ANNOUNCEMENT 05 Dec 2019

The Mexican government announced the increase in the total budget allocated to the Guaranteed Prices Programme that provides a subsidy in the form of guaranteed minimum prices for corn, bread-wheat, rice, milk and beans. 

NUMBER OF INTERVENTIONS

1

  • 1 harmful
  • 0 neutral
  • 0 liberalising

SOURCE

Secretary of Agriculture and Rural Development of Mexico. Secretaría de Agricultura y Desarrollo Rural de México. Prensa. "Fortalecen esquema de Precios de Garantía para granos básicos" de 5 de diciembre de 2019. Available at: https://www.gob.mx/agricultura/prensa/fortalecen-esquema-de-precios-de-garantia-para-granos-basicos?idiom=es

Inception date: 01 Jan 2020 | Removal date: 31 Dec 2020

Price stabilisation

On 5 December 2020, the Secretary of Agriculture and Rural Development of Mexico announced the increase in the total budget allocated to the Guaranteed Prices Programme. The budget for the fiscal year 2020, was increased from MXN 6 billion (circa USD 309.8 million) to MXN 10 billion (over USD 516.3 million), see related state acts.

The Guaranteed Prices Programme provides a subsidy in the form of guaranteed minimum prices for small producers of corn, bread-wheat, rice, milk and beans. To do so, the government organises public purchases at fixed prices.

Despite the increase in the total budget, the minimum prices set in 2019 have been maintained as it follows:

  • MXN 5,610 (USD 293.48) per tonne of maize;
  • MXN 14,500 (USD 758.54) per tonne in the case of beans;
  • MXN 5,790 (USD 302.89) per tonne of bread-wheat;
  • MXN 6,120 (USD 320.16) per tonne of rice; and
  • MXN 8.20 (USD 0.43) per litre of milk.

Nonetheless, for the 2020 fiscal year, the maximum volumes that farmers can sale have been increased so that agricultural producers can receive a greater benefit.

 

Guaranteed Prices Policy
Until 1989 and 1993 the Mexican government implemented a guaranteed prices policy on several grains and other basic commodities including maize, wheat, beans and rice. With these schemes, the government sought to protect the local market to boost agricultural auto-sufficiency. However, with the progressive liberalization of the Mexican agricultural market, such policies where abandoned.
 
Since 2019 the government is re-implementing some of those policies with the objective to boost auto-sufficiency and reduce imports.

AFFECTED SECTORS