Falcon Asilomar 3 28 06

The Yaqui Project A 15-year Retrospective Look by an Applied Economist: 

The Yaqui Project A 15-year Retrospective Look by an Applied Economist Wally Falcon Asilomar, March 28, 2006

Perspective: 

Perspective “As a development economist who had focused on policy analysis and policy advice at the national level, and as CIMMYT’s Chairman.”

Past as Prologue: 

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

Scope and Methods: 

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

Policy reforms: 1991 to 1996: 

Policy reforms: 1991 to 1996 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

Major Findings: 

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

Slide8: 

Valley Logo: 1992 2002 2003

Slide9: 

Area Planted in the Yaqui Valley, by Crop Maize Wheat Soy Safflower

Slide10: 

Policy reforms and exogenous shocks: 2001 to present 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

World Market Commodity Prices: 1988 - 2002: 

World Market Commodity Prices: 1988 - 2002

Profits for major crops in the Yaqui Valley: 

Profits for major crops in the Yaqui Valley Private vs. social costs

Government Support: 

Government Support Mexico (2002): Wheat Prod.--3.2 mmt Government Support $0.202 mil. Wheat PSE--34% Maize Prod.--19.3 mmt Government 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%

Slide14: 

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!

Slide15: 

Livestock and the effect of NAFTA

Linkages between the Wheat and Pork Sectors: 

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)

The Valley in 2025? : 

The Valley in 2025?

Lessons/Surprises--Some Valley, Some Personal: 

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

Some Disappointments: 

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

Overall: 

Overall On a net basis, the positives greatly outweighed the disappointments at all levels--personal, project, and professional.