Agricultural Policy Monitoring and Evaluation 2026

20. Mexico

Main findings

Support to agriculture

Agricultural support in Mexico has declined substantially over the past two decades. The Producer Support Estimate (PSE) averaged 15.1% of gross farm receipts in 2023-25, down from 25.3% in 2000-02. This reduction largely reflects a marked decrease in Market Price Support (MPS), which fell from 17.7% to 9.5% of gross farm receipts over the same period, driven by trade liberalisation and domestic policy reforms. Nevertheless, domestic producer prices remain, on average, 11% above border reference prices, and MPS continues to dominate Single Commodity Transfers, particularly for sugar, rice, barley, beans and wheat.

During 2023-25, payments based on input use (fertilisers and electricity) and land dominated budgetary transfers to producers. These measures mainly targeted small‑scale farmers, notably through subsidies for fertilisers, while support for electricity used in water pumping benefited farms of all sizes. Additional instruments included area‑based payments to support subsistence producers of staple crops and land‑based schemes promoting afforestation and agroforestry.

The General Service Support Estimate (GSSE) averaged 1.9% of the agricultural value of production in 2023-25, less than the OECD average of 3.6%. This spending was directed towards infrastructure development and the agricultural knowledge and innovation system. Overall, total support to agriculture represented 0.8% of Mexico’s Gross Domestic Product (GDP) over the same period.

Key policy changes in 2025-26

Following a change in administration in late 2024, agricultural policy was reframed under the National Development Plan 2025-2030 and the Sectoral Programme for Agriculture and Rural Development. These documents focus on food sovereignty, poverty reduction, income growth for small‑scale producers, and the sustainable management of natural resources. Policy orientation emphasises social inclusion and resilience, aiming to build a more nutritious, equitable and climate‑robust agri‑food system.

In 2025–2026, rather than creating entirely new tools, the government restructured and consolidated existing programmes to improve coordination, efficiency, and territorial coverage. Key reforms include replacing SEGALMEX with the Food for the Well-being framework, which integrates procurement, storage, and distribution of food from small producers; reorganising DICONSA into the Stores for the Well-being; and LICONSA into Milk for Well-being to streamline operations. The Guaranteed Prices Programme was restructured into the Well-being Stockpiling and Fair-Trade components to strengthen direct procurement and market access, while its operational activities were transferred to Milk for the Well-being.

In addition, Fertilisers for Well-being and Production for Well-being were expanded with better targeting to women and Indigenous producers. The programme Harvesting Sovereignty was introduced to provide credit as well as insurance, technical assistance, and marketing support to small and medium producers, aiming to boost domestic staple food production under a more co-ordinated food sovereignty strategy.

The country also strengthened its sustainability agenda in agriculture through several co-ordinated actions. The “No Fires in My Parcel” campaign was expanded to reduce agricultural burning and promote compliance with fire regulations, while the Sin Deforestar Digital Platform was established to improve traceability and enforce deforestation-free production by linking geospatial and satellite data with information on producers, land use, and supply chains. The government also adopted a national strategy to reduce and properly use pesticides, including the gradual elimination of hazardous substances and promotion of safer alternatives.

Lastly, in 2025, Mexico focused on improving agricultural productivity through innovation, technology adoption, and stronger sustainability and inclusion measures. Key actions included the National Agreement on the White Corn-Tortilla Chain to stabilise prices and improve supply chain co-ordination, as well as efforts to promote genetic improvement, mechanisation, and digitalisation for small and medium producers. The government also advanced the National Native Maize Plan to conserve and commercialise traditional maize varieties.

Assessment and recommendations

• Mexico has made notable progress in shifting support toward more targeted payments for smallholder and vulnerable producers through programmes such as Production for Wellbeing, Fertiliser for Wellbeing, and Sowing Life. These programmes provide an important foundation for more inclusive agricultural support; however, there is scope to strengthen their sustainability impact further.

• For instance, the Fertiliser for Wellbeing Programme could be complemented with expanded training in good agricultural practices and more systematic soil analysis to better match nutrient applications to local conditions. The safeguards against land clearing under the Sowing for Life programme could be implemented via targeted payments based on forest environmental services.

