The price policy for the most important cereal crops

Abstract

The Egyptian agriculture sector has suffered from the governmentalinterventions that led to decreasing the efficiency of using the sector‘sresources especially those related to pricing of wheat, corn and rice as strategiccrops. These interventions led to market and price distortions. Accordingly,this paper aims to investigate these distortions and evaluate the price policyusing Policy Analysis Matrix and to investigate the price imbalances using thepartial Equilibrium Model.The Policy Analysis Matrix for wheat shows that the nominal rate ofprotection for outputs is 0.23 as an average for the study period (2000-2013)and the effective rate of protection for the same period is 0.17. It has alsoshown that the nominal rate of protection for the inputs is 1.13. The averagecost of local inputs for wheat has shown to be 0.068 as an average for thestudy period and the profitability coefficient is 0.106 for the same period.As for corn, the nominal rate of protection for outputs is 0.25 as an average forthe study period (2000-2013) and the effective rate of protection for the sameperiod is 0.18. It has also shown that the nominal rate of protection for theinputs is 1.17. The average cost of local inputs for wheat has shown to be0.069 as an average for the study period and the profitability coefficient is 0.11for the same period.As for rice, the nominal rate of protection for outputs is 0.133 as anaverage for the study period (2000-2013) and the effective rate of protectionfor the same period is 0.097. It has also shown that the nominal rate ofprotection for the inputs is 1.105. The average cost of local inputs for wheathas shown to be 0.038 as an average for the study period and the profitabilitycoefficient is 0.059 for the same period.Using the Partial Equilibrium Model for wheat, several indicatorsestimated. These indicators include; the average net economic loss inproduction, average net economic loss in consumption, average net social loss,average loss in production surplus, average consumer gains, average loss ingovernment revenue, and change in foreign cash. Values of these indicatorsare 2.2, 3, 5.2, 5.4, 10.5, 55, and 13.4 million EGP respectively as an averagefor the study period.As for corn, the same indicators estimated. Values of these indicatorsare 1.1, 1.6, 2.6, 3.9, 6.6, 31, and 7.1 million EGP respectively as an averagefor the study period.As for rice, the same indicators estimated. Values of these indicatorsare 3.5, 3.65, 7.2, 12.9, 12.5, 23.6, and 16.6 million EGP respectively as anaverage for the study period.