NAFTA’s impact on Mexican farmers

Nice new paper by Silvia Prina in RDE (gated link here, ungated version of the paper here). Here’s the abstract:

Trade liberalization can generate substantial distributional conflicts. This paper measures the impact of increasing trade openness between Mexico and the U.S. resulting from NAFTA on the income of small versus large cash-crop farmers in Mexico. Benefits resulting from higher prices of export goods as well as losses incurred from greater import competition are considered. First, relating NAFTA cuts in trade restrictions to border prices of Mexican exports and imports, I find that NAFTA-induced tariff reductions decreased the border price of corn, Mexico’s main agricultural import, and increased the border prices of tomatoes and melons, Mexico’s main agricultural exports. Then, I find that, among cash-crop farmers, the rise in fruit and vegetable prices benefited small farmers more than large farmers; while the drop in corn prices hurt large farmers more than small. Finally, the analysis at the regional level shows stronger results in the central region where trade liberalization increased the level of earning of poor farmers relative to those of large farmers. These results are consistent with observed cropping patterns and regional characteristics.

3 thoughts on “NAFTA’s impact on Mexican farmers

  1. Interesting how the same situation can give different results. I read a blog a couple months ago (which I can’t find unfortunately) lamenting all of the small Mexican farmers ruined and starving by NAFTA.

    Then again, too many results in economics are filtered through the lens of political leanings.

  2. Hi Thomas: yes, what you describe is the usual complaint. But it’s a complicated situation, depending on what you sell and what you buy. Mexican corn farmers who sell to the market definitely were hurt. This article claims those are more often larger farms.

  3. This is really sad to hear because they are vital part of our living system. We should always look to help poor because they are one of the main part of this world, it is a huge problem been unemployed and that’s why I only suggest to work with Forex trading, it’s an picture perfect business with every feature including free 8 USD no deposit bonus by great broker OctaFX, it’s outstanding having a bonus like this because we can test our skills.

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