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Please use this identifier to cite or link to this item: http://hdl.handle.net/123456789/10231

Title: Economic Analysis of Production Costs and Risk for Wheat at El-Sawalem Village, Etai-El-Barood County
Authors: Adel M. Khalifa Ghanem
Keywords: Wheat cost functions, optimal and profit-maximizing output levels, Risk.
Issue Date: 2000
Publisher: Journal of King Saud University
Abstract: The aim of this article is to examine the cost structure and risk associated with wheat production in the eastern area of El-Sawalem Village, Etai-El-Barood County, Egypt, for the year 1998/99. Primary data is collected through personal interviews with farmers at the study area during August 1999. Some of the study results are: (1) Total variable production costs (TVC) and total fixed costs (TFC) represent approximately 57.7% and 42.4% of total production cost (TC) per feddan, respectively. This TC per feddan is estimated at L.E. 1304.4. (2) The optimal output size of 20.7 Ardeb exceeds that of the actual one by nearly 8.4 Ardeb, or equivalently L.E. 821.2, taking the prevailing farm price of L.E./Ardeb 98 into consideratio. It is estimated that the minimum acceptable farm price which makes the farmer continues wheat production is in the neighborhood of L.E/Ardeb 45.74 (3) The profit-maximizing level of output of 26.1 Ardeb exceeds that of the actual one by nearly 13.8 Ardeb, or equivalently L.E. 1347.5 at existing price levels. (4) The actual net farm income for wheat which is estimated at L.E. 524 is found to be lower than that of the optimum output level and the profit-maximizing level of output by L.E. 605 and L.E. 765.1, respectively. (5) The price-elasticity of supply for wheat is found to be relatively low due to the impossibility of controlling output levels and wheat auto-consumption. (6) Unfavorable weather conditions, diseases, weed, and the utilization of traditional seeds are considered to be the major sources of production risk for wheat. The upper limits of their occurrence at the study area at a confidence level of 99% are: 78.7%, 68.9%, 81.6%, and 58.7%, respectively. Whereas the high prices of input requirements, rental of machinery, wages, and lack of information are found to be the major sources of price risk for wheat. The upper limits of their occurrence at the same-above confidence level are 94.8%, 87.7%, 81.6%, and 75.5%, respectively. (7) Difficulty of providing funds and loan servicing are considered to be the two major sources of financial risk. Their corresponding upper limits of occurrence at the 99% confidence level are estimated at 79.9% and 90.4% respectively. And (8) fire is considered to be the major source of losses for wheat. The upper limit of fire occurrence is estimated at 24.7% at the 99% confidence level.
URI: http://hdl.handle.net/123456789/10231
Appears in Collections:College of Foods And Agricultural Science

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