Private Sector Profitability of Maize Production in the Bajío Region of Guanajuato, Mexico

Abstract

Agriculture, generally speaking, is the basis of the food system of any country. Mexico's maize crop is particularly important, not only in terms of food security but also as in terms of culture and identity. The fact that, in recent decades, Mexico has positioned itself as the second largest importer of maize is worrying. For the purpose of measuring the private sector profitability of maize production in the Bajío region of Guanajuato, this study analyzed data from 2,996 producers who participate in the "High Yield Maize Assessment Program (PROEMAR)", of the Instituto Nacional de Investigaciones Forestales, Agrícolas y Pecuarias- Bajío Experiment Camp (INIFAP-CEBAJ). We used the Policy Analysis Matrix (PAM) developed in 1989 by Monke and Pearson. The results indicate that the benefit-cost ratios of the three technological systems analyzed (considering in their total income, the sale of grain and sub products), were 2.20 for rainfall (T); 1.50 for irrigation with livestock (RCA) and 1.01 for irrigation without livestock (RSA), excluding land costs; including land costs decreased the ratios to 2.13, 1.35 and 0.91. The private cost ratio (RCP), excluding the land, by production system was: T = 0.04, RCA = 0.13 and RSA = 0.85, which implies that the maize producers in the Bajío region of Guanajuato are competitive. When including land rent in the production costs, the rainfall and irrigation with livestock systems remained competitive with a RCP of 0.07 and 0.32, respectively; not so for the production unit with the irrigation system without livestock (2.04). The most significant input was fertilizer costs, which represented 50% of the costs.