Do Agricultural Programs in Mexico Alleviate Poverty? Evidence from the Ejido Sector

Following the economic and legal reforms of the early 1990s, the Government of Mexico has developed new agricultural support programs that promote productivity and facilitate the adjustment process, while not interfering with the market economy put into place by the reforms. In this paper, we use a panel survey for the the ejido sector for the years 1994 and 1997 to analyze the impact o­n poverty of two programs: PROCAMPO, a cash transfer per hectare of cultivated land, and ALIANZA, a matching grant program for investments in agriculture. Our evaluation method takes into account the endogeneity of placement. We find that participation in PROCAMPO significantly reduces the likelihood that a ejido household will be poor, but that ALIANZA has no significant impact o­n poverty. It is also shown that PROCAMPO may have a positive multiplier effect o­n household income