIne. The MexIcun government hud cur-
rIed out numerous progrum evuluutIons belorehund, dutIng buck ut leust through the
l980s, but only ut the dIscretIon ol polIcymukers - und they remuIned strIctly conden-
tIul und were not even dIssemInuted wIthIn the publIc sector.
The government's current mundute to commIssIon evuluutIons covers progrums thut de-
lIver dIrect subsIdIes, such us Procumpo und Ingreso-ObetIvo, but does not cover pro-
grums thut delIver IndIrect subsIdIes, such wuter und electrIcIty lor lurmers wIth IrrIgu-
tIon, nor do they uddress progrums operuted by stute governments. AlIunzu wus un
exceptIon, however, huvIng been subect to u decude ol evuluutIons oIntly munuged by
3ugurpu und the FAO.
55
The omcIul evuluutIons ure currIed out by thIrd purtIes, but theIr degree ol uctuul Inde-
pendence vurIes. In pructIce, the evuluutors ure chosen by the ugencIes themselves,
whIch set the evuluutors' ugendu. It took severul yeurs lor the evuluutIon results to be-
come more consIstently uccessIble to the publIc (Fox und HuIght 2007). 3ome sIgnIcunt
evuluutIons dId not remuIn on ugency websItes. For exumple, one ol most reveulIng evul-
uutIons ol A3ERCA's MurketIng 3upport progrums, coverIng FY2006, Is no longer uvuIl-
uble on theIr websIte (A3ERCA 2006).
Very lew MexIcun evuluutIons lollow the stundurds set by Progresu, whIch sought to
determIne Impuct wIth scIentIc rIgor by usIng control groups. 3ome do document re-
sults, though theIr scope Is construIned by the luct thut both the evuluutIon ugendu und
the evuluutIng entIty ure usuully determIned by the ugency In questIon. As u result, most
MexIcun progrum evuluutIons locus prImurIly on complIunce wIth udmInIstrutIve rules,
wIthout questIonIng the purumeters set by the ugency under evuluutIon. 3ome ussess
progrum coveruge ol turget populutIons und curry out lurge-scule surveys thut ussess clIent
sutIsluctIon (e.g., Cuerru Ford 2005u, 2005b). Others document rutes ol clIent sutIsluctIon
wIthout uddressIng turget populutIons thut ure excluded lrom the progrum (e.g., A3ERCA 2006,
CEA 2006). In other words, Interested purtIes Inuence the evuluutIon ugendu (the ugen-
cy to be evuluuted), others Inuence the ndIngs (those wIth uccess to the progrums),
whIle the vIews ol stukeholders who ure excluded lrom the progrums ure not uddressed.
To encouruge congress to locus more on lessons lrom the evuluutIon experIence so lur,
MexIco's congressIonul rurul uuIrs reseurch center currIed out u very comprehensIve
metu-evuluutIon" ol ugrIculturul progrums, whIch IdentIed muny ol theIr construInts
(CEDR33A 2007c).
56
Nevertheless, there Is lIttle evIdence thut congress took the results
Into uccount. The World Bunk hus recently udded u muor contrIbutIon to the evuluutIon
lIteruture wIth un overvIew ol MexIcun broud publIc spendIng trends In ugrIculture und
rurul development, recently publIshed onlIne In both 3punIsh und EnglIsh (World Bunk
2009b).
57
In 2007, the NutIonul EvuluutIon CouncIl (CONEVAL) led u process thut compured pro-
grum gouls to operutIonul desIgn.
58
CONEVAL ulso contrIbutes to uddressIng u quulIty
control" gup In the omcIul evuluutIon polIcy, though much ol Its mundute Is cIrcum-
scrIbed to socIul progrums, whIch leuves out ugrIculture. In 2008, the publIc Interest
group CestIn 3ocIul y CooperucIn (CE3OC) currIed out u comprehensIve Independent
ussessment ol the desIgn ol l04 lederul progrums, generutIng u comprehensIve und uc-
cessIble runkIng:
59
AccordIng to CE3OC's dIrector:
55 See Scott, thls volume and Palmer-Rubln, thls volume. For a revlew of thls evaluatlon experlence, see Sagarpa/CLP^L/
F^O (2008).
56 Rlndermann, Cruz, 0e 0los 1rulllo and Ferman (2007) reach slmllar concluslons.
57 See www.worldbank.org/mexlco, under economlc and sector reports"
58 See coneval.gob.mx
59 See http://www.gesoc.org.mx/lcadl/
1
Mexcan agrcuIturaI goIcy

CIven the luck ol Interest thut the lederul government und the congress huve to encouruge
comprehensIve und trunspurent upprouches to the use ol the InlormutIon, CE3OC hus tuk-
en on the role ol metuevuluutIon ol the perlormunce evuluutIon polIcy (PED), lrom u cIvIl
socIety posItIon - provIdIng un Independent und systemutIc unulysIs ol the results ol the
externul evuluutIons ol progrums, us well us the condItIons In whIch they were currIed out
between 2007 und 2009... [these tools und runkIngs] permIt the detectIon ol strengths, us
well us specIc problem ureus thut requIre uttentIon to Improve the progrums' desIgn und
perlormunce."
60
CE3OC's ussessment ol Procumpo's evuluutIons durIng 2007-2009 guve the progrum u
slIghtly ubove uveruge runkIng lor the quulIty ol Its progrum desIgn:
[receIvIng].u rutIng ol 6.9 out ol l0 (45
th
out ol l04 runked). Procumpo cume out uheud
wIth rutIngs ol 7.6 y 7.8 In the IndIcutors lor strntcgc nIgnmcnt nnJ opcrnton, but re-
ceIved only 4.5 In orcntnton to rcsuIts nnJ thc ctzcnry. ThIs IndIcutes thut Procumpo
does uddress u hIghly relevunt publIc problem (low productIve cupucIty und poverty
umong rurul producers), und Its operutIons ure consIdered to lunctIon reusonubly In the
delIvery ol benets, but Its rutIonule lor IdentIlyIng Its benecIurIes Is Incorrect. Pro-
cumpo Is bused on un ullocutIon ol resources bused on theIr umount ol lund, und not on
the specIc needs ol the turget populutIon, whIch generutes u rcgrcssvc logIc In thut Its
benets end up dIsproportIonutely luvorIng those who huve more hectures In productIon
und those who huve hIgher Incomes." (emphusIs In orIgInul).
The DIrect Producer 3upport Progrum (Ingreso ObetIvo) wus runked 5.7 In the ICADI
study (7lth pluce out ol l04), wIth u runkIng ol 5.9 und 6.3 In the IndIcutors lor strntcgc
nIgnmcnt nnJ opcrnton und 4.5 In orcntnton to rcsuIts nnJ thc ctzcnry. These runk-
Ings ure due to the luck ol clurIty In the denItIon ol the progrum's turget populutIon, the
luck ol medIum und long term plunnIng Instruments to ussure the progrum's consIsten-
cy, us well us the weuk logIc ol the lInkuges between thIs progrum und Procumpo, In
terms ol the results thut they seek.
The two progrums shure sImIlur strengths und weuknesses: operutIonul cupucIty but
lIttle cupucIty to resolve the publIc problem thut they were creuted to uddress: to deul
wIth the growIng levels ol InequIty und poverty umong rurul producers."
6l
3o lur, MexIco's omcIul evuluutIons In ugrIculture huve hud lImIted Impuct on the polIcy
process. ThIs substuntIul body ol reseurch constItutes un untupped resource lor Inlorm-
Ing publIc debute over ugrIculturul polIcy.

BIBLIOCRAPHY
Aduto, MIchelle und John HoddInott (eds.) (20l0). ConJtonnI Cnsh Trnnsjcrs n Lntn Amcr-
cn, BultImore: John HopkIns UnIversIty Press, lorthcomIng.
Almudu MIreles, Hugo (2007) Lu compru y couccIn del voto: Unu experIencIu cIududunu,"
presented ut: Cundudos y derechos: ProteccIn de progrumus socIules y construccIn de
cIududunu," MexIco CIty, UnIted NutIons Development Progrum, AprIl. http://www.semI-
nurIoproteccIondeprogrumus.org.mx/
ApurIcIo, RIcurdo und DuvId Corrochuno (2005). El perl del votunte clIentelur en MxIco
durunte lus eleccIones de 2000," LstuJos SocoIgcos, l2(68). http://redulyc.uuemex.mx
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mcntnrn cn Mxco. MexIco CIty: ColegIo de MxIco.
AppendInI, KIrsten, Rul Curcu BurrIo und BeutrIz De lu TIeru Hernndez (2008). 3egurI-
dud ulImenturIu y culIdud" de los ulImentos: unu estrutegIu cumpesInu," In Rul Curcu
BurrIos, BeutrIz De Lu TIeru Hernndez und KIrsten AppendInI (eds.) lnsttuconcs y Jcsn-
rroIIo Lnsnyos sobrc In compIcjJnJ JcI cnmpo mcxcnno, MxIco: UNAM. UACH/ ColegIo
de MxIco. pp. l05-l32.
AppendInI, KIrtsen, Lorenu Corts und Vuldemur Duz HInoosu (2008). EstrutegIus de segurI-
dud ulImenturIu en los hogures cumpesInos: Lu ImportuncIu de lu culIdud del muz y lu tor-
tIllu," In KIrsten AppendInI und CubrIelu Torres-Muzueru (eds.) RurnIJnJ sn ngrcuIturn
MexIco: El ColegIo de MexIco, pp. l03-l28.
Arslun, AslIhun und J. Edwurds Tuylor (2009). Furmers' 3ubectIve VuluutIon ol 3ubsIstence
Crops: The Cuse ol TrudItIonul MuIze In MexIco," Amcrcnn )ournnI oj AgrcuIturnI Lconom-
cs, 9l(4). pp. 956-972.
60 See Conzlez ^rreola (2010)
61 lbld
Subsdzng 1neguaIty

ArvIzu, Juun (20l0). Muyorgu: 'NI por tIcu deo de recIbIr mI subvencIn'," LI UnvcrsnI. Feb-
ruury l8, http://www.elunIversul.com.mx/grucos/especIul/EU_procumpo/muyorgu.html
A3ERCA (Apoyos y 3ervIcIos u lu ComercIulIzucIn AgropecuurIu) (2006). Progrumu de upo-
yos dIrectos ul productor por excedentes de comercIulIzucIn puru reconversIn productIvu
IntegrucIn de cudenus ugroulImenturIus y utencIn u luctores crtIcos," MexIco CIty:
A3ERCA
A3ERCA (Apoyos y 3ervIcIos u lu ComercIulIzucIn AgropecuurIu) (2008). Avunce de upoyos
entregudos por trunslerencIu electrnIcu, ul l4 de ugosto de 2008," MexIco CIty: A3ERCA,
CoordInucIn Cenerul de ComercIulIzucIn, DIreccIn de Pugos u lu ComercIulIzucIn.
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2
AgrcuIturaI
subsdy grograms:
The ratonaIe and
rratonaIty ot a goorIy-
desgned goIcy
Maurcc Mernc
l
#ENTRO DE )NVESTIGACIN Y $OCENCIA %CONMICAS
1 1hls paper was wrltten wlth the collaboratlon of Natalla Rlvera and ordy Melndez. ^ longer verslon of thls paper, lncludlng
all complete blbllography, was publlshed as a Cl0L worklng Paper (01/0^P 229, September, 2009). 1he full verslon lncludes
detalled, full cltatlons of numerous pollcy analyses and data sources, as well as government regulatlons, operatlonal manuals
and decrees. 1hls summary verslon was edlted by onathan Fox wlth the collaboratlon of Maurlclo Snchez ^lvarez and, then,
corrected by the author.
2
AgrcuIturaI Subsdy Programs

CIundomenIco Munone hus suggested thut publIc polIcIes, lIke scIentIc reseurch progrums,
huve u hurd core." At the heurt ol ull polIcIes, there Is the denItIon ol the problem thut the
stute wIll uddress, the crIterIu und vulues thut guIde Its InterventIon, us well us Its specIc
Intended goul. To contInue the metuphor, Muone suys thut polIcIes ulso huve theIr sulety
belt" (mude up ol the rules, resources, lunctIons, uctIons und ugencIes In churge ol curryIng
them out), und thut It muy -or should- be udusted ulong the wuy (l997).
ThIs study shows whut huppens when the hurd core ol u polIcy Is not well-dened und, Insteud,
It Is bound by un excessIvely rIgId sulety belt, unuble to udupt to new cIrcumstunces, und wIthout
the tImely ussessment mechunIsms thut cun Issue u wurnIng ubout u polIcy thut Is no longer
meetIng Its gouls. When unreluted or even contrudIctory gouls uccumulute, the lormul proce-
dures muy become u meuns to cupture or dIvert publIc resources, und eventuully bureuucrutIc
routInes cun repluce the polIcy's orIgInul gouls. Aher studyIng the polIcIes desIgned to grunt
ugrIculturul subsIdIes In MexIco lrom l994 to 2009, we huve lound thut the combInutIon ol un
Ill-dened und reluxed hurd core wIth u rIgId sulety belt resulted In the cupture ol resources,
the devIutIon ol polIcy gouls und, probubly overt ucts ol corruptIon. The evIdence ulso shows thut
trunspurency muy be u uselul tool to observe those cuses ol cupture, devIutIon und corruptIon
In publIc polIcIes.
Our study locuses on the Procnmpo und lngrcso Dbjctvo progrums, whIch constItute the core ol
the current polIcy to support the MexIcun ugrIculturul sector. The prIor hIstory ol ugrIculturul
polIcy reects two opposIte upprouches: the rst one, lrom l970 to l982, Involved the strengthen-
Ing ol stute purtIcIputIon In rurul development und the promotIon ol nutIonul lood securIty.
2

The second one, currIed out uher the l982 economIc crIsIs, chunged the prevIous lorms ol stute
InterventIon und pursued u more murket-orIented ugrIculturul development upprouch. DurIng
thIs perIod, the stute contInued to Intervene, not wIth lurge Investments but wIth new regu lu-
tory Instruments. Cruph shows thut uher l985, publIc expendIture turgeted ut rurul develop-
ment begun to decreuse, seekIng greuter InsertIon ol producers In the murket (see Cruph ).
Craph l
PUBlIC lXPlNLITUll IN lUlAl Ll\ll0PMlNT, B CATlC0l, 19S22006.
MIllI0N PlS0S, 1994
5curce: lello ,200S. S)
DurIng the l970s, MexIcun ugrIculture wus not open to InternutIonul murket lorces, und Imports
requIred specIul permIts or were currIed out dIrectly by the stute. The government's NutIonul
BusIc Foods Compuny (Conusupo) reguluted prIces by purchusIng busIc gruIns vIu support prIces.
The lederul government ulso subsIdIzed Inputs, such us lertIlIzers, seeds, wuter, ugrochemIculs
und credIt. Covernment ugencIes Involved In murketIng busIc gruIns und IndustrIul crops trIed
to creute murketIng ulternutIves In Isoluted ureus, where the locul bosses controlled the trude
In lood und other goods.
2 See Hewltt de ^lcntara (2007) and Fox (1990, 1992), among others.
Productlve actlvltles Soclal development aslc and productlve lnfrastructure
0
5,000
10,000
15,000
20,000
25,000
30,000
35,000
40,000
1
9
8
2
1
9
8
3
1
9
8
4
1
9
8
5
1
9
8
6
1
9
8
7
1
9
8
8
1
9
8
9
1
9
9
0
1
9
9
1
1
9
9
2
1
9
9
3
1
9
9
4
1
9
9
5
1
9
9
6
1
9
9
7
1
9
9
8
1
9
9
9
2
0
0
0
2
0
0
1
2
0
0
2
2
0
0
3
2
0
0
4
2
0
0
5
2
0
0
6
Subsdzng 1neguaIty

In l980, the government luunched the MexIcun Food 3ystem (3AM), whIch uImed to loster the
productIon ol stuple loods, to Improve gruIn dIstrIbutIon nutIonully und, eventuully, to reuch lood
sell-sumcIency. ThIs progrum trIed to move lrom u regressIve upprouch thut treuted the poorest
und the rIchest producers us though they were equul, towurds u more peusunt-orIented up-
prouch thut uttempted to luvor busIc gruIns und ruInled ugrIculture. The 3AM progrum trIed to
develop un Integruted strutegy thut uddressed ull the lInks In the lood productIon und consump-
tIon chuIn, lrom the use ol more productIve seeds to the nutrItIonul enrIchment ol stuple loods,
wIth greuter polItIcul support ol the government. However, the combInutIon ol nuncIul mIs-
munugement und the lull ol oIl prIces rendered thIs upprouch economIcully unvIuble.
The De lu MudrId udmInIstrutIon (l982-l988) then begun u process ol structurul udustment In
the government support system lor ugrIculture. The 3ulInus de CorturI udmInIstrutIon (l988-
l994) elImInuted most ol the support prIces und substuntIully decreused turIs, wIth the excep-
tIon ol the protectIon grunted to corn und beuns. ThIs trude und murket lIberulIzutIon reveuled
u serIes ol old structurul problems, such us producers' luck ol knowledge und experIence regurd-
Ing the murketIng process, us well us Inudequute Inlrustructure und nuncIng, whIch led to
producer uncertuInty In the luce ol luture InternutIonul competItIon und prIce mobIlIty. In l989
und l990, In luct, commercIul producers hud greut dImculty sellIng theIr crops und the govern-
ment responded by creutIng u new ugency culled AgrIculturul MurketIng 3upport 3ervIces
(A3ERCA) In l99l, wIth broud new responsIbIlItIes lor productIon und murketIng.
But the l992 relorm ol ArtIcle 27 ol the ConstItutIon wus perhups the centerpIece ol the relor-
mulutIon ol the MexIcun stute's rurul development strutegy. ThIs relorm promoted the dIvIsIon
ol cjJo lund Into IndIvIduully tItled purcels, legulIzed lund rentul und ullowed Its conversIon Into
prIvute property. The system ol ugrurIun courts wus ulso relormed to ududIcute lund dIsputes,
und u new ugency (PROCEDE) wus creuted to dene und tItle lund purcels wIthIn eIdos. Meun-
whIle, the negotIutIons ol the North AmerIcun Free Trude Agreement (NAFTA) were In progress.
The treuty, whIch would come Into eect In Junuury l994, xed u l5-yeur term to lIberulIze
ugrIculturul trude (IncludIng the most sensItIve crops, corn und beuns) und InspIred the creutIon
ol the DIrect Rurul 3upport Progrum (Procumpo), on July 25 ol thut yeur. ThIs Is how u new eru
In the hIstory ol MexIcun ugrIculturul support polIcIes begun.
l. PROCAMPO
Procumpo not only repluced the prevIous ugrIculturul support strutegy, but It ulso sought to reuch
u sector ol producers who hud been excluded by It. The new polIcy desIgn took Into uccount low-
Income producers who produced muInly lor household consumptIon. ThIs sector hud not re ceIved
Conusupo's support (vIu support prIces und murketIng subsIdIes) becuuse It dId not produce
murketuble surpluses und, uccordIng to omcIul estImutes, thIs sector not only numbered more
thun 2.2 mIllIon producers, but -uccordIng to publIc omcIuls Involved In the desIgn ol thIs new
polIcy- the system ol support prIces hud contrIbuted to IncreusIng InequulIty In Income dIstrI-
butIon. As u result, Procumpo chose to gIve producers u set puyment per hecture In euch ugrI-
culturul cycle so thut they could operute bused on the elIgIble lund ureu In productIon, und
were not tIed eIther to the IndIvIduul producer or to the volume hurvested.
From Its rst yeur, Procumpo rules lImIted puyments to producers ol corn, beuns, wheut, rIce, sor-
ghum, soybeuns, cotton, sumower und burley. The progrum begun wIth u closed" support ureu,
determIned by the lunds thut hud been sown wIth those elIgIble crops durIng the three crop
cycles prIor to the sprIng-summer ol l993. By the l995/l996 lull-wInter crop cycle, however, ull
legul crops were ullowed, us well us lIvestock, tImber productIon und lund In upproved ecologIcul
proects. From the begInnIng, the regIstrutIon wus open to IndIvIduuls or rms und, uccordIng to
the orIgInul rules, the support checks would be Issued prelerentIully to the IndIvIduul producer,
though In the cuse ol socIul orgunIzutIons the lunds could be receIved by theIr legul representutIves.
Procumpo's orIgInul rules were luter modIed lrequently, tryIng to correct errors, to uddress
umbIguItIes und to udust progrum operutIons, whether concernIng the productIon cycles or the
InlormutIon requIred lor the producer upplIcutIon -- whIch hud to be renewed unnuully. Under
the Fox udmInIstrutIon (2000-2006), two polIcy chunges luvored low-Income producers: those
who cultIvuted less thun 5 hectures (l2.3 ucres) would receIve u slIghtly hIgher puyment per
hectucre, the support would be delIvered (only In the cuse ol the sprIng-summer cycle) belore
the pluntIng seuson, und the umounts ol the puyments lor plots smuller thun one hecture (2.5
ucres) would be rounded up to thut ol one lull hecture.
As ol 2002, Procumpo dutu on regIstered plots dIvIded the benecIurIes Into three cutegorIes:
those wIth less thun l hecture, those wIth between l und 5 hectures, und those wIth more thun
5 hectures. ThIs dIvIsIon wus the busIs lor estublIshIng, In 2003, dIerentIuted puyments levels
lor those wIth up to 5 hectures, who then receIved u per hecture umount slIghtly hIgher thun
the one receIved by the lurger producers. Furthermore, In the most recent chunges to the progrum,
2
AgrcuIturaI Subsdy Programs

publIshed on AprIl 8, 2009, the dIerentIutIon ol rutes lollows u three-level upprouch: un ullI-
unce rute" lor ruInled plots wIth lewer thun 5 hectures, u prelerentIul rute" lor ruInled plots
wIth more thun 5 hectures, und u normul rute" lor the rest ol the ruInled plots und lor ull the
lull-wInter (IrrIguted) plots. ThIs lust modIcutIon ulso Included, lor the rst tIme, u ceIlIng ol
M$l00,000 (uround $7,700 dollurs), per person, per crop cycle. The lust modIcutIon wus u
reuctIon to the progrum's excesses, becuuse even though It wus thought thut Procumpo's regu-
lutIons hud ulreudy Incorporuted the ceIlIngs on the sIze ol prIvute lundholdIngs ol up to l00
IrrIguted hectures und 200 ruInled hectures (uccordIng to Art. 27 ol the ConstItutIon), It wus not
untIl the AprIl, 2009 rule chunge thut the progrum explIcItly set u cup on the muxImum umount
ol lundIng thut u producer could receIve.
Furthermore, Procumpo ulso spun o u reluted progrum culled Procumpo CupItulIzu, desIgned
to stImulute the cupItulIzutIon ol the orIgInul progrum benecIurIes through loun ugreements
thut would be repuId wIth the progrum's own luture ow ol puyments. AccordIng to Its rules,
ull upplIcutIons requIred u productIve proect, whether prImury or ugroIndustrIul productIon,
thut lederul, stute und locul ugrIculturul omcIuls would evuluute und eventuully upprove
(3ugurpu, Conseo MexIcuno puru el Desurrollo Rurul 3ustentuble, wIth the ussIstunce ol the
stute, dIstrIct und munIcIpul councIls und A3ERCA). The progrum ulso estublIshed thut orgunIzed
low-Income benecIurIes, especIully women und IndIgenous groups, would be gIven prIorIty.
FInully, though stute und munIcIpul uuthorItIes huve u suy In the desIgn und plunnIng ol other
rurul development progrums, Procumpo Is munuged by the lederul government. Euch yeur, Pro-
cumpo's proects und upplIcutIons ure submItted to the locul MInIstry ol AgrIculture's omces,
the Rurul Development 3upport Center (CADER). CADER, together wIth the 3ocIul OversIght
CommIttee, revIews the upplIcutIon und supportIng documents, und then the upplIcutIon mukes
Its wuy up the chuIn ol commund to the regIonul omce ol A3ERCA, where It Is electronIcully
processed und receIves u rst upprovul. Aher muny levels ol revIew wIthIn A3ERCA und ut the
MInIstry ol AgrIculture regIonul omces, the upplIcutIons ure nully upproved und then A3ERCA
Issues the checks, whIch ure delIvered to the producer In the sume CADER omce where theIr
upplIcutIon wus submItted (wIth the exceptIon ol the growIng shure ol puyments thut ure mude
by dIrect bunk trunsler).
2. MARKETINC 5UPPORT PROCRAM5
3Ince l99l, A3ERCA luunched Its MurketIng 3upport Progrum (PAC) to support cotton, rIce,
sorghum, soybeuns und wheut crops. Mostly, these progrums were not turgeted ut producers,
but to buyers ol crops thut could be experIencIng murketIng dImcultIes (such us u unloreseen
lull In InternutIonul ugrIculturul prIces). In 200l, however, reportedly In response to concerns
ol producers und stute governments, the Progrum ol MurketIng 3upport und RegIonul Murket
Development (PACDMR) redIrected the ow ol resources dIrectly to producers. The correspond-
Ing progrum rules were publIshed In 2003 und stuted specIcully thut the goul ol the Ingreso
ObetIvo progrum Is to delIver supports dIrectly to ugrIculturul producers, whether IndIvIduuls
or rms, who huve murketIng problems or surpluses ol elIgIble crops." The lundIng lrom In-
greso ObetIvo covers most seeds und gruIns, und the umount ol the subsIdy Is determIned by
the dIerence between the crop's turget prIce - u cost ulreudy estublIshed In order to uvoId
losses- und the murket prIce. ThIs Is very sImIlur to support prIces, but converted Into puy-
ments orgunIzed so thut uny producer regIstered In Procumpo could get It.
These puyments huve u muxImum umount, correspondIng to the productIon ol l00 IrrIguted
hectures or Its equIvulent In seusonul lund, per person. At the end ol 2007, the progrum chunged
Its nume to Progrum ol AttentIon to 3tructurul Problems (ulso known us Compensutory 3up-
ports). LIke Procumpo, the Ingreso ObetIvo subprogrum Is lInked to producers through the
MInIstry ol AgrIculture's lederul und stute omces, und Is operuted by A3ERCA.
3. DIVERTED AND FRU5TRATED COAL5
The lIteruture on publIc polIcy desIgn und ImplementutIon stresses thut one ol the most sIgnI-
cunt uws ol uny stute InterventIon Is the luck ol u cleur denItIon ol the problems to be uddress ed,
bused on u precIse IdentIcutIon ol theIr cuuses und the puthwuys ol uctIon to chunge the stntus
quo. ThIs luck ol denItIon not only generutes the ImmInent rIsk thut ull bureuucrutIc uctIons
ustIly themselves, In the nume ol more or less vugue gouls, but It ulso becomes pructIcully Im-
possIble to evuluute whether the polIcy hus uchIeved Its gouls. In thIs scenurIo, u publIc polIcy
Is more lIkely to be held cuptIve by Interests thut come Into pluy durIng Its ImplementutIon.
Procumpo's loundIng decree suId thut Its muIn goul wus to trunsler resources to support the
economy ol rurul producers, who plunt lund elIgIble to be regIstered In the progrum dIrectory,
Subsdzng 1neguaIty

lulll the requIrements und present wrItten upplIcutIons lor support." The Ideu wus to estublIsh
u dIrect lInk to the economy ol rurul producers, through uctIons thut encouruge trunspurency
und ght corruptIon," In order to uchIeve u lIst ol sIx dIerent cluuses" (or gouls) the progrum hud
to uccomplIsh und thut, lrom the begInnIng, reveuled the conlusIon between the polIcy's hurd
core und the meuns to curry It out.
The rst ol these cluuses wus to Improve Internul und externul competItIveness, to ruIse the
stundurd ol lIvIng ol rurul lumIlIes, und to modernIze the murketIng system. In order to Increu se
the rurul productIon unIts' cupucIty lor cupItulIzutIon." The second cluuse emphusIzed thut the
supports should be used to convert those lunds, wherever possIble, In order to estublIsh more
protuble uctIvItIes, thus gIvIng economIc certuInty to rurul producers und greuter cupu cIty to
udupt to chunge." The thIrd one wus to promote new ullIunces between the socIul und the
prIvute sectors... through the udoptIon ol more udvunced technologIes."
The lourth cluuse thut ustIed the subsIdIes wus much more locused: Becuuse more thun 2.2
mIllIon rurul producers use theIr productIon lor household consumptIon, they ure excluded
lrom the support system, und therelore, huve u dIsudvuntuge compured to producers who mur-
ket theIr hurvests, onc oj thc mnn gonIs oj ths progrnm s to mprovc thc ncomcs oj thosc
proJuccrs." The hh cluuse mentIoned envIronmentul conservutIon gouls. The sIxth one sum-
murIzed thut It wus In the nutIonul Interest to support rurul producers, by meuns ol u progrum
thut ruIses the stundurd ol lIvIng und losters rurul development." The creutIon ol Procumpo
CupItulIzu uddressed one ol the more specIc gouls thut hud not been uddressed by the regulur
progrum (Procumpo TrudIcIonul), to cupItulIze productIon unIts und to encouruge economIc
certuInty. Although Ingreso ObetIvo wus purt ol u dIerent progrum, whIch lundumentully
supports producers wIth murketIng surpluses, us hus been noted, It shures wIth Procumpo the
goul ol IncreusIng competItIveness und economIc protubIlIty In the MexIcun countrysIde.
The problem Is thut none ol those gouls huve been uchIeved In u stuble or permunent wuy. The
government spends substuntIul umounts on ugrIculturul support (It hus to be noted thut Pro-
cumpo uccounts lor ulmost 5% ol the ugrIculturul CDP sInce l994), but thIs lundIng hus not
trunsluted Into u more competItIve ugrIculturul sector, nor In u sustuIned Increuse In productIon
ol gruIns und oIlseeds, nor In un Improvement In the stundurd ol lIvIng ol the more dIsudvuntuged
producers. Ruther, MexIco remuIns substuntIully dependent on ugro-lood Imports. Though the
yIeld per hecture hus Improved In the lust eIght yeurs, MexIco Is stIll well behInd Cunudu und
the UnIted 3tutes, whIch IndIcutes the structurul lrugIlIty ol Its ugrIculture. As the Federul
AudIt Agency hus lound, the IndIcutors constructed by A3ERCA. do not ullow lor meusurIng
the emcIency wIth whIch Its strutegIc gouls huve been uchIeved, IncludIng the Improvement
ol the Income level ol rurul producers und the Increuse ol the cupItulIzutIon cupucIty ol theIr
productIon unIts."
3
The lImIted dutu gIven by the evuluutIons ubout the vurIubIlIty ol Income level ol the bene-
cIurIes und the cupItulIzutIon ol productIon unIts Is bused on the perceptIon" ol the supported
producers, und Is not dIsuggreguted by stutes und munIcIpulItIes. AccordIng to u ColegIo de
MexIco economIcs thesIs, Procumpo producers huve not chunged the productIon putterns lrom
[busIc] gruIns to other kInds ol crops. [Between] l994 to 2005 only. l4% ol progrum benecIurIes
huve chunged theIr lund use puttern."
4
Furthermore, thIs gure corresponds muInly to cjJo
producers In northwestern MexIco wIth more thun 5 IrrIguted hectures.
In terms ol poverty trends, the shure ol rurul InhubItunts below the poverty lIne lell by more
thun l0 poInts, lrom 66.5% In l992 to 54.7% In 2006. However, In 2006, ol l4.4 mIllIon people
omcIully consIdered to be In ucute poverty (pobrezu ulImenturIu",) two-thIrds lIved In the
countrysIde. Although ubsolute poverty hus lullen ut the nutIonul level, the gup between the
developed North und the buckwurd 3outh remuIns. ThIs Issue should not be overlooked, be-
cuuse u compurIson ol the stutes thut huve receIved the most support lrom Procumpo und
Ingreso ObetIvo wIth those thut huve the most producers regIstered, cleurly shows thut the
subsIdIes ure concentruted In the North, whIle the producers ure concentruted In the 3outh.
The omcIul dutu In Tuble l IndIcutes thut the lurm subsIdy polIcy hus lollowed u two-truck
strutegy. On the one hund, the rIcher stutes ol the Northwest should huve Increused theIr com-
petItIveness, productIon und productIvIty, und, on the other hund, the poorer stutes ol the 3outh
und Center should huve reduced theIr poverty, but neIther ol these two sItuutIons hus hup-
pened.
3 ^udltora Superlor de la Federacln (2008: 415). For addltlonal detalls on Mexlcan agrlcultural trends, see Merlno (2009).
4 See Cern Monroy (2008)
2
AgrcuIturaI Subsdy Programs

TabIe 1
lAlM SUBSIL AM0UNTS ANL LISTlIBUTI0N 0l BlNllICIAlIlS IN SlllCTlL STATlS
3tute
l994-2008 Procumpo und
Ingreso ObetIvo umounts
Percentuge BenecIurIes Percentuge
3Inulou $l8,l45,970,543 l0.8% 86,892 3.4%
TumuulIpus $l4,937,699,9l8 8.9% 68,7l0 2.7%
Zucutecus $ll,489,27l,362 6.8% l06,02l 4.l%
JulIsco $ll,284,293,808 6.7% l08,3l5 4.2%
ChIhuuhuu $l0,255,034,0l6 6.l% 79,898 3.l%
3onoru $8,66l,l24,964 5.l% 2l,262 0.8%
ChIupus $ll,039,566,255 6.6% 236,l48 9.2%
Ouxucu $6,360,839,300 3.8% 237,87l 9.3%
Verucruz $6,764,979,568 4.0% 205,96l 8.0%
Pueblu $6,372,070,477 3.8% l70,02l 6.6%
Cuerrero $4,588,l59,437 2.7% ll6,498 4.5%
5curce: ACllCA, dete eveleble et www.subsdoselcempo.org.mx, ASl ,200S.41S), UNLP ,2009. 6)
In uddItIon, the omcIul dutu hus been Incomplete und Inuccurute. Up to 2008, A3ERCA hud not
yet quuntIed Its operutIon costs, nor hud It produced relIuble emcIency IndIcutors. The uvuIl-
uble InlormutIon, uccordIng to externul evuluutIons, IndIcuted thut the omcIul versIons huve
tended to conrm Procumpo's operutIonul emcIency. usIng vurIous IndIcutors. thut leud the
evuluutIons to conrm luvoruble expectutIons ubout the progrum's luture," but In concrete
terms, the evuluutIons us such do not provIde conclusIve evIdence regurdIng the progrum's
multIplIer eects on productIve uctIvIty und the stundurd ol lIvIng ol the benecIurIes."
5
4. "WE ALL ACREE, BUT WE WANT MORE"
WIth so muny gouls und such meuger results, we muy usk: Whut wus the muIn problem thut
wus to be uddressed und whut wus the denItIve goul thut subsIdy polIcy wus supposed to
uchIeve Why do the most InuentIul orgunIzutIons In rurul MexIco, us well us the governors
ol the stutes thut huve receIved the most lundIng, delend u polIcy thut hus not uchIeved Its
gouls uher l5 yeurs ol operutIon The dutu uvuIluble suggest thut the progrums huve been
muIntuIned only becuuse ol the commItments estublIshed wIth those who huve beneted the
most, und becuuse ol the polItIcul Interests thut huve converged uround those resources. There
Is ulso evIdence thut the ImplementutIon ol those progrums hus creuted opportunItIes lor cor-
ruptIon. But the most solId explunutIon ol these progrums' contInuIty would be In the prIor
constructIon ol clIentelIstIc networks und mutuully benecIul relutIonshIps thut neIther the
producer orgunIzutIons nor the stute governments, nor the lederul government huve been uble
to breuk. On the contrury, euch tIme there hus been un eort to modIly the relutIonshIps, con-
Ict hus ensued.
In August 2008, the [then] 3ecretury ol AgrIculture, Alberto Crdenus, unnounced thut the
lederul government wus consIderIng chungIng the rules ol operutIon ol A3ERCA's two muIn
subsIdy progrums (Procumpo und Ingreso ObetIvo), In order to seek greuter bulunce between
Income groups und regIons.
6
The unnouncement ulso conrmed thut PresIdent Culdern hud
uuthorIzed the extensIon ol those progrums lor un uddItIonul 5 yeur perIod, even though theIr
orIgInul l5-yeur lIlespun wus ubout to end.
TabIe 2
Pl0LUCllS, lANL ANL SUBSIL IN Pl0CAMP0, B ll\ll, 2006
Level
Producers
(thousunds)
%
Hectures
(thousunds)
%
3ubsIdy
receIved %
I. Up to l hecture lots 6l2.4 23.9 606.5 4.3 0.6%
II. l to 5 huctures l,373.4 53.6 3,977.l 28.2 46.l%
III. More thun 5 hectures 576.5 22.5 9,5l9.7 67.5 53.3%
Totul 2,562.3 l00 l4,l03.3 l00 l00
5curce: Author's enelyss from dete n ASl ,200S. 42S) Aveleble et http.//www.esf.gob.mx, secton. Informe de Audtores'
5 See 0urn Ferman, Schwenteslus Rlndermann, Cmez Cruz and 1rulllo Fllx (2007: 13)
6 vernlca Martnez, aa Procampo apoyo a estados norteos", Rcjormo, ^ugust 20, 2008.
Subsdzng 1neguaIty

The Federul AudIt und omcIul dutu show u strong concentrutIon ol Procumpo resources between
l994 und 2006. At one end, 0.2% ol benecIurIes (u lIttle more thun 50,000 producers) receIved
puyments lor more thun l00 hectures euch, uccountIng lor 8.7% ol the totul puyments.
7
At the
other end, us cun be seen In Tuble , 23.9% ol the producers regIstered wIth less thun one
hecture euch burely receIved 0.6% ol the resources, even though they hud 4.3% ol the lund.
ThIs Is the busIs lor the Federul AudIt Agency's recommendutIon thut the MInIstry ol AgrIculture
revIew the progrum's rules ol operutIon, wIth the explIcIt purpose ol uvoIdIng the reproductIon
ol thut Income concentrutIon.
At the begInnIng ol 2009, however, the reectIon ol the chunges recommended by the Federul
AudIt Agency hud become u polItIcul cuuse lor most ol the stute governments und the more
InuentIul producer orgunIzutIons In MexIco. There wus no opposItIon to the government's
decIsIon to ruIse the subsIdIes turgeted ut the smullest lurms, us hud been huppenIng. But
whut provoked u reul medIu buttle wus the proposul to obtuIn those uddItIonul resources lor
the poorest by reducIng the puyments to the owners ol the lurger lurms, whIch would ulso leud
to the redIstrIbutIon ol resources lrom some stutes to others. For Instunce, the secretury ol
rurul development ol the stute ol TumuulIpus, upon leurnIng thut the MInIstry ol AgrIculture
wus consIderIng reducIng puyments to lurge producers, udmItted thut uround 45% ol 2008
Procumpo budget would go to only 9% ol the producers enrolled. But he udded, the 3ecretury
[Alberto Crdenus] doesn't understund thut thut 9% produces 92% ol the gruIn In MexIco."
8
But
hIs counterpurt In the stute ol 3Inulou, Jorge Kondo Lpez, then chuIrmun ol the MexIcun
AssocIutIon ol AgrIculturul Development 3ecreturIes (AM3DA) dened the terms ol the conIct
whIch would modIly the rules ol the gume, Whut Crdenus Is tryIng to do meuns tukIng lunds
lrom the stutes, he Is conlrontIng us. The stute governments ure wIllIng to revIew the progrum,
but not Il It meuns tukIng resources uwuy lrom us."
9
It Is no coIncIdence thut TumuulIpus und
3Inulou ure two ol the stutes thut huve receIved the most subsIdIes lrom those progrums, us
shown In Cruph .
Gragh 2
Pl0CAMP0 ANL INCllS0 0BlTI\0 lIST0lICAl PAMlNTS, B STATl
5curce: ASllCA dete, eveleble et www.subsdoselcempo.org.mx.
7 1hls ls based on omclal ^SLRC^ data avallable at Fundar's farm subsldy database, at www.subsldlosalcampo.org.mx.
8 vernlca Martnez, aa Procampo apoyo a estados norteos", Rcjormo, ^ugust 20, 2008.
9 lb|J.
Procampo lngreso Obetlvo
$20,000,000
$18,000,000
$12,000,000
$14,000,000
$16,000,000
$10,000,000
$8,000,000
$6,000,000
$4,000,000
$2,000,000
0
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2
AgrcuIturaI Subsdy Programs

Producer orgunIzutIons ulso mude theIr presence lelt. On 3eptember 2008, the NutIonul Peus-
unt ConlederutIon (CNC), the ugrIculturul brunch ol the InstItutIonul RevolutIonury Purty (PRI),
reected the proposul to reduce puyments to lurger producers. CNC leuders culled lor u slIght
Increuse In the subsIdIes turgeted towurds producers wIth less thun 5 hectures, but muIntuInIng
the umounts turgeted to the rest. The CNC, whIch represents muInly smullholders (cjJntnros
und comuncros), closed runks wIth the leudIng prIvute sector Interest groups (whIch In the pust
huve pursued dIerent Interests), such us the NutIonul Furmers und Runchers CouncIl (CNA),
the NutIonul ConlederutIon ol PrIvute Lundowners (CNPR), und the NutIonul Runchers' Conlede-
rutIon (CNPC). These orgunIzutIons demunded the tImely delIvery ol puyments to everybody
und the contInued support lor sepurute puyments lor the sprIng-summer und lull-wInter crop
cycles, un uspect ol the progrum thut grunts two puyments per yeur to IrrIguted producers.
l0
By the end ol 2008, It wus cleur thut the dIsputes over government ugrIculturul spendIng hud
guIned uttentIon und generuted conIcts thut, up to then, were hIdden by u sort ol negotIuted
stubIlIty. Juun E. PurdInus, u renowned expert on publIc sector oversIght und trunspurency In
MexIco, commented In the newspuper Rcjormn:
.Procumpo's most serIous problem Is not the subsIdIes thut go to the drug deulers, but the mon-
umentul umounts ol money gIven to successlul lurmers who don't need the government's lurgess.
AccordIng to the websIte www.subsIdIosulcumpo.org.mx, 5% ol the rIchest lurmers concentrute
44% ol Procumpo's totul resources (l994-2008). In contrust, 80% ol the poorest benecIurIes re-
ceIved burely 27%... The ussumptIon thut the budget spent on rurul MexIco benets poor peusunts
Is u myth. euch peso spent In thIs subsIdy Increuses the rurul InequulIty gup. The rIght decIsIons
ure polItIcully unleusIble. Procum po hus creuted u powerlul portlolIo ol clIents. 3ubsIdy checks
huve turned Into u vested rIght" lor theIr benecIurIes. Il someone dured to chunge those prIvI-
leges, they would provoke u socIul movement wIth the slogun The subsIdy belongs to those who
work It". We huve ull the polItIcul stubIlIty thut the budget cun buy.
ll
ThIs stutement would be conrmed In 3eptember 2008 by u publIc declurutIon ol the NutIonul
Covernors' Conlerence (CONACO), buckIng the InItIutIve ol the governor ol 3Inulou, hIstorI-
cully the stute thut hus beneted the most lrom lurm subsIdIes:
ThIs Conlerence expresses Its concern ubout the luct thut In tImes ol lood crIsIs, whIle ull coun-
trIes, especIully the UnIted 3tutes und Europe, ure strengthenIng theIr lurm support progrums to
ruIse productIvIty. In MexIco, In contrust, there ure wurnIngs ol u cleur tenden cy to wIthdruw sup-
ports or to reduce Procumpo, Ingreso ObetIvo und murketIng progrums. On the other hund, the
MInIstry ol AgrIculture Is tryIng to weuken Procumpo, even though thIs could provoke u notuble
lull In nutIonul gruIn productIon. ThIs dIsIntegrutIng proposul ussumes u new upprouch wIth dIl-
lerentIul puyment rutes, whIch would Increuse the ullocutIon to producers wIth less thun l0
hectures, but bused on u reductIon ol umounts puId to producers wIth more thun l0 hectures.
ThIs new model ulso proposes contInuIng Procumpo lor only unother 5 yeurs, closIng the regIstry,
us well us elImInutIng support lor double crops or double cycles, whIch would sIgnIcuntly reduce
MexIco's lood productIon.
l2
CONACO wus demundIng un Increuse In subsIdy spendIng und Its specIc proposuls Included
contInuIng the progrum lor ut leust l0 more yeurs, keepIng the double cycle, ullowIng new
producers to regIster lor puyments, und IncreusIng the support lor those wIth less thun l0
hectures, provIdIng thut those wIth more thun l0 hectures, Il theIr puyments ure not Increused,
ut leust they should stuy us they ure." EvIdently, the governors' power wus lelt In the House ol
RepresentutIves, whIch reected the government's proposul to reduce lurm subsIdy spendIng
und to modIly the ullocutIon crIterIu, wIth the explIcIt goul ol contInuIng the exIstIng polIcy.
Nevertheless, the dIerences between the MInIstry ol AgrIculture und the orgunIzutIons op-
posed to chungIng lurm subsIdy polIcy contInued. Aher the rst deleut ol the lederul uuthorI-
tIes und theIr Impotence to redIrect subsIdIes, both CNC und CNA not only muIntuIned theIr
opposItIon to the government's proposuls, they Increused the polItIcul pressure. They not only
demunded thut Procumpo contInue, they ulso culled lor un Increuse In the omcIul turget prIces
lor busIc gruIns, especIully corn, under the Ingreso ObetIvo progrum. The government un-
nounced new, hIgher relerence prIces on Junuury 2, 2009.
But, how cun the ullIunce between CNC und CNA be expluIned, sInce they represent very dIl-
lerent sectors The CNC's leuder, Cruz Lpez AguIlur, suId thut the 3ecretury ol AgrIculture
hus turned Into the muIn ully ol the opposItIon to the NutIonul ActIon Purty (PAN), becuuse
he hus the vIrtue ol unItIng the muorIty ol ugrIculturul producers uguInst the government."
l3

10 Rechaza CNC propuesta de Sagarpa del nuevo Procampo", lmocn /ropccuor|o, Monday, September 22, 2008. Consult-
ed at www.lmagenagropecuarla.com/artculos.phpld_sec12&ld_art=540. See also CL0RSS^ (2008b)
11 uan Pardlnas, Pronarco o Procampo," Rcjormo, Nov. 23, 2008
12 CON^CO (2008)
13 Radlo lntervlew, on the Lntre ^mlgos" program (later called Lnfoque fnanclero"), wlth ^llcla Salgado and Roberto
^gullar, on Lstreo 100 (100.1 FM, Mexlco Clty), February 7, 2009.
Subsdzng 1neguaIty

The current subsIdy polIcy hud reInlorced both orgunIzutIons' networks und polItIcul clout,
und they were reudy to delend It ut ull costs.
Although Procumpo wus creuted wIth un explIcIt trunspurency und untI-corruptIon mundute,
sInce Its orIgIns there huve been muny wIndows ol opportunIty lor the cupture und polItIcul
use ol subsIdIes, und very lew wIndows lor publIc oversIght on the constructIon ol the regIstry
und the puyment mechunIsms. It Is no coIncIdence thut In the Index ol QuulIty und DesIgn ol
PublIc Progrums (ICADI), constructed by the publIc Interest group 3ocIul Munugement und
CooperutIon (CE3OC), bused on u revIew ol omcIul government polIcy evuluutIons, Procumpo
wus runked only 45 out ol l04 progrums evuluuted.
l4
As hus been noted, thIs wus due not only
to the luck ol precIsIon In the progrum's gouls, but ulso to the poor productIon ol complete und
verIuble InlormutIon, whIch creutes serIous obstucles even lor those churged wIth Implement-
Ing the polIcy.
3Ince Its orIgIns, It wus cleur thut one ol the muIn rIsks ol the progrum wus the proper construc-
tIon ol the regIstry ol benecIurIes. ThIs rIsk wus supposed to be mItIguted by busIng the sub-
sIdIes on lunds In productIon ruther thun to IndIvIduuls, und thut the rst eorts to creute the
orIgInul regIstry requIred showIng thut those purcels were, Indeed, producIng elIgIble crops. It
Is cleur, however, thut the rupId expunsIon ol progrum operutIons creuted opportunItIes to enroll
non-producers, und lIttle Is known ubout the control meusures thut were supposed to uvoId thIs
bIus. There wus ulso lIttle certuInty thut the progrum would munuge to enroll ull ol the producers
who were elIgIble In the l993 census, becuuse the MInIstry ol AgrIculture hud never tuken on
such u vust tusk, wIth so muny producers scuttered ucross the country. As u result, there Is lIttle
systemutIc evIdence ubout the putterns ol InclusIon und exclusIon In the progrum regIstry.
l5
It
Is worth notIng thut to receIve the rst puyments, producers hud to prove theIr IdentIty wIth
uny document wIth u sIgnuture or ngerprInt (und they ulso could do It wIth u power ol uttor-
ney or even through un IntermedIury orgunIzutIon) und It wus never requIred thut they be the
owner ol the purcel, sInce It wus enough to show u contruct ol derIvutIve possessIon, In whIch
the lundowner uuthorIzed the lurmIng ol the purcel.
Procumpo's rst OperutIonul Munuul set two kInds ol controls to verIly upplIcutIons. The rst
one wus to be currIed out by the producers together wIth locul uuthorItIes, wIthIn the Over-
sIght und Control 3ubcommIttees (3CV), whIch would be creuted us collegIul uutonomous bod-
Ies." The second one wus through rundom verIcutIons ol communItIes und plots to conrm
the InlormutIon producers' provIded In theIr upplIcutIon." EvIdently, these rules were desIgned
to gIve the muIn producer orgunIzutIons u suy over who would be the rst to get to sIgn up,
IncludIng the possIbIlIty to present the upplIcutIons IndIrectly, through them. Indeed, the rules
permItted producers to sIgn up IndIrectly, vIu theIr orgunIzutIons.
The rst dIrector ol Procumpo, Jos OctuvIo Lpez Presu, reculled thut eurly In the process ol
enrollIng producers, there were strong pressures lrom the producer orgunIzutIons umlIuted
wIth the NutIonul AgrurIun Congress (most ol whom were In the CNC), us well us lrom the ul-
reudy powerlul lumers ol 3Inulou und other orgunIzutIons ussocIuted wIth the InstItutIonul
RevolutIonury Purty. AccordIng to Lpez Presu, the leuders ol these groups wunted to negotIute
the regIstrIes. 3o we suId 'ne, you negotIute them, but In euch dIstrIct. You burguIn, but out
there, In the eld, not here In the Federul DIstrIct'." He udded thut:
To orgunIze the rst Procumpo regIstrIes, 45,000 ugrIculturul representutIves were elected lrom
85,000 vIlluges, In ulmost every loculIty In the country, und they were mude to tuke un outh thut
they would do theIr ob. Aher receIvIng truInIng, u rundom selectIon lollowed to see who would
revIew the upplIcutIons In the nume ol the peusunts, together wIth ull the cjJos und prIvute
lurmers In euch regIon, to see who would huve the rIght to government support.
l6
He ulso reculled thut the lederul government drew on the operutIonul Inlrustructure ol the Nu-
tIonul 3olIdurIty Progrum, whIch wus quIte consolIduted towurds the end ol the 3ulInus de Cor -
turI udmInIstrutIon. Thunks to thIs operutIonul network, they were uble to curry out u census ol
gruIn producers, wIth u locus on corn. Lpez Presu underlInes the enormous dImculty ol doIng
u census In more thun 80,000 vIlluges wIth rudImentury computer tools. They needed to get
InlormutIon ubout lour mIllIon people, IncludIng theIr numes, the locutIon ol theIr plots und
whut they produced. Nevertheless, by the second hull ol l993, the InlormutIon thut becume
the busIs ol the rst regIstry hud been collected, und the rst benecIurIes were set to receIve
theIr checks In June l994.
In the process, there wus u cleur tensIon between lurge producer orgunIzutIons thut uttempted
(und succeeded) In regIsterIng theIr members und government omcIuls who uttempted to
brouden the uccess to the lurgest number ol cjJos und communItIes. Another source ol tensIon
Involved the stute governors und theIr eorts to use the subsIdIes lor electorul purposes. These
14 Conzlez, ct ol. (2009).
15 Fox (1995).
16 1ranscrlbed lntervlew, os Octavlo Lpez Presa, Mexlco Clty, February 27, 2009.
2
AgrcuIturaI Subsdy Programs

conIcts were costly. Lpez Presu reculled thut out ol the 45,000 producers rundomly selected
to oversee progrum operutIons locully, ll dIed In the tIme I wus there. I don't know whether It
wus becuuse they were tukIng theIr dutIes serIously or not, but the luct Is there were ll deuths."
Jos OctuvIo Lpez Presu ulso reported thut lollowIng the ZuputIstu uprIsIng In Junuury l994,
the subsIdy progrum guIned even more polItIcul Importunce. The stute governors sIgned up to
orgunIze events to delIver the puyments, und some cubInet members ulso purtIcIputed (be-
tween Murch und June, l994) und even PresIdent 3ulInus hImsell. ThInk ubout It thIs wuy
[contInues Lpez Presu], we were hostIng u purty whIle we were stIll buIldIng the house, puttIng
up the bunners und the brIcks ut the sume tIme." He udded un especIully vuluuble recollectIon:
Around June l994, we hud u meetIng In Ouxtepec, the whole weekend. There I delIvered my
report, und In contrust to prevIous weekly reports, when there were l0 or l2 people, here there
were more or less 40. 3omeone suggested thut we should prIvIlege the delIvery ol puyments to
PRI munIcIpulItIes, und obvIously I suId thut It wus Illegul. The use ol the Internet und e-muIl
wus ust begInnIng buck then, und ull ol our omces were ulreudy connected. 3o the lollowIng
Monduy, the rst thIng I dId wus to send un e-muIl to ull ol the representutIves In the rurul dIs-
trIcts, remIndIng them ol theIr oblIgutIons us publIc servunts und tellIng them thut, Il uny omcIul
lrom the MInIstry would wunt to dIvert the progrum lrom Its gouls, they should ImmedIutely le
u report wIth the AudIt omce und the upproprIute uuthorItIes. I sent thut e-muIl Monduy mornIng
und, 24 hours luter, on Tuesduy, I wus ubruptly red.
One mIght huve expected thut wIth the pussIng ol tIme those orIgInul condItIons would huve
chunged, especIully becuuse the ulternutIon ol polItIcul purtIes In the presIdency und the grow-
Ing polItIcul plurulIsm thut, precIsely uher l994, becume u churucterIstIc ol the MexIcun polItI-
cul regIme. But ut the end ol 2008 und the begInnIng ol 2009, un uttempt to chunge the lurm
subsIdy progrum's rules ol operutIon creuted u conIct, und the uctors und Interests ut pluy
remuIned pructIcully the sume us when the rst regIstry wus creuted In l993. On the one
hund, u sector wIthIn the lederul government suys It seeks the modernIzutIon ol dIrect rurul
subsIdy progrums, und on the other hund, producer orgunIzutIons reluse to gIve up the stute
rents cuptured by theIr members lor l5 yeurs, us well us the governors, who lIke theIr prede-
cessors In l994, contInue to ussert the polItIcul use ol those trunslers. The problems thut these
subsIdy progrums luce toduy ure pructIcully the sume us those reculled by Its rst dIrector,
Lpez Presu.
AccordIng to Procumpo und Ingreso ObetIvo's current munugers, the opposItIon lrom governors
und the muIn producer orgunIzutIons to the MInIstry ol AgrIculture's proposed chunges Is not
only due to the resIstunce ol the lurmers who receIve the lurgest subsIdIes, It ulso Involves the
struggle ol locul polItIcIuns und socIul leuders who wunt to control the regIstrIes und puyments.
l7

