Impact Of Economic Reform Policy On The Production Of Most Major Crops In Egypt:

The Eeconomic-Refonn Policy in the Egyptian Agricultural Sector had included several trends, the most important, is the change of the planning style, from centralplanning depending on the influance of the government to a planning depending on expanding the apportunity of working under the market mechanism and limitting the roleof government on acheaving the Agricultural development with a change of the philosofYof managing the resources of the National AgriculturalEconomy. We can say that theproblem of the study, especially in the fonn of the Eeconomic Refonn policy, is that theEgyptian Agricultural Sector had taken several proceedures and changes that weresuitable for its liberlization, these must had been an influence on the Agriculturalproduction that differes as these changes. Thus, the problem of this study is aknowldgethese changes and the positive an negative effects of it, and its role in forming theskeleton and production of the main crops in Egypt and its effects an adjusting with thelocal and foreign markets.This study aims to measure the effect of acheving the Eeconomic refonn policy onthe production of the main crops in Egypt, on both the eeconomical and fisicalcoefficients of the important studied crops, through studing the acheaved improvementsin the essential changes of the two periods of studu and with using he suitable statisticaland analytical methods. Also, the study aimed to aknowldge the effect of the EeconomicReform Policy an the eeconomic effeciency of the studied crops through studing thestructural combination of the items of the production costs, and estimating theproduction cost functions, productivity functions and functions of responce the oftotalproduction of the most important crops in the two periods of study. The study haddepended on the two methods, (the meduction method and the induction method) bothtogether, and the research study depended on using the methods ofthe descriptive andquantative analysis of the data and the explenation of the Eeconomic-Relations betweenthe variables by the moathematical methods. The study depended on the specific datedfor its theoritical, previous, frame and this was from sev,eralsources of which, editionals,books and Arabic and English specialized papers. Also studies serculations andpublications that had a strong relation of the subject of the study essiod by a scietificauthoroties and research centres. While the study essentially depended on having thebuplished and unbuplished matters related to its analytical fonn on documentations,publications of the governmental and nongovernmental authorities.The study contains of four essential research chapters, The first chapter delt withthe frame of the eeconomic reform in Egypt and it separated three portions, the first deltwith the study of main features of the eeconomic text review reform in Egypt throughstuding the fases of the eeconomic changes and the Egyptian economy before theEeeonomic Reform, then the motives of the eeconomic reform and the structuraladjustment programmes then studing the aims, methods of the eeconomic reform policy.The second partition delt with studing the main features of the Eeeonomic Reform in thesphere of agriculture, through studying the declarations and programs and the cropstructure in the frame of the Eeeonomic Reform Policy and the thired partition deals withthe text review of the previous studies related to the study.The second chapter delt with trended changes of the productive limitations of themost important crops, this chapter is separated into three partions, the first delt with thestudying of the trendal changes of the plisical limitations of the main crops production,and from which, it is clear that in the first period of the study before the application ofthe eeconomic reform the average of the cultivated area of the wheat, rice, maize, bean,cotton and sugarcane, were 1272, 982, 1383, 268, 1087 and 252 thousand feddanssequantly. The feddan productivity average were 10 Ardab, 2.4 Ton, 14 ardab, 1 Ton,6.9 Kentar and 36 ton for the previous crops in sequent, and the average of the totalcosts were 226,273,247,215,411 and 586 pounds sequantly. Also, the farm price wasabout 127, ISO, 22.4, 44, 71.2 and 22.6 pound per unit of the previous crops sequantlywhile the feddan net revenue were about 108, ISO, lIS, 85, 136 and 233 poundsequantly. As for the second period of the study after applying the eeconomic reformpolicy and the data of the study declares that the cultivated area was about 1879, 1135,1598, 228, 296, 889 and 273 thousand feddan and the average of the productivity of thefeddan was about 14.7 ardab, 3 ton, 18.2 ardab, 1.1 ton, 6.2 kentar and 43 ton while theaverage of the total costs was about 604, 710, 720,572,912 and 1458 pound and theaverage of the form price where about 433,400, 56, 124, 265 and 58 pound per unit forthe previous crops sequantly. Also, the average of net feddan revenue was about 799,633, 556,473,303 and 986 pound sequantly. By studying the time trends and estimatingthe time trend functions of the cultivated area of the important crops before applying theeeconomic reform policy, it is clear that the areas cultivated with wheat, rice, maize,bean, .cotton and sugar cane had a decliningtrends with an annual decrease, were about19.3, 