Subsidization Agricultural Production Requirements for the Most Important Strategic Crops in Egypt

Abstract

Many countries follow support policies directed at the agricultural sector, and support takes different forms and is applied through multiple means and methods. This aims to stimulate production to achieve continuous food security and expand the cultivated areas of these crops, thus increasing the value of national agricultural production. Since the second half of the 1980s, agricultural policy began to implement the economic reform program to implement subsidies on agricultural production requirements (such as: seeds, fertilizers, pesticides), in order to support agricultural production requirements that affect the prices and costs of the most important strategic agricultural crops in Egypt. The research problem was limited to the high prices of agricultural production requirements, which represent the most important problems facing farmers in Egypt, and also the problem of fertilizers in terms of their high prices and unavailability, in addition to the high rental prices of agricultural machinery, which leads to high agricultural costs and a reduction in the cultivated areas of crops, in particular Strategic crops. Financing strategic crops amounted to more than 6 billion pounds annually, with a soft interest rate of 5%, in addition to the state bearing a subsidy worth 7% in recent years, equivalent to more than 500 million pounds annually, while the number of beneficiaries reached about 600,000 farmers. Therefore, farmers must be supported by providing production requirements of fertilizers, seeds, and pesticides at low prices and high quality, in the winter and summer seasons, to increase the area and productivity of crops. The research aims to identify the methods followed by the state in its support policy for agricultural production requirements for Egyptian strategic agricultural crops, and to work to protect agricultural producers from price fluctuations and increase production for those crops during all agricultural seasons. The most important results of the research were that the implementation of cash support requires the presence of detailed data on those eligible for subsidy, and increasing subsidy for some agricultural production requirements, especially for strategic crops, encourages farmers to increase productivity, and this is evident in the wheat crop, as it led to an increase in local production from 9.2 million tons in 2014 to 10 million tons in 2022. It also becomes clear that there is a fluctuation in the value of support directed to farmers, which affects the rise in the costs per acre of strategic crops, especially wheat. The research concluded that when measuring the development of the value of support directed to farmers, it did not give an appropriate statistical picture due to the fluctuation of data up and down over the course of time, the high cost of agricultural production inputs for strategic crops such as wheat and corn, and increased inflation rates.