The possibility of increasing agricultural productivity in Egypt.
thesisposted on 19.11.2015, 09:12 by S. R. Makary
It is often argued that the burden of providing surplus in the primary producing countries falls upon agriculture. By extracting this surplus to be utilized in clearing the way for rapid growth, economic development would be sustained. This raises an empirical question: how can agricultural production be increased. The logic of increasing agricultural productivity may be explained in terms of investment allocation among sectors, and resource allocation within the agricultural sector. Rapid growth in an early stage of economic development might be achieved through reallocation of investment in favour of agriculture. In a second stage agricultural resources must efficiently be allocated to ensure continuous development. These two aspects are investigated and tested with respect to the Egyptian economy, in an attempt to identify the possibility of increasing agricultural productivity under the present economic structure. The study is therefore divided into an introduction and two broad parts. In the introduction we briefly sketch the characteristics of Egyptian agriculture in order to recognise its role in the national economy and to investigate the implication of the present agricultural policy. Part one (two chapters) is devoted to testing investment allocation efficiency among the commodity sectors. In chapter II, the arguments for and against agricultural development are recalled to be analysed with respect to empirical evidence from the past. The necessity of agricultural development is investigated to be tested against the conditions under which the primary producing countries operate. A three sectoral approach emphasises on creating agricultural surplus in the early stages of economic development is suggested in Chapter III, to be tested with respect to the Egyptian economy during the period 1960-65. Minimum capital-output ratio criterion is applied in reallocating investment among commodity sectors. Comparison between the actual outcome and that resulted from investment reallocation is made to justify the suggested approach. An input-output table is employed to show the interrelation between sectors and to ensure overall balance. A demand - supply table is used to determine sectoral surplus (or deficit). Part two comprises five chapters to be devoted to testing resource allocation efficiency within the agricultural sector. In chapter IV, both technical and economic theory of production are reviewed with special referrence to the popular forms of production function analysing their limitations in both theoretical and practical terms, and showing the major statistical constraints to the application of production function approach. The previous empirical investigations of production behaviour in Egyptian agriculture are survied in chapter V. In the remaining chapters, an attempt is made to identify agricultural potentiality in terms of resource allocation efficiency. The whole area is divided into five regions. North & West Delta, Middle Delta, East Delta, Middle Egypt and Upper Egypt. Production behaviour is examined for each region separately to test for resource allocation efficiency among regions. A production function approach is adopted to test technical efficiency. Three algebraic forms; linear function, Cobb-Douglas function and constant Elasticity of Substitution function are tested against the numerical observations. A time series production function for the period 1960-75 is estimated in chapter VI. A separate production function (i.e. disaggrative production function) is fitted for the major crops (cotton, rice and wheat) in each region. Chapter VII is devoted to testing technical efficiency with respect to the various farm size classes and tenure forms. Estimates are based on cross sectional data collected directly from the farmers and confined to cotton, the major single crop. A two-stage model is applied to test resource allocation efficiency among as well as within stages of cultivation. A management index is derived to examine its impact on large farms efficiency. In the final chapter (chapter VIII) a maximisation approach for constrained extrema is adopted to determine the optimum level of output (i.e. maximum profit) for the various classes of farm size to be utilised in identifying the productivity gap under the present situation and to find out the relevant class of farm size to Egyptian agriculture. The implications of the findings are discussed.