Towards A Sustainable Agriculture Strategy for Egypt “Results from An Agriculture Economy Interaction Model”

Authors

1 Faculty of Computers and Information- Cairo University. Former Minister of Higher Education and Scientific Research Cairo- Egypt

2 Department of Agricultural Economics Faculty of Agriculture Cairo University, Egypt

Abstract

The study seeks to build an economy-wide analytical tool to address structural distortions in Egypt's agriculture sector, assess different policy measures and development alternatives, and capture its interactions with the rest of the economy. To this end, an agriculture economy interaction model based on social accounting matrix (SAM) principles and the computable general equilibrium (CGE) modeling tradition was developed. Two scenarios, the reference path scenario and the agriculture development scenario, are developed and assessed using the model through 2024/25. The reference path scenario maintains Egypt’s recent socioeconomic reform program, as well as the agriculture enhancement scenario, which aims to increase the share of agriculture in investments and public spending, while also increasing agricultural productivity. By adopting the agriculture development scenario, the economic growth of the agriculture sector is improved, food security strategy is supported, the production capacity of agricultural activities is enhanced, national saving behavior is improved, most per capita welfare indicators are increased, and finally, overall GDP growth is enhanced. However, this scenario necessitates increasing investment and reliance on imported goods, thus resulting in deterioration of the trade balance and the current account deficit of the balance of payments.

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