They report thut Procumpo's process ol convertIng the puyment delIvery mechunIsm to dIrect
bunk deposIts hus luced strong polItIcul und bureuucrutIc resIstunce, even InsIde the MInIstry
ol AgrIculture. AccordIng to the munuger In churge ol puyments, lust yeur, u check could be
held up lor u yeur, then It wus In trunsIt, someone hud It who dId not cush It, und sometImes
corruptIon wus Involved. For exumple, un omcIul would suy: 'I'll gIve you cush lor your check
Il you gIve me l0%'." CertuIn Interest group leuders compluIned lor the sume reuson: becuuse
there Is no busIness In It unymore, becuuse It wus clIentelIstIc: gIve me 20% und I'll tuke cure
ol your check, sometImes In colluborutIon wIth some corrupt udmInIstrutor... PuyIng through
dIrect bunk deposIt prevents thIs, becuuse the producer receIves theIr lunds dIrectly." The
munugers emphusIze thut no producer hus compluIned ubout the dIrect bunk deposIt process
(whIch now covers more thun 60% ol the producers, uccordIng to the munugers In churge.)
From the poInt ol vIew ol lederul omcIuls, the stute governments ulso luunched theIr oensIve
uguInst chungIng the rules ol Procumpo und Ingreso ObetIvo becuuse theIr stute ugrIculture
secreturIes (3EDACRO3) huve been ghtIng to be the ones who gIve out the money. to do
polItIcs leh und rIght." The lederul coordInutor ol Ingreso ObetIvo In the stute ol Verucruz re-
ported the cuse ol Its lurm muchInery subsIdy progrum, whIch prohIbIts buyIng u certuIn
tructor becuuse It's blue. It's no oke. FIdel Herreru [the governor ol Verucruz] does not lund the
purchuse ol tructors Il they ure blue. They huve to be green or red."
Even though the controversIul new operutIonul rules propose greuter decentrulIzutIon, ullowIng
stute governments to munuge more resources, 3EDACRO3' compluInt wus stIll In lorce, be-
cuuse the stutes ure not only seekIng more lunds, but ulso more lreedom to decIde on how they
ure used. A3ERCA omcIuls' posItIon Is thut they ure uttemptIng to requIre u work plun, u proect
plun und un Investment plun per stute, us u condItIon to Increuse lundIng.
17 1ranscrlbed lntervlew wlth ^SLRC^ managers: Custavo ^dolfo Crdenas Cutlrrez, Coordlnador Ceneral de ^poyos al
Campo (PROC^MPO), Manuel Martnez de Leo, Coordlnador Ceneral de Comerclallzaclones, Fldel Caona Urblna, 0lrector
Ceneral de Programacln y Lvaluacln de ^poyos 0lrectos al Campo, Rubn Zamanllla Prez, 0lrector Ceneral de Medlos
de Pago, and Mlguel ^ngel Hernndez Servn, 0lrector de Segulmlento Operatlvo. February 27, 2009, Mexlco Clty.
Subsdzng 1neguaIty

On the other hund, Custuvo Crdenus, [then] Cenerul CoordInutor ol AgrIculturul 3upport, uc-
knowledges thut It Is Importunt to updute the regIstry ol Procumpo benecIurIes, u posItIon
surely Inuenced by the luct thut he Is u PAN member und u lederul congressmun, on leuve,
lrom the stute ol TumuulIpus. He suys thut ull the documentutIon regurdIng lund possessIon
und ownershIp Is goIng to be dIgItIzed, IncludIng the plot georelerence und the producer's per-
sonul IdentIcutIon und photo, thereby lInkIng the lund to the owner. And he udds, There won't
be uny more conlusIon, thIs umbIguIty ubout who Is pluntIng und who Is the owner, whIch
reully husn't helped us ut ull." Even though the updutIng ol the regIstry wus postponed untIl
uher the July 2009 electIons, whut lollows Is unlIkely to be very dIerent lrom whut hus be-
come open dIspute lor the clIentelIstIc control ol the subsIdIes. In uddItIon to the modIcutIons
proposed to the subsIdy puyment umounts lor the lurger plots und the resIstunce lrom the stutes
thut receIve the most resources (such us TumuulIpus und 3Inulou), the cleun-up ol the bene-
cIury lIsts und Its systemutIc und open dIsclosure wIll surely udd new luctors to the conIct.
Dutu oered by the Federul AudIt Agency uher Its 2006 revIew ol Procumpo show dIversIon ol
resources, benecIurIes thut receIved the money wIthout huvIng proven theIr work or who hud
not plunted, huge uncushed checks, problems wIth bunk reconcIlIutIon, duplIcuted und even
luke benecIurIes.
l8
We muy therelore ussume thut the opucIty In A3ERCA's InlormutIon Is not
only u uw derIved lrom Its umbIguous und ImprecIse desIgn, or due to u poor bureuucrutIc
operutIon, but It hus ulso served to estublIsh polItIcul networks und negotIutIons thut lor l5
yeurs huve prevented the dIsclosure ol relIuble InlormutIon ubout who Is benettIng lrom the
subsIdIes und whut Interests ure Involved.
5. POOR RULE5 AND LITTLE TRAN5PARENCY:
THE DOUBLE DOOR TO CORRUPTION
Even though he hus probubly commItted no crIme, nor cun he be uccused ol the IntentIon to
do so, It Is worth poIntIng out the peculIur cuse ol Mr. Jorge Kondo Lpez, who untIl December,
2008 wus the 3Inulou stute 3ecretury ol AgrIculture. As hus been noted belore, he wus ulso the
chuIrmun ol the AssocIutIon ol [stute] 3ecreturIes ol Rurul Development, whIch so rmly op-
posed chungIng the operutIonul rules ol the lurm subsIdy progrums. AccordIng to the omcIul
A3ERCA dutu, uvuIluble ut www.subsIdIosulcumpo.org.mx, Mr. Kondo Lpez - or someone wIth
the sume nume - hus receIved M$l.7 mIllIon (uccordIng to un A3ERCA omcIul, muybe more).
Munuel Murtnez de Leo, un A3ERCA omcIul, remembers the promInent role thut Kondo Lpez
pluyed durIng the constructIon ol Procumpo's rst regIstry:
I wus workIng In the prIvute sector then. In the NutIonul Furmers und Runchers CouncIl, und.
he wus the presIdent ol the ConlederutIon ol AgrIculturul AssocIutIons ol the 3tute ol 3Inulou
(CAADE3) und ugrIculturul vIce-presIdent ol the NutIonul Furmers und Runchers CouncIl... He
lought lor Procumpo to puy out by the ton und not by the hecture. Thut wus the toughest Issue.
But Kondo Lpez's leudershIp umong the 3Inulou producers not only ullowed hIm to huve sIgnI-
cunt Inuence on the procedures used to creute Procumpo's orIgInul regIstry, us well us on the
crIterIu lor ullocutIng subsIdIes, but ulso permItted hIm to become u PRI lederul representutIve
In the LVI LegIsluture. Nevertheless, the polIcymukers In churge ut thut tIme (IncludIng Procum-
po's rst dIrector) munuged to lInk Procumpo puyments to the lund, ruther thun to IndIvIduul
producers or to theIr volume ol productIon (though wIthout un eectIve ceIlIng on the umount ol
lund thut could be subsIdIzed). ThIs upprouch ullowed the government to bulunce the Interests
ol lurge und smull owners, In u context In whIch, us Lpez Presu put It, on the one hund, those
CAADE3 (ConlederutIon ol AssocIutIons ol the 3tute ol 3Inulou) producers were uble to muke u
huge umount ol noIse und hud u greut deul ol polItIcul clout. And on the other hund, there
were subsIstence producers who hud no suy, but lor morul und economIc reusons hud to be
IndIsputuble benecIurIes." Moreover, In the InternutIonul trude polIcy context, the luct thut
Procumpo dId not lInk puyments to the volume ol productIon guve the MexIcun government
certuIn prestIge, becuuse the upprouch wus much more murket-lrIendly" thun thut ol Its OECD
counterpurts In Europe und North AmerIcu.
The decIsIon to ullocute subsIdIes bused on the number ol hectures lurmed ruther thun on the
volume produced reected un uttempt to uvoId even greuter InequulIty In the dIstrIbutIon ol
subsIdIes. But thIs polIcy dId permIt thut one IndIvIduul (or orgunIzutIon) could regIster muny
dIerent lurms In vurIous purts ol the country, mukIng It dImcult to determIne who Is receIvIng
exuctly how much. Moreover, the system creuted the possIbIlIty ol people receIvIng checks In
the nume ol others. It wus not untIl the publIc Interest group Fundur luunched the 3ubsIdIos ul
Cum po" websIte, when omcIul benecIury dutu becume publIcly uccessIble In pructIce, reveulIng
the hIghly unequul dIstrIbutIon ol lurm subsIdy puyments. The websIte's seurch engIne ullows
cItIzens to nd out how much specIc IndIvIduuls huve receIved, und In November 2008, sev-
erul muor newspupers reported the coIncIdence between the numes ol subsIdy recIpIents und
2
AgrcuIturaI Subsdy Programs

relutIves ol severul well-known drug deulers.


l8
All thIs cun be true und, however, wIthout vIo-
lutIng the progrum's legulIty or Its rules ol operutIon becuuse, us hus been repeutedly noted,
subsIdIes were lInked to lund und not to IndIvIduuls. Nevertheless, the orgunIzutIon ol the
regIstry und the ubsence ol un emcIent, relIuble system ol turgeted trunspurency huve ulso
creuted opportunItIes lor dIrect corruptIon ol progrum resources.
Yet the luct thut ugrIculturul omcIuls In churge ol those progrums ure lIsted In the regIstry und
thut they huve been receIved progrum subsIdIes does cleurly vIolute the current regulutIons,
especIully becuuse the rules ol operutIon, us modIed on December 2007, explIcItly lorbId thIs.
To explore thIs problem, we creuted u dutubuse wIth the numes, posItIons und responsIbIlItIes
ol ull lederul, stute und munIcIpul ugrIculturul omcIuls, und we cross-relerenced the InlormutIon
wIth the subsIdy recIpIent dutu lrom Procumpo regIstrIes (whose regIstry IdentIcutIon number
ulso coIncIdes wIth the ones lrom the Ingreso ObetIvo progrum). ThIs reseurch produced 328
coIncIdences. We ulso noted thut there ure severul numbers wIth dIerent producer numes und
thut uppurently belong to the sume person. 3o, we submItted 83 publIc InlormutIon requests
to A3ERCA to determIne whether these regIstrutIons wIth the sume nume, but u dIerent
produ cer number, belonged to the sume person. The responses were mIxed, ulthough we ob-
served u generul trend ol one regIstrutIon per producer. But we ulso conrmed thut there ure
cuses In whIch the sume benecIury hus multIplIed hIs regIstrIes, by meuns ol dIerent pro-
ducer numbers. The only wuy to conrm the correspondence between nume, regIstry und
person would be to uccess the lull les ol euch und every one ol the cuses, wIth theIr omcIul
IndIvIduul PopulutIon IdentIcutIon Number (CURP) und, moreover, the receIpts Issued (to see
whether they uctuully cushed the puyments). But these publIc InlormutIon requests were de-
nIed, becuuse they were consIdered to Involve personul dutu. Overull, we lound thut ut leust 37l
numes und IndIvIduul regIstrutIons thut receIved subsIdIes In 2008 corresponded wIth the
numes ol publIc omcIuls Involved wIth operutIng ugrIculturul progrums. Ol these, we ure sure
ol the coIncIdence In 292 cuses (l3l lederul, l6l stute), whIle the dutu wus InsumcIent to con-
rm 55 regIstrutIons thut coIncIde wIth the numes ol lederul ugrIculture omcIuls. And, ol
course, one ol those cuses Is Jorge Kondo Lpez, who hus 89 regIstrutIons In the publIc lurm
subsIdy roster. Yet we cunnot be ussured thut the coIncIdIng numes necessurIly reler to the
sume person, becuuse they could be numesukes ol the omcIuls detected.
It Is worth notIng thut even uher the publIcutIon ol the lurm subsIdy recIpIent dutu In the
3ubsIdIos ul cumpo" websIte, und wIth the uccess possIbIlItIes oered by MexIco's current
trunspurency luw, It Is stIll not possIble to conrm thut more thun 300 publIc servunts ure
receIvIng prohIbIted benets. Whut Is cleur Is thut the current operutIonul rules und uws In
the IntegrutIon und control ol the regIstry muke thIs possIble. It Is ulso cleur thut A3ERCA hus
not met Its strutegIc goul ol preventIng und reducIng corruptIon und mukIng trunspurent the
ImplementutIon und operutIon ol Its supports und servIces."
6. CONCLU5ION5
In thIs study we huve trIed to show thut Procumpo und Ingreso ObetIvo huve not met theIr ol-
cIul InstItutIonul gouls. We huve ulso seen thut the luck ol trunspurency In theIr operutIons und
results hus served other gouls: to dIstrIbute publIc resources to muIntuIn polItIcul stubIlIty und to
buIld support lor governments. The progrums huve not met theIr orIgInul gouls becuuse, umong
other reusons, lrom Its desIgn, the ImplementutIon network wus In conIct wIth thut possIbIlIty
und luvored the eurly cupture ol these publIc resources. As noted ut the begInnIng ol thIs study,
the hurd core ol MexIcun lurm subsIdy polIcy uttempted to uddress muny dIerent und conIct-
Ing gouls, but evuded u denItIon ol the problems ol ugrIculturul productIon, productIvIty und
competIveness us u whole. At the sume tIme, the polIcy estublIshed u serIes ol rIgId rules und pro-
cedures lor the constructIon ol the progrum regIstrIes thut ended up becomIng Its own rnson
Jtrc. The progrum's snjcty bcIt cuncelled out Its hnrJ corc, und eventuully luvored the dIversIon
und even corruptIon ol publIc resources dedIcuted to the countrysIde.
Thut suId, It Is not evIdent thut the lurm subsIdy progrums were used openly to buy votes or to
nunce electorul cumpuIgns (ulthough there ure sIgns thut thIs muy huve occurred In certuIn
electIons). But there Is sumcIent evIdence to stute thut these resources creuted socIul und polI-
tIcul demunds, supported by cleurly IdentIuble networks, und thut chungIng them would huve
polItIcul costs lor uny government. The muIn benecIurIes ol the subsIdy progrums huve not ol-
lered cleur results In terms ol Increused productIon, productIvIty or competItIveness. But they
huve been very emcIent ut muIntuInIng polItIcul pressure to uvoId reducIng subsIdIes over the
pust l5 yeurs und to openly Increuse theIr prots. Notubly, thIs hus been the posItIon thut the Nu-
tIonul Furmers und Runchers CouncIl (CNA) hus muIntuIned ever sInce the subsIdy progrum
begun.
18 See ^yuda Procampo narcofamlllares", Ll Norte, Monterrey, Nuevo Len, November 8, 2008, and Plden llmplar el
Procampo", fl Un|vcrsol, Mexlco Clty, November 24, 2008.
Subsdzng 1neguaIty

At the sume tIme, the less prIvIleged benecIurIes wIth lower Incomes und lewer hectures
huve not munuged to Improve theIr stundurd ol lIvIng, nor huve they Increused theIr plots'
productIvIty, nor hus competItIon become more bulunced us u result ol the subsIdIes receIved.
The per cupItu lundIng levels ure so smull thut It would be ImpossIble to uchIeve such un umbI-
tIous outcome. Nevertheless, the dutu do show thut Procumpo hus pluyed un Importunt socIul
lunctIon by mItIgutIng the poverty ol mIllIons ol peusunts, It hus mude u modest monetury
contrIbutIon by ut leust provIdIng u relIuble unnuul Income to u broud segment ol low Income
producers. ThIs support hus been InsumcIent to overcome theIr poverty, but hus provIded u
mInImum level ol Insurunce lor survIvul.
From unother poInt ol vIew, Procumpo hus ulso ullowed socIul und polItIcul orgunIzutIons cluIm-
Ing to represent those murgInulIzed socIul groups to tuke udvuntuge ol theIr role us IntermedIurIes
wIth the progrum bureuucrucy by churgIng producers substuntIul lees, und to use thIs role to put
pressure on the government to ullocute even more resources. The stutements documented In
thIs study und the dutu druwn lrom Procumpo's regIstrIes tell us thut, sInce the regIstry wus
rst creuted, ugrurIun orgunIzutIons (notubly the NutIonul Peusunt ConlederutIon) hud u strong
Inuence on determInIng who wus regIstered. To dute, the progrums' rules ol operutIon stIll
ullow them to muIntuIn u dIrect und uctIve relutIonshIp wIth the subsIdy benecIurIes. As u
result, lurm subsIdIes pluy u duul role, contrIbutIng to the survIvul ol low-Income peusunts,
whIle ullowIng Interest groups to use them polItIcully.
ThIs study hus shown thut the hurd core ol the lurm subsIdy polIcy In MexIco should huve
uchIeved, ut leust, both un Increuse In productIon und productIvIty ol lurge producers und un
Improvement In the stundurd ol lIvIng condItIons ol low-Income peusunts. Yet, ull externul
evuluutIons uvuIluble ugree thut none ol these gouls hus been met. They ulso note the luck ol the
systemutIc und complete dutu needed to muke un ussessment ol theIr success or the dIversIons
ol the progrum. Even the Federul AudIt Agency, the ugency In churge ol collectIng dIrect Inlor-
mutIon und revIewIng the progrums urchIves, wus unuble to estublIsh the scope ol the subsIdy
polIcy. In other words, Procumpo Is stIll In eect becuuse It contrIbutes to peusunt Incomes,
but not becuuse It hus ullowed the constructIon ol u level pluyIng eld to compete wIth Its two
purtners In the North AmerIcun Free Trude Agreement.
Furthermore, thIs study hus underlIned A3ERCA's luck ol trunspurency, IncludIng the luck ol
certuInty regurdIng the wuy In whIch some ol subsIdy puyments ure dIstrIbuted to producers,
those thut ure not yet delIvered by dIrect bunk deposIt. AccordIng to Procumpo's generul dIrector,
Custuvo Crdenus, us ol eurly 2009, the progrum hud only u lIst ol benecIurIes, not u proper
regIstry. Creuter trunspurency In the subsIdy puyment process Is certuInly u pluusIble goul lor
the progrum's current munugers, but the lug In uchIevIng thIs speuks eloquently to the wuy In
whIch the progrum hus been Implemented up untIl now. As thIs study shows, the dutu obtuIned
through the unulysIs ol the benecIury regIstry ure InsumcIent to conrm the IdentIty ol the
people receIvIng puyments, whether the Issue Is rulIng out numesukes or reveulIng the uggre-
guted umounts receIved by u sIngle person, through the uccumulutIon ol dIerent regIstered
plots. The only thIng thut cun be leurned Is thut there Is u nume regIstered uccordIng to the
progrums' rules ol operutIon und thut people under those numes receIve lurm subsIdIes.
Beyond the regIstry Issue, the subsIdy progrums huve not InternulIzed the concept und the goul
ol opcn govcrnmcnt In other operutIonul ureus, such us decIsIon-mukIng. Moreover, the study
lound thut the progrum procedures leh room lor the dIversIon ol resources, IncludIng possIble
corruptIon In the cuse ol numerous publIc omcIuls who muy be Illegully receIvIng lurm subsI-
dIes. WhIle thIs study does not muke legul udgements, It does show thut there Is evIdence ol
the possIbIlIty thut hundreds ol publIc omcIuls ure receIvIng subsIdIes us owners ol lurms und
ure therelore Involved In conIcts ol Interest.
In uddItIon, we huve presented enough evIdence to show thut stute governments huve openly
supported those who delend the clIentelIstIc networks thut huve been buIlt uround A3ERCA's
progrums. When the lederul government opened up the publIc debute ubout Procumpo's luture
und suggested the possIbIlIty ol chungIng the puyment umounts und the rules lor theIr ullocu-
tIon, the stute governments not only cume out In opposItIon, they ulso guve polItIcul buckIng
to the Interest groups thut opposed uny chunge becuuse theIr subsIdIes would huve been ul-
lected. In Itsell, thIs does not constItute evIdence ol uny IllegulIty, but the stute governments
cleurly preler the stntus quo, tukIng Into uccount thut some key stute omcIuls prevIously served
us leuders ol the ugrIbusIness groups thut would be most uected by u lurm subsIdy polIcy
relorm thut would luvor lower-Income producers ut the expense ol the weulthIest producers.
FInully, we presented evIdence showIng thut the meuns used so lur by the stute to correct or
modIly uws In the desIgn or ImplementutIon ol lurm subsIdy progrums huve been Insum-
cIent, some even useless, In spIte ol the serIes ol evuluutIons thut huve recommended utten-
tIon to these problems. ThIs suggests thut the dIversIon In these progrums' gouls hus, over the
yeurs, served the stute's polItIcul Interests. In other words, polItIcul stubIlIty In the MexIcun
countrysIde hus tuken prIorIty over the progrum's InItIul (conIctIng) gouls.
2
AgrcuIturaI Subsdy Programs

In summury, the uws In the denItIon ol the problem thut lurm subsIdy progrums were sup-
posed to uddress not only lucIlItuted the eurly cupture ol resources, but these progrum's gouls
were ulso dIverted, convertIng them Into un Instrument used by the MexIcun stute to sustuIn Its
polItIcul networks und buse ol support In the countrysIde. In the best cuse scenurIo, these resour ces
cun be seen us huvIng contrIbuted to socIul peuce und greuter polItIcul stubIlIty und dIulogue
wIth powerlul ugrIbusIness und peusunt orgunIzutIons. But they dId not level the pluyIng eld
between lurmers In MexIco, the UnIted 3tutes und Cunudu. Thut goul lell by the wuysIde.
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Muone, CIundomnIco (l997) LvJcncn, nrgumcntncn y pcrsunsn cn In jormuIncn Jc poItcns,
MexIco: Fondo de Culturu EconmIcu/ColegIo NucIonul de CIencIus PoltIcus y AdmInIstrucIn PblIcu.
MerIno, MuurIcIo (2003). Ln trnnscn votnJn. Crtcn n In ntcrprctncn JcI cnmbo poItco cn Mxco,
MexIco, Fondo de Culturu EconmIcu.
------ (2006). Lu ImportuncIu de lus rutInus: Murco terIco puru unu InvestIgucIn sobre lu gestIn
pblIcu munIcIpul en MxIco", Andrew D. 3elee y LetIcIu 3untn Del Ro (eds..): 0cmocrncn y cu-
JnJnnn. Pnrtcpncn cuJnJnnn y JcIbcrncn pbIcn cn gobcrnos IocnIcs mcxcnnos, WushIng-
ton, D.C., Woodrow WIlson InternutIonul Center lor 3cholurs.
------- (2008). Lu ImportuncIu de lu tIcu en el unlIsIs de lus poltIcus pblIcus," Rcvstn CLA0 Rcjormn
y 0cmocrncn, 4l, June, pp. 7-32.
------- (2008b). Lu trunspurencIu como poltIcu pblIcu", John M. Ackermun (ed.), Ms nII JcI ncccso n
In njormncn trnnspnrcncn, rcnJcn Jc cucntns y cstnJo Jc Jcrccho, MexIco, 3Iglo XXI EdItores.
------- (2009). Los progrumus de subsIdIos ul cumpo: Lus ruzones y sInruzones de unu poltIcu mul dIse-
udu," 0ocumcnto Jc Trnbnjo, DT/DAP 229, MexIco: CIDE, 3eptember [ulso reprInted us Mcxcnn Ru-
rnI 0cvcIopmcnt Rcscnrch Rcport, No. l, Woodrow WIlson InternutIonul Center lor 3cholurs, 20l0,
www.wIlsoncenter.org/DesurrolloRurulMexIcuno]
-------- (20l0, In press). Lu ImportuncIu de lu tIcu en el unlIsIs de lus poltIcus pblIcus," Lnjoqucs Jc
poItcns pbIcns (collectIve volume) MexIco, DIvIsIn de AdmInIstrucIn PblIcu, Centro de Inves-
tIgucIn y DocencIu EconmIcus (CIDE).
Subsdzng 1neguaIty

Rello, Fernundo (2008). InercIu estructurul y globulIzucIn: lu ugrIculturu y los cumpesInos, ms ull del
TLCAN", Crupo de Trubuo sobre Desurrollo y MedIo AmbIente en lus AmrIcus, Trubuo de DIscusIn,
No. 20, July.
3ugurnugu VIllegus, MyrIum (2007). EvuluucIn de consIstencIu y resultudos de Progrumu de Apoyos
DIrectos ul Cumpo (Procumpo) puru el eercIcIo scul 2007," MexIco, 3ervIcIos ProlesIonules puru el
Desurrollo EconmIco.
3ugurpu (2008). LI Procnmpo Dpcrncn c mpnctos. Ln nucvn vsn Jc un vcjo rcto, MexIco CIty, Februury.
3cott, John (2007). Procumpo, ecIencIu con equIdud," unpublIshed document, 2007.
3ecreturu de AgrIculturu y Recursos HIdrulIcos (3ARH) (l993). Procnmpo. Vnmos nI grnno pnrn pro-
grcsnr, MexIco CIty.
UNDP (2009). lnJcnJorcs Jc 0csnrroIIo Humnno y 0ncro 2000 y 2005, UnIted NutIons Development
Progrumme.
Hevspaper References
Acupurun 5 estudos 50% de upoyo," El UnIversul, November 24, 2008.
Ayudu Procumpo u nurcolumlIures," LI Nortc, Monterrey, Nuevo Len, November 8, 2008.
Conlormun ugrIcultores de TumuulIpus lrente contru el nuevo Procumpo," Ln )ornnJn, 3eptember ll, 2008.
Custu 3ugurpu sIn 'ton nI son'," Rcjormn, Junuury 23, 2009.
Knochenuhuuer, CuIllermo, Procumpo renovudo," Ln )ornnJn Jc MorcIos, August 29, 2008.
Murtnez, VernIcu, Buu Procumpo upoyo u estudos norteos," Rcjormn, MexIto CIty, August 20, 2008.
PurdInus, Juun E., Pronurco o Procumpo," Rcjormn, MexIco CIty, November 23, 2008.
PIden lImpIur el Procumpo," LI UnvcrsnI, MexIco CIty, November 24, 2008.
Rechuzu CNC propuestu de 3ugurpu del nuevo Procumpo," lmngcn ngropccunrn, 3eptember 22, 2008.
RIcos y pobres con ucceso ul Procumpo, dIce Crdenus," LI SgIo Jc 0urnngo, November 20, 2008.
Ven IrregulurIdudes en subsIdIos ul cumpo," Rcjormn, October l4, 2008.
Ccvernmental Decrees and Rules cf Cperattcn (chrcnclcgtcally)
Acuerdo por el que se dun u conocer los productos elegIbles y los montos del Ingreso obetIvo mnImo
puru los cIclos ugrcolus del otoo-InvIerno 2008/2009 ul prImuveru-veruno 20l3," 0DF (0nro Dj-
cnI Jc In FcJcrncn), Junuury 2, 2009.
Acuerdo por el que se modIcun y udIcIonun dIversus dIsposIcIones de lus Reglus de OperucIn del
Progrumu de Apoyos DIrectos ul Cumpo, denomInudo Procumpo," 0DF, AprIl 8, 2009.
Decreto que regulu el Progrumu de Apoyos DIrectos ul Cumpo denomInudo Procumpo," 0DF, July, l994.
Ley de CupItulIzucIn del Procumpo 0DF, December 3l, 200l.
MnnunI Jc Dpcrncn Jc Procnmpo, 3ARH, Internul document, l993.
ModIcucIones y AdIcIones u lus Reglus de OperucIn ul Progrumu de Apoyos DIrectos ul Cumpo (Pro-
cumpo), puru los cIclos ugrcolus PrImuveru-Veruno 2002 y Otoo-InvIerno 2002/2003," 0DF, Febru-
ury 2l, 2003.
Normus de OperucIn puru el CIclo Agrcolu Otoo-InvIerno 95/96 del Progrumu de Apoyos ul Cumpo
(Procumpo)," 0DF, Februury l6, l996.
Normus de OperucIn puru el cIclo ugrcolu PrImuveru-Veruno l996 del Progrumu de Apoyos ul Cumpo
(Procumpo)," 0DF, Muy 2l, l996.
Normus de OperucIn del Progrumu de Apoyos DIrectos ul Cumpo (Procumpo) puru los cIclos ugrcolus
PrImuveru-Veruno 200l y Otoo-InvIerno 200l/2002," 0DF, Februury l5, 200l.
Procumpo O, Normus de OperucIn Otoo-InvIerno 94/95, Internul document, Junuury l2, l995
Reglus de OperucIn del Progrumu de Apoyos DIrectos ul Cumpo (Procumpo), puru los cIclos ugrcolus
PrImuveru- Veruno 2002 y Otoo-InvIerno 2002/ 2003," 0DF, Februury 20, 2002.
Reglus de OperucIn del Progrumu de Apoyos DIrectos ul Productor por Excedentes de ComercIulIzucIn
puru ReconversIn ProductIvu, IntegrucIn de Cudenus AgroulImenturIus y AtencIn u Fuctores CrtI-
cos," 0DF, June l7, 2003.
Reglus de OperucIn del 3Istemu de Curuntus y Acceso AntIcIpudo u Pugos Futuros del Procumpo,"
0DF, December 23, 2003.
Reglus de OperucIn del Progrumu de AtencIn u Problemus Estructurules (Apoyos CompensutorIos),"
0DF, December 3l, 2007.
Intervtevs
IntervIew wIth Jos OctuvIo Lpez Presu, MexIco CIty, Februury 27, 2009.
CollectIve IntervIew wIth Custuvo Adollo Crdenus CutIrrez, CoordInudor Cenerul de Apoyos ul Cum-
po (Procumpo), Munuel Murtnez de Leo, CoordInudor Cenerul de ComercIulIzucIones, FIdel Cuonu
UrbInu, DIrector Cenerul de ProgrumucIn y EvuluucIn de Apoyos DIrectos ul Cumpo, Rubn Zu-
munIllu Prez, DIrector Cenerul de MedIos de Pugo, y MIguel ngel Hernndez 3ervn, DIrector de
3eguImIento OperutIvo, MexIco CIty, Februury 25, 2009.
3

3
AgrcuIturaI
Subsdes
n Mexco:
Who Gets What7
}chn 5cctt
l
#ENTRO DE )NVESTIGACIN Y $OCENCIA %CONMICAS
1 1hls ls an abrldged verslon of Scott (2010).
3
AgrcuIturaI Subsdes n Mexco

INTRODUCTION
ThIs study presents u detuIled und comprehensIve IncIdence unulysIs ol the prIncIpul ugrIcul-
turul und rurul development progrums (ARD) Introduced In MexIco In the context ol the open-
Ing up ol ugrIculturul murkets through the North AmerIcun Free Trude Agreement In l994-
2008. These progrums huve been the subect ol vurIous evuluutIons In recent yeurs.
2
The OECD
und World Bunk reports Incorporute quuntItutIve estImutes ol the IncIdence ol ugrIculturul
subsIdIes ut the household/producer level, us well us geogruphIcully, bused on 3cott (2006,
2008). The present study buIlds upon und extends the lutter results In severul respects, Includ-
Ing un extended dIscussIon ol the relevunce ol dIstrIbutIve unulysIs In the evuluutIon ol ugrI-
culturul subsIdIes, u dIstrIbutIve unulysIs ol the Income sources und employment condItIons ol
rurul und ugrIculturul households, un expunsIon In the coveruge progrums unulyzed, und the
use ol more uccurute meusures ol producer weulth to estImute the dIstrIbutIon ol ugrIculturul
subsIdIes ut the household/producer level.
The poverty-reductIon potentIul ol ugrIculture Is u prIncIpul theme ol the WorIJ 0cvcIopmcnt
Rcport 2008, though the report ulso emphusIzes the growIng Importunce ol non-lurm rurul
uctIvItIes. None ol the noted evuluutIons ol ugrIculturul polIcIes In MexIco Includes un unulysIs
ol rurul/ugrIculturul lubor murkets. ThIs remuIns one ol the leust studIed uspects ol the rurul
economy In MexIco (see EsquIvel 2009 lor u recent reseurch outlIne ol thIs ureu), und hus Im-
portunt polIcy ImplIcutIons In the present context, us the regressIve concentrutIon ol subsIdIes
In the rIcher, northern stute producers hus ohen been rutIonulIzed by the cluIm thut these
subsIdIes trIckle down" to the poor through ugrIculturul lubor murkets. However, gIven the
compensutory ruther thun productIve obectIves In the desIgn und ullocutIon ol most ol these
subsIdIes, these huve tended to luvor estublIshed lurge-scule, cupItul-IntensIve gruIn produc-
tIon, ruther thun the development ol more lubor-IntensIve lruIt und vegetuble productIon.
There Is no evIdence ol posItIve employment eects ol ugrIculturul subsIdIes ut the stute level.
Over the lust decude ugrIculturul employment hus declIned sIgnIcuntly In most stutes, but
dIsproportIonutely so In those receIvIng the lurger subsIdy shures (see sectIon 5, below).
The study renes the benet IncIdence unulysIs ol ugrIculturul subsIdIes by controllIng lor
vurIutIons In the quulIty und productIvIty ol lund, us well us producer prIces, ut the stute level,
thus obtuInIng u better proxy ol the weulth/Income ol benecIurIes thun sImple (undIerentI-
uted) lund holdIngs. ThIs reveuls thut the prelImInury ussessments ol prevIous studIes overes-
tImuted the degree ol regressIvIty (concentrutIon on weulthIer producers) In the cuse ol the
delInked Procnmpo trunslers, but underestImuted the concentrutIon In the cuse ol lngrcso Db-
jctvo, us ol most ol the other subsIdIes concentruted on lurger commercIul producers. Not
surprIsIngly, the unulysIs ulso reveuls thut lund ussets, thus udusted, ure lur more unequully
dIstrIbuted thun suggested by the unudusted lund dutu commonly used to meusure lund In-
equulIty In MexIco und InternutIonully (DeInInger und OlInto 2002).
The study Is structured us lollows. 3ectIon l consIders the relevunce ol dIstrIbutIve unulysIs In
the present context In the lIght ol the multIple (und ohen conIctIve) obectIves ol ugrIcul-
turul subsIdIes. In purtIculur, the sectIon responds to u well-estublIshed vIew (umong polIcy-
mukers In the sector) thut dIsmIsses such unulysIs us ImposIng equIty obectIves on Instru-
ments concerned purely wIth emcIency obectIves. 3ectIon 2 descrIbes und quuntIes the
evolutIon ol the prIncIpul ugrIculturul udustment/compensutory progrums In MexIco In the
post-NAFTA eru. 3ectIon 3 revIews the evolutIon ol ugrIculturul growth, productIvIty und em-
ployment und wuges, consIderIng the possIble eects ol ugrIculturul subsIdIes on these trends.
3ectIon 4 revIews recent dutu on rurul poverty und humun development deprIvutIon, und unu-
lyzes the Income sources und lubor murket prole ol the rurul poor. 3ectIon 5 unulyzes the
dIstrIbutIon ol ugrIculturul subsIdIes ut the stute und munIcIpul level, und Its IncIdence on
growth, productIvIty und employment. 3ectIon 6 presents u benet IncIdence unulysIs ol ugrI-
culturul subsIdIes ut the producer und household level, und estImutes the (rst-order) Impuct
ol ARD expendItures on rurul Income InequulIty In MexIco. 3ectIon 7 derIves polIcy recommen-
dutIons.
2 Recent comprehenslve evaluatlons of agrlcultural and rural pollcles ln Mexlco have been produced by the OLC0 (2006),
l^0 (2007) and world ank (2008), though only the OLC0 report has been publlshed to thls date (September 2009).
Lvaluatlons of Procampo have been undertaken by CL^, ^udltora Superlor de la Federacln (2006), and an advlsory group
on Procampo's reform set up ln 2008 by Sagarpa and l^0 (unpubllshed). ^llanza para el Campo has been evaluated by
F^O (2005).
Subsdos gara Ia desguaIdad

l. I5 EQUITY RELEVANT PRODUCTIVE,


COMPEN5ATORY AND DI5TRIBUTIVE
OBJECTIVE5 IN ACRICULTURAL POLICY
The dIstrIbutIve IncIdence ol ugrIculturul subsIdIes In MexIco hus receIved growIng uttentIon
not only In the cIted InternutIonul reports, but ulso In u number ol governmentul und non-
governmentul InItIutIves, us well us In the medIu.
3
PolIcy-mukers wIthIn the ugrIculturul
sector, however, huve trudItIonully been more skeptIcul ubout the relevunce ol equIty con-
sIderutIons lor the desIgn und uppruIsul ol ugrIculturul polIcIes. To motIvute the dIstrIbutIve
unulysIs to be presented below, It Is therelore Importunt to clurIly thIs Issue ut the outset.
The desIgn und evuluutIon ol MexIco's ugrIculturul polIcIes hus ohen been plugued by u
problem whIch Is common In complex polIcy ureus: the ImposItIon ol multIple, ohen con-
IctIve obectIves on sIngle polIcy Instruments. ThIs Is ohen uggruvuted when the obec-
tIves ure conlused und ImplIcIt, ruther thun cleurly dened. A notuble exumple ol thIs Is the
cuse ol Procumpo, us wIll be seen below.
At the sume tIme, the ovcrnII conceptIon, desIgn und evuluutIon ol rurul development und
ugrIculturul polIcIes hus trudItIonully been murked by u shurp dIvIsIon In obectIves be-
tween productIve" und socIul" progrums, wIth the lormer concerned exclusIvely wIth In-
creusIng the productIvIty ol the ugrIculturul sector, und the lutter locused on ullevIutIng
rurul poverty. ThIs dIvIsIon hus been hIstorIcully IngruIned ut the lederul und locul udmIn-
IstrutIons, wIth u strIct dIvIsIon between the mInIstrIes responsIble lor productIve" pro-
grums (muInly Sngnrpn), und those concerned wIth socIul" progrums (muInly ScJcsoI). ThIs
dIvIsIon hus been preserved In the Lcy Jc 0csnrroIIo RurnI SustcntnbIc und Its ussocIuted
budgetury Instrument, the Progrnmn LspccnI Concurrcntc pnrn cI 0csnrroIIo SustcntnbIc
(PEC). DespIte Its Intended lunctIon us un IntegrutIng und coordInutIng InstItutIonul lrume-
work lor rurul development polIcy, In pructIce the PEC hus served us lIttle more thun u
clussIcutIon system thut groups the lurge set ol ugrIculturul und rurul development pro-
grums by common lunctIons, ut the broudest level In terms ol productIve vs. socIul.
ThIs dIvIsIon Is consIstent wIth u generul result lrom modern wellure economIcs ubout the
Independence ol emcIency lrom equIty InterventIons,
4
whIch muy be Interpreted us Imply-
Ing thut productIve" progrums should locus exclusIvely on correctIng murket luIlures to
push CDP towurds the economy's productIve potentIul (the proJucton possbIty jrontcr),
delegutIng to socIul" (redIstrIbutIve) Instruments the tusk ol uttuInIng u purtIculur socIul
optImum wIthIn thIs lrontIer. An obvIous ImplIcutIon ol thIs InterpretutIon Is thut produc-
tIve Instruments should be evuluuted by theIr success In IncreusIng productIvIty, not by
theIr dIstrIbutIve IncIdence (und vIce versu lor socIul progrums).
ThIs muy seem to provIde u rIgorous loundutIon lor the reectIon ol dIstrIbutIve concerns
In the cuse ol ugrIculturul subsIdIes. 3uch skeptIcIsm Is ol course ohen u thInly veIled und
sell-servIng rutIonulIzutIon on behull ol estublIshed Interests,
5
but It muy ulso be u legItI-
mute concern ol ugrIculturul polIcy-mukers, especIully gIven MexIco's ugrurIun hIstory. For
exumple, RosenzweIg (2008) presents thIs concern In u recent unulysIs ol ugrIculturul pol-
Icy produced lor u punel ol Independent experts on Procumpo relorm set up by 3ugurpu und
the IDB: One ol the reusons why ugrIculturul polIcy hus lost eectIveness Is becuuse ol
poorly-understood equIty consIderutIons. By busIng trunslers on the luctors ol productIon,
one Is necessurIly seekIng u productIve ruther thun u socIul equIty outcome. ." (pp.5-6).
CIven the prevulence und busIc economIc logIc ol thIs cluIm, It Is Importunt to be us cleur
us possIble In expluInIng why thIs Is In luct un urgument lor consIderIng the dIstrIbutIve
Impuct ol ugrIculturul subsIdIes In theIr overull ussessment, ruther thun IgnorIng It.
3 1hese lnclude varlous forums on the reform of agrlcultural subsldles ln Presldencla de la Repbllca, Congress (Cen-
tro de Lstudlos para el 0esarrollo Rural Sustentable y la Soberana ^llmentarla, CL0RSS^), and the excellent data base
that lncludes Procampo and other agrlcultural subsldles publlshed by FUN0^R (www.subsldlosalcampo.org.mx). 1he
lncldence of agrlcultural subsldles has also been reported by CONLv^L ln thelr lnjormc Jc fvoluoc|n Jc lo Polt|co Jc
0csorrollo Soc|ol cn Mx|co 2008 (graph 16. P.80), and appears to have been used ln the defnltlon of prlorltles ln the
2010 proposed federal budget.
4 1hls follows from the so-called fundamental theorems of welfare economlcs" whlch prove that every competltlve
market ln general equlllbrlum ls Pareto emclent, and conversely, every Pareto emclent polnt can be achleved through a
general equlllbrlum (per approprlate allocatlon of assets).
5 For example, a presentacln at Sagarpa by the /soc|oc|on Mcx|cono Jc Sccrctor|os Jc 0csorrollo /ropccuor|o
(^MS0^, Sept. 2008, presented to the Secretary of ^grlculture and addressed to the Presldent of Mexlco) reactlng
to recent reform proposals, dlsmlssed dlstrlbutlve concerns as popullst", wlth a sombre threat: Unfortunately some
have proposed the goal of changlng PRDC/MPD onJ lnrcso Dbjct|vo to tokc owoy jrom lorc proJuccrs to |vc tnc smoll
oncs... lts tnc R|cn vs. tnc Poor. Tnot sounJs l|kc Jcmooucry onJ onocnron|st|c popul|sm onJ w|ll provokc J|sturbonccs
tnot w|ll unJcrm|nc tnc stob|l|ty oj tnc country." 1he presentatlon was dellvered by orge Kondo, Presldent of ^MS0^,
Secretary of ^grlculture of Slnaloa (one of the states wlth the largest shares of agrlcultural subsldles), and apparently
personally a maor benefclary of these subsldles (Merlno, 2009, based on www.subsldlosalcampo.or.mx).
3
AgrcuIturaI Subsdes n Mexco

l Note rst thut even Il the condItIons ol the wellure theorems dId upply, ullowIng u strIct
sepurutIon In the ImplementutIon ol emcIency und equIty polIcIes, thIs would stIll not muke
the dIstrIbutIve eects ol the emcIency Instruments Irrelevunt. On the contrury, desIgnIng
und ImplementIng the equIty Instruments to uchIeve the socIul optImum would ol course
requIre precIse understundIng ol the (colluterul) dIstrIbutIve eects ol the emcIency Instru-
ments. These eects could be neutrul or even progressIve, thus lucIlItutIng the tusk ol the
equIty Instruments. As we wIll see, ugrIculturul subsIdIes In MexIco (us In most countrIes)
ure uctuully hIghly regressIve, most ol them even more regressIve thun the dIstrIbutIon ol
prIvute Incomes In the rurul sector. ConsIderIng theIr weIght In the ugrIculturul/rurul economy,
thIs meuns thut they ure uctuully u sIgnIcunt Jctcrmnnnt ol rurul InequulIty In MexIco.
ThIs ImplIes thut to uchIeve the socIul optImum (ussumIng thIs gIves some posItIve weIght to
equIty), the redIstrIbutIve Instruments would huve to be desIgned to compensute lor the eect
ol the productIve Instruments us well us lor the other (murket) determInunts ol InequulIty.
2 In luct, ol course, the IdeulIzed ussumptIons ol the wellure theorems ure hIghly unreulIstIc,
und especIully so In the context ol rurul und ugrIculturul murkets und InstItutIons. The
theorems ussume the exIstence ol complete und perlectly competItIve murkets lor ull goods
und luctors ol productIon, perlectly Inlormed economIc ugents, und costless (perlectly In-
lormed) redIstrIbutIve Instruments. In uddItIon to ussumIng no murket luIlures, the wellure
theorems ussume no luIlures In non-murket (polItIcul, government und non-government)
InstItutIons requIred to IdentIly und Implement u socIully optImum dIstrIbutIon. The luIlure ol
these condItIons to upply does not meun thut the wellure theorems ure ol no pructIcul Interest,
but theIr guIdIng power Is negutIve" or IndIrect ruther thun dIrect: It lIes In the cupucIty to
IdentIly precIsely und exhuustIvely the lulsIlyIng condItIons to be uddressed by publIc polIcy.
5 In the present context, thIs meuns thut the emcIency und equIty consIderutIons ure not eus-
Ily sepuruble In the desIgn und evuluutIon ol ugrIculturul subsIdIes und ugrIculturul/rurul
development polIcIes more generully. CIven the murket-luIlures prevulent In the rurul/ugrI-
culturul sector, lurge InequulItIes between producers In the uccess to Inputs und murkets
represent u muor restrIctIon to productIvIty und growth. The close Interdependence be-
tween emcIency und equIty condItIons In economIc growth hus receIved much uttentIon In
recent yeurs, us revIewed In the WorIJ 0cvcIopmcnt Rcport 2006 Lquty nnJ 0cvcIopmcnt,
the WDR 2008 In the context ol ugrIculture, und World Bunk (2004, 2006) und Levy und
Wulton (2009) lor the cuse ol the LutIn AmerIcun regIon und MexIco, respectIvely. ThIs In-
terdependence muy be Illustruted wIth muny specIc exumples, und even wIth the broud
hIstory ol ugrurIun relorm und ugrIculturul support polIcIes In MexIco over the lust century.
At the rIsk ol gross sImplIcutIon, thIs hIstory muy be summurIzed us lollows:
u) The ugrurIun relorm produced utomIzed ugrIculturul lund holdIngs und drustIcully con-
struIned lund murkets under the cjJo system,
b) The prIncIpul ugrIculturul support polIcIes upplIed In thIs perIodprIce-bused subsIdIes
und IrrIgutIon und other Input subsIdIesbeneted mostly lurge-scule und cupItul
(IrrIgutIon)-IntensIve gruIn producers In the North, but luIled to reuch the bulk ol smull-
scule und subsIstence producers creuted by the Relorm, construInIng them to low-quulI-
ty, low-Investment, technologIcully prImItIve productIon unIts. It wus only by the end ol
the century thut u muor trunsler progrum wus Introduced cupuble ol reuchIng the bulk
ol these producers (Procumpo l994), even Il theIr shure ol the trunsler wus lImIted to
theIr shure In lund-holdIngs.
c) In uddItIon to the hIstorIcul bIus uguInst smull-holders, subsIstence lurmers und lundless
ugrIculturul workers In the ullocutIon ol ugrIculturul subsIdIes, poor rurul households
were ulso excluded lrom most socIul und untI-poverty progrums, uguIn untIl the end ol
the century. These were ullocuted wIth u strong urbnn bns whIch wus only reversed wIth
eorts to expund the coveruge ol busIc educutIon und heulth servIces to rurul ureus In the
l990's, IncludIng especIully the creutIon ol the InnovutIve Progrcsn CCT progrum In l997
(renumed DportunJnJcs In 200l).
4 To recup the sepurutIon ol cquty und c[ccncy Instruments: lund relorm und (belutedly)
socIul progrums were used to uddress rurul InequulIty, whIle ugrIculturul subsIdIes were
concentruted on the lurger producers on purely emcIency consIderutIons. The outcome ol
these polIcIes, us we wIll see bellow, Is un ugrIculturul sector whIch Is both hIghly unequul
und relutIvely InemcIent, us well us resIlIent to relorm (sectIon 3). At the centenury ol the
MexIcun RevolutIon, two decudes uher the second ugrurIun relorm", the rurul economy Is
stIll trupped In u low growth, hIgh InequulIty equIlIbrIum, burely sustuInIng the poorest ol
the poor whIle supportIng some ol the rIchest und most generously subsIdIzed IndIvIduuls
In MexIco. ThIs outcome reects muny luIlures ol desIgn und ImplementutIon wIthIn the
two muor polIcy cutegorIes (dIstrIbutIve und productIve), but Is ulso expluIned by the hIs-
torIcul sepurutIon ol these Instruments, leudIng respectIvely (ut one extreme) to u populous,
commercIully unvIuble smull-holder und subsIstence sector, whIch hus survIved us u lorm
ol mInImul socIul Insurunce, und (ut the other end) lurge-scule northern gruIn producers re-
ceIvIng the bulk ol subsIdIes wIthout much evIdence ol sIgnIcunt Impucts In productIvIty
Subsdos gara Ia desguaIdad

or employment (see sectIons 3 und 5). In the mIddle, ure the smull to mIddle-sIzed (5-20+
hus) producers wIth undeveloped potentIul, construIned In theIr uccess to credIt, Insurunce,
technology, murketIng und other crItIcul Inputs. These ure generully not poor enough to
benet lrom DportunJnJcs or other socIul progrums und not lurge enough to uttruct sIg-
nIcunt ugrIculturul subsIdIes under present ullocutIon crIterIu, but muy well be the poten-
tIul benecIurIes wIth the hIghest Impuct: such support would be both more equItuble und
more productIve, reluxIng sIgnIcunt bIndIng construInts on ugrIculturul productIon (In
contrust to lurge producers whIch ure ulreudy close to theIr productIon-possIbIlIty lrontIers,
purtly us u consequence ol the cumulutIve eect ol pust hIstorIcul Investments In theIr lu-
vor). A sImIlur urgument wus mude heen yeurs ugo by De Junvry et ul. (l995), who showed
thut the strutu ol mIddle-sIzed producers hud the most potentIul to benet lrom support to
lucIlItute crop reconversIon und modernIzutIon under NAFTA. Unlortunutely, whIle Pro-
cumpo dId succeed In ullocutIng resources to these producers ut leust proportIonul to theIr
shure In cultIvuted lund (4l%, see gruph 30, below), the requIred complementury Inputs luIled
to reuch thIs strutu (both becuuse the Input support progrums were sIgnIcuntly curtuIled,
und those whIch do exIst ure concentruted on the lurger producers, see sectIon 6, below).
2. ACRICULTURAL TRADE ADJU5TMENT AND
COMPEN5ATORY PROCRAM5 AFTER NAFTA
The prIncIpul ARD polIcIes currently Implemented In MexIco orIgInuted In the context ol u
broud, murket-orIentuted relorm eort to modernIze the ugrIculturul sector In the eurly und
mIddle nInetIes, In the context ol both, the openIng up ol ugrIculturul commodIty murkets
under the North Amcrcnn Frcc TrnJc Agrccmcnt (NAFTA) In l994 wIth u l5 yeur trunsItIonul
perIod, und the constItutIonul relorm ol the cjJo lund tenure system In l992.
MexIco's second ugrurIun relorm", us thIs umbItIous relorm eort hus rIghtly been lubeled (by
one ol Its prIncIpul urchItects, see CordIllo et ul. l999), wus uccompunIed by extensIve relorms In
ARD polIcIes, IntroducIng more emcIent (less dIstortIonury), us well us more equItuble polIcy
Instruments. The long, druwn-out rst" ugrurIun relorm, lollowIng the MexIcun RevolutIon, wus
uccompunIed lrom the Crdenus udmInIstrutIon In the l930s untIl Its lormul termInutIon In
l992, by two prIncIpul lorms ol ugrIculturul support: Input support (IrrIgutIon, lertIlIzers) und
murket prIce support (MP3). By desIgn, these support polIcIes where both hIghly dIstortIonury und
InequItuble, luIlIng to reuch the smull und subsIstence lurmers creuted by the ugrurIun relorm.
Furmers were purtly compensuted lor the gruduul reductIon ol MP3 under NAFTA through
three prIncIpul support progrums: u) the Progrnmn Jc Apoyos n In ComcrcnIzncn
6
, un out-
put-bused subsIdy progrum Introduced In l99l, b) the Progrnmn Jc Apoyos 0rcctos nI Cnmpo
(PRDCAMPD), u per hecture dIrect trunsler progrum decoupled lrom productIon und commer-
cIulIzutIon, Introduced In l994, und c) AInnzn pnrn cI Cnmpo, un Investment support progrum
(or lumIly ol progrums) oerIng mutchIng grunts und support servIces, Introduced In l996. The
expectutIon wus thut these progrums would not only pluy u compensutory role In the luce ol
growIng externul competItIon but, In the cuse ol Procnmpo und AInnzn, would ulso provIde the
necessury support lor lurmers to modernIze productIon und swItch to hIgher vulue crops In the
context ol the newly lIberulIzed lund und product murkets.
In the context ol MexIcos duul ugrIculturul sector und prevIous ugrIculturul support polIcIes,
the decoupled desIgn ol Procnmpo wus revolutIonury In terms ol emcIency us well us equIty.
By decouplIng trunslers lrom productIon/commercIulIzutIon, the progrum wus expected to
mInImIze dIstortIons In productIve decIsIons und to trunsler resources dIrectly to subsIstence
lurmers, lor the rst tIme In MexIco's post-revolutIonury hIstory. The orIgInul decree lor the
creutIon ol Procumpo lIsts un extended lIst ol obectIves, IncludIng promInently us one ol Its
muIn obectIves", IncreusIng the Income ol 2.2 mIllIon rurul subsIstence producers whIch
were excluded lrom the support system".
7
6 1he Programa de ^poyos a la Comerclallzacln and PROC^MPO are both managed by ^poyos y Servlclos a la Comer-
clallzacln ^grarla (^SLRC^).
7 0ccrcc tnot Rculotcs tnc Rurol 0|rcct Support Prorom, Procompo, 0OF, uly 25, 1994. 1he llst of obectlves lncludes (emphasls
added): 1) greater partlclpatlon of the rural prlvate and soclal sectors to Improve domestIc and InternatIona| competItIve-
ness, 2) raIse the |IvIng standards of rura| famI|Ies, 3) modernIzatIon of the marketIng system, 4) Increase the capacIty
of capIta|IzatIon of rural productlon unlts, 5) facI|Itate the conversIon of those lands ln whlch lt ls posslble to establlsh more
proftable actlvltles, glvlng economIc certaInty to rural producers and Increased capacIty to adapt to change, as requlred by
the new agrlcultural pollcy under way, and the lmplementatlon of the agrarlan pollcy contalned ln the amendment to ^rt. 27 of
the Constltutlon 6) promote new a||Iances between the socIa| and prIvate sectors, through olnt ventures, organlzatlons and
enterprlses capable of faclng the challenges of competltlveness, 7) adoptIon of more advanced techno|ogIes and the expan-
slon of productlon strategles based on prlnclples of emclency and productlvlty, 8) because more than 2.2 mI||Ion rura| produc-
ers, whose harvests are used for househo|d consumptIon, are exc|uded from the support programs, and as a result face
unequal terms compared to those producers who market thelr crops, thls system ls deslgned to have as one of lts maln goals
the Increase In those producers' Income |eve|s, 9) contrIbute to the recovery and conservatIon of forests and ung|es, and
to reduce soI| erosIon and water po||utIon, thereby encouraglng a culture of rural resource conservatlon....
3
AgrcuIturaI Subsdes n Mexco