• Develop tools to improve the targeting and effectiveness of support programmes, such as an agroclimatic zoning system based on soil and climate characteristics

• Promoting digital tools, for example, satellite monitoring and farm-level data platforms, would allow better targeting of support, improved tracking of environmental outcomes, and more timely policy adjustments.

• Phase out electricity subsidies and introduce water pricing to deter excessive water use and facilitate sustainable water management. Improved water allocation systems, stronger user associations, particularly for small-scale farmers, and investments in efficient irrigation are also needed for long-term water security.

• Integrate risk management strategies that combine insurance, early warning systems, climate information services, and diversification to help farmers cope with climate variability.

• Strengthen producer organisations, such as co-operatives, and improve smallholders’ access to input and output markets, including quality seeds, to alleviate scale-related constraints and facilitate productivity gains.

• Facilitate access to finance for smallholders through blended finance instruments, credit guarantees, and partnerships between public development banks, commercial banks, microfinance institutions, and producer organisations to reduce lending risks and improve access to affordable financing, particularly for investments in sustainable technologies and productivity-enhancing practices.

• Increasing linkages between producers, processors, retailers, and exporters through contract farming arrangements to help farmers access markets and capture more value. Improvements in market information systems and investments in storage, logistics, and cold-chain infrastructure is also needed to enhance quality standards and reduce post-harvest losses.

• Recent institutional reforms have improved programme coherence and governance, but stronger coordination, monitoring, and accountability are needed. A central coordination and evaluation mechanism supported by a unified monitoring and evaluation system would better align policy objectives and track results, while stronger regional coordination would improve implementation and ensure that programmes effectively reach diverse producer groups.

Key indicators on agricultural support

Table 20.1. Mexico: Estimates of support to agriculture

Million USD

	1991-93	2000-02	2023-25	2023	2024	2025p
Total value of production (at farm gate)	28 123	31 350	85 425	87 181	84 311	84 782
of which: share of MPS commodities (%)	68.31	66.28	63.05	62.15	63.13	63.88
Total value of consumption (at farm gate)	28 207	34 367	115 423	127 630	97 696	120 942
Producer Support Estimate (PSE)	9 148	8 541	13 577	11 665	16 131	12 935
Support based on commodity output	7 701	6 283	8 675	6 918	11 036	8 071
Market price support¹	7 649	5 969	8 517	6 817	10 844	7 889
Positive market price support	7 696	6 000	8 606	6 875	10 978	7 965
Negative market price support	-47	-32	-89	-58	-134	-76
Payments based on output	52	315	158	101	192	182
Payments based on input use	1 444	953	1 897	1 908	1 938	1 844
Based on variable input use	747	350	1 520	1 520	1 545	1 495
with input constraints	0	0	0	0	0	0
Based on fixed capital formation	545	362	194	213	204	166
with input constraints	0	4	27	34	27	21
Based on on-farm services	152	241	182	175	188	183
with input constraints	0	0	0	0	0	0
Payments based on current A/An/R/I, production required	3	137	-0	0	0	0
Based on Receipts / Income	0	59	-0	0	0	0
Based on Area planted / Animal numbers	3	78	-0	0	0	0
With input constraints	0	0	0	0	0	0
Payments based on non-current A/An/R/I, production required	0	0	922	748	1 030	988
Payments based on non-current A/An/R/I, production not required	0	1 168	-0	0	0	0
With variable payment rates	0	0	0	0	0	0
with commodity exceptions	0	0	0	0	0	0
With fixed payment rates	0	1 168	-0	0	0	0
with commodity exceptions	0	0	0	0	0	0
Payments based on non-commodity criteria	0	0	2 083	2 091	2 127	2 032
Based on long-term resource retirement	0	0	2 083	2 091	2 127	2 032
Based on a specific non-commodity output	0	0	0	0	0	0
Based on other non-commodity criteria	0	0	0	0	0	0
Miscellaneous payments	0	0	0	0	0	0
Percentage PSE (%)	30.91	25.22	15.02	12.68	18.00	14.40
Producer NPC (coeff.)	1.41	1.26	1.11	1.09	1.14	1.11
Producer NAC (coeff.)	1.45	1.34	1.18	1.15	1.22	1.17
General Services Support Estimate (GSSE)	1 048	621	1 702	1 886	1 693	1 526
Agricultural knowledge and innovation system	288	304	453	450	463	446
Inspection and control	0	102	100	99	103	97
Development and maintenance of infrastructure	285	112	1 149	1 338	1 126	983
Marketing and promotion	83	103	0	0	0	0
Cost of public stockholding	392	0	0	0	0	0
Miscellaneous	0	0	0	0	0	0
Percentage GSSE (% of TSE)	9.49	6.52	10.95	13.71	9.39	10.40
Consumer Support Estimate (CSE)	-7 016	-5 522	-7 312	-5 910	-8 853	-7 173
Transfers to producers from consumers	-7 671	-5 894	-7 626	-6 200	-9 193	-7 486
Other transfers from consumers	-396	-124	-30	-21	-39	-30
Transfers to consumers from taxpayers	853	348	211	209	213	210
Excess feed cost	199	148	133	101	166	133
Percentage CSE (%)	-25.65	-16.27	-6.36	-4.64	-9.08	-5.94
Consumer NPC (coeff.)	1.40	1.21	1.07	1.05	1.10	1.07
Consumer NAC (coeff.)	1.34	1.19	1.07	1.05	1.10	1.06
Total Support Estimate (TSE)	11 048	9 511	15 489	13 760	18 036	14 672
Transfers from consumers	8 067	6 018	7 656	6 220	9 231	7 516
Transfers from taxpayers	3 377	3 617	7 863	7 561	8 843	7 186
Budget revenues	-396	-124	-30	-21	-39	-30
Percentage TSE (% of GDP)	2.47	1.22	0.85	0.77	0.99	0.79
Total Budgetary Support Estimate (TBSE)	3 399	3 542	6 973	6 943	7 192	6 783
Percentage TBSE (% of GDP)	0.76	0.45	0.38	0.39	0.39	0.36
GDP deflator (1991-93 = 100)	100	391	1 247	1 188	1 246	1 309
Exchange rate (national currency per USD)	3.08	9.48	18.43	17.76	18.30	19.24

