The Egyptian rice market : a model analysis of the effects of government interventions and subsidies

In the rice industry, policy has involved government procurement of rice, input subsidies, area and water control, rice distribution to consumers at below-market prices, foreign trade control, and fixed prices for quota rice. These policies have led to a drop in rice acreage from 1.2 million to 985,000 feddans and a deceleration of yield increases. At the same time, demand for rice has grown rapidly, causing a decline in rice exports and foreign exchange. This study presents a historical view of Egyptian rice production, consumption, and marketing channels, followed by an analysis of the institutional framework of government intervention within which the rice market functions. The need for policy reform and various reform approaches are discussed. The report then formulates an econometric model of the Egyptian rice market and discusses the results of the estimation process. The final chapter uses simulation experiments to estimate the historical impact of some of the policies that have been used to influence the Egyptian rice economy.