The relorm In ugrIculturul support polIcIes wus uccompunIed by u relorm In rurul development
und untI-poverty polIcIes, InvolvIng the lollowIng Inter-lInked elements: u) the IntroductIon ol
InnovutIve und eectIvely turgeted rurul progrums, b) u reullocutIon ol socIul spendIng to-
wurds the rurul sector, reversIng the murked urbun bIus ol socIul spendIng In prevIous decudes
(In untI-poverty progrums, lood subsIdIes, busIc educutIon und heulth servIces lor the unIn-
sured), und c) un Increuse In the relutIve shure ol rurul development (socIul) over ugrIculturul
support (productIve) progrums In overull ARD spendIng. The prIncIpul progrum Introduced to
Implement these relorms wus the Progrnmn Jc LJucncn, SnIuJ y AImcntncn (Progrcsn, In
l997, renumed DportunJnJcs In 200l), oerIng dIrect cush trunslers to poor rurul households
condItIonul on humun cupItul Investment (uttendIng busIc educutIon und usIng heulth ser-
vIces).
8
Three Importunt turgeted rurul development progrums Introduced In thIs perIod ure: u)
the FonJo Jc Aportnconcs pnrn lnjrncstructurn SocnI (FAlS, In l996), u lurge decentrulIzed
lund lor busIc Inlrustructurul Investment replucIng the Progrnmn NnconnI Jc SoIJnrJnJ
(PRONA3OL) ol the 3ulInus udmInIstrutIon (l988-l994), b) the Progrnmn Jc LmpIco TcmpornI
(PLT, In l995), u multI-ugency, sell-turgeted temporury employment progrum,
9
und c) the RurnI
0cvcIopmcnt Progrnm (l996), the prIncIpul AlIunzu progrum lormully turgeted to poor producers.
The prIncIpul Instruments emergIng lrom these relorms huve been retuIned wIth some mInor
chunges uher 2000, though the puce und depth ol the prevIous relorm eort hus not been sus-
tuIned In the present decude. A potentIully Importunt InstItutIonul InnovutIon wus the pussIng
ol un umbrellu luw lor rurul development, the Lcy Jc 0csnrroIIo SocnI SustcntnbIc (200l),
whIch Included un eort to creute u coordInutIng lrumework lor ARD expendItures, the Pro-
grnmn LspccnI Concurrcntc pnrn cI 0csnrroIIo RurnI SustcntnbIc (PEC). However, beyond oer-
Ing u budgetury clussIcutIon scheme to order ARD expendItures, the PEC hus not hud much
Impuct on the ullocutIon ol ARD resources.
3Ince 2000, ARD spendIng hus ulmost doubled In reul terms, reuchIng u lederul ARD budget ol
204 bIllIon pesos lor 2008. ThIs expunsIon huppened In the context ol the lIberulIzutIon ol
most ugrIculturul products In 2003 und the lIberulIzutIon ol the sensItIve" products (muIze,
beuns, sugur und mIlk powder) In 2008. The successlul polItIcul mobIlIzutIon by lurmer orgu-
nIzutIons led to the negotIutIon ol the AcucrJo NnconnI pnrn cI Cnmpo (2003). As wIll be
shown below, the consequent expunsIon ol APE wus ullocuted to the more dIstortIonury In-
struments (und some new, lIke ugrIculturul dIesel subsIdIes), u purtIul retrenchment ol the
prevIous relorm eort.
l0
3. 5UB5IDIE5, CROWTH, PRODUCTIVITY
AND EMPLOYMENT IN ACRICULTURE
5.l. Crcvth and Prcducttvtty (Land and Tctal
Factcr Prcducttvtty)
Between l980 und 2007 ugrIculturul CDP hus grown by un uveruge yeurly rute ol l.6%, whIle
totul CDP hus grown by 2.7%, so ACDP/CDP hus contructed lrom 7% to 5.4% over thIs perIod.
However, the gup between the nutIonul und ugrIculturul growth rutes hus nurrowed In more
recent yeurs: ugrIculture CDP lugged In the rst yeurs ol the lIberulIzutIon relorms, but the gup
hus nurrowed uher 2000. In 200l und 2003, when totul CDP growth stugnuted (0.2% und l.3%,
respectIvely), ugrIculture CDP grew by 3.5% und 3.l%. The lutter trend, together wIth the stu-
bIlIty ol busIc lood prIces und OportunIdudes trunslers Is wIdely credIted lor the unexpected
reductIon In rurul poverty durIng the stugnunt 2000-2002 perIod (3zkely und Ruscon 2005),
us descrIbed below.
ImmedIutely uher l994 we observe u sIgnIcunt Increuse In the productIon ol lruIts und veg-
etubles, but only u modest expunsIon In gruIns consIstent wIth the pre-l994 trend. The lormer
wus ussocIuted wIth un expunsIon In cultIvuted lund In the cuse ol vegetubles, und un Increuse
In the productIvIty ol lund In the cuse ol lruIts. By contrust, uher 2000, the growth ol vegetuble
productIon slows down, und In the cuse ol lruIts declInes, whIle gruIns grow ut un uveruge
7.5% unnuully, entIrely through IncreusIng lund productIvIty. The l988-l994 und 2000-2004
perIods present sImIlur trends In the relutIve behuvIor ol gruIn vs. lruIts & vegetuble produc-
tIon und cultIvuted lund, In luvor ol the lormer. ThIs coIncIdes wIth the surge ol MP3 und
output-bused support lor gruIns, us well us the expunsIon ol vurIuble Input-bused support,
whIch Is ulso mostly lInked to the lutter.
8 ln 2001 the program was extended to urban areas and upper-secondary educatlon and renamed Oportunldades.
9 Orlglnally the PL1 lnvolved the partlclpatlon of Sedesol, Semarnat, SC1, and Sagarpa, but the Sagarpa component has
been recently dlscontlnued.
10 For further dlscusslon and extenslve data to support the prevlous summary, see Scott (2010).
Subsdos gara Ia desguaIdad

These trends muy IndIcute u conIct between the murket lIberulIzutIon process, InItIuted In
the eurly l990s und culmInutIng In 2008, und ugrIculturul support polIcIes. Both MP3 und
output-lInked A3ERCA puyments huve turgeted mostly trudItIonul crops, purtIculurly muIze
und other gruIns, us well us ruw sugur und some unImul products lIke mIlk und poultry meut.
FruIts und vegetubles, on the other hund, huve not receIved sIgnIcunt support, but huve ben-
eted lrom the lIberulIzutIon ol ugrIculturul murkets. Fur lrom beIng resolved, thIs conIct hus
been revIved In the present decude, wIth the gruduul shIh buck towurds more dIstortIonury
support polIcIes. 3ubsIdIes huve been bIused towurds trudItIonul crops (gruIns), thus humper-
Ing ruther thun supportIng the compurutIve udvuntuges towurds lruIts & vegetubles under
murket lIberulIzutIon.
ConsIderIng the correlutIon between ARD expendIture und ugrIculturul perlormunce, gruph l
compures growth rutes In ugrIculturul CDP und TFP over the l98l-200l perIod wIth uveruge
ARD/CDP expendIture rutes lor l985-200l lor the prIncIpul LAC countrIes (ordered by ARD/
ACDP). These rutes vury wIdely, lrom MexIco, wIth ARD expendIture equul to 34% ol ugrIcul-
turul CDP, to ColombIu, wIth less thun 3% ol CDP.
ll
The gure suggests Il unythIng u negutIve
correlutIon between the countrIes' ARD expendItures und growth ol CDP und TFP. ExcludIng
Costu RIcu, the sIx top spenders (ubove l5% ol ugrIculturul CDP), huve the lowest ugrIculturul CDP
growth rutes over the perIod. On the other hund, the hIgh growth ugrIculturul sectors (both
CDP und TFP) ure concentruted In the lower und mIddle end ol the ARD spendIng dIstrIbutIon.
Gragh 1
LISTlIBUTI0N 0l AlL/ACLP ANL A\llACl lAll AClICUlTUlAl CLP ANL TlP Cl0WTl
lATlS IN 19S1/S2001
Source. AlL expendture end Agrculturel CLP from lA0legonel 0mce for lA, Agrculturel TlP growth retes from Avle
end lvenson ,2004).
5.2. Emplcyment, vages and cther tnccme scurces
Between l930 und l980 the shure ol ugrIculture In totul employment declIned lrom 7l% to
26% (gruph 2), but by the end ol the century u hh ol the lubor lorce wus stIll employed In
ugrIculture. AccordIng to the nutIonul employment survey (ENOE), ugrIculturul employment
11 1he expendlture data and C0P data are from the reglonal F^O data base. 1FP growth estlmates are from ^vlla and
Lvenson (2004).
-1.0%
0.0%
1.0%
2.0%
3.0%
4.0%
5.0%
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(
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C0P 1981-2001 1FP 1981-2001 ^R0/C0P 1985-2001
3
AgrcuIturaI Subsdes n Mexco

hus declIned to l3% In 2008, representIng 5.7 mIllIon workers, but Is stIll very sIgnIcunt In
the poor southern stutes: 40% In ChIupus, und close to 30% In Ouxucu und Cuerrero.
DespIte these employment dutu, the economIc weIght und lubor Income lrom ugrIculture hus
lullen drustIcully In recent decudes. The 2007 AgrIculturul Census shows thut most workers In
the sector ure unpuId lumIly members, und ol those who receIve puyment the muorIty ure
eventuul workers (Tuble l): ol the 8.6 mIllIon persons reported workIng In ugrIculture In the
2007 Census, only 42l,000 ure permunent puId workers. ThIs number hus pructIcully remuIned
the sume sInce the l99l Census, whIle the totul number ol workers hus declIned lrom l0.6 to
8.6 mIllIon, und unpuId lumIly workers huve declIned lrom 8.3 to 3.5 mIllIon, wIth seusonul
puId workers IncreusIng lrom l.8 to 4.7 mIllIon. ThIs substItutIon ol unpuId lumIly workers lor
puId seusonul workers Is strIkIng und suggests ugrIculturul lubor murkets huve developed sIg-
nIcuntly In the NAFTA yeurs, lIberutIng lumIly members lor more productIve rurul und non-
rurul employment (mIgrutIon) opportunItIes. ThIs hypothesIs Is ulso consIstent wIth the evolu-
tIon ol rurul Income sources, descrIbed In the next sectIon (see gruph l0, ll).
Unlortunutely, ut the tIme ol wrItIng the tubles lrom the 2007 AgrIculturul Census publIshed
by INECI do not report employment by lurm sIze. However, the dutu lrom the l99l Census
(gruphs 3, 4) shows thut both unpuId lumIly workers und puId seusonul workers ure concen-
truted In smull to medIum lurms, whIle puId workers ure concentruted In medIum to lurge
lurms. CompurIng the number ol producers In euch strutu (gruph 5), It Is InterestIng to note
thut between l99l und 2007 smull producers huve Increused lrom 2.24 to 2.75 mIllIon, whIle
the number ol both mIddle-sIzed und lurger producers huve declIned by ulmost 30%.
Wuges In the prImury sector huve ulso lullen sIgnIcuntly In relutIon to the rest ol the econo-
my und even In ubsolute terms (tuble 2, gruph 6), declInIng by 2.2% unnuully In l989-l994
whIle uveruge wuges lor the economy overull Increused 6% unnuully, und IncreusIng l.4% un-
nuully In the lust decude (vs. 2.9% overull). The declIne In prImury sector employment deceler-
uted In 2007-2008, und wuges uctuully Increused more thun In the rest ol the economy In thIs yeur.
The prImury sector only uccounted lor 6% ol the totul wuge muss ol the economy In 2008.
Gragh 2
lMPl0MlNT IN AClICUlTUll AS A SlAll 0l T0TAl lMPl0MlNT IN MlXIC0.
NATI0NAl ANL SlllCTlL STATlS
Source. INlCI, Populeton Census. 19:01990, lN0l, 1996200S.
0
10
20
30
40
50
60
70
80
90
100
1
9
3
0
1
9
4
0
1
9
5
0
1
9
6
0
1
9
7
0
1
9
8
0
1
9
9
0
1
9
9
6
1
9
9
8
1
9
9
9
2
0
0
0
2
0
0
1
2
0
0
2
2
0
0
3
2
0
0
4
2
0
0
5
2
0
0
6
2
0
0
7
2
0
0
8
Naclonal Chlapas Oaxaca Cuerrero Sonora Chlhuahua Slnaloa 1amaullpas Mxlco
Subsdos gara Ia desguaIdad

TabIe 1
lMPl0MlNT IN AClICUlTUlAl ANL l0llSTl.
AClAlIAN ClNSUS 1991, 200/
l99l 2007
Change
l99l-2007
Tctal l0,676,3ll 8,650,l87 -l9%
Hcn Remunerated (FumIly)* 8,370,879 3,5l0,394 -58%
Mule 7,ll2,977 2,399,283 -66%
Femule l,257,902 l,lll,lll -l2%
Remunerated 2,305,432 5,l39,793 l23%
Permanent (more thun 6 months) 427,337 420,989 -l%
Mule 399,944 378 70l -5%
Femule 27,393 42 288 54%
5eascnal (less thun 6 months) l,878,095 4,7l8,804 l5l%
Mule l,7l7,275 4 l64 690 l43%
Femule l60,820 554 ll4 245%
*The l99l Census ulso reports 268,033, workers who ure unpuId but non-lumIly.
Source. Agrculturel Census, 200/ INlCI ,teble 114 n lesultedos del \III Censo Agrcole, Cenedero y lorestel, Agrculturel
Census 1991, INlCI, teble S4 n http.//www.redeco.econome.unem.mx/CA/CAC91/.
Gragh 3
LISTlIBUTI0N 0l AClICUlTUlAl W0llllS B lAlM SIl 1991.
NUMBll 0l W0llllS
Source. Agrculturel Census 1991 ,INlCI).
0
500,000
1,000,000
1,500,000
2,000,000
2,500,000
3,000,000
3,500,000
Non wage Seasonal wage ear-round wage
0
-
2
2
-
5
5
-
2
0
2
0
-
5
0
5
0
-
1
0
0
1
0
0
-
1
0
0
0
1
0
0
0
-
2
5
0
0
2
5
0
0
-
3
AgrcuIturaI Subsdes n Mexco

Gragh 4
LISTlIBUTI0N 0l AClICUlTUlAl W0llllS B lAlM SIl 1991
Source. Agrculturel Census 1991, INlCI, teble S4 n http.//www.redeco.econome.unem.mx/CA/CAC91/ .
Gragh 5
LISTlIBUTI0N 0l Pl0LUCllS B
BlNllICIAlIlS/Pl0LUCllS IN 200/ ClNSUS
Source. euthor's celculetons usng ASllCA edmnstretve dete end tebuler nformeton from the Agrculturel Census 1991
end nformeton of the Agrculturel Census 200/ cted n Le le Medrd ,2009).
0
10
20
30
40
50
60
70
0-5 Has 5-20 Has 20+ Has
Non wage Seasonal wage ear - round wage
0-5 5-20 20-100
0
500,000
1,000,000
1,500,000
2,000,000
2,500,000
3,000,000 0.7
0.6
0.5
0.4
0.3
0.2
0.1
0
Producers Census 1991 Producers ln Procampo 2006
Producers Census 2007 Coverage Procampo 2006 / Census 2007
Subsdos gara Ia desguaIdad

TabIe 2
lMPl0MlNT ANL WAClS IN PlIMAl SlCT0l.
200S200S lIlST UAlTll
PrImury 3ector Other sectors
Employed pop
2005 6,047,36l 34,528,5l3
2006 5,875,6l9 35,845,496
2007 5,734,735 36,665,727
2008 5,676,086 37,644,59l
Wuge (MP/month)
2005 2,605 l0,l47
2006 2,393 l0,595
2007 2,293 l0,865
2008 2,382 ll,l2l
Annuul growth rutes
Employed Pop
2005-2006 -2.8% 3.8%
2006-2007 -2.4% 2.3%
2007-2008 -l.0% 2.7%
Wuge
2005-2006 -8.l% 4.4%
2006-2007 -4.2% 2.6%
2007-2008 3.9% 2.4%
Wuge Muss
2005-2006 -l0.7% 8.4%
2006-2007 -6.5% 4.9%
2007-2008 2.8% 5.l%
Source. lN0l 200S200S, INlCI.
Gragh 6
ANNUAl ClANCl IN WAClS. 19SS200S
Source. lNl, lN0l.
4. RURAL POVERTY AND INEQUALITY;
ACRICULTURE IN RURAL INCOME5
MeusurIng rurul development In terms ol monetury poverty und busIc humun development
In dIcutors, lurge gups persIst between the rurul und urbun sector, but ulso wIthIn the rurul
sector. Extreme poverty (nImcntnrn) declIned lrom 53% to 24% between l996 und 2006, but
most ol thIs declIne represents u recovery lrom the drumutIc Increuse In poverty lollowIng the
l995 tequIlu" crIsIs: the l992-2002 decude wus lully lost" In terms ol rurul poverty-reduc-
^grlculture 1otal
- 2.2
6.0
-12.2
-11.5
1.4
2.5
1989-1994 1995-1996 1997-2008
-15
-10
-5
0
5
10
3
AgrcuIturaI Subsdes n Mexco

tIon, und the declIne observed between 2002 und 2006 wus ulmost completely reversed by
2008, when extreme poverty reuched ulmost 3l.8%, only slIghtly below the l992 vulue (gruph
7). The 2006-2008 Increuse In poverty wus due muInly to the Increuse In the prIce ol the busIc
lood busket due to the globul rIse In lood prIces, und the begInnIng ol the eects ol the globul
nuncIul crIsIs. 3Ince thIs stIll does not tuke Into uccount the lull eects ol the lutter crIsIs, It
Is unlortunutely certuIn thut rurul poverty wIll Increuse sIgnIcuntly more In 2009-20l0.
The rurul sector Is ohen perceIved und ussumed by polIcy mukers to be relutIvely homogenous,
but the contrusts In poverty rutes by sIze ol loculIty und regIonully the sector ure us drumutIc
us those between the rurul und urbun sectors. The poverty rute doubles us we puss lrom urbun
(>l5,000 InhubItunts) to semI-urbun (2500-l5000) loculItIes, und doubles uguIn lrom the lut-
ter to smull rurul loculItIes (<2500) (World Bunk 2005). The contrust between rurul ureus In the
northern stutes und the rurul 3outh Is even more drumutIc, wIth ulmost u ten-lold dIerence
In extreme poverty rutes: lrom 6.5% In BC, to close to 60% In ChIupus und Cuerrero (gruph 8).
The poorest eIght stutes uccount lor 64% ol the rurul poor, but only l8% ol ugrIculturul CDP.
As dIscussed ubove und shown In detuIl below, the noted dIvIsIon ol lubor between socIul" und
productIve" rurul expendItures cun be cleurly upprecIuted In the sume gruph: the ullocutIon ol
OportunIdudes corresponds closely to the dIstrIbutIon ol poverty, whIle APE Is dIstrIbuted be-
tween stutes us u lunctIon ol ugrIculturul productIon.
Rurul Income InequulIty Increused sIgnIcuntly between l994 und 2000 (2002 Il we consIder
only monetury Income sources), but declIned buck to l994 levels by 2006).
l2
The Inverted U-
shupe reects mostly the evolutIon ol lubor und non-monetury Income In thIs perIod, whIch
suggests u structurul trunslormutIon In the rurul economy but requIres lurther InvestIgutIon.
Trunslers huve contrIbuted to reduce rurul InequulIty und utten the trend over the perIod.
ThIs reects the eect ol OportunIdudes, Procumpo (whIch us we wIll see Is regressIve In ub-
solute terms but progressIve In relutIve terms), und remIttunces.
Gragh 7
lUlAl P0\llT lATlS ANL lUlAl SlAll IN T0TAl P0\llT. 19922006
Source. C0Nl\Al.
12 For further detalls on the dynamlcs of lncome dlstrlbutlon ln Mexlco over thls perlod see Lsqulvel (2008), and Lsqulvel,
Lustlg and Scott (2009).
Rural poverty rates (patrlmonlal) Rural poverty rates (acute)
Rural poverty share (ln natlonal poverty)
80%
70%
60%
50%
40%
30%
20%
10%
0%
1
9
9
2
1
9
9
4
1
9
9
6
1
9
9
8
2
0
0
0
2
0
0
2
2
0
0
4
2
0
0
5
2
0
0
6
2
0
0
8
P
o
v
e
r
t
y

s
h
a
r
e
s
P
o
v
e
r
t
y

r
a
t
e
s
0
10
20
30
40
50
60
70
80
90
Subsdos gara Ia desguaIdad

Gragh B
lXTllMl lUlAl P0\llT P0BllA AlIMlNTAlIA, ACLP ANL PUBlIC AlL
lXPlNLITUll. 200S/2006
STATlS 0lLlllL B lXTllMl lUlAl P0\llT lATl
Source. C0Nl\Al ,rurel poverty), INlCI ,Agrculturel CLP), 0lver end Sentllenes ,200S). ,AlL expendture.
Extreme InequulItIes In rurul lIvIng stundurds persIst even In the busIc humun development
(heulth, educutIon) IndIcutors turgeted by the prIncIpul socIul spendIng progrums. In the 2000
census, IllIterucy In rurul ureus wus 2l%, twIce the nutIonul uveruge und seven tImes the uver-
uge lor MexIco CIty, und uveruge schoolIng wus less thun 5 yeurs, hull the uveruge lor MexIco
CIty. Almost three-quurters ol the populutIon In MexIco CIty (hull ol the nutIonul populutIon)
hud completed post-prImury educutIon, but only u quurter ol the populutIon In the rurul sec-
tor. In 2005, Inlunt mortulIty rutes (IMR) vurIed wIdely by munIcIpulIty ordered by the CD-
NAPD mnrgnnIty nJcx, u multI-dImensIonul poverty IndIcutor closely correluted wIth degree
ol rurulness": lrom 3-8 per thousund (lIve bIrths) In rIcher urbun JcIcgnconcs, to 30-80 per
thousund In the poorest munIcIpulItIes, compuruble to the gup observed between low und hIgh
Income countrIes In the world (gruph 9).
To ussess the extent to whIch ugrIculture oers Income und employment opportunItIes lor the
rurul poor In MexIco, we use ENICH Income-expendIture surveys, the ENOE (2008) employ-
ment survey, und ENCA3EH (2004), u lurge und detuIled survey coverIng households In Dpor-
tunJnJcs loculItIes. Though the lutter Is not nutIonully representutIve, It Is representutIve ol
producers In poor rurul loculItIes.
There hus been u drumutIc trunslormutIon In the Income sources lor the uveruge rurul house-
hold over the lust decude. Independent (non-wuge) lurm Income hus collupsed lrom 28.7% to
9.l% ol totul household Income between l992 und 2004, whIle totul (Independent und wuge)
lurm Income hus contructed lrom close to 38% to ust l7% ol household Income (gruph l0).
The extreme rurul poor huve u lurger purtIcIputIon In ugrIculturul uctIvItIes, but they ulso de-
rIve u relutIvely smull shure ol theIr Income lrom the sector (gruphs ll und l2, tubles 3 und 4).
The poorest quIntIle uccounts lor more thun hull ol ull ugrIculturul workers und 60% ol house-
0
10
20
30
40
50
60
Rural poverty rate
Cumulatlve poverty shares Cumulatlve ^grlc. C0P
Cumulatlve Oportunldades shares Cumulatlve ^PL shares
C
h
l
a
p
a
s
C
u
e
r
r
e
r
o
O
a
x
a
c
a
S
a
n

L
u
l
s

P
o
t
o
s

P
u
e
b
l
a
v
e
r
a
c
r
u
z
1
a
b
a
s
c
o
M
l
c
h
o
a
c

n
C
a
m
p
e
c
h
e
0
u
r
a
n
g
o
C
u
a
n
a

u
a
t
o
H
l
d
a
l
g
o
Q
u
l
n
t
a
n
a

R
o
o

u
c
a
t

n
M

x
l
c
o
N
a
y
a
r
l
t
Z
a
c
a
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e
c
a
s
1
a
m
a
u
l
l
p
a
s
S
l
n
a
l
o
a
Q
u
e
r

t
a
r
o
C
h
l
h
u
a
h
u
a

a
l
l
s
c
o
S
o
n
o
r
a
1
l
a
x
c
a
l
a
C
o
a
h
u
l
l
a
^
g
u
a
s
c
a
l
l
e
n
t
e
s
N
u
e
v
o

L
e

n
M
o
r
e
l
o
s
C
o
l
l
m
a

a

C
a
l
l
f
o
r
n
l
a

S
u
r
0
l
s
t
r
l
t
o

F
e
d
e
r
a
l

a

C
a
l
l
f
o
r
n
l
a
P
o
v
e
r
t
y

r
a
t
e
C
u
m
m
u
l
a
t
l
v
e

s
h
a
r
e
s
3
AgrcuIturaI Subsdes n Mexco

holds In the poorest decIle huve ugrIculturul workers, though only 26.6% ol these households
report generutIng Independent lurmIng Income. However, the poorest 30% ol households ob-
tuIn on uveruge less thun u thIrd ol theIr Income lrom ugrIculture. In purtIculur, subsIstence
lurmIng hus become Irrelevunt source ol Income lor rurul households: 27% ol HHs report ob-
tuInIng non-monetury Income lrom sell-productIon/consumptIon, but thIs represents less
thun 2% ol theIr totul current Income, und only 7% lor the poorest decIle. Non-lurmIng wuges
represents the prIncIpul sIngle Income source lor ull but the poorest decIle, whose lurgest In-
come source ure publIc trunslers.
In compurIson to urbun households, rurul households obtuIn u smuller shure ol theIr Income lrom
the lubor murket (4l%) und ure more dependent on trunslers (l8%) und sell-employment (l8%).
ConsIderIng the churucterIstIcs ol rurul households In poor loculItIes were OportunIdudes op-
erutes, tuble 4 dIvIdes these by lund-holdIngs. It Is notuble rst thut 7l% ol these households
ure lundless. Though these households tend to be younger und huve less ussets generully
(housIng, upplIunces und curs), they ulso report hIgher lubor Income und educutIon IndIcutors
thun lund owners.
Among the lutter non-ugrIculturul workers ure better o thun ugrIculturul workers, whIch ulso
report the lowest coveruge ol socIul securIty ol ull household groups (5%).
By lur the poorest households In these loculItIes ure not the lundless, but smull-holders, espe-
cIully households wIth less thun 2 hectures. These ulso tend to huve u hIgher proportIon ol
IndIgenous populutIon und ugrIculturul workers (more thun 70% ol these household report the
muIn occuputIon ol the household heud us ugrIculturul workers), but lowest proportIon ol cj-
Jntnros or comuncros.
The greut muorIty ol lund-holders own theIr lund, though thIs proportIon Is lower lor smull
holders. Most ol the lund Is ruInled, though the proportIon ol IrrIguted lund Increuses In the
6-20 hu runge. Corn Is the prIncIpul crop, especIully umong smull-holders, lollowed by beuns.
The dutu on the coveruge ol publIc progrums wIll be tuken up In sectIon 6.
Gragh 9
INlANT M0lTAlIT lATlS IMl B MUNICIPAlITIlS 0lLlllL B IMl ANL C0NAP0
MAlCINAlIT INLlX. 200S
Source. C0NAP0.

80
70
60
50
40
30
20
10
0
Ordered by Conapo Marglnallty lndex Ordered by lMR (2005)
Urban, low marglnallty Rural, hlgh marglnallty
Subsdos gara Ia desguaIdad

Gragh 10
INC0Ml S0UlClS 0l lUlAl l0USll0lLS. 19922004
Source. luz Cestllo ,200S). Totel does not edd up to 100+ beceuse smeller or unspecned ncome sources were excluded.
Gragh 11
INC0Ml S0UlClS 0l lUlAl ANL AClICUlTUlAl l0USll0lLS. 2006
INC0Ml P0l CAPITA Pll M0NTl
Source. euthor's celculetons besed on lNICl 2006 ,INlCI).
lndependent Farmlng
^grlcultural wage Labor
lndep. Non-Farm ^ctlvs.
Non-Farm wage Labor
Penslons
lnternatlonal transfers
Oportunldades and Procampo
transfers
0omestlc lnter-household
transfers
0
10
20
30
40
50
60
70
80
90
100
1992 2004
28.7
9.0
15.5
22.8
0.1
1.6
2.0
8.6
9.1
8.2
18.5
36.3
3.7
4.1
4.2
4.6
Farm
lncome
Non farm
lncome
1ransfers
0
10
20
30
40
50
60
70
80
90
100
Other
^utoconsumo
ln klnd payments and glhs
Publlc transfers
Prlvate transfers
lndependent lncome Non Farmlng
wages Non Farmlng
lndependent lncome Farmlng
wages Farmlng
1 2 3 4 5 6 7 8 9 10
3
AgrcuIturaI Subsdes n Mexco

TabIe 3
AClICUlTUlAl ACTI\ITIlS B lUlAl l0USll0lL LlCIllS 0lLlllL B INC0Ml Pll CAPITA 2006
Hh wIth ugrIculturul workers Hh wIth Independent lurmIng Income
HH DecIles Households % DecIle
House-
holds
% DecIle
Annuul lurmIng Income
mIllIon MP MP/hh
l 3,222,5l0 60% 705,977 26.6% 2,705 3,83l
2 l,492,37l 32% 249,587 9.4% l,830 7,33l
5 946,424 24% l90,263 7.2% l,253 6,586
4 625,353 l5% ll9,835 4.5% l,038 8,664
5 578,002 l3% l03,074 3.9% l,853 l7,977
6 340,805 9% 86,394 3.3% 982 ll,362
7 390,0l9 9% 68,l00 2.6% 977 l4,349
8 233,630 7% 63,465 2.4% 9l7 l4,456
9 l44,672 5% 30,022 l.l% 878 29,249
l0 l52,976 4% 39,52l l.5% 3,52l 89,093
Tctal 8,l26,762 l8% l,656,238 6.2% l5,954 9,633
Source. euthor's estmetons besed on lNICl ,2006).
TabIe 4
M0NlTAl ANL N0NM0NlTAl NM INC0Ml S0UlClS. lUlAl ANL UlBAN ll.
+ 0l T0TAl CUlllNT INC0Ml 2006
Urbun Rurul
HH Income HH Income
Lubor Income 79% 52% 67% 4l%
Independent Income 38% l5% 53% l8%
Trunslers 38% 9% 70% l8%
Presents (NM) 70% 8% 7l% ll%
ImplIcIt housIng rent (NM) 80% l2% 95% 9%
3ell-productIon/consumptIon (NM) l2% 0.7% 27% l.8%
Puyments In kInd (NM) l8% l.6% 6.6% 0.9%
Rent 6.0% 3.4% 3.2% 0.9%
Source. lNICl 2006
Gragh 12
PUBlIC ANL PlI\ATl TlANSlllS Pll CAPITA Pll M0NTl llClI\lL
B lUlAl l0USll0lLS. 2006 B LlCIll
Source. euthor's celculetons besed on lNICl 2006 ,INlCI).
1 2 3 4 5 6 7 8 9 10
0
100
200
300
400
500
600
PROC^MPO
Oportunldades
lnternatlonal prlvate transfers
0omestlc prlvate transfers
Other publlc transfers
Old ^ge Penslons
Subsdos gara Ia desguaIdad

Gragh 13
P0SITI0N 0l l0USll0lL llAL IN MAIN 0CCUPATI0N IN P00l lUlAl l0CAlITIlS,
B SIl 0l lANL 0WNlL 0l USlL.
Source. euthor's celculetons lNCASll 2004 0portundedes survey.
TabIe 5
l0USll0lL llAL ClAlACTllISTICS, l0USll0lL ASSlTS ANL lANL USl B lANL 0WNllSlIP 0l USl 2004.
Lundless
<l HA l-2HA 2-5HA 6-l0HA ll-20HA 20HA+
Non AgrIculturul
worker
AgrIculturul
worker
Households (#)
223,465 255,968 45,726 52,394 59,ll9 23,l35 ll,094 5,603
33% 38% 7% 8% 9% 3% 2% l%
Age (yeurs) 38 39 43 45 52 58 58 56
Income lrom muIn ob ($/
month)
2,547 2,2l9 l,792 l,748 l,846 2,004 2,l07 2,274
IndIgenous 6% l0% 3l% 33% l7% 6% 6% 8%
LIterucy 90% 84% 75% 74% 77% 82% 83% 82%
Post-busIc educutIon 4l% 44% 4l% 44% 38% 35% 35% 36%
No socIul securIty 78% 94% 74% 86% 78% 66% 64% 74%
Procumpo 0% l% 7% l9% 39% 47% 44% 42%
OportunIdudes 50% 44% 46% 58% 56% 5l% 35% 38%
Both 0% 0% 4% ll% 23% 28% l9% l6%
House owned 66% 69% 85% 89% 9l% 94% 96% 96%
DIrt Floor l8% 3l% 45% 50% 32% l5% l5% 20%
Rooms (#) l.7 l.6 l.6 l.6 2.0 2.4 2.4 2.3
ElectrIcIty 93% 88% 83% 72% 78% 90% 89% 82%
PIped wuter In house 28% 24% l9% l7% 28% 43% 45% 4l%
FrIdge 54% 43% 28% 27% 47% 69% 74% 65%
Cur or Truck l3% l0% 7% 8% l9% 33% 4l% 4l%
Tructor 0% 0% 0% 0% l% 5% 9% l0%
Land charactertsttcs
Owned 78% 8l% 88% 93% 94% 95%
Rented 5% 4% 3% l% l% l%
3hurecropIng 3% 2% 2% 2% l% l%
Borrowed l4% l2% 7% 3% 2% 2%
IrrIguted 7% 5% l0% l6% l8% l0%
AgrIculturul use 67% 65% 68% 67% 63% 57%
LIve stock use l% l% 2% 4% ll% 23%
Forestry use 0% 0% 0% 0% l% l%
Not used 32% 34% 30% 29% 25% l9%
Corn 63% 6l% 55% 50% 44% 44%
Beuns l2% l6% l9% 20% l7% l9%
0
10
20
30
40
50
60
70
80
90
100
Lldatarlo or comunero
Other
Self-employed
Non agrlcultural worker
^grlcultural wage worker
L
a
n
d
l
e
s
s
<
1

H
^
1
-
2
H
^
2
-
5
H
^
6
-
1
0
H
^
1
1
-
2
0
H
^
2
0
+
H
^
1
o
t
a
l
3
AgrcuIturaI Subsdes n Mexco

5. CEOCRAPHIC DI5TRIBUTION OF
ACRICULTURAL 5UB5IDIE5
5.l Dtstrtbuttcn cf agrtcultural publtc expendttures acrcss states
The geogruphIc unulysIs ugrIculturul publIc expendItures (APE) Is presented ut the stute level
lor most progrums, but extended to the munIcIpulIty level where InlormutIon Is uvuIluble (Pro-
cnmpo, lngrcso Dbjctvo). In thIs cuse the dIstrIbutIon ol APE Is unulyzed orderIng stutes (und
munIcIpulItIes) by theIr rurul poverty rutes, usIng the omcIul meusures ol pobrczn nImcntnrn
estImuted by CONEVAL lor 2005 (see gruph 8 ubove), except lor gruph l4 whIch uses the mul-
tIvurIute CONAPO murgInulIty Index. The two stute runkIngs ure closely correluted.
The dIvIsIon ol lubor between socIul und productIve progrums noted ubove (sectIon 2) Is Illus-
truted cleurly by the overull ullocutIon ol these progrums ut the stute level. Cruph 8 (sectIon 4
ubove) compures the cumulutIve dIstrIbutIon ol APE und ol DportunJnJcs, the lurgest rurul
socIul progrum. ThIs reveuls thut the dIstrIbutIon ol APE lollows closely the dIstrIbutIon ugrI-
culturul CDP (ACDP), whIle the dIstrIbutIon ol DportunJnJcs lollows closely the dIstrIbutIon
ol extreme rurul poverty.
The correlutIon ol APE wIth ugrIculturul economIc uctIvIty Is weuker Il we consIder ugrIcul-
turul employment (PD Agr In gruph l4). As we huve seen belore, the lurgest benecIurIes, the
rIcher ugrIculturul stutes ol 3Inulou, TumuulIpus, ChIhuuhuu und JulIsco, uccount lor u relu-
tIvely smull proportIon ol ugrIculturul employment. By contrust, the poorer stutes ol Verucruz,
ChIupus, Ouxucu, Pueblu und Cuerrero, uccount lor u lurge purt ol employment but receIve u
much smuller shure ol these resources.
The dIstrIbutIon ol APE pcr rurnI cnptn lor the prIncIpul progrums Is concentruted In the
rIcher hull ol the poverty-ordered stute dIstrIbutIon, wIth the hIghest benets ullocuted to
TumuulIpus, 3Inulou, ChIhuuhuu, und 3onoru (gruph l5, usIng dutu presented In World Bunk
2004). These lour stutes ure umong the prIncIpul benecIurIes ol Procumpo (In per cupItu
terms), reectIng theIr ugrIculturul lund ussets, but theIr dIsproportIonute purtIcIputIon In APE
Is ulso expluIned by Apoyos, 0cscI und the electrIcIty/wuter subsIdIes (TurIlu 9). At the other
extreme ol the stute dIstrIbutIon, the poorest stutes obtuIn support mostly lrom Procumpo und
AlIunzu, but overull obtuIn burely u tenth ol the support benetIng the lormer stutes (In rurul
per cupItu terms).
Gragh 14
AClICUlTUlAl PUBlIC lXPlNLITUll APl, AClICUlTUlAl CLP ACLP ANL
AClICUlTUlAl lMPl0MlNT P0 ACl
Source. euthor's celculetons besed on Agrculturel Census 1991 ,INlCI).
0
2
4
6
8
10
12
14
S
l
n
a
l
o
a
1
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m
a
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a

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1
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a

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^PL ^C0P PO ^g
Subsdos gara Ia desguaIdad

Gragh 15
ANNUAl SPlNLINC Pll lUlAl CAPITA MP B PlINCIPAl APl Pl0ClAMS.
2006 2002 STATlS 0lLlllL B lXTllMl P0\llT lATl
Source. 0lver end Sentllenes ,200S
The electrIcIty subsIdy lor ugrIculture Is mostly used lor wuter-pumpIng lor IrrIgutIon In the
northern stutes und represented l0,672 mIllIon pesos In 2008 (Tcrccr lnjormc Jc 0obcrno,
2009). ThIs Is the most heuvIly subsIdIzed use ol electrIcIty In MexIco, wIth prIce equul to ust
28% ol cost (vs. 90-l00% In Industry). In uddItIon to Its regressIve ullocutIon, whIch Is u con-
sequence ol the dIstrIbutIon ol hydrologIcul resources In MexIco, thIs subsIdy hus contrIbuted
to u sIgnIcunt und unsustuInuble Increuse In the over-exploItutIon ol uquIlers In MexIco (Mu-
oz et ul. 2005, Cuevuru et ul. 2007, Kessler et ul 2007).
TukIng the broudest dIvIsIon between publIc goods, representIng less thun l0% ol totul ugrI-
culturul publIc spendIng (see gruph l7), und prIvute trunslers, It Is notuble thut the lormer ure
even more regressIvely dIstrIbuted thun the lutter, wIth per cupItu benets rIsIng sIgnIcuntly
In the upper hull ol the stute dIstrIbutIon.
ConsIderIng the dIstrIbutIon ol the three prIncIpul support progrums, Procnmpo, AInnzn und
Apoyos (gruph l8, the cumulutIve dIstrIbutIon ol extreme poverty Is Included us u benchmurk
to udge the degree ol progressIvIty ol the progrums), AInnzn Is the most progressIve ut the
stute level, wIth 28% ol trunslers goIng to the poorest ve stutes, lollowed by Procumpo, wIth
22%. The degree ol progressIvIty hus been slIghtly reduced lor both progrums between 2002
und 2006. Apoyos Is hIghly concentruted In ust lour stutes, 3Inulou, 3onoru, TumuulIpus en
ChIhuuhuu receIvIng 80% ol Its resources In 2002, wIth the poorest hull ol the stutes receIvIng
ust 5% ol resources In 2002, und less thun l0% In 2006.
ConsIderIng the cuse ol Procumpo In purtIculur, we use the l99l und 2007 AgrIculturul Census
to evuluute coveruge ut the stute level (gruphs 20-22u), In the PV cycle. ThIs unulysIs must be
Interpreted wIth some cure, us producers muy be counted more thun once In the Procumpo
dutu buse, whIch muy expluIn the coveruge rutes ubove l00% In smuller stutes. WIth thIs cu-
veut, the unulysIs reveuls u lurge vurIutIons In coveruge between stutes, lrom lull coveruge In
Durungo und CouhuIlu, to less thun l5% In BC3 und Tubusco.
0
1,000
2,000
3,000
4,000
5,000
6,000
^llanza para el campo 0lesel
^poyos a la comerclallzacln PROC^N PROC^MPO (1radltlonal)
C
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a

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a
3
AgrcuIturaI Subsdes n Mexco

ConsIderIng the cuse ol muIze und compurIng lrom the begInnIng to the present ol the pro-
grum (gruph 20u), the number ol producers hus Increused some stutes, IncludIng ChIupus,
Pueblu und MxIco, but the totul number ol producers hus decreused slIghtly (2.68 mIllIon In
l99l, 2.66 mIllIon In 2007), whIle cultIvuted lund hus Increused lrom 7.3 to 8.l mIllIon hect-
ures. Procumpo's coveruge hus decreused sIgnIcuntly In ull stutes except ChIhuuhuu, und
JulIsco (In terms ol lund).
Procumpo coveruge Is below 50% In the poorer stutes (Verucruz, Cuerrero, ChIupus), und ust
ubove 50% In Ouxucu. 3ome ol the lurge ugrIculturul stutes huve hIgh coveruge rutes (ChIhuu-
huu, JulIsco), but thIs Is not so lor TumuulIpus und 3Inulou. There uppeurs to be no cleur relu-
tIon wIth uveruge sIze ol lund holdIngs (gruph 2lu).
Gragh 16
IllICATI0N SUBSILIlS
Source. World Benk ,2004)
0
500
1,000
1,500
2,000
2,500
^grlcultural electrlc subsldy Hydrologlcal lnfrastructure Hydroagrlcultural lnfrastructure
C
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Subsdos gara Ia desguaIdad

Gragh 17
PUBlIC ANL PlI\ATl C00LS IN APl. 1996
Source. euthor's eleboreton usng dete from 0lver end Sentllenes ,200S).
Graghs 1Ba, b and c
LISTlIBUTI0N 0l Pl0CAMP0, AlIANA, AP00S. 20022006
PllClNTACl SlAllS ANL CUMUlATI\l 0l NATI0NAl T0TAl,
STATlS 0lLlllL B lXTllMl P0\llT lATl
0
1,000
2,000
3,000
4,000
5,000
Prlvate goods Publlc goods
C
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0
50
100
150
200
250
300
350
0
2%
4%
6%
8%
10%
0lstr. 2002 0lstr. 2006 Cumul. 0lstr. 2002 Cumul. 0lstr. 2006
Cumulatlve rural poverty shares 2006
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b
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n
12% 100
90
80
70
60
50
40
30
20
10
0
Procampo
3
AgrcuIturaI Subsdes n Mexco

Source. euthor's eleboreton usng dete from 0lver end Sentllenes ,200S), World Benk ,2004).
0
20%
25%
10%
5%
15%
30%
35%
40%
0lstr. 2002 0lstr. 2006 Cumul. 0lstr. 2002 Cumul. 0lstr. 2006
Cumulatlve rural poverty shares 2006
C
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b
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n
45% 100
90
80
70
60
50
40
30
20
10
0
^poyos
C
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a
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r

t
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C
h
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u
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u
a

a
l
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s
c
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r
a
1
l
a
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c
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^
g
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t
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s
N
u
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v
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L
e

n
M
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e
l
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s
C
o
l
l
m
a

a

C
a
l
l
f
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r
n
l
a

S
u
r

a

C
a
l
l
f
o
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n
l
a
0
l
s
t
r
l
b
u
t
l
o
n
C
u
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m
u
l
a
t
l
v
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0
l
s
t
r
l
b
u
t
l
o
n
0
4%
5%
2%
1%
3%
6%
7%
8% 100
90
80
70
60
50
40
30
20
10
0
0lstr. 2002 0lstr. 2006 Cumul. 0lstr. 2002 Cumul. 0lstr. 2006
Cumulatlve rural poverty shares 2006
^llanza
Subsdos gara Ia desguaIdad

Gragh 19
Pl0CAMP0 C0\llACl 0l All ANL C0lN Pl0LUCllS P\ 200/
BlNllICIAlIlS/Pl0LUCllS IN 200/ ClNSUS
Source. euthor's celculetons usng ASllCA edmnstretve dete end 200/ Agrculturel Census, INlCI.
0
20%
40%
60%
80%
100%
120%
0
u
r
a
n
g
o
C
o
a
h
u
l
l
a
C
h
l
h
u
a
h
u
a

a
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l
s
c
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C
u
a
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a

u
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Q
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t
a
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o

u
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n
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a
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a

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o
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n
N
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v
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L
e

n
1
a
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a
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1
l
a
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a
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a
n

L
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P
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x
l
c
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S
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a
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a
O
a
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a
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S
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a
P
u
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b
l
a
C
h
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a
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M
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C
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l
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a
C
u
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r
r
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r
o
N
a
y
a
r
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t
v
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r
a
c
r
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z

a

C
a
l
l
f
o
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n
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a
0
l
s
t
r
l
t
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F
e
d
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a
l

a

C
a
l
l
f
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n
l
a

S
u
r
1
a
b
a
s
c
o
140%
1otal Corn
3
AgrcuIturaI Subsdes n Mexco

Gragh 20a and b


Pl0CAMP0 C0\llACl 0l C0lN Pl0LUCllS ANL lANL. P\ 200/
Source. euthor's celculetons usng ASllCA edmnstretve dete.
0
50,000
100,000
150,000
200,000
250,000
300,000
C
h
l
a
p
a
s
P
u
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b
l
a
M

x
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c
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a
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n
C
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a

u
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a
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L
u
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s

P
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o
s

a
l
l
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c
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a
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c
a
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1
l
a
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c
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n
0
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a
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a
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1
a
m
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0
l
s
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F
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d
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a
l
C
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a
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n
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r
a

a

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a
l
l
f
o
r
n
l
a

S
u
r

a

C
a
l
l
f
o
r
n
l
a
350,000
Procampo 95 Procampo 07 Census 1991 Census 2007
Producers
C
h
l
a
p
a
s

a
l
l
s
c
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M
l
c
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a
c

n
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0
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v
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a
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1
a
b
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a
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u
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a
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a
r
l
t
S
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M
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r
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l
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m
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a

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F
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d
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a
l
l
f
o
r
n
l
a
600,000
500,000
800,000
700,000
400,000
300,000
200,000
100,000
0
Procampo 95 Procampo 07 Census 1991 Census 2007
Cultlvated land
Subsdos gara Ia desguaIdad

5.2. Dtstrtbuttcn cf agrtcultural publtc expendttures


acrcss muntctpaltttes
We present un unulysIs ol the dIstrIbutIon ol trunslers ut the munIcIpulIty level usIng udmIn-
IstrutIve A3ERCA dutu lor Procnmpo und lngrcso Dbjctvo (the prIncIpul Instrument ol Apoyos
n In ComcrcnIzncn), und dutu on the munIcIpul ullocutIon ol most ol the other ARD pro-
grums Included In PEC compIled by CEDR33A (2009). MunIcIpulItIes ure ordered by ucute rurul
poverty rutes (pobrezu ulImenturIu) estImuted by CONEVAL.
Both Procnmpo und lngrcso Dbjctvo ure regressIvely dIstrIbuted, but the lutter extremely so,
wIth hIgh per cupItu puyments lor u smull lructIon ol munIcIpulItIes, und no puyments lor
most ol the rest (gruph 22u). In compurIson, the Procumpo benets ure densely dIstrIbuted
throughout. The poorest 50% ol munIcIpulItIes receIve 40% ol Procumpo trunslers, but less
thun 6% ol Ingreso ObetIvo, und In the lutter cuse these resources ure concentruted In u lew
munIcIpulItIes so the greut muorIty ol the poorest hull ol munIcIpulItIes (und ull those In the
poorest thIrd) receIve no trunslers lrom lngrcso Dbjctvo ut ull.
The CEDR33A (2009) dutu buse ullows lor the rst tIme un unulysIs ol the dIstrIbutIon ol u
muorIty ol the PEC progrums, representIng the bulk ol lederul ARD spendIng Implemented In
MexIco toduy. The dutu Is lor 2007 und covers 59 PEC progrums wIth u combIned budget ol
$l04 bIllIon pesos, representIng close to 60% ol PEC.
We unulyze thIs dutu by orderIng munIcIpulItIes by rurul poverty rutes, purtItIonIng munIcIpul-
Ity sets thus ordered to obtuIn rurul populutIon decIles, so thut euch decIle represents l0% ol
the rurul populutIon (not l0% ol munIcIpulItIes). ExcludIng some smull progrums und redun-
duncIes, gruph 23 presents the dIstrIbutIons ol 32 IndIvIduul progrums, und gruph 24 presents
the dIstrIbutIon ol the progrums grouped uccordIng to the prIncIpul lunctIonul cutegorIes.
Two Importunt cuveuts In InterpretIng the lollowIng results must be mentIoned. FIrst, the
quulIty ol the dutu muy vury sIgnIcuntly between progrums, us they orIgInute In udmInIstrutIve
records. 3econdly, the unulysIs Ignores Intru-munIcIpul InequulItIes so the results muy dIer
lrom the unulysIs bused on IndIvIduul producer or household dutu presented below (sectIon 6).
ConsIderIng the progrums IndIvIduully, we nd u wIde runge between the most progressIve,
lnjrncstructurn Bscn lnJgcnn, wIth more thun 90% ullocuted to the poorest 40%, und the
most regressIve, wIth 90% ol resources ullocuted to the rIchest 40%. As expected, 3edesol pro-
grums domInute umong the more progressIve, but we ulso nd here IndIgenous (CDI), wuter
(CAN), und trunsport (3CT) progrums, us well us lederulIzed lunds (FAII3) und Procnmpo Cnp-
tnIzn. The regressIve end Is domInuted by 3ugurpu Apoyos und AlIunzu progrums, us well us
nuncIng progrums (FIRA, FInuncIeru Rurul), FORTAMUN, und Procumpo TrudIcIonul. The contrust
between Procumpo TrudIcIonul und CupItulIzu Is surprIsIng und requIres lurther InvestIgutIon.
The dIstrIbutIon by lunctIonul cutegorIes (gruph 24) conrms these results: socIul und Inlru-
structure spendIng ure progressIve overull, envIronmentul progrums ure broudly neutrul, whIle
nuncIul und competItIveness" progrums (us these ure clussIed In the PEC), ure hIghly regres-
sIve. There Is un InterestIng contrust between the two lederulIzed munIcIpul lunds (Rumo 33):
the FI3M, ullocuted In purt through u poverty-bused lormulu, Is progressIve, whIle FORTAMUN
Is regressIve. The overull dIstrIbutIon ol ull the PEC progrums unulyzed here Is broudly neutrul.
l3
13 See addltlonal data ln the full worklng paper verslon of thls study.
3
AgrcuIturaI Subsdes n Mexco

Gragh 21a
A\llACl SIl 0l lANL l0lLINCS. ClNSUS ANL Pl0CAMP0
Source. euthor's celculetons usng ASllCA edmnstretve dete.
Gragh 21b
A\llACl SIl 0l lANLl0lLINCS. ClNSUS ANL Pl0CAMP0 C0lN Pl0LUCllS
Source. euthor's celculetons usng ASllCA edmnstretve dete.
Census 2007 Procampo 2008

a

C
a
l
l
f
o
r
n
l
a
1
a
m
a
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p
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a
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l
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a
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a

a
l
l
s
c
o

a

C
a
l
l
f
o
r
n
l
a

S
u
r
0
u
r
a
n
g
o
S
o
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a
^
g
u
a
s
c
a
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t
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s
C
o
l
l
m
a
C
u
a
n
a

u
a
t
o
N
u
e
v
o

L
e

n
C
a
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p
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c
h
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M
l
c
h
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a
c

n
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a
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L
u
l
s

P
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s

N
a
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a
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l
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1
l
a
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a

R
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v
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x
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1
a
b
a
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c
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a
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a
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a

u
c
a
t

n
0
l
s
t
r
l
t
o

F
e
d
e
r
a
l
0
20
18
14
10
6
16
12
8
4
2
Census 2007 Procampo 2007

a

C
a
l
l
f
o
r
n
l
a

a
l
l
s
c
o
C
h
l
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u
a
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u
a
Z
a
c
a
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c
a
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^
g
u
a
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c
a
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a

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a
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a

S
u
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0
u
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a
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C
u
a
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a

u
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C
o
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a
1
a
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a
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a
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v
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L
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n
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n
S
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a
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a
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N
a
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a
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a
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L
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P
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1
l
a
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c
a
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a
P
u
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b
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M
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u
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R
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x
l
c
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u
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H
l
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1
a
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0
l
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F
e
d
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r
a
l
0
12
10
6
8
4
2
Subsdos gara Ia desguaIdad

Graghs 22a and b


Pl0CAMP0 ANL INCllS0 0BlTI\0 TlANSlllS IN 0I200S P\2006 B MUNICIPAlITIlS
0lLlllL B lUlAl lXTllMl P0\llT lATl P0BllA AlIMlNTAlIA
Source. ASllCA edmnstretve dete beses, C0Nl\Al muncpel poverty meesures.
Procampo Pesos/cap Procampo cumulatlve dlstrlbutlon Cumulatlve rural poverty dlstrlbutlon
Procampo
5
8
0
1
5
5
2
3
0
3
0
5
3
8
0
4
5
5
5
3
0
6
0
5
6
8
0
7
5
5
8
3
0
9
0
5
9
8
0
1
0
5
5
1
1
3
0
1
2
0
5
1
2
8
0
1
3
5
5
1
4
3
0
1
5
0
5
1
5
8
0
1
6
5
5
1
7
3
0
1
8
0
5
1
8
8
0
1
9
5
5
2
0
3
0
2
1
0
5
2
1
8
0
2
2
5
5
2
3
3
0
2
4
0
5
70%
100%
90%
80%
50%
60%
40%
30%
20%
10%
16,000
14,000
12,000
10,000
8,000
6,000
4,000
2,000
0 0
lngreso - Obetlvo
5
8
0
1
5
5
2
3
0
3
0
5
3
8
0
4
5
5
5
3
0
6
0
5
6
8
0
7
5
5
8
3
0
9
0
5
9
8
0
1
0
5
5
1
1
3
0
1
2
0
5
1
2
8
0
1
3
5
5
1
4
3
0
1
5
0
5
1
5
8
0
1
6
5
5
1
7
3
0
1
8
0
5
1
8
8
0
1
9
5
5
2
0
3
0
2
1
0
5
2
1
8
0
2
2
5
5
2
3
3
0
2
4
0
5
70%
90%
80%
50%
60%
40%
30%
20%
10%
4,500
4,000
3,500
3,000
2,500
2,000
1,500
1,000
500
0
100%
Procampo Pesos/cap Procampo dlstrlbucln acumulada Pobreza rural acumulada
0
3
AgrcuIturaI Subsdes n Mexco

Gragh 23
LISTlIBUTI0N 0l lUlAl Ll\ll0PMlNT ANL AClICUlTUlAl Pl0ClAMS BASlL 0N P0PU
lATI0N LlCIllS LllI\lL ll0M MUNICIPAl ll\ll LATA, 0lLlllL B MUNICIPAl lUlAl
lXTllMl P0\llT lATl AlIMlNTAlIA
Source. Author's celculeton usng dete from ClLlSSA ,2009).
Poorest 40% of munlclpalltles wealthlest 40% of munlclpalltles
lnfraestructura slca a lndgenas (C0l)
Mlcroreglones (Sedesol)
^gua Potable Nueva (CN^)
Programa de Lmpleo 1emporal (SC1)
Oportunldades - ^llmentacln (Sedesol)
F. ^port. lnfraestructura Soclal Munlclpal (FlSM R33)
Oportunldades - ecas Lducatlvas (Sedesol)
PROC^MPO Capltallza (Sagarpa)
Programa ^basto Rural P^R (0lCONS^ Sedesol)
Oportunldades - tlles Lscolares (Sedesol)
vlvlenda Rural (FONH^PO)
P. de ^poyo ^llmantarlo P^L (0lCONS^ Sedesol)
70 y ms - ^dultos Mayores (Sedesol)
PROC^N (Sagarpa)
F. Mlcrofnanclamlento a Mueres Rurales (FOMMUR SL)
^reas Naturales Protegldas (Conafor)
Plantaclones Forestales Comerclales (Conafor)
P. de Mueres del Sector ^grarlo (PROMUS^C SR^)
F. ^poyo a Proyectos Productlvos ^grarlos (F^PP^ SR^)
^lcantarlllado Nuevo (CN^)
^poyo a los Proyectos de lnversln Rural P^PlR
F. Naclonal Lmpresas en Solldarldad (FON^LS SL)
^mpllacln de Unldades de Rlego (CN^)
PROC^MPO 1radlclonal (Sagarpa)
Fortaleclmlento Munlclpal (R33)
0esarrollo Canadero (Sagarpa)
Programa lntegral (Flnanclera Rural)
0escuentos (Flra)
lngreso Obetlvo (Sagarpa)
Lmergentes de Comerclallzacln (Sagarpa)
0% 20% 40% 60% 80% 100%
Subsdos gara Ia desguaIdad

Gragh 24
LISTlIBUTI0N B Bl0AL lUNCTI0NAl Cl0UPS 0l lUlAl Ll\ll0PMlNT ANL AClICUl
TUlAl Pl0ClAMS BASlL 0N P0PUlATI0N LlCIllS LllI\lL ll0M MUNICIPAl ll\ll LATA,
0lLlllL B MUNICIPAl lUlAl lXTllMl P0\llT lATl
Source. Author's celculeton usng dete from ClLlSSA ,2009).
5.5. Eects cf farm substdtes cn grcvth, prcducttvtty,
emplcyment and mtgrattcn
The geogruphIc concentrutIon ol APE In MexIco constItutes u unIque nuturul experIment to test
the Impuct ol APE on ugrIculturul growth. ThIs unulysIs Is ol some polIcy relevunce becuuse the
noted strutegIc ullocutIon ol ugrIculturul subsIdIes to the lurgest ugrIculturul stutes (see gruphs
8, l5) Is motIvuted on two ussumptIons: u) thut the overull Impuct ol APE Is muxImIzed by
concentrutIng resources In the most productIve stutes, und b) thut the most productIve stutes
ure the bIg northern ugrIculturul stutes, uccountIng lor the lurgest shures In nutIonul ACDP.
Though consIstent dutu on the evolutIon ol ull APE ut the stute level Is lImIted, whut Is uvuIl-
uble suggests thut there Is much hIstorIcul InertIu und lIttle Inter-temporul vurIutIon In the
dIstrIbutIon ol lederul resources between stutes. ThIs Is obvIously true In the cuse ol Procum-
po, whIch estublIshed Its hIstorIcul entItlements In l993 und hus undergone only murgInul
chunges In Its rules sInce then, but ulso uppeurs to be the cuse ol the other muyor progrums
(gruph 25). We therelore use the 2006 dIstrIbutIon ol APE us un upproxImutIon to the dIstrIbu-
tIon ol APE over the lust decude.
As documented ubove (gruph l5), the dIstrIbutIon ol APE Is closely correluted wIth the dIstrI-
butIon ol ACDP. The lurgest recIpIents (3Inulou, TumuulIpus, ChIhuuhuu) ure luvored dIspropor-
tIonutely even In relutIon to the sIze ol theIr ACDP. The ugrIculturul sector In the muIn bene-
cIury stutes mIght thus be expected to perlorm better thun the rest. Cruphs 27, 28 present
unnuul growth rutes lor ACDP (l994-2004) und lor lund und lubor productIvIty (2000-2004).
As wIth the InternutIonul dutu, there Is no uppurent correlutIon between APE und growth In
ACDP. Il unythIng, the relutIonshIp uppeurs to be negutIve: except lor Zucutecus, the stutes
wIth growth levels sIgnIcuntly ubove the nutIonul uveruge (MexIco, Durungo, Quereturo, Nue-
vo Leon, JulIsco, AguusculIentes, BC3) ure ull In the lower hull ol the APE/CDP dIstrIbutIon
(>l0%), whIle the three top recIpIents ol APE hud below-uveruge growth.
F
l
n
a
n
c
e
,

