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Economic and food security benefits associated with raised-bed wheat production in Egypt

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Abstract

Countries in the West Asia and North Africa (WANA) region are dependent on imports of wheat to meet their food security needs. Mechanized raised-bed wheat production is an effective means of increasing productivity and saving scarce water, but the technology needs substantial adaptation to local conditions. This paper estimates the economic benefits from a long-term adaptive research project designed to adapt and promote mechanical raised-bed wheat production in Egypt. The technology itself is associated with a 25% increase in productivity due to higher yields, 50% lower seed costs, a 25% reduction in water use, and lower labor costs. The mechanical raised-bed program is now a component of Egypt’s national wheat campaign and it is estimated that by 2023 approximately 800,000 ha of wheat will be planted with the technology. This paper estimates that over a 15 year project horizon, the benefits will exceed US$ 4 billion, with most of the benefits accruing to more than one million Egyptian wheat producers. Other benefits include reduced wheat imports (by more than 50% by 2025), reduced dependence on international commodity markets and increased productivity on more than 200,000 ha of water-starved lands.

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Notes

  1. Water Benchmarks of CWANA Phase I (Community-Based Optimization of the Management of Scarce Water Resources in Agriculture in West Asia and North Africa) began activities in 2004 and ended in 2008. It was funded by the Arab Fund for Economic and Social Development (AFESD), the International Fund for Agricultural Development (IFAD) and the OPEC Fund for International Development (OFID). The project included activities on sites throughout WANA.

  2. Water Benchmarks of CWANA Phase II, a follow up to the Phase I was funded by AFESD and ran from 2009 to 2013.

  3. Enhancing Food Security in the Arab Countries, Phase I, ran from 2010 to 2014, and was funded by AFESD, the Kuwait Fund for Arab Economic Development (KFAED), the Islamic Development Bank and OFID. Phase II began in 2014, with the Bill and Melinda Gates Foundation added to the list of donors.

  4. The recommended variety depends on agro-ecological conditions and seed availability. Newly released improved wheat cultivars are part of the package: Sids 12, Misr 1 and Misr 2 at project inception, with Gemmiza 11 starting in 2011, Sids 13 starting in 2012 and Shandawel 1 starting in 2013.

  5. Additional machines were purchased by EFSAC for use in, Iraq and Tunisia. Each country requires modification of the Egypt-specific design and ICARDA engineers are providing necessary support for such modifications.

  6. 1 E£ = USD 0.060 at the time of writing.

  7. Irrigation distribution systems in Egypt deliver water 50 to 60 cm below field surfaces and farmers pump water to lift it from delivery canals (Wahby et al. 1984). Pumping costs include diesel fuel, time cost and equipment depreciation: farmers are not charged for water use. Egypt’s cereal sector is heavily dependent on fuel: an estimated 11.1% of production value is attributable to fuel costs (Al-Riffai et al. 2016).

  8. The mesqa is the lowest level of irrigation canal in Egypt; each mesqa feeds between 10 and 40 farms.

  9. More than 850,000 ha (about 29% of wheat area) are in the highest suitability class; 660,000 are suitable at level 2 and 823,000 ha are suitable at level 3. About 21% of wheat area is not suited for the technology.

  10. A growing literature uses treatment effect approaches to measure this cost-shift; much of this literature focuses on challenges to identification of a treatment effect when using observational data (Matuschke et al. 2007; Minten and Barrett 2008).

  11. The counterfactual is cost of production and yields in control farms — neighboring farmers who allowed their costs and yields to be measured. An assumption of the estimate of project benefits is that per land-area gains will be replicated as the package is scaled up. The experience in Al Sharkia indicates that newly incorporated farmers are receiving similar benefits compared to demonstration farmers selected for early participation (Saleh and Ahmed 2016).

  12. Absent good information, best practice is to assume a unitary own-price elasticity of supply (Alston et al. 1995), but due to wide donor interest in Egyptian wheat policy, a number of estimates exist. USAID (2006) summarizes more than seven studies and, while the estimates vary by study, the average elasticity of supply was 0.37. Kherallah et al. (1999) use a supply elasticity of 0.3.

  13. When the baseline model is run from 2009 to 2017, where we have good information about adoption and impacts on participating farmers, the net present value of benefits (in 2009 dollars) is US$ 576,000. As the NWC up-scales diffusion, benefits grow rapidly.

  14. Al-Riffai et al. (2016) do not distinguish between urban and rural manufacturing and specialized heavy equipment manufacturing is likely to be far more labor intensive than most manufacturing. Their SAM, although highly disaggregated, does not contain the detail necessary to examine employment in plow/planter production.

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Authors and Affiliations

  1. Virginia Polytechnic Institute and State University, Blacksburg, VA, USA

    Jeffrey Alwang

  2. Agricultural Research Center, Cairo, Egypt

    Samy Sabry

  3. International Center for Agricultural Research in the Dry Areas, Amman, Jordan

    Kamel Shideed

  4. International Center for Agricultural Research in the Dry Areas, Cairo, Egypt

    Atef Swelam

  5. International Center for Agricultural Research in the Dry Areas, Tunis, Tunisia

    Habib Halila

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  1. Jeffrey Alwang
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  2. Samy Sabry
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  3. Kamel Shideed
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  4. Atef Swelam
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Correspondence to Jeffrey Alwang.

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Alwang, J., Sabry, S., Shideed, K. et al. Economic and food security benefits associated with raised-bed wheat production in Egypt. Food Sec. 10, 589–601 (2018). https://doi.org/10.1007/s12571-018-0794-3

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