An Assessment of the Impact of Wheat Market Liberalization in Egypt; A Multi-Market Model Approach
AbstractWheat is central to the government of Egypt’s food security policy which is influenced by a concern for overdependence on imports and the need to provide subsidized bread for the poor. This paper uses a multi-market approach to assess the impact of complete wheat market liberalization, an international wheat price increase, the value of strategic stocks and the impact of investment to generate higher yields and lower transaction costs for wheat producers. Results show that wheat market liberalization implies very substantial costs for consumers and producers. The estimated income losses that these groups suffer would appear to be below the current total subsidy costs and hence a cash transfer program would, in principle, be feasible. The results show that wheat price movements impact strongly on the supply and/or demand side in particular of berseem, rice, maize, cotton and livestock which has significant implications for their net imports as well as input use. Results indicate that strategic stocks can be useful to neutralize the impact of a wheat price spike. Increasing wheat yields and reducing transportation boosts wheat self-sufficiency but does not dampen the impact of removing the wheat subsidy system on household’s welfare.
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Bibliographic InfoPaper provided by Agricultural and Development Economics Division of the Food and Agriculture Organization of the United Nations (FAO - ESA) in its series Working Papers with number 07-15.
Length: 29 pages
Date of creation: 2007
Date of revision:
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Postal: Agricultural Sector in Economic Development Service FAO Viale delle Terme di Caracalla 00153 Rome Italy
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More information through EDIRC
Egypt; agriculture sector; wheat; multi-market model; bread subsidy; policy scenario impact analysis.;
Find related papers by JEL classification:
- Q11 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Agriculture - - - Aggregate Supply and Demand Analysis; Prices
- Q18 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Agriculture - - - Agricultural Policy; Food Policy
This paper has been announced in the following NEP Reports:
- NEP-AFR-2007-09-09 (Africa)
- NEP-AGR-2007-09-09 (Agricultural Economics)
- NEP-ALL-2007-09-09 (All new papers)
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Nicholas Minot & Francesco Goletti, 1998. "Export Liberalization and Household Welfare: The Case of Rice in Vietnam," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 80(4), pages 738-749.
- Kherallah, Mylene & Lofgren, Hans & Gruhn, Peter & Reeder, Meyra M., 2000. "Wheat policy reform in Egypt: adjustment of local markets and options for future reforms," Research reports 115, International Food Policy Research Institute (IFPRI).
- Dorosh, Paul & Ninno, Carlo del & Sahn, David E., 1995. "Poverty alleviation in Mozambique: a multi-market analysis of the role of food aid," Agricultural Economics: The Journal of the International Association of Agricultural Economists, International Association of Agricultural Economists, vol. 13(2), November.
- Srinivasan, P. V. & Jha, Shikha, 2001. "Liberalized trade and domestic price stability. The case of rice and wheat in India," Journal of Development Economics, Elsevier, vol. 65(2), pages 417-441, August.
- Dorosh, Paul & del Ninno, Carlo & Sahn, David E., 1995. "Poverty alleviation in Mozambique: a multi-market analysis of the role of food aid," Agricultural Economics, Blackwell, vol. 13(2), pages 89-99, November.
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