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Economic Study of Cotton Production and Marketing in Egypt (Case study: Dakahlia Governorate)

. Dr. Tarek Mohamed Abo-mosa & Dr. Nivine Todary Guirguis Bebawy


Abstract

Egyptian cotton occupies a prominent position in the Egyptian national economy as it is an important and primary source of currency and foreign exchange for the country. Due to its global position among various global cottons, it is characterized by quality, spinning qualities, and staple length that are not available in many other global varieties. Egyptian cotton has gone through many internal and external turns and challenges. The main problem of the research is the decline and decrease in both the cultivated area and the total production of the cotton crop. Therefore, the research aims primarily to study and estimate the productive and economic efficiency and the most important production and marketing problems of the cotton crop in Dakahlia Governorate for the 2024 season. The research relied on descriptive and quantitative statistical analysis methods and the use of simple regression analysis to estimate production functions and on secondary data issued by the competent official authorities. In addition, the primary data was obtained through a questionnaire form that was collected through a personal interview with a simple random sample of cotton farmers in Dakahlia Governorate for the 2024 season. The research reached several results, the most important of which is that the cultivated area and total production of cotton crops at the level of the Republic and Dakahlia Governorate took a general trend of statistically significant decrease during the period (2000-2023). It also showed an increase in production costs, as the total costs in Sherbin and Belqas districts amounted to about 41.32 and 38.64 thousand pounds. The productivity per feddan decreased, as it amounted to about 2.84 and 3.27 quintals, respectively. This led to a decrease in total return, as it amounted to about 34.08 and 39.24 thousand pounds, respectively, and the realization of losses in Sherbin district estimated at 7.24 thousand pounds, and a low net return of about 598 pounds in Belqas district. By estimating the partial elasticities of the production elements that were proven to be significant in the districts of Sherbin and Belqas. It was found that they were positive and greater than one, which means that the cotton farmers in the study sample are producing in the first production stage of the law of diminishing returns and that the farmers have not yet reached the optimal production and they had the opportunity to achieve this if the available resources were optimally exploited. It was also shown that the average productivity of the production elements used in Sherbin Center for each of human labor, seeds, phosphate fertilizer, foliar fertilizer, and pesticides amounted to about 0.04, 0.11, 0.12, 0.26, and 0.52 quintals. While the marginal product of the same elements used amounted to about 0.02, 0.-0.38, 0.17, 0.34, and 0.63, respectively. By comparing the value of the marginal product of these elements with their unit price. It was shown that the economic efficiency of these production elements amounted to about 1.13, -72.67, 64.33, 15.71, and 16.97, and all of these values ​​are greater than one, which means that the economic efficiency of using these resources is low and that they have not reached the level of economic efficiency. It is recommended to increase the quantities used in the production process to reach the optimal resource combination, except for the seed element, which is characterized by waste. As for Belqas Center, the average productivity of the production elements used for each of the seeds, foliar fertilizer, pesticides, and mechanical labor amounted to about 0.13, 0.36, 0.45, and 0.08 quintals. While the marginal product of the same elements used amounted to about 0.16, 0.21, 0.05, and -0.04 respectively. By comparing the value of the marginal product of these elements with their unit price, it was found that the economic efficiency of these production elements amounted to about 29.78, 24.21, 1.54, and -2.88. All of these values ​​are greater than one, which means that the economic efficiency of using these resources is low and that they have not reached the level of economic efficiency. It is recommended to increase the quantities used in the production process to reach the optimal resource combination, except for the mechanical labor element, which is characterized by waste. It also becomes clear that by studying the production and economic efficiency of the production elements used to produce the cotton crop at the level of the study sample in Dakahlia Governorate. Some of these elements may achieve production efficiency, but all of them do not achieve economic efficiency. This is due to either the lack of use of some of them or the excessive use of others. This means that the farmers of the research sample cannot reach the optimal resource combination that achieves optimal production. This may be due to the existence of production and marketing problems that have resulted in a decline and decrease in productivity per acre and the achievement of low returns or losses. The most important production problems, according to farmers' opinions, are the weak productivity of current varieties and their inability to withstand the negative effects of climate change. The spread of many insect, fungal, and viral diseases and the ineffectiveness of many pesticides to combat them. The lack of adequate control over fertilizer and pesticide production companies, allows them to manipulate and cheat. The absence of a guidance role to provide advice and correct information to combat insect and fungal diseases. In addition to marketing problems, represented by the fact that the guaranteed prices set by the state are not done through a realistic study of the production and costs of the cotton crop. There is manipulation within a single auction and a quasi-agreement between companies not to raise prices above a certain limit. There is a large difference in auction prices at the beginning of the season from prices at the end of the season, which harms farmers. In addition, the delay in receiving the value of cotton from banks because of companies' failure to pay on the required date.

Keywords: Cotton, Production, Marketing, Net Return, Farm Price.

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