The Mexican government will reform a state agricultural support program that has been regarded as "failed," a legislator said on Monday.

The reform was revealed only hours after experts said the government has failed to carry out the program Procampo, which was set up in 1994 to compensate Mexico's small agricultural producers after the North American Free Trade Agreement lowered trade barriers on agricultural products with the United States.

"This year, 2009, will be the last year in which Procampo will operate in its current form," Jose Isabel Trejo, who leads the finance commission of the country's upper legislative house, told media. "The program has become distorted with the passing of the years," he said.

His statements came after the state-run Economic Teaching and Investigation Center released a report showing that 80 percent of Procampo's 171 billion peso (12.88 billion U.S. dollars) budget went to 20 percent of the farmers who had the most land, and that the typical payment to poorer agriculturalists was a mere 700 pesos a year.

"The new program has to be designed to benefit everyone and should avoid abuse by those that do not have the right or the conditions to receive such resources," said Trejo, a Senator representing the central Mexico state of Zacatecas. "I believe that a lot of people who benefited from the program used the money for other things."

The Center's report also showed substantial chunks of the money had gone to elected officials, leading businessmen and convicted drug dealers. (1 U.S. dollar = 13.27 pesos)