Potential self-sufficiency in major Egyptian crops: necessary production and price policies as estimated by an econometric model

Riad El-Sayed Emarah

ISU General Staff Papers from Iowa State University, Department of Economics

Abstract: This study is an attempt to contribute to the understanding and solving of the major Egyptian agricultural problems. The major crops analyzed in this study are wheat, beans, corn, rice, and sugarcane. Other crops in the crop rotation such as berseem, winter tomatoes, cotton, and summer potatoes also are analyzed. These crops are included to allow analysis of interrelationships in the crop system. The study period is from 1960-1979;To analyze the self-sufficiency for the year 2000, this study uses an econometric model. The model is based upon the ordinary theory of the firm and the ordinary theory of the consumer. In estimation, three major reduced forms are used. These reduced forms explain and predict to the year 2000. The farmers in Egypt are generally profit responsive. The estimated supply elasticities for wheat, beans, corn, rice, and cotton are very reasonable. Further, except for wheat, the estimated income and price elasticities of demand are also reasonable;For an X percent increase in the supply of the major crops, and an X percent reduction in the demand, this study provides the basis for selection of alternatives. The major policy alternatives analyzed in this study are investment in the Egyptian farmland, taste adaption, and effective resource control. The results from the econometric model provide a basis for an increase in the degree of self-sufficiency by the year 2000. This holds true for wheat, beans, and corn. As for rice, the model predicts a reduction in exports. But, based upon this study's policies, Egypt will still be self-sufficient in rice by the year 2000. As for sugarcane, the data are much too complex to allow computation of regression equations. But, in general, the model predicts a further reduction in the degree of self-sufficiency unless productivity grows at a reasonable annual rate. This result justifies the significance of this study to Egypt;This study also related the proposed self-sufficiency policies to the other policy alternatives. This study's policies are an investment type. On the contrary, the other policies are of the consumption type. Therefore, this study's policies are necessary and inexpensive. Other policy options, such as adopting a new importation policy and the Sudan-Egypt integration, have been discussed in this study.

Date: 1982-01-01
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