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On Price Liberalization, Poverty, and Shifting Cultivation: An Example from Mexico

A bioeconomic model is used to explore the potential impacts of price policies on land use under shifting cultivation. The model is calibrated with household level and agroecological data from Yucatan, Mexico. Besides the direct effect of the liberalization of maize prices, the results indicate that changes in real wages in post-NAFTA Mexico may have non-expected effects on the labor diversification and land-use decisions of households. Further, it is shown that income may well be inversely related to both the suboptimal level of forest clearing, and the state of soil fertility, albeit in a non-monotonic (U-shape) way. (JEL O13, Q24)