Impact of Agricultural Policies on the Egyptian Cotton Sector Using Policy Analysis Matrix

Abstract

The Egyptian cotton sector is considered one of the most important export strategic sectors in Egypt, where the Egyptian government takes many agricultural policies that lead to an increase in exports of that crop to foreign markets, as these policies that the government takes have a major impact on the producers of that crop, and this study examined the impact of Agricultural policies on the Egyptian cotton crop, using the policy analysis matrix to know the effect of government policies on the producers of that crop and also the impact of those policies on Egyptian exports of the cotton crop, and the results showed that when comparing the financial and economic performance of the elements of cotton crop production, the financial performance was less than the economic performance on all cost items except workers' wages [1], indicating that the Government is subsidizing cost items, thereby supporting cotton producers. Comparing the average variable costs of cotton during the study period financially and economically shows that the financial valuation exceeds the economic valuation, with the average variable costs of $418.36 at market prices [2] , amounting to $368.84 at world prices, The results also showed that the Nominal Protection Coefficient for the output of the Egyptian cotton in the period under study (2000-2017) was 0.74, indicating the lack of a fair production policy during that period, perhaps due to the fact that the value of the Nominal Protection Coefficient  for the production of the Egyptian cotton crop was lower than the correct one. It also indicated that the value of the Nominal Protection Coefficient for production supplies was 0.92, which indicates a decrease in government support for that crop compared to the value of the effective protection factor of 0.72 during the period under study (2000-2017). This indicates that the factor of the cost of domestic resources for the Egyptian cotton crop is 0.47, and this indicates that the Egyptian cotton has a comparative advantage in foreign markets, the study recommended Maintaining the foreign markets of the Egyptian cotton crop, as it has a global comparative and competitive advantage, and provides the state with foreign exchange, which contributes significantly to the Egyptian national economy.