The agricultural policy of Mexico in the american context (1995-2020)

Abstract

Objective: To analyze the long-term relationship of two groups of agricultural policy instruments -Producer Support Estimate (PSE) and General Services Support Estimate (GSSE)- OECD classification of agricultural Gross Domestic Product (GDP) in Mexico, USA, Canada, Chile and Brazil during the period 1995-2020, to generate information that contributes to the design of agricultural policies.

Design/Methodology/Approach: The information used was from the OECD and was integrated into a time series for the period 1995-2020. A quantitative analysis based on the econometric method was performed, applying the cointegration test.

Results: The series of Canada, Brazil and Mexico are cointegrated, because the model error has a unit root, that is, the variables are not of order I(0), at the individual level, but the combination of the variables, shows that the error is an I(0) process with half zero. However, the variables for Chile and the US do not show cointegration.

Limitations/implications of the study: In an open economy environment, the design and implementation of policies that include the use of various groups of instruments is required, considering their relevance so that the resources transferred to the sector generate the expected results.

Findings/Conclusions: The GSSE, compared to the PSE, maintains a closer long-term relationship with agricultural GDP growth in most countries, so it is assumed that using this group of instruments to transfer resources to the sector will improve their performance to a greater extent.

Keywords: Cointegration, Producer Support Estimate, General Services Support Estimate.