The Egyptian agriculture sector has suffered from the governmental
interventions that led to decreasing the efficiency of using the sector‘s
resources especially those related to pricing of wheat, corn and rice as strategic
crops. These interventions led to market and price distortions. Accordingly,
this paper aims to investigate these distortions and evaluate the price policy
using Policy Analysis Matrix and to investigate the price imbalances using the
partial Equilibrium Model.
The Policy Analysis Matrix for wheat shows that the nominal rate of
protection 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 also
shown that the nominal rate of protection for the inputs is 1.13. The average
cost of local inputs for wheat has shown to be 0.068 as an average for the
study 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 for
the study period (2000-2013) and the effective rate of protection for the same
period is 0.18. It has also shown that the nominal rate of protection for the
inputs is 1.17. The average cost of local inputs for wheat has shown to be
0.069 as an average for the study period and the profitability coefficient is 0.11
for the same period.
As for rice, the nominal rate of protection for outputs is 0.133 as an
average for the study period (2000-2013) and the effective rate of protection
for the same period is 0.097. It has also shown that the nominal rate of
protection for the inputs is 1.105. The average cost of local inputs for wheat
has shown to be 0.038 as an average for the study period and the profitability
coefficient is 0.059 for the same period.
Using the Partial Equilibrium Model for wheat, several indicators
estimated. These indicators include; the average net economic loss in
production, average net economic loss in consumption, average net social loss,
average loss in production surplus, average consumer gains, average loss in
government revenue, and change in foreign cash. Values of these indicators
are 2.2, 3, 5.2, 5.4, 10.5, 55, and 13.4 million EGP respectively as an average
for the study period.
As for corn, the same indicators estimated. Values of these indicators
are 1.1, 1.6, 2.6, 3.9, 6.6, 31, and 7.1 million EGP respectively as an average
for the study period.
As for rice, the same indicators estimated. Values of these indicators
are 3.5, 3.65, 7.2, 12.9, 12.5, 23.6, and 16.6 million EGP respectively as an
average for the study period.