| Egypt's agricultural policy passed through various stages during the period(1981-1985).The agricultural sector suffered from governmental intervention policies,including determining areas to be cultivated with each crop,underpricing of agricultural products,and marketing of agricultural products,export,and import of farming crops,isolating domestic prices of farm commodities from world prices.As of the mid-1980 s,economic reform policies started to be implemented.The agriculture sector has been the first sector in the national economy to implement economic reform policies and market mechanisms.As a result,agriculture has moved to a free-market economy.Hence government intervention in price policy has been abolished,prices of the agricultural commodity have been liberalized,and the private sector started to import,export,and agrarian market inputs.By the late 1980 s,Egypt's agricultural sector has been acting according to the strategy of market mechanisms.Economic decisions related to production,pricing,marketing,and production inputs have been liberalized.And since economic reform policies usually come in the form of a package of interrelated policy programs.So,implementing such policies usually leads to the emergence of a successive series of impacts on the revenues and production costs of some crops as one of the methods used in quantitative analysis of agricultural policies.In addition,the agricultural price policy represents great importance in the national economic structure in general and farming projects in particular.Where it aims to reduce the wide fluctuations in prices and agricultural incomes.Besides,realizing a certain level of income for farmers and achieving stability so that farmers can put their future production plans safely.Agricultural price policy aims to achieve optimal relations between agricultural and nonagricultural prices.Moreover,hence agricultural and non-agricultural incomes.In most cases,agricultural prices are determined based on current supply conditions,which is naturally affected by lagged price levels.It is,in turn,leads to continued price fluctuations.It is well known that the unfair prices of agricultural commodities represent an obstacle to agricultural economic development.Accordingly,it is necessary to develop an agrarian price policy that integrates with the comprehensive economic development policy.The agricultural policy affects production directly and indirectly.Increasing agricultural production is an urgent necessity in developing countries,especially those countries endowed with agrarian resources in their national economy.The main factor that positively affects production is offering incentives and guarantees of farmers to encourage them to improve the production of agricultural commodities.Besides,increasing growth rate and the good distribution of production inputs,as well as achieving stability in prices of agricultural commodities,which ensures relative stability in farmers' incomes.It means that price stability can lead to organizing the process of agricultural production.It helps achieve economic efficiency,where it leads to minimizing risk and uncertainties to the degree that enables farmers to design their production plans and organize their investments under improved conditions.Agriculture remains an essential sector in the Egyptian economy and a key pillar for food security.The Ministry of Planning,Monitoring,and Administrative Reform's databases reveal that investment in agriculture for fiscal year 2016/2017 amounted to US$ 9.2 billion,including 2.8 % of overall public investment.Agriculture's contribution to GDP averaged 13.2 % between 2000 and 2017,while employment in agriculture averaged 29 % over the same period.It was down from 58 % in 1960 and 34% in 1990.Besides,the total value of agricultural production is estimated at US$ 20.55 billion,of which plant production represents 51.24% worth US$ 10.53 billion.Moreover,the value of cereal crops' production amounted to US$ 6.54 billion,representing 62.11% of the total value of plant production.The average per capita share of grains is estimated at 260.7 kg/annum.While the value of vegetable crops' production amounted to US$ 2.01 billion,representing 19.09% of the total value of plant production.The average per capita share of vegetables is estimated at 79.3 kg/year.Across governorates,the percentage of agriculture in total employment and GDP varies considerably because of differences in agro-climatic conditions as well as a degree of economic diversification.Regionally,Upper Egypt governorates have a higher share of employment in agriculture,while Lower Egypt has a relatively higher percentage of GDP stemming from agriculture.The problem of this study investigates is that Egypt's price policy has gone through different stages.Before 1987,a direct intervention was applied,where the government set areas cultivated with certain crops,compulsive delivery of the produced plants against pre-set prices less than freemarket prices were used.This policy resulted in negative repercussions on achieving the objectives of agricultural policy.It caused an imbalance between local and international prices of crops.Which led the government to embark on adopting several economic policies to reform the course of Egypt's economy as of the mid-1980 s,which calls for evaluating such policies and analyzing their interlinked impacts on the economics of production of major food crops,namely wheat,maize,rice,and potatoes.So,this study investigates the problems arising from direct and indirect governmental interventions in agricultural production by adopting development strategies that aim to achieve a free market economy.As well as the study focuses on the problem that domestic production of wheat and maize fails to meet domestic consumption.This issue has been increasing because the rate of growth in productivity fails to match the growing needs of the population.Therefore,the study attempts to quantify the food gap between wheat and maize production and consumption in Egypt.Besides studying the rice problem where in recent years,the government resorted to implanting the policy of defining rice cultivated areas and banning exports from