Agricultural policy reforms and village economies: A computable general-equilibrium analysis from Mexico

This paper explores the impacts of agricultural trade and development policies on production, incomes, and migration in rural Mexico using a village computable general-equilibrium (CGE) framework. Three versions of the villagewide model are used to analyze the implications of rural market imperfections in shaping agricultural and trade policy impacts. Policy experiments reveal that maize-price liberalization under NAFTA will result in large changes in maize production but relatively small changes in household-farm incomes and migration. Increases in the productivity of family resources in household-farm production, unlike direct income payments currently being implemented in Mexico, can achieve both efficiency and income distribution gains while neutralizing the migration impact of maize price reforms. (C) 1999 Society for Policy Modeling. Published by Elsevier Science Inc.