Reassessing the economic returns of diverse traditional agricultural systems for smallholder farmers: a case study of the milpa in Mexico

Traditional agricultural systems are recognized for their contribution to food security and income for the poorest households in rural communities. However, agricultural development policies typically prioritize and account for solely the main cash crop contribution to the market, ignoring the full range of subproducts and benefits these systems provide. We analyze the economic net returns of the milpa in Mexico, accounting not only for the maize grain production but for the full range of subproducts generated in the system, considering the varying levels of intensification among smallholder farmers. We combined microdata census from 26,963 smallholder farmers and participatory methods to model economic net returns of three farm typologies using Monte Carlo simulations. We identified three groups of farmers: the traditional (63%) largely maintaining traditional practices, the transitional (34%) beginning to adopt agricultural inputs, and the intensified group (3%) exhibiting a more input-intensive cultivation. Labor and input costs account for about 90% of total costs. The highest net return ( p < 0.05) was observed in the traditional group's most diverse milpa system, due to high resource-use efficiency through multi-product cultivation and low external input reliance. Initial increases in intensification lead to a sharp decline in net returns; recovery only begins once a critical threshold (0.81) is surpassed, a condition met by only 0.2% of smallholder farmers. We highlight that recognizing subproduct diversity is essential for assessing economic returns in traditional systems. Furthermore, modernization incurs substantial input expenses that often fail to offset costs on small-scale farms. • Traditional diverse systems yielded higher net returns than intensive models. • Increased input reliance raises yields but fails to offset incurred costs. • We identified 31 species and 67 distinct uses associated with milpa products. • Supporting traditional systems is crucial for future agricultural sustainability.