An Impact Evaluation of Agricultural Subsidies on Human Capital Development and Poverty Reduction: Evidence from Rural Mexico

Jul 2005
This working papers offers an impact evaluation of two innovative programs cash transfer schemes from the Mexican Government: PROGRESA, which is a national anti-poverty scheme directed at chronic rural poverty, and PROCAMPO, a scheme designed to compensate farmers for the negative price effects of NAFTA. The analysis of data collected for an evaluation of PROGRESA suggests that the overall level of food consumption and health check-ups is lower among PROGRESA households that also participate in PROCAMPO. The overall conclusions are that program conditionality does influence longer-term (human capital) and medium term (productive) investment decisions, the receipt of multiple forms of treatment by beneficiaries can affect the overall impact of each individual program, and conditional transfers may have muted effects among agricultural households in the face of market imperfections.