Egypt's Economic Enablers to Confront the Crisis of Wheat under the Contemporary Global Challenges

Abdelgawwad, Nouran Abdelhamid

doi:10.21608/alexja.2022.155334.1024

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	Egypt's Economic Enablers to Confront the Crisis of Wheat under the Contemporary Global Challenges "الممكنات الاقتصادية لمواجهة أزمة القمح في مصر في ظل التحديات العالمية المعاصرة"
Article 3, Volume 67, Issue 3, September 2022, Page 149-174 PDF (8.43 MB)
Document Type: Original Article
DOI: 10.21608/alexja.2022.155334.1024
View on SCiNiTO
Author
Nouran Abdelhamid Abdelgawwad
International trade, Faculty of international transportation and logistics, Arab academy for science and technology
Receive Date: 09 August 2022, Revise Date: 19 September 2022, Accept Date: 28 October 2022
Abstract
The problem of the study is summarized in the sharp gap between the local production and consumption of wheat in Egypt, which negatively affected the rates of self-sufficiency and the state of wheat food security. Consequently, Therefore, the study generally aimed at identifying the economic enablers to confront the crisis of wheat in Egypt, using both descriptive and quantitative statistical analysis methods, and depending on published and unpublished time-series data from its various sources. The study found that there is a decrease in the food security coefficient of wheat in Egypt during the study period (2001- 2020), which was estimated at 0.35. This coefficient means that the strategic stock of wheat in Egypt is only sufficient for the local consumption of 4.2 months. The results also showed that (the dependency ratio on wheat imports, and population) are the most important variables affecting the ratio of self-sufficiency of wheat in Egypt, which explained together about 84% of the total changes that occurred in self-sufficiency during the study period. Estimating the supply response model for wheat in Egypt, it was found that the cultivated area of wheat in the current year is greatly affected by the net revenue of wheat acres in the previous year, which explains about 85% of the total changes in the cultivated area of wheat. Concerning the farm prices for wheat in Egypt, the findings indicated that the actual price of wheat according to production costs during the study period were lower than the estimated price, and this means that farm prices are not remunerative for farmers to grow and produce wheat. It was also found that the actual prices according to the parity prices (based on the general index of wholesale prices and the general index of consumer prices) were higher than the estimated price, which indicates that the estimated price of wheat does not give producers the purchasing power it was in the comparison year (2015), and therefore the agricultural price policy is not in favor of wheat producers. The study suggested an optimal distribution of the number of wheat imports from the foreign markets, which achieved a reduction of 33 million dollars in the bill of wheat imports in comparison to the actual distribution. The proposed optimal distribution is based on the redistribution of Egyptian wheat imports as follows: 6721.6, 2600.5, 1486.1, 111.2, 82.3, 472.2, 128.3, 122, 170.9 thousand tons, representing about 56.5%, 21.9%, 12.5%, 0.9%, 0.7%, 4.0%, 1.1%, 1.0%, 1.4% of the total amount of imports, from Russia, Ukraine, Romania, France, the United States of America, Australia, Poland, Argentina, and Korea, respectively. In light of the previous results, the study concluded with a set of recommendations to solve the crisis of wheat in Egypt, which represent in the following: 1. The necessity for horizontal expansion in wheat cultivation in order to improve self-sufficiency rates, to reduce the dependency ratio on imports, and to reduce the import bill of wheat. 2. The necessity of adjusting the farm price of wheat, and increasing it to meet the global prices. 3. Developing high-yield species of wheat to improve productivity and increase local production. 4. Rationalizing the consumption of wheat and its products in Egypt to meet the global standard levels. 5. population increase rates in Egypt must be taken into consideration when drawing up agricultural policies related to the production, consumption, and import of wheat. 6. Reconsidering the geographical distribution of wheat imports from foreign markets, in order to reduce the imports bill, by focusing on Ukraine, France, Australia, and Korean markets.
Keywords
Wheat crisis; Food security; Farm pricing; Distribution of imports
Main Subjects
Agricultural Economic and Social Sciences


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Egypt's Economic Enablers to Confront the Crisis of Wheat under the Contemporary Global Challenges "الممكنات الاقتصادية لمواجهة أزمة القمح في مصر في ظل التحديات العالمية المعاصرة"