1
o
t
a
l
0
8,000,000,000
6,000,000,000
7,000,000,000
5,000,000,000
4,000,000,000
3,000,000,000
2,000,000,000
1,000,000,000
1 2 3 4 5 6 7 8 9 10
35,000,000,000
30,000,000,000
25,000,000,000
20,000,000,000
15,000,000,000
10,000,000,000
5,000,000,000
0
Flnance (rlght scale) 1otal excl. fnance (rlght scale)
Soclal Lnvlronment Fortamun (R33) lnfraestructure (lncludlng FlSM) Competltlveness
3
AgrcuIturaI Subsdes n Mexco

Lubor und lund productIvIty ulso uppeur to be uncorreluted wIth APE (gruph 27). The lour
stutes wIth the hIghest APE/ACDP rutes present the lowest lund productIvItIes umong ull
stutes except two. On the other hund, productIvIty growth Is roughly U-shuped: It Is posItIve
lor some ol the stutes wIth lurgest shures ol APE, negutIve lor most stutes In the mIddle und
uguIn posItIve lor the stutes wIth the smullest APE shures.
Graghs 25a, b and C
PllClNTACl SlAll 0l STATlS IN Pl0CAMP0, AP00S, ANL AlIANA TlANSlllS. 199S
200/ 0lLlllL B lAllIlST lAl A\AIlABll
1995 1996 1997 1998 1999 2000
2001 2002 2003 2004 2005 2006 2007
1
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F
e
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0
2%
4%
6%
8%
10%
12%
Procampo
2001 2002 2004 2005 2006
S
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0
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F
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a
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0%
45%
35%
30%
40%
25%
20%
15%
10%
5%
^poyos a la comerclallzacln
Subsdos gara Ia desguaIdad

Source. Segerpe, 0lver end Sentllenes ,200S)


Gragh 26
APl + ACLP ANL A\llACl lAll ACLP Cl0WTl lATlS.
19942004 STATlS 0lLlllL B APl/ACLP
Source. euthors celculetons usng dete from SIAP ,SACAlPA) end 0lver end Sentllenes ,200S).
2002 2003 2004 2005 2006
v
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0%
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3%
2%
1%
^llanza
35%
30%
25%
20%
15%
10%
5%
0% 0%
1%
2%
3%
4%
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6%
1
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^grlcultural C0P growth rate 1994-200 ^PL/C0P 2006
C
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3
AgrcuIturaI Subsdes n Mexco

Graghs 27a and b


A\llACl \AlUl 0l Pl0LUCTI0N Pll W0llll ANL llCTAll 20002004, Tl0USANL MP
2004 ANL PllClNTACl ClANCl IN lAB0l ANL lANL Pl0LUCTI\IT 20002004, +. STATlS
0lLlllL B APl/ACLP
Source. euthors celculetons usng dete from SIAP ,SACAlPA).
value of productlon/hectare value of productlon/worker
1
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100
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120
80
60
40
20
30
25
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40
35
20
15
10
5
0 0
Change ln vP/hctr Change ln vP/worker
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/
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r

(
h
c
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r
)
60%
100%
80%
40%
20%
0%
-40%
-60%
-20%
-80%
Subsdos gara Ia desguaIdad

FInully, gruph 28 compures the dIstrIbutIon ol employment loss In ugrIculture over the lust
decude (l996-2008) wIth the dIstrIbutIon ol the prIncIpul support progrums, orderIng stutes
by theIr shure In the totul employment loss over the perIod. AguIn, we observe u negutIve cor-
relutIon: the stutes wIth the steepest ugrIculturul employment losses receIve on uveruge more
support.
These results muy seem counterIntuItIve, but cun be expluIned by severul luctors. FIrst, APE
und Inlrustructurul Investments huve been concentruted hIstorIcully In the lurgest und most
developed ugrIculturul stutes, where uddItIonul growth potentIul und productIvIty guIns muy
thus be smuller thun In the less developed stutes where publIc Investment hus been scurcer.
3econdly, us noted belore, u lurge proportIon ol ugrIculturul subsIdIes Is dIrected ut lurge-scule
und cupItul-IntensIve muIze und other gruIn productIon, wIth lImIted dIrect employment po-
tentIul. FInully, the results muy ulso reect u lImIted productIve Impuct ol most ugrIculturul
subsIdIes ut the lurm level. Muny ol these subsIdIes represent compensutory trunslers ruther
thun productIvIty-IncreusIng Investments, und lor the lutter Impuct evuluutIons ure uvuIluble
lor uny ol these progrums.
FInully, to obtuIn u prelImInury sense ol the correlutIon between Procumpo trunslers und mI-
grutIon decIsIons, we compure the dIstrIbutIon ol Procnmpo benecIurIes ut the munIcIpulIty
level wIth vurIous census-bused mIgrutIon meusures, IncludIng households receIvIng remIt-
tunces (2000), households wIth mIgrunts (2000), InternutIonul mIgrunts In l995 und 2000,
und the chunge In mIgrunts between these two yeurs (gruph 35). ThIs reveuls u weuk relutIon-
shIp between the dIstrIbutIon ol Procumpo und mIgrutIon ut the munIcIpul level, ut leust In the
cuse ol poorer munIcIpulItIes, us Procumpo bcncjcnrcs (In contrust to Its trunslers) ure con-
centruted dIsproportIonutely In the poorer munIcIpulItIes, whIle mIgrunts come dIsproportIon-
utely lrom munIcIpulItIes wIth lower poverty levels. ThIs Is consIstent wIth the results ol u
curelul econometrIc unulysIs on thIs Issue In u compunIon puper to the present study (Cuecue-
chu und 3cott 20l0).
Gragh 2B
AClICUlTUlAl lMPl0MlNT ANL AClICUlTUlAl SUBSILIlS
Source. euthor's celculetons besed on dete from lN0l end 0lver end Sentllenes ,200S).
Share ln natlonal employment loss ^grlcultural employment loss 1996-2008
Procampo share (1995-2007) Other ^SLRC^ share (2001-2006)
^llanza share (2002-2006)
M

x
l
c
o

a
l
l
s
c
o
M
l
c
h
o
a
c

n
O
a
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z
C
u
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r
r
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r
o
C
h
l
a
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a
s
C
u
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a

u
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o
H
l
d
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o
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r
a
1
a
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a
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N
u
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v
o

L
e

n
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h
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a
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a
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u
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p
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Z
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c
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S
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a
Q
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e
r

t
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r
o
C
o
a
h
u
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a
0
u
r
a
n
g
o
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g
u
a
s
c
a
l
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n
t
e
s
1
l
a
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c
a
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a
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a
y
a
r
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a
m
p
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h
e
P
u
e
b
l
a

a

C
a
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f
o
r
n
l
a

S
u
r

u
c
a
t

n
S
a
n

L
u
l
s

P
o
t
o
s

C
o
l
l
m
a
Q
u
l
n
t
a
n
a

R
o
o

a

C
a
l
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f
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r
n
l
a
M
o
r
e
l
o
s
S
h
a
r
e
,

c
h
a
n
g
e

l
n

a
g
r
l
c
u
l
t
u
r
a
l

e
m
p
l
o
y
m
e
n
t

0%
20%
10%
-10%
-20%
-30%
-50%
-60%
-40%
-70%
P
r
o
c
a
m
p
o
,

^
S
L
R
C
^
,

^
l
l
a
n
z
a
35%
30%
25%
20%
15%
10%
5%
0%
3
AgrcuIturaI Subsdes n Mexco

BCX 7:
DOE5 PROCAMPO LIMIT MICRATION TO THE U5
Alfredc Cuechuecha and }chn 5cctt (CIDE)
WhIle rurul cItIzens' decIsIons to leuve the countrysIde ure Inuenced by muny luctors,
the uvuIlubIlIty ol ugrIculturul employment Is certuInly one ol them. In prIncIple, lurm
subsIdIes thut ure lurge enough to muke ugrIculturul productIon by smull und medIum-
sIzed lurmers economIcully vIuble should huve the eect ol dIscourugIng mIgrutIon, not
only by the producers themselves, but ulso by those who they mIght employ locully. Re-
seurch strutegIes Included both unulysIs ol the Impuct on locul lubor murkets (ut the
munIcIpul level), us well us household und IndIvIduul level Impucts, bused on NutIonul
Employment 3urvey 2005-2006 dutu (ENOE).
The study ol locul lubor murket Impucts lound thut the Increuse In mIgrutIon levels wus
hIghest where Procumpo puyments were lowest. At hIgher levels ol Procumpo puyments,
In contrust, there Is u posItIve relutIonshIp wIth Increuses In munIcIpul mIgrutIon levels,
whIch suggests the need lor uddItIonul reseurch. The study ol IndIvIduul und household
responses ullows lor greuter precIsIon, und the econometrIc unulysIs locused on the eect
ol euch uddItIonul peso ol Procumpo puyments on mIgrutIon ows ut the lumIly level
(whIle holdIng muny relevunt vurIubles constunt). ThIs unulysIs lound thut Procumpo
puyments were ussocIuted wIth stutIstIcully sIgnIcunt, though modest reductIons In
mIgrutIon levels. Procumpo wus ulso ussocIuted wIth retuInIng employment In the corn
und beun sectors, und negutIvely ussocIuted wIth employment In lruIts und vegetubles.
Note: ThIs box summurIes the extensIve ndIngs presented In Allredo Cuecuechu und
John 3cott, The eect ol ugrIculturul subsIdIes on mIgrutIon und ugrIculturul employ-
ment," Woodrow WIlson Center, MexIco InstItute, RurnI 0cvcIopmcnt Rcscnrch Rcport,
No. 3., Junuury, 20l0
Gragh 29
MUNICIPAl Pl0CAMP0 ANL MIClATI0N C0NClNTlATI0N CUl\lS. 199S2000
Source. euthor's celculetons usng ASllCA edmnstretve dete, C0Nl\Al muncpel poverty meesures, end 199S Conteo
end 2000 Censo de Poblecn y \vende ,INlCI).
0
0.1
0.2
0.3
0.4
0.5
0.6
0.7
0.8
0.9
1
0
.
0
4
0
.
0
7
0
.
0
9
0
.
1
2
0
.
1
4
0
.
1
6
0
.
2
0
.
2
3
0
.
2
5
0
.
2
9
0
.
3
2
0
.
3
5
0
.
3
8
0
.
4
1
0
.
4
3
0
.
4
6
0
.
4
9
0
.
5
2
0
.
5
5
0
.
5
7
0
.
6
0
.
6
3
0
.
6
7
0
.
7
0
.
7
3
0
.
7
5
0
.
7
8
0
.
8
1
0
.
8
3
0
.
8
6
0
.
8
9
0
.
9
2
0
.
9
4
0
.
9
7
Rural poverty (allmentarla) Procampo benefclarles 2000 Procampo transfers 2000
Households wlth mlgrants 2000 Households recelvlng remlttances 2000 Mlgrants 1995-2000
Mlgrants 2000 Mlgrants 1995
Subsdos gara Ia desguaIdad

6. DI5TRIBUTION OF ACRICULTURAL AND


RURAL DEVELOPMENT PROCRAM5 AMONC
HOU5EHOLD5 AND PRODUCER5
In thIs sectIon the dIstrIbutIon ol benets Is unulyzed ut the level ol IndIvIduul producers und
households. The uvuIlubIlIty ol household und producer dutu buses reportIng both ugrIculturul
support progrums und u relevunt meusure ol household/producer wellbeIng or weulth Is lIm-
Ited. ThIs study uses three kInds ol dutu sources, whIch ure complementury but not strIctly
compuruble: u) nutIonul household surveys IncludIng coveruge ol ARD progrums (ENICH 2006
und 2008, und ENICH-Modulo 3ocIul 2006), b) evuluutIon surveys lor specIc progrums (AlIun-
zu, OportunIdudes), und c) udmInIstrutIve dutu ol the progrums (Procumpo, Ingreso ObetIvo).
The nutIonul household surveys huve the Importunt udvuntuges ol beIng nutIonully represen-
tutIve und IncludIng hIgh-quulIty dutu on Income und other meusures ol wellure, but theIr
sumple sIze Is not desIgned to cupture specIc trunsler progrums uccurutely, especIully when
these huve lImIted coveruge or concentrute u lurge shure ol theIr benets In u relutIvely smull
proportIon households. The other two sources ure desIgned to cupture the progrum benecIu-
rIes und trunslers uccurutely, but ure not nutIonully representutIve und generully contuIn lIm-
Ited or no Income dutu. The unulysIs obtuIned lrom the three sources must therelore be Inter-
preted curelully und complementurIly.
The dIstrIbutIon ol benets Is unulyzed usIng two dIerent orderIng crIterIu correspondIng to
the ulternutIve dutu sources. In the cuse ol udmInIstrutIve dutu, producers ure ordered by lund
holdIngs, whIch Is the only proxy ol weulth/wellure uvuIluble In thIs dutu. In the cuse ol the
nutIonul household surveys, benets receIved ure unulyzed by populutIon decIles ordered by
totul current Income per cupItu.
Data 5curces
Dutu 3ource Progrum
ENICH 2006, 2008 Procumpo, OportunIdudes
ENICH-Modulo 3ocIul 2006 3ocIul und rurul development progrums
OportunIdudes recertIcutIon und IdentIcutIon dutu
buse (ENCA3EH 2004)
OportunIdudes, Procumpo
A3ERCA benecIury dutu buse (2005, 2006) Procumpo, Ingreso ObetIvo
AlIunzu evuluutIon dutu buse - EvulIunzu (2005,
2006), FAO-3ugurpu
AlIunzu puru el Cumpo
The household und producer dutu uvuIluble ullows coveruge ol the prIncIpul ARD progrums,
IncludIng the prIncIpul ugrIculturul support progrums (Procumpo, Ingreso ObetIvo, und AlIun-
zu), us well us the prIncIpul rurul socIul progrums, IncludIng DportunJnJcs, Adultos Muyores
70 y ms, und Progrnmn Jc LmpIco TcmpornI. We ulso estImute the dIstrIbutIon ol hydro-ugrI-
culturul und ugrIculturul electrIcIty subsIdIes (TurIlu 9) usIng the dIstrIbutIon ol IrrIguted lund
us u (rough) proxy. The ugrIculturul support progrums covered In thIs IncIdence unulysIs repre-
sent upproxImutely 75% ol totul APE In MexIco.
6.l Rescurce dtstrtbuttcn patterns amcng prcducers,
by dectle, crdered by land-hcldtngs
Belore unulyzIng the dIstrIbutIon ol ugrIculturul subsIdIes by producer decIles (runked by lund-hold-
Ings), we consIder the dIstrIbutIon ol producers grouped by uveruge sIze ol lund-holdIngs. Us-
Ing udmInIstrutIve dutu, producers wIth less thun 5 hus represent 75% ol Procumpos benecIurIes,
but receIve 37% ol the progrum's trunslers, reectIng theIr shure In covered lund (gruph 30).
Producers wIth 5-20 hus represent 22% ol benecIurIes und receIve 4l% ol the benets, whIle pro-
ducers wIth more thun 20 hus represent 3% ol the benecIurIes und obtuIn 23% ol the trunslers.
Is ull the regressIvIty ol Procumpo expluIned by the dIstrIbutIon ol lund In MexIco, or Is the
progrum's coveruge ol producers ulso bIused uguInst smuller producers CompurIson between
the Procumpo dutu und the 2007 AgrIculturul Census In the uggregute suggest no such bIus,
neIther ut the stute level (see gruph 2lu) nor ut the nutIonul level (gruph 5, ubove): coveruge Is
hIghest umong smull 0-5 (66%) und medIum (63%) producers. However, the evIdence lrom
poor rurul loculItIes presents u somewhut dIerent pIcture (gruph 3l), wIth coveruge declInIng
wIth lund sIze, to ust l9% lor l-2 hus und 7% lor less thun l hu. ThIs Issue requIres lurther
InvestIgutIon. One possIble explunutIon lor the dIerence between the two sources mIght be
thut the Census mIght under-report smuller producer unIts.
3
AgrcuIturaI Subsdes n Mexco

Gragh 30
LISTlIBUTI0N 0l Pl0LUCllS ANL TlANSlllS ll0M Pl0CAMP0 ANL INCllS0 0BlTI\0
BlTWllN Pl0CAMP0 BlNllICIAlIlS 2006
Source. euthor's celculetons usng ASllCA edmnstretve dete.
Gragh 31
C0\llACl 0l 0P0lTUNILALlS ANL Pl0CAMP0 AM0NC l0USll0lLS IN P00l lUlAl
l0CAlITIlS, B SIl 0l lANL 0WNlL 0l USlL 2004.
Source. euthor's celculetons lNCASll 2004 0portundedes survey.
0
10
20
30
40
50
60
0-2 2-5 5-10 10-20 20-100
Producers Procampo transfers lngreso Obetlvo transfers
32%
43%
28%
8%
16%
24%
13%
6%
17%
22%
3%
23%
57%
9%
1%
0
10
20
30
40
50
60
Procampo Oportunldades oth Nelther
L
a
n
d
l
e
s
s
,

n
o
n
a
g
r
l
c
u
l
t
u
r
a
l
<
1

H
^
1
-
2
H
^
2
-
5
H
^
6
-
1
0
H
^
1
1
-
2
0
H
^
2
0
+
H
^
L
a
n
d
l
e
s
s
,

a
g
r
l
c
u
l
t
u
r
a
l
50%
0%
0% 0%
44%
7%
46%
4%
19%
58%
39%
56%
23%
47%
51%
44%
35%
19%
42%
38%
16%
28%
11%
1%
Subsdos gara Ia desguaIdad

ThIs dutu ulso ullows us to contrust the coveruge ol Procumpo und OportunIdudes. As expected,
OportunIdudes coveruge Is relutIvely hIgh throughout In these poor rurul loculItIes, but It Is
sIgnIcuntly hIgher lor household wIth l-5 hus (58%), thun umong lundless ugrIculturul work-
ers und households wIth less thun l hu. (44% und 46%, respectIvely). It Is ulso remurkuble thut
In the poorest group In terms ol lund us well us Income (see tuble 5 ubove), those under l hu.,
only 4% ol households huve both progrums, whIle 50% huve ncthcr.
DespIte Its level ol concentrutIon, Procumpo Is by lur the most pro-poor umong the three prIn-
cIpul ugrIculturul progrums. Burely 9% ol the benets lrom lngrcso Dbjctvo reuch the smuller
75% ol producers, whIle the top 3% ol producers ubsorb 60% ol the progrum's trunslers.
More surprIsIngly, usIng IndIvIduul producer dutu AInnzn ulso uppeurs to be sIgnIcuntly more
regressIve thun Procumpo, despIte the compurutIvely progressIve dIstrIbutIon documented
ubove ut the stute level (gruph l8). AInnzn Includes u broud set ol lurm Investment progrums
nunced through mutchIng grunts by both lederul und stute governments. These ure clussIed
Into three prIncIpul groups, the Progrnmn Jc 0csnrroIIo RurnI (PDR), the Progrnmn Jc Fomcnto
AgrcoIn, und the Progrnmn Jc Fomcnto 0nnnJcro. In contrust to the lutter two, whIch huve no
explIcIt equIty obectIves, the rules ol PDR explIcItly turget low-Income producers. These re-
quIre thut ut leust 70% ol Its resources be ullocuted to Very HIgh or HIgh murgInulIty loculItIes
(us dened by CONAPO's murgInulIty Index). However, the AlIunzu evuluutIon dutu reveul u
luIlure to comply wIth these crIterIu: In 2004 only 32% ol the expendItures ussocIuted wIth
PDR were spent In these loculItIes - less thun 2% In Very HIgh murgInulIty loculItIes.
In the context ol u recent evuluutIon ol the progrum, FAO (2005) used u survey und typology
ol benecIurIes bused on socIoeconomIc und productIve vurIubles to evuluute the dIstrIbutIon
ol PDR benets.
l4
The FAO study lound thut 78% ol PDR benecIurIes were ol Types I und II,
In contrust to 54% ol totul AInnzn benecIurIes, und on thIs busIs concluded thut the PDR Is
turgeted to low Income producers" (p 3). Unlortunutely, however, thIs conclusIon does not sur-
vIve u curelul unulysIs ol the FAO dutu. FIrst, the evuluutIon survey Is representutIve ol AlIunzu
benecIurIes only, so theIr low Income" posItIon Is dened relutIve to thIs set ol benecIurIes, not
the rurul populutIons ut lurge. 3econdly, the usset-bused typology used In the FAO evuluutIons
Is not well suIted to IdentIly poorer producers even wIthIn thIs set (see tuble In loo tnote und
gruph below). To uddress the lutter problem tuble 6 presents busIc churucterIstIcs und trunslers
receIved by producer quIntIles ordered by schoolIng level, usIng the LvnInnzn dutu. ThIs sImple
ulternutIve orderIng brIngs out the extreme dIerences between the lower und upper groups:
lrom l to l4 yeurs ol schoolIng, und lrom 7.5 (l) to ll4 (l0.5) ruInled (IrrIguted) Hus. The two
lowest strutu, representIng 40% ol the benecIurIes, receIve only 35% ol PDR trunslers.
To uddress the rst problem, World Bunk (2006, g. 3.24) uses u rurul household survey
(ENHRUM 2002) to pluce these types wIthIn the nutIonul rurul dIstrIbutIon. As shown In gruph
33, thIs ImplIes thut ulmost 73% ol PRD trunslers ure concentruted In the rIchest quIntIle ol
the rurul populutIon by EvulIunzu's usset Index (Types II-IV, representIng 22% ol the populu-
tIon), whIle 35% ol PRD benecIurIes und 45% ol ull AlIunzu benecIurIes ure concentruted In
the rIchest 2% ol the rurul populutIon.
TabIe 6
ClAlACTllISTICS ANL TlANSlllS T0 AlIANA BlNllICIAlIlS.
BlNllICIAl UINTIllS 0lLlllL B SCl00lINC l\AlIANA 200S
l 2 3 4 5
Age 58 53 48 43 42
3choolIng l.l 4.l 6.0 8.4 l4.l
Lund
RuInled 7.5 l2.8 l9.l 30.4 ll4.3
IrrIguted l.0 l.6 l.3 3.3 l0.5
DIstrIbutIon ol
trunslers
Totul l3% l8% l7% 23% 30%
Rurul dev l6% l9% 2l% 25% 20%
AgrIculture l3% 20% l4% 20% 33%
LIvestock 8% ll% l7% 24% 40%
Source. euthor's celculetons usng lvelenze 200S dete.
14 1he table below reports the values of some of the prlnclpal varlables ln the F^O typology based on a survey of P0R
benefclarles.
1ypology of P0R enefclarles
5e|ected varIab|es I II III Iv v
Lducatlon (ears) 4.8 6.3 8.9 14.3 19.0
value of ^ssets (MP) 1,799 56,557 208,853 662,765 512,000
Number of Lqulvalent Cattle Unlts 5.6 8.3 13.8 28.6 71.0
lrrlgated land Lqulvalent (hectare) 0.8 3.0 11.1 33.1 10.0
5ource: FAO (2005)
3
AgrcuIturaI Subsdes n Mexco

Gragh 32 a and b
LISTlIBUTI0N 0l BlNllICIAlIlS ANL lUNLS 0l Tll PRD0RAMA 0L 0LSARRDLLD RURAL
B MAlCINAlIT 0l l0CAlITIlS ANL S0CI0lC0N0MIC Pl0LUCll TPl'. 2004
Source. lA0 ,200S) end World Benk ,2006).
0
10
20
30
40
50
60
70
80
Rural populatlon P0R benefts
Medlum, low, very low
very hlgh Hlgh
MarginaIity
0
10
20
30
40
50
60
70
80
Rural populatlon P0R benefts
P0R benefclarles 1otal ^llanza benefclarles
1ype lll-lv
1ype l 1ype ll
Subsdos gara Ia desguaIdad

To compure the dIstrIbutIon ol the prIncIpul APE progrums on u common busIs we present the
dIstrIbutIon ol benets by producer decIles, und concentrutIon curves bused on producer per-
centIles, runkIng producers by two ulternutIve lund meusures:
(l) sIze ol lund holdIngs us reported In the udmInIstrutIve or evuluutIon dutu, und
(2) quulIty-udusted lund ussets: us u more uccurute proxy lor producer Income und weulth un
upproxImutIon to the vulue ol lund ussets obtuIned lrom the estImuted vulue ol productIon In
euch productIve unIt tukIng Into uccount u) whether It Is ruInled or IrrIguted, b) crop type, c)
sIze ol cultIvuted lund, und d) uveruge productIvIty und prIces by 3tute (usIng 3ugurpu dutu).
Tuble 7 presents the dIstrIbutIon ol Procumpo und Ingreso ObetIvo usIng the two concepts,
und gruphs 34-36 present concentrutIon curves lor these progrums, lor AlIunzu (tted lrom the
observutIons uvuIluble lrom the FAO dutu presented ubove) und lor energy und hydro-ugrIcul-
turul subsIdIes (proxIed by the dIstrIbutIon ol IrrIguted lund). ThIs unulysIs reveuls extreme
concentrutIons ol benets lor ull progrums, except lor Procumpo In the quulIty-udusted runk-
Ings. The poorest producer decIle (In terms ol both runkIngs) receIves u tenth ol u percentuge
poInt ol lngrcso Dbjctvo, sImIlurly InsIgnIcunt lructIons ol energy/IrrIgutIon subsIdIes, und
only 2-3% ol Procumpo. At the other extreme, the producers In the top decIle receIve trunsler
shures In the order ol:
42% (33%) ol Procnmpo (udusted)
55% ol the AInnzn P0R,
60% ol energy und hydrologIcul subsIdIes,
85% (90%) ol lngrcso Dbjctvo.
These dIstrIbutIons ure ol course mutuully reInlorcIng. In uddItIon to the lurge subsIdIes us-
socIuted wIth IrrIgutIon, us gruph 43 shows, the dIstrIbutIon ol Procumpo und Ingreso ObetIvo
ure more regressIve lor IrrIguted thun lor ruIn-led lund.
It Is InterestIng thut the more uccurute meusure ol producer weulth reduces the degree ol re-
gressIvIty In the cuse ol Procnmpo but It Increuses It In lngrcso Dbjctvo. ThIs suggests thut
muny ol the lurger benecIurIes lrom Procumpo gIven the sIze ol theIr lunds muy be poorer
once the lund Is udusted lor quulIty (und vIceversu lor smuller ones), whIle Ingreso ObetIvo Is not
only concentruted on lurger lund-holdIngs but ulso on those wIth the more productIve ones.
TabIe 7
LISTlIBUTI0N 0l Pl0CAMP0 ANL INCllS0 0BlTI\0 TlANSlllS B Pl0LUCll LlCIllS
lANllL B 1 lANL l0lLINCS ANL 2 UAlITALUSTlL lANL l0lLINCS
SPlINCSUMMll 2006
Producer DecIles
Lund (Hus) DIstrIbutIon ol trunslers
Averuge
Runge Procumpo Ingreso ObetIvo
MIn Mux (l) (2) (l) (2)
l 0.93 0.0l l.00 2.2% 2.9% 0.l% 0.l%
2 l.00 l.00 l.00 2.3% 3.4% 0.l% 0.3%
3 l.39 l.00 l.75 3.2% 3.9% 0.3% 0.0%
4 l.98 l.75 2.00 4.6% 5.l% l.0% 0.2%
5 2.l2 2.00 2.50 4.9% 6.4% 2.6% 0.2%
6 2.90 2.50 3.00 6.7% 7.6% l.4% 0.9%
7 3.62 3.00 4.00 8.3% 9.9% 2.0% 0.8%
8 4.75 4.00 5.79 l0.8% l2.l% 2.6% l.3%
9 6.99 5.79 9.00 l5.2% l5.8% 5.0% 6.8%
l0 20.48 9.00 l957.5 4l.8% 33.0% 85.0% 89.6%
PercentIles
90-97 9 20 l7% 23%
98-l00 20 l957.5 25% 62%
Source. euthor's celculetons usng ASllCA edmnstretve dete.
3
AgrcuIturaI Subsdes n Mexco

Gragh 33
Pl0CAMP0, INCllS0 0BlTI\0, AlIANA LlSAll0ll0 lUlAl, ANL lANL
C0NClNTlATI0N CUl\lS. 0lLlllL B Pl0T SIl
Source. euthor's celculetons usng ASllCA edmnstretve dete, lA0 ,200S) end World Benk ,2006).
Gragh 34
Pl0CAMP0 ANL INCllS0 0BlTI\0 C0NClNTlATI0N CUl\lS.
lAINllL ANL IllICATlL lANL
Source. euthor's celculetons usng ASllCA edmnstretve dete.
Procampo lngreso Obetlvo ^llanza-0esarrollo rural lrrlgated Land Ralnfed Land
0
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
10% 20% 30% 40% 50% 60% 70% 80% 90% 100%
0
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
10% 20% 30% 40% 50% 60% 70% 80% 90% 100%
lrrlgated Land Ralnfed Land Procampo (lrrlgated) lngreso Obetlvo (lrrlgated)
Procampo (ralnfed) lngreso Obetlvo (ralnfed)
Subsdos gara Ia desguaIdad

Gragh 35
Pl0CAMP0, INCllS0 0BlTI\0 ANL lANL.
0lLlllL B lSTIMATlL lANL \AlUl/Pl0LUCll INC0Ml
Source. euthor's celculetons usng ASllCA edmnstretve dete, lA0 ,200S) end World Benk ,2006).
6.2. Rescurce dtstrtbuttcn amcng hcusehclds, by dectles crdered
by tnccme per captta
To put these dIstrIbutIons In the context ol publIc rurul spendIng on socIul progrums us well us
the nutIonul und rurul Income dIstrIbutIon, und to estImute the dIstrIbutIve Impuct ol these
resources, In thIs sectIon we unulyze the dIstrIbutIon ol Procumpo und the prIncIpul socIul
progrums usIng the ENICH 2006 survey (und Its ussocIuted Modulo de Progrumus 3ocIules").
In the cuse ol Procumpo, the only ugrIculturul progrum reported In thIs survey, these results
must be Interpreted wIth some cure, us the survey Is not desIgned to be representutIve ol In-
dIvIduul trunslers, especIully when u lurge proportIon ol theIr resources Is concentruted on u
smull lructIon ol the populutIon In the top decIle, us we huve ust seen Is the cuse ol Procum-
po.
l5
DespIte thIs, the ENICH dutu conrm u concentrutIon ol benets In the top decIle (gruph
36), where 4.5% ol Procumpo's benecIurIes receIve 27% ol the progrum's trunslers, whIle the
poorest Income decIle uccounts lor 20% ol benecIurIes but 8.7% ol benets.
The contrust between the prIncIpul socIul und ugrIculturul progrums, OportunIdudes und Pro-
cumpo, Is evIdent lrom theIr concentrutIon curves In Income spuce, both nutIonully und wIth-
In the rurul sector (gruph 37).
A crItIcul Issue In thIs unulysIs Is the posItIon ol the APE concentrutIon curves wIth respect to
the (pre-trunsler) Income Lorenz curve, us thIs determInes whether these progrums ure sImply
IneectIve us redIstrIbutIve Instruments, or uctuully contrIbute to ncrcnsc Income InequulIty
(below the Lorenz curve). The noted dutu lImItutIons In both the ENICH und the udmInIstrutIve
dutu preclude u dIrect und unumbIguous settlement ol the Issue. It seems reusonuble to con-
15 1he analysls above based on admlnlstratlve data has shown that a quarter of the program transfers are recelved by the
top 3% of producers. ^s ls well known the LNlCH survey does not capture HH lncomes at the upper extreme of the lncome
dlstrlbutlon very well, for three prlnclpal reasons: a) the low statlstlcal probablllty of selectlng thls small set of HHs ln the
sample, b) these HHs are less llkely to partlclpate once selected, an c) even lf they are selected and agree to partlclpate,
they are more llkely to underreport thelr lncome. 1he slzable measured underreportlng of aggregate lncomes and spendlng
ln the LNlCH ln relatlon to the Natlonal ^ccounts ls attrlbuted ln part to thls truncatlon, and ls the prlnclpal reason why the
omclal methodology to measure poverty ln Mexlco does not adust lncome to Natlonal ^ccounts. See Leyva-Parra (2005)
and Scott (2005). 1hls seems to be the maln explanatlon for the large dlerence ln the degree of estlmated regresslvlty
for Procampo uslng LNlCH (0.12) vs. admlnlstratlve data (0.50).
lncome (Lnlgh 2008) Procampo adusted Pv Land Land, adusted lngreso Obetlvo, adusted Pv
0
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
10% 20% 30% 40% 50% 60% 70% 80% 90% 100%
3
AgrcuIturaI Subsdes n Mexco

clude thut Procumpo (und perhups AlIunzu's PDR) Is probubly progressIve In relutIve terms: Its
concentrutIon curve Is well ubove the Income Lorenz curve generuted by the ENICH dutu
(gruph 37), but sImIlur to the lutter when usIng udmInIstrutIve dutu (gruph 35, 38).
Gragh 36
LISTlIBUTI0N 0l Pl0CAMP0 BlNllICIAlIlS ANL TlANSlllS B NATI0NAl P0PUlATI0N
LlCIllS 0lLlllL B PllTlANSlll INC0Ml Pll CAPITA. 2006
Source. euthor's celculetons usng lNICl 2006.
But Procumpo Is probubly the exceptIon umong (non-turgeted) ugrIculturul subsIdes. The con-
centrutIon curve lor ugrIculturul lund und perhups even quulIty-udusted lund muy reusonubly
be Interpreted us un uppcr bounJ lor the concentrutIon curves ol non-tnrgctcJ, nput- or out-
put-InkcJ trnnsjcrs nnJ subsJcs, generully: u lurge purt ol the rurul populutIon (ut leust the
poorest 50%) Is excluded lrom such progrums sImply becuuse they ure eIther lundless or huve
plots whIch ure too smull to be reuched by such progrums (except lor u decoupled progrum lIke
Procumpo), und In the upper hull ol the lund dIstrIbutIon there ure probubly strong economIes
ol scule (und lund quulIty) In the cupucIty to uttruct ugrIculturul support resources (unless
some explIcIt turgetIng Is upplIed, us In the cuse ol the PDR). ThIs upplIes cleurly to the cuse ol
Input support progrums lIke the energy subsIdIes (dIesel ugropecuurIo und turIlu 9). ThIs Im-
plIes thut the muorIty ol ugrIculturul support progrums, und APE overull, ure regressIve In
relutIve terms, und thus u contrIbutIng cuuse ol rurul Income InequulIty.
These estImutes ol course only consIder the dIrect, rst-order IncIdence ol the benets lrom
APE. In u generul equIlIbrIum settIng, ugrIculturul workers und smull lund owners muy shure
some ol the benets lrom the ugrIculturul support trunslers obtuIned by lurge commercIul
producers, through hIgher wuges und lund prIces. However, there ure ut leust two reusons to
doubt thut such trIckle-down" eects would be sumcIent to reverse the rst-order eect. FIrst,
us we huve seen, the lurge, gruIn-producIng commercIul lurms In the northern stutes benet-
Ing lrom these trunslers tend to be cupItul- ruther thun lubor-IntensIve. 3econdly, by lurther
IncreusIng the cost-udvuntuge ol lurge-scule producers, these trunslers undermIne the cupuc-
Ity ol smull (potentIully) commercIul producers to compete In these murkets. Note thut the
urgument to support these smuller but vIuble lurmers Is exuctly unulogous to the urgument
ohen used In luvor ol supportIng the lurger commercIul producers to compensute them lor
unluIr competItIon due to InternutIonul subsIdIes.
To compure the equIty ol APE more systemutIcully In the context ol RD expendItures, und us-
sess the globul Impuct ol ARD expendItures on rurul Income InequulIty, we cun compure the
APE progrums unulyzed ubove wIth the socIul und rurul development progrums reported In the
ENICH 2006 und u specIul 3ocIul Progrum Module" commIssIoned by 3edesol wIth the ENICH
2006. The lollowIng gruphs compure two synthetIc IndIcutors: concentrutIon coemcIents (CC)
und the shures ol trunslers receIved by the poorest/rIchest quIntIle.
1 2 3 4 5 6 7 8 9 10
0%
5%
10%
15%
20%
25%
30%
enefclarles 1ranfers
20.4%
8.7%
14.8%
8.7%
11.4%
7.1%
11.8%
7.1%
11.2%
8.2%
8.9%
8.7%
5.3%
8.8%
5.6%
6.9%
6.2%
8.9%
4.5%
27%
Subsdos gara Ia desguaIdad

Graghs 37 a and b
LISTlIBUTI0N 0l 0P0lTUNILALlS ANL Pl0CAMP0 TlANSlllS ANL PllTlANSlll
INC0Ml B NATI0NAl ANL lUlAl l0USll0lL LlCIllS 0lLlllL B PllTlANSlll
INC0Ml Pll CAPITA NlT 0l TlANSlllS.
Source. euthor's celculetons usng lNICl 2006.
Oportunldades Procampo lngreso total
R
e
c
u
r
s
o
s
0
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
10% 20% 30% 40% 50% 60% 70% 80% 90% 100%
Natlonal 0lstrlbutlon (pre-transfers)
Oportunldades Procampo lngreso total
R
e
c
u
r
s
o
s
0
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
10% 20% 30% 40% 50% 60% 70% 80% 90% 100%
Rural 0lstrlbutlon (pre-transfers)
3
AgrcuIturaI Subsdes n Mexco

Gragh 3B
C0NClNTlATI0N C0lllICIlNTS 0l AlL lXPlNLITUllS, INC0Ml ANL lANL. 2006, 200S
lUlAl l0USll0lLS 0lLlllL B PllTlANSlll INC0Ml Pll CAPITA
Source. euthor's celculetons usng lNICl 2006, Socel Module of lNICl 2006, lNICl 200S ,0portundedes, Procempo)
ASllCA Benencery dete beses ,Pso lrme, PlT, Leesyunos end Lespenses LIl, 0pcones Productves, end Crdto), end
Cuente Pblce 2006.
Though us noted ubove, the coemcIents obtuIned lrom udmInIstrutIve dutu (bused on quulIty-
udusted lund-orderIngs) ure not strIctly compuruble wIth the ENICH-bused IndIcutors, the
contrust between the socIul und rurul progrums (OportunIdudes, PIso FIrme und the Progrumu
de Empleo Temporul, the most progressIve) und ugrIculturul progrums (Ingreso ObetIvo und
IrrIguted lund-bused progrums, the most regressIve) Is cleur lrom the gup ol the estImuted
concentrutIon coemcIents (gruphs 38, 39).
To obtuIn un estImute ol the dIstrIbutIon und IncIdence ol overull RDE und APE expendItures
und theIr dIstrIbutIve eect, we muke the lollowIng ussumptIons:
The socIul und rurul development expendItures (RDE) we huve not been uble to estImute dI-
rectly (40% ol the totul) Is dIstrIbuted on uveruge us those we huve. ThIs probubly overestI-
mutes the progressIvIty ol RDE, gIven the weIght ol OportunIdudes In our estImutes.
The APE progrums whose dIstrIbutIon we huve not been uble to estImute (37%) ure ussumed
to be dIstrIbuted us totul (ruIn led & IrrIguted) cultIvuted lund, us reported In the A3ERCA dutu
buses, except lor the energy und hydro ugrIculturul expendItures, whIch ure proxIed through
the dIstrIbutIon ol IrrIguted lund. ThIs Is probubly u lower bound lor the regressIvIty ol APE.
CIven the Importunt degree ol underreportIng ol household Income In ENICH when compured
to the NutIonul Accounts, to obtuIn u reulIstIc estImute ol the IncIdence ol ARD expendItures
we udust household Income by the relevunt luctor (l.87). 3Ince It Is reusonuble to ussume thut
underreportIng In MexIco Is more sIgnIcunt ut the top thun the lower end ol the Income dIs-
trIbutIon, we report both udusted und unudusted estImutes.
DespIte the compurubIlIty Issues, totul APE uppeur to contrIbute to Increuse rurul Income In-
equulIty In MexIco, whIle the RD expendItures consIdered here ure progressIve (pro-poor) In
ubsolute terms, wIth the notuble exceptIon ol 3edesols smull productIve progrums, IncludIng
Dpconcs ProJuctvns, Apoyos n In PnInbrn, whIch ure reported here together wIth other credIt
progrums. The poorest quIntIle ol rurul households receIve 3l% ol RDE, but ust 4% ol APE,
whIle the rIchest quIntIle receIve 9% ol RCD but 60.7% ol APE. Totul ARD ure regressIve In
ubsolute terms, but stIll progressIve relutIve to the dIstrIbutIon ol pre-trunsler Income.
Totul APE trunslers represent u hh (20.7%) ol the udusted uveruge Income ol the rIchest de-
cIle (ulmost 40% Il unudusted to NAs), but ust 7.6% lor the poorest (l4% unudusted) (tuble
8). On the other hund, RDE udd 53% (ulmost l00% unudusted) to the poorest decIles pre-
trunsler Income, but burely udds to the Income ol the top decIle. AddIng these trunslers to-
PL1
Plso Flrme
Oportunldades
0esayunos 0lF
1otal R0
Seguro Popular
Llconsa
^dultos Mayores 70+
0espensa 0lF
Procampo (LNlCH)
1otal ^0R
Procampo (^SLRC^)
Pre-transfer lncome
1otal land
Opclones Prod. y Crdltos
Ralnfed land
1otal ^PL
lrrlgated land
1otal land adusted
lngreso Obetlvo
0% 20% 40% 60% -60% -40% -20% 80% 100%
Subsdos gara Ia desguaIdad

gether, the dIstrIbutIon ol publIc ARD expendItures Is ut lor the poorest 40%, ut close to $400
pesos per cupItu per month, but Increuses shurply In the tenth decIle, where rurul households
obtuIn on uveruge more thun $3000 pesos monthly per cupItu.
In purely uccountIng terms, APE ncrcnscs the rurul CInI coemcIent by 6.7% (ll.5% unudust-
ed), whIle RDE Jccrcnscs It by l4% (24.8% unudusted), wIth u net reductIon ol 6.5% ussocI-
uted wIth totul ARD. In other words, APE uppeurs to cuncel more thun hull ol the redIstrIbu-
tIve Impuct ol RDE on relutIve InequulIty, meusured through the CInI coemcIent (though not,
ol course, on poverty reductIon).
WhIle the recognItIon und concern lor the InequIty ol APE In MexIco hus grown In recent
yeurs, purtly us u result ol the IncreusIng uvuIlubIlIty ol the type ol evIdence revIewed In thIs
study, relorm eorts to uddress these InequItIes huve so lur been tImId und huve cleurly been
eectIvely blocked by lurge producer Interest groups und ugrIculturul stutes. For exumple, lol-
lowIng the recommendutIons ol u number ol specIul udvIsory groups on Procumpo relorm set
up by 3ugurpu und the PresIdent's Omce, us well u the numerous nutIonul und InternutIonul
reports cIted belore, there wus uppurently u genuIne IntentIon on the purt ol the lederul gov-
ernment to lImIt Procumpo trunslers to smull und medIum-sIzed lurmers, but thIs wus eec-
tIvely blocked by the noted Interest groups. The result wus u murgInul relorm ol the Procumpo
rules whIch Increused trunslers to smull (ruInled) lurmers, whIle lImItIng muxImum benets
per producer per cycle to l00,000 pesos. Cruph 43 shows the results ol u sImulutIon ol thIs
relorm upplIed to the A3ERCA dutu buse, reveulIng u neglIgIble dIstrIbutIve Impuct.
A more recent relorm eort Is contuIned In the lederul budget proposul lor 20l0, whIch pro-
poses muyor cuts In perhups the most regressIve APE Instrument ol ull, lngrcso Dbjctvo. It wIll
be InterestIng to see Il thIs proposul survIves the legIslutIve negotIutIon.
Gragh 39
lllATI\l SlAll 0l P00llST 20+ 0l lUlAl l0USll0lLS IN 0l AlL lXPlNLITUllS,
INC0Ml ANL lANL. 2006, 200S lUlAl l0USll0lLS 0lLlllL
B PllTlANSlll INC0Ml Pll CAPITA
Source. euthor's celculetons usng lNICl 2006, Socel Module of lNICl 2006, lNICl 200S ,0portundedes, Procempo)
ASllCA Benencery dete beses ,Pso lrme, PlT, Leesyunos end Lespenses LIl, 0pcones Productves, end Crdto)..
Poorest 20% Rlchest 20%
0% 20% 40% 60% 80% 100%
PL1
Plso Flrme
0esayunos 0lF
Oportunldades
1otal R0
^dultos Mayores 70+
Procampo (LNlCH)
Seguro Popular
0espensa 0lF
1otal ^0R
Llconsa
Opclones Prod. y Crdltos
Procampo (^SLRC^ adusted land)
1otal land
Pre-transfer lncome
Ralnfed land
1otal ^PL
lrrlgated land
1otal land adusted
lngreso Obetlvo
3
AgrcuIturaI Subsdes n Mexco

Gragh 40
LISTlIBUTI0N 0l APl ANL lLl
lUlAl l0USll0lL LlCIllS 0lLlllL B INC0Ml Pll CAPITA Bll0ll TlANSlllS
Source. euthor's celculetons usng lNICl 2006, Socel Module of lNICl 2006, lNICl 200S ,0portundedes, Procempo)
ASllCA Benencery dete beses ,Pso lrme, PlT, Leesyunos end Lespenses LIl, 0pcones Productves, end Crdto), end
Cuente Pblce 2006.
Gragh 41
INCILlNCl 0l APl ANL lLl IN lUlAl l0USll0lL INC0Ml. TlANSlllS
AS + 0l PllTlANSlll INC0Ml
l0USll0lL LlCIllS 0lLlllL B INC0Ml Pll CAPITA Bll0ll TlANSlllS
Source. euthor's celculetons usng lNICl 2006, Socel Module of lNICl 2006, lNICl 200S ,0portundedes, Procempo)
ASllCA Benencery dete beses ,Pso lrme, PlT, Leesyunos end Lespenses LIl, 0pcones Productves, end Crdto), end
Cuente Pblce 2006.
0%
60%
50%
40%
30%
20%
10%
1 2 3 4 5 6 7 8 9 10
^PL R0L
1.6%
17.2%
1.6%
15.8%
2.5%
13.2%
3.4%
12%
4%
12.1%
5.2%
9.4%
6.9%
7.1%
9.2%
6.6%
13.4%
4.8%
1.8%
52.3%
0%
60%
50%
40%
30%
20%
10%
^PL R0L
1 2 3 4 5 6 7 8 9 10
7.6%
52.9%
5.1%
30.9%
6%
20.5%
7.1%
16.3%
7.4%
15.2%
8.1%
9.8%
9%
6.3%
10.2%
4.9%
12.6%
3.1%
20.7%
0.5%
Subsdos gara Ia desguaIdad

Gragh 42
lSTIMATlL A\llACl M0NTll TlANSlllS Pll CAPITA T0 lUlAl
l0USll0lLS ll0M APl ANL lLl
lUlAl l0USll0lL LlCIllS 0lLlllL B INC0Ml Pll CAPITA Bll0ll TlANSlllS
Source. euthor's celculetons usng lNICl 2006, Socel Module of lNICl 2006, lNICl 200S ,0portundedes, Procempo)
ASllCA Benencery dete beses ,Pso lrme, PlT, Leesyunos end Lespenses LIl, 0pcones Productves, end Crdto), end
Cuente Pblce 2006.
Gragh 43
SIMUlATlL llllCT 0l Tll 2009 Pl0CAMP0 lUllS 0N Tll LISTlIBUTI0N 0l Pl0CAMP0
TlANSlllS AM0NC Pl0LUCllS 0lLlllL B lSTIMATlL lANL \AlUl/Pl0LUCll INC0Ml
Source. euthor's celculetons usng ASllCA Benencery dete bese.
40%
35%
45%
30%
25%
20%
15%
10%
5%
Pre-2009 Rules 2009 Rules
1 2 3 4 5 6 7 8 9 10
0%
0
500
1000
1500
2000
2500
3000
3500
^PL R0L
1 2 3 4 5 6 7 8 9 10
339
49
336
55
287
84
291
126
328
159
255
210
199
282
201
417
175
719
78
3005
3
AgrcuIturaI Subsdes n Mexco

TabIe B
llLISTlIBUTI\l llllCTS 0l AClICUlTUlAl ANL lUlAl lXPlNLITUllS
HH
DecIles
DIstrIbutIon
Trunsler IncIdence
Trunslers
Pre-trunsler
Income
Post-trunsler Income
APE RDE + APE + RDE
+ APE
& RDE
APE RDE Totul
Income:
Unudusted
(MIllIon MP)
l08,572 76,925 467,957
l l.6% l7.2% 2.9% 2.7% 4.9% 4.4% l4.2% 99.0% ll3.2%
2 l.6% l5.8% 4.4% 3.9% 6.0% 5.3% 9.5% 57.9% 67.4%
3 2.5% l3.2% 5.5% 5.0% 6.6% 5.9% ll.2% 38.3% 49.5%
4 3.4% l2.0% 6.5% 6.0% 7.3% 6.7% l3.2% 30.4% 43.7%
5 4.0% l2.l% 7.l% 6.6% 7.8% 7.2% l3.8% 28.4% 42.2%
6 5.2% 9.4% 8.5% 8.0% 8.7% 8.2% l5.l% l8.4% 33.5%
7 6.9% 7.l% l0.0% 9.5% 9.6% 9.2% l6.8% ll.8% 28.6%
8 9.2% 6.6% ll.6% ll.2% l0.9% l0.6% l9.l% 9.2% 28.3%
9 l3.4% 4.8% l3.7% l3.8% l2.5% l2.7% 23.6% 5.8% 29.3%
l0 52.3% l.8% 29.7% 33.5% 25.8% 29.7% 38.7% l.0% 39.7%
Totul l00.0% l00.0% l00.0% l00.0% l00.0% l00.0% 23.2% l6.4% 39.6%
C/CC 0.5859 -0.2652 0.5486 0.5887 0.2620 0.5ll8
Chunge In C ll.5% -24.8% -l0.6%
Income: Ad-
usted
(MIllIon MP)
875,29l
l 2.9% 2.7% 4.0% 3.8% 7.6% 52.9% 60.5%
2 4.4% 4.l% 5.3% 5.0% 5.l% 30.9% 36.0%
3 5.5% 5.2% 6.l% 5.8% 6.0% 20.5% 26.5%
4 6.5% 6.2% 7.0% 6.6% 7.l% l6.3% 23.3%
5 7.l% 6.8% 7.5% 7.2% 7.4% l5.2% 22.6%
6 8.5% 8.2% 8.6% 8.3% 8.l% 9.8% l7.9%
7 l0.0% 9.7% 9.8% 9.5% 9.0% 6.3% l5.3%
8 ll.6% ll.4% ll.2% ll.0% l0.2% 4.9% l5.l%
9 l3.7% l3.7% l3.0% l3.l% l2.6% 3.l% l5.7%
l0 29.7% 3l.9% 27.5% 29.7% 20.7% 0.5% 2l.2%
Tctal l2.4% 8.8% 2l.2%
C/CC 0.3486 0.372l 0.2990 0.3259
Chunge In C 6.7% -l4.2% -6.5%
7. CONCLU5ION5 AND POLICY
RECOMMENDATION5
ThIs report hus unulyzed the dIstrIbutIve IncIdence ol the prIncIpul ugrIculturul und rurul de-
velopment progrums Implemented In MexIco In over the lust two decudes, In the context ol un
umbItIous eort to modernIze the ugrIculturul sector und uddress rurul poverty. ThIs second
ugrurIun relorm" Included the l992 LjJo relorm, the openIng ol ugrIculturul murkets through
the North Amcrcnn Frcc TrnJc Agrccmcnt (l994-2008), the shIh to more emcIent und equItuble
ugrIculturul support Instruments, especIully the delInked Procnmpo trunslers. A sImIlurly um-
bItIous und complementury relorm eort In rurul socIul polIcIes Included the IntroductIon ol
eectIvely turgeted rurul progrums, notubly Progrcsn/DportunJnJcs, und u more generul pro-
rurul reullocutIon ol socIul spendIng, reversIng u strong hIstorIc urbun bIus In the ullocutIon ol
untI-poverty progrums, lood subsIdIes, busIc educutIon und heulth servIces lor the unInsured.
WhIle un evuluutIon ol the Impuct ol these relorms on ugrIculture und rurul poverty In MexIco
Is ImpossIble In the ubsence ol the relevunt counterluctuul, especIully gIven the brouder eco-
nomIc context ol InstubIlIty und stugnutIon churucterIzIng thIs perIod, the evIdence on the
Instruments und outcomes ol these polIcIes revIewed In thIs report suggests thut the prIncIpul
chullenges motIvutIng the relorms remuIn In pluce. We wIll not uttempt to summurIze thIs
extensIve evIdence here, beyond emphusIzIng u lew busIc observutIons:
Subsdos gara Ia desguaIdad

a) Toduy us two decudes ugo, u thIrd ol the rurul populutIon lIve In extreme poverty (pobrezu
ulImenturIu) und despIte u gruduul urbunIzutIon process the rurul sector stIll uccounts lor u
muorIty ol the extreme poor.
b) WhIle there Is some evIdence ol the IncIpIent development ol rurul lubor und lund murkets,
these ure stIll humpered by structurul restrIctIons und the luck ol udequute uccess to other
productIve Inputs, IncludIng credIt, humun cupItul, technology, trunsport und other Inlru-
structure.
c) DespIte some evIdence ol growth In productIvIty und crop dIversIcutIon In lIne wIth Mex-
Ico's geogruphIc und luctor compurutIve udvuntuges (lubor-IntensIve lruIts und vegetubles),
the gruIn-bused duul structure ol ugrIculture hus survIved pructIcully unchunged.
d) Perhups the most drumutIc trunslormutIon ol the rurul economy over thIs perIod Is the de-
clIne ol ugrIculture us u sIgnIcunt source ol Income und lubor opportunItIes lor most rurul
households, wIth publIc trunslers, remIttunces, und non-lurmIng rurul uctIvItIes llIng the
voId.
LookIng Into the polIcy ImplIcutIons ol the ubove unulysIs, It Is Importunt to note thut despIte
Its umbItIous ugendu the second ugrurIun relorm" muy not huve been umbItIous enough In Its
ImplementutIon, luIlIng to support ugrIculturul development were It wus most needed, by pro-
vIdIng crItIcul Inputs to mIddle-sIzed lurmers wIth sIgnIcunt but construIned productIve (und
employment-generutIon) potentIul. We muy IdentIly some busIc components ol u thIrd ugrur-
Iun relorm", dIrected ut the three prIncIpul producer strutu:
a) ConsIderIng mIddle-sIzed producers, In uddItIon to the noted emcIency vs. equIty" concep-
tuul lrumework, un Importunt pructIcul restrIctIon expluInIng the luck ol sIgnIcunt produc-
tIve support progrums reuchIng smull to medIum producers Is the lurge heterogeneIty ol such
producers, mukIng the IdentIcutIon, ImplementutIon und monItorIng ol specIc support
puckuges" dImcult. ThIs wIll requIre the development ol InnovutIve und exIble support Ins-
truments us well us the development ol u detuIled producer dutu buse (un eort ol the lutter
kInd Is currently under wuy ut 3ugurpu In colluborutIon wIth the IADB und World Bunk).
b) In the cuse ol the precurIous socIul Insurunce lunctIon ol subsIstence lurmIng, thIs should
gIve wuy through the constructIon ol eectIve und unIversul non-contrIbutIve socIul Insur-
unce schemes In the rurul sector, lIberutIng lund resources to theIr most productIve use.
c) In the cuse ol the lurger commercIul producers, u cuse Is ohen mude In luvor ol muIntuInIng
or IncreusIng support us u response to InternutIonul support lor competIng producers und
the Ideu ol lood securIty (soberunu ulImenturIu"). But thIs must be curelully und explIcItly
weIghted uguInst competIng consIderutIons, IncludIng I) the hIgh opportunIty cost ol scul
resources In u country wIth low scul cupucIty, hIgh InequulIty und hIstorIcully low publIc
Investment, und II) the uvuIlubIlIty ol better (less dIstortIng und InequItuble) Instruments to
ensure domestIc stubIlIty In lood prIces und supply whIle exploItIng the very consIderuble
benets to domestIc consumers lrom InternutIonul productIvIty guIns und subsIdIes. On the
other hund, u cuse muy be mude lor shIhIng support resources turgeted ut thIs producer
group lrom prIvute trunslers to publIc goods, though us hus been documented here such
Investments ure ulreudy heuvIly concentruted on these producers.
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CEDR33A (2009). Apuntes sobre eercIcIo del presupuesto 2007 puru el sector rurul," Hctor
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Producers", WorIJ 0cvcIopmcnt, 23(8), pp. l349-l362.
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co: Murket Forces or 3tute ActIon," Chupter 6 In Thc Ncw 0ynnmcs oj lncomc lncqunIty n
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evuluucIon.org.mx/pugInu/Inlorme-evuluucIon-progrumus.
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trIcu puru el bombeo hIdrulIco en lu ugrIculturu", EstudIos sobre PoltIcus y Custo PblIco
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Kessler TImothy, R. QuItzow und W. Reuben 2007, 3ocIul Impucts und InstItutIonul Chul-
lenges ol Croundwuter Munugement In MexIco: A Poverty und 3ocIul Impuct AnulysIs
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ventIons In the Wuter 3ector, World Bunk.
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0uJc. PurIs: OECD.
OECD (2007b). Mcxco Lstmntcs oj support to ngrcuIturc, ProJuccr nnJ Consumcr Support
Lstmntcs DLC0 0ntnbnsc l986-2006. PurIs: OECD
RosenzweIg. Andrs (2008). Apuntes puru el Crupo de Trubuo sobre Procumpo: lu PoltIcu de
Fomento ProductIvo en MxIco en el 3ector AgropecuurIo", 3ugurpu, unpublIshed.
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Pobrezu," In MIguel 3zkely (ed.), Nmcros quc mucvcn nI munJo Ln mcJcn Jc In pobrczn
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Achcvcmcnts, Contnung thc Rcjorm AgcnJn, PurIs: OECD.
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mcnt Rcscnrch Rcport, No. 2, Woodrow WIlson InternutIonul Center lor 3cholurs, MexIco
InstItute, www.wIlsoncenter.org/DesurrolloRurulMexIcuno.
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Pnpcr 04-02, Medlord, Muss: Tuhs UnIversIty, Clobul Development und EnvIronment InstI-
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World Bunk (2004u). Mcxco PubIc LxpcnJturc Rcvcw. WushIngton D.C.: World Bunk.
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4

