The Standard Estimation of Production and Cost Functions for Dry Rice Crop in Egypt (A Case study in New Valley Governorate)

Document Type : Original Research

Authors

1 Agricultural Economics,Faculty of Agriclture, New Vally University, New Vally. Egypt

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

Abstract

The research aimed to estimate the standard production and cost functions for dry rice in the New Valley Governorate by studying the current trends in cultivated area, feddan productivity, and total production of dry rice in Egypt and New Valley Governorate. It also explored economic efficiency indicators and the production challenges of dry rice in the governorate. The findings of the research include:

A decline was observed in the cultivated area, feddan productivity, and total production of dry rice in Egypt during the period (2003–2022), with annual decreases of approximately 1.96%, 0.75%, and 2.58%, respectively. These trends were statistically significant at the 0.01 level.

In the New Valley Governorate, the cultivated area and total production of dry rice also decreased during the same period, with annual reductions of approximately 10.94% and 11.30%, respectively, which were statistically significant at the 0.01 level. However, the decline in feddan productivity during this period was not statistically significant.

The production elasticity of mechanical labor costs was found to be 0.687, indicating that a 1% increase in the utilization of this input leads to a 0.687% increase in production. The total production elasticity was approximately 0.755, suggesting that production occurs in the second (economic) stage of production.

The production level that maximizes returns was estimated to be approximately 10.48 tons. Additionally, the production level that minimizes the average cost to its lowest point was found to be approximately 7.51 tons.

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