Agricultural price policies play an important role in guiding farmers towards producing a specific crop, especially the wheat crop, which is the most important grain crop in the world, particularly in Egypt.
The study's problem is that the wheat producers in Egypt bear the burden of paying implicit taxes due to price distortions resulting from imbalances between domestic and international markets.
The study aimed to examine the effects of government intervention policies at various stages of the flow of goods using a policy analysis matrix (PAM) by calculating price protection indicators for the producer and consumer, as well as the comparative advantage of producing a wheat crop.
The study results showed that the nominal protection coefficient for the output during the study period (2000–2018) was 0.86 on average, which is less than one, implying that there was an absence of a fair production policy during the study period. It also indicated that the value of the nominal protection coefficient for inputs was 0.92 on average, which is less than unity, implying a very low subsidy on inputs used in wheat production during the study period. The domestic resource cost ratio amounted to about 0.53, implying that Egypt enjoyed a comparative advantage in wheat production during the study period. So, it is preferable to produce wheat domestically rather than be dependent on imports.