addressing the issue of limited irrigation water.Such a policy also resulted in reducing the self-sufficiency rate in rice.It is worth noting that Egypt has been facing the problem of increased prices of most agricultural commodities,including rice,which pushed the government to ban rice exports from increasing domestic supply to cover the consumption need of the population.Also,this study investigates the problem of the potato crop,such a strategic crop that has been facing some obstacles due to price distortions,which resulted in a year-over-year increase in production cost and reduced exports,thus negative impacts on the country's hard currency proceeds.This study was designed to assess the impact of agricultural price policies on wheat,maize,rice and potatoes consumers and producers,and the welfare impact of government interventions.To estimate the effect of government intervention(as opposed to non-intervention)on welfare gains,using a partial analysis(traditional),Partial Equilibrium Model using(GAMS),To this end,using secondary and primary data on production,consumption,and other related variables from 2000 to 2017.Also,assess the current and future food security by applied a simulation model using vensim software to predict the results for the next decade.Also,an almost ideal demand model(AIDS)was used to assess various price elasticities across the international markets.Besides,use One Way ANOVA to know are farmers' perceptions and attitudes towards the problems facing them.Besides the ARDL Model to study the impact of supply response of wheat,maize,cultivated rice area to changes in farmgate price and net revenue.The main findings indicate that the government follows a neutral policy regarding wheat,maize,rice,and potatoes production.Besides,society incurs losses in wheat production under interventions or non-interventions by the government.The results also show that the government has been imposing implicit taxes on maize,rice,and potatoes producers and that they will be better off without government intervention.Besides,domestic wheat and maize production have a comparative advantage over imported wheat and maize.With government intervention,consumer surplus and producer losses and net economic losses are higher.These results indicate that the government should strive to increase domestic wheat and maize production while keeping intervention in the wheat and maize market to a minimum.Also,the results show that by 2030,Egypt's dependence on wheat and maize imports will increase by 80.30% and 61.97%,respectively.Although domestic wheat and maize production and productivity are expected to increase in the future,wheat and maize food security will decline due to high population growth in the country.The results of the AIDS model show that the demand for wheat and maize in the Egyptian market is elastic.Also,approximately 73% of wheat comes from the Russian Federation,Ukraine,and the United States of America,and 56% of maize imports come from Argentina,Brazil,and the United States.In regards to the relative importance of problems,wheat farmers confront indicate that lack of a fair procurement price ranks first 12.87%.Followed by lack of subsidy on production inputs and their high prices ranked second 11.88%,oligopoly in wheat purchase markets and the weak role of agricultural extension ranked third 10.7%,and fourth 10.5%,respectively.High production cost and low revenue per acre ranked fifth 8.91%,while high loss during harvesting ranked sixth 8.51%.Long-distance between farms and markets ranked seventh and last by accounting for 7.92% of the problem's wheat farmers in Minia governorate confront.Furthermore,the problem that rice production is influenced by limiting rice planted area ranks first,with relative importance amounting to 100%.The problem that farmer's income is impacted by limiting rice planted area ranks second,with relative importance amounting to 99.22%.The problem that farmgate price is influenced by banning rice exports ranks third,with relative importance amounting to 93.75%.Besides,the problem that farmgate price is influenced by limiting rice planted area ranks fourth,with relative importance amounting to 88.28%.Also,Lack of new high yielding varieties to compensate for limiting rice planted area ranks fifth,with relative importance amounting to 82.03%.Farmers' carelessness regarding implementing the decree issued to limit rice planted area ranks sixth,with relative importance amounting to 74.61%.High production cost and low revenue per acre plus shortage in fertilizers and pesticides rank seventh,with relative importance amounting to 14.06%.Infections by diseases and pests rank eighth,with relative importance amounting to 13.28%.Low productivity ranks ninth,with relative importance amounting to 12.89%.The shortage of skilled labor ranks tenth,with relative importance amounting to 6.25%.Significant loss during harvesting ranks eleventh,with relative importance amounting to 3.125%.Based on the findings of the overall study,it is recommended thatI.Continue implementing food subsidy policy and reforming the implemented price policy at the sectoral and national levels.II.Setting appropriate procurement prices for crops at some point in time must be revisited periodically based on evolutions in the production costs of producing such crops,yield,the profitability of competing for crops,evolutions in international prices,and comparing domestic to world demand for such crops.III.Improve the state of food security depending on domestic production through improving the self-sufficiency rate in food commodities.IV.Self-sufficiency rate in wheat,wheat flour,and maize can be raised by reducing losses along the chain,in addition to devoting attention to some other factors.V.It is crucial to study the international prices of crops periodically to use them as guides when setting the prices of export and import crops,which helps in promoting exports and reducing imports.VI.Establish an Agricultural Policy Information Center that comprises an integrated field information unit and a unit for technical aspects related to the implementation of agricultural policy. |
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