4
Why Iook a gR
horse n the mouth7
Benecary gercegtons
ot the Procamgo grogram
Maurcc Maldcnadc 5nchez-Aldana

lnsttuto TccnoIgco y Jc LstuJos Supcrorcs JcI DccJcntc


1 1hls report ls based on a much more extenslve study, whlch was completed ln uly, 2009 and lncludes both a synthesls
and state level reports (Maldonado 2010). For thelr collaboratlon wlth the feld research, the author thanks Cellna Sols
ecerra, uan Lnrlque velazco Ortlz, Martlnlano Hernndez y 0avld Maldonado Snchez ^ldana. 1hls chapter was edlted
and translated by onathan Fox.
4
Benecary Percegtons ot the Procamgo Program

ThIs study presents the ndIngs ol u pIlot survey, desIgned to see how purtIcIpunts In Procum po
perceIve the progrum, wIth un emphusIs on trunspurency und uccountubIlIty Issues. ThIs ugendu
Includes understundIng the determInunts ol uccess to the progrum, perceIved trunsuctIon costs
Involved In deulIng wIth the progrum, the degree to whIch progrum operutIons ure trunspurent
to purtIcIpunts, us well us the uvuIlubIlIty und use ol lormul uccountubIlIty processes. The sur-
vey Involved extensIve IntervIews wIth more thun l00 smullholders In ve stutes, IncludIng
JulIsco, Cuerrero, ChIupus, Ouxucu und Pueblu. WIthIn u unIverse thut Included both members
und non-members ol producer orgunIzutIons, surveyed IndIvIduuls were selected lrom dIerent
strutu ut rundom lrom Procumpo benecIury lIsts. RegIonul peusunt orgunIzutIon leuders were
ulso IntervIewed, us well u smull sumple ol non-purtIcIpunts. OmcIul progrum evuluutIons pro-
vIded uselul buckground, und surveyed very lurge sumples ol purtIcIpunts, but the evuluutIon
ugendu dId not locus on progrum trunspurency und uccountubIlIty Issues. WhIle thIs survey's
sumple Is not lurge enough to be representutIve, the ndIngs nevertheless ruIse Issues thut
more umbItIous surveys mIght tuke Into uccount.
Most producers surveyed see Procumpo puyments us u dIscretIonury oerIng by the government,
not lInked to purtIcIputIon or co-responsIbIlIty. The term most wIdely used to reler to the subsI-
dy wus u support" (un npoyo"). Producers knew ust the busIcs ubout progrum operutIons, ohen
respondIng thut they hud to present theIr electIon regIstrutIon curd und copIes ol theIr lund
documents." In the ubsence ol u consIstent ow ol InlormutIon lrom the ugency, producers only
see the nul lInk In the chuIn ol progrum decIsIons, und the rest Is leh to theIr ImugInutIon. In
thIs context, most progrum purtIcIpunts were eIther unuwure ol or dId not enguge wIth Its ol-
cIul trunspurency und uccountubIlIty processes, und In pructIce they uddressed theIr concerns
wIth progrum perlormunce through pre-exIstIng chunnels, such us theIr producer orgunIzutIon
or theIr cjJo leudershIp. The muIn exceptIon to thIs puttern Is lound In IndIgenous regIons, where
Procumpo's muIn omcIul chunnel lor benecIury representutIon und progrum oversIght, the
spokesperson (vocnI"), hus been Incorporuted Into exIstIng communIty servIce structures.
l. PROCRAM ACCE55
Most producers dId recull the orIgInul sIgnup process, und theIr testImonIes help to uccount lor
Procumpo's uneven coveruge ol ostensIbly elIgIble producers. At the tIme, lew hud u cleur
sense ol the progrum or Its gouls, the InlormutIon thut reuched potentIul benecIurIes wus ut
the dIscretIon ol the government outreuch omcIuls. In some regIons, such us the munIcIpulIty
ol Lu UnIn, Cuerrero, the progrum provoked mIstrust ut rst: ut rst, muny thought It wus u
progrum to support the PRI, but even though It wusn't muny dId not ugree to sIgn up..." An-
other producer reported Lots ol lolks dIdn't sIgn up becuuse they thought they were goIng to
tuke uwuy theIr lund." At mInImum, there wus u hIgh degree ol dIsInlormutIon ubout the pro-
grum, Its requIrements und Its gouls.
Muny reported thut Procumpo dId not do Its own communIty outreuch when creutIng the
orIgInul regIstry. Insteud, cjJo leuders were culled to meetIngs, und they In turn encouruged
producers to sIgn up, but wIthout InlormIng them ubout the progrum, whIch creuted mIstrust
und led muny to not belIeve thut It would work. AccordIng to producers In Lu UnIon, Cuerrero,
some cjJo leuders reportedly sIgned up lunds thut were not In productIon, und other sIgned
up muny relutIves. Producers surveyed dId not report wIdespreud open electorul use ol the
progrum In Its eurly yeurs, but they dId report thut uccess wus ut the dIscretIon ol cjJo leuders
und AgrIculture 3ecreturIut regIonul stu. Becuuse uccess to Procumpo regIstrutIon wus soon
lrozen, thIs dIscretIonul uccess ut rst ended up huvIng long term Impucts.
Producers ohen mentIoned thut muny people enrolled plots In Procumpo thut were not theIrs und
they receIved checks lor yeurs wIthout workIng the lund. In some regIons, thIs luter chunged.
As some mentIoned Now they check und thIs sItuutIon wus put In order." In other regIons,
however, the Issue persIsts.
2
As one cumpesInu In NochIxtlun, Ouxucu put It:
They lIst whoever they wunt. There ure people who don't even plunt, I went to the meetIngs, I
know, I know them. How Is It possIble thut they gIve them u pIle ol money Only to theIr lrIends!
Thut's why I don't get Involved, I'm so old now, It's better not to. Those crooks huve so much
lund.
In ChIupus, some ol those who dId sIgn up reported thut the orIgInul meusurements ol plot sIze
were too smull, sometImes 30% less thun theIr uctuul holdIngs, but they huve uccepted the
sItuutIon.
2 ^s one of the Cuerrero producers put lt even the dead get thelr cash. the famlly keeps gettlng the check wlth a copy of
hls votlng card." However, slnce Procampo payments are tled to the plot and not the person, lnherltance ls allowed. et the
com ment suggested both a lack of famlllarlty wlth thls baslc prlnclple of Procampo, as well as a more general perceptlon
that anythlng was posslble ln the program.
Subsdzng 1neguaIty

In Cuetzulun, In the 3Ierru Norte ol Pueblu, the process ol InItIul IncorporutIon Into the pro-
grum dIered In Importunt wuys, uccordIng to u producer who served us u vocnI lor ulmost sIx
yeurs. He reported thut the regIstrutIon process took pluce In two wuys sImultuneously. Up In
the mountuIns, the IndIgenous peusunt producers cume down to the county seut to regIster theIr
plots, IncludIng some who were sIgned up on the recommendutIon ol the CNC," some ol whom
cluIm thut deuls were mude In the stute cupItul to sIgn up certuIn lIsts ol people, IncludIng some
who lurmed lIttle ol theIr lund but got puId lor ull ol It. In the lower ureus, the regIstrutIon pro-
cess wus more precIse, und the ugrIculturul technIcIuns went dIrectly to the communItIes.
Thunks to support lrom the Tosepun TItutunIske" cooperutIve, the peusunts leurned ubout the
progrum und lollowed the regIstrutIon procedures, to the poInt where ulmost ull the lurmers,
whether lundowners or renters, sIgned up plots. AccordIng to the lormer vocul, there wus so-
cIul ustIce, the whole hecture wus regIstered und no one wus excluded, everyone got It, there
were even compueros who suId you're un IdIot" Il you dIdn't go In.". But the lollowIng yeur
recrImInutIons" begun, und they cuught people who hud sIgned up to 24 hectures but reully
only hud l3, so there were cuts - though no sunctIons." These recrImInutIons cun muInly
lrom the peusunt communItIes themselves, sInce they detected these plots und the producers
who were beIng puId lor more lund thun they hud, or worked. TheIr sense ol InustIce led to
pressure on the vocnIcs, who reported the churges to the AgrIculture 3ecreturIut's locul omces.
An udvIsor to the Tosepun cooperutIve, who worked lor yeurs to support producer uccess to the
Pro cumpo progrum, expluIned thut It mude sense lor producers to sIgn up, even Il they were
renters, becuuse In theIr vIew, the subsIdy wus supposed to benet those who produced: we used
to suy Il there ure goIng to be subsIdIes, they should be lor those who work." But thIs uccess
dIdn't lust, becuuse us ol the second yeur they progrum begun to requIre documents thut
proved eIther ownershIp or use-rIghts to the lund, und sInce muny renters dIdn't huve them
(especIully the smull-scule producers who were coop members). They were gruduully dropped
lrom the rolls, u process descrIbed locully us beIng delIsted." ThIs wus wIdely seen us unust, to
be cut o lor udmInIstrutIve reusons. AccordIng to the udvIsor, toduy less thun 30% ol Tosepun
coop members ure Included In the progrum, so now, [Procumpo] supports the huves, und the
huve-nots ure murgInulIzed. For coop members, Procumpo ruIsed expectutIons, but us they got
pushed out over tIme, seeIng how It worked, they got demorulIzed." Yet thIs Increused enlorce-
ment ol udmInIstrutIve requIrements wus very unevenly upplIed, sInce even toduy there ure
lolks wIth 20 hectures who ulreudy sold theIr lund und they stIll get puId. There ure cuses
where houses huve been buIlt on the lund und the current owners don't huve uny Ideu thut
theIr lunds ure stIll druwIng Procumpo checks." Producers In the FruIlescu regIon ol ChIupus
reported u sImIlur sItuutIon.
In Cuerrero, u representutIve ol the UNORCA expluIned thut In order to help theIr members to
deul wIth Procumpo, they huve orgunIzed regIonul truInIng events lor our 90 member groups,
to expluIn the rules ol operutIon." In theIr vIew, the AgrIculture 3ecreturIut stu ut the locul
level doesn't gIve out InlormutIon, they ust unnounce the openIng und closIng dutes ol the
ugrIculturul seuson, und when the checks ure reudy." He reported some polItIcul condItIonul-
Ity ol uccess to the progrum In Its eurly yeurs, but not uny more. Indeed, the survey lound no
reports ol recent electorul condItIonIng ol uccess t Procumpo puyments. In uddItIon, hurdly
uny ol the producers IntervIewed reported dIrect corruptIon In uccessIng theIr puyments,
though some muke voluntury contrIbutIons to locul ugrIculturul omcIuls: whutever one leels
lIke lor theIr expenses, becuuse they huve to come ull the wuy out here.," uccordIng to u pro-
ducer lrom Atengo, JulIsco.
2. PRODUCERPROCAMPO INTERACTION5
There Is u generul sense thut whutever comes Is good." Yet deulIng wIth the ugrIculturul bu-
reuucrucy produces mIxed leelIngs umong Procumpo purtIcIpunts. Even producers In Tuxpun, Ju-
lIsco who huve u greut deul ol experIence wIth und knowledge ol the progrum report: you huve
to wuIt lor the CADER [ugrIculturul omcIuls], they decIde when to see you." For the members
ol the Tosepun cooperutIve In Pueblu, the problems ure ut the level ol the Rurul Development
DIstrIct [locul omces ol the AgrIculture 3ecreturIut], becuuse they huve u dIerent mentulIty.
It's our ImpressIon thut they leel thut It's theIr money und they huve to control." They leel u
dIstunce becuuse lor un [nonpurtIsun] orgunIzutIon lIke Tosepun, Il you don't huve purty colors,
then euch purty treuts you lIke you're wIth the other one." Vegetuble growers In Texmelucun
ulso huve problems wIth treutment by ugrIculturul omcIuls: we're In theIr hunds. there Is un
ImplIcIt understundIng: they uct lIke they ure provIdIng servIces to us und we uct lIke we ure
llIng out the puperwork." In Cuerrero, u CNC representutIve reported thut they huve not re-
ceIved uny benet us un orgunIzutIon [lrom Procumpo]," ugrIculturul omcIuls don't provIde uny
InlormutIon to the orgunIzutIon, It's un operutIon ol the bureuucrucy." Indeed, the progrum wus
desIgned to reuch IndIvIduul producers dIrectly, und locul ugrIculturul omcIuls ohen do not up-
prove ol producer orgunIzutIons helpIng theIr members deul wIth udmInIstrutIve Issues, theIr
4
Benecary Percegtons ot the Procamgo Program

contrIbutIon Is lImIted to provIdIng InlormutIon to theIr members. Nevertheless, some orgunI-


zutIons ure Interested In promotIng ulternutIve upprouches. In the cuse ol UNORCA - Cuerrero,
lor exumple, the progrum's muIn benet would be lor producers to upproprIute It to cupItulIze
themselves, to Increuse productIve cupucIty und yIelds wIth more Integruted proects."
Procumpo Imposes costs on purtIcIpunts, such us trunsportutIon, lood und the truvel tIme Invol-
ved In goIng buck und lorth lrom government ugencIes. Yet most producers dId not experIence
these trunsuctIon costs us onerous, regurdless ol the umount they receIved lrom Procumpo. At
the sume tIme, less thun hull reported thut It wus eusy" to deul wIth the progrum, u plurulIty
reported deulIngs us so-so" (rcguInr") und u smull mInorIty consIdered It dImcult." When usk ed
whether progrum benets were worth the tIme und energy Involved, u muorIty reported more
or less" (rcguInr"). An IndIgenous producer lrom MuosIk, ChIupus put It thIs wuy: I thInk thut
the progrum requIres u lot ol puperwork, but I thInk It's luIr lor the government to usk lor It.
They usk lor 5 documents. Muybe the only chunge there should be Is lor the support to come
down In Murch or AprIl." Indeed, the Issue ol deluyed puyments cume up ohen. As u producer
In 3un MurtIn Texmelun, Pueblu observed belore they guve the support In AprIl, now In Oc-
tober or November. By thut tIme It's only good lor u lew beers, Insteud ol u bug ol lertIlIzer.
The puyment should urrIve In tIme, or It gets dIverted." The ex-vocul lrom Cuetzulun, Pueblu
noted thut belore, u lot ol the money ended up In the burs, but not uny more. 3ometImes It's
lute, though It comes quIckly In electIon yeurs. 3ometImes you get It In Muy, sometImes In
October. It's greut when It comes ut the begInnIng ol the hurvest. It's u mutter ol plunnIng."
Another producer lrom Teneupu, ChIupus udded In spIte ol the luteness und so much red tupe,
we expect It becuuse It's Income lor the lumIly. We're worrIed becuuse we don't huve much
Income. 3omethIng Is somethIng." Yet lor some lumIlIes, lulllIng the Procumpo requIrement
to keep the plot In productIon Is u losIng proposItIon. As one producer lrom 3un Jos del Pro-
greso, Ouxucu, put It: You huve to put so much In, und we don't get buck even u quurter ol whut
the crop cost to produce." As u producer In Atengo JulIsco, put It, dumn It, the puyments they
gIve us ure so tIny, ust enough to not get too depressed, only u consolutIon prIze."
Almost 90% ol those IntervIewed expressed Interest In the progrum's operutIons, but the vust
muorIty ol those IntervIewed dId not know theIr omcIul Procumpo producer number, nor the
number ol theIr plot. Most reculled how much they receIved In the pust, but not how much or
when theIr next puyment wus comIng. More thun 40% reported thut they only leurn ubout
chunges In the umount ol theIr puyment when the check comes. Only 40% reported huvIng
receIved omcIul communIcutIons lrom the progrum, whut InlormutIon they receIve Is usuully
verbul or lrom the cjJo leuder or ugrIculture mInIstry stu. Lower-Income producers were
more lIkely to receIve only verbul InlormutIon. IndIgenous producers were more lIkely to re-
ceIve InlormutIon lrom theIr vocnIns. When usked whether they knew how to request Inlor-
mutIon ubout how progrum resources ure hundled, 82% suId no. When usked whether they
consIdered progrum operutIons to be trunspurent und uccountuble, only 30% suId yes, 60%
suId no, und the rest dIdn't know.
In Cuerrero, the UNORCA representutIve reported thut Procumpo purtIcIpunts huve not hud
uccess to InlormutIon ubout Procumpo operutIons. [the progrum] Is not very trunspurent. We
know ubout It lrom muguzInes or publIcutIons, one nds u putrImonIul" uttItude towurd pro-
grum InlormutIon." The Cuerrero CNC leuder ugreed: the progrum Is currIed out only by om-
cIuls, they don't provIde InlormutIon ubout how It operutes In Cuerrero. They ust Inlorm when
the puyments ure reudy, nothIng else."
3. COMMUNITY OVER5ICHT: VOCALE5
In prIncIple, Procumpo's system ol communIty oversIght commIttees und producer lIuIsons Is sup-
posed to encouruge both trunspurency und uccountubIlIty In progrum operutIons. However, omcIul
Procumpo progrum evuluutIons huve not uddressed the questIon ol to whut degree the vocnIns
uctuully exIst In pructIce, nor the degree to whIch they ure uble to comply wIth theIr mundute.
3
The
results ol thIs survey IndIcute thut In pructIce, the system hus lullen lur short ol Its potentIul.
In muny ureus the communIty oversIght body, represented by the vocnI, dId not exIst In pructIce, espe-
cIully In ureus wIth predomInuntly prIvute property. Producers there hud lIttle communIty Invol-
vement, und dId not recull ever huvIng dIscussed progrum chunges wIth other progrum purtI-
cIpunts. Il they wunted progrum InlormutIon, they went personully to the regIonul omce ol the
AgrIculture 3ecreturIut, or usked cjJo or munIcoul leuders. 3ome mentIoned thut Procum po vocnIcs
3 Omclally, ^SLRC^ defnes vocolos" as havlng apparently extenslve power: 1he producers are lnvolved ln the defnltlon
and lmplementatlon of the program's substantlve actlvltles and oversee the allocatlon of resources through control and
overslght commlttees and Procampo's soclal control vocolo. 1hese representatlves ratlfy the destlnatlon of the payments
aher confrmlng that the authorlzed appllcatlons comply wlth the requlrements stlpulated ln the Procampo regulatlons."
Clor|JoJcs /ropccuor|os, No. 121, Sept. 2003, p. 20. See also Hevla (thls volume)
Subsdzng 1neguaIty

were numed ut rst, In the cjJos, but thut the posItIon wus generully ussIgned to exIstIng cjJo und
prIvute lurmer leuders, who hundled the progrum ut theIr dIscretIon wIthout InlormIng purtIcIpunts.
In IndIgenous communItIes, In contrust, ull ol the producers IntervIewed knew who theIr vocnI
wus und knew somethIng ol theIr mIssIon. ThIs puttern wus lound In IndIgenous regIons ol
ChIupus, Ouxucu und JulIsco, und hud been the cuse In IndIgenous regIon ol Pueblu untIl the
vocnIcs' luck ol emcucy led orgunIzed producers to lose luIth In them. Yet producers' wIllIng-
ness to serve In thIs progrum oversIght und lIuIson role does not meun thut they huve the In-
lormutIon und power necessury to exercIse un oversIght role eectIvely. One Procumpo vocnI
lrom un eIdo In ChIupus reported:
As u vocul ol my commIttee I uttend meetIngs lrequently In the Teneupu county seut, but they
gIve us lIttle InlormutIon ubout the procedures. Aherwurds we meet us u commIttee wIth ull the
members here In the communIty.
PurtIcIpunts compluInts, whIch ure sometImes chunneled through vocnIcs, tend to Involve the
deluyed delIvery ol puyments.
In Pueblu, un ex-vocnI reported thut the InItIul selectIon process worked democrutIcully, ut leust
In the IndIgenous regIon ol Cuetzulun. The progrum oversIght process wus Incorporuted Into the
pre-exIstIng purtIcIputory sub-munIcIpul vIlluge governunce structure, the munIcIpul uuxIlIury
bourds." Both cjJo members und smull lurmers proposed cundIdutes, voted und numed the vo-
cnIcs. The representutIve ol the Tosepun cooperutIve reculled thut the vocnIcs were chosen In un
ussembly, und In some wuys Tosepun contrIbuted to thIs.. Over tIme, though, they begun to
IrrItute the AgrIculture 3ecreturIut, und those who hud vested Interests." For exumple, In the eurly
yeurs Tosepun orgunIzers und vocnIcs revIewed the lurge prIvute plots thut were sIgned up,
even though they were not In productIon. When we delIvered the results, In the Rurul Devel-
opment DIstrIct omces they looked the other wuy."
In the experIence ol the vegetuble producers In Ouxucu, theIr vocnIcs were ulso numed In lront ol
the communIty," but they udded thut they never rotuted, nobody should be In u posItIon permu-
nently, only PorrIo Duz, und then they never cull u meetIng." At the sume tIme, they udmItted
sometImes producers ure uputhetIc, und thut Is convenIent lor the government." A member ol
thIs orgunIzutIon udded thut the vocnIcs ure no more thun lormulItIes. nothIng huppens wIth
the omcIul chunnels, ust wIth one's buddIes. [thut's why] we huve hud to get mobIlIzed, we've
uchIeved the supports we've gotten through [stute level] mobIlIzutIons" (though they clurIly thut
they neIther blockude nor occupy government omces. The CNC leuder In Cuerrero mude u sImIlur
poInt: us un orgunIzutIon we ure plurulIstIc, there ure groups lrom ull the polItIcul purtIes, und
we huve to support them so thut they get uttentIon lrom the AgrIculture 3ecreturIut. [whut we
huve to do Is] to pressure the omcIuls so thut they delIver the resources on tIme."
4. PERCEPTION5 OF INEQUALITY
The unequul dIstrIbutIon ol Procumpo's benets Is very trunspurent to purtIcIpunts. ThIs Is lo-
gIcul, gIven the nuture ol the progrum's per hecture puyments, but muny producers ulso guve the
ImpressIon thut they perceIved u certuIn InustIce, Insolur us lurge lundowners receIved lurge
checks, whIle smullholders hud to muke do wIth puyments thut were too smull to chunge theIr
structurul condItIon. From theIr perspectIve, Procumpo dId not contrIbute to uddressIng theIr po-
verty, whIle It helped those who ulreudy hud resources to concentrute even more cupItul. As u
producer In 3un MurtIn Texmelucun, Pueblu, put It:
It's good lor the lundowner, lor those who huve us much us 200 hectures, ust ImugIne how much
they get. They'll suy 'wIth my Procumpo puyment I'll get me u tructor' und wIll stIll huve some
leh over. And the guy who's screwed, when He stuys screwed.
ThIs perspectIve wus shured by the representutIves ol producer orgunIzutIons. In the cuse ol
UNORCA-Cuerrero, they mentIoned Procumpo's gouls, observIng thut the progrum meets Its
goul ol supportIng the productIon ol corn, but the peusunts uren't uble to reuch the progrum's
other obectIves." The CNC representutIve In Cuerrero noted thut
Procumpo Is good, but It hus not met Its gouls, ubove ull those InvolvIng the orgunIzutIon ol pro-
ductIon und murketIng. The extru money lrom Procumpo helps wIth subsIstence, but doesn't
Inuence productIon, chungIng crops, or orgunIzutIonul development. It's u mInImul support lor
the peusunts' busIc needs, but It's not enough to get beyond subsIstence.
The representutIve ol the UnIn NucIonul de Fomento, ProduccIn y ComercIulIzucIn udded
thut Procumpo doesn't benet the smull producer who hus one or two hectures, It doesn't pull
them out ol the hole, und doesn't Improve theIr wuy ol lIle. lor the smull producer It's u lot ol
red tupe lor very lIttle money."
4
Benecary Percegtons ot the Procamgo Program

BCX 8:
THE EXPERIENCE OF WIXARITARI HUICHOL
INDICENOU5 COMMUNITIE5 IN JALI5CO WITH
PROCAMPO
Maurtctc Maldcnadc (ITE5U)
Three HuIchol communItIes In JulIsco huve enguged wIth the Procumpo progrum In theIr
own wuy. They regIstered lor the Procumpo us u group, receIved u block puyment und
then dIstrIbute the lunds umong members ol theIr ugrurIun communItIes. These IndIgenous
communItIes hold group lund rIghts, und the members (comuneros") ure not IndIvIduul
owners ol specIc purcels. Members do hold IndIvIduul prIvute property, however, und In
pructIce euch lumIly's plots ure cleurly ussIgned, ohen wIth lences.
These communItIes shure more thun lund rIghts, they ulso shure u brouder sense ol com-
munIty membershIp (communulIty) In un uncestrul domuIn. Lund Is not seen only us u
luctor ol productIon. TheIr Ideu ol shured terrItorIulIty Is cuptured In the HuI chol term tn
kcknr, meunIng our home, our home lor everyone.
Members meet every three months In generul ussemblIes to dIscuss shured concerns, es-
pecIully those reluted to lund tenure und government progrums. In thIs context, the Pro-
cumpo puyment becomes u publIc Issue lor communIty dIscussIon. PurtIcIputIon In the
progrum Is therelore regIstered eIther under the nume ol the entIre ugrurIun communIty
or under the nume ol the elected ugrurIun commIssIoner ut the tIme. For exumple, the
Procumpo regIstry lIsts 843 hectures under IndIgenous CommunIty ol 3un Andres Co-
humIutu." ThIs Is ust us legul us the regIstrutIon ol prIvute rms under Procumpo, though
less common. TheIr own nume lor theIr communIty Is TuteI-KIe" (whIch meuns lu cusu
de nuestru mudre").
The commIssIoner, together wIth the rest ol the ugrurIun communIty leudershIp, Is respon-
sIble lor convenIng the ussembly In whIch the resources ure shured umong communIty
members. ThIs ussembly Is one ol the most celebrutory und well-uttended ol the yeur.
Resources ure dIstrIbuted equully to members In good stundIng, wIthout the conventIo-
nul verIcutIon ol whether euch plot hud been plunted thut yeur. In the duys belore the
ussembly, locul merchunts stock up, In prepurutIon lor Increuse consumer demund lor
beer und lood.
5. CONCLU5ION5
Producers tend to huve u very prugmutIc uttItude towurd the progrum. It Is seen us benecIul,
smull but uselul. Ruther thun beIng seen us u compensutory entItlement, the puyments ure
seen us dependIng on the dIscretIonury goodwIll ol the government. ThIs generutes u puttern
ol dependence on government, ugrIculturul ugency stu In purtIculur, most ohen delInked
lrom shured processes thut could bolster producer purtIcIputIon und co-responsIbIlIty. In muny
regIons, benecIurIes" dId not see vulue In the omcIul chunnels lor trunspurency und uccount-
ubIlIty. As long us theIr checks kept comIng, lew producers were Interested In these lormul
procedures. They dId express Interest In beIng up to dute" on the progrum, ut leust In terms ol
dutes und umounts ol puyments. In pructIce, lor these pructIcul reusons, they dId express Interest
In trunspurency und uccountubIlIty - but prImurIly understood In terms ol theIr own Inlormul
pructIces or pre-exIstIng chunnels lor representutIon. Notubly, where producer orgunIzutIons
represent theIr members, they ulso trunsmIt not only InlormutIon, but ulso provIde udvIce,
expluIn the context und encouruge producer dIscussIon ubout Procumpo.
The muIn omcIul chunnel lor producer voIce In Issues ol progrum trunspurency und uccountubI-
lIty, the vocnIn, wus ohen eIther IneectIve or non-exIstent. Insteud, cjJo leuders were ohen
churged wIth deulIng wIth Procumpo lollow-up on behull ol theIr constItuencIes. In severul In-
dIgenous regIons, In contrust, engugement wIth the progrum wus Incorporuted Into pre-exIstIng
InstItutIons ol communIty sell-governunce, most notubly through theIr uctIve upproprIutIon ol
the vocnIn us u producer Interluce wIth the progrum. In these communItIes, where the role ol the
vocnIn wus wIdely-understood, producers ulso knew more ubout progrum operutIons, suggestIng
greuter uccess to InlormutIon thun In communItIes wIthout uctIve vocnIns.
Subsdzng 1neguaIty

These ndIngs show thut the progrum does not strengthen cItIzenshIp, In the sense ol exercIsIng
rIghts through purtIcIputIon In or oversIght ol the use ol publIc resources. Insteud, the progrum
tends to weuken socIul cupItul, encourugIng euch IndIvIduul to locus on theIr smull IndIvIduul
unnuul check ruther thun on how to bolster the progrum's uccountubIlIty und trunspurency
more generully. ThIs leuds producers to look the other wuy, tolerutIng certuIn IrregulurItIes In
order to uvoId eopurdIzIng theIr uccess to the puyment. Indeed, In the process ol IntervIewIng
Procumpo purtIcIpunts, they ohen expressed leur thut expressIng themselves could leud theIr
puyments to be reduced or even cut o.
Procumpo Is ohen relerred to us u support," or u help," In the sense ol u gIh lrom the govern-
ment. NotIons ol how gIhs ure receIved, InherIted lrom MexIco's culturul legucy, ure ussocIuted
wIth dependence on the goodwIll ol elItes und u luck ol rIghts. ThIs context helps to expluIn why,
In muny dIerent regIons, Procumpo wus descrIbed In terms ol wIdely-used lolk proverbs,
such us A qun Ic Jnn pnn, quc IIorc, [Who crIes lor beIng gIve breud] or "n cnbnIIo rcgn InJo
no sc Ic vc cI coImIIo" [don't look u gIh horse In the mouth]. These phruses reect uttItudes
dIrectly reluted to uccountubIlIty und trunspurency - thut one should thunk the government
lor doIng the luvor ruther thun compluIn. As one AgrIculture 3ecreturIut udvIsor put It, we ure
creutIng u culture ol beggurs."
The eld reseurch dId not nd uny evIdence ol InstItutIonul Interest In encourugIng greuter
trunspurency or uccountubIlIty. OmcIuls use these terms, but they do not emphusIze uctIons on
the ground, such us encourugIng the lIng ol compluInts. The closest ugrIculturul progrum lInk to
producers Is the CADER, und stu ure very prugmutIc, complyIng wIth mInImum progrum rules.
These producer IntervIews IndIcute thut Procumpo hus only purtIully met some ol Its gouls. It
hus delIvered dIrect puyments, decoupled lrom the volume ol productIon und type ol crop, but
muny plots were leh out, und most Importuntly, muny producers. For muny purtIcIpunts, the
resources ure InsumcIent to support the progrum's other gouls. The progrum contrIbuted to
lumIly Income, but dId not chunge theIr sItuutIon ol poverty. Moreover, lundless lurmworkers
und muny smull-scule renters were not Included. Only In u lew cuses dId the progrum encour-
uge rurul orgunIzutIon, und then only becuuse pre-exIstIng representutIve groups enguged, ol-
ten In spIte ol the opposItIon or IndIerence ol the regIonul representutIves ol the AgrIculture
3ecreturIut.
The ndIngs ol thIs pIlot survey suggest ut leust two muIn Issues lor luture reseurch, In order
to Inlorm u more strutegIc upprouch to trunspurency und uccountubIlIty.
l 3tudy wuys ol revItulIzIng und strengthenIng the role ol the voculu, throughout the coun-
try, not only In Its current omcIul role In terms ol socIul oversIght, but ulso, lollowIng the
model lrom IndIgenous communItIes, us u lormul lIuIson between orgunIzed producers und
the ugency responsIble. ThIs would open up two-wuy chunnels ol communIcutIon, Inlormu-
tIon und dIulogue, und In the process could chunge everyduy pructIces so thut trunspurency
und uccountubIlIty would muke sense to producers. ThIs would Involve u chunge In the gov-
ernment's upprouch, sInce currently the voculus exIst muInly only on puper.
2 Anulyze wuys to encouruge ugency colluborutIon wIth regIonul orgunIzutIons to desIgn und
luunch ulternutIve upprouches to promote both InlormutIon ow und more eectIve Invest-
ment ol progrum resources. The current progrum desIgn chunnels resources prImurIly to
IndIvIduuls. Yet socIul orgunIzutIons could be encouruged to generute proposuls lor socIul
oversIght, trunspurency, or more eectIve use ol the resources, udupted to the specIcs ol
euch regIon In order to buIld on exIstIng socIul cupItul.
BIBLIOCRAPHY:
Muldonudo, MuurIcIo (20l0) A quIn le dun pun, que llore PercepcIones de benecIurIos del progrumu
Procumpo," Mcxcnn RurnI 0cvcIopmcnt Rcscnrch Rcports, No. 4, Woodrow WIlson InternutIonul Cen-
ter lor 3cholurs, MexIco InstItute, www.wIlsoncenter.org/DesurrolloRurulMexIcuno
S

S
Farm subsdy
recgent Ists:
A case ot cIear or
ogague transgarency7
Lbby Haght
5NIVERSITY OF #ALIFORNIA 3ANTA #RUZ
)NTERNATIONAL "UDGET 0ARTNERSHIP
}cnathan Fc
5NIVERSITY OF #ALIFORNIA 3ANTA #RUZ
S
Farm Subsdy Recgent Lsts

MexIcun luw requIres thut lederul ugencIes publIcly dIsclose busIc InlormutIon ubout theIr
operutIons, IncludIng theIr rosters ol subsIdy recIpIents.
l
In prIncIple, thIs mundute ullows
cItIzens to detect possIble unomulIes In how publIc lunds ure dIstrIbuted through these progrums,
both ut the level ol IndIvIduuls und In terms ol brouder dIstrIbutIonul putterns. In thIs wuy,
governmentul trunspurency creutes the potentIul to encouruge publIc sector uccountubIlIty.
PublIc uccess to the omcIul lIsts ol recIpIents ol MexIco's muIn ugrIculturul subsIdy progrums
hus put thIs hypothesIs to the test through un Intense publIc debute, trIggered by press coveru ge
und u cIvIl socIety proect culled MexIcun Furm 3ubsIdIes." ThIs proect, locuted onlIne ut www.
subsIdIosulcumpo.org.mx, Is hosted by the publIc Interest group Fundur, Center lor AnulysIs
und Reseurch und ulso Involves ucudemIcs und peusunt orgunIzutIons. The proect Is bused on
the omcIul dutubuses ol the Procumpo und Ingreso ObetIvo lurm subsIdy progrums (publIcly
uvuIluble thunks to the Federul Trunspurency und PublIc InlormutIon Access Luw, LFTAIC) und
presents the dutu In u much more uccessIble lormut (lor reusons thut wIll be expluIned below).
The presentutIon ol the omcIul dutu In thIs lormut mukes It possIble to do seurches, und ullows
the publIc to leurn detuIls ubout these subsIdy puyments, showIng who receIves how much,
where und lor whut. The websIte's unulysIs ol the omcIul dutu ulso reveuls the puyments' dIs-
trIbutIon putterns. The dutu shows, lor exumple, thut even Procumpo, the AgrIculture MInIstry
(3ugurpu) progrum thut Is the most pro-poor, hus u very unequul dIstrIbutIon ol puyments.
ThIs websIte proect, together wIth MuurIcIo MerIno's unulysIs (thIs volume), uttructed medIu
Interest In knowIng more ubout the dIstrIbutIon ol these publIc resources. The dIscussIon wus
led by the nutIonul newspuper LI UnvcrsnI In July, 2009 und uguIn In Februury, 20l0, und wus
tuken up by other nutIonul und locul medIu.
2
ThIs coveruge led to questIonIng und Independent
ussessments ol the uctuul dIstrIbutIon ol Procumpo und Ingreso-ObetIvo subsIdIes - though
the rst ol these two progrums hus been operutIng lor l5 yeurs. AnulysIs ol the current ben-
ecIury lIsts ruIsed the questIon ol whether these progrums were lulllIng theIr orIgInul gouls.
The ournulIsts' InvestIgutIon produced u serIes ol InuentIul reports thut reveuled thut the
omcIul progrum benecIury lIsts Included the numes ol well-known ugrIculturul sector polIcy-
mukers, us well us the numes ol relutIves ol ulleged drug deulers.
3
ThIs led to medIu dIscus-
sIon ol the wuys In whIch Procumpo und Ingreso-ObetIvo huve reully been operutIng durIng
ull these yeurs, und members ol MexIcun socIety begun to usk whether these progrums were
usIng publIc resources In the most upproprIute wuy.
FollowIng the InstItutIonul commItment to the tImely publIcutIon ol certuIn dutu on the dIs-
trIbutIon ol omcIul subsIdIes, thIs sIgnIcunt udvunce towurds open government leuds quIckly
to u second generutIon" ol questIons, lurgely InvolvIng the qunIty ol trunspurency. 3ome In-
lormutIon dIsclosure strutegIes generute more publIc uccess thun others. Indeed, some open
government meusures ure so lImIted thut they luck the combInutIon ol uccessIbIlIty, consIs-
tency und relIubIlIty thut ure needed lor trunspurency to lulll Its potentIul to encouruge uc-
countubIlIty.
The medIu coveruge ol the celebrIty benecIurIes ol Procumpo und Ingreso-ObetIvo subsIdIes
Included dIscussIon ol the relutIonshIp between trunspurency und uccountubIlIty, especIully
lrom the perspectIve ol the lImIts ol the omcIul InlormutIon. As wIll be seen below, the omcIul
dutu do not present enough InlormutIon to conrm whether u nume on the lIst reully relers to
the specIc person thut It uppurently IdentIes. In other words, the luct thut the nume ol the
current 3ecretury ol AgrIculture, FruncIsco Muyorgu, comes up us u Procumpo benecIury does
not necessurIly meun thut It Is uctuully the 3ecretury hImsell, becuuse It could reler to un-
other person wIth the sume nume. In thIs cuse, when the medIu reported the substuntIul
umount ol government lundIng thut the current 3ecretury und hIs lumIly receIved durIng hIs
perIod ol servIce us u publIc omcIul In the ugrIculturul sector, Muyorgu conrmed thut the
nume on the lIst wus Indeed hIs (Hernndez 20l0, ArvIzu 20l0). He went on to delend hIs rIght
to be u progrum benecIury, urguIng thut government omcIuls huve the rIght to subsIdIes Il
they ure lurmers (In spIte ol the rules thut prohIbIt conIcts ol Interest). AccordIng to the 3ec-
retury, I don't thInk there Is uny reuson to gIve them up, not even lor ethIcul reusons" (ArvIzu
20l0). In contrust, MerIno cItes the ubsolute prohIbItIons In the AgrIculture MInIstry's rules
ol operutIon, publIshed In December, 2007, und those whIch uppeured much eurlIer In ArtIcle
8 ol the Federul Luw ol AdmInIstrutIve ResponsIbIlItIes ol PublIc 3ervunts" (MerIno 20l0).
MerIno lurther contends thut ulthough there ure legul Ins und outs to uvoId sunctIons lor re-
ceIvIng subsIdIes, lrom the ethIcul poInt ol vIew, thIs Is evIdently u reprehensIble posItIon"
1 ^rtlcle 7 of the Federal 1ransparency and ^ccess to lnformatlon Law (LF1^lPC ln Spanlsh) clearly detalls the lnformatlon
subect to mandatory dlsclosure requlrements. enefclary llsts for federal subsldy programs are speclfed under thls clause
for pro-actlve dlsclosure. ln other words, thls lnformatlon must be made publlc by any federal agency operatlng a subsldy
program on thelr webslte, wlthout requlrlng that an lnterested party fle an lnformatlon request.
2 Notably, see the work of Lvangellna Hernndez and lgnaclo ^lvarado, of fl Un|vcrsols lnvestlgatlve Unlt.
3 See the two serles ln fl Un|vcrsol at: http://www.elunlversal.com.mx/grafcos/especlal/LU_procampo/hlstorlco.html (for uly
2009 coverage), and http://www.elunlversal.com.mx/grafcos/especlal/LU_procampo (for the February 2010 coverage).
Subsdzng 1neguaIty

(Hernndez 20l0).
4
MeunwhIle, MerIno observes thut the 3ecretury ol PublIc AdmInIstrutIon
prelers to turn the Issue over to the stute government's oversIght ugencIes" (MerIno 20l0).
MeunwhIle, us one mIght ImugIne, when the medIu poInted out the presence ol relutIves ol ulleged
drug deulers on the Procumpo subsIdy lIsts, It wus not possIble to get the sume kInd ol de
lucto conrmutIon In the lorm ol publIc stutements by the uccused." As u result, one cunnot
cluIm wIth l00% certuInty thut the numes on the lIst correspond to the specIc IndIvIduuls
who uppeur to be IdentIed. However, the luct thut there could be doubts ubout the precIse
IdentItIes ol subsIdy benecIurIes Is u cleur exumple ol the lImIts ol whut uppeurs to be truns-
purency, us well us Its dIsconnect wIth uccountubIlIty.
ThIs ruIses Importunt Issues lor the brouder debute ubout the potentIul lor u more trunspurent
publIc sector to leud to lull uccountubIlIty. FIrst, one must recognIze thut the medIu coveruge
(though lImIted by the emphusIs on exposIng scundul) opened up to debute the Issue ol how
subsIdy progrums dIstrIbute publIc resources, sImply by uskIng whether the current benecIurIes
ure those who should reully be receIvIng these lunds. 3econd, these revelutIons und dIscussIons
could be u step towurds u brouder publIc debute regurdIng government omcIuls who receIve
publIc subsIdIes lrom progrums In theIr own sector - the Issue ol conIct ol Interest. ThIrd, the
debute over who Is on the subsIdy lIsts trIggered lurger questIons ubout the progrums' perlor-
munce. ThIs poInts to the nurrow ugendus ol the omcIul evuluutIons ol Procumpo und Ingreso
ObetIvo, Insolur us these progrums' evuluutIons huve not uddressed theIr luck ol trunspurency,
nor theIr reul Impucts In MexIcun socIety. Moreover, the cuse ol the publIc debute over Procum-
po und Ingreso ObetIvo shows thut ulthough trunspurency cun Inlorm the dIscussIon ol the
Impuct ol governmentul progrums und where publIc lunds go, thIs debute hus yet to be Inlormed
by the Involvement ol other InstItutIons, such us the udIcIury und the congress, whIch could
begIn the long trunsItIon to uccountubIlIty.
In thIs context, thIs study presents the results ol detuIled Independent unulysIs ol the nuture
und quulIty ol publIc dutu In the lIsts ol recIpIents ol MexIco's muIn lurm subsIdy progrums,
IncludIng but not lImIted to Procumpo und Ingreso ObetIvo. The study Is bused on u serIes ol
publIc InlormutIon requests sent to A3ERCA, lormul uppeuls ol denIuls ol InlormutIon requests,
und unulysIs ol omcIul dutu mude possIble through the new, Independent on-lIne dutubuse,
www.subsIdIosulcumpo.org.mx. Beyond determInIng whether the numes on the benecIury lIsts
correspond to specIc IndIvIduuls, the goul Is to estublIsh, though un Independent evuluutIon
ol publIc progrums, the degree to whIch omcIul trunspurency Is meetIng Its goul ol provIdIng
the publIc wIth quulIty, relIuble InlormutIon.
In summury, thIs ussessment lound thut A3ERCA's dIsclosure meusures lor Its two muIn lurm
subsIdy progrums uppeur to be very trunspurent ut rst, but upon closer exumInutIon they ure
quIte opuque. In uddItIon, muny ol MexIco's other lurm subsIdy progrums lull short ol even the
uppeurunce ol trunspurency. In generul, ull ol A3ERCA's subsIdy progrums shure two cross-
cuttIng problems, InvolvIng the quulIty ol publIc dutu: InconsIstency In the presentutIon und
luck ol precIsIon regurdIng who the benecIurIes ure und how much they receIve.
- One key InstItutIonul construInt Is thut euch government ugencyund euch progrum wIthIn
euch ugencyorgunIzes und dIssemInutes theIr recIpIent InlormutIon dIerently. The lederul
trunspurency luw (LFTAIPC) does not set mInImum stundurds lor quulIty und consIstency
ol omcIul dutu. Furm subsIdy polIcy Is more trunspurent thun It wus belore open govern-
ment relorms, but the InconsIstency In the presentutIon ol the dutu contInues to prevent
externul observers lrom determInIng exuctly who gets whut lrom more thun one progrum.
- In uddItIon, lurm subsIdy dutu does not consIstently reveul how much money IndIvIduuls or
enterprIses receIve lrom euch progrum. Even the two most trunspurent subsIdy progrums,
Procumpo und Ingreso-ObetIvo, present dutu thut show the umount ol euch puyment to
euch regIstered recIpIent. Yet IndIvIduuls or enterprIses cun be regIstered more thun once,
whIch meuns thut the publIc dutu unJcrstntcs the concentruted dIstrIbutIon ol subsIdy puy-
ments. At the sume tIme, the omcIul regIstrutIon system ullows groups ol producers to
regIster together us one recIpIent (us In the cuse ol the Rurul ProductIon 3ocIetIes, lor ex-
umple), whIch would leud the dutu to ovcrstntc the degree ol concentrutIon ol puyments. In
other words, thIs wuy ol presentIng the dutu on who receIves subsIdIes Is dIstorted In two
opposIte dIrectIons ut the sume tIme. As u result, It Is not cleur whether, on bulunce, the
omcIul dutu overstutes or understutes the concentruted putterns ol dIstrIbutIon ol lurm
subsIdIes. UntIl omcIul lurm subsIdy dutubuses dIsclose how much publIc money goes to
euch IndIvIduul, It wIll not be possIble lor the publIc to know who gets whut In lurm sub-
sIdy puyments.
4 For addltlonal detalls, see Merlno (thls volume).
S
Farm Subsdy Recgent Lsts

l. PUBLIC ACCE55 TO FARM 5UB5IDY DATA


The mundutory dIsclosure ol recIpIent lIsts requIred by the lederul trunspurency luw (LFTAIPC)
hus Increused publIc uccess to InlormutIon ubout who Is gettIng whut lrom A3ERCA's two lurgest
lurm subsIdy progrums, Procumpo und Ingreso ObetIvo. More InlormutIon Is currently uvuIluble
onlIne thun ever belore ubout euch progrum's subsIdy recIpIents, ut leust lor those specIulIsts
wIth the skIlls necessury to nuvIgute omcIul dutubuses. However, the lederul trunspurency luw
Includes no requIrements regurdIng how euch ugency, or euch progrum wIthIn euch ugency,
orgunIze und present theIr InlormutIon. The luw requIres ugencIes to publIsh whntcvcr Inlor-
mutIon Is currently In theIr possessIon regurdIng subsIdy recIpIents, however thut InlormutIon
muy be orgunIzed or presented. They ure not requIred to gcncrntc InlormutIon thut Is not cur-
rently In use by the ugency.
5
ThIs luck ol mInImum stundurds und consIstent lormut Is un
obstucle to publIc scrutIny ol these publIc expendItures.
Becuuse ol InstItutIonul lImItutIons, though muny lurmers und ugrIbusInesses receIve subsIdIes
lrom multIple progrums ut the sume tIme, the current InlormutIon dIsclosure system prevents
observers lrom knowIng exuctly who gets whut lrom more thun one progrum. The cuuse ol thIs
opucIty Is thut euch ol the dIerent ugrIculturul ugencIes und progrums use theIr own lIsts lor
keepIng truck ol subsIdy recIpIents. In uddItIon, most progrums ussIgn subsIdy recIpIents theIr
own sepurute IndIvIduul IdentIcutIon number, whIch prevents unulysIs ol who gets whut lrom
more thun one progrum. PolIcymukers huve suggested thut they plun to uddress thIs Issue, but
us ol eurly 20l0, tungIble chunges huve yet to be seen. ThIs combInutIon ol the luck ol u unI-
versul subsIdy recIpIent IdentIcutIon number or u centrulIzed benecIury lIst thut Includes ull
the relevunt progrums greutly complIcutes the extent to whIch current open government re-
lorms cun bolster uccountubIlIty In lurm subsIdy progrums.
Most progrums present theIr InlormutIon ubout lurm subsIdy recIpIents wIth u hIgh degree ol
Internul homogeneIty, us wIll be dIscussed below. In the best cuses, progrums ussIgn lurmers
un IdentIcutIon number specIc to thut progrum, whIch remuIns somewhut consIstent over
tIme und therelore ullows some truckIng ol subsIdy puyments to lurmers ucross yeurs wIthIn
thut progrum. However, thIs Is not ulwuys the cuse, und Independent unulysIs ol benecIury
lIsts lound exumples ol dIrect-puyment subsIdy progrums whose recIpIent lIsts do not Include
unIque lurmer IdentIcutIon numbers, und therelore do not even ullow truckIng ol puyments
ucross yeurs wIthIn the sume progrum.
Overull, It Is currently ImpossIble to know the uggregute umount ol subsIdIes thut uny one lurm-
er receIves ucross progrums lor uny yeur wIth uny certuInty. 3Ince, ut best, the ID number us-
sIgned to u lurmer Is unIque only to one specIc progrum ut u tIme, It Is quIte possIble thut u
lurmer hus dozens ol dIerent ID numbers when receIvIng lundIng lrom multIple progrums,
und/or severul puyments wIthIn u gIven progrum. 3Ince progrums ure not currently requIred to
publIsh InlormutIon thut IdentIlyIes euch IndIvIduul lurmer, there Is no wuy to know wIth
certuInty whether the sume nume, eIther wIthIn u progrum or ucross progrums, Is Indeed the
sume person or u cuse where two dIerent people huve IdentIcul numes.
ThIs Issue hus guIned sIgnIcunce, us government responses to publIc InlormutIon requests
huve consIstently urgued thut uddItIonul InlormutIon permIttIng the IdentIcutIon ol lurmers
beyond the publIcutIon ol theIr numes Is eIther unuvuIluble, or not subect to omcIul trunspur-
ency requIrements.
6
WhIle It Is Importunt thut IndIvIduuls' prIvute personul InlormutIon be
protected, Il It Is true thut IdentIlyIng InlormutIon on IndIvIduul lurmers Is unnvnInbIc (meun-
Ing thut government hus not guthered thIs InlormutIon, regurdless ol whether publIshIng It
vIolutes prIvucy cluuses), thIs would Imply thut even the government Is unuwure ol how much
lundIng uny one lurmer Is receIvIng lrom the whole runge ol lurm subsIdy progrums.
The lollowIng sectIon presents the results ol un Independent ussessment ol publIc uccess to
recIpIent dutu lor euch ol MexIco's muIn lurm subsIdy progrums,
- Prccampc, Mextcc's largest dtrect payment agrtcultural substdy prcgram represent-
tng cver 60% cf A5ERCA's budget (cver 20% cf 5agarpa's tctal budget), publtshes
by far the mcst ccmprehenstve farm substdy tnfcrmattcn avatlable. Currently,
A3ERCA publIshes und lrequently updutes the lull recIpIent lIsts lor Procumpo onlIne, lor
ull ol the over 2 mIllIon regIstered benecIurIes ol the progrum sInce Its InceptIon In l994.
7

ThIs InlormutIon Is eusIly downlouduble In Excel, und Includes detuIled dutu on euch re-
cIpIent's nume, the stute und munIcIpulIty where theIr lund Is locuted, theIr crop, the umount
ol lund lunded by the puyment, und the puyment umount (umong other detuIls provIded).
5 ^rtlcle 42 of the LF1^lPC clearly states that agencles are only requlred to glve out lnformatlon already ln thelr possesslon.
6 lntervlew held ln S^C^RP^'s omces wlth Craclela ^gullar, 0lrector of ^SLRC^ and ^lberto Crdenas, then Mlnlster of ^grl-
culture, ^ugust 11, 2009. See also lnformatlon request number: 0810000021607. Note that omclal publlc lnformatlon requests
are avallable for consultatlon through the lF^l's Zoom search englne, at http://buscador.lfal.org.mx/buscador/blenvenldo.do
7 ^vallable at http://www.aserca.gob.mx/artman/publlsh/artlcle_1424.asp
Subsdzng 1neguaIty

FIles ure presented by yeur, seuson, und stute. WIthIn the Procumpo dutubuse (und over
tIme), euch recIpIent Is ussIgned u Procumpo Furmer ID lor theIr puyments. As wIll be dIs-
cussed In lurther detuIl below, thIs Furmer ID permIts multIple regIstrIes und Is not sum-
cIently unIque to dIstInguIsh between lurmers wIth sImIlur numes.
- Ingresc Cbettvc, Mextcc's 5
rd
largest substdy prcgram, part cf A5ERCA's Markettng
5uppcrts prcgrams vhtch represent cver l8% cf the agency's budget, and ust un-
der l0% cf the cverall 5agarpa budget, alsc makes avatlable htghly ccmprehenstve
tnfcrmattcn cn rectptents. OrIgInully, to quulIly lor Ingreso ObetIvo puyments, u potentIul
recIpIent wus requIred to be regIstered In the Procumpo dutubuse. As u result, the InlormutIon
regIstered lor Ingreso ObetIvo benecIurIes closely resembles the publIc Procumpo dutu,
und on some occusIons uses the sume Furmer ID to IdentIly puyments udmInIstered through
Ingreso ObetIvo (though not ulwuys). The dutubuses publIcly uvuIluble on A3ERCA's websIte
lor thIs progrum ure ulso eusIly downlouduble In Excel, und provIde equully dIsuggreguted
InlormutIon on euch puyment, IncludIng lurmer nume, Furmer ID, geogruphIc InlormutIon,
crop, tonnuge subsIdIzed, und puyment umounts (umong other dutu).
- Benectary ltsts fcr Mextcc's 2
nd
largest agrtcultural substdy prcgram, The Prcgram
fcr Acqutstttcn cf Prcducttve Assets (El Prcgrama para la Adqutstctn de Acttvcs
Prcducttvcs, prevtcusly kncvn as Altanza para el Campc), vhtch represents
arcund l8% cf 5agarpa's budget, are much mcre dtmcult tc cbtatn and are htghly
tnccnststent. Funded by the lederul AgrIculture MInIstry but udmInIstered by stute und
munIcIpul governments, the umbrellu Investment subsIdy progrum long known us AlIunzu
puru el Cumpo does not currently publIsh u sIngle nutIonul dutubuse ol progrum recIpIents.
WhIle there ure certuIn nutIonul elIgIbIlIty guIdelInes estublIshed euch yeur ut the Federul
level, stute und locul governments ure ultImutely responsIble lor determInIng who wIll re-
ceIve lundIng lrom the progrums In theIr stute or regIon. Therelore, euch stute muIntuIns Its
own recIpIent lIsts, whose orgunIzutIon und uccessIbIlIty vury wIdely. As u result, It Is very
dImcult to verIly the degree to whIch lederul elIgIbIlIty stundurds ure respected In pructIce.
MonItorIng Is ulso complIcuted by the umbrellu progrum's dIvIsIon Into Involves numerous
components und sub-progrums wIthIn the lederul AgrIculture MInIstry (3ugurpu). Funds lor
the progrum ure u combInutIon ol lederul, stute und munIcIpul budget trunslers, ull ol whIch
ure concentruted Into stute government publIc trust lunds (jJccomso In 3punIsh).
Together, these luctors eectIvely block publIc uccess to InlormutIon ubout who Is receIvIng
lundIng- und lor whut- lrom the AlIunzu Investment support progrums. The overull umount
ol money thut Is beIng spent lor these progrums In euch stute Is very dImcult to uncover, us
uccess to InlormutIon ubout jJccomsos Is u grey ureu In the current LFTAIPC, und euch
stute hus Its own locul trunspurency luws, whIch ure very uneven In theIr scope und ucces-
sIbIlIty.
8
The luct thut euch stute or munIcIpulIty ulso chooses who wIll eectIvely guIn
uccess to these progrums ulso meuns thut the constructIon ol u nutIonul recIpIent lIst de-
pends entIrely on the tImelIness In whIch euch stute mukes theIr recIpIent InlormutIon
uvuIluble (Il ut ull), und the quulIty ol euch stute's progrum dutu.
9

