Estimating The Demand Functions and Pricing of The Economic Resources Used in Rice Production of The Republic of Egypt

This study aimed to estimate the demand functions and the cost of economic resources used in the production of rice in the different provinces, based on the estimated production function and deriving the functions of product margin and the yield threshold of the economic resources, and then calculate the value of the yield threshold of the resources, which will equated with marginal costs (the unit price from the supplier) at a point of achieving economic efficiency.
This study resulted in a group of important points that include:
1- The average unit cost of water resources used in the production of rice reached 97.6 pounds / thousand m 3, while the average unit cost of human labor (wage) was 40.3 pounds / man / day, and the average cost of the machine work (hourly wage) has reached 88.6 pounds / hour, and finally the average unit cost of chemical fertilizers (unit price) 4947.0 pounds / ton.
2- The increase in the unit cost of water resources, the human labor, the  automated work, and chemical fertilizers by 10% leads to a decrease in the quantities used from those resources in the various provinces by rates reaching 12.0%, 14.9%, 14.1%, 12.8%, respectively.
3- It is expected in light of the stability of the resources required for the rice crop on one hand and the increase of their prices by 50% on the other hand, a decrease in area planted by rice crop in the different provinces amounts to 38.7%.
4- This study recommends the necessity of including the water resource in the framework of economic accounting, by pricing of water resources used for agricultural purposes, according to the amount of water used, as it is the case in Spain, Morocco, Tunisia, Cyprus, aiming for rationalizing the water consumption and insuring its availability for the future generations and achieving sustainable agricultural development.