Dynamic Modeling of Food Security in the Light of Reality and the Future: The Case of Maize Crop

Abstract

Some countries are experiencing an absolute shortage of maize production and supplies for domestic consumption, affecting the country’s overall food security situation. As a result, the government relies heavily on corn imports to compensate for the shortage of domestic supplies. This study was designed to assess current and future corn food security, the impact of agricultural price policies on corn consumers and producers, and the welfare impact of government interventions. We used secondary data on corn production, consumption and other related variables from 2000 to 2017. We applied a simulation model using Vensim software to predict the results for the next decade. In addition, an almost ideal demand model (AID) was used to assess various price elasticity across the international markets. To estimate the impact of government intervention (as opposed to nonintervention) on welfare gains, we used a partial equilibrium model. The results show that by 2030, Egypt’s dependence on maize imports will increase by 61.97%. Although domestic maize production and productivity are expected to increase in the future, maize food security will decline due to the high population growth in the country. The results of AID model show that the demand for corn in the Egyptian market is elastic. In addition, approximately 56% of corn imports come from Argentina, Brazil and the United States. The results of the partial equilibrium model show that the government has been imposing implicit taxes on corn producers and that they will be better off without government intervention. In addition, domestic corn production has a comparative advantage over imported corn. 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 corn production while keeping intervention in the corn market to a minimum.