- A5ERCA's rematntng substdy prcgrams, ncv kncvn as Ccmpensatcry 5uppcrts
(fcrmerly kncvn as Markettng 5uppcrts) ccnttnue tc be cpaque. Ingreso ObetIvo Is
only one element ol u lurger puckuge ol murketIng subsIdy progrums. A3ERCA currently
operutes un uddItIonul l0 sub-progrums operutIng under thIs umbrellu subsIdy progrum, ull
ol whIch ure gurnerIng IncreusIng budget ullocutIons sInce dIrect puyments to support corn
prIces to lurmers through Ingreso ObetIvo huve lullen sInce 2006. Recently, A3ERCA hus
begun publIshIng recIpIent lIsts lor the remuInIng MurketIng 3upports progrums, though
these les ure not locuted In the RecIpIent LIsts" sectIon ol theIr websIte, und Insteud ure
to be lound wIthIn the descrIptIve InlormutIon uvuIluble ubout euch sub-progrum.
l0

InlormutIon ubout recIpIents ol the MurketIng 3upports subsIdIes (wIth the purtIul excep-
tIon ol Ingreso ObetIvo) Is presented In such u wuy thut It mukes It very dImcult to truly
understund who Is receIvIng lundIng, where, lor whut reuson, und lor how muchdespIte
the luct thut these progrums provIde very lurge puyments to recIpIents, ohen lor muny mIl-
lIons ol pesos ut u tIme.
ll
Access to thIs dutu Is dImcult becuuse euch sub-progrum posts u
serIes ol les, ohen In PDF or In u serIes ol dIsoInted Excel les, whIch contuIn mInImul
InlormutIon on the recIpIents ol euch sub-progrum, Il recIpIent InlormutIon Is uvuIluble ut
8 For more lnformatlon on the complexlty and opaclty of state government budgets, lncludlng thelr llmlted agrlcultural
spendlng lnformatlon, see the work of the state budget transparency proect, led by uan Pardlnas of the lnstltuto Mexlcano
para la Competltlvldad (lMCO), at http://lmco.org.mx/fnanzaspubllcas/
9 For analysls of how these lnvestment subsldy programs allocate resources, see Palmer-Rubln (thls volume).
10 Flles are scattered throughout the lnformatlon avallable ln the Our Programs" sectlon, at http://www.^SLRC^.gob.mx/
subhomes/NuestrosProgramas.asp.
11 See ox 5 ln Fox and Halght (thls report) for examples of transnatlonal corporatlons that recelve mllllons of pesos ln
payments through the Marketlng Support sub-programs.
S
Farm Subsdy Recgent Lsts

ull.
l2
AddItIonully, not ull les lor u gIven progrum durIng u consIstent perIod ol tIme ure
uvuIluble In the sume on-lIne locutIon. ThIs study lound u number ol cuses where recIpIent
lIsts lor export or storuge subsIdIes ure embedded wIthIn the recIpIent InlormutIon lor un
entIrely dIerent progrum.
l3

Most ol these sub-progrums do not Include uny type ol ID number uttuched to recIpIents,
und lor those thut do huve u unIque number correspondIng to u specIc recIpIent, thIs num-
ber vurIes lrom yeur to yeur becuuse It reects the number uttuched to theIr upplIcutIon lor
lundIng ruther thun ussIgnIng u number to the recIpIent themselves. In other words, most
sub-progrum recIpIent lIsts ure eIther lIsts wIth no IdentIlyIng InlormutIon uttuched to euch
recIpIent, or Il they do uttuch un IdentIer", It Is the number ol thut yeur's upplIcutIon und
not u consIstent ID thut cun be trucked ucross tIme.
3ome sub-progrums do not specIly even the stute In whIch the recIpIent Is locuted. Insteud,
the les reler to u group ol stutes wIthout specIlyIng whIch recIpIent receIved lundIng In
whIch stute In the group. 3ome sub-progrums' recIpIent lIsts relers to u regIon ruther thun
to stute or munIcIpulItIes.
Overull, A3ERCA's orgunIzutIon und presentutIon ol subsIdy dutu lor most ol the MurketIng
3upports sub-progrums mukes It very dImcult to compure the dIstrIbutIon ol puyments eI-
ther over tIme wIthIn the sume sub-progrum, or ucross sub-progrums lor the sume yeur. The
presentutIon ol these recIpIent lIsts Is chuotIc ut best, und even uher u sIgnIcunt reseurch
eort to orgunIze the dutu In u wuy thut would permIt compurIsons ucross progrums wIthIn
the sume yeur (u monumentul tusk unto Itsell), the Incompleteness ol the InlormutIon pro-
vIded mukes It extremely dImcult to know wIth uny degree ol certuInty the uggregute
umount ol MurketIng 3upports subsIdIes puId to uny one lurmer, orgunIzutIon or compuny.
The publIc Interest group, Fundur, hus mude repeuted uttempts to uccess greuter levels ol
detuIl on the puyments mude through these progrums.
l4
WhIle lImIted progress hus been
mude In u smull mInorIty ol cuses, unlortunutely the predomInunt A3ERCA response hus
been thut the InlormutIon currently uvuIluble on theIr websIte Is the best thut they cun do"
In terms ol provIdIng detuIl ubout subsIdy recIpIents. 3ome omcIuls cluIm thut the nuture
ol the progrum In questIon does not permIt the collectIon ol greuter detuIl on who receIves
puyments. Others cluIm thut provIdIng uny uddItIonul InlormutIon would vIolute the prI-
vute personul InlormutIon ol the recIpIents. Others sImply cluIm thut despIte theIr best el-
lorts, the ugency cunnot be responsIble lor gutherIng the level ol detuIl thut Fundur hus
requested, und sInce they ure not requIred to gcncrntc InlormutIon In response to un Inlor-
mutIon request, sInce the InlormutIon requested Is not ulreudy beIng guthered In the lormut
requested, they ure not requIred to provIde It.
Overull, the cuse ol the MurketIng 3upports sub-progrums (other thun Ingreso ObetIvo)
shows thut despIte A3ERCA's lormul complIunce wIth the omcIul mundute to pro-uctIvely
publIsh recIpIent lIsts, the ugency Is lur lrom trunspurent ubout these dIrect murketIng sub-
sIdy progrums' uctuul dIstrIbutIon ol puyments.
- 5tmtlarly, rectptent ltsts fcr A5ERCA's fuel and cther substdtes are ncmtnally
avatlable, but they prcvtde tnsumctent tnfcrmattcn and are dtmcult tc dectpher.
A3ERCA lormully complIes wIth LFTAIPC mundutes, Insolur us ull ol the progrums It dIrectly
operutes provIde ut leust nomInully publIc recIpIent lIsts through theIr websIteIncludIng
Its commercIul strengthenIng" und luel subsIdy progrums. However, us Is the cuse wIth the
MurketIng 3upports sub-progrums (upurt lrom Ingreso ObetIvo), the uvuIlubIlIty ol these
recIpIent lIsts lor the remuInIng subsIdy progrums does not necessurIly lucIlItute Indepen-
dent monItorIng or unulysIs ol subsIdy recIpIents.
In the cuse ol the luel subsIdy progrums, whIch Include 3 subprogrums desIgned to subsIdIze
the cost ol luel used In tructors, other lurm muchInery und shIng bouts, recIpIent lIsts ure
publIshed In PDF lormut, presentIng InlormutIon In u .txt lormut thut Is extremely dImcult
to reud.
l5
The InlormutIon Is not presented In u tuble, ruther It Is u lIst ol text dIvIded by u
serIes ol vertIcul lInes (thut vury lor euch entry In the lIst) IndIcutIng the stute, dIstrIct, sub-
dIstrIct, nume und puyment umount. No IdentIcutIon number lor euch recIpIent Is pre-
sented.
3epurute les IndIcute, lor euch stute, the overull consumptIon (In lIters) lor u gIven tIme
perIod, us well us prIce vurIutIons. However, even Il one compures these les wIth the uc-
12 For example, the sub-program /poyo o lo lnJucc|n Jc Potroncs Jc ProJucc|n Jc Dlco|nosos currently had no reclplent
lnformatlon avallable onllne as of 0ecember 14th, 2009.
13 lnformatlon ln varylng harvest cycles, and sub-programs related to transportatlon and export subsldles, are ohen em-
bedded ln fles clalmlng to pertaln to storage subsldles, for example.
14 See lnformatlon requests clted above.
15 See http://www.aserca.gob.mx/artman/publlsh/artlcle_1234.asp
Subsdzng 1neguaIty

tuul recIpIent lIst, It Is ImpossIble to relute how muny lIters, und ut whut prIce, euch IndI-
vIduul recIpIent consumed und therelore whut exuctly wus subsIdIzed. Aher decIpherIng
the dImcult presentutIon ol the recIpIent dutu, we know the umount thut A3ERCA puId euch
recIpIent, but It Is ImpossIble to determIne how muny lIters were covered und ut whut prIce
per lIter.
Becuuse ol the nuture ol the presentutIon ol thIs InlormutIon, In uddItIon to the lImIts on
compurIng the multIple les uvuIluble, It Is extremely dImcult to perlorm un Independent
unulysIs ol who Is receIvIng these luel subsIdIes, where, und why. The les ure thousunds ol
puges long lor euch yeur, they ure pussword protected (lImItIng the possIbIlItIes ol vIewIng
the documents In uny other lormut). Even when prInted, they ure extremely dImcult to
reud, let ulone compure ucross stutes even wIthIn the sume yeur. CompurIng subsIdy dIstrI-
butIon over tIme Is un equully dImcult tusk, lImIted ulso by the luck ol u unIque IdentIcu-
tIon number lor euch recIpIent.

- Whtle Prccampc's rectptent ltsts date back tc the begtnntng cf the prcgram (l994),
tnfcrmattcn abcut Ccmpensatcry 5uppcrts (Apcycs Ccmpensatcrtcs) prtcr tc 2000
ts very dtmcult tc cbtatn. The currently uvuIluble dutubuses lor Procumpo provIde detuIled
InlormutIon on the hIstory ol subsIdy puyments sInce the rst checks thut were Issued under
the progrum. In contrust, however, the progrums now operutIng under the umbrellu progrum,
Apoyos CompensutorIos (or Apoyos u lu ComercIulIzucIn), whIch huve been In pluce sInce
l99l, do not dIsclose hIstorIcul puyment dutu.
Whut begun us essentIully u puckuge ol subsIdIes desIgned to ulso compensute crop purchus-
ers us ugrIculturul murkets were IncreusIngly opened", sInce then hus undergone u serIes
ol sub-dIvIsIons breukIng out euch lundIng lIne Into dIerent sub-progrums, euch wIth theIr
own rules, und therelore ulso theIr own recIpIent lIsts (us dIscussed ubove).
The notuble exceptIon Is Ingreso ObetIvo, whose publIcly uvuIluble recIpIent lIsts ure not
only the most complete ol ull the MurketIng 3upports sub-progrums, but ulso provIde Inlormu-
tIon lor puyments mude sInce the progrum wus Implemented us such (les go buck to 2000).
However, the remuInIng sub-progrumsmuny ol whIch provIde very lurge puyments ol
muny mIllIons ol pesos to smull numbers ol recIpIentshuve gone through u serIes ol recon-
gurutIons mukIng the hIstorIcul reconstructIon ol exuctly whIch progrums were operutIng
In whIch yeurs very dImcult to decIpher. Most ol the currently publIcly uvuIluble recIpIent
lIsts ure much more recent, 3 sub-progrums only provIde InlormutIon sturtIng In 2008, l
goes buck to 2007, 3 to 2006, l to 2004, und only l progrum provIdes detuIls lrom 2002
lorwurd.
An InlormutIon request submItted to obtuIn dutu ubout recIpIents ol MurketIng 3upports
puyments lrom the progrum's InceptIon to dute produced u response provIdIng InlormutIon
lrom l999 lorwurd.
l6
The le provIded wus u Word document contuInIng u serIes ol photos
(.pg les) ol tubles ol recIpIents, mukIng the compurIson ol recIpIents over tIme very dIm-
cult, especIully lor those progrums whose recIpIent lIsts publIcly uvuIluble onlIne do not go
buck very lur In tIme.
These dImcultIes In the orgunIzutIon und presentutIon ol the dutu publIcly uvuIluble lor
recIpIents ol the MurketIng 3upports sub-progrums (wIth the notuble exceptIon ol Ingreso
ObetIvo), combIned wIth the luck ol relIuble und uccessIble InlormutIon on the hIstorIc
dIstrIbutIon ol the progrum, muke un overull understundIng ol how these lunds huve been
spent, where they've gone, und why, u very dImcult tusk. CIven thut these progrums provIde
substuntIul umounts ol lundIng to those who ure uble to uccess them, It Is notuble thut
lormul complIunce wIth trunspurency requIrements does not provIde sumcIent InlormutIon
to understund how the puyments ure dIstrIbuted.
Overull, on the one hund, A3ERCA oers u hIgh degree ol detuIl uvuIluble In Its Procumpo
und Ingreso ObetIvo recIpIent lIsts, whIch provIde more comprehensIve InlormutIon on the
reul dIstrIbutIon ol subsIdy puyments thun uny other ugrIculturul progrum. On the other
hund, however, A3ERCA Is sImultuneously responsIble lor some ol the most opuque recIpIent
lIsts In theIr MurketIng 3upports, luel und other subsIdy progrums.
16 See lnformatlon request 0810000040808.
S
Farm Subsdy Recgent Lsts

2. CON5I5TENCY AND RELIABILITY OF


OFFICIAL DATA ON 5UB5IDY RECIPIENT5:
THE CA5E OF PROCAMPO
Trunspurency Is u necessuryIl InsumcIentcondItIon lor uccountubIlIty. We huve seen thut
lor muny ol MexIco's muor ugrIculturul subsIdy progrums, lormul complIunce wIth mundutory
dIsclosure requIrements does not necessurIly bolster trunspurency, sInce the dutu presented Is
wuys thut render the InlormutIon lurgely InuccessIble. In other words, lor progrums such us
the MurketIng 3upports subsIdIes und the AlIunzu Investment progrums, dIsclosure" does not
even Imply trunspurency".
In the cuse ol those A3ERCA progrums thut nrc more trunspurent, such us Procumpo und In-
greso ObetIvo, tukIng the necessury steps to move lurther ulong the puth towurd uccountubIl-
Ity depends on u number ol uddItIonul luctors. On one hund, Interested purtIes would need to
tuke udvuntuge ol government trunspurency In order to perlorm Independent unulyses thut
Inlorm publIc debute ubout progrum operutIons. In other words, wutchdog groups, progrum
evuluutors, the medIu und ucudemIcs cun use greuter degrees ol trunspurency to bolster uc-
countubIlIty when they udequutely utIlIze the InlormutIon uvuIluble to evuluute progrum per-
lormunce, generute ulternutIve proposuls, und hold government omcIuls to tusk lor complIunce
wIth exIstIng regulutIons.
However, Independent uctors' cupucIty to uct on newly trunspurent InlormutIon depends ulso
on the qunIty und rcInbIty ol the dutu provIded. Though the government's omcIul subsIdy
recIpIent regIstrIes ure now publIcly uccessIble, thIs new level ol trunspurency does not ud-
dress problems ol dutu quulIty. ThIs complIcutes the degree to whIch trunspurency cun pro-
mote uccountubIlIty. In the cuse ol A3ERCA's most trunspurent und comprehensIve recIpIent
lIsts, lor Procumpo und Ingreso ObetIvo, Independent unulysIs shows thut the InlormutIon
publIcly uvuIluble Is InsumcIently relIuble to ensure thut the dutu uctuully reveuls who Is get-
tIng whut lrom these dIrect puyment progrums. The prIncIpul weuknesses In dutu relIubIlIty
ure detuIled below:
- The publtcly avatlable rectptent ltsts fcr Prccampc repcrt tnfcrmattcn cn tndt-
vtdual payments, nct tndtvtduals. Procumpo puyments ure technIcully tIed to the lund
purcel thut Is receIvIng lundIng, not necessurIly to the lurmer or enterprIse thut Is cultIvut-
Ing It. When the lund Is regIstered In Procumpo It Is ussIgned Its own purcel ID number
(joIo Jc prcJo In 3punIsh). However, thIs lund-IdentIer Is not currently uvuIluble In the
publIcly uccessIble recIpIent lIsts. Whut Is uvuIluble Is un ID number ussIgned to the lurmer
who Is receIvIng the puyment (cInvc Jc proJuctor In 3punIsh). However, uny one IndIvIduul
lurmer muy huve multIple Furmer ID numbers wIthIn the Procumpo regIstry, even durIng
the sume hurvest cycle. EssentIully, every tIme Procumpo Issues u puyment to u progrum
recIpIent, thut puyment Is recorded uccordIng to the Furmer ID lor the IndIvIduul or orgunI-
zutIon receIvIng the puyment, whIch muy not necessurIly be the only Procumpo Furmer ID
they huve been ussIgned. Therelore, uny one IndIvIduul muy uppeur severul tImes In the
Procumpo regIstry. WhIle InlormutIon ubout the munIcIpulIty In whIch the lund Is locuted,
und the number ol hectures receIvIng lundIng Is Included, none ol the puyment InlormutIon
Is lInked to the orIgInul lund IdentIer.
- Many tndtvtduals have multtple prcducer numbers tn the Prccampc regtstry, fcr
reascns that are nct clear. It Is both possIble und legul thut u lurmer could regIster more
thun one plot ol lurmlund upon sIgnIng up lor Procumpo. Therelore, u lurmer could under-
stundubly be ussocIuted wIth severul dIerent lund IdentIer numbers (joIos Jc prcJo)
regIstered wIth the progrum. However, there Is no cleurly dened relutIonshIp between the
Furmer ID number thut Procumpo ussIgns to IndIvIduuls, und the lund lor whIch they ure
receIvIng the puyment.
A3ERCA hus not provIded uny omcIul explunutIon us to how Furmer ID numbers huve been
ussIgned to IndIvIduul Procumpo recIpIents over tIme, und no uddItIonul IdentIlyIng Inlor-
mutIon on IndIvIduuls Is provIded. Currently, whut thIs ImplIes Is thut there Is no wuy to
know wIth certuInty whether the multIple uppeurunces ol IdentIcul numes under dIerent
Furmer ID numbers ure Indeed the sume person, or whether they ure dIerent people lo-
cuted In the sume pluce who huppen to huve IdentIcul numes.
One possIble explunutIon lor ussIgnIng multIple Furmer ID numbers to the sume IndIvIduul
could be expluIned by the pructIce ol lund rentul. Procumpo's operutIng rules permIt rentul
ol lurmlund, und the progrum hus encouruged rentul throughout Its hIstory, whIch muy
expluIn why some lurmers huve been ussIgned multIple ID numbers. It could be the cuse
thut when un IndIvIduul rents someone else's lund lor u gIven seuson, the lund owner cedes
Subsdzng 1neguaIty

theIr Procumpo puyment to the renter us purt ol the rentul puckuge. In thIs cuse, Il the rent-
Ing lurmer ulso hus theIr own lund regIstered In Procumpo, It Is possIble thut In the cuse ol
the rentul trunsuctIon, the lurmer wus ussIgned u new ID number.
Procumpo's dIrector reported thut us much us 80% ol the puyments Issued durIng the Full-
WInter hurvest cycle ure puId to renters ruther thun to lundholders.
l7
Il It Is the cuse thut
some ol the multIplIcutIon In Furmer ID numbers Is due to extensIve lund rentul, then It Is
stIll uncleur whether or not the rentul Furmer ID hus remuIned consIstent over tIme, or Is ulso
constuntly chungIng.
A3ERCA hus yet to clurIly how Furmer IDs ure ussIgned to IndIvIduuls or to orgunIzutIons,
whIch greutly lImIts the cupucIty ol Independent unulysIs to document dIstrIbutIonul put-
terns In subsIdy puyments. 3Ince there Is no cleur ussocIutIon between numes thut coIncIde
und ID numbers, und In the ubsence ol un omcIul explunutIon us to how the Furmer ID Is us-
sIgned, there Is no wuy to know wIth certuInty eIther who Is receIvIng these puyments, or
the uggregute umount ol lundIng thut un IndIvIduul lurmer or orgunIzutIon mIght be receIvIng.
To underscore the scule ol thIs problem, the publIcly uvuIluble recIpIent lIsts lor ust the Tru-
dIcIonul" component ol Procumpo IndIcute thut there huve been over 5.3 mIllIon dIstInct
Furmer ID numbers ussIgned to IndIvIduuls und/or orgunIzutIons over tIme.
l8
However, the
omcIul number ol producers beneted" by Procumpo recIpIents In l995 wus 2.9 mIllIon,
uccordIng to the lnjormc Jc 0obcrno (uppurently relerrIng to IndIvIduul producers). The
number ol producers beneted" wus stIll 2.8 mIllIon In 2002, but lell to 2.4 mIllIon In
2008.
l9
In other words, the number ol Furmer ID numbers thut huve been ussIgned to IndI-
vIduuls or orgunIzutIons over tIme Is consIderubly hIgher thun the omcIul count ol the totul
number ol lurmers purtIcIputIng In the progrum (especIully In recent yeurs).
- The Prccampc plct number ts the cnly reltable tdentter that has nct changed
cver ttme. However, thIs InlormutIon Is not currently publIcly uvuIluble, und the current
DIrector ol A3ERCA IndIcuted thut the sensItIvIty ol thIs InlormutIon (urguIng thut Its releuse
would permIt the loculIzutIon ol progrum benecIurIes) prohIbIts Its releuse to the publIc.
20

Il thIs InlormutIon were mude publIcly uvuIluble, one would be uble to truck the overull
umount ol puyments thut huve been mude to euch plot ol lund enlIsted In the progrum.
However, thIs would stIll not resolve the Issue ol how to conrm who hus been receIvIng
puyment lor workIng u gIven lundholdIng.
Access to the ID numbers lor specIc lundholdIngs would permIt un unulysIs ol the degree
to whIch thut purcel (or portIons thereol) huve been subect to rentul. One could ostensIbly
see the vurIety ol Furmer ID numbers thut huve been Issued puyments lor euch purcel ol
lund, und whether or not the lund hus been lunded In Its entIrety or sub-dIvIded. However,
uccess to thIs kInd ol dutu would not solve the problem ol knowIng whether or not the po-
tentIully multIple Furmer ID numbers reluted to u purcel pertuIn to the sume person or dIl-
lerent people wIth IdentIcul numes.
Reseurchers Interested In guInIng greuter detuIl ubout the ubsolute number ol dIstInct IndI-
vIduuls receIvIng Procumpo subsIdy puyments led InlormutIon requests to A3ERCA uskIng
lor greuter specIcIty In the InlormutIon ubout the Procumpo regIstry. The omcIul responses
reveuled thut A3ERCA does uctuully huve In Its possessIon InlormutIon permIttIng the dIs-
tInctIon between multIple Furmer IDs, sImIlur numes, und dIstInct IndIvIduuls. 3uch uddItIo-
nul InlormutIon, when pertuInIng to IndIvIduuls ruther thun orgunIzutIons, Includes MexI-
co's nutIonul unIversul populutIon regIstry number (CURP In 3punIsh) ussIgned to IndIvIduuls
when theIr bIrth Is regIstered. 3Ince thIs code contuIns potentIully sensItIve personul Inlor-
mutIon, Its releuse would vIolute prIvucy cluuses In the trunspurency luw, but the luct thut
A3ERCA does Indeed uppeur to huve thIs number In Its records ImplIes thut they nrc uble to
ussocIute multIple IDs wIth dIstInct IndIvIduuls. At the very leust, the luct thut A3ERCA
does huve the cupucIty to relute ID numbers to IndIvIduul numes wIth greuter certuInty
ImplIes thut the creutIon ol u more consIstent Furmer ID number Is not InconceIvuble.
At the sume tIme, In the Interest ol protectIng prIvute personul InlormutIon, unother uddI-
tIonul pIece ol InlormutIon thut could be uselul lor dIscernIng between IndIvIduuls wIth
IdentIcul numes could be the InclusIon In the publIcly uvuIluble dutubuses ol the loculIty
where the IndIvIduul's puyment Is Issued. WhIle thIs would not provIde totul certuInty thut
the lIstIng ol more thun one person wIth the sume nume In the regIstry Indeed relers to the
sume IndIvIduul, the currently uvuIluble InlormutIon only provIdes dutu on the muncpnIty
17 lnformatlon provlded by then-Procampo 0lrector Custavo ^dolfo Crdenas Cutlrrez, une 19th, 2009 ln the Procampo omces.
18 See www.subsldlosalcampo.org.mx
19 Coblerno Federal (2009) and lnformatlon request No. 0810000025509, avallable for publlc consultatlon through the
lF^l's Zoom search englne, at http://buscador.lfal.org.mx/buscador/blenvenldo.do.
20 Meetlng wlth Craclela ^gullar, 0lrector of ^SLRC^ and ^lberto Cardenas, then Mlnlster of ^grlculture, held ln S^C^R-
P^'s omces, ^ugust 11, 2009.
S
Farm Subsdy Recgent Lsts

where puyments ure Issued (compuruble to u county). It Is much less lIkely thut dIerent
IndIvIduuls wIth IdentIcul numes resIde In the sume IocnIty thun Il producers hud the sume
numes wIthIn u muncpnIty. WhIle thIs upprouch would not provIde l00% certuInty us to
whether the multIple Furmer IDs uttuched to un IdentIcul nume ure Indeed the sume per-
son, It would decreuse the lIkelIhood thut repeuted numes reler to dIerent IndIvIduuls.
- The clartcattcn cf the relattcnshtp betveen Prccampc's Farmer ID number and
tndtvtduals vculd sttll nct resclve the stmultanecus tssue cf payments tc crgant-
zattcns that dtstrtbute substdtes tc thetr members. Procumpo's rules ulso permIt u
cooperutIve, orgunIzutIon, cjJo, or other collectIve enterprIse to regIster lor subsIdy puyments
us u group. ThIs ImplIes thut the dIerent lund purcels ussocIuted wIth such un orgunIzutIon
ure grouped together In the puyment process, und only one check (or deposIt) Is Issued to
the orgunIzutIon us u whole (ruther thun dIrectly to the IndIvIduuls Involved In the orgunI-
zutIon). The orgunIzutIon then dIstrIbutes thIs lump sum puyment umong Its members.
Procumpo's regIstry ulso ussIgns Furmer ID numbers to orgunIzutIons. There ure cuses where
the sume orgunIzutIon Is ussIgned multIple ID numbers, lor reusons thut ure ust us uncleur
us In the cuse ol the sume pructIce wIth IndIvIduuls. Currently, It Is ImpossIble to know how
muny IndIvIduul lurmers ure Involved In u regIstered orgunIzutIons, or wIthIn theIr mem-
bershIp, how muny wIll receIve u portIon ol the Procumpo puyment lor uny gIven hurvest
cycle. InlormutIon requests to A3ERCA, In uddItIon to dIrect conversutIons wIth A3ERCA
stu, IndIcute thut even A3ERCA does not know how muny IndIvIduuls wIll receIve portIons
ol u puyment thut Is mude to un orgunIzutIon.
2l

A3ERCA cluIms thut sInce locul 3ugurpu omces (CADERs) ure responsIble lor receIvIng Pro-
cumpo upplIcutIons, there Is no wuy thut the centrul omces cun control the quulIty ol the
dutu. AddItIonully, A3ERCA cluIms thut gutherIng such u hIgh level ol detuIl on euch IndI-
vIduul In the progrum (much less such detuIl on members ol orgunIzutIons), consIderIng
thut there ure over two mIllIon benecIurIes, und gIven thut It would Involve coordInutIng
wIth so muny locul government omces.
- Fcr these reascns, the Prccampc regtstry stmultanecusly cver-ccunts the tctal num-
ber cf tndtvtdual rectptents, and at the same ttme underccunts the number cf dts-
ttnct farmers recetvtng fundtng as members cf crgantzattcns. The net eect ol these
two dIstortIons on the totul overull number ol Procumpo benecIurIes Is not cleur. In the
Federul AudIt Agency's revIew ol A3ERCA's 2006 perlormunce, they lound 2.56 mIllIon pro-
ducers und 3.48 mIllIon purcels on the rolls (A3F 2008: 428). AccordIng to A3ERCA dutu
reported In PresIdentI Culderon's unnuul stute ol the nutIon report (lnjormc Jc 0obcrno) lor
the sume yeur (2006), there were 2.32 mIllIon lurmers enrolled In the progrum.
22
A3ERCA's
response to un InlormutIon request thut specIcully usked lor u response IndIcutIng the
totul number ol unIque IndIvIduuls" receIvIng puyments through the progrum reported
thut, In 2006, there were upproxImutely 2.75 mIllIon lurmers enrolled In the progrum.
23
These InconsIstencIes, only lor the cuse ol 2006, ure not mInor, sInce they represent dIer-
ences ol between l90,000 to 430,000 lurmers. ThIs lutter vurIutIon corresponds to the dIl-
lerence between the two gures thut A3ERCA provIded In the totul number ol progrum
benecIurIes. Other thun the lormul response to the InlormutIon request, neIther the lnjormc
Jc 0obcrno nor the A3F AudIt Report cleurly dene how they reuched theIr conclusIons
ubout the dIstInct number ol IndIvIduul lurmers purtIcIputIng In the progrum. In other words,
lor the two omcIul publIshed reports, we do not know Il they sImply udded up the totul
number ol Furmer IDs (sImultuneously ovcr-countng ol IndIvIduuls wIth more thun one ID
durIng 2006, und unJcrcountng becuuse ol the members ol orgunIzutIons Included), nor
whether they used some other methodology to uddress questIons ruIsed by the dutu (such
us whether IdentIcul numes reler to the sume person or not). The luct thut these two counts
vury ImplIes thut they must huve used dIerent crIterIu to estublIsh whut 'counts" us un
IndIvIduul In determInIng theIr overull quuntItIes ol progrum benecIurIes.
In A3ERCA's response to the InlormutIon request cIted ubove, omcIuls reported thut they
solved the problem ol over-countIng IndIvIduuls by cluImIng thut the numbers provIded
were culculuted uher ussocIutIng euch IndIvIduul wIth uddItIonul IdentIlyIng InlormutIon
(such us theIr nume, CURP, bIrthduy, bIrthpluce, und other InlormutIon). However, they
openly stuted thut In the cuse ol orgunIzutIons, euch one wus only counted once uccordIng
to Its correspondIng Furmer ID.
24
Therelore, It Is remurkuble thut thIs purtIculur culculutIon
21 lntervlew wlth Craclela ^gullar, then 0lrector of ^SLRC^ and ^lberto Crdenas, then Mlnlster of ^grlculture, S^C^RP^,
^ugust 11, 2009.
22 Coblerno Federal (2009: 196) (en el archlvo correspondlente a Lconoma competltlva")
23 See lnformatlon request 0810000025509
24 lnformatlon request No. 0810000025509. 1he exact text of the response to the lnformatlon request states the followlng,
Note: ecause a producer can have more than one Farmer l0, to count the lndlvldual producers one groups together the
father's last name, the mother's last name, the frst name, the date of blrth, the state of blrth, CURP and Llectoral Reglstra-
tlon number for physlcal persons, and ln the case of moral persons [enterprlses], they are only counted by Farmer l0. (slc)
Subsdzng 1neguaIty

ol the number ol benecIurIes In Procumpo Is the hIghest ol the 3 omcIul sources uvuIluble,
sInce methodologIcully the Issue ol over-countIng IndIvIduuls wIth multIple ID numbers
wus ostensIbly resolved, und we ure leh wIth the problem ol undercountIng the number ol
dIstInct IndIvIduuls thut muy be shurIng u sIngle Furmer ID through theIr orgunIzutIon.
The undercountIng Issue Is hIghlIghted by the luct thut the lurgest puyments mude through
Procumpo ure Issued through orgunIzutIons. The top l4 recIpIents over tIme ol Procumpo
TrudIcIonul ure ull groups ruther thun IndIvIduuls, IncludIng mostly prIvute enterprIses, but
ulso u lurge IndIgenous cjJo In the stute ol JulIsco (see Muldonudo, thIs volume).
25
In luct,
there ure only 7 IndIvIduuls In the lIst ol the top 50 recIpIents ol the Procumpo TrudIcIonul
progrum between l994-2008.
26

- Thts ambtgutty as tc vhc exactly recetves vhat frcm Prccampc makes tt tmpcs-
stble tc carry cut a ccnststent analysts cf the dtstrtbuttcnal patterns cf substdy
payments, cr tc mcnttcr ccmpltance vtth extsttng rules. The ubsence ol the purcel ID
number lrom the publIcly uvuIluble recIpIent lIsts meuns thut puyments cunnot be uccu-
rutely trucked to the specIc lund thut Is beIng lunded. At the sume tIme, the InsumcIently
precIse Furmer ID number, both lor IndIvIduuls und orgunIzutIons, und the luck ol un omcIul
explunutIon us to how the Furmer ID Is ussIgned, meuns thut truckIng puyments ut the In-
dIvIduul level Is ImpossIble to uchIeve wIth precIsIon. The only uccurute unulysIs ol dIstrI-
butIonul putterns thut cun currently be currIed out would be the dIstrIbutIon ol puyments
ut the munIcIpul level over tIme. WhIle thIs unulysIs would ullow one to see where the
money hus been goIng, und the degree ol concentrutIon In the geogruphIc dIstrIbutIon ol
puyments, un unulysIs ol the degree ol concentrutIon In puyment dIstrIbutIon ut the IndI-
vIduul level (I.e.: who gets exuctly whut, In compurIson to whut others get) wIll be ImprecIse
us long us the Furmer ID problems persIst.
Another Importunt Independent unulysIs thut Is currently ImpossIble to perlorm wIth pre-
cIsIon, whIch Is Importunt lrom un uccountubIlIty perspectIve, would be un Independent
evuluutIon ol the degree to whIch Procumpo puyments respect the progrum's estublIshed op-
erutIng rules. When Procumpo wus rst creuted vIu PresIdentIul Decree, It wus estublIshed
thut puyments would be lImIted to l00 hectures ol IrrIguted lund, or Its equIvulent In ruInled
lund (notIng ulso thut these ure the lundholdIng lImIts estublIshed In the ConstItutIon lollow-
Ing the ugrurIun relorm). However, It Is uncleur whether, In pructIce, uny uuthorIty wus ever
tusked wIth ensurIng complIunce wIth thIs ceIlIng, ut leust belore 2009 (see Box l). These
provIsIons dId not uddress lund rentul, whIch leh open u spuce lor dIscretIonury uctIon. The
puyment ceIlIng ol l00 hectures ol IrrIguted lund wus reIteruted In 2004, when Congress
Included these restrIctIons on Procumpo puyments In Its Budget Decree. In AprIl, 2009, the
AgrIculture MInIstry und A3ERCA ugreed to lurther lImIt Procumpo puyments to IndIvIduuls,
publIshIng In Procumpo's operutIng rules u lImIt ol $l00,000 pesos per lurmer per hurvest
cycle (U3$8,000).
These omcIul lImIts on Procumpo puyments restrIct the umount ol lundIng thut uny one
IndIvIduul Is ullowed to receIve. However, sInce there Is currently InsumcIent InlormutIon
publIcly uvuIluble to truck wIth certuInty puyments ut the IndIvIduul level, It Is ImpossIble
to Independently verIly whether these legully estublIshed lImIts ure beIng respected.
For exumple, even uher the AprIl 2009 chunges In the operutIng rules, some producers con-
tInued to receIve umounts thut consIderubly exceeded the estublIshed ceIlIngs. As shown In
Box l, whIch Is by no meuns u complete lIst ol the vIolutIons ol the rules, A3ERCA's own dutu
reveuled thut the mude puyments ol more thun $l00,000 pesos euch to muny IndIvIduuls
producers lor the sprIng-summer 2009 crop cycle. [EdItor's note: One yeur luter, however,
Procumpo puyment ceIlIngs uppeured to be respected lor the rst tIme (see below), possIbly
In response to Increused publIc scrutIny.
25 www.subsldlosalcampo.org.mx
26 www.subsldlosalcampo.org.mx
S
Farm Subsdy Recgent Lsts

BCX 9:
NONCOMPLIANCE WITH PROCAMPO RULE5 OF
OPERATION: INDIVIDUAL5 WHO RECEIVED MORE
THAN MSl00,000 5PRINC5UMMER 2009
Ana }caqutna Rutz Cuerra (Fundar)
AccordIng to Procumpo's Rules ol OperutIon, no IndIvIduul Is ullowed to receIve more thun
l00,000 pesos In subsIdIes, sturtIng wIth the 3prIng-3ummer 2009 crop cycle. Nevertheless,
these rules were not strIctly upplIed. Here lollows u tuble whIch shows the benecIurIes
who receIved more thun l00,00l pesos lor the 3prIng-3ummer 2009 crop cycle.
27

A3ERCA
3ubsIdy recIpIents lIsted who receIved more thun M$l00,00 lrom PROCAMPO
TrudIcIonul - 3prIng-3ummer Crop Cycle 2009
Producer Nume 3tute
Areu lunded
(hectures)
Amount ol
lundIng
(pesos)
CIclo
HANUN JORCE JORCE ALFREDO TumuulIpus 328.6 $ 3l6,44l.80 PV09
ZUNICA CEPEDA MARIA CUADALUPE TumuulIpus 30l.842l6 $ 290,674.00 PV09
CARCIA MEDRANO J 3ERCIO Durungo 257.54 $ 25l,824.l2 PV09
MANZUR NADER 3ANDRA TumuulIpus 249.l3 $ 239,9l2.l9 PV09
ARELLANO CANALE3 MARIA BRI3ELDA TumuulIpus 208.l7 $ 200,467.7l PV09
DE LA CARZA COLLADO LUCA3 TumuulIpus 207.68432 $ 200,000.00 PV09
ARCUELLO HERNANDEZ ALEJANDRO TumuulIpus 204 $ l97,800.00 PV09
RAMO3 FLORE3 JAVIER JulIsco 202.842l6 $ l97,022.00 PV09
DE ANDA 3ANCHEZ 3AUL EDUARDO TumuulIpus 203.842l6 $ l96,300.00 PV09
CARDENA3 CHARLE3 JOAQUIN TumuulIpus 203.842l6 $ l96,300.00 PV09
BARRON TIJERINA A3CENCION TumuulIpus 200 $ l92,600.00 PV09
ELIA3 3UDERMAN ACANETA ChIhuuhuu l93.842l6 $ l86,670.00 PV09
URIBE RIVERA DAFNE ALEJANDRA TumuulIpus l80.005607 $ l73,345.40 PV09
LOAIZA CONTRERA3 JO3E DIECO O3CAR Pueblu l80 $ l73,340.00 PV09
DE LA CARZA MORANTE3 CE3AR TumuulIpus l78.842l6 $ l72,225.00 PV09
MONTE3 NEVAREZ 3AMUEL ChIhuuhuu l55.5 $ l66,875.50 PV09
TINOCO TINOCO MANUEL Durungo l7l $ l64,673.00 PV09
UNCER WIEN3 ELIZABETH ChIhuuhuu l69.242l6 $ l62,980.20 PV09
JAQUEZ FLORE3 JUAN ANTONIO ChIhuuhuu l67.68432 $ l6l,480.00 PV09
CIE3BRECHT REIMER JUAN REYNALDO ChIhuuhuu l66 $ l59,858.00 PV09
PEREZ ROMO MERCEDE3 JulIsco l65 $ l58,895.00 PV09
ORTIZ HERRERA JO3E LUI3 Zucutecus l6l.l2 $ l55,l58.56 PV09
LOPEZ 3OLI3 JO3E Zucutecus l52 $ l46,376.00 PV09
3ILVA COMEZ JO3E LUI3 ChIupus ll2 $ l45,600.00 PV09
BRETON Y BRETON JAIME ELOY Tluxculu l45 $ l39,635.00 PV09
ARCUELLE3 URENO ABRIL TumuulIpus l44 $ l38,672.00 PV09
VILABOA MURILLO ROBERTO Verucruz l40 $ l34,820.00 PV09
ABRAM3 ZACHARIA3 WILHILEM ChIhuuhuu l36.5 $ l33,32l.00 PV09
PEREZ ARCE LILIA 3UNANA TumuulIpus l37.5 $ l32,4l2.50 PV09
RAMO3 ZAVALA ARTURO TumuulIpus l33 $ l28,079.00 PV09
CRIVELLI CRUZ CARLO3 ANTONIO Verucruz l32 $ l27,ll6.00 PV09
HERNANDEZ CHAVARRIA ALFREDO JulIsco l3l $ l26,l53.00 PV09
LANDA ARROYO AURORA MIRIAM Verucruz l30.35 $ l25,527.05 PV09
LOPEZ CALVEZ JO3E CALDINO
ANA3TACIO DE JE3U3
Pueblu l29 $ l24,227.00 PV09
ARELLANO CURROLA JUAN Zucutecus l29 $ l24,227.00 PV09
27 1he llst does not lnclude those who recelved exactly 100,000 pesos because, technlcally, that was permltted by the
Rules of Operatlon.
Subsdzng 1neguaIty

Producer Nume 3tute


Areu lunded
(hectures)
Amount ol
lundIng
(pesos)
CIclo
3ANTO3 RODRICUEZ MARTHA PATRICIA TumuulIpus l26.l896552 $ l22,l49.00 PV09
ACEVE3 FERNANDEZ FRANCI3CO JO3E AguusculIentes l25 $ l20,375.00 PV09
MORALE3 ROMAN TERE3A Verucruz l25 $ l20,375.00 PV09
VALLE3 MATA MA EL3A Durungo l22.6l4746 $ ll9,260.00 PV09
MENCHACA MUNOZ 3ALVADOR Zucutecus ll5 $ ll6,297.50 PV09
HERNANDEZ RECENDE3 J JE3U3 Aguus culIen tes l20 $ ll5,560.00 PV09
ZUNO CHAVIRA MARIO ALVERTO ChIhuuhuu l20 $ ll5,560.00 PV09
ARRIETA CARDENA3 MARIA OLIVIA Durungo l20 $ ll5,560.00 PV09
3O3A RINCON MARIA EUCENIA Verucruz l20 $ ll5,560.00 PV09
AVALO3 MARTINEZ ARMANDO TumuulIpus ll2.2l $ ll5,053.05 PV09
BEJARANO CARCIA ROCELIO ChIhuuhuu ll9.35 $ ll4,934.05 PV09
FAVELA DURAN CABRIEL
Buu
CulIlornIu 3ur
ll8 $ ll3,634.00 PV09
DOMINCUEZ HERNANDEZ JORCE Zucutecus ll7.7l $ ll3,354.73 PV09
CRIJALVA CONZALEZ O3CAR I3IDRO ChIhuuhuu ll7 $ ll2,67l.00 PV09
TERAN FLORE3 BRENDA CUADALUPE TumuulIpus ll4.l72l6 $ l09,947.79 PV09
LOPEZ CALVEZ JO3E CALDINO
ANA3TACIO DE JE3U3
Tluxculu ll4 $ l09,782.00 PV09
JACOBO RODELO JE3U3 ARTURO 3Inulou l09 $ l09,695.00 PV09
FRAIRE MARTINEZ ROBERTO Durungo 93.86 $ l08,877.60 PV09
MUNOZ PECINA 3ANDRA TumuulIpus ll3 $ l08,8l9.00 PV09
ARROYO3 COLMENERO CILDARDO ChIhuuhuu ll0.96 $ l08,539.48 PV09
VA3QUEZ MARTINEZ JO3E RICARDO Morelos 95.36 $ l08,l22.26 PV09
BU3TILLO3 BU3TILLO3 EMICDIO ChIhuuhuu ll2 $ l07,856.00 PV09
CARCIA HERNANDEZ MARTHA CELIA ChIhuuhuu ll2 $ l07,856.00 PV09
LUDER3 BECERRIL CU3TAVO 3onoru ll2 $ l07,856.00 PV09
MARTINEZ RIVERA TOMA3 Durungo lll.5 $ l07,374.50 PV09
VILLARREAL CORTEZ MYRTHALA
PATRICIA
TumuulIpus ll0.83 $ l06,729.29 PV09
VALADEZ PADILLA EFREN Zucutecus ll0.26 $ l06,662.29 PV09
MARTINEZ NECRETE ARTURO Cuunuuuto ll0.002l6 $ l05,932.08 PV09
OROZCO XX BLANCA ARMIDA ChIhuuhuu ll0 $ l05,930.00 PV09
ZUMARAN CA3TANEDA JO3E ALFREDO Durungo ll0 $ l05,930.00 PV09
BERLANCA E3PINOZA MARCARITA TumuulIpus ll0 $ l05,930.00 PV09
MORALE3 MARTINEZ JO3E LUI3 Durungo 99 $ l05,ll0.00 PV09
DELCADO 3ALAZAR TOBIA3 Durungo l08.5 $ l04,485.50 PV09
BANUELO3 MEDINA JO3E Zucutecus l08.4 $ l04,389.20 PV09
BU3TILLO3 OLIVA3 JE3U3 MARIA ChIhuuhuu l05.5 $ l04,l57.50 PV09
COMEZ NUCAMENDI JO3E RUMUALDO ChIupus l08 $ l04,004.00 PV09
VAZQUEZ CONTRERA3 I3MAEL Durungo l04 $ l03,522.00 PV09
FRIE3EN VOTH JOHAN ChIhuuhuu l02 $ l03,5l4.00 PV09
ALVAREZ ARIA3 JO3E MIchoucn l06.4 $ l02,463.20 PV09
3ANTA EDWICE3 3.P.R DE R.L. ChIhuuhuu l06 $ l02,078.00 PV09
MONTIEL RODRICUEZ ANDRE3 3Inulou l06 $ l02,078.00 PV09
MONREAL CA3TILLO FRANCI3CO JAVIER
3un LuIs
Potos
l04.7l $ l02,0l5.23 PV09
WIEBE LOEWEN CORNELIU3 ChIhuuhuu l05.3 $ l0l,403.90 PV09
ANCHONDO RAMO3 ANTONIO MANUEL ChIhuuhuu 98.79 $ l00,l64.58 PV09
ALBA OLAVARRIETA ARTURO Aguus culIentes l04 $ l00,l52.00 PV09
PENNER PETER3 DAVID TumuulIpus l04 $ l00,l52.00 PV09
Source. 0mcel dete from ASllCA's benencery lsts, downloeded Aprl 20, 2010, from http.//www.eserce.gob.mx/ertmen/
publsh/ertcle_1S/S.esp. Accordng to ASllCA's webste, ths dete wes up to dete es of August 1S, 2009. [Update: As
cf August, 20l0, cne year later, the authcr's nev revtev cf the Prccampc rectptent ltst fcr the sprtng -
summer 20l0 crcp cycle shcved that the payment cetltng fcr tndtvtduals vas betng respected.J
S
Farm Subsdy Recgent Lsts

The medIu coveruge ol the lurm subsIdy Issue In Februury 20l0 ruIsed the questIon: why
were the Rules ol OperutIon beIng vIoluted (the rules hud been chunged not long belore).
Although neIther 3ugurpu nor A3ERCA responded dIrectly to these questIons, the DIrector
ol A3ERCA und the DIrector ol Procumpo dId both resIgn (the 3ecretury ol AgrIculture hud
chunged In the summer ol 2009). However, the government's response dId not Include spe-
cIc InstItutIonul chunges thut would ussure complIunce wIth the operutIng rules ol Procum-
po, A3ERCA und 3ugurpu. Insteud, the commItments mude (detuIled below) relerred to u
cleun-up" ol the Procumpo regIstry through the verIcutIon und updutIng ol the dutu, the
use ol better technology (lIke geo-relerencIng systems) to ussure thut the producers receIvIng
progrum subsIdIes reully comply wIth the rules. In pructIce, however, the ImplementutIon
ol these pluns hus been quIte slow, sInce they would be completed In 20ll ut the eurlIest.
MeunwhIle, sInce A3ERCA lucks other InstItutIonul mechunIsms to ussure complIunce wIth
Its own rules, the ugency contInues to use the exIstIng regIstry (wIth ull ol Its ussocIuted
problems), uppurently drIven by InertIu.
Another Issue ol monItorIng und complIunce Involves elIgIbIlIty lor Procumpo puyments In
cuses ol conIcts ol Interest, und whether or not publIc omcIuls workIng In ugencIes reluted
to ugrIculturul polIcy should be ullowed to receIve subsIdy puyments whIle In omce (see
MerIno, thIs volume). As mentIoned, becuuse the Furmer ID Is InsumcIent to IdentIly IndI-
vIduuls beyond the uppeurunce ol theIr nume, there Is no wuy to know wIth certuInty
whether omcIuls ure vIolutIng these regulutIons whIle In omce. From un uccountubIlIty per-
spectIve, the Independent unulysIs ol complIunce wIth conIct ol Interest cluuses Is essen-
tIul to holdIng publIc servunts uccountuble lor theIr behuvIor whIle In omce.
Independent ctvtl scctety pcltcy mcnttcrtng, expressed thrcugh the 5ubsdcs al
Campc en Mcc vebstte, seeks tc tncrease the accesstbtltty cf cmctal data cn
substdy dtstrtbuttcn tn Prccampc and Ingresc Cbettvc. DespIte A3ERCA's onlIne
publIc dIssemInutIon ol the ruw dutubuses lor Its two lurgest progrums, theIr sIze und scope
muke It dImcult lor cItIzens to uccess the dutu In Its omcIul lormut. Becuuse Procumpo ulone
reuches over 2 mIllIon benecIurIes euch yeur, the Excel les lor euch stute (especIully In the
3prIng-3ummer hurvest cycle where the muorIty ol puyments ure mude) Involve thou-
sunds und thousunds ol entrIes. Even lor experts In Excel, munugIng InlormutIon lrom such
u lurge dutu set Is hIghly complIcuted. ThIs Issue Is exucerbuted when one consIders thut the
progrum hus been operutIng lor over l5 yeurs.
In response, u cIvIl socIety InItIutIve culled SubsJos nI Cnmpo cn Mxco, -- u colluborutIve
proect umong NCOs, socIul orgunIzutIons und ucudemIcs -- sought to lucIlItute uccess to
Procumpo's recIpIent lIsts by publIshIng them In un eusIly seurchuble lormut onlIne (uvuIl-
uble ut www.subsIdIosulcumpo.org.mx). The websIte's dutubuse mukes It eusy to compure
puyments throughout the l5 yeurs ol the progrum's operutIons, In uddItIon to dIstrIbutIonul
putterns ucross stutes. The on-lIne plutlorm ulso Includes the omcIul dutubuses lor Ingreso
ObetIvo, whIch lucIlItutes compurIson ol puyment trends over tIme und geogruphIcully. The
websIte ulso ullows vIewers to do seurches lor the numes ol IndIvIduuls or orgunIzutIons, us
well us to see the detuIled InlormutIon ol where, lor whut crop, the number ol hectures und
lunded (tons In the cuse ol Ingreso ObetIvo), us well us the umounts ol puyments over tIme
lor euch recIpIent lIsted.
ThIs websIte mukes uccessIble A3ERCA's omcIul recIpIent lIsts cxnctIy us they ure presented
by the ugency. ThIs meuns thut the content ol the omcIul dutu Is not ultered ut ull, even
when there ure obvIous spellIng und/or typogruphIcul errors. Therelore, the Increused ucces-
sIbIlIty ol the dutu through thIs onlIne resource Is subect to the sume lImItutIons In the
omcIul lIsts. It does not solve the problems ol multIple Furmer ID numbers to IndIvIduuls,
nor does It provIde uny uddItIonul InlormutIon ubout regIstered orgunIzutIons. WhIle greuter
publIc uccess to the omcIul dutu creutes the potentIul lor bolsterIng uccountubIlIty, the extent
to whIch thIs websIte cun permIt precIse monItorIng ol the dIstrIbutIon ol lurm subsIdy
puyments over tIme Is lImIted by the sume luctors descrIbed ubove.
- Cmctal Prccampc data dc nct permtt analysts cf the degree cf prcgram ccverage cf
gratn prcducers. PolIcymukers, observers und unulysts ohen ImplIcItly ussume thut Pro-
cumpo covers ull elIgIble producers, yet In pructIce, the degree ol progrum coveruge Is not
cleur. The publIcly uvuIluble dutu on Procumpo recIpIents does not ullow lor un unulysIs ol
the progrum's overull degree ol coveruge, eIther In terms ol elIgIble lurmers or lund. More-
over, the omcIul evuluutIons ol Procumpo do not uddress thIs Issue. However, uccordIng to
the reseurch ndIngs presented In the reports by 3cott und Fox und HuIght (thIs volume),
undercoveruge Is sIgnIcunt. Both studIes cIte surveys showIng thut most smullholders luck
uccess to the Procumpo progrum. ThIs puttern Is due to two sets ol luctors. FIrst, some pro-
ducers were not regIstered In the rst pluce, buck In l993-l994, lor reusons thut requIre
uddItIonul reseurch. RegIstrutIon wus then closed. 3econd, IncreusIng numbers ol regIstered
producers ure not purtIcIputIng, us documented by u 2006 lederul uudIt (A3F 2008). The
overull purtIcIputIon rute umong regIstered producers wus 9l% nutIonully, but some stutes
Subsdzng 1neguaIty

showed much hIgher rutes ol non-purtIcIputIon, lor reusons thut ure not cleur.
28
AddItIonul
InlormutIon Is needed to ussess the degree to whIch Procumpo Is eectIvely reuchIng Its
turget populutIon.
- In sptte cf tts ltmttattcns, the Prccampc database vas cne cf the mcst ccmprehen-
stve sets cf data abcut agrtcultural acttvtty durtng the stxteen years tn betveen the
l99l and 2007 nattcnal agrtcultural censuses. The l99l prevIous ugrIculturul census
wus currIed out belore the relorm ol ArtIcle 27 ol the ConstItutIon, ullowIng the IndIvIduul
tItlIng und possIble sule ol cjJo lund, und prIor to the Procede lund regIstrutIon progrum.
29

The most recent ugrIculturul census, currIed out In 2007, hus only recently been mude publIc,
und so lur only purtIully (see Robles Berlungu, thIs volume).
The luck ol u comprehensIve nutIonul census lor ugrIculture lor over l5 yeurs leuves open
the questIon ol whIch dutu wus beIng used to muke muor ugrIculturul polIcy decIsIons dur-
Ing thut tIme lrume. Few other government sources, ut leust not those thut ure publIcly
uvuIluble, contuIn us much InlormutIon us the Procumpo dutubuse In terms ol whut crops
lurmers ure growIng, und where. However, the ulorementIoned problems In the quulIty und
relIubIlIty ol these dutubuses ulso cull Into questIon the busIs lor ugrIculturul polIcy decI-
sIons, Il the A3ERCA dutubuses were used to Inlorm them.
- The Agrtculture Mtntstry and A5ERCA (vtth suppcrt frcm the Inter-Amertcan
Develcpment Bank and the Wcrld Bank) have prcmtsed tc tmprcve the qualtty
and accesstbtltty cf data cn substdy rectptents cf Prccampc. The government re-
cently unnounced (und budgeted) the Investment ol $400 mIllIon pesos Into cleunIng up"
the Procumpo roster. RegulutIons were publIshed In 3eptember, 2009 IndIcutIng how the
government Intends to verIly the elIgIbIlIty ol lurmers currently enrolled In the progrum
(DOF 2009). At the sume tIme, lurge louns lrom the Inter-AmerIcun Development Bunk und
the World Bunk ulso commIt sIgnIcunt resources to contrIbutIng to ImprovIng the quulIty
ol the dutu on who receIves Procumpo puyments.
30

