Comparative advantage and policy incentives for wheat production in rainfed and irrigated areas of Mexico
1986
Byerlee, D. | Longmire, J.
Increasing demand for wheat products and Mexico's trade and financial situation are placing pressure on expanding domestic wheat production. As expansion in irrigated areas will be limited to yield increases unless wheat substitutes for competing crops, rainfed wheat production can be considered as an alternative. This study analizes the comparative advantage of wheat in two contrasting regions of Mexico: the Yaqui Valley, Sonora (irrigated wheat with average yields over 5 t/ha) and the rainfed highland area of the states of Tlaxcala and Hidalgo (wheat yields around 2 t/ha). The influence of the government in setting output and input prices in the Mexican wheat industry is discussed (producers have been receiving prices below world prices). The analysis of the comparative advantage of wheat production in two regions in Mexico suggests that rainfed wheat in the central highlands may be equally as competitive as irrigated wheat in the north west, despite the fact that very little research and extension has been devoted to wheat grown under rainfed conditions in Mexico. The case for allocating research and extension resources to rainfed wheat in Mexico is strengthened by this study
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