Prioritizing public investment in agriculture for post-COVID-19 recovery: A sectoral ranking for Mexico

This article discusses the importance of the agricultural sector for Mexico's economy and its capacity to generate employment. It highlights that, although this sector lacks strong productive dynamism and presents high informality, investing in its productive infrastructure can contribute to post-pandemic economic recovery and welfare. A dynamic computable general equilibrium model is presented in which public investment in productive infrastructure equivalent to 0.25% of GDP is allocated to the agricultural sectors for three immediate years and the effects are analyzed up to 2030. The results show improvements in GDP, agrifood production and private consumption, as well as a reduction in rural poverty. The analysis suggests that new investments should prioritize the sugarcane sector, followed by cereals, especially corn, and other export-oriented crops, such as flowers and coffee. In addition, it recommends financing these investments with external loans to accelerate recovery and avoid the short-term macroeconomic trade-offs of domestic financing.