PROFITABILITY AND COMPARATIVE ADVANTAGE OF GARLIC, BROCCOLI AND CAULIFLOWER PRODUCTION IN GUANAJUATO, ZACATECAS AND AGUASCALIENTES (1991-1992)

Abstract

Because the free market policy adopted by Mexico will affect the price structure and profitability levels in the agricultural sector, the purposes of this research were: 1) To calculate the private profitability levels for the production systems of fresh garlic (Allium sativum), broccoli (Brassica oleracea var. itálica) and cauliflower (Brassica oleracea var. botrytis), using current prices and assuming that these prices are distorted due to government intervention policies, such as tariffs, exchange rate and agricultural subsidies; 2) To estimate the economic profitability levels in fresh garlic and frozen broccoli and cauliflower, based on theoretical undistorted prices determined by simulating a free market with the United States, and 3) To determine if there exists any comparative advantage in these products. The Policy Analysis Matrix method was used for those purposes. The results showed that there are price distortions and positive gains in the current economic situation; that in the free market scenery the gross income increases more than production cost, resulting in a higher profitability level, and that there are evidences of comparative advantage in these products. Garlic production was the most profitable and efficient crop, ahead of frozen cauliflower and broccoli.