Scale, technique and composition effects in the Mexican agricultural sector: the influence of NAFTA and the institutional environment |
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Authors: | Silvina J Vilas-Ghiso Diana M Liverman |
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Institution: | (1) Environmental Change Institute, Oxford University Centre for the Environment, South Parks Road, Oxford, OX1 3QY, UK |
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Abstract: | More than a decade after NAFTA (North American Free Trade Agreement) entered into force, the environmental effects of agricultural
trade liberalization in Mexico are still controversial, emerging, and not fully understood. This paper contributes to the
literature that aims to explore trends in input use in the agricultural sector in Mexico during the post-NAFTA period among
both commercial/industrial and traditional/rainfed farmers, and examines the influence of the national and multilateral institutional
framework on these outcomes. We decompose the post-NAFTA agricultural production data into scale, technique and composition
effects to estimate the impact that trade liberalization has had on the use of fertilizer and land use, two key agricultural
inputs for which reliable aggregate data is available. We conclude that among commercial farmers patterns of crop type specialization
and significant technological improvements have led to some declines in fertilizer use but they have been offset by growth
in fertilizer use associated with growing agricultural output. Among traditional farmers increased output and specialization
in land-intensive grain crops are contributing to an increase in land under cultivation and technological improvements show
the potential, but not yet not the strength, to counteract these effects. We analyse the environmental institutional framework
and rural development plans, observing that institutional weaknesses have, in several instances, reduced the environmental
benefit of technique and composition effects. We conclude with recommendations about how the Mexican agricultural sector might
reap the environmental benefits of international agricultural trade. |
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Keywords: | Mexico NAFTA Agriculture Environment Scale technique and composition effects |
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