18, 4.6, 16.1 and 1.5 thousand feddan sequantly; while it declairs that the area ofrice crop was increasing by about 20.6 thousandfeddan annually.But after applying theeeconomic reform policy it occures that, the cultivated area with the crops, wheat rice,maize and sugar cane had an increasing trend, annualy increase by 117.2, 53.2,35.3 and2 thousand feddan sequantly (this was statistically significant),while the bean and cottoncultivated areas had a declining trend decreasing annually by about 2,47.5 thousandfeddan. The study’s results declaires that each of the per feddan productivity of the rice,maize, cotton and sugar can had an increased trend before applying the eeconomicreform, and the annual increase rate about 0.35, 0.2%, 1.9”10and 0.8% of the annualaverage of the per feddan productivity of the formal crops sequantly. The annualdecrease of the wheat and bean was 1.9”10 and 0.31% sequantly during the same period.As after applying the eeconomic reform policy, the results of the trend for these perfeddan productivity for the wheat, rice, maize, cotton and sugarcane, that there is anincreasing trend during this period, and it was estimated statistically significant, withabout 4.1%, 4.5%,4.6%,0.5% and 2.7% sequantly. As for the total production of rice, cotton and sugarcane, it had an increasing trend during the first period before the reformwith an annual rate about 3.0%, 0.3% and 0.4% from the annual average of the totalproduction for the same crops sequantly, and the decreasing rates for wheat, maize andbean was about 3.3%, 0.7%, 2.7% sequantly before the reform. But after applying theeeconomic reform policy, it occures that the total production of wheat, rice, maize andsugarcane had an increased trend and statistically significant,the annual rate of increasewas estimated by 9.20,9.1%,6.7% and 4.2%. As for the self contention rate, the studydeclaires that the self content percentage as an average for the first period before thereforme reached about 18.7%, 69%, 110010,84% and 55% for the wheat, maize, rice,bean., and sugarcane sequantly, while after applying the reform policy it reached about40%, 74%, 108%,90% and 62% for the same crops as previously mentioned sequantly.The studydeclaires that decrease the per-capita average share from wheat from 187 Kg.annually as an average before the reform to about 173.5% annually as an average afterthe reform, while the per-capita average decreased from the rice, bean.,and sugar fromabout 95.6%, 6.1% and 31.4 kg annually as an average for the first period before thereform to about 83.3,5.3 and 27.3 Kg annuallyas an average for the second period afterthe reform sequantly while the average of per-capita share of rice increased from 33.2%Kg annually to about 36 Kg annually. As for the second partition of the second chapter,it delt with the study of the trend changes of the eeconomic limitations to produce themain crops through a studying the changes, in the farm prices, the net per feddanrevenue, of the substitute circulations, the surplus value and the revenue on the investedpound for the inmportant main crops in the study. from the results, it occures that thefarm rices for wheat, rice, bean, cotton and sugarcan had an increasing tend before thereform and the increase rate reached annuallyabout 2.5%,8.5%, 15.2%,3.4% and 5.2%sequantly from the annual average of the current farm prices. The study declaires that thedecrease of the maize crop with a rate about 1.4%, but after the Reform it is noticed thatthe farm prices of wheat, rice, maize, bean, cotton and sugercane had an increasing trendand statistically significant with an annual rate of 97.4%, 15.4%, 11%,87%, 16% and15.8% sequantly. As it concerns the per feddan net revenue, it occures that, as for thewheat, maize, bean and sugarcane it had a decreasing trend before the reform with a ratereached about 13%, 25%, 24% and 0.5% sequantly. As for the rice and cotton they hadan increasing trend was about 10010and 9.4% forthe two crops sequantly. After applying_______________ ~’___ ----------..tv-4-the, eeconomic reform policy, it occuer that there is an increasing trend and statisticallysignificant for the wheat, rice, maize, cotton and cane with an increase rate reachedabout 9:3%;;;16.4%, 6.1%, 55.3% and IB%sequantly, also the study declaires itsdecreasing for the bean crop with a decrease rate rl:llChedO.2%.As after applying theEeconomic Reform Policy, it occured that the wheat, rice and cotton had an increasedtread withan increase rate reached about 3.8%, 8.7%,and 16.7% from the annual averageof the net revenue per feddan . As for the maize and sugarcane they had a decline trendwith a ratio about 5.4% and 19”10 from the annual average of the revenue per feddansequantly. As for the surplus value, the study dealing that it raised from about 279, 250,242, 263, 389 and 554 pound per feddan as an average of the first period, before theReform, and reached to about 808, 848, 824, 850, 1382 and 1866 as an average for thesecond period, after the Reform, for the wheat, rice, maize, bean, cotton and sugarcanesequantly, and also for the revenue of the invested pound, it is clear from the study that itreached, as an average during the firt period before the Reform, about 0.64, 0.37, 0.41,0.66, 0.28 and 0.37 and wa increaed to about 1.1,0.8,0.8,0.69,0.82 and 0.72 pounds,as an average of the second