AN ECONOMIC STUDY FOR SUPPLY RESPONSE OF WHEAT CROP IN A.R.E .AT (1994 – 2009)

Document Type : Research articles.

Abstract

The study of supply response offers the methodology that enables
identifying the effects of different factors either price or technological, in
conjunction with legislative or regulatory ruling and others on wheat
producers. Taking into consideration the production, consumption,
demographic position, and the global changes that are related to this product,
makes this subject more interesting for researchers to perform this study
aiming to provide analysis that may be offered for political and economical
decision makers.
Studies concluded that the estimated area for agriculture between (1994 –
2009) is increasing by 2.4% and 1.5% if the increase in Erdab price and net
Feddan of wheat returns of current values in the previous year is 10%, whereas
the area for agriculture decreases by 1.8% and 1.1% if the increase in area
planted of wheat and production costs of current values in the previous year is
10%. However, if all the parameters in the function increased by 10%, the
estimated planted area in the year under study would increase by about 1.9%
which is statistically confirmed at all known economical standards.
This is achieved in light of using the real values for the monetary
changes in estimating the sensitivity function in double logarithmic format.
The study revealed that the estimated planted area in the current year, during
the period under study is increasing by 3.65%. and 1.61% if the Erdab and net
acre returns of wheat price escalated by the real values in the previous year by
10%. Whereas, it is decreased by 1.92% if the production costs are increased
by the real values of the previous year 10%. If all parameters of the function
were to be increased by 10%, the expected planted area in the current year
within the period under study would increase by 3.34%, which is statistically
confirmed at known economical standards. Therefore, it is important to take
into consideration the consequences of increasing agricultural prices and
production costs, and net Feddan returns when deciding production strategies
related to wheat production in the upcoming years where the production
strategies would be decided.
In light of the above, the study recommends the following:
1- Continue increasing agricultural prices in accordance to the
economical situations of the country, especially inflation.
2- Publishing crop prices by all means of advertising before planting
crops by a reasonable time period. So that agricultures would be
motivated to plant wheat aimed areas.
3- Concern not to increase the production costs. This could be achieved
by saving all necessities of production in the appropriate time and
achievable prices for the majority of agricultures.
4- Interest in the deployment of high productivity species and its
agricultural extention methods that have a net positive Feddan return.
5- Speeding up issuing of the new cooperation law, where it contains
providing and activating the basic roles for production and marketing
and production cooperation.

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