Analysis of the impact of aquaculture subsidies on production, the case of Mexico

Abstract Subsidies are a key government tool for supporting aquaculture, aiming to boost production, competitiveness, and sustainability. However, their effectiveness remains debated. This study examines the effectiveness of subsidies in Mexican aquaculture by analyzing the evolution of subsidy allocation from 2010 to 2021 and its impact on production with a modified Cobb-Douglas production function. During this period, total subsidy funding declined from ≈3.8 billion MXN to ≈2 billion MXN whileproduction increased by 127%, suggesting other drivers—such as technological adoption and market expansion—played a more significant role. Additionally, some subsidies may have inadvertentley reinforced unsustainable practices. These findings highlight the need for policy redesign focused on improving efficiency and sustainability. Rather than broad-based subsidies, targeted interventions—such as support for farm modernization, capacity building, and integrated financial services—may better align with long-term development goals.