An Analytical Study of The Impact of Structural Changes on The Prices of Agricultural Production Requirements in Light of The Current Local Changes in The Arab Republic of Egypt Case Study: Cotton Crop

Document Type : Original Article

Authors

Agricultural Economics Research Institute - Agricultural Research Center

Abstract

The problem of the study is  that agricultural production in general and the cotton crop in particular have  a continuous increase in the average production costs per feddan - which has weakened the farmers’ ability to obtain the largest amount of production at the least amount of costs and thus weakened their ability to achieve the productive and economic efficiency of agricultural production in general And for the cotton crop and the resources used in its production in particular, and despite the increase in its prices from one period to another, the increase in the prices of production requirements was faster, which affected the cultivated area of ​​it and shift to the cultivation of other more profitable crops. The recent period after 2011 has a noticeable rise in the prices of production requirements in particular and the general level of prices in general - this had a great impact, especially on the agricultural sector.
The study aims generally to describe the changes that occurred in the costs of producing the cotton crop in Egypt, as well as the developments in the costs of producing the crop by dividing the study period into two periods, the first (2002-2010) as a base period, and the second (2011-2019) as a comparison period. With the aim of identifying what local structural changes brought about, such as the January 25, 2011 revolution, as well as the liberalization of the exchange rate for the pound in 2016 and its impact on the profitability of the feddan of the crop and the area cultivated from it.
The most important results of the study The area cultivated with the cotton crop have a general decreasing and significant trend, amounting to about 27.48 thousand feddans annually, with an annual decrease rate of about 6.76% from the average during that period, the decrease in the cultivated area of the crop due to the decrease in the net yield from it, and the difficulty in marketing while production costs are rising steadily.
 By examining the relative importance of the cost items, the cost of rent came in the first place for the cost items, as it represented about 36.52% of the total costs, equivalent to about 53.34% of the variable costs, followed by the importance of the cost of human labor, which came in the second place of the cost items, where it represented about 50.69%, 30.27 % of variable costs and total costs, respectively. As for the cost of automated work, it came in third place, representing about 16.18%, 9.9% of both variable costs and total costs, respectively. By studying the impact of local structural changes on the most important economic variables for the cotton crop, it became clear that The average area cultivated with the crop during the comparison period is approximately 46% of the average cultivated area during the base period, due to farmers' tendency to cultivate more profitable crops.  The average farm prices of the cotton crop during the comparison period were about 172% of what they were during the base period. The average total costs during the comparison period were about 198% of their counterparts during the base period.  The average net return during the comparison period is about 142% of the average net return during the base period.
 

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Alexandria Science Exchange Journal
Volume 43, Issue 3 - Serial Number 3
JULY-SEPTEMBER
September 2022
Pages 399-415

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