Modeling the market and welfare effects of Mexico's “Agriculture by Contract” program
Lence, S.H.
Modeling the market and welfare effects of Mexico's “Agriculture by Contract” program - Ames, IA (USA) : Wiley, 2016.
Peer review
“Agriculture by contract” (A × C) is the main Mexican government program aimed at mitigating price risks for agricultural producers in Mexico. A × C has unique features involving forward contracts and the provision of basis subsidies and subsidized exchange‐traded futures options for both producers and intermediaries. A simulation model is developed to analyze the market and welfare effects of A × C. When applied to corn, results show that A × C exerts substantial impacts and causes large transfers across sectors. Even if A × C reduced intermediaries' market power to the largest extent feasible, results indicate that it would still cause important losses in aggregate welfare.
Text in English
0002-9092 1467-8276 (Online)
https://doi.org/10.1093/ajae/aav052
Contract farming
Programmes
Markets
Prices
Welfare
Mexico
Modeling the market and welfare effects of Mexico's “Agriculture by Contract” program - Ames, IA (USA) : Wiley, 2016.
Peer review
“Agriculture by contract” (A × C) is the main Mexican government program aimed at mitigating price risks for agricultural producers in Mexico. A × C has unique features involving forward contracts and the provision of basis subsidies and subsidized exchange‐traded futures options for both producers and intermediaries. A simulation model is developed to analyze the market and welfare effects of A × C. When applied to corn, results show that A × C exerts substantial impacts and causes large transfers across sectors. Even if A × C reduced intermediaries' market power to the largest extent feasible, results indicate that it would still cause important losses in aggregate welfare.
Text in English
0002-9092 1467-8276 (Online)
https://doi.org/10.1093/ajae/aav052
Contract farming
Programmes
Markets
Prices
Welfare
Mexico