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El Llano is the southwestern quarter of the State of Aguascalientes in Mexico. Its economy in 1962 and 1963 was based upon three major activities: corn and bean farming, dairying, and export of labor services to the United States. The low levels of per family income found in the region were caused by low levels of productivity of corn and bean agriculture, for two reasons. First, income from corn and beans formed nearly half the gross regional income. Second, several of the other sources of regional income were technically tied to the level of harvest of corn and beans owing to the use of the harvest and its by-products as inputs to the other activities. The level of productivity in the cultivation of corn and beans was very low primarily owing to two causes. El Llano is located on the arid margin of corn and bean agriculture in Mexico. Also, the level of traditional technology is primitive. Moreover, El Llano's farmers were cultivating their land so intensively that the marginal productivity of labor was zero and the marginal productivity of capital was equal to its marginal cost. A market for fluid milk developed just prior to the period of the study (1962-1963) through construction of farm-to-market roads and the opening of a powdered milk plant by the Nestle Corporation in the vicinity. The rate of return to investment in dairying was more than four times the rate of return to an equivalent investment in corn and bean cultivation. Investment funds were obtained by many of the region's families by performing contract labor services in the United States. The rate of growth of income from dairying as a proportion of gross regional income was less than optimal given the high rates of return to investment in dairying. The United States terminated the large scale importation of Mexican farm laborers in 1965, so this source of investment funds has been eliminated. The general future of El Llano's economy is bleak unless the process of conversion from corn and bean agriculture to some form of animal husbandry is continued. [ABSTRACT FROM AUTHOR]