An analytical study of the efficient use of production factors for wheat and cotton crops in Egypt.

Abstract

The study aimed to identify the cost structure for wheat and cotton crops,the weights of different cost items, profit per pound, the statistical estimates ofcost functions in the short- run, net revenue for producer and the productionlevel that minimize the cost, and maximize the profit. The choice of wheat andcotton was due to their economic importance since wheat represents a strategicnutrition crop which carts the government a great amount of money to import itwhich cause negative effect an the payment balance. Cotton, an the other land,is a cash crop which has appreciable effect an the payment balance, in additionto importance for textile industry, ail, soap manufacture and animal feed.Studying the economic parameters of wheat crop indicated that theaverage area of wheat, through the period (2005-2007), was about 2539thousand and feddan, the average yield was about 18.55 Ardab, the form gate price was L.E 170/ardab, the average cost was L.E 2190/feddan, the totalrevenue was L.E 4049/feddan, the net revenue was L.E 1859/feddan, and thenet return per pound was L.E 0.44.As for cotton, in the same period, it was found that the average area wasabout 569 thousand feddan, the average yield was about 6.73 Kantar, the formgate price was L.E 728/kantar, the average cost was L.E 3428/feddan, the totalrevenue was L.E 5022/feddan, the net revenue was 1594/feddan and a onepound return was L.E 0.43The analysis of variance for cost of production for one feddan showed asignificant difference among the cost averages in the governorates whichproduce wheat and cotton at 0.01% and 0.05%, restively. By using the L.S.Dtest, the governorates were separated in similar gropes with reapest to the costof production per feddan.The linear equation model of cost function showed a significant increasingrelation between the production per feddan and the cost production for crop.The cost function was also significant in the short-run in the quadratic form.The minimum costs were achieved at 17.59, 18.86, 19.72, 19.83A/F for the fourgropes, respectively. The minimum profit was achieved at 25.3 A/F. The leastcosts were achieved in Sohag, Albehera, Almonofia and Giza governorates.As for cotton the estimation model has shown an increasing relationbetween the production per feddan and the cost of production. The marginalcost per kantar was estimated at L.E 325. The cost function was also significantin the short run, in the short run, in the quadratic form. The minimum costswere 5.57, 6.32, 7.12, 7.79 Kentar/feddan for the four groups. The maximumprofits was achieved at 8.2 K/F. The least costs were achieved in Kafr elshaa,Gharbia, Asuit, Sohag and Elmeniea governorates.Most governorates, which produce the two crops, did not reach theoptimum size of production with minimum cost or maximum profit. The needsmore efforts in order to increase productivity, and this, in turn, helps to achievemore efficient use of the limited land resource.