An Economic Study of the Determinants for the Supply Response of the Cotton Crop in Egypt

Farm prices are one of the key economic variables affecting the production
decisions of farmers through their response to cotton prices or to competitive
crops price in the same season, as well as some other economic variables that
specify the cultivated areas and quantities produced from cotton. So that the
study aims to assess the Egyptian cotton crop supply response functions in order
to identify the degree of response of farmers to price and some important
economic variables affecting the area under cotton In addition to estimating
elasticity respond to these variables during (1997-2013).
According to the results of instability coefficient estimated in the study,
there is a lack of stability in all the years of study in the area under cultivation,
production and farm price for cotton crop , where it came from all of them is
equal to zero during the study period.
There was a statistically significant response in the current area of cotton to
changes in the feddan productive variables, farm price and net income ,and the
total cost of feddan with a delay of one year, the longest response was for net
return, followed by both productivity, farm price and production costs per
Feddan. The results of estimating supply response functions to cotton crop by
using multiple regression nerlov model with explanatory variables of the
competing crops for the cotton such as net income for maize and rice to give a
total elasticity response about -3.17.
The current cotton area response to change in both the farm price for cotton,
corn and rice in the previous year, with total elasticity of respond about-0.23.also
there is a Response in the current cotton area to the change in all of the
production costs of cotton and corn and rice production costs in the previous year
with elasticity of response about -0.57.
Some recommendations can be drawn from the study: Need to find some
sort of price stability for the cotton crop, which leads to the stability of cultivated
areas and production of cotton, as well as the need to provide control over the
prices of inputs to ensure that the high production costs of cotton crop and the
reluctance of farmers growing the crop. You must provide information to farmers
about the competing crops for cotton