Optimal crop combination under soaring oil and energy prices in the kingdom of Saudi Arabia

Abstract

There is a growing consensus that increasing costs of production, engendered by soaring oil and energy prices, have a negative effect on crop production, productivity, and efficiency. The oil and energy subsidy removal in the Kingdom of Saudi Arabia (KSA) necessitates conducting this study, which aimed to determine optimal cropping patterns under soaring oil and energy prices and to compute the comparative and competitive efficiencies of crop production. The study used combined analytical approaches, namely: linear programming (LP) and policy analysis matrix (PAM). It is perceived that crop production was highly profitable in the prevailing market and soaring oil and energy prices. However, the results of the optimal LP model reveal that returns from the cultivated crops in the study area surpassed the actual one by about four times. Furthermore, subsidy removal has reduced the total consumed amounts of energy and water constraints; however, the resources used are insufficient. On the other hand, all cultivated crops have shown high competitiveness with some crops gaining indirect export support. Thus, to achieve the maximum benefits of subsidy removal from the energy sector, the agricultural authority should adopt good extension programs to improve farmers’ knowledge and skill in the field of farm management practices and efficient use of the resources.