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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
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    File URL: ftp://ftp.fao.org/docrep/fao/008/af842e/af842e00.pdf
    File Function: First version, 2006
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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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