The study aims at showing the impacts of the economic liberalization policies
on the prices of the most important strategical crops in Egypt which are wheat, corn,
rice and cotton, through analyzing the different relations of the liberalization period and
the period before liberalization, in order to know the effect of changes in global prices
on the local prices of these crops, also to know the impact of canceling the subsidy for
the agricultural production requirements. By using the Dummy variable, the direct
impact of integrated and partial liberalization policies had been indicated on the
production, productivity and the area of wheat, corn and rice crops. While the negative
impact had been indicated on cotton
Studying the relation between the farm price for the unit and the productive unit
cost, indicated that the price policy encourages the farmers to increase producing
wheat, corn and rice during the period before implementing the economic
liberalization. It indicated also that the average of increase in cost was more than the
average of increase in prices during the period of integrated and partial liberalization
for implementing the policies. While it had been indicated that the government
encouraged cotton producers only during the period of partial liberalization.
By estimating the relation between the cultivated area and the net profit of the last
year, the direct impact of the net profit of the last year had been indicated on wheat,
corn and rice areas during the partial liberalization period. The negative impact of
cotton during the partial liberalization period had been indicated, while the direct
impact of cotton had been indicated during the period of integrated implementation of
policies.
The results of nominal protection coefficient indicated that wheat, corn and rice
producers receive a subsidy from the value of their p.oduction as a result of the
positive protection which covers the producers of these crops, during the complete
liberalization period in exchange for imposing an indirect taxes during the partial
liberalization period. These taxes were greater during the period before implementing
the policies. While the nominal protection coefficient for cotton crop indicated that the
indirect taxes increase during the period of complete liberalization more than the
period before. It is clear that the effective protection coefficient value passed integer
one during the period of complete liberalization for wheat, corn and rice crops, this
reflects that the producers of these crops are covered with a positive protection policy
represented in receiving a subsidy in exchange for imposing an indirect taxes on these
producers during the period of partial liberalization, and these taxes increase during
the period before implementing the policies. While indirect taxes were imposed on
cotton producers, these taxes reach its maximum during the complete liberalization
period and reach its minimum during the period before implementing policies. By using
the previous results of Domestic Resources cost factor as an indicator, the results
indicated that Egypt has a competitive advantage in producing these crops -that it was
indicated that the production of domestic feddan from tr.ese crops is lesser than the
added value to the feddan compared with border prices. S{J it is preferable to increase
the production of these crops.