AGRICULTURAL SURPLUS TRANSFERS: ALTERNATIVES POLICIES FOR MEXICO

This dissertation attempts to analyze the mechanisms used in Mexico to transfer the agricultural surplus and to develop an econometric model to evaluate the agricultural sector's performance, and its contributions, via surplus transfers from agriculture to nonagriculture, to the process of nonagricultural capital formation in the period 1950-1979.;To understand the role of the agricultural sector in the Mexican economic development, the agricultural sector's contributions were analyzed. Agriculture assured, in most of the years of the period analyzed, a sufficient supply of food and raw materials. In addition, agriculture supplied an increasing share of available foreign exchange that financed the imports needed for the process of industrialization.;These resources were extracted through prices, credit, and foreign trade policies in most of the years of the period analyzed; however, resources were transferred to agriculture from the rest of the economy through the fiscal system, mainly in the period 1970-1979. (The flow of labor also represented a very important source of human capital transferred from agriculture to nonagriculture). Agricultural transfers accounted for approximately 10.0% of the agricultural output in the 1950-1979 period.;A model containing three simultaneous-equations was developed to evaluate the agricultural sector's contribution, via agricultural transfers, to nonagricultural capital formation. The results of the model showed that agricultural transfers did little to explain nonagricultural capital formation, particularly during the 1970's. Via its contribution to total value added and through food prices, the agricultural sector did influence (market) nonagricultural capital formation. The results of the model also showed that nonagricultural capital formation was explained basically on the "demand side", by changes in income lagged one year and by changes of the money supply. This finding is consistent with either a Keynessian (income) or a Monetarist (money supply) position or viewpoint.;The study reviews various theories on the role of agriculture and the agricultural surplus transfers in the process of economic development. The first set of theories centers on the contributions or functions of the agricultural sector in each phase of the overall economic development, and are theoretical in nature. The second set contains empirical evidences that attempt to measure the transfers and their contribution to economic development.