Note: p: provisional. NPC: Nominal Protection Coefficient. NAC: Nominal Assistance Coefficient. A/An/R/I: Area planted/Animal numbers/Receipts/Income. 1. Market Price Support (MPS) is net of producer levies and excess feed cost. MPS commodities for Mexico are: barley, garlic, red pepper, Chinese cabbage, rice, soybean, milk, beef and veal, pig meat, poultry and eggs.

Source: OECD (2026), “Producer and Consumer Support Estimates”, OECD Agricultural policy monitoring (database), https://data-explorer.oecd.org/.

Policy landscape

Agricultural policies in Mexico have been delivered through a set of priority programmes. Public support remains strongly targeted towards small- and medium-sized producers, with increased emphasis on women, Indigenous populations, and vulnerable rural communities. Changes to Mexico’s agricultural policy in 2025 and 2026 reflect a shift towards: 1) strengthening food sovereignty and self-sufficiency; 2) reducing poverty and inequality in rural areas; 3) increasing the income of small-scale producers; 4) promoting sustainable management of soil and water resources; 5) developing an inclusive, resilient, and nutritious agri-food system. Main agricultural policy instruments are:

The Fertilisers for Well-being Programme (Fertilizantes para el Bienestar) provides in-kind support through the delivery of nitrogen and phosphate fertilisers (300 kg per hectare with a cap of 600 kg per producer). Beneficiaries include producers of maize, beans, rice, or any other crop planted on less than 3 ha of land and located in highly marginalised and poor communities of the country.

The Production for Well-being Programme (Producción para el Bienestar) provides direct payments based on area or animal number to small and medium-sized producers of staple and strategic crops such as maize, rice, beans, wheat, amaranth, chia, sugarcane, coffee, cocoa, nopal-cactus, honey, and milk. The support is complemented by technical assistance promoting agroecological practices. Eligibility is limited to holdings of less than 20 ha and to the inclusion criteria (e.g. vulnerable populations).

