EFFECTS OF THE PRICE SUPPORTS POLICY ON THE RICE MARKET IN MEXICO

Abstract

Rice (Oryza sativa L.) is the most consumed staple food in the world; in the case of Mexico, this cereal is essential as part of the basic diet; however, currently consumption depends on imports by 81 %. The price supports policy began in 2019 with the aim of increasing the income of producers and encouraging food self-sufficiency; thus, the analysis of its impacts is important to make agricultural policy recommendations. The objective of this research was to determine the effects of the price supports policy on production, consumption, rough rice imports, milled rice imports, consumer price and social welfare, A spatial equilibrium model was used to represent the rice market in Mexico. Data of the base model correspond to the agricultural year 2020 and the results obtained, assuming full support of the price supports policy to the total of the domestic production, indicated that production of rough rice increases by 6.9 % (17.3 thousand t) and imports of rough rice decrease by 1.9 %; imports of milled rice, price and consumption of milled rice are not affected. It is concluded that price supports policy meets the objective of its creation; however, the percentage of decrease in imports is low, so that, additional efforts are required to reduce food dependence.