Effects of the guaranteed price on the average rural price of beans in Mexico

Abstract

Starting in 2019, the Government of Mexico has undertaken a set of priority programs, including the guaranteed price program for staple food products, with the aim of increasing the income of small and medium-scale agricultural producers. For beans, support is provided to producers of up to 30 hectares of rainfed land and up to five hectares of irrigated land and a limit of 15 t in both cases; with a purchase price of 14 500.00  $ t^-1 in 2019 and a reached level of 17 344.00 $ t^-1 in 2023. In order to understand the effects of the guaranteed price program on the level of the rural average price paid to bean producers, this paper models the intervention in the time series of bean prices in Mexico resulting from setting the guaranteed price in 2019. The estimated intervention model was of the ARIMA (1,1,0) type and shows an abrupt and permanent change in the time series of the average rural bean price at the beginning and during the subsequent years of said intervention, indicating that it improved the rural price and generated economic incentives, not only for small producers who market within the program, but in general, for all bean producers.