AN ECONOMIC STUDY OF INVESTMENT ATMOSPHERE IN THE EGYPTIAN AGRICULTURAL SECTOR | ||
| Egyptian Journal of Agricultural Research | ||
| Article 28, Volume 81, Issue 1, March 2003, Pages 411-432 PDF (5.09 M) | ||
| Document Type: Original Article | ||
| DOI: 10.21608/ejar.2003.276354 | ||
| Author | ||
| SOHEIR M. EL-KADHI | ||
| Senior Researcher, Agricultural Economics Research Institute, Agricultural Research Center, Dokki, Giza, Egypt | ||
| Abstract | ||
| Undoubtedly. the relatively meager share of agriculture in investment allocations leads to a rather unstable sector performance. This study aims at measuring the performance of investment in agriculture and testing the hypothesis of an Investment deficit in the Egyptian agriculture. It also seeks to determine the unused production capacities or totally ceased projects. The results negate the assumption that the Egyptian agricultural sector suffers from an investment deficit. However. the existing situation may Indicate an apparent decline in the ratio of capital use in the sector. This ratio explains the relationship between the actually used investment capacities and their maximum potentials according to performance rates and socio-economic develop. merit plans. The study also indicates that the agricultural investors in Behaira and Me. noufia governorates were short of economic information. Numerous feasibility studies were not in full conformity with the real situation, most probably due to variation of the macro-economic and monetary policies In the pervious periods. lower staff efficiency and longer project implementation period than actually planned. Investors reported lengthy procedures during project approval phase and application for credit. Production and marketing problems were also reported. Such a state of affairs has resulted in unused capacities and sometimes defunct projects. In Behaira governorate, the number of such projects was 141 enterprises, with a total investment portfolio of LE 15.35 million. In Menoulia governorate, 134 enterprises, with total investment of LE 27.035 million, were found to be dysfunctioning or defunct. Assessing the general trend of capital intensification coefficient in agriculture, the study concludes that the agricultural sector progressively tends to be capital intensive. Regression coefficient was estimated at 113.3 and the investment coefficient was estimated at 1.23 at current prices and 1.17 at fixed prices. Re-employment rale was estimated at 1.07. This indicates that the agricultural sector is inclined to be more capital intensive, certainly at the ex- pensed of labor | ||
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