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An Assessment of the Impact of Increasing Wheat Self-Sufficiency and Promoting Cash-Transfer Subsidies for Consumers in Egypt: A Multi-Market Model

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  • Gamal M. Siam

    (Department of Agricultural Economics, Faculty of Agriculture, Cairo University)

Abstract

Wheat is central to the government of Egypt's food security policy which is based on increasing self-sufficiency in wheat on the one hand and subsidizing bread for consumers on the other hand. This paper uses a multi-market approach to assess the impact of increased self-sufficiency in wheat and a switch to a cash-transfer subsidy on cropping patterns, food consumption, production, input use, and income. The findings show that raising self-sufficiency in wheat would reduce reliance on imports but would also adversely affect other sectors, in particular livestock. At full self-sufficiency in wheat, berseem the main animal feed would nearly vanish, with negative repercussions for livestock production. The simulations also show that a move to a cash transfer subsidy system would improve targeting of the poor and eliminate distortions on the consumption side. Finally, under the current wheat policy an increase in the world price of wheat would intensify the adverse consequences of both self-sufficiency and consumer subsidies at the agricultural sector level and economy wide.

Suggested Citation

  • Gamal M. Siam, 2006. "An Assessment of the Impact of Increasing Wheat Self-Sufficiency and Promoting Cash-Transfer Subsidies for Consumers in Egypt: A Multi-Market Model," Working Papers 06-03, Agricultural and Development Economics Division of the Food and Agriculture Organization of the United Nations (FAO - ESA).
  • Handle: RePEc:fao:wpaper:0603
    as

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    File URL: ftp://ftp.fao.org/docrep/fao/008/af842e/af842e00.pdf
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    References listed on IDEAS

    as
    1. Gaurav Datt & Dean Jolliffe & Manohar Sharma, 2001. "A Profile of Poverty in Egypt," African Development Review, African Development Bank, vol. 13(2), pages 202-237.
    2. Reardon, Thomas, 1997. "Using evidence of household income diversification to inform study of the rural nonfarm labor market in Africa," World Development, Elsevier, vol. 25(5), pages 735-747, May.
    3. Janvry, Alain de & Sadoulet, Elisabeth, 2001. "Income Strategies Among Rural Households in Mexico: The Role of Off-farm Activities," World Development, Elsevier, vol. 29(3), pages 467-480, March.
    4. Barrett, C. B. & Reardon, T. & Webb, P., 2001. "Nonfarm income diversification and household livelihood strategies in rural Africa: concepts, dynamics, and policy implications," Food Policy, Elsevier, vol. 26(4), pages 315-331, August.
    5. El-Laithy, Heba & Lokshin, Michael & Banerji, Arup, 2003. "Poverty and economic growth in Egypt, 1995-2000," Policy Research Working Paper Series 3068, The World Bank.
    6. John L. Newman & Paul J. Gertler, 1994. "Family Productivity, Labor Supply, and Welfare in a Low Income Country," Journal of Human Resources, University of Wisconsin Press, pages 989-1026.
    7. Rose, Elaina, 2001. "Ex ante and ex post labor supply response to risk in a low-income area," Journal of Development Economics, Elsevier, vol. 64(2), pages 371-388, April.
    8. Mark R. Rosenzweig, 1980. "Neoclassical Theory and the Optimizing Peasant: An Econometric Analysis of Market Family Labor Supply in a Developing Country," The Quarterly Journal of Economics, Oxford University Press, vol. 94(1), pages 31-55.
    9. Datt, Gaurav & Olmsted, Jennifer, 1998. "Agricultural wages and food prices in Egypt," FCND discussion papers 53, International Food Policy Research Institute (IFPRI).
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    More about this item

    Keywords

    Egypt; agriculture sector; wheat; multi-market model; wheat self-sufficiency; bread subsidy; policy scenario impact analysis.;

    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

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