NAFTA AND MEXICO MAIZE PRODUCERS

The fall in the producer price of maize that will accompany implementa tion of trade liberalization and NAFTA has led to dire predictions of falling incomes and labor displacement in Mexican agriculture. We use a household survey of the ejido sector to show that a majority of maiz e producers are in fact not producing for the market and will conseque ntly not be directly affected as producers by a drop in the price of m aize, while a significant share will benefit as consumers. For the net sellers, we explore the determinants of two solutions to a falling ma ize price: diversification toward high value crops and modernization o f maize production. For both of these, results show the fundamental im portance of reconstructing supportive institutions for marketing, cred it, and technical assistance in replacement of the services formerly o ffered by government and subsequently discontinued under state contrac tion.