Economic and social impact of recent developments on rural and agricultural policies and institutions in México.

Abstract

The objective of this paper is to analyze and explain the conditions,
implications, and the impact of rural policies and institutions in
Mexico on growth and welfare in the country, in the frame of
the neoliberal model of economic development during the last
years. Several dysfunctions between the present agricultural
economic structure and the process of implementation of the
current changes in the reforms of agricultural policy are identified.
These severe dysfunctions, induced, or at least led to depth, have
been caused by the recent changes in strategy and macroeconomic
policies and the institutional structure. The work hypothesis is
that most of the dysfunctions in the rural sector in México have
had so far direct influence on the low levels of efficiency and
productivity of agriculture, thus affecting equity of social
development and stability of the political system. First, the
exceptional events are described in a historical perspective,
analyzing the implications and the impact of state policy and
institutions, which led to the consecutive models of rural and
agricultural development, after to Mexican Revolution. The
Agrarian Reform distributed the land and partly recognized the
plight of the landless. Industrialization by import substitution
(ISI) favored manufactured goods and city population and
neglected the rural sector. Even though the production of basic
grains and other foods reached self-sufficiency by the 60’s,
shortage began to be felt mainly during the 70’s, due to population
growth and lack of investments in the sector. The alimentary
crisis was solved by increasing imports. The new project, called
shared development, was not able to attract private investment
to agricultural production. Under the imposed frame of structural
adjustment after the 1982 crisis, policies of economic stabilization,
brought trade liberalization and international competition to the
sector, through constitutional reforms in land tenure and the
opening of the North American Free Trade Agreement. The main
factors, blocking growth and productivity, which may be classified
in two types, are identified. The first type belongs to physical
and geographic environment, considered as limiting factors and
obstacles difficult to modify, because they are part of nature.
The second group of factors covers agricultural and institutional
policies, which depend mainly on political goodwill. It is shown
that in the case of México, they have been erratic. After analyzing
the total impact of these policies and institutions on economic growth, social expenditure, and political equity and instability, some considerations on the formulation of alternative policies are
offered.