A3ERCA's prevIous dIrector, CrucIelu AguIlur, reported thut us they curry out the process ol
verIcutIon", they Intend to InstItute u Furmer ID Internul to Procumpo und Ingreso Obe-
tIvo thut wIll be more relIuble thun the InlormutIon currently uvuIluble.
3l
However, specIc
InlormutIon on how thIs process ol ImprovIng the Furmer ID wIll work hus yet to be mude
publIc, other thun thut the process Is under wuy und wIll tuke ut leust u yeur.
These InItIutIves represent potentIully Importunt steps towurd ImprovIng the quulIty und
relIubIlIty ol the publIc dutu on Procumpo. As cIvIl socIety orgunIzutIons contInue to monI-
tor Procumpo's perlormunce, uccess to Improved InlormutIon wIll bolster theIr eorts to
seek greuter publIc sector uccountubIlIty In cuse ol Procumpo lurm subsIdIes. At the sume
tIme, publIc scrutIny ol quulIty und uccess to omcIul dutu ubout MexIco's muny other lurm
subsIdy progrums remuIns IncIpIent.
3. CONCLU5ION5
MedIu coveruge In 2009 und 20l0 led to greuter uttentIon to MexIco's muIn lurm subsIdy pro-
grums. Whether or not certuIn IndIvIduuls ure receIvIng lurm subsIdIes, such us publIc omcIuls
or relutIves ol ulleged drug deulers, Is only u symptom ol u lurger questIon whIch should be the
subect ol u brouder publIc debute. MultIple omcIul evuluutIons huve not determIned whether the
desIgn or perlormunce ol these progrums meets theIr gouls. Moreover, the lImIted ugendus ol
the omcIul evuluutIons do not usk whether these gouls ure the ones thut ugrIculturul subsIdy
polIcy should pursue. For now, It Is cleur thut omcIul trunspurency, through the publIcutIon ol
recIpIent lIsts, hus mude u substuntIul contrIbutIon to the debute over lurm subsIdIes. At the
sume tIme, the publIc debute Is unloldIng In the ubsence ol precIse und relIuble InlormutIon
ubout who reully receIves (und concentrutes) these subsIdIes.
28 For example, ln 2006 Procampo leh out more than a quarter of the already-reglstered producers ln Cuerrero, reachlng
only 71.5%, and covered 79.1% of the reglstered producers ln Chlapas (^SF 2008: 418).
29 Procede's full name ls the Programa de Certlfcacln de 0erechos Lldales y 1ltulacln de Solares Urbanos (1he Pro-
gram for the Certlfcatlon of Lldo Rlghts and the 1ltllng of House Plots).
30 See www.ladb.org and www.worldbank.org
31 Meetlng held ln S^C^RP^'s omces wlth Craclela ^gullar, then 0lrector of ^SLRC^ and ^lberto Crdenas, then Mlnlster
of ^grlculture, ^ugust 11, 2009.
S
Farm Subsdy Recgent Lsts

BIBLIOCRAPHY
ArvIzu, Juun (20l0) Muyorgu: NI por tIcu deo de recIbIr mI subvencIn," LI UnvcrsnI, Feb. l8 , http://
www.elunIversul.com.mx/grucos/especIul/EU_procumpo/muyorgu.html
A3F (AudItoru 3uperIor de lu FederucIn) (2008). lnjormc JcI rcsuItnJo Jc In rcvsn y jscnIzncn
supcror Jc In Cucntn PbIcn, Scctor 0cjcnsn NnconnI, Scctor AgrcuIturn, 0nnnJcrn, 0csnrroIIo
RurnI, Pcscn y AImcntncn, Tomo IV, Vol. I. http://www.usl.gob.mx/truns/Inlormes/IR2008I/IndIce/
sectorIules.htm
DOF (2009) "Acuerdo por el que se emIten los lIneumIentos del Progumu de ActuulIzucIn de Dutos y
ExpedIentes del DIrectorIo del Procumpo," 0nro DjcnI Jc In FcJcrncn, MexIco: CobIerno Federul,
3ept. l, http://www.usercu.gob.mx/urtmun/uplouds/uctuulIzucI_n_expedIentes_procumpo_09.pdl
CobIerno Federul (2009) Tcrccr lnjormc Jc 0obcrno, Ancxo LstnJstco, MexIco: CobIerno Federul, http://
www.Inlorme.gob.mx/unexo_estudIstIco/
Hernndez, EvungelInu (20l0) Los Cuzmn Loeru y tItulur de 3ugurpu cobrun Procumpo," LI UnvcrsnI,
Feb. l5, http://www.elunIversul.com.mx/grucos/especIul/EU_procumpo/procumpo.html
MerIno, MuurIcIo (20l0) Delectos de lontuneru," LI UnvcrsnI, Feb. l7, http://www.elunIversul.com.mx/
edItorIules/47407.html
6

6
StakehoIder
oversght ot
ASBRCA's tarm
subsdy grograms

Felpe Heva de la }ara
l
#ENTRO DE )NVESTIGACIONES Y %STUDIOS 3UPERIORES EN !NTROPOLOGA
3OCIAL DEL 'OLFO
1 1hls chapter summarlzes the fndlngs of a much more extenslve, feld-based study (Hevla de la ara 2010). 1ranslatlon
by onathan Fox and Charlle Roberts.
6
StakehoIder oversght ot ASBRCA's tarm

MIllIons ol pesos In lurm subsIdIes ure ullocuted und dIstrIbuted through processes thut
luck trunspurency. Producers, cItIzens und theIr orgunIzutIons huve very lImIted chunnels lor
purtIcIputIon. The 2009 regulutIons lor MexIco's muIn lurm subsIdy delIvery ugency, A3ERCA
[AgrIculturul MurketIng 3upport 3ervIces] oblIges Its progrums to deploy socIul oversIght
mechunIsms through: the publIcutIon ol theIr benecIury lIsts, the luunchIng ol cItIzen utten-
tIon" progrums to uddress the publIc's concerns, the creutIon ol commIttees ol benecIurIes to
monItor progrum operutIons, the promotIon ol venues lor dIulogue between ol publIc omcIuls
und benecIurIes, und coulItIons wIth publIc Interest groups lor progrum monItorIng und over-
sIght. Nevertheless, thIs study lound thut A3ERCA hus not upplIed these meusures to Its pro-
grums, ut leust us ol the mIddle ol 2009.
3ocIul oversIght Is dened us mechunIsms ol InstItutIonulIzed cItIzen purtIcIputIon uImed ut
promotIng uccountubIlIty. In contrust to other mechunIsms ol cItIzen purtIcIputIon lor plun-
nIng, ImplementIng, und evuluutIng polIcIes, socIul oversIght hus locused Its uctIons on the
monItorIng und oversIght ol the entIre publIc polIcy cycle through vurIous Instruments, such
us the estublIshment ol commIttees ol benecIurIes, cItIzen uttentIon" progrums, und the pur-
tIcIputIon ol cItIzens In collegIul government decIsIon-mukIng bodIes. The InstItutIonul de-
sIgns und perlormunce ol such urrungements muy leud eIther to weuk or to strong systems ol
cItIzen oversIght (HevIu 2009). Il the systems ure to be strong, the groups thut curry out the
oversIght must be uutonomous, und they must huve the necessury clout - both dIrect und In-
dIrect - to enuble these groups to curry out theIr oversIght tusks, whIch, by theIr very nuture,
ure polItIcul. Thut Is, they uttempt to huve un Impuct In the publIc sphere (CunIll 2009).
By merely tukIng Into consIderutIon whut the regulutIons suy, one cun conclude thut A3ERCA's
progrums huve serIous InstItutIonul shortcomIngs when It comes to socIul oversIght. As Illus-
truted In Tuble l, whIle ull the problems meet the mInImum requIrements ol trunspurency -
such us publIcutIon ol the benecIury lIsts on the websIte - und the lormul exIstence ol com-
mon systems lor cItIzen uttentIon lor ull ol A3ERCA, operuted by the Internul oversIght omce,
the more specIc socIul oversIght Instruments, uccordIng to the relevunt lederul rules, such us
socIul oversIght commIttees, exIst only lor Procumpo und Procumpo CupItulIzes, und then only
on puper. The brouder study revIews euch ol these Instruments In greuter detuIl (HevIu de lu
Juru 20l0)
TabIe 1
S0CIAl 0\llSIClT ACTI0NS IN Tll ASllCA Pl0ClAMS
A3ERCA PROCRAM3
Trunspurency LImIted socIul oversIght Expunded socIul oversIght
PublIc
benecIury
lIsts
CItIzen
AttentIon
progrums/l
3ocIul oversIght
commIttees
LInk wIth C3O
lor oversIght
InstItutIonul
venues lor
communIcutIon
P
R
O
C
A
M
P
O
CAPITALIZA + + +/-/2 +/-/3 -
PROCAMPO + + + - -
RECI3TRO ALTERNO + + - - -
COBERTURA PRECIO3 + + - - -
A
P
O
Y
O
3

C
O
M
P
E
N
3
A
T
O
R
I
O
3APOYO A COBERTURA3 + + - - -
INCRE3O OBJETIVO + + - +/-/4 -
CONVENIO
CONCERTACIN
+ + - - -
ORDENAMIENTO MER-
CADO CRANO3 OLEACI-
NO3A3
+ + - - -
E3QUEMA3 DE COMER-
CIALIZACIN E3PECFI-
CO3
+ + - - -
DIE3EL ACROPECUARIO + + - - -
P
R
O
M
O
A
C
R
O
PROMOACRO + + - - -
NO1LS: 1/1hese Cltlzen ^ttentlon programs refer to ^SLRC^'s lnternal overslght omce, as per lts regulatlons (S^C^RP^ 2008). /2 1he only mentlon
of soclal overslght ln Procampo Capltallza ls ln lts slmpllfed procedure, whlch llmlts the functlon of the commlttees to acknowledglng recelpt of the
benefclary llsts" (^SLRC^ 2005). /3 ln theory the State [level] Commlttee for Sustalnable Rural 0evelopment has non-governmental representatlon and ls
authorlzed to rule on the technlcal feaslblllty of economlc proects and to oversee thelr lmplementatlon (^SLRC^ 2009a). 4/1hls refers to cltlzen monltor-
lng of the cltlzen commltment letters" (^SLRC^ 2009b). Source: prepared by the author.
Subsdzng 1neguaIty

Up untIl 2008, only Procumpo - und Its spIno progrum Procumpo CupItulIzes - Included socIul oversIght
mechunIsms In theIr desIgn und operutIon. It wus not untIl the udmInIstrutIve rules were umended In 2009
thut the progrums Promougro und Apoyos CompensutorIos (Compensutory 3upports) were rst requIred to put
socIul oversIght mechunIsms In pluce.
In the cuse ol PROCAMPO, u socIul oversIght mechunIsm wus Included lrom the outset. ArtIcle 9 ol Its loundIng
decree specIes:
The MInIstry, In coordInutIon wIth the Omce ol the Comptroller-Cenerul ol the FederutIon, unJcr thc socnI ovcr-
sght mcchnnsm, shnII gvc pnrtcpnton to thc proJuccrs n thc ovcrsght oj thc usc oj thc rcsourccs nnJ nctons
unJcrtnkcn n PRDCAMPD, to whIch end the 3teerIng CommIttees (ComIts DIrectIvos) ol the Rurul Development
DIstrIcts shull promote the estublIshment ol OversIght CommIttees (3ubcomIts de Control y VIgIluncIu) In theIr
terrItorIul dIstrIcts, us well us the electIon und truInIng ol members ol those commIttees (vocnIcs Jc contrnIorn
socnI) umong the producers (Covernment ol MexIco l994. ArtIcle 9, emphusIs udded).
The oversIght commIttees ure mude up ol government representutIves und producers, und huve the lollowIng
lunctIons: receIve und revIew the lorms lor the requIred unnuul renewul, physIcul und documentury verIcutIon
ol the upplIcutIons lor the unnuul renewul, und muke recommendutIons on these upplIcutIons to the Rurul
Development DIstrIct und lorwurd the documentutIon to the Rurul Development DIstrIct (A3ERCA, 2009u).
AccordIng to the PublIc AdmInIstrutIon MInIstry, us ol 2000, u totul ol l92 3ocIul OversIght commIttees were
operutIng (one lor euch Rurul Development DIstrIct), wIth the purtIcIputIon ol 7l2 members (one lor euch CADER
[u smuller level ol rurul development dIstrIct]) (3FP 2006:l8).
In terms ol these commIttees' uutonomy, producers ure under-represented whIle government omcIuls predo mI-
nute. TheIr lunctIons - In pructIce - Involve more udmInIstrutIon thun socIul oversIght. Hundreds ol ugrurIun
communItIes ure supposed to elect u sIngle representutIve lor regIon-wIde commIttees thut Interluce wIth the locul
brunch ol the AgrIculture MInIstry, known us the CADER. ThIs system ol representutIon dIscouruges the emer gen-
ce ol Independent leudershIp und luvors the exIstIng corporutIst peusunt orgunIzutIons, whIch ulso purtIcI pu ted
In determInIng who wus uble to regIster lor the Procumpo progrum In the rst pluce. ThIs luck ol uutonomy Is ulso
reected In the lImIts on the oversIght commIttees' operutIons. For exumple, commIttee presIdents ure chosen
by government omcIuls. In uddItIon, A3ERCA controls the procedures lor electIng members und lor renewIng
leudershIp, who ure not ullowed to oIn together wIth other commIttees (lor exumple, In the sume regIon) to be
uble to monItor more lInks In the chuIn ol progrum ImplementutIon. Moreover, the commIttees ure not ullowed
to chunge theIr structure, such us beIng tIed to the CADERs, to bolster theIr cupucIty to represent ugrurIun
communItIes, nor cun they creute Independent workIng groups.
In terms ol these commIttees' uctuul degree ol Inuence over Procumpo operutIons, these commIttees huve lormul
veto power over some progrum decIsIons, notubly whIch IndIvIduul producers ure recommended" lor theIr
requIred unnuul renewul ol uccess to Procumpo resour ces. In pructIce, however, becuuse government omcIuls
predomInute on these commIttees, producers do not use these chunnels to monItor und oversee Procumpo. WIth so
lIttle uutonomy or power, these socIul oversIght commIttees end up tendIng to oversee other producers more
thun they monItor progrum omcIuls. As In the cuse ol other condItIonul cush trunsler progrums, these commIttees luck
the mInImum degrees ol uutonomy und power thut ure necessury to be uble to become cItIzen counterpurts lor
oversIght ol government progrums. CItIzens ure lImIted to uddressIng the opuque ureus ol A3ERCA operutIons by
InlormIng the ugency uuthorItIes ol problems through Its own compluInt system und/or Internul control" omce.
In terms ol the dIssemInutIon ol the progrum benecIury lIsts, whIle ull the A3ERCA progrums do publIsh such
lIsts, they do not Include consIstent producer IdentIcutIon numbers, whIch prevents observers lrom uddIng
up the subsIdIes thut uny IndIvIduul producer receIves lrom more thun one ol A3ERCA's muny progrums (see
HuIght und Fox, thIs volume). In the cuse ol Procumpo, the dIssemInutIon technology Is not user-lrIendly,
whIch lImIts uccess to the lIsts In pructIce. The study ulso lound obstucles In Its eort to nd key InlormutIon
regurdIng the processes through whIch producers ure ullowed to request uccess to A3ERCA's other, less well-
known subsIdy progrums, known us complementury supports." The begInnIng und end dutes lor progrum
sIgn-up ure especIully dImcult lor producers to nd.
To comply wIth Its mundute to creute cItIzen uttentIon" progrums, A3ERCA developed u uselul Internul Inlor-
mutIon system lor receIvIng compluInts. However, thIs study dId not nd sumcIent evIdence to conclude thut
these progrums huve uctuully encouruged InstItutIonul responsIveness or uccountubIlIty. LIke other systems lor
receIvIng compluInts by telephone, thIs one luces legul construInts thut lImIt Its cupucIty to uctuully deul wIth
problems und denuncIutIons thut ure regIstered by phone.
Notubly, A3ERCA progrums dId not report uny purtnershIps wIth publIc Interest groups lor the purposes ol
monItorIng und oversIght (wIth the exceptIon ol cItIzen monItorIng through u smull pIlot InItIutIve, the cItIzen
commItment letters" ol the Ingreso ObetIvo progrum). Nor hus A3ERCA creuted spuces ol orgunIzed dIulogue
wIth benecIurIes, ulthough they ostensIbly be cume oblIgutory us ol the 2009 progrum rules. Though the cItI-
zen commItment letters InItIutIve should be lollowed up, theIr omcIul scope Is extremely lImIted und they
huve lew prospects lor huvIng uny Impuct In the short or medIum term.
ThIs unulysIs suggests thut the prIncIpul mechunIsm lor cItIzen monItorIng und oversIght ol A3ERCA Is
through publIc InlormutIon uccess, through growIng numbers ol InlormutIon requests.
6
StakehoIder oversght ot ASBRCA's tarm

Bused on the unulysIs, It uppeurs thut the muIn mechunIsm lor monItorIng und oversIght uvuIluble
to (und used by) cItIzens Is uccess to InlormutIon, by meuns ol the growIng number ol re quests lor
InlormutIon. As shown bused on u stutIstIcul unulysIs ol InlormutIon requests, theIr use turns out
to be u necessury yet InsumcIent mechunIsm lor monItorIng the operutIon ol these progrums.
AnulysIs ol u representutIve sumple ol A3ERCA InlormutIon requests showed thut only 6l.7%
ol ugency responses could be consIdered posItIve." Requests InvolvIng Procumpo uccount lor
25% ol InlormutIon requests, und they receIve the most posItIve responses. Another 25% were
dIrected to the murketIng support progrums, und 40% went to A3ERCA's centrul omces. How-
ever, publIcly uvuIluble dutu does not permIt uny ussessment ol the degree to whIch publIc
InlormutIon requests contrIbuted to specIc oversIght uctIons or oversIght outcomes, wIth the
exceptIon ol the Furm 3ubsIdy websIte creuted by Fundur (www.subsIdIosulcumpo.org.mx).
ThIs publIc Interest group used InlormutIon requests us u tool to construct thIs publIc dutu-
buse, whIch hus been wIdely covered In the nutIonul press.
RECOMMENDATION5
These ndIngs ure the busIs lor the lollowIng recommendutIons ubout how A3ERCA could Im-
prove Its socIul oversIght systems:
- To Implement systems lor socIul oversIght, A3ERCA should coordInute wIth the PublIc Ad-
mInIstrutIon MInIstry's Adunct Cenerul DIrectorute lor 3ocIul OversIght. ThIs would permIt
uccess to truInIng, best pructIces, un Integruted InlormutIon system und coordInutIon thut
would lucIlItute the promotIon ol commIttees In rurul ureu, us well us coordInutIon wIth mu-
nIcIpul und stute government-led socIul oversIght progrums.
- 3et up 3ocIul OversIght CommIttees, bused on the lunctIons specIed In Art. 20 ol the PublIc
AdmInIstrutIon MInIstry's omcIul guIdelInes lor socIul oversIght progrums.
2
In uddItIon to
the cItIzen uttentIon" systems, thIs would Involve the commIttees huvIng uctuul powers und
uutonomy In theIr composItIon und operutIon. ThIs would requIre cleur procedures lor the
selectIon ol commIttee members, lor specIlyIng commIttee lunctIons und powers, us well us
operutIonul munuuls und truInIng lor progrum benecIury spokespeople.
- Luunch progrums to encouruge the purtIcIputIon ol cIvIl socIety orgunIzutIons In cItIzen mo-
nItorIng. The Involvement ol publIc Interest groups In oversIght ol A3ERCA progrums could
be promoted dIrectly, through openIng u new lIne ol support through the co-Investment
progrum ol INDE3OL, und/or through un AgrIculture MInIstry progrum to encouruge purtI-
cIputIon. These promotIonul progrums, whIch ure mundutory uccordIng to the LFF (Federul
Luw lor the PromotIon ol CIvIl 3ocIety OrgunIzutIons) should be currIed out through publIc
grunt competItIons thut would muke uwurds bused on the decIsIons ol oInt government-
cIvIl socIety ussessment bodIes thut operute uccordIng to cleur rules.
- Creute oInt government-cIvIl socIety commIttees to ussess lundIng proposuls. As ulreudy
exIsts In severul 3ocIul Development MInIstry und AgrIculture MInIstry progrums, technIcul
commIttees, IncludIng non-governmentul representutIves, cun purtIcIpute In revIewIng pro-
ducer requests In order to muke resource ullocutIon decIsIons more trunspurent.
- Improve publIc uccess to the lIsts ol A3ERCA progrum benecIurIes, usIng the work ol Fundur
us u relerence poInt. WIth the goul ol mukIng publIc relIuble dutu on the lIsts ol IndIvIduul
producers, by stute und munIcIpulIty, A3ERCA should use the methodology ol Fundur's the
Furm 3ubsIdy Dutubuse," wIth the goul ol mukIng the InlormutIon trunspurent und keepIng
the roster up to dute.
- Huve ull ugrIculturul progrums use the sume producer relerence number. ThIs would ullow
the uggregutIon ol InlormutIon ubout ull the lederul subsIdIes thut euch producer receIves.
- Updute the Procumpo benecIury lIst In reul tIme, wIth open enrollment. ThIs how other
Income trunsler progrums work, such us the Cudustro nIco In BruzIl or 3IB3EN In ColombIu,
where the updutIng ol the roster Is uutomutIc und uccess Is not construIned by lImIted tIme
wIndows. The ugrIculturul census or other mechunIsms cun serve to verIly the dutu und to
estublIsh checks und bulunces.
For locul cIvIl socIety orgunIzutIons und ugrurIun communItIes Interested In monItorIng und
oversIght ol A3ERCA's lurm subsIdy progrums, recommendutIons Include:
2 See SFP (2008)
Subsdzng 1neguaIty

- Encouruge the horIzontul und vertIcul networkIng ol Procumpo's exIstIng cItIzen oversIght
commIttees. BrIngIng together benecIury spokespeople who deul wIth the sume regIonul
AgrIculture MInIstry omces (CADER) und rurul development dIstrIcts (DDR) would bolster
theIr cupucIty to oversee the chuIn ol A3ERCA's lurm subsIdy progrum decIsIon-mukIng.
- MonItor the exIstIng Procumpo cItIzen oversIght commIttees, especIully theIr recommendu tIons"
lor benecIury renewul, by cullIng lor decIsIons to be mude In publIc, by purtIcIputIng us
observers In these meetIngs und by lollowIng up on problems thut emerge In these commIttees.
- To ruIse publIc uwureness umong stukeholders, dIssemInute InlormutIon ubout other A3ER-
CA progrums, such us the Compensutory 3upports" progrum, vIu communIty rudIo und other
rurul communIcutIons medIu.
- PurtIcIpute In the generutIon und truInIng ol cItIzen oversIght commIttees, to buIld theIr
cupucIty to monItor A3ERCA progrum operutIons.
- PurtIcIpute In the cItIzen monItorIng ol the operutIon ot A3ERCA progrums.
- Follow up on compluInts und denuncIutIons ol ubuses presented to A3ERCA's omcIul Inter-
nul control" omce und/or Its InlormutIon und compluInts system.
BCX l0:
MONITORINC PRODUCER5 "FROM ABOVE"
Feltpe Hevta de la }ara (CIE5A5)
BeIng regIstered In the lIst Is not enough to receIve Procumpo subsIdIes. Euch seuson,
the producers huve to upply lor the subsIdIes durIng the perIods when the wIndows ure
open ut the CADER, or locul brunch omce ol the AgrIculture MInIstry, In theIr loculIty. A
producer's ubIlIty to receIve subsIdIes depends on thIs uctIon. The udmInIstrutIve proce-
dure entuIls llIng out u stundurd upplIcutIon und submIttIng It to the CADER, specIlyIng
the totul number ol hectures to be plunted und the totul umount ol lund uvuIluble. Il the
producer's le hus been modIed - us u result ol trunslerrIng the rIghts ol some purcel ol
lund, lor exumple - s/he hus to updute theIr dutu ut the CADER wIthIn the estublIshed
tImelrumes.
In these processes, one crItIcul ureu ol corruptIon Is the dIerence between whut euch
lurmer suys he Is goIng to plunt, und whut Is uctuully plunted. The muIn untIcorruptIon"
uctIons reported by A3ERCA huve to do wIth thIs poInt, IntroducIng the use ol sutellIte
photogruphy lor verIlyIng the totul ureu uctuully plunted. AccordIng to the Inter-Agency
CommIssIon on Trunspurency und FIghtIng CorruptIon (CITCC, 2006): For verIlyIng cjJo
propertIes, the AgrIculture MInIstry, us ol yeurend 2004, uttuIned l00 percent coveruge
ol plots wIth sutellIte Imuges, mukIng It possIble to IdentIly whether u gIven property Is
or Is not plunted, und whether It complIes wIth the rules [In thIs cuse, whether It Is
plunted In legul crops], und to determIne the chunges In ureu plunted or hurvest by pur-
cel, owner, und producer. ThIs system conlers certuInty und trunspurency when subsI-
dIes ure grunted by the Progrumu de Apoyos DIrectos ul Cumpo (Procumpo).
The sutellIte Imuges muke It possIble to determIne the ureu uctuully plunted und wheth-
er the crop Is or Is not legul. For exumple, uccordIng to Juun AntonIo Fernndez 3ols,
then dIrector ol Procumpo, In 200l, 300,000 hectures were tuken out ol the progrum,
most becuuse the ureu hud been set usIde lor growIng nurcotIcs, supervIsIon wIll now be
strIcter, sInce It hus the sutellIte Imuges ol the MInIstry ol NutIonul Delense, the Nuvy,
the MInIstry ol InterIor, und the EnvIronment MInIstry, umong unother 26 government
omces" (Prez 200l).
ThIs procedure InvolvIng horIzontul verIcutIon usIng sutellIte Imuges Is supplemented
by revIews ol the les und eld vIsIts by the CADER stu to deter thIs pructIce. Nonethe-
less, the eld vIsIts huve dImInIshed In number over tIme. AccordIng to our sources, ut
present physIcul InspectIons ol the purcels ure ullowed lor only lour reusons: when un
Increuse In lund to be covered Is sought ol more thun hull u hecture, when the lund Is lor
common use, when the lunds huve not been prevIously Included In the progrum, und due
to cItIzen compluInts chunneled to the OversIght CommIttee und/or the Internul Over-
sIght Omce. PhysIcul vIsIts to the propertIes depend on the operutIonul cupubIlIty und
humun resources uvuIluble ut euch CADER.
6
StakehoIder oversght ot ASBRCA's tarm

BIBLIOCRAPHY
A3ERCA (2005) ProcedImIento operutIvo sImplIcudo Integrul del PROCAMPO cupItulIzu (PO3IK) de los
cIclos ugrcolus prImuveru-veruno 2005 ul otoo InvIerno 2008-2009," MxIco: A3ERCA
------ (2009) OmcIul websIte http://www.usercu.gob.mx/, lust consulted AprIl 20
------ (2009b) Respuestu u lu solIcItud de InlormucIn No. 08l00000l8409. Inlomex, MxIco.
CITCC (2006) Rcportc n In soccJnJ, 2006. MxIco: 3ecreturu de lu FuncIn PblIcu, ComIsIn Intersec-
returIul puru lu TrunspurencIu y el Combute u lu CorrupcIn en lu AdmInIstrucIn PblIcu Federul
http://www.progrumuuntIcorrupcIon.gob.mx/logros_2006.html#3ACARPA
CunIll, NurIu (2009) Contruloru socIul y derechos socIules. El desulo de lu IntegrulIdud". 0cstn y
poItcn pbIcn. l8(l). pp.3-37.
HevIu de lu Juru, FelIpe (2009) Contruloru socIul y proteccIn de Progrumus socIules" In DuvId Cmez
lvurez (ed.) CnnJnJos y contrnpcsos. Ln protcccn Jc progrnmns, poItcns y Jcrcchos socnIcs cn
Mxco y Amrcn Lntnn. Cuuduluuru: ITE3O/PNUD
------ (20l0) VIgIluncIu y control en el cumpo: MecunIsmos, procesos y dInumIcus de contrulorIu socIul
en los progrumus dependIentes de Apoyos y 3ervIcIos u lu ComercIulIzucIon AgropecuurIu A3ERCA"
Mcxcnn RurnI 0cvcIopmcnt Rcscnrch Rcports, No. 5, Woodrow WIlson InternutIonul Center lor 3chol-
urs, MexIco InstItute,www.wIlsoncenter.org/DesurrolloRurulMexIcuno
CobIerno de MexIco, (l994) Decreto que regulu el progrumu de upoyos dIrectos ul cumpo denomInudo
PROCAMPO," 0nro DjcnI Jc In FcJcrncn July 25
Prez, MutIlde (200l) Muntendr PROCAMPO subsIdIos u luncIonurIos". Ln )ornnJn, December 7
3ACARPA () Acuerdo por el que se dun u conocer lus Reglus de OperucIn de los progrumus de lu
3ecreturu de AgrIculturu, Cunuderu, Desurrollo Rurul, Pescu y AlImentucIn, que se IndIcun." 0nro
DjcnI Jc In FcJcrncn, Dec. 3l
3FP (2006) lnjormc Jc rcnJcn Jc cucntns Jc In nJmnstrncn 2000-2006. MexIco 3ecreturu de lu
FuncIn PblIcu
3FP, (2008) Acuerdo por el que se estublecen los LIneumIentos puru lu promocIn y operucIn de lu
Contruloru 3ocIul en los progrumus lederules de desurrollo socIul," 3ecreturu de lu FuncIn PblIcu,
0nro DjcnI Jc In FcJcrncn. AprIl ll
7

7
1s decentraIzaton
the answer7
Lessons trom
!LIANZA PARA EL #AMPO
ran Palmer-Rubn
l
5NIVERSITY OF #ALIFORNIA "ERKELEY
1 1hls pollcy brlef summarlzes the fndlngs of a more extenslve feld-based study (Palmer-Rubln 2010).
7
Lessons trom AIanza gara eI Camgo

AInnzn pnrn cI Cnmpo (AlIunzu) Is the nume ol the second lurgest lederul ugrIculturul progrum
In MexIco. The stuted gouls ol AlIunzu's muny subprogrums ure to help lurmers, runchers, shers,
und other rurul populutIons muke cupItul Investments to Improve the vulue-udded ol theIr pro-
ductIon. In contrust to MexIco's lurgest ugrIculturul progrum, Procumpo, AlIunzu Is decentrul-
Izedmuny ol the decIsIons ubout progrum desIgn und ImplementutIon ure mude on the stute
level. Roughly two-thIrds ol the lunds lor these stute-level proects, however, come lrom the led-
erul government. 3tute ugrIculturul mInIstry omcIuls und representutIves ol 3ugurpu, the lederul
ugrIculturul mInIstry, oIntly undertuke progrum plunnIng und ImplementutIon.
2
The purported benets ol decentrulIzutIon lor ugrIculturul support progrums ure thut It ullows
lor resources to be more emcIently ullocuted, bused on the economIc needs ol the populutIon
und envIronmentul condItIons lor lurmIng thun lor progrums thut ure udmInIstered on the led-
erul level. The potentIul druwbucks, however, ure thut decentrulIzed progrums ure more prone
to beIng dIverted us putronuge or mIsspent due to the luck ol udmInIstrutIve cupucIty und ohen-
nontrunspurent polIcymukIng process ol stute governments. Further, the Involvement ol both
lederul- und stute-level omcIuls In polIcy desIgn und budgetIng Introduces greuter opportunI-
tIes lor udmInIstrutIve deluys und mulleusunce.
Gragh 1
lAlClST AClICUlTUlAl SUPP0lT Pl0ClAMS IN 200S
MIllI0NS 0l MlXICAN PlS0S
Source. Segerpe budget nformeton on the Mexcen Treesury webste. <www.epertedos.hecende.gob.mx, eccessed
Lecember 10, 2009.
AlIunzu's progrums support lurmers through mutchIng grunts lor Investments uImed ut Improv-
Ing rurul productIvIty, IncludIng muchInery such us tructors or IrrIgutIon systems, lucIlItIes lor
storuge or processIng, Inputs such us seeds, chemIculs, or stud unImuls, or consultunts to Improve
productIon methods. BenecIurIes must contrIbute between ten und nInety percent ol the cost
ol un expense thut Is supported by AlIunzu, dependIng on the type ol Investment beIng mude und
the producer's level ol murgInulIty. Euch stute Is requIred to set usIde u certuIn percentuge ol
lunds lor smull-, medIum-, und lurge-scule producers. The 0csnrroIIo RurnI (Rurul Development)
subprogrum Is the only subprogrum wIthIn AlIunzu thut Is specIcully desIgned to turget poor
producers und mukes up between roughly ten und lorty percent ol AlIunzu budgets In euch
stute. NutIonwIde, ubout l7.4 percent ol AlIunzu lunds went to 0csnrroIIo RurnI In 2009 (Mex-
Icun Treusury, Prcsupucsto Jc Lgrcsos Jc In FcJcrncn, 2009).
The study combInes three methods ol dutu collectIon: InstItutIonul unulysIs ol 3ugurpu und the
ugrIculturul mInIstry ol the stute ol ChIupus, stutIstIcul ussessment ol budgetury gures und
trends In upplIcutIons lor AlIunzu subprogrums, und IntervIews wIth poor coee und corn
lurmers In ChIupus. ThIs brIel summurIzes the puper's ndIngs In lour ureus: lederul ullocutIon
ol AlIunzu lunds to stutes, ullocutIon ol lunds wIthIn stutes, producer uccess In pructIce, und
the progrum evuluutIon process currIed out by the Food und AgrIculture AssocIutIon ol the
UnIted NutIons (FAO).
2 ln 2008, through an admlnlstratlve reorganlzatlon of Sagarpa's programs, ^llanza's subprograms were dlvlded glven new
names such as ^dqulslcln de ^ctlvos Productlvos and Programa Soporte. 1hls reform has not had slgnlfcant lmpacts on
program deslgn or lmplementatlon on the federal or state levels. ln thls report, to avold confuslon, l refer to these pro-
grams as ^llanza."
29,178.1
14,198.4
11,380.4
9,354.7
Other Programs Procampo
^llanza para el Campo ^poyos a la Comerclallzacln
Subsdzng 1neguaIty

l. FEDERAL ALLOCATION OF FUND5 TO 5TATE5


- 5agarpa's system fcr allccattng Altanza funds tc the states has been tnccnststent
and changes frequently. AllocutIon ol lederul lunds to stutes hus lollowed u vurIety ol lor-
mulus sInce the InceptIon ol AlIunzu, leudIng to InconsIstent levels ol lundIng lor euch stute,
thereIn undermInIng long-term rurul development plunnIng on the stute level. As Tuble l
shows, the overull AlIunzu budget vurIes drumutIcully, IntroducIng greuter vurIubIlIty In the
ubout ol lunds receIved by euch stute.
TabIe 1
NATI0NAl AlIANA BULClT
Yeur 2005 2006 2007 2008 2009 20l0
Amount Allocuted to AlIunzu
(mIllIons ol MexIcun pesos)*
7,234.0 6,269.7 8,729.3 ll,380.4 l6,042.2 7,500.0
Percent ol Totul 3ugurpu Budget l5.6% l2.8% l5.3% l7.8% 22.6% l2.3%
Source. Segerpe budget nformeton on the Mexcen Treesury webste. www.epertedos.hecende.gob.mx, eccessed Lecember
10, 2009.
* lgures for 200S through 2009 renect the nnel reported budgets (presnpnesrcs e,ercdcs; n the Prcrumu specu! Ccncnr
renre ,PlC). lgure for 2010 s the proposed budget (presnpnesrc uprcludc; from the Prcpnesru Presnpnesrc de rescs de !u
ederucn ,PPll), deted Sept. S, 2009.
- The federal crtterta fcr allccattng Altanza funds tc the states ts regresstve, favcrtng
htgher prcductng, lcver pcverty states. WhIle stutes wIth lurge poor rurul populutIons
ure umong the lurgest recIpIents, stutes where more emcIent lurge-scule lurmIng prolIler-
utes (typIcully In the North), receIve more AlIunzu money on u per rurul cupItu busIs. Federul
AlIunzu lunds ure dIstrIbuted umong stutes bused on IndIcutors thut meusure ugrIculturul
productIon und poverty. Fuctors thut rewurd hIgher producIng stutes tend to cuncel out"
luctors thut rewurd poorer stutes, resultIng In u regressIve ullocutIon ol lunds. Cruph 2 dem-
onstrutes thIs dIspurIty wIth dutu lor the ve hIghest-receIvIng stutes ol 2008. 3onoru runks
hh, receIvIng ubout 65 percent us much money us Verucruz, the top receIvIng stute (444.7
versus 688.l mIllIon pesos) wIth only ubout seven percent us muny ugrIculturul producers
us In Verucruz (25,694 versus 363,443 lurmers).
7
Lessons trom AIanza gara eI Camgo

Gragh 2
T0P lI\l AlIANA llClI\INC STATlS IN 200S WITl ASPlCTS 0l TllIl Pl0LUCTI0N
Source. Budget ngures drewn from. Asocecn Mexcene de Secreteros de Leserrollo Agropecuero ,AMSLA). ul!u
de Purrcpuccnes ederu!es de A!unzu puru e! Cumpc pcr nrdudsrudc 20022009. lmployment end lend ng
ures teken from the Mexcen government's 200/ egrculturel census, found et. <http.//www.neg.org.mx/neg/defeult.
espxsestc14SS1, eccessed Lecember 10, 2009.
2. ALLOCATION OF FUND5 WITHIN 5TATE5
- Dectstcns abcut allccattcn cf Altanza funds tc dterent prcects are made tn a ncn-
transparent fashtcn ustng tnccnststent crtterta. WIthIn stutes, the process thut deter-
mInes the ullocutIon ol lunds umong und wIthIn AlIunzu subprogrums vurIes wIdely lrom
stute to stute. DecIsIons ubout whIch types ol progrums und whIch upplIcunts to prIorItIze
ure mude behInd closed doors In commIttees mude up ol both lederul und stute-level repre-
sentutIves. Both 3ugurpu omcIuls und stute-level ugrIculturul mInIstry omcIuls IntervIewed
expluIned thut purtIsun ullIunces between stute und lederul-level polItIcIuns ure un Importunt
luctor In determInIng the level ol uutonomy ol stute mInIstry omcIuls In desIgnutIng AlIunzu
lunds. ThIs dIscretIonulIty, combIned wIth the luck ol trunspurency In budgetIng, leuves
openIngs lor AlIunzu lunds to be used lor clIentelIstIc purposes.
- There ts ltttle evtdence that lcv-tnccme prcducers recetve a stgntcant share cf
Altanza funds. ThIs upplIes even lor Desurrollo Rurul, AlIunzu's ostensIbly pro-poor sub-
progrum. Recent unulysIs by the World Bunk und John 3cott nds thut nutIonwIde In 2004,
55 percent ol Desurrollo Rurul lunds went to the rIchest producer decIle, despIte the luct
thut budget rules requIre thut ut leust 50 percent ol lunds go to the lowest Income produc-
ers (World Bunk 20l0: 59, 3cott 2009: 56). ThIs ndIng suggests thut the omcIul dIstrIbutIon
crIterIu thut ure desIgned to dIrect u mInImum shure ol progrum lundIng to lower Income
producers ure not respected In pructIce. InvestIgutIon ol 3ugurpu und ChIupus' stute ugrIcul-
turul mInIstry currIed out lor thIs report uncovered no sIgn ol polIcIes lor uddressIng these
wIdespreud vIolutIons In turgetIng crIterIu.
- The prcgram's crttertcn fcr dentng small-scale farmers (cvners cf less than 20
hectares cf farmable land) ts htgh and therefcre tncludes mtddle-tnccme prcducers
Populatlon Lmployed ln ^grlculture Square Kllometers ln Productlon
Federal Contrlbutlon to ^llanza, 2008 (Mllllons of Pesos)
250,000
800
700
600
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Subsdzng 1neguaIty

tn thts categcry.
3
ThIs uspect ol polIcy desIgn prevents the omcIul dutu lrom reveulIng the
degree to whIch the progrum reuches low-Income lurmers. In ChIupus In 2008, lor Instunce,
ulmost 95 percent ol upplIcunts t Into the low cupItul" cutegory, dened us huvIng lewer
thun 20 hectures ol lund (3ugurpu 2009).
4
3tutes ure only requIred to ullocute 50 percent ol
lunds to low cupItul producers, even though In stutes lIke ChIupus they muke up the vust
muorIty ol upplIcunts.
- The prccess fcr evaluattng appltcattcns ts ncntransparent and htghly subecttve. The
stute commIttees thut receIve und revIew AlIunzu upplIcutIons decIde whIch upplIcutIons to
lund usIng nontrunspurent crIterIu. The Rules ol OperutIon Include u system lor scorIng up-
plIcutIons bused on proect desIgn und demogruphIc churucterIstIcs ol the upplIcunts (3ugurpu
2008). However, 3ugurpu omcIuls IntervIewed, IncludIng MIguel ngel Lpez, Heud ol Invest-
ment und CupItulIzutIon lor 3ugurpu's 3ubsecreturIut ol AgrIculture, expluIned thut In muny
stutes, upplIcutIon scores ure not u decIsIve luctor In lundIng decIsIons und thut some stutes
do not Implement the scorIng system ut ull. ThIs study's evuluutIon ol u lIst ol upplIcunts In
ChIupus conrmed thIs luctupplIcutIons thut ure upproved lor lundIng ohen receIve lower
scores on these crIterIu thun other upplIcutIons thut ure denIed. Further, denIed upplIcunts
generully ure not gIven u reuson lor the denIul.
3. PRODUCER ACCE55 TO ALIANZA FUND5
IN PRACTICE
Wtth fev excepttcns, fcr small-scale farmers, belcngtng tc an crgantzattcn cf prc-
ducers ts a necessary, thcugh nct sumctent ccndtttcn fcr accesstng Altanza suppcrt.
In ChIupus, lor Instunce, over 95 percent ol upplIcunts to the AgrIculturul 3upport subprogrum
upplIed us members ol groups In 2008 (3ugurpu 2009). ApplyIng us u group ruther thun IndI-
vIduully helps to uddress the lollowIng chullenges lor poor upplIcunts:
- Muny producers ure excluded lrom receIvIng AlIunzu lunds becuuse the lunds ure puId out
us u reImbursement lor Investments ulreudy mude, representIng u sIgnIcunt nuncIul burden.
ThIs core leuture buIlt Into progrum desIgn Is u purtIculurly duuntIng obstucle lor producers
who must purchuse costly cupItul such us IrrIgutIon systems or tructors to compete In ugrIcul-
turul murkets. Producer orgunIzutIons cun more eusIly uccess credIt to cover these uplront
expenses, yet muny members ol such orgunIzutIons IntervIewed stIll cIted thIs us the muIn
luctor thut prevents them lrom uccessIng AlIunzu lunds.
- The upplIcutIon process Is bureuucrutIc, mukIng the progrum InuccessIble lor lurmers wIth
lImIted lormul educutIon. Croups ol producers ohen hIre consultunts, ut greut cost, to help
them guther the requIred documents und ll out the complex upplIcutIon.
- Communul lundholders, IncludIng most IndIgenous upplIcunts, luce even greuter obstucles
thun other smull-scule lurmers lor two reusons: they ohen do not speuk 3punIsh, mukIng
the upplIcutIon process even more opuque, und IndIvIduul lund tItles ure u requIrement ol
upplyIng lor muny AlIunzu subprogrums und ure needed to use us colluterul lor bunk louns.
WhIle legully constItuted groups ol producers cun upply lor AlIunzu progrums und uccess
credIt wIth u certIcute lor communully held lund, the bureuucrutIc process ol legul constI-
tutIon und upplyIng lor thIs certIcute Is dImcult.
4. FAO EVALUATION5 OF ALIANZA PARA EL CAMPO
Desptte veaknesses tn the evaluattcn prccess, cmctal evaluattcns cf Altanza have
crtttctzed the prcgram fcr betng cverly bureaucrattc and fcr tnemctent allccattcn cf
rescurces. 3Ince l999, the MexIco delegutIon ol the Food und AgrIculture AssocIutIon ol the
UnIted NutIons (FAO) hus currIed out yeurly evuluutIons ol AlIunzu. These evuluutIons uddress
progrum desIgn und the success ol AlIunzu In meetIng Its stuted obectIves. ThIs report's muIn
conclusIons concernIng the FAO evuluutIon process ure the lollowIng:
- DespIte the luct thut the FAO Is hIred by 3ugurpu to curry out evuluutIons ol AlIunzu, the
evuluutIon process Is hIndered by u luck ol uccess to 3ugurpu documents, stutIstIcs, und
3 1he latest Rules of Operatlon for ^llanza, put ln place ln 2008, allow for state agrlcultural mlnlstrles to declde whlch
producers are classlfed as small-, medlum-, and large-scale based on thelr states' demographlc makeup, but mlnlstrles are
stlll ln the process of undertaklng Lstudlos de Lstratlfcacln de Productores," a step requlred to get Sagarpa's approval
for a change these categorles.
4 ecause low-lncome producers face greater obstacles ln submlttlng appllcatlons for ^llanza support than hlgher-lncome
producers, the percentage of cl||blc producers wlth fewer than 20 hectares ls even larger than the percentage of appllcants.
7
Lessons trom AIanza gara eI Camgo

personnel. Muny ol the IndIcutors used by FAO evuluutIons ure derIved lrom less precIse
sources, IncludIng uggregute dutu on rurul development or surveys ol potentIul benecIu-
rIes. Also, FAO evuluutIons ol yeurly AlIunzu ImplementutIon begIn In August ol euch yeur,
not ullowIng tIme to puss to be uble to observe the results ol the progrums.
5
- A serIes ol FAO reports huve crItIcIzed AlIunzu lor u luck ol long-term plunnIng, InsumcIent
coordInutIon between 3ugurpu und stute ugrIculturul mInIstrIes, und un overly bureuucrutIc
desIgn.
6
These uspects ol progrum desIgn result In un InemcIent ullocutIon ol resources, de-
luys In progrum ImplementutIon, und decreused uccessIbIlIty ol AlIunzu, especIully lor poor
producers.
- FAO evuluutIons huve ulso recommended thut AlIunzu could more emcIently contrIbute to
rurul development by ullocutIng u greuter shure ol lunds to smull-scule lurmers. They poInt
out thut 3ugurpu's stundurd crIterIu lor dIstInguIshIng umong smull, medIum, und lurge-scule
lurmers ure InupproprIute lor the lurmIng populutIons ol severul stutes (FAO 2007: 29).
- FAO evuluutors repeutedly suggest thut more AlIunzu lunds be ullocuted to publIc goods
thut Improve rurul ugrIculturul Inlrustructure und lucIlItute Improved protubIlIty through
vertIcul IntegrutIon ruther thun exclusIonury prIvute goods. 3eventy-sIx percent ol progrum
lunds lrom l996-2007 were spent on prIvute goods (cupItul) lor producers, 95 percent ol
whIch Is used In prImury productIonsuch us tructors, IrrIgutIon systems, und genetIc mu-
terIuls (Crupo InterugencIul de Desurrollo 2009: 2l-22).
5. CONCLU5ION5
ThIs study hus uddressed some ol the muor obstucles thut stund In the wuy ol smull-scule
lurmers benettIng lrom AInnzn pnrn cI Cnmpo. Muny ol these problems wIth uccess ure
sImIlur to the shortcomIngs In lederully-udmInIstered ugrIculturul progrums, such us Procumpo.
Others, however, ure dIrectly reluted to AlIunzu's relIunce on stute governments to udmInIster
the progrum und ullocute resources. The purported benets ol decentrulIzutIon lor ugrIculturul
support progrums ure thut they ullow lor resources to be ullocuted by decIsIon-mukers who ure
more uwure ol the economIc potentIul ol the turget groups und the envIronmentul condItIons
lor lurmIng. WhIle some ol these benets ure surely uchIeved, thIs study lound uspects ol pro-
grum desIgn und ImplementutIon thut leud to regressIve trends In budgetIng und luck ol uccess
lor low-Income producers. Furthermore, the dIscretIonulIty und luck ol trunspurency In stute
government resource ullocutIon decIsIons creute opportunItIes lor the devIutIon ol lunds us
putronuge. ThIs report's ndIngs suggest thut these decIencIes result In u dIstrIbutIon ol ug-
rIculturul Investment resources thut dIsluvors low-Income upplIcunts.
5 For a summary and assessment of the F^O evaluatlon process of ^llanza, see Crupo lnteragenclal de 0esarrollo (2009: 22-25).
Subsdzng 1neguaIty

BCX ll:
TRIMMER5 V5. TRACTOR5
Brtan Palmer-Rubtn (UCB)
Much ol AInnzns lunds go to lurmers to support u wIde runge ol cupItul Investments,
IncludIng Items us InexpensIve us hedge-trImmers or us costly us tructors. OrgunIzutIons
ol smull-scule lurmers Implement u vurIety ol strutegIes to uccess support lrom AlIunzu
to muke these Investments. DependIng on the umount ol money sought und churucterIs-
tIcs ol the lurmers receIvIng the lunds, poor lurmers who seek to uccess AlIunzu's re-
sources luce dIerent kInds ol obstucles. However, thIs study's results suggest thut lor ull
poor lurmers, belongIng to u producer orgunIzutIon Is u necessury though not sumcIent
condItIon lor uccessIng AlIunzu support.
Two cuses lrom ChIupus ure IllustrutIve ol the vurIutIon In experIences ol orgunIzutIons ol
smull scule producers: the purchuse ol hundreds ol puIrs ol hundheld tools lor Muomut,
un orgunIzutIon ol coee growers In the hIghlunds munIcIpulIty ol Chenulh und the pur-
chuse ol u tructor by u corn lurmer orgunIzutIon culled TotIkes, bused In the munIcIpulIty
ol VenustIuno Currunzu. These smullhollders would not huve been uble to uccess AlIunzu
lunds wIthout the support thut theIr orgunIzutIons provIded, In order to munuge the
hIghly bureuucrutIc upplIcutIon process, provIde uccess to credIt, und wIeld polItIcul In-
uence wIth stute ugrIculturul omcIuls. Most smullholders ure unuble to overcome these
numerous hurdles und therelore cunnot uccess the AlIunzu mutchIng lunds.
Muomut Is un orgunIzutIon ol roughly one thousund IndIgenous tzeltul coee lurmers
bused In the hIghlunds munIcIpulIty ol Chenulh. The uveruge member ol Muomut lurms
ubout l.5 hectures ol coee lund, usIng the most lubor IntensIve und low cupItul technI-
ques. The members ol Muomut rely on the orgunIzutIon In muny wuys, IncludIng provIdIng
uccess to ugrIculturul support progrums such us AlIunzu. Lorenzo 3ntIz Cmez, PresIdent
ol Muomut expluIned thut successlul protests In the pust huve led the orgunIzutIon's
members to vIew government support us un entItlement ruther thun us u benet (IntervIew,
July 3, 2009). Il the stute or lederul ugrIculturul mInIstry wIthdruws support In u gIven
yeur, Muomut Is reudy und wIllIng to protest theIr exclusIon. 3ntIz Cmez und other
members ol Muomut's leudershIp structure serve the Importunt roles ol negotIutIng
wIth ugrIculturul mInIstry omcIuls, llIng out puperwork, und ussIstIng members In guth-
erIng the requIred documentsbIrth certIcutes, votIng documents, und lund tItles.
Becuuse ol the extremely lImIted nuncIul resources ol Muomut's members, lurge-scule
Investments In muchInery ure pructIcully unheurd ol. The lurmers benet lrom AlIunzu
by usIng Its resources to buy the busIc hund-held tools thut muke pluntIng und hurvestIng
coee more emcIent: trImmers, shovels, und hole-dIggers. In 2008, lor Instunce, Muomut
submItted un upplIcutIon lor AlIunzu to lund the purchuse ol these hund tools lor ull ol
Its members. They were upproved lor roughly one-hull ol the tools thut they requested.
Becuuse Muomut's lurmers ure clussIed In the poorest cutegory dened by 3ugurpu und
lIve In hIgh-murgInulIty vIlluges, AlIunzu lunded 90 percent ol the cost ol the tools,
whIch were dIstrIbuted umong members through u rume. Due to Its sIze und longevIty
the orgunIzutIon wus lounded In l983Muomut Is umong the most InuentIul orgunI-
zutIons ol smull-scule coee growers' In the stute, uccordIng to Rumn Murtnez CorIu,
DIrector ol the Foro puru el Desurrollo 3ustentuble, AC, u ChIupus bused NCO thut spe-
cIulIzes In rurul development (IntervIew, July 6, 2009). In contrust to the experIence ol
Muomut, most coee lurmers In ChIupus do not huve uccess to AlIunzu becuuse they do
not belong to orgunIzutIons thut ure us eectIve ut nuvIgutIng these udmInIstrutIve und
polItIcul chunnels.
CondItIons ure even more dImcult lor low-Income lurmers who try to muke u lIvIng grow-
Ing more cupItul-IntensIve crops, such us corn, us they uttempt to uccess AlIunzu support
lor more costly Investments. The process lor upplyIng lor support to buy u tructor Is demon-
strutIve ol these chullenges. A hIgh percentuge ol resources In the AgrIculturul 3upport
subprogrum ol AlIunzu go towurd the purchuse ol tructors, demonstrutIng u bIus towurd
cupItul-IntensIve ugrIculturul sectors. 3mull-scule lurmers thut grow these crops, however
luce muny chullengesboth lormul und InlormulIn uccessIng thIs support, however. For
exumple, severul corn lurmers IntervIewed In ChIupus compluIned thut the most Inex-
pensIve tructor lor whIch they could get theIr upplIcutIon uccepted cost over MX$300,000
only MX$l20,000 ol whIch Is covered by the progrum. The stute government's rutIonule
lor excludIng smuller, more uorduble tructors lrom the progrum Is not cleureven
though smull tructors ut hull the prIce ure lormully elIgIble lor AlIunzu support (lor lIst
ol Investments covered, see http://www.sugurpu.gob.mx/ugrIculturu/PrecIosJustos/PugI-
nus/deluult.uspx). Purt ol the explunutIon Is lound In the luct thut the tructor progrum ol
7
Lessons trom AIanza gara eI Camgo

the pust two yeurs requIred upplIcunts or groups ol upplIcunts to huve ut leust 35 ucres
ol lund thut wus lurmuble wIth tructors.
The experIence ol TotIkes, un orgunIzutIon ol smull-scule corn lurmers bused In the munIcI-
pulIty ol VenustIuno Currunzu, Is purtIculurly IllustrutIve. TotIkes wus lounded In 2000
und represents roughly 5,000 corn lurmers, most ol whom ure IndIgenous tzotzIl wIth
lewer thut ve hectures ol lund. Much lIke Muomut, TotIkes hus u vertIcul leudershIp
structure thut helps members In the udmInIstrutIve process ol upplyIng lor support lrom
ugrIculturul support progrums such us AlIunzu. TotIkes ulso Is uble to exercIse some de-
gree ol polItIcul leveruge on the stute level through Its umlIutIon wIth the Lmprcsn lntc-
grnJorn Cnmpcsnn (EIC3A), u stutewIde corn cooperutIve thut belongs to ANEC, u nu-
tIonul network ol ugrIculturul murketIng orgunIzutIons.
Even wIth the help ol the orgunIzutIon's leudershIp und EIC3A, however, the members ol
TotIkes luce duuntIng obstucles In uccessIng support lrom AlIunzu to help buy u tructor.
AccordIng to Ruly de Jess Coello Cmez, presIdent ol TotIkes, groups ol lurmers umlI-
uted wIth TotIkes ohen submIt upplIcutIons to AlIunzu severul yeurs In u row wIthout
success (IntervIew July 2, 2009). 3ome groups' upplIcutIons luIl becuuse theIr members
lIve on communully held hund und thus do not huve possessIon ol lund tItles, u requIre-
ment ol the upplIcutIon. Others sImply cunnot guther the mInImum umount requIred to
purchuse u tructorroughly MX$350,000 (ubout U3$27,000) whIle uwuItIng reImburse-
ment lrom 3ugurpu. In the hundlul ol successlul cuses, members took udvuntuge ol the
lIne ol cupItul secured through TotIkes und u greut deul ol udmInIstrutIve support und
polItIcul Inuence provIded by EIC3A personnel. Aher thIs urduous process, the corn
lurmers stIll must Invest lurge umounts ol theIr own lunds, us AlIunzu support lor truc-
tors Is cupped ut MX$l20,000 In ChIupus.
In compurIng these two cuses, we cun druw three muIn conclusIons. FIrst, uccessIng support
lrom AlIunzu Is extremely dImcult lor smull-scule lurmers, due to logIstIcul, udmInIstrutIve
und nuncIul obstucles. 3econd, the stute government's InterpretutIon ol the lederul pro-
grum Is bIused towurds especIully expensIve, cupItul-IntensIve Investments, such us lurge
tructors, thut ure both InupproprIute und InuccessIble lor low und mIddle-Income producers.
FInully, the polItIcul, udmInIstrutIve, und nuncIul support provIded by producers' orgu-
nIzutIons Is un essentIul precondItIon lor poor lurmers to uccess AlIunzu.
BIBLIOCRAPHY:
AsocIucIn MexIcunu de 3ecreturIos de Desurrollo AgropecuurIo, A.C. (AM3DA) (2009). Tublu de Pur-
tIcIpucIones Federules de AlIunzu puru el Cumpopor EntIdud Estudo. 2002-2009."
0nro DjcnI Jc In FcJcrncn. (2008). QuIntu 3eccIn: 3ecreturu de AgrIculturu, Cunuderu, Desurrollo
Rurul, Pescu y AlImentucIn," Rules ol OperutIon
FAO (2007). lnjormc Jc LvnIuncn y Consstcncn 0sco, AInnzn pnrn cI Cnmpo. MxIco, octubre
Crupo InterugencIul de Desurrollo (2009). Mxco LvnIuncn Jc poItcns rurnIcs. TcnJcncns tcrcns y
Iccconcs Jc In cxpcrcncn. MxIco: CEPAL, FAO, IICA y el Bunco MundIul, Murch
Pulmer-RubIn, BrIun (20l0). DecentrulIzed AgrIculturul 3upport Progrums In MexIco: Resource AllocutIon
und Obstucles to Access lor Low-Income Producers," Mcxcnn RurnI 0cvcIopmcnt Rcscnrch Rcports,
No. 6, Woodrow WIlson InternutIonul Center lor 3cholurs, MexIco InstItute, www.wIlsoncenter.org/
DesurrolloRurulMexIcuno
3ACARPA (2008). AInnzn pnrn cI Cnmpo LvnIuncn Jc 0sco JcI Progrnmn pnrn In AJqus cn Jc
Actvos ProJuctvos, http://www.luo-evuluucIon.org.mx/pugInu/Inlorme-evuluucIon-progrumus, uccessed
Dec l8, 2009
------ (2009) AlIunzu puru el Cumpo progrum budget, http://www.sIser-ulIunzucontIgo.gob.mx, uccessed
Dec. l8, 2009
Sccrctnrn Jc HnccnJn y CrJto PbIco (3HCP websIte). www.upurtudos.hucIendu.gob.mx, lust uccessed
December l0, 2009.
3cott, John (20l0). The IncIdence ol AgrIculturul 3ubsIdIes In MexIco," Mcxcnn RurnI 0cvcIopmcnt
Rcscnrch Rcport, No. 2, Woodrow WIlson InternutIonul Center lor 3cholurs, MexIco InstItute, www.
wIlsoncenter.org/DesurrolloRurulMexIcuno
World Bunk (20l0). AgrcuIturc nnJ RurnI 0cvcIopmcnt PubIc LxpcnJturc Rcvcw, Report No. 5l902-
MX, WushIngton: World Bunk
8

