Project Summary

NAFTA’s trade opening was widely expected to lead to increased, low-cost corn imports, shifting Mexican agriculture away from corn and displacing many hundreds of thousands of small-scale corn producers. This prediction framed Mexico’s agricultural subsidy programs for the next 15 years; trade compensation and adjustment programs spent at least $20 billion dollars on direct transfer payments to farmers between 1994 and 2009. As expected, corn imports increased substantially, but corn is still Mexico’s most important crop, in terms of the volume of production, the numbers of producers and the area under cultivation. Yet at the same time, many farmers have left agriculture. What happened? This report focuses on how Mexico’s post-NAFTA agricultural trade compensation policies actually worked in practice, with a focus on corn.