PROCAMPO, the Mexican corn market, and Mexican food security

Abstract

PROCAMPO (Program for Direct Assistance in Agriculture or Programa de Apoyos Directos al Campo) is an income transfer payment to Mexican farmers that compensates them for subsidies received by foreign competitors. Corn (Zea mays) has received the largest amount of PROCAMPO payments and is the primary component of Mexico’s food and feed supply. Results of a spatial and temporal model show that without PROCAMPO, Mexican annual average corn production would have been lower and corn imports would have been 40.5% higher in 2005–2007. Increased producer and consumer surplus and savings from reduced imports reveal that the benefits of PROCAMPO were higher than the program’s costs. Greater PROCAMPO support would decrease Mexican corn imports and increase domestic corn production. It is recommended that PROCAMPO payments to corn producers be continued and increased in the interest of Mexican national food security.