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The Yaqui Project A 15-year Retrospective Look by an Applied Economist Wally Falcon Asilomar, March...
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The Yaqui Project A 15-year Retrospective Look
by an Applied Economist
Wally Falcon
Asilomar, March 28, 2006
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Perspective
“As a development economist who had focused on policy analysis and policy advice at the national level, and as CIMMYT’s Chairman.”
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Past as Prologue
“The problem with history is that it is just one damned thing after another.”
George Bernard Shaw
The value of a 15-year involvement
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Scope and Methods
• Interdisciplinary questions; Mostly disciplinary answers
• Site selection and the continuing issue of scale
• Valley versus national policy formation• Original motivations
--Studying farmer responsiveness --Evaluating effects of a suite of policy
changes
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Policy reforms: 1991 to 1996
Mexican agriculture
Yaqui Valley agriculture
Policy Reforms: Shift towards privatized markets
• Trade liberalization: NAFTA (1994)
• PROCAMPO = decoupled payments
• Removal of factor and output price supports
• Decentralization of water market
• Land reform = amendment of Article 27
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Major Findings
Role of shocks--macro policy, pests, water
Rapidly changing private and social profitability of crop activities
NAFTA and the livestock industry
Diversification dilemmas
Low price responsiveness of farmers
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Valley Logo:
1992
20022003
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Area Planted in the Yaqui Valley, by Crop
Maize
Wheat
Soy
Safflower
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Policy reforms and exogenous shocks: 2001 to present
Mexican agriculture
Yaqui Valley agriculture
Policy Reforms:
• Environmental regulation of livestock waste
• Zero tariff levels on pork imports
• Emergency payments to farmers via grain prices
Exogenous Shocks:
• Continuing drought
• Wheat pests = Karnal bunt, aphids, rusts
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World Market Commodity Prices: 1988 - 2002
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Profits for major crops in the Yaqui Valley
Private vs. social costs
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Government Support
Mexico (2002):Wheat Prod.--3.2 mmtGovernment Support$0.202 mil.Wheat PSE--34%
Maize Prod.--19.3 mmtGovernment Support$1,081 mil.Maize PSE--31%
United States (2002):
Wheat Prod.--44.1 mmt
Government Support
$2,611 mil.
Wheat PSE--30%
Maize Prod.--228.8 mmt
Government Support
$4,578 mil.
Maize PSE--17%
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Uso de Nitrogeno en Trigo
0
50
100
150
200
250
300
1 2 3 4 5
Year - Ano
Kg
N/h
a
1956 1966 1981 1997 2002
100%
100%100%
84%
64%
Percentages represent the proportion of the area that is fertilized
And nitrogen use goes up, whatever!
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Livestock and the effect of NAFTA
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Linkages between the Wheat and Pork Sectors
Sonora produces 1.5 million tons of durum wheat
• 800,000 tons bought by the pork producers
• 200,000 – chicken producers
• 50,000 – cattle (feedlots)
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The Valley in 2025?
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Lessons/Surprises--Some Valley, Some Personal
• Unresponsiveness of farmers to prices (??)• Large role of the credit unions• Low levels of corruption• Reaffirmation of the importance of macro
policy• Difficulties of simultaneously doing first-
rate research and policy advice • Relative unimportance of Varietal Change• New respect for nitrogen pollution• New respect for GIS and spatial variation
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Some Disappointments• Difficulty in funding a truly integrated set of
studies (especially for a full-time person in Cd. Obregon)
• Inability to measure/value all nitrogen externalities adequately
• Project’s limited impact on development• Difficulty in identifying diversification
options• Limited success in learning more about the ejido communitie, and about migration more generally
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Overall
On a net basis, the positives greatly outweighed the disappointments at all levels--personal, project, and professional.