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The Corn Price Surge: Impacts on Rural Mexico

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  • Dyer, George A.
  • Taylor, J. Edward

Abstract

We use an agent-based, general-equilibrium model to explore the impacts of world corn-price increases on land use and income in rural Mexico. In the model, interactions among heterogeneous agents within a local context shape both macro and microeconomic outcomes. Results suggest that subsistence activities allowed agriculture to absorb the shock, limiting the benefits of higher prices for the population while keeping deforestation pressures in check. An estimated 5.7% corn-area expansion by 2008 and wide variation across regions corresponds well with ex-post reports. Agricultural growth led to 0.02% and 3.9% increases in real income for rural households and absentee landholders, respectively.

Suggested Citation

  • Dyer, George A. & Taylor, J. Edward, 2011. "The Corn Price Surge: Impacts on Rural Mexico," World Development, Elsevier, vol. 39(10), pages 1878-1887.
  • Handle: RePEc:eee:wdevel:v:39:y:2011:i:10:p:1878-1887
    DOI: 10.1016/j.worlddev.2011.04.032
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    References listed on IDEAS

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    Cited by:

    1. Rita Motzigkeit Gonzalez, 2016. "Welfare effects of changed prices The “Tortilla Crisis" revisited," Working Papers 167, Bavarian Graduate Program in Economics (BGPE).
    2. Channing Arndt & Karl Pauw & James Thurlow, 2016. "The Economy-wide Impacts and Risks of Malawi's Farm Input Subsidy Program," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 98(3), pages 962-980.
    3. Channing Arndt & M. Azhar Hussain & E. Samuel Jones & Virgulino Nhate & Finn Tarp & James Thurlow, 2013. "Explaining the Evolution of Poverty: The Case of Mozambique," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 95(1), pages 206-206.
    4. Wood, Benjamin D.K. & Nelson, Carl H. & Nogueira, Lia, 2012. "Poverty effects of food price escalation: The importance of substitution effects in Mexican households," Food Policy, Elsevier, vol. 37(1), pages 77-85.
    5. Suh, Dong Hee, 2014. "Adjustment of Import Demand for Corn in Mexico: Implications for U.S. Ethanol Mandate," 2014 Annual Meeting, July 27-29, 2014, Minneapolis, Minnesota 169829, Agricultural and Applied Economics Association.
    6. Nuppenau, Ernst-August, 2015. "Mitigation of Large-Scale Biofuel Expansion with Smallholder Conflict: Modelling of Land Use Dynamics using Control Theory for Policy Design to Sustain Food Security and Improve Productivity," 2015 Conference, August 9-14, 2015, Milan, Italy 225669, International Association of Agricultural Economists.
    7. Arndt, Channing & Pauw, Karl & Thurlow, James, 2014. "The economywide impacts and risks of Malawi.s farm input subsidy programme," WIDER Working Paper Series 099, World Institute for Development Economic Research (UNU-WIDER).
    8. Meza-Pale, Pablo & Yunez-Naude, Antonio, 2015. "The Effect of Rainfall Variation on Agricultural Households: Evidence from Mexico," 2015 Conference, August 9-14, 2015, Milan, Italy 212457, International Association of Agricultural Economists.

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    Keywords

    food; land use; maize; Latin America; Mexico; biofuels;

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