CRITICAL VALUES TO EVALUATE AGRICULTURAL PROJECTS IN SCENARIOS OF ESTOCHASTIC PRICES

Abstract

Since the entry into the North American Free Trade Agreement (NAFTA), in México there has been a conversion of those crops considered less profitable, such as cereals, to others more profitable such as fruits and vegetables. However, on carrying out an estimate of the value that indicates how many times greater should be the value of the project regarding the investment, in order to be profitable under stochastic prices scenarios, it was noted that this value is greater for fruits and vegetables than for those crops considered less profitable. The critical value was 1.39 for cereals, 1.45 for vegetables, and 1.64 for fruits. Therefore, the investment in the production of fruit and vegetables is riskier, and should have a higher value project that in the case of less profitable crops.