period, after the Reform,The thired partition studying the Analysis of variance of the most imporotanteeconomic variables that affect on the production on the main crops before and afterapplying the Eeconomic-Refonn Policy,it is clear that for the two periods of study andthe cultivated area, that the deferences are significant and assured statistically at the levelof 0.1 for the crops of wheat, maize, cotton and sugarcane, this mean that there is anevidence that the Eeconomic-Refonn Policy had. a real effect and Positive, on theagriculture sector. on the average of the cultivated area, and the differences of the riceand been had no significance. As for the per,feddan productivity, it was clear that thesignificance of the averages that was assured statistically at the level 0.01 for the crops,the..wheat, rice, maize and sugarcane. And at level 0.05 for the cotton but for the beanthe significance of the differences did not be assured, that is an evidence that theEeconomic Refonn policy have a real and Positive affect on the per feddan averageproductivity for the formal crops except the bean. As for the total costs, the farm priceand the per feddan net revenue, the Analysisof variance result decleaire the significanceof the differences and that it is assurred statistically at the level 0.01 for the wheat rice,maize, cotton, bean and sugarcane and that is an evidence that the Eeconomic ReformPolicy have a real effect on each the average of the total costs, the farm price and the netrevenue per feddan for the main crops of the study.The third chapter of the study, it deltwith production analysis of the agriculturalmain crops, it contained of two parts, the first, deals with estimating the productionfunctions of the important crops ofthe study, this was before applying the EeconomicReform Policy. For the wheat, it recommended that the two factors of chemical fertilizerand the mean power have a positive effect on the volume of production, and as for theRice, it is showed that the variables of the function had an unsignificant effect, but for theMaize, it is showed that the factor of mechanical power had a positive effect on theproduction, and fina1lyfor the cotton it is clear that the factor of mechanical work had anegative effect on the volume of total production. At second, after applying theEeconomic Reform Policy, the results of the study shows that concerning the chemicalferti1izer it had a positive effect of the volume of production, and as for the Rice,thevalue of seeds had a positive effect on the production. For the Maize, the two factors ofthe mean power and the mechanical power had a positive effect on the production, and atfina1 for the cotton crop, it is revealed that the value of seeds had a negative effect on thevolume of production.The second part, it delt with responce functions of production to the totalproduction of the main important crops, before applying the Eeconomic Reform policy,the results of the study, as for the wheat, it shows that the net revenue if increased by10”10,that lead to increase of the total production by 2. I%, and for the Rice, if the netrevenue increase by 10”/0that had to an increase of the production by 0.26%, and for theMaize, the increase of the net revenue by one pound in the present year, leads to anincrease of the total production in the next year by about 2 thousand ardab, and finallyfor the cotton, the increase of the net revenue by one pound in the present year, leadstoan increase in the total production in the next year by about 0.6 thousand kentar. Afterapplying the Eeconomic Reform Policy, it is showed that for the wheat, the increase ofthe net revenue by one pound in the present year, lead to an increase of the totalproduction by about 3.2 thousand ton and for the crop of Rice, it showed that byincreasing the net revenue by one pound in the present year, leads to an increase of thetotal production by about 3.2 thousand ton. An as for the Maize, the results shows thatan increase of the net revenue per feddan in the present Year,that lead to an increase ofthe total production by 7.7 thousand ardab in the next year and finally, for the cotton, theincrease of the net revenue per feddan of it by one pound in the present year, leads toincrease the total production by 0.42 thousand kentar in the next year.The fourth chapter of this study was concerned of studing the production costsanalysis of the main agricultral and it contained of two particions. The first delt with astudy of the structural formation of the production cost fthe most important main cropsunder the Eeconomic-Reform Policies. It occured that total costs of production perfeddan ..from the crops, these are, the ..wheat, rice, maize, cotton, bean, and sugarcanereached. aboI,It 226, 273, 247,215,411 and 586 pound per feddan as an average of thefirst period, before the Reform, while it reached about 604, 710, 720, 572,912 and 1458pound per feddan as an average for the second period, after the Reform, for the previouscrops sequantly. It was clear that the rates of increase in the constant costs during the-period of Reform than in the period before the Reform reached about 185%.229%,274%, 166%, 219”10 and 186%, that for the formal crops sequantly, and that is anevidence that this great increase of the constant costs in the second period than in thefirst period as a result of