Minimum prices apply to key commodities, such as maize, beans, wheat, milk, and rice, through the Guaranteed Prices Programme (Precios de Garantía), which is implemented via two instruments: the Well-being Stockpiling Programme for public procurement, and the Fair-Trade Programme for market access. The government buys staples directly from small and medium-sized producers at guaranteed prices, eliminating intermediaries. Food is then sold through a network of Stores for the Well-being that target remote and low-income areas.

Food for Well-being (Alimentación para el Bienestar) provides the overall framework for food access for vulnerable populations. Stores for the Well-being (Tiendas del Bienestar, formerly DICONSA) are also part of the food access framework, and are a network of convenience stores across the country that distribute basic food products to underserved and low‑income communities. There are more than 24 500 convenience stores (fixed or mobile) across the country, selling at reduced prices 30 products defined as a staple food basket. The stores help improve food access to marginalised populations while also providing a stable market for products procured from smallholder farmers. Milk for Well-being Programme (Leche para el Bienestar, formerly LICONSA) is also part of the Food for Well-being framework; and purchases milk from small and medium-sized farmers at guaranteed prices, then processes, fortifies, and distributes it through a nationwide network to vulnerable households at subsidised prices.

The 2002 Rural Energy Act (Ley de Energía para el Campo, LEC-2002) provides reduced electricity rates for water pumping to irrigate land contingent on verified use for pumping and compliance with metering and reporting requirements. While the programme is open to farms of all sizes, it primarily benefits medium and large-scale operations due to their higher irrigation intensity.

A key programme that relates to agriculture but that is under the responsibility of the Ministry of Well-being within the Rural Development strategy is the Sowing for Life (Sembrando Vida) programme, which supports agroforestry projects implemented by small-scale farmers located in poor municipalities. Participating farmers receive monthly income support, technical assistance, and inputs (such as seedlings), conditional on cultivating designated plots and participating in community-based learning groups. The programme focuses on restoring degraded land, enhancing carbon sequestration, and strengthening local economies, while improving livelihoods for smallholders.

The national public framework for agricultural credit provides preferential loan rates through commercial banks, credit unions, and other financial intermediaries, using funds from FIRA, a second-tier public financial institution. This credit primarily benefits medium and large-scale farmers. The 2025-created Harvesting Sovereignty (Cosechando Soberanía) programme uses FIRA funds to provide loans to smallholders, under preferential terms, including lower interest rates and more flexible repayment conditions. It also provides technical support, research for animal and plant health and production and delivery of high-quality seeds.

Public expenditures on general services focus on agricultural knowledge and innovation systems, infrastructure and biosecurity. A key GSSE service is the Agri-food Health and Safety Programme, implemented by the Animal and Plant Health Agency (SENASICA), which strengthens sanitary and phytosanitary systems through surveillance, prevention, and control measures. The programme operates through a nationwide network of inspection points, laboratory diagnostics, and rapid response protocols, ensuring early detection and containment of pests and diseases while supporting compliance with domestic and international standards. Additional initiatives aim to increase products’ market value, promote circular bioeconomy approaches, and enhance sustainable resource management.

Recent policy developments

Domestic policy developments in 2025-26

Following the change in administration in October 2024, the government adopted the National Development Plan 2025-2030 and the Sectoral Programme for Agriculture and Rural Development 2025‑2030, which define the strategic direction of agricultural policy. Major changes to Mexico’s agricultural policy in 2025 and 2026 reflect a shift toward a more integrated, state‑led food system focused on smallholders, food security, and domestic production. These changes were reoriented to improve efficiency, targeting, and territorial coverage, while maintaining a strong social focus. Rather than introducing entirely new instruments, the restructuring focused on consolidating, renaming, and strengthening coordination among existing programmes. Key developments include:

• The dismantling of SEGALMEX, the food access institution, while creating the Food for the Well-being food access framework (Alimentacion para el Bienestar), which consolidates procurement, storage, and distribution functions into a single entity. The system links direct procurement from small producers, processing, and subsidised sales of food products. moving from fragmented institutions to a vertically integrated, state-coordinated agri‑food system.

• The restructuring of the public food stores network, DICONSA, into the Stores for the Well-being (Tiendas del Bienestar), to improve governance and operational clarity, while making it part of the Food for the Well-being framework.

