Technical change, employment, and supply response of agriculture in the Nile Delta. A system-wide approach

In this paper, a system-wide model of crop production in the Delta region is developed in order to comprehensively analyze Egyptian agricultural policies and also to identify the main causes of the slow growth of the sector in the seventies. Previous studies based on single-crop models have blamed the government's price policies as the culprit. Our estimation results show that although there might have been some gains from appropriate changes in the relative prices of crops, price policies in general were not responsible for the poor performance of the sector, since the aggregate supply response of crops to the price levels in indeed quite low. The main factor which seems to explain the slow growth of agriculture is the decline in the level of investment in irrigation and drainage. Investment in land reclamation, on the other hand, has had negative effects on the short-run growth of the sector. On the question of the impact of increased mechanization on Egyptian agriculture, we find that mechanical power has essentially displaced animals in crop production without much affecting the growth rate of the sector or its employment opportunities directly.