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Pl 480 Title I: the Egyptian Case PL 480 TITLE I: THE EGYPTIAN CASE June 1983 U. S. Agency for International Development PN-AAL-o 1 5 BEST AVAILABLE PL 480 TITLE I: TEE EGYPTIAN CASE A.I.D. Project Impact Evaluation No. 45 Richard N. Blue, Team Leader (Bureau for Program and Policy Coordination, A.I.D.) David W. Dunlop (Dartmouth Medical School and Bureau for Program and Policy Coordination, A.I.D.) Michael Goldman (Bureau of Economic and Business Affairs, U.S. Department of State) Lloyd S. Harbert (Foreign Agriculture Service, U.S. Department of Agriculture) U.S. Agency for International Development June 1983 The views and interpretations expressed in this report are those of the authors and do not necessarily represent those of the Agency for International Development, the Department of State, or the Department of Agriculture. A.I.D. EVALUATION PUBLICATIONS A complete list of reports issued in the A.I.D. Evaluation Publication series is included in the back of this document, together with information for ordering reports. TABLE OF CONTENTS . List of Tables ............................................v List of Figures .........................................vii Foreword ................................................viii Summary ..................................................ix Preface .................................................xiv Glossary ..............................................xviii Map ..................................................... xix I . Introduction....................................... 1 A . Trends in Egypt's PL 480 Title I Program .......2 B . Total Wheat Imports and Concessional Food Assistanee ................................... 2 I1 . Self-Help Provisions in PL 480 Title I Agreements with Egypt .......................................4 A . Objectives of PL 480 Self-Belp Provisions ......4 B . Substance of Self-Help Measures Since 1976 .....5 I11 . The Egyptian Context ............................... 7 A . An Analysis of Egypt's Wheat Supply Since 1949 ..................................... 7 B . The Political and Macroeconomic Reality Since 1974 ....................................14 C . An Analysis of Consumer Subsidies .............15 D . Egypt's Food Requirements ..................... 17 E . Food Import Financing Capacity ................19 F . Food and Agricultural Policy ..................21 1 . Objectives ................................21 2 . Decision-Making Structure .................22 3 . Agricultural Policy Issues ................23 IV . Impact of the PL 480 Title I Pragram on Egypt ..... 24 A . The Egyptian Political Perception .............24 B . Effect on the Agricultural Sector .............25 C . Cavernment Budget Impact ...................... 28 D . Equity of Wheat Distribution in Egypt .........31 E . Effect on Dietary Patterns and Health and Nutrition Status ............................33 1 . Dietary Patterns ..........................33 2 . Health and Nutrition Status ............... 33 F . The Macroeconomic Impacts of PL 480 Title I ...36 TABLE OF CONTENTS (cont.) Page V. Benefit of PL 480 Title I to the United States.........QO A. U.S. Foreign Policy Objectives ..................... 40 B. Market Development Impact.. ........................ 41 C. Major Conclusions, 1975 to the Present.............42 1. Major Findings and Conclusions--General Economic Effects.............................42 2. Effects on Nutrition and Diet..................45 3. Development Impact ............................. 45 4. Foreign Policy Dynamic .........................47 D. Policy Issues......................................47 Appendixes Relationship of PL 480 Title I to Titles I1 and I11 PL 480 Title I in a Macroeconomic Context: The Relationship between Food Aid and Economic Growth PL 480 Title I Self-Help Assessment Summary of Self-Help Measures, 1976-1981 Self-Help Agreements and Identifiable Actions, 1976-1981 USAID Projects in Agriculture, Rural Development, and Health Related to Self-Help Agreements, 1976-1981 The Incentive Structure in Egypt's Wheat Market A Graphical Analysis of the Impact of PL 480 Title I on Egyptian Wheat Production and Government of Egypt Policy Options Statistical Tables and Figures Bibliography Notes on the Authors -v- LIST OF TABLES Text Tables Table 1. Egypt PL 480, 1960-1981...........................3 Table 2. Egyptian Government Expenditures on Consumer Subsidies, 1976-1981/1982 ......................16 Table 3. International Comparison of Yields for Wheat, Rice, and Maize................................la Table 4. Forecast of Egyptian Import Requirements of Wheat, Coarse Grains, and Rice, 1978/1980 and 1985.......................................18 Table 5. Egypt's External Account Balance 1977-1980/1981 .................................20 Table 6. Egyptian Farm Management Options, 1979...........27 Table 7. Trends in PL 480 Locally Generated Revenues in Egypt in Comparison with Total Government Expenditures and Total Expenditures of the Ministries of Agriculture and Irrigation, Including Related Public Service Institutions and Economic Authorities, 1975-1981............29 Table 8. Trends in Food Composition of Egyptian Diet, 1958/1959 to 1974/1975.........................34 Table 9. Nutritional Status of Egyptian Preschool Children, 1978.................................35 Table 10. Benefits and Costs Associated with Four Different Policy Options Facing Egypt, 1981....38 Table 11. U.S. Shipments of Wheat and Wheat Products to Egypt, 1977-1981............................43 Table 12. U.S. Wheat Flour Exports, 1979/1980 and 1980/1981......... .............................43 Appendix Tables Table F-1. USAID Projects in Agriculture, Rural Development, and Health Related to Self-Help Agreements, 1976-1981...............F-1 Table F-2. Major Self-Help Activities of Government of Egypt, 1976-1981...........................F-7 Table G-1. Farm Management Options Facing the Egyptian Farmer, 1979..................................G-5 Table G-2. Alternative Returns to Wheat for Egyptian Farmers, 1981.................................G-6 Table G-3. Empirical Estimates of Egyptian Farmers' Supply Response ...............................G-8 Table G-4. Conclusions Derived from Table G-3 About Crop Complementarity ..........................G-9 -vi- LIST OF TABLES (COnt.1 Appendix Tables Page Table H-1. A Comparison of Wheat Imports, Production, and Prices, 1974-1980.........................H-1 Table 1-1. Government of Egypt Food Subsidies, 1970/1971.- 1980/1981 ...........................1-1 Table 1-2. Combined Ministry of Irrigation/Ministry of Agriculture Recurrent and Capital Budgