Farmers' Subjective Valuation of Subsistence Crops: The Case of Traditional Maize in Mexico
38 Pages Posted: 19 Oct 2007 Last revised: 13 Dec 2013
There are 2 versions of this paper
Farmers' Subjective Valuation of Subsistence Crops: The Case of Traditional Maize in Mexico
Farmers' Subjective Valuation of Subsistence Crops: The Case of Traditional Maize in Mexico
Abstract
Subsistence farmers may not respond to market incentives if their resource allocation decisions are based on shadow prices. This may lead to 'puzzling results from an economic point of view if shadow prices are not taken into account. Subsistence maize farmers in rural Mexico are an example with their non-response to decreasing maize prices after NAFTA. I analyze the true value measure of maize, hence farmers' real incentives to cultivate it, using nationally representative rural household data from Mexico. I develop an agricultural household model with an asymmetric market constraint to conceptualize the non-market values of the subsistence crop. I derive estimable shadow prices and discuss how they affect farmers' resource allocation.
I find that the estimated shadow price of traditional maize is significantly higher than market prices for maize for subsistence farmers. I analyze the key farm- and farmer-specific factors that are correlated with shadow prices of traditional maize. Irrigation and high soil quality are negatively correlated with shadow prices; male-headed and indigenous households have above-average shadow prices. The latter correlation is especially true in southern and southeastern Mexico indicating high \emph{de facto} incentives to maintain traditional maize in these regions. On-farm conservation programs would be more effective if targeted to communities that have high shadow prices. The method I use is flexible enough to be applied to guide conservation programs in other regions and with other crops.
Keywords: On-farm conservation, crop genetic resources, traditional maize, Mexico, farmer valuation, policy targeting
JEL Classification: O13, Q12
Suggested Citation: Suggested Citation
Do you have a job opening that you would like to promote on SSRN?
Recommended Papers
-
Testing Exogeneity in the Bivariate Probit Model: A Monte Carlo Study
By Chiara Monfardini and Rosalba Radice
-
Family Income and Participation in Post-Secondary Education
By Miles Corak, Garth Lipps, ...
-
Effects of Work-Related Absences on Families: Evidence from the Gulf War
By Joshua D. Angrist and John H. Johnson