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English :
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An Economic Study of Agricultural Pricing Policies for Cotton in Egypt
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Arabic :
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دراسة اقتصادية للسياسات السعرية الزراعية لمحصول القطن في مصر
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| Abstract |
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• Egyptian Journal of Agricultural Economics. Egyptian Association of Agricultural Economics. Vol.(23), No.(3), Cairo, Egypt, September 2013.
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The current study aimed at analyzing the agricultural price policies of cotton in Egypt through using tools of descriptive and statistical analysis e.g. general trend, indices, t-test and policy analysis matrix (PAM). The current study depended on secondary data for the period (1997-2011) published by the Economic Affairs Sector at the Ministry of Agriculture and Land Reclamation, and the Central Agency for Public Mobilization and Statistics. The results showed a statistically significant annual decrease of the area cultivated by cotton reaching about 29.3 thousand feddans, representing about 5.02% of the average area cultivated by this crop in Egypt during the study period of 583.5 thousand feddans. However, coton yield showed statistically insignificant annual increase whereas, cotton production showed statistically significant annual decrease reaching about 159.7 thousand qentar, representing about 4.1% of the average total production of this crop in Egypt during the study period of 3883.2 thousand qentar. The cultivation and production of cotton was concentrated in the governorates located at Lower Egypt, where the total area of cotton reached about 342.6 thousand feddans, representing about 87.6% of the total area cultivated by cotton in Egypt amounting to about 391.2 thousand feddans as an annual average for the study period. The area cultivated by extra long staple cotton (ELS) accounted for about 17.8% of the total area cultivated by this crop in Egypt as an annual average for the period (2009-2011). However, Giza 88 is one of the major varieties of ELS accounted for about 98.6% of the total area cultivated by ELS varieties whereas, the area cultivated by cotton varieties of grade Good/Fully Good (G/FG) represented about 82.2% of the total area cultivated by this crop in Egypt. Giza 86 is one of the major varieties of G/FG accounted for about 86.9% of the total area cultivated by G/FG varieties.
Besides, the total costs of production at current prices for cotton showed statistically significant annual increase representing about 8.6% of the average total costs of production for this crop in Egypt during the study period. The total costs of producing one qentar of cotton showed statistically significant annual increase representing about 7.9% of the average total costs of producing one qentar of cotton in Egypt during the study period. The net return for producing one qentar of cotton from one feddan showed statistically significant annual increase representing about 10.1% of the average net return for producing one qentar of cotton in Egypt during the study period. The profitability of one pound invested in cotton production reached about L.E. 0.5 as an annual average for the study period.
The results revealed farm-gate price of cotton showed statistically significant annual increase reaching about L.E. 56.6 per one qentar, representing about 8.73% of the average farm-gate price of this crop in Egypt during the study period of L.E. 648.2 per one qentar. Comparing the average actual farm-gate price of cotton (reaching about L.E. 648.2 per one qentar) with the average estimated price (estimated at L.E. 551.4 per one qentar) at the basis of cotton costs of production during the period (1997-2011), the results showed statistically isignificant difference between the two averages. Despite the fact that cotton farmers get farm-gate price covering the costs of production plus profits, but this is not obviously notable by them. Thus, they reluctant cotton cultivation. Comparing the average actual farm-gate price of cotton (reaching about L.E. 648.2 per one qentar) with the average estimated price (estimated at L.E. 679.4 per one qentar) at the basis of cotton equivalent price during the study period, the results showed statistically isignificant difference between the two averages. Despite the fact that cotton farmers get farm-gate price nearly the same as its equivalent price, but this is not obviously notable by them. Thus, they reluctant cotton cultivation because of the distortions of world prices due to the mechanism of subsidy for cotton producers in most cotton producing countries reaching about USD 4.1 billion in 2006/2007.
On the other hand, the results of policy analysis matrix (PAM) for the cotton revealed that cotton producers in Egypt enjoy positive protection (subsidy) since the annual average effective protection coefficient reached about 1.12 for the period (1997-2011). This result indicated that the net effect of price policy was in favor of the Egyptian cotton producers. In addition, Egypt enjoys a comparative advantage in cotton production since the annual average of domestic resource cost coefficient (DRC) reached about 0.49.
In light of the findings of the study, the study recommends the following:
- When determining cotton procurement price at the basis of cotton costs of production, policy makers should not depend only at the secondary data published by the Economic Affairs Sector at the Ministry of agriculture and land reclamation to ensure reality.
-When determining cotton procurement price in Egypt at the basis of world prices, policy makers should take into account the direct support of the cotton-producing countries as well as their spendings on scientific research-oriented agricultural development of new varieties of high yield.
- Cotton procurement price should be linked to cotton net revenue of cotton competitive crops.
- The need for the announcement of cotton procurement price at an enough time prior cotton cultivation.
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| URL |
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| Publication year |
2013
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| Availability location |
مكتبة معهد بحوث الاقتصاد الزراعي-7 ش نادى الصيد - مبنى الهيئات والشركات - الدقي- الجيزة (الدور الرابع)
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| Organization Name |
Agricultural Economics Research Institute (AERI)
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| City |
القاهرة
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| serial title |
المجلة المصرية للاقتصاد الزراعي
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| Author(s) from ARC |
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| Publication Type |
Journal
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