التركيب المحصولى المصرى فى ظل المخاطرة والمتغيرات المحلية والدولية
[Egyptian Cropping Pattern Under Risk and Varying Domestic and International Circumstances]
AbstractCropping pattern refers to the percentage of acreage occupied by various crops within the crop rotation. It is determined through cultivated' area assigned to each crop according to the sequence system necessitated by crop rotation considerations. The optimum crop pattern is the one, which achieves the highest possible net return depending on input and output prices together with crop yields. It is a dynamic process as it changes from time to another based on farmers' needs and crops profitability in the previous year. It also may differ based on whether we are looking from the point of view individual farmer, trader, middleman, and exporter or from the point of view the society as a whole. Various crops are competing on the limited land within the agricultural season. So expanding the acreage of any crop would automatically entail contraction of another competitive crop, as total supply of land is almost fixed and limited. The major objective behind designing an indicative cropping pattern is the issue of food security. This issue is important both from strategic perspective, as well as in the context of poverty. While there is emerging consensus on the definition of food security as aiming to assure the country adequate access to food, both internally and externally generated, there is still reference to the need to grow certain strategic crops. Moreover, there is a desire to achieve a measure of stabilization in producer and consumer prices through the development of buffer stocks. There are various options available, each of which has costs and benefits related to them. One option would be a high level of risk aversion, which would entail a cropping pattern that centers on subsistence crops. Another option may pursue efficiency pricing and therefore would result in crops being growing in which the country has a comparative advantage. For example, self-sufficiency for wheat could be enhanced to 75% in an efficient manner. Meanwhile the domestic production of rice and sugar cane may expand to a frontier that misallocates resources of water and land. The agricultural production is very susceptible to risks originated from natural, economic or social fosters that are difficult to predict or control. In Egypt, cropping pattern, is influenced by local economic variables to up prices, i.e., cropped area is determined by farmer response to changes in absolute or relative prices of the preceding season, in addition to profitability of crops of the last season, where farmer can not change supply of labor, the elapse of period of time curding to the nature of the crops being produced. Egypt's cropping pattern is also affected by international variables related to transactions with international markets for food products and to transactions with international markets for food products and to problem related to world production of biological fuel, world financial crisis, world food crisis, and rules imposed by the international trade system. As a result, there is a deficit in the Egyptian balance of trade for food commodities amounting to L.E. 8 milliards on average for the last few years. The upsurge in demand for agricultural crops like wheat, maize, soybeans, vegetable, oils, and sugar crops for the use in producing biological fuel has resulted in a drastic increase in prices of food, during 2005-2007 the average rate of price increase of food commodities has been estimated at 83% which led to a high increase in import bill in developing -and poor countries among them Egypt which is a not food importer. For many reasons developing an increase in domestic agricultural production of strategic food crops, i.e., cereals legumes. Vegetable, oils, and sugar crops, is the best way to confront international variables, Either through vertical or horizontal expansion of those crops in addition to reducing the acreage of high water consuming scraps, which is the objective behind suggesting the cropping pattern in the short and long terms. Each of these objectives is direct by associated with the master end of ensuring food serenity. Indicative cropping pattern during last years varies considerably as compared to the actual cropping pattern experienced by farmers' decisions irrespective of the agricultural policy of the government Egypt. However, indicative or proposed cropping pattern could be put into action by introducing economic, institution and organization instruments. Those various instruments should be streamlined and harmonized together. Economic instruments advisable for execution of cropping pattern could include subsidizing production and inputs for strategic export and import crops that minimize consumption of irrigation water, introducing contractual agricultural production system, especially, in regard to cotton, sugar cane and sugar beet in addition to other industrial crops. It is advisable to establish agricultural stabilization funds to insure' farmers against various types of risks notably price risks. More over incentives either negative like taxes or positive like interest rate reduction, and rescheduling of debts could also be provided and operated. One major organizational instrument that has been successful recently introduced at a probation scale in three governorates is the national project for development of the field irrigation system in wade and delta. It is estimated that application of that project would save 15% of water consumed for irrigation. The saved water could be used for ameliorating and reclaiming an estimated acreage of 3 million feddans. In addition it is suggested that elimination of camels and messages on the fields would save and area of 0.5 million feddans to be put under cultivation. The study has estimated risk associated with Egyptian cropping pattern by application of linear and non-linear mathematical programming. Three models of minimization risk have been proposed and manipulated including: (1) Minimization Of Total Absolute Deviations: (MOTAD). (2) Risk Input-Output MOTAD. (3) Two Stage Stochastic Programming – (TSSP-RIO-MOTAD). In addition to the various scenarios cited above with their respective major objective functions, the models do comprise acreage, means of production in terms of cost of production, monthly year round irrigation water, and annual agricultural labor on monthly basis. Sensitivity analysis has been estimated for depicting the effect of changing prices of wheat and rice on cropping pattern disposition, by the application of TSSP-RIO-MOTAD model. Among the major results of these analyses are: 1- An increment of gross margin to farmers at L.E 3.8 milliard which deeps that suggested cropping has achieved the profit maximization goal which producers would aim at. 2- A huge amount of irrigation water has been saved estimated at 2.6 milliard cubic meters. A magnitude of water saved of this amount could be assigned for reclaiming new lands at about 0.7 million feddans. 3- Capital resources saved estimated at L.E. 985 million. 4- Augmenting acreage under wheat to reach as much as 3 million feddans, which help contributing positives to the nation's food security goal. 5- Reduction in rice acreage so as not to exceed one million feddan. Adding to the nations objectives of saving irrigation water to be used for reclamation of additional new lands. 6- Augmenting acreage cultivated to Soya beans, sunflower, maize, and summer sorghum at 84.9%, 69.5%, 41%, and 12.3% respectively, which, once again, contributes to the nation's objective related to enhancing food security. 7- Augmenting areas under lentil, lupine, chickpeas, broad bean, and fenugreek by 111%, 62.2%, 39.5%, 19.8%, and 8.6% respectively, which positively adds to food security objective. The proposed cropping pattern derived through sensitivity analysis and based on varying farm- prices for wheat and rice is heavily dependent on the effectiveness and synergy of mechanisms and instruments suggested for addressing and implementing of the indicative cropping pattern. Securing the accomplishment of maximization of farmer's profit margin are very major and essential objectives of the proposed cropping pattern.
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Bibliographic InfoPaper provided by University Library of Munich, Germany in its series MPRA Paper with number 42634.
Date of creation: 04 Oct 2009
Date of revision: 04 Oct 2009
Publication status: Published in Conference Towards Development of New Policies to Promote the Agricultural Sector in Egypt , Faculty of Economics and Political Science, Cairo University, FAO, CEFRS, & AERI 1.1(2009): pp. 1-48
Risk; MOTAD; Risk Input-Output MOTAD; Two Stage Stochastic Programming – (TSSP-RIO-MOTAD);
Find related papers by JEL classification:
- D81 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Criteria for Decision-Making under Risk and Uncertainty
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- Harry Markowitz, 1952. "Portfolio Selection," Journal of Finance, American Finance Association, American Finance Association, vol. 7(1), pages 77-91, 03.
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