8
The mgacts ot U.S.
agrcuIturaI
goIces on
Mexcan groducers
Tmcthy A. Wse
l
0IobnI 0cvcIopmcnt nnJ Lnvronmcnt lnsttutc, Tujs Unvcrsty
1 1hls chapter summarlzes work presented more extenslvely ln a longer background paper (wlse 2010). 1he author would
llke to thank etsy Rakocy for lnvaluable research asslstance for thls proect.
8
The 1mgacts ot U.S. AgrcuIturaI PoIces

The MexIcun government hus shuped Its ugrIculturul polIcIes durIng u tIme ol severe ud-
ustment, whIch wus ushered In by the openIng ol the MexIcun economy under NAFTA. It
wus wIdely recognIzed ut the begInnIng ol NAFTA thut MexIco hud geogruphIcully-bused
compurutIve udvuntuges In supplyIng o-seuson lruIts und vegetubles to u hungry U.3.
murket. U.3. producers muIntuIned cleur udvuntuges over theIr southern neIghbors In
muny stuple crops und meuts, wIth yIelds much hIgher thun theIr MexIcun counterpurts
und wIth lurge exportuble surpluses. ThIs posed cleur rIsks to MexIco's lurge smullholder
populutIon, muny ol whom relIed on crops thut competed wIth U.3. Imports proposed lor
lIberulIzutIon. NAFTA's lIberulIzutIon ol ugrIculturul trude produced the expected results,
wIth more stuple crops und meuts owIng south und seusonul lruIts und vegetubles owIng
north (lor buckground, see de Itu 2008, Romero 2009, ZuhnIser und Crugo 2009).
NAFTA reduced turIs und quotus on u wIde runge ol products, wIth some sensItIve prod-
ucts ullowed longer trunsItIon perIods to elImInute exIstIng protectIons, up to l5 yeurs.
Not ull ol these trunsItIon perIods were lollowed - most notubly corn In MexIco's cuse - but
the lust ol the trunsItIon perIods cume to u close on Junuury l, 2008. In ugrIculture, turIs
und quotus huve now lurgely been elImInuted. Not so ugrIculturul subsIdIes. NAFTA dId
not dIscIplIne subsIdIes, In contrust to WTO negotIutIons whIch In ugrIculture huve treuted
domestIc lurm subsIdIes us one ol the three pIllurs" ol trude-dIstortIng ugrIculturul protec-
tIon, the other two beIng export subsIdIes und turIs. U.3. lurm subsIdIes sInce NAFTA
huve dwurled MexIco's, und muny ol those subsIdIes ure lor crops the UnIted 3tutes exports
to MexIco (WIse 2007). ThIs hus prompted churges thut the level pluyIng eld NAFTA wus
supposed to creute Is In luct tIlted heuvIly In luvor ol the UnIted 3tutes.
How huve U.3. ugrIculturul polIcIes uected MexIcun producers In un economIc envIron-
ment ol lIberulIzed trude We unulyzed eIght heuvIly supported commodItIes - corn, soy-
beuns, wheut, cotton, rIce, beel, pork, und poultry - thut compete wIth MexIcun productIon
und thut huve seen Increuses In U.3. exports to MexIco ol between l59% und 707% sInce
the eurly l990s. Together they represent 52% ol the vulue ol U.3. ugrIculturul exports to
MexIco. We exumIned the extent to whIch those products were exported to MexIco ut prIc-
es below productIon costs between l997 und 2005. We look ut those yeurs becuuse the
perIod begIns uher NAFTA's lIberulIzutIon wus lurgely Implemented nnJ uher the l996 U.3.
Furm BIll, whIch cuused sIgnIcunt chunges to U.3. productIon und prIces by brIngIng u
greut deul ol lund buck Into ugrIculturul productIon. The perIod under study ends belore
the recent run-up In commodIty prIces.
Our goul wus to estImute the costs to MexIcun producers ol domestIc lurm prIces drIven
down by below-cost Imports lrom the UnIted 3tutes. We estImute the costs ut $l2.8 bIllIon
lrom l997-2005 lor the eIght products (In constunt 2000 U3 dollurs), l0% ol the vulue ol
ull MexIcun ugrIculturul exports to the UnIted 3tutes. Corn producers were by lur the most
heuvIly uected, wIth $6.6 bIllIon In losses, un uveruge ol $38 per metrIc ton, or $99 per
hecture. ThIs Is more thun the uveruge per-hecture puyment to smull-scule producers un-
der the Procumpo subsIdy progrum.
l. E5TIMATINC DUMPINC
All eIght products huve been heuvIly Impucted by U.3. ugrIculturul polIcIes - not ust sub-
sIdIes - whIch huve Increused the competItIveness ol U.3. exports. AccordIng to U.3. gov-
ernment dutu, U.3. lurm subsIdIes lor these crops uveruged $ll.5 bIllIon per yeur lrom
l997-2005, wIth corn receIvIng $4.5 bIllIon/yeur In commodIty progrum support. U.3. ex-
port credIts provIded uddItIonul support to exporters, though thIs hus declIned sIgnIcuntly
In recent yeurs.
On u per hecture busIs, U.3. subsIdy levels ure sIgnIcuntly hIgher thun they ure In MexIco,
wIth the exceptIon ol wheut. WhIle U.3. lurm subsIdIes Increused uher the l996 U.3. Furm
BIll, the luw's most Importunt eect wus the removul ol oor prIces, stock munugement,
und lund set-usIdes, whIch brought prevIously Idle lund buck Into productIon. The result-
Ing surpluses drove prIces well below productIon costs. Low prIces brought hIgher subsI-
dIes, sInce some subsIdIes were trIggered by low prIces, but It Is not cleur thut the subsIdIes
themselves cuused the low prIces (Ruy, de lu Torre Ugurte et ul. 2003). (In luct, economIc
modelIng ol subsIdy elImInutIon generully nds lImIted long-term prIce Impucts.)
The best estImute ol the Impucts ol U.3. polIcIes on exports Is the so-culled dumpIng mur-
gIn," the percentuge by whIch export prIces ure below productIon costs. ThIs cuptures the
Impuct ol ull chunges In ugrIculturul polIcIes In relutIon to exports, denIng us dumpIng"
the exportutIon ol uny product ut u prIce below costs (thut Is, not ust dIrect subsIdIes). ThIs
Is one ol the denItIons ol dumpIng In the World Trude OrgunIzutIon ugreement (RItchIe,
Murphy et ul. 2003). It Is u more relIuble estImute thun the wIdely cIted Producer 3ubsIdy
Subsdzng 1neguaIty

EquIvulent (P3E), whIch estImutes support In unrelIuble wuys, purtIculurly lor developIng
countrIes (see WIse 2004 lor more detuIled unulysIs).
TabIe 1
IMPACT 0l U.S. LUMPINC 0N MlXICAN Pl0LUCllS
Sources. USLAlATUS, Stermer et el. ,2006), SACAlPA
For the ve crops und three lIvestock sectors unulyzed, the results show vurIed but sIgnIcunt
Impucts on MexIcun producers, us presented In Tuble l. As noted eurlIer, ull eIght products
suw sIgnIcunt growth In U.3. exports lrom the eurly l990s, the lowest beIng u l59% Increuse
In soybeun exports und the hIghest u 707% Increuse In pork exports. All eIght products showed
posItIve dumpIng murgIns lor the perIod we exumIned (l997-2005), wIth the estImutes lor the
lIvestock products (usIng u dIerent methodology) lower (5%-l0%) thun the estImutes lor the
crops (l7%-38%). The reluted trends In MexIco were sIgnIcunt us well. Reul producer prIces
lell drumutIcully lor ull products lrom theIr levels In the eurly l990s, wIth 2005 prIces (In reul
pesos) 44%-67% lower.
There wus sIgnIcunt vurIutIon In the observed Impucts ol rIsIng Imports und lower
prIces on MexIcun productIon. Corn stunds out lor Its counterIntuItIve 50% Increuse In pro-
ductIon, whIch leuves MexIco lurgely sell-sumcIent In the productIon ol whIte corn lor humun
consumptIon und hIghly dependent on Imports lor the lust-growIng lIvestock sector. The
other crops ull showed declInes In MexIcun productIon, wIth smull declInes In wheut (-7%),
cotton (-3%) und rIce (-8%) und u lurge drop (-83%) In soybeun productIon, whIch MexIco ull-
but-ceused producIng. The lIvestock products ull showed robust productIon Increuses (3l%-
l33%), whIch reect the dynumIc demund lor meut-bused proteIns In the MexIcun dIet und the
contInued ubIlIty ol MexIco-bused producers to meet some ol thut growIng demund.
UnIted 3tutes MexIco
Producer
Totul Import
dependency
Losses
Exports to MexIco
(l000 tm)
DumpIng
murgIn
PrIce Drop
ProductIon Mex
(l000 tm)
l997-
2005
l990-92 2006-8 growth %
uvg
97-05
2005/90-2 l990-92 2006-8 growth l990-92 2006-8 2000U3$
reul
pesos 2000
mIllIons
Corn - ull 2,0l4 l0,330 4l3% l9% -66% l5,807 23,650 50% 7% 34% 6,57l
w/o crucked l,982 8,385 323% 7% 28%
3oybeuns l,4l0 3,653 l59% l2% -67% 6l9 l05 -83% 74% 97% 3l
Wheut 360 2,5l5 599% 34% -58% 3,87l 3,6ll -7% l8% 57% 2,l76
Cotton 49 3l2 53l% 38% -65% l38 l34 -3% 48% 70% 805
RIce l29 806 524% l6% -5l% l97 l8l -8% 60% 76% 67
3ubtotul 9,650
Beel 54 204 278% 5% -45% l,677 2,l9l 3l% 6% l6% l,566
Pork 27 2l8 707% l0% -56% 8l4 l,l40 40% 4% 3l% l,l6l
Poultry 85 396 363% l0% -44% l,l56 2,693 l33% 7% l9% 455
3ubtotul 3,l82
Totul Losses l2,832
8
The 1mgacts ot U.S. AgrcuIturaI PoIces

Fgure 1
MlXIC0. lISINC IMP0lT LlPlNLlNC
Source. USLA lAS Producton, Supply end Lstrbuton 0nlne, 2009.
MexIco's Import dependency lor ull eIght products Increused sIgnIcuntly. (3ee FIgure l.) In
lIvestock, dependency Increused lrom the eurly-l990s levels ol 4-7% to 2006-8 levels ol l6-
3l%. For the crops, the InItIul levels ol dependency were ulreudy hIgh In the eurly l990s (7-
74%) und the levels ol Import dependency were much hIgher by 2006-8 - rungIng lrom 34%
lor corn to 97% lor soybeuns. The vust muorIty ol Imports cume lrom the UnIted 3tutes.
2. E5TIMATINC THE CO5T5 TO MEXICAN
PRODUCER5
The costs to MexIcun producers ol exports enterIng the country ut prIces below theIr costs ol
productIon lull In two broud cutegorIes:
- DomestIc lurm prIces ure drIven lower, reducIng receIpts to lurmers.
- Demund lor domestIc lurm products Is dIspluced by Imports.
For thIs proect, we uttempt only to estImute the dIrect costs ol lower prIces. It would requIre
more complex modelIng to estImute uccurutely the wuys In whIch hIgher U.3. prIces lor u vu-
rIety ol lurm products would reduce demund In MexIco lor U.3. exports und boost demund lor
MexIcun productIon, whIch would ruIse prIces lurther (see Dyer 2008 lor u dIscussIon ol these
Impucts).
As Tuble l shows, lrom l997-2005 the U.3. exported the ve crops studIed here ut dumpIng
murgIns rungIng lrom l2% lor soybeuns to 38% lor cotton. AssumIng MexIcun producer prIc-
es were depressed by the sume percentuge us the dumpIng murgIns, below-cost exports cost
MexIcun producers ol corn, soybeuns, wheut, cotton und rIce un estImuted $9.7 bIllIon lrom
l997-2005, ust over $l bIllIon per yeur.
Meut wus exported ut below-cost prIces becuuse U.3. producers beneted lrom below-cost
soybeuns und corn, key components In leed, whIch Is the lurgest sIngle operutIng cost lor In-
100%
80%
90%
60%
70%
50%
40%
30%
20%
10%
1990-92 2006-08
l
m
p
o
r
t

S
h
a
r
e

o
f

C
o
n
s
u
m
p
t
l
o
n
C
o
r
n
S
o
y
w
h
e
a
t
C
o
t
t
o
n
R
l
c
e

e
e
f
P
o
r
k
P
o
u
l
t
r
y
0
Subsdzng 1neguaIty

dustrIul lIvestock producers. ThIs so-culled ImplIcIt subsIdy to IndustrIulIzed meut producers
resulted In dumpIng murgIns ol 5-l0% (3turmer, WIttemun et ul. 2006, 3turmer und WIse
2007). ThIs cost those MexIcun lIvestock producers who dId not benet lrom Imported leed un
estImuted $3.2 bIllIon. The lurgest losses were In beel, ut $l.6 bIllIon, or $l75 mIllIon per yeur.
Totul losses lor the eIght products together ure estImuted ut $l2.8 bIllIon lor the nIne-yeur
perIod, or $l.4 bIllIon per yeur. To put these numbers In context, the unnuul losses ure more
thun l0% ol the vulue ol ull MexIcun ugrIculturul exports to the UnIted 3tutes (IncludIng beer,
whIch Is, oddly, clussIed us MexIco's most Importunt ugrIculturul export). The losses lrom
U.3. dumpIng surpuss the totul vulue ol MexIco's unnuul tomuto exports to the UnIted 3tutes,
whIch surged uher NAFTA.
3. THE CA5E OF CORN
Not surprIsIngly, corn showed the hIghest overull losses, wIth uveruge dumpIng murgIns ol
l9%. ThIs contrIbuted to u 4l3% Increuse In U.3. exports (countIng unreguluted crucked corn
exports) und u 66% declIne In reul producer prIces lrom the eurly l990s to 2005. In purt, ol
course, thIs wus cuused by the MexIcun government's decIsIon not to enlorce NAFTA's turI-
rute quotu (TRQ) lor most corn Imports. (3ee FIgure 2.) WhIle some huve locused on MexIco's
estImuted $3.8 bIllIon In lost turI revenues lrom not enlorcIng the TRQ, thIs wus not the most
Importunt cost ol MexIco's ucceleruted lIberulIzutIon. The TRQ's prohIbItIve turIs would huve
slowed or hulted Imports, so the loregone turI revenue Is entIrely hypothetIcul. The reul Im-
puct wus on prIces, us the government chose not to use the TRQ to slow the Import surge. WIth
Imports oodIng the murket ut dumpIng-level prIces, the Impucts on producers were drumutIc.

Fgure 2
MlXICAN C0lN. IMP0lTS ANL llAl Pl0LUCll PlIClS, 19S9200S
Source. USLA/lAS, SACAlPA/SIAP 2009
Remurkubly, MexIcun productIon ol whIte corn Increused 50% In spIte ol the competItIon lrom
Imports und the lull In prIces (see FIgure 3).
M
l
l
l
l
o
n
s

o
f

M
e
t
r
l
c

1
o
n
s
Producer prlce lmports from US
Ldlble Corn Cracked Corn N^F1^ Quota
12
10
8
6
4
2
0
5
4.5
4
3.5
3
2.5
2
1.5
1
0.5
0
1
9
8
9
1
9
9
1
1
9
9
3
1
9
9
5
1
9
9
7
1
9
9
9
2
0
0
1
2
0
0
3
2
0
0
5
2
0
0
7
1
h
o
u
s
a
n
d
s

o
f

2
0
0
3

M
e
x
l
c
a
n

P
e
s
o
s
8
The 1mgacts ot U.S. AgrcuIturaI PoIces

Fgure 3
MlXICAN C0lN. Pl0LUCTI0N, IMP0lTS, 1990200S
Source. USLA/lAS, SACAlPA/SIAP 2009
The estImuted cost to MexIcun producers ol dumpIng-level prIces wus more thun $6 bIllIon
over the nIne-yeur perIod, or $730 mIllIon per yeur (In constunt 2000 dollurs). Losses exceeded
$ll bIllIon sInce l990, wIth the hIghest losses In l993, und In l999 und 2000 when dumpIng
murgIns exceeded 30% (see FIgure 4).
Fgure 4
C0lN. LUMPINC MAlCINS ANL ANNUAl l0SSlS 1990200S
Source. USLA, 0lCL, IATP, SACAlPA, euthor's celculetons.
M
l
l
l
l
o
n
s

o
f

M
e
t
r
l
c

1
o
n
s
Corn lmports from the US Mexlcan Productlon
(lncl. cracked)
30
25
20
40
35
15
10
5
0
1
9
9
0
1
9
9
2
1
9
9
4
1
9
9
6
1
9
9
8
2
0
0
0
2
0
0
2
2
0
0
4
2
0
0
6
2
0
0
8
0
u
m
p
l
n
g

m
a
r
g
l
n
M
l
l
l
l
o
n
s

2
0
0
0

U
S
$
0
200
400
600
800
1,000
1,200
1,400
1,600
1,800
2,000
^nnual losses 0umplng margln
35%
30%
25%
20%
15%
10%
5%
0%
1
9
9
0
1
9
9
2
1
9
9
4
1
9
9
6
1
9
9
8
2
0
0
0
2
0
0
2
2
0
0
4
2
0
0
6
2
0
0
8
Subsdzng 1neguaIty

Whut dId thIs meun lor MexIcun producers From l997-2005, producers lost un estImuted
$38 per metrIc ton ol corn, or $99/hu per yeur. For most yeurs, per hecture losses were be-
tween $50 und $l00. In l993, l999, und 2000, losses exceeded $l75/hu (see FIgure 5).
Fgure 5
C0lN LUMPINC l0SSlS/lA T0 MlXICAN Pl0LUCllS 1990200S
Source. USLA/lAS 2009, euthor's celculetons.
ThIs hIghlIghts the humun costs ol ugrIculturul dumpIng. In reul pesos (2000), thIs Is un uver-
uge loss ol 958 pesos/hu between l997 und 2005, or 367 pesos per metrIc ton. For the lowest
productIvIty smullholders, thIs elImInuted uny posItIve Income lrom the sules ol corn In the
murketpluce. It Illustrutes one ol the most Importunt reusons lor the wIdely observed retreut
to subsIstence" umong MexIcun smullholders: When It no longer puys to sell your corn, better
to use It ust to leed your lumIly.
These losses ulso hIghlIght the Importunce ol Procumpo puyments to MexIcun lurmers, und
the Irony thut these subsIdIes huve compensuted lor U.3. dumpIng ruther thun helped lurmers
Increuse productIvIty. Procumpo wus set up us purt ol the trunsItIon perIod under NAFTA us
un Income-support progrum to help lurmers become more competItIve or shIh to other crops
or lIvelIhoods. On Its luce, Procumpo wus Intended to uddress the usymmetrIes between U.3.
und MexIcun ugrIculture. As un Income-support progrum, Procumpo proved un Importunt lIle-
lIne, but Its vulue us u stImulus to competItIve corn productIon wus lurgely undercut by U.3.
dumpIng. Between l994 und 2005, the reul vulue ol Procumpo puyments declIned 39%. In
2000 pesos, puyments to the smullest producers uveruged 858 pesos/hu. ThIs wus InsumcIent
even to compensute MexIco's corn lurmers lor the prIce Impucts ol dumpIng, whIch uveruged
958 pesos/hu. NothIng wus leh over to help lurmers uddress the true sources ol the develop-
mentul usymmetrIes between U.3. und MexIcun corn lurmers.
4. I5 DUMPINC A THINC OF THE PA5T
WhIle the long-term trends suggest nomInul prIces lor some ugrIculturul commodItIes slIghtly
hIgher thun theIr pre-boom lows, It would be u mIstuke to conclude thut MexIcun producers
huve seen the end ol U.3. ugrIculturul dumpIng (OECD-FAO 2009). Costs ol productIon, heuvIly
drIven by the prIces lor petroleum-bused Inputs, remuIn well ubove theIr pre-spIke levels us
well, und there Is lIttle IndIcutIon thut Input costs wIll go down sIgnIcuntly In the luture.
Costs ol productIon lor corn In the UnIted 3tutes In 2009 were l7% ubove theIr 2007 levels,
whIle prIces contInue to lull. PrelImInury prIce dutu suggest thut In 2009 the UnIted 3tutes wus
ulreudy exportIng wheut und cotton ut prIces below productIon costs.
Unlortunutely, NAFTA hus elImInuted MexIco's most eectIve polIcy Instruments lor uddress-
Ing dumpIng-level prIces. Under the TRQ, the MexIcun government could huve levIed turIs to
compensute lor dumpIng. No longer. Now, the government would need to le u dIspute under
the WTO In un uttempt to wIn the rIght to Impose countervuIlIng dutIes to muke up lor hIgh
U.3. subsIdIes. The polItIcul costs ol such u strutegy ure hIgh, und MexIco hus u poor truck re-
cord In such dIsputes.
3hort ol renegotIutIng NAFTA, only greuter cooperutIon lrom the UnIted 3tutes In lImItIng
exports ol the most sensItIve products - whIte corn, beuns, und nonlut dry mIlk, umong others
- wIll help protect MexIco's smull-scule lurmers lrom luture dumpIng.
R
e
a
l

d
o
l
l
a
r
s
/
h
a

(
2
0
0
0
$
U
S
)
0
50
100
150
200
250
1
9
9
0
1
9
9
2
1
9
9
4
1
9
9
6
1
9
9
8
2
0
0
0
2
0
0
2
2
0
0
4
2
0
0
6
2
0
0
8
8
The 1mgacts ot U.S. AgrcuIturaI PoIces

BIBLIOCRAPHY
De Itu, Anu (2008). Fourteen Yeurs ol NAFTA und the TortIllu CrIsIs," Amcrcns Progrnm
SpccnI Rcport. WushIngton, DC: AmerIcus Progrum, Center lor InternutIonul PolIcy (CIP).
Dyer, Ceorge (2008). ImplIcucIones de los cumbIos en el precIo del muz sobre el uso del
suelo en MexIco," Proyecto de CooperucIn TcnIcu ATN/NP-9677-ME. WushIngton, D.C.:
Inter-AmerIcun Development Bunk: 66.
OECD-FAO (2009). DLC0-FAD AgrcuIturnI DutIook 2009-20l8. PurIs, OECD-FAO.
Ruy, Durell, DunIel De Lu Torre Ugurte, und Kelly TIller. (2003). RethInkIng U3 AgrIculturul
PolIcy: ChungIng Course to 3ecure Furmer LIvelIhoods WorldwIde," KnoxvIlle, Tenn: UnI-
versIty ol Tennessee, AgrIculturul PolIcy AnulysIs Center. http://www.ugpolIcy.org/blue-
prInt.html.
RItchIe, Murk, 3ophIu Murphy, und Mury Beth Luke (2003). UnIted 3tutes DumpIng on
World AgrIculturul Murkets," Cnncun Scrcs Pnpcr No. l, MInneupolIs, MN, InstItute lor
AgrIculture und Trude PolIcy.
Romero, Jos (2009). MedIcIon del Impucto de los Acuerdos de LIbre ComercIo en AmerIcu
LutInu: El Cuso de MexIco," LstuJos y Pcrspcctvns. 57, MexIco CIty: CEPAL.
3turmer, Elunor und TImothy A.WIse (2007). FeedIng ut the Trough: IndustrIul LIvestock
FIrms 3uved $35 BIllIon lrom Low Feed PrIces," 00AL PoIcy Brcj No. 07-03. Medlord,
MA: Tuhs UnIversIty, Clobul Development und EnvIronment InstItute.
3turmer, Elunor, AImee WIttemun, et ul. (2006). FeedIng the Fuctory Furm: ImplIcIt 3ubsI-
dIes to the BroIler ChIcken Industry," 00AL Workng Pnpcr, No. 06-03. Medlord, MA:
Tuhs UnIversIty, Clobul Development und EnvIronment InstItute.
WIse, TImothy A. (2004). The Purudox ol AgrIculturul 3ubsIdIes: Meusurement Issues, Ag-
rIculturul DumpIng, und PolIcy Relorm," 00AL Workng Pnpcr, No. 04-02, Medlord, MA:
Tuhs UnIversIty, Clobul Development und EnvIronment InstItute.
WIse, TImothy A. (2007). PolIcy 3puce lor MexIcun MuIze: ProtectIng Agro-bIodIversIty by
PromotIng Rurul LIvelIhoods," 00AL Workng Pnpcr, No. 07-0l. Medlord, MA: Tuhs UnI-
versIty, Clobul Development und EnvIronment InstItute.
WIse, TImothy A. (20l0). The Costs to MexIcun Producers ol U.3. AgrIculturul PolIcIes."
Mcxcnn RurnI 0cvcIopmcnt Rcscnrch Rcport, No. 7, Woodrow WIlson InternutIonul Cen-
ter lor 3cholurs, MexIco InstItute, www.wIlsoncenter.org/DesurrolloRurulMexIcuno.
ZuhnIser, 3teven und Zuchury Crugo (2009). NAFTA nt l5 BuIJng on Frcc TrnJc. WushIng-
ton, DC, U3DA EconomIc Reseurch 3ervIce. http://www.ers.usdu.gov/PublIcutIons/
WR30903/.
9

9
A Iong-term vew:
Comgarng the resuIts ot
Mexco's 1991 and 2007
AgrcuIturaI Censuses
Hctcr Rcbles erlanga
l
5NIVERSIDAD !UTNOMA -ETROPOLITANA_8OCHIMILCO
1 1ranslated by onathan Fox
9
Comgarng the resuIts AgrcuIturaI Censuses

5UMMARY
A compurIson ol the results ol the l99l und 2007 AgrIculture Censuses ullows one to see the
most sIgnIcunt chunges In the MexIcun countrysIde over u l6 yeur perIod thut Included severul
structurul chunges, IncludIng the l992 relorms ol ArtIcle 27 ol the ConstItutIon, the lree trude
ugreement wIth the U3 und Cunudu, the restructurIng ol the MexIcun stute, whIch wIthdrew
lrom muny rurul uctIvItIes, the IntensIcutIon ol the mIgrutIon process und the 200l 3ustuInuble
Rurul Development Luw, umong others.
Muny ol the chunges In MexIco, und especIully In the countrysIde, took pluce wIthout up-to-dute
InlormutIon on the sItuutIon In the ugrIculturul und lorestry sector ut nutIonul, stute or munIcI-
pul levels, becuuse the VIII AgrIculturul und LIvestock Census wus not currIed out us scheduled
In 200l.
ThIs compurutIve exercIse ullows one to see chunges In: lund use putterns, productIon uctIvIty,
the numbers ol productIon unIts, uvuIlubIlIty ol IrrIgutIon und ugrIculturul muchInery, types ol
tructIon used lor crop productIon, heud ol lIvestock, us well us whether or not the yIelds ol prIn-
cIpul crops Increused.
ThIs dutu permIts un ussessment ol the eects ol the structurul relorms In the MexIcun coun-
trysIde, us well us the structurul problems ol the rurul sector In 2007.
l. OVERVIEW
The MexIcun countrysIde hus gone through u serIes ol trunslormutIons In recent decudes thut
ure purt ol the globulIzutIon process. These chunges ure expressed through chungIng lund use, us
well us chungIng economIc relutIonshIps resultIng lrom the trude openIng, und through dIerent
lorms ol power und uuthorIty thut ure expressed In dIverse structures und InstItutIons, us well
us In the IncreusIng presence ol u wIde runge ol rurul uctors.
It Is dImcult to ussess the scope ol these chunges wIthout up-to-dute stutIstIcul InlormutIon.
The luck ol dutu ut nutIonul und stute levels wus overcome by the decIsIons ol the LX LegIslu-
ture's congressIonul representutIves lInked to the rurul sector, lrom dIerent polItIcul purtIes,
wIth support lrom the rest ol the Congress, to ullocute resources In the 2007 budget so thut
the NutIonul InstItute ol 3tutIstIcs, Ceogruphy und InlormutIon (INECI) could curry out the
VIII AgrIculturul und LIvestock Census lrom October to December ol thut yeur.
In the second hull ol 2009, INECI presented the nutIonul und stute level results ol the VIII
AgrIculturul und LIvestock Census, whIch mude possIble u compurIson wIth the prevIous l99l
VII Census. It Is Importunt to note thut the census results thut huve been releused so lur only
permIt compurIson ol ProductIon UnIt (UP) dutu ut very hIgh levels ol uggregutIon, wIthout
dIstInguIshIng by crop, sIze ol UP, uccess to wuter, etc. - In spIte ol the luct thut two yeurs hud
pussed sInce the dutu wus collected. The udvuntuge ol the dutu Is thut It comes lrom INECI, the
ugency responsIble lor generutIng stutIstIcul InlormutIon In MexIco, whIch upplIed u consIs-
tent methodology to survey ull the lurms In the country.
ThIs study compures chunges between l99l und 2007 In the lollowIng vurIubles: productIon
unIts, lund use, lund tenure, uvuIlubIlIty ol IrrIgutIon wuter, plot sIze, the number ol tructors
und trucks, the type ol tructIon used, the number ol heud ol lIvestock, uccess to credIt, us well
us the ureu sown und hurvested ol the prIncIpul crops. As wIll be seen, however, very lew ol
these IndIcutors cun be cross-relerenced becuuse the denItIve census results huve not yet
been publIshed.
Although the most generul census results ure now uvuIluble, INECI should publIsh ull ol the
dutu dIsuggreguted to the munIcIpul level, It Is dImcult to belIeve thut 2009 ended wIthout
publIc uccess to thIs InlormutIon.
2
ThIs concern Is bused on the proposItIon thut the publIcu-
tIon ol census dutu Is u core prIncIple ol trunspurency.
The luck ol dIsuggreguted results prevents the unulysIs ol regIonul putterns, us well us unulysIs
by type ol UP or crop. One cunnot unulyze chunges In croppIng putterns over the pust l6 yeurs,
nor cun one determIne whIch regIons or productIve uctIvItIes guIned or lost ground In the pro-
cess ol the lust two decudes ol structurul chunge.
The concern over the luck ol results Is underscored by the prIor experIence wIth the decIsIon
not to curry out the VIII AgrIculturul und LIvestock when It should huve been, In 200l. Recull
2 Ldltor's note: 1hls study was completed at the end of 2009.
Subsdzng 1neguaIty

thut the IX Census Is due to be currIed out In 20ll, und the prepurutIons need to begIn one
yeur belorehund, so Il we do not huve the results In the short term und they ure deluyed untIl
lute In 20l0, one could urgue thut It wIll not be necessury to curry out u new census.
2. COMPARINC THE MAIN VARIABLE5
l. Between l99l und 2007, the number ol productIon unIts Increused by 25.9%. Yet It wus not
the ugrIculturul und lIvestock UP, whIch grew 6.5%, thut grew the most, but ruther those In-
volved In other economIc uctIvItIes. Notubly, the lund ureu dedIcuted to ugrIculture und lIve-
stock lell by 24.7%, whIch hud the eect ol reducIng the uveruge UP sIze by 7 hectures. Thut
Is, MexIco hus less prImury sector uctIvIty on smuller plots, ut u tIme ol world lood crIsIs. ThIs
scenurIo ruIses the questIon ol whut Is huppenIng In the 43 mIllIon hectures thut were re-
ported us huvIng no ugrIculturul uctIvIty, u cutegory thut grew l59.3% In ureu between l99l
und 2007.
It Is extremely Importunt lor polIcy-mukers to know the reusons lor the reductIon In ugrIcul-
turul und lIvestock lund ureu. The responses would vury dependIng on whether the shrInkuge
Is due to out-mIgrutIon, versus whether the producers shIhed Into more protuble uctIvItIes.
To shed u bIt ol lIght on the Issue ol why 97l,000 productIon unIts dId not plunt crops In 2007,
uccordIng to Tuble l4 ol the VIII Census, 33.2% ol the UP dId not plunt becuuse ol luck ol lunds
or support, 25.9% becuuse the lunds were lyIng lullow, und l0.l% becuuse ol bud weuther or
drought.
TabIe 1
Pl0LUCTI0N UNITS WITl ANL WITl0UT AClICUlTUlAl ANL lI\lST0Cl ACTI\IT
Yeur
ProductIon unIts
WIth ugrIculture/
lIvestock uctIvIty
Averuge plot sIze
WIthout ugrIculturul/
lIvestock uctIvIty
Number Areu Number Areu Areu Number Areu
l990 4,407,880 l08,346,084 3,823,063 9l,4l3,395 23.9 584,8l7 l6,932,688
2007 5,548,845 ll2,743,247 4,069,957 68,829,752 l6.9 l,478,888 43,9l3,494
Increuse (%) 25.9 4.l 6.5 -24.7 l52.9 l59.3
2. In the lust l6 yeurs the ureu surveyed remuIned ulmost constunt, IncludIng potentIul crop-
lund. In contrust, lorested lunds shrunk by 55.4%, possIbly delorested to expund pustures,
whIch Increused by 8 mIllIon hectures. However, the 900,000 hecture Increuse In unproductIve
lund does not uccount lor the exponentIul Increuse In lunds wIthout ugrIculturul or lIvestock
uctIvIty, us shown In Tuble l.
5. It Is Importunt to note thut In the lust 50 yeurs, potentIul croplund grew by 7 mIllIon hect-
ures und the umount regIstered In 2007 Is the hIghest so lur. Thut Is, the 3l mIllIon hectures
reported In Tuble 2 represent the country's muxImum, the ugrIculturul lrontIer. In uddItIon,
one cun conclude thut only l8% ol MexIco's rurul lunds ure upt lor ugrIculture, whIch suggests
thut we ure not u nutIon thut should lImIt Its rurul economIc development polIcIes to the pro-
motIon ol ugrIculture.
TabIe 2
lANL USl PATTllNS
Yeur
Totul ureu
surveyed
Croplund Pusture Forest UnproductIve
l990 l08,346,084 3l,l04,45l 67,232,593 8,793,066 l,2l5,973
2007 ll2,743,247 3l,5l2,323 75,l87,6l2 3,9l9,4l5 2,l23,896
Increuse (%) 4.l l.3 ll.8 - 55.4 74.7
4. In MexIco, some uctors opposed the l992 relorms ol Art. 27 ol the ConstItutIon becuuse ol
theIr concerns thut socIul sector lunds would be prIvutIzed, expectIng thut cjJos und ugrurIun
communItIes would lose theIr lunds to the prIvute sector.
3
The 2007 Census results show thut
thIs dId not huppen. WhIle ugrurIun communIty lund ureu wus reduced, they converted to cj-
3 Ldltor's note: Mexlco's soclal sector landholdlngs take two maln forms, cj|Jos and agrarlan communltles. 1he latter are
somewhat dlerent forms of governance of land tenure that are based on restltutlon of lndlgenous communlty lands.
9
Comgarng the resuIts AgrcuIturaI Censuses

Jos, whIle prIvute property remuIned constunt. The Increuse In cjJo lunds could huve two
explunutIons: rst, the ugrurIun courts' resolutIon ol the ugrurIun relorm ududIcutIon bucklog,
und second, the possIbIlIty ullowed by the AgrurIun Luw to chunge how socIul sector property
Is cutegorIzed, by decIsIon ol the ussembly ol members.
4
TabIe 3
lANL USl ACC0lLINC T0 Pl0PllT CATlC0l
Yeur
Totul ureu
surveyed
EIdo
AgrurIun
CommunIty
PrIvute
AgrIculturul
colony
PublIc
lunds
l990 l08,346,082 30,032,643 4,338,099 70,493,493 2,l66,650 l,3l5,l97
2007 ll2,743,247 37,057,776 3,783,888 70,0l4,723 l,393,803 493,054
Increuse (%) 4.l 23.4 -l2.8 -0.7 -35.7 - 62.5
5. The l99l-2007 census dutu show thut the umount ol lund consIdered to be IrrIguted or
well-wutered remuIned constunt. The only chunge Is thut In l99l l.7 mIllIon hectures ol non-
IrrIguted lund thut wus clussIed us well-wutered (Jc humcJnJ) were no longer reported us
such, und uppeur to huve been cutegorIzed us IrrIguted, sInce the umount ol ruInled lund dId
not decreuse. In synthesIs, In the lust l6 yeurs, no ruInled lunds guIned uccess to IrrIgutIon - u
worrIsome sItuutIon becuuse relIuble uccess to wuter ullows lor Increused productIvIty und the
plunnIng ol ugrIculturul uctIvIty.
TabIe 4
lANL ANL ACClSS T0 WATll
Yeur IrrIguted % Well-wutered % RuInled % Other
l990 3,824,366 l3.6 l,792,390 4.0 23,l70,409 82.4 28,ll3,852
2007 5,563,492 l8.4 - 24,657,753 8l.6 30,22l,245
Increuse (%) 45.5 -l00.0 6.4 7.5
6. The productIon unIts wIth less thun 5 hectures, representIng 7l.6% ol the totul, huve Increus ed
In number. Over 80 yeurs they grew by 708%, lrom 332,000 In l930 to 2.6 unIts In 2007, whIch
mukes the mnjunJo the predomInunt lorm ol lundholdIng In our country.
WhIle the l992 relorms ol Art. 27 ol the ConstItutIon uttempted to roll buck the presence ol
mnjunJos, uveruge plot sIze hus grown smuller over the pust heen yeurs Between l99l und
200l, the uveruge ureu dIvIded up Into lurm plots wIthIn cjJo lund lell lrom 9.l to 8.5 hectures,
und by 2007 us reduced to 7.5 hu.
5
Over l6 yeurs, cjJo und ugrurIun communIty plots lost 2l%
ol theIr uveruge sIze. Il the unulysIs locused on the cultIvuted ureu ol ull productIon unIts, thut
hus lullen lrom 8.9 to 8.4 hectures. Thut IndIcutes thut the predomInunce ol productIon unIts
wIth less thun 5 hectures upplIes to both the ugrurIun relorm und the prIvute sectors. Indeed,
mInIlundIos represent un even lurger shure ol prIvute lundholdIngs, uccountIng lor 62% ol
those productIon unIts, compured to 50% ol cjJo productIon unIts.
6
3mull lurms predomInute
In ull types ol property.
TabIe 5
Pl0LUCTI0N UNITS WITl lAlMlL AllA 0l llSS TlAN S llCTAllS
Yeur Lund lurmed
ProductIon
unIts
Averuge ureu
lurmed
Less thun 5
hectures
%
l990 3l,l04,45l 3,504,5l0 8.9 2,ll4,622 60.3
2007 3l,5l2,323 3,755,043 8.4 2,688,6ll 7l.6
Increuse (%) l.3 7.l -5.4 27.l
7. The dutu on ureu hurvested shows two trends, the crops lor whIch the lund ureu remuIned
constunt over the pust l6 yeurs (corn und sugur cune) und the crops whIch reported less ureu
4 Ldltor's note: Clven the drop ln agrarlan communlty land area lndlcated ln 1able 3, thls suggests that some agrarlan com-
munltles may have chosen to convert to cj|Jo status.
5 lNLCl, vlll and lX Lldo Census, Mexlco
6 Clven that the lnformatlon released so far from the vlll ^grlcultural Census ls only ln aggregated form, one ls unable to see
what share of these productlon unlts' land ls farmed, how much ls leh fallow and what crops are grown. 1he publlcatlon of
the defnltlve results wlll permlt thls analysls.
Subsdzng 1neguaIty

hurvested (beuns, wheut, coee, cotton und sorghum). It Is notuble thut none ol these crops
showed sIgnIcunt Increuses In ureu hurvested.
Corn und sugur cune show productIon Increuses, whIch hus to do wIth yIeld Increuses compured
to l99l, especIully lor corn. Coee experIenced the opposIte trend, und wus the only crop thut
showed reduced productIon und yIelds. The productIon ol wheut, beuns und cotton lell, be-
cuuse ol the reduced ureu hurvested, sInce they could not compete wIth the cheuper prIces ol
these commodItIes In InternutIonul murkets. The country contInues to be In decIt In corn,
wheut und rIce, In spIte ol Increused corn productIon - In contrust to decudes ugo, when the
country wus sell-sumcIent.
TabIe 6
PlINCIPAl Cl0PS. AllA lAl\lSTlL, Pl0LUCTI0N ANL IllL
/
Crop l990 2007 Increuse (%)
Corn
Areu hurvested 7,705,l63 7,329,283 - 4.9
ProductIon (KC) l0,228,262,250 20,662,l58,3l0 l02.0
YIeld (KC) l,327 2,8l9 ll2.4
FrIol
Areu hurvested 2,37l,836 l,522,494 - 35.8
ProductIon (KC) l,279,556,270 882,275,730 - 3l.0
YIeld (KC) 539 579 7.4
Wheut
Areu hurvested 958,847 275,364 - 7l.3
ProductIon (KC) 3,475,725,829 l,258,8l6,300 - 63.8
YIeld (KC) 3,625 4,57l 26.l
3ugur cune
Areu hurvested 600,538 6l7,855 2.9
ProductIon (KC) 35,54l,l99,386 45,862,653,740 29.0
YIeld (KC) 59,l82 74,229 25.4
Coee
Areu hurvested 73l,524 68l,288 - 6.9
ProductIon (KC) l,947,046,832 l,l54,729,660 - 40.7
YIeld (KC) 2,662 l,695 - 36.3
Cotton
Areu hurvested 253,097 ll6,828 - 53.8
ProductIon (KC) 534,539,000 326,050,l00 -39.0
YIeld (KC) 2,ll2 2,79l 32.l
3orghum
Areu hurvested l,542,l6l l,ll7,l30 -27.6
ProductIon (KC) 3,690,554,062 3,996,792,300 8.3
YIeld (KC) 2,393 3,578 49.5
8. In terms ol the type ol lurm equIpment used to work the lund, durIng the l99l-2007 perIod
the number ol productIon unIts thut used only mechunIzed tructIon Increused, whIle the num-
ber thut used only unImuls or mIxed tructIon decreused. In other words, unImul tructIon Is less
wIdely used. Notubly, the lurge number ol UP thut use only munuul tools lor lurmIng remuIned
constunt durIng the sume perIod.
Although the number ol productIon unIts usIng only mechunIzed tructIon grew 45.9%, the
totul number ol tructors und trucks dropped by 24.7% und 30.8%, respectIvely. ThIs decreuse
muy be due to the reduced number ol lurms thut were uble to uccess cupItul Investment louns,
whIle the Increused costs ol Inputs und servIces muy huve oblIged producers to chunge theIr
lIvelIhood strutegIes. For exumple, the prIces lor nItrogen-bused lertIlIzers, In whIch MexIco Is
In decIt, Increused by more thun 50%, lrom M$ 2,200 per ton In 2005 to M$3,3000 In 2008,
whIle potussIum-bused lertIlIzer prIces Increused 200%, lrom M$4,l5l to $l2,857 durIng the
7 ^s ln the case of the slze of UPs, data that would permlt analysls of productlon unlts by crop remalns unavallable to the publlc.
9
Comgarng the resuIts AgrcuIturaI Censuses

sume perIod (Cuzmn 2008). The cost per burrel ol oIl, whIch dIrectly Inuences ugrochemIcul
prIces, hus rIsen 25% over 2005.
TabIe 7
MlClANIATI0N ANL NUMBllS 0l TlACT0lS ANL TlUClS
PlINCIPAl Cl0PS
Yeur Totul UP
Only
mechunIzed
Only unImul
tructIon
Both mechunIzed
und unImul tructIon
Only
munuul tools
Tructors Trucks**
l990 2,564,8l4 843,509 l,l30,095 59l,2l0 l,236,5l9 3l7,3l2 l98,200
2007* 3,74l,438 l,lll,885 63l,7l5 374,659 l,25l,204 238,830 l37,238
Increuse (%) 45.9 3l.8 - 44.l - 36.6 l.2 -24.7 -30.8
* The sum ol UP by type ol tructIon does not udd up to the totul UP
** Relers to ull trucks lurger thun 2 tons
Increused luel costs Impucts the use ol lurm muchInery us well, whIch could expluIn the reduced
numbers ol tructors In 2007. Another explunutIon muy Involve un Increuse In the number ol
lurger cupucIty tructors, whIch could cover lurger ureus. There uppeur to be lewer servIce pro-
vIders who rent lund prepurutIon muchInery. AccordIng to the 2007 census, 99.5% ol those
lurmers who used tructors reported thut they rented the servIce.
9. One ol the centrul problems In the MexIcun countrysIde Is the luck ol nuncIng lor produc-
tIve Investment. ThIs sItuutIon thut worsened over the pust l6 yeurs, us the number ol UP
reportIng thut they receIved credIt lell lrom 744,000 to only l72,000 - u drop ol 76.8%. Cur-
rently, uccordIng to the Census, only 4% ol ull productIon unIts receIved credIt. Il one consIders
thut credIt Is needed to leveruge the cupItulIzutIon ol productIon unIts, thIs dutu suggests thut
the vust muorIty ol MexIcun lurmers cunnot Improve the condItIons under whIch they pro-
duce und compete In InternutIonul murkets.
TabIe B
Pl0LUCTI0N UNITS WITl ACClSS T0 CllLIT
Yeur UP WIth credIt
l990 3,867,495 744,400
2007 4,067,633 l72,585
Increuse (%) 5.2 -76.8
l0. The predomInunce ol smull lurms, the luck ol Increused uccess to IrrIgutIon, the drop In the
number ol lurms receIvIng credIt und the low use ol lurm muchInery expluIns much ol MexI-
co's lImIted cupucIty to murket productIon In InternutIonul murkets. AccordIng to the Census'
Tuble 26 UP wIth lund, nursery or greenhouse dedIcuted to productIon," ol the 3.7 mIllIon UP,
only 3,2l3 reported InternutIonul sules - only 0.08% ol ull lurms. In uddItIon, the Census' Tuble
27 UP wIth lund, nursery or greenhouse dedIcuted to productIon uccordIng to type ol buyer"
reported thut l,5l8,000 UP dId not sell theIr crops. In synthesIs, lew UP ure dIrectly Inserted
Into the globul economy.
ll. In lIvestock productIon, only poultry grew between l99l und 2007 - by 53.4%. The num-
ber ol cuttle remuIned ulmost constunt, whIle the numbers ol pIgs, horses, sheep, gouts ull lell
substuntIully. The poultry Increuse Is due to the Increused number ol technIed operutIons lor
the productIon ol loreIgn vurIetIes ol meut und eggs. The reductIon ol horses Is due to theIr
reduced use us work unImuls. Numbers ol other lIvestock lell In purt becuuse the Increused
cost ol leed, by 60% In the pust two yeurs, oblIged muny producers, especIully smull-scule, to
reduce theIr herds or wIthdruw lrom the uctIvIty.
TabIe 9
NUMBll 0l llAL 0l lI\lST0Cl
Yeur Cuttle Horses 3heep Couts PIgs Poultry
l990 23,865,899 5,l80,72l 4,0l0,6l0 6,882,767 l0,58l,242 232,560,043
2007 23,3l6,942 2,l43,934 7,305,578 4,l24,20l 9,02l,l92 356,824,337
Increuse (%) - 2.3 - 58.6 82.2 - 40.l - l4.7 53.4
Subsdzng 1neguaIty

The compurIson ol the AgrIculturul und LIvestock Censuses ol l99l und 2007 shows the lol-
lowIng negutIve results:
- The number ol productIon unIts wIthout ugrIculturul or lIvestock uctIvIty Increused sIgnI-
cuntly, whIch IndIcutes un ubundonment ol the use ol lund lor lood productIon
- The lund under IrrIgutIon dId not Increuse, yet wuter Is u key Input lor plunnIng crop pro-
ductIon, ImprovIng crop yIelds und IncreusIng producer Income
- The lull In lurm credIt lImIted the cupItulIzutIon ol productIon unIts, whIch Is necessury lor
them to become more competItIve
- The lrugmentutIon und pulverIzutIon ol lund dIstrIbutIon persIsted, preventIng the generu-
tIon ol economIes ol scule
- Access to cupItul goods lell, IncludIng tructors und trucks, whIle most productIon unIts dId
not use mechunIzutIon
- The number ol heud ol lurger lIvestock remuIned constunt or lell, In contrust to whut hup-
pened to the nutIonul populutIon, leudIng the number ol heud per household to lull In relu-
tIon to l99l
- In the context ol the trude openIng, the number ol lurms thut purtIcIpute In InternutIonul
trude Is very smull.
The compurIson ol the AgrIculturul und LIvestock Censuses ol l99l und 2007 ulso shows
posItIve results:
- Both productIon und productIvIty ol key crops Increused, permIttIng lurms to become more
competItIve
- The productIon ol poultry meut und eggs Increused, IncreusIng the uvuIlubIlIty ol thIs busIc
lood to MexIcun consumers
- In 2009, In spIte ol the luck ol uccess to credIt, more lurms used muchInery thun In l99l
- The dIstrIbutIon ol lund by property regIme dId not chunge, whIch IndIcutes stubIlIty In
terms ol lund tenure.
3. RECOMMENDATION5
The census dutu compurIson ruIses muor publIc polIcy Issues ubout ugrIculture, lIvestock und
lorestry, especIully becuuse the results ol the VIII AgrIculturul und LIvestock Census, us well
us the IX EIdo Census, IndIcute thut key polIcy gouls huve not been reuched, IncludIng: revers-
Ing the trend towurd mnjunJsmo, cupItulIzIng the countrysIde, chungIng crop putterns, pro-
motIng new upprouches to orgunIzutIon und generutIng certuInty In lund tenure. Now Is the
tIme to consIder curryIng out chunges thut poInt In u dIerent dIrectIon:
l) PolIcy needs to tuke Into uccount the predomInunce ol mnjunJos und the lrugmentutIon
ol lundholdIngs In the MexIcun countrysIde. The recognItIon ol the problem ol pulverIzutIon
ol lundholdIngs suggests solutIons thut Involve the promotIon ol lorms ol orgunIzutIon ol
producers thut druw on communIty-bused tIes ol solIdurIty und permIt the Improvement ol
some stuges ol the productIon process. ThIs recognItIon ulso suggests the need to Invest
more resources In ugrIculturul reseurch thut generutes technologIes thut ure upproprIute to
thIs kInd ol lurm.
2) The census results IndIcute the huge potentIul ol non-ugrIculturul lunds: 75 mIllIon hect-
ures ol nuturul pustures (not countIng those regIstered us common lunds In cjJos) und up-
proxImutely 50 mIllIon hectures ol lund wIth lorest und other kInds ol vegetutIon. These
lunds' Importunce Is not only In the vulue ol theIr nuturul resources, but ulso In the possIbIl-
Ity ol generutIng new productIve ulternutIves, such us envIronmentul servIces, tourIsm
proects, us well us both metullIc und non-metullIc mInIng, ull ol whIch cun generute em-
ployment. Euch proect should tuke Into uccount how It cun dIrectly benet the lundholders,
whIle protectIng nuturul resources.
5) MexIco wus sell-sumcIent In busIc loods, but thIs sItuutIon hus chunged In recent yeurs. The
luck ol lood sell-sumcIency uects muny sectors ol socIety, especIully the poorest. ThIs sItu-
utIon poInts to the need to estublIsh u long-term, systemutIc, sustuInuble ugro-lood pro-
grum thut would uddress ull the Issues Involved In guurunteeIng upproprIute, tImely und
sumcIent lood supplIes to the MexIcun populutIon, tukIng Into uccount uvuIlubIlIty, stubIlIty
In supply, uccess, nutrItIon, lood sulety, quulIty und bIosecurIty. 3uch polIcIes should oer
sumcIent Income to producers lor them to be uble to be economIcully protuble or to lulll
theIr socIul or culturul roles In the dIerent productIve systems.
4) The luck ol Investment In rurul Inlrustructure und the reduced cupItulIzutIon ol productIon
unIts reveuled by the VIII Census suggest the need to restructure publIc spendIng lor rurul
MexIco. Lurger Investments In Inlrustructure ure needed, to reverse losses In recent yeurs In
9
Comgarng the resuIts AgrcuIturaI Censuses

terms ol wurehouses, rouds und IrrIgutIon dIstrIcts. ThIs upprouch would huve broud re-
gIonul Impucts, In contrust to the concentrutIon ol resources In u hundlul ol commercIul
producers thut Is cuused by the current budget dIstrIbutIon (reected In the 3pecIul Concur-
rent Progrum lor 3ustuInuble Rurul Development, known us the PEC). Insteud, ugrIculturul
polIcy should be unIversul, long-term, und should generute better condItIons lor productIve
uctIvItIes.
5) The luck ol ugrIculturul credIt, us reported In the Census, should chunge. It Is necessury to
consIder credIt strutegIes wIth Interest rutes thut ure competItIve wIth our trudIng purtners,
und to creute nuncIul optIons lor low-Income producers. It Is dImcult lor lurms to compete
wIth our trudIng purtners Il they cun only rely on the subsIdIes delIvered by the PEC.
6) No doubt, lIvIng In rurul ureus In our country Is ussocIuted wIth poverty. To be u resIdent ol
these regIons leuve one In u condItIon ol dIscrImInutIon. To mentIon ust u lew lucts: 80%
ol the people who lIve In the lowest Income munIcIpulItIes ure consIdered rurul, more thun
hull ol the populutIon employed In the prImury sector eurns less thut the mInImum wuge
or hus no cush Income, the CDP per cupItu In the countrysIde Is one sIxth ol thut ol urbun
ureus, ulmost ull ol the munIcIpulItIes consIdered ut extreme nutrItIonul rIsk ure rurul, und
lour ol every ten mIgrunts to the U3 ure lrom rurul ureus.
The polIcIes to uddress rurul poverty should not be lImIted exclusIvely to socIul progrums,
us they ure now. OportunIdudes Is toduy the progrum wIth the broudest coveruge In rurul
ureus. AgrIculturul progrums, In contrust, do not reuch low-Income rurul ureus, IncludIng
productIon lundIng, the LIvestock Progrum, the Compensutory Funds lor Rurul Energy
Costs, the 3upport Funds lor ProductIve CompetItIveness, Income Turget und the dIerent
progrums wIthIn the Rurul AllIunce, ust to provIde u lew exumples. The reorIentutIon ol
rurul untI-poverty polIcy should not be postponed uny longer. Poverty wIll not be overcome
only wIth socIul wellure puyments, the promotIon ol productIve uctIvItIes should be the
centrul uxIs ol MexIcun rurul development polIcy.
BIBLIOCRAPHY
Cuzmn, Jess, 2008. Orgenes de lu crIsIs ulImenturIu mundIul," Rumbo RurnI, 4(9), Muy-
August. CEDR33A
5ubsIdIzIng InequaIIty:
MexIcan Corn PoIIcy sInce NAFTA
ThIs edItIon was prInted In October 20l0.
The edItIon consIsts of 700 copIes.
PubIIcatIon coordInatIon: AIIcIa AthI
PrInted by UrIbe Impresos
MdIcos 23, CoIonIa 5Ifn,
DeIegacIn IztapaIapa, MxIco D.F.