EFFECTS OF ELIMINATION OF TARIFFS AND EXCHANGE RATE ON MEXICAN BEAN MARKET

Abstract

The socioeconomic importance of bean (Phaseolus vulgaris L.) in México lies in its role as staple in the national diet, as for its role as a product grown for more than 1 million farmers. These justifies studies to analyze the way agricultural and macroeconomic policies affect production, consumption and imports of this legume. In order to analyze the way trade commercial policies and exchange rate affect the Mexican bean market, a spatial and intertemporal equilibrium model was formulated and validated for the average period 2001-2003. The results indicate that bean production is sensitive to variations in exchange rate and to the increased tariff-free imported volume. Consumption, however, being more inelastic to price changes is not affected in a considerable way. If the quota for 2001-2003 established by NAFTA were acquainted, then imports should have been 42.2 thousands tons low, while production 32.3 thousands tons higher. A free trade policy in 2001-2003 would have put bean imports in 164.7 thousand tons and production would have dropped 45.0 thousand lower as compared with the levels in 2001-2003. An increased exchange rate would have decreased the bean imports in 42.5 thousands tons.