Total factor productivity change in Egyptian agriculture: A governorate level analysis using stochastic frontiers

Agriculture plays a major role in Egypt's economy, accounting for approximately 17% of the country's gross domestic product (GDP) and absorbing about 32% of the labor force. However, agricultural productivity growth has not kept pace with that of other sectors, such as mining, services, and manufacturing. Lagging productivity growth in agriculture is associated with many factors including the fragmentation of land holdings, the difficulty of developing expanding the size of farms, the relatively low wages paid to farm workers, low farm profitability and inadequate funding for research and extension.;This dissertation provides measures of total factor productivity (TFP) change in Egypt and analyzes the factors that influence productivity for the most important crops - wheat, maize, rice, and cotton. Chapter 1 provides an overview of key components of Egyptian agriculture and describes the methodologies used in this study. Chapter 2 provides a review of the literature on aggregate TFP for studies that have used production frontier methods. Chapters 3 and 4 present contrasting approaches to the analysis of TFP and its components. Chapter 3 implements both Cobb-Douglass and translog function models for single-output multi-input stochastic production frontiers for the four major crops, and Chapter 4 utilizes a translog multi-output multi-input stochastic input distance function for the three major grains.;Both approaches reveal a high level of technical efficiency (TE) in grain production; thus, productivity growth needs to come from new technologies. The major policy recommendation based on this finding is the need to invest in research and development in order to reverse a continuous decline in technological progress (TP). Bringing more land into production would also help to increase TFP in Egyptian grain crops.;Because cotton is produced with a relatively low level of technical efficiency, it is possible that some "catch-up" can be achieved through more effective use of existing technology. In this case, policies designed to enhance managerial capabilities seem appropriate.;This study is based on aggregate data for Egyptian governorates. For future research, it is recommended that farm-level data be published officially and then used to identify optimal farm size units, and policy and extension strategies that are suitable for different environmental settings across the country. To the extent that TFP change can be associated with loss of soil fertility associated with erosion and other environmental factors in the Nile River Delta, studies at the micro level would help to pinpoint the most effective ways to enhance productivity growth in Egypt.