An Assessment of the Impact of Increasing Wheat Self-Sufficiency and Promoting Cash-Transfer Subsidies for Consumers in Egypt: A Multi-Market Model

Gamal Siam
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Gamal Siam: Department of Agricultural Economics, Faculty of Agriculture, Cairo University

No 06-03, Working Papers from Agricultural and Development Economics Division of the Food and Agriculture Organization of the United Nations (FAO - ESA)

Abstract: Wheat is central to the government of Egypt's food security policy which is based on increasing self-sufficiency in wheat on the one hand and subsidizing bread for consumers on the other hand. This paper uses a multi-market approach to assess the impact of increased self-sufficiency in wheat and a switch to a cash-transfer subsidy on cropping patterns, food consumption, production, input use, and income. The findings show that raising self-sufficiency in wheat would reduce reliance on imports but would also adversely affect other sectors, in particular livestock. At full self-sufficiency in wheat, berseem the main animal feed would nearly vanish, with negative repercussions for livestock production. The simulations also show that a move to a cash transfer subsidy system would improve targeting of the poor and eliminate distortions on the consumption side. Finally, under the current wheat policy an increase in the world price of wheat would intensify the adverse consequences of both self-sufficiency and consumer subsidies at the agricultural sector level and economy wide.

Keywords: Egypt; agriculture sector; wheat; multi-market model; wheat self-sufficiency; bread subsidy; policy scenario impact analysis. (search for similar items in EconPapers)
JEL-codes: Q11 Q18 (search for similar items in EconPapers)
New Economics Papers: this item is included in nep-afr and nep-cwa
Date: 2006-02
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