• The restructuring of the milk procurement mechanism, LICONSA, into Milk for Well-being to improve administrative and logistical efficiency, strengthen the dairy value chain, and enhance the social distribution system. Milk for Well-being is also part of the Food for Well-being framework.

• The Guaranteed Prices Programme was restructured into two components: the Well-being Stockpiling programme, which involves public procurement and storage of staple crops, with the government purchasing directly from small and medium-sized producers at guaranteed prices, eliminating intermediaries; and the Fair-Trade Programme, which supports market access and value chain integration. As of 2025, the operational activities of the Guaranteed Prices Programme were transferred to the Milk for Well-being programme.

• Expansion and improved targeting of the Fertilisers for Well-being Programme, with increased participation of women and Indigenous producers.

  Expansion of the Production for Well-being Programme, combining direct income support with technical assistance.

• The Harvesting Sovereignty programme was introduced to provide credit to small and medium producers using FIRA funds. The programme also provides integrated support by combining credit, insurance, technical assistance and marketing. The programme aims to increase domestic production of staple crops (maize, beans, rice, milk). This combines previously separate instruments (credit, extension, market support) into a bundled “integrated support” model aligned with food sovereignty objectives.

Several actions related to sustainability aspects were also undertaken during this period:

• The “No Fires in My Parcel” information campaign, which promotes alternatives to agricultural burning and strengthens compliance with fire-use regulations, was expanded.

• The Sin Deforestar Digital Platform was set in place to support traceability and enforcement of deforestation-free production systems, through a data verification system that links agricultural production to land-use information. The platform links geospatial and satellite information with data on producers, farm locations, and supply chains, allowing products to be traced back to their exact plot of land and verifying compliance with deforestation-free criteria.

• The National Strategy for the Reduction and Proper Use of Pesticides was adopted, including the progressive banning of hazardous substances and the promotion of sustainable alternatives.

• The number of Agroclimatic Technical Roundtables, which support climate-informed decision-making through the integration of scientific and traditional knowledge, was increased.

• International co-operation projects were also expanded with a focus on mitigation and adaptation, including initiatives targeting methane reduction, soil carbon sequestration, water efficiency, and sustainable livestock systems.

In 2025, policy efforts were emphasised to improve productivity through innovation and technological adoption while ensuring environmental sustainability and social inclusion. Key initiatives include:

• The National Agreement on the White Corn-Tortilla Chain, which aims to stabilise prices and improve supply chain efficiency through coordination between producers, industry, and government.

• Genetic improvement, mechanisation, and digitalisation, particularly for small- and medium-scale producers.

• The National Native Maize Plan, which promotes the conservation, production, and commercialisation of traditional maize varieties.

• Development of value chains such as coffee, cocoa, and honey, with an emphasis on agroforestry systems and smallholder inclusion.

• Improve livestock productivity and sustainability, including genetic improvement and infrastructure investments.

Trade policy developments in 2025-26

Negotiations on the modernisation of the Mexico-European Union Global Agreement (MGA) and the Interim Trade Agreement (ITA) were concluded in January 2025. The updated agreement expands market access through broader tariff liberalisation, strengthens sanitary and phytosanitary (SPS) provisions, and enhances protection of geographical indications. The agreement removes tariffs of up to 100% on key EU agri-food exports, including cheese, poultry, pork, pasta, apples, jams, chocolate and wine. It also expands the protection of European geographical indications in Mexico to 568 products and simplifies customs and regulatory procedures. The agreement once ratified will enter into force.

Ahead of the 2026 review of the United States-Mexico-Canada Agreement (USMCA), Mexico engaged in discussions with its North American partners on sanitary and phytosanitary measures, agricultural biotechnology, rules of origin, labour and environmental provisions, and dispute-settlement mechanisms to maintain market access and support integrated regional supply chains.

Policy context

Key economic and agricultural statistics

In 2024, Mexico had a population of about 130 million and ranked as the 13^th largest economy globally. Agriculture accounted for 3.7% of GDP, up from 3.2% in 2000, and remained an important source of employment, representing 10.8% of total employment. Trade is a key pillar of the economy, amounting to 34% of GDP in 2024, with agro‑food products playing a significant role: they represented 7.8% of total exports and 5.3% of total imports, reflecting both Mexico’s strong agro‑export orientation and its reliance on imported inputs (Table 20.2).

Table 20.2. Mexico: Contextual indicators

	Mexico		International comparison
	2000*	2024*	2000*	2024*
Economic context			Share in total of all countries
GDP (billion USD in PPPs)	1 154	3 379	2.8%	2.0%
Population (million)	99	130	2.3%	2.4%
Land area (thousand km2)	1 944	1 944	2.3%	2.3%
Agricultural area (AA) (thousand ha)	106 330	98 545	3.5%	3.3%
			All countries1
Population density (inhabitants/km2)	50	67	52	64
GDP per capita (USD in PPPs)	11 688	25 986	9 508	31 740
Trade as % of GDP	23.0	34.0	12.3	15.0
Agriculture in the economy			All countries1
Agriculture in GDP (%)	3.2	3.7	3.0	3.6
Agriculture share in employment (%)	17.3	10.8	-	-
Agro-food exports (% of total exports)	4.6	7.8	6.4	8.3
Agro-food imports (% of total imports)	5.6	5.3	6.1	7.5
Characteristics of the agricultural sector			All countries1
Crop in total agricultural production (%)	57.0	55.5	62.1	60.4
Livestock in total agricultural production (%)	43.0	44.5	37.9	39.6
Share of arable land in AA (%)	21.5	20.3	33.0	34.0

Note: *or closest available year.

1. Average of all countries covered in this report.

Sources: OECD statistical databases; International Labour Organisation (ILO); UN Comtrade; World Bank, WDI; FAO database and national data.

Figure 20.4 shows that Mexico’s economic performance over 2000-25 was characterised by moderate growth, relatively stable inflation, and cyclical unemployment, punctuated by major shocks. Real GDP growth fluctuated around 2-4% for much of the period, with sharp contractions during the global financial crisis in 2009 and the COVID‑19 pandemic in 2020, followed by recoveries in subsequent years, and a relative slow down around 1% since 2023. Inflation declined from high levels in the early 2000s and remained broadly contained for most of the period, before rising markedly in 2021-22 and easing thereafter. Unemployment was relatively stable before the pandemic, increased sharply in 2020, and then declined gradually as economic activity recovered.

Agro‑food exports rose from around USD 8 billion in 2000 to nearly USD 48 billion by 2024, while imports grew from about USD 9 billion to USD 33 billion. Although imports generally exceeded exports in the early 2000s, export growth accelerated from the mid‑2010s onward, resulting in a widening agro-food trade surplus in recent years and highlighting the increasing importance of agro-food exports in Mexico’s trade. Mexico’s agro-food exports in 2024 were largely composed of processed products for consumption, which accounted for just over half of total exports, while primary products for consumption represented around 40%. In contrast, agro-food imports were more diversified, but dominated by processed products, particularly those destined for consumption and industry, together accounting for about 70% of imports. This composition highlights Mexico’s strong role in exporting processed food products, alongside a continued reliance on imported primary and processed inputs for food processing and industrial use (Figures 20.5A and 20.5B).

Mexico’s agricultural output growth over 2014-23 was driven primarily by total factor productivity (TFP) gains, which accounted for the largest share of growth, while contributions from primary factors and intermediate inputs were relatively limited. Compared with the world average, Mexico recorded higher output growth, with a stronger reliance on productivity improvements rather than input expansion, indicating that efficiency gains played a central role in supporting agricultural growth over the period. In 2024, agricultural GHG emissions represent 18.1% of the country’s total, which is higher than the OECD average (10.3%) and well above the sector’s relative contribution to the country’s economy (3.7% in 2024). The water stress index for 2024 is 20.1, well above the value observed in 2000 (15.6). Agriculture is partly responsible for this pressure due to its high share of total water abstractions (76%) (Figure 20.6 and Table 20.3).

Table 20.3. Mexico: Productivity and environmental indicators

	Mexico		International comparison
	1991-2000	2014-23	1991-2000	2014-23
			World
TFP annual growth rate (%)	4.2%	1.9%	1.8%	0.8%
			OECD average
Environmental indicators	2000*	2024*	2000*	2024*
Nitrogen balance, kg/ha	26.4	34.2	32.3	29.0
Phosphorus balance, kg/ha	1.9	3.9	3.3	2.3
Agriculture share of total energy use (%)	2.9	3.7	1.7	2.0
Agriculture share of GHG emissions (%)	19.0	18.1	8.7	10.3
Share of irrigated land in AA (%)¹	4.5	6.3	-	-
Share of agriculture in water abstractions (%)	82.0	76.0	46.1	47.7
Water stress indicator	15.6	20.1	..	..

Note: * or closest available year.

Sources: USDA Economic Research Service, Agricultural Productivity database; OECD statistical databases; FAO database and national data.

Historical trends in agricultural policies

Starting in the 1980s, reforms to price support reduced its prominence in the policy mix. In 1988‑89, guaranteed prices for wheat, sorghum, barley, rice and oilseeds were eliminated. After the enactment of the North American Free Trade Agreement (NAFTA) in 1994, guaranteed prices for maize and beans were phased out, and the government also withdrew support for procurement and marketing for all commodities except for beans and maize, for which it was reduced but not eliminated.

The old system of market price support was replaced by a new one of direct income support through farm payments (Procampo) based on the historically cultivated crop area, which was given to all farms irrespective of their size. During this period of trade liberalisation, subsidies for financial instruments to reduce financial risks (price hedge instruments) were also put in place. Input subsidies for seeds, fertiliser, pesticides, machinery and diesel fuel were reduced in the 1990s, but the input subsidy for electricity to pump groundwater was maintained.

In 2018, direct payments were redirected to target small and medium-scale farmers located in poor regions of the country. Minimum guaranteed prices for staple crops were reinstated in the form of government purchases of crops from a limited number of farmers, targeted to smallholders, at a minimum price. Crops purchased under this intervention were then distributed to poor households at subsidised prices in both rural and urban areas. The Procampo programme (direct payments based on land) was renamed “Production for Well-being” and reformed to provide support only to small-scale farmers, with particular focus on those located in poor communities. Furthermore, subsidies for large farms and food processors to encourage price hedging were dismantled. A fertiliser programme targeted to smallholders was created, as well as the Sowing for Life programme that subsidises agroforestry activities carried out by smallholders. SEGALMEX, DICONSA, and LICONSA were restructured, and functions were reoriented.

Table 20.4. Mexico: Agricultural policy trends

Period	Broader framework	Changes in agricultural policies
Prior to 1990s	Import substitution model	Agricultural tariffs and import quotas Minimum prices for staple food (maize, rice, beans, wheat, etc.) State food marketing enterprise (CONASUPO) Subsidies for inputs (fertilisers, seeds, electricity for water pumps) Preferential agricultural credit
1990-2018	Trade liberalisation	Dismantling of tariffs on agricultural products (except sugar) Dismantling of the state marketing enterprise Elimination of input subsidies, except for electricity for water pumps Elimination of minimum prices Reforms to land tenure NAFTA and other FTAs signed Preferential agricultural credit Creation of direct payment to farmers (PROCAMPO) Insurance and price hedge subsidies
2018- present	Reforms to target and tailor direct payments to smallholders	Guaranteed minimum prices on staples (maize, beans, wheat, rice and milk) are targeted at smallholders and limited to a certain amount of production volume. PROCAMPO was renamed “Production for Well-being” and reformed to provide payments to only small-scale producers living in poverty conditions across the country. The fertiliser for well-being programme was created to target only small-scale farmers and is limited to only 600kg per year per farmer. The Sowing Life programme was created to support agroforestry projects implemented by small-scale farmers. Electricity subsidy for water pumping continues. Preferential agricultural credit continues at a lower rate, while financial institutions have been reformed or dismantled. SEGALMEX was dismantled, and its functions were transferred to DICONSA LICONSA was restructured, and Milk for the Well-being programme was created.

Mexico provides relatively low levels of support to its agricultural sector, and this has decreased over the years. The Mexican Producer Support Estimate (PSE) was mostly comprised of market price support until the end of the 1990s. After this period, the share of market price support declined while that of budgetary support grew, until 2016 when market price support became the largest component of producer support (Figure 20.7).