liberlization of the relationship between the owner and the in theagricultural-and leave it to the powers of the market. As about the variable costs of theproduction of feddan from the formal most important main crops, the results declairesthat there are rates of increase for the variable costs during the second period, after theReform than of the average variable costs during the first period, before the Reform, andwere about 161%, 150%, 175%, 189%, 107% and 141% for the wheat, rice, maize,bean, cotton and sugarcane sequantly, that was refered to the total liberlization of theprices of requests of the Agricultural production and not to support it ever. This wasfollowed by a total liberlization of the find prices of the main crops. This it occured fromthe study that the costs of the manpower payrole come in the first stage, then the costs ofitems of production requests come in the seconod stage, then in the third stage there isthe item of the cots of Mechanical work, and that from the total of the variable costsbefore and after the applying of the Eeconomic-Reform policy and for the same previouscrops sequantly. The study declaires the development of the production requests’s value,as for the costs of seeds, it reached about 10.3, 20, 5.6, 20.8, 2.4, 35, pound per feddanas an average of the first period and 40.2, 73.3, 29.8, 85, 19.8 and 97.3 pound perfeddan as an average of the second period of the study and after applying the ReformPolicy for the wheat, rice, maize, bean, cotton and cane sequantly. As for the item of themanpower payrole for the previous crops sequantly it raised from about 82.6, 81.7, 230,261.6’, 118 and 108 pound per feddan as an average of the first period ofthe study toabout 172, 216.6, 221.5, 181.5, 402 and 392 pound per feddan for the same cropssequantly, and as an average for the second period after the Reform. As for values of themechanical work, it raised from about 37, 48, 32, 30, 34 and 78 pond per feddan as anaverage of the first period of the study to about 121, 172, 101, 109, 102 and 257 poundper feddan as an average for the second period of the study and for the same previouscrops sequantly.As for the second partition of this chapter of study, it delt with studying theproduction cost functions and its estimation for the most important main crops, forexample, the results shows, for the wheat, that the eeconomic stage of crop productionin the first period of the study is begening from a productioon estimated by 1.35 ton perfeddan and that this production is in the eeconomic-stage where the factor of elasticitywas 6.1, but for the second period, it-shows that the main volume of prodcution and themore effecient in productivity is at 2.2 ton, it was noticed that the level of production ofthis crop acheaves this volume, and the factor of elasticity was 1.6 which is a verypositive .value, and it shows that the production in this period is acheaved in theEeconomic-stage also. As for rice, the eeconomic-stage for production of this cropbegins with a production estimated by 2.37 per feddan and that the average revenue perfeddan of the crop establish the volume of production the more efficient and moreprofitable, the factor of elasticity 4.3, that means that the production is in theEeconomic-Stage, that is during the first period of study, but as for the second period, itshows that the volume of production for the crop of rice is acheaved the condition ofmaximum profit and it shows that by calculating the elasticity of costs at the level of therevenue per feddan that is estimated by about 3 tons, and the fact or of elasticity was 7.1,that show it is positive and bigger than the rand 1, that measur that the production duringthe period of Reform is in the eeconomic-stage. As for the crop of maize, it occure fromthe study that the optimum productive volume and the more effecient in productivity isfaced by a production estimated by 14.8 ardab, while in average of production for feddanreached about 14 ardab, but in the second period of the study it shows that the volume ofthe optimum production volume is 16.1 ardab and the average of production offeddanduring this period was 16.5 ardab, that means that the production in the econmic stageduring the second period, where the factor of elasticitywas 5.7. As for the sugercanecrop, the study results reveals that the value of production that achieve the firstcondition of the conditions of profit is reached about 31.4 ton per feddan, and it isnoticed that it is more by 3.5 ton per feddan than the optimum volume at the average offarm price of 22.6 pound per ton, also it is noticed that the elasticity factor was about2.3, it was positive and bigger than the round one, that means that the production of thecrop before applying the Eeconomic Reform Policy is in the Eeconomic Stage. After theapplying of the Reform Policy the results show the volume of production that achievesthe conditions of Profit which reached about 32 ton per feddan and this is more than theoptimum volume of production by 3.2 ton per feddan at the average farm price ofpound per ton, and by estimating the elasticity of costs, the elasticity factor was 8.6, it ispositive and bigger than the round one, which means that the production during this period is in the eeconomical stage.Finally, it containes the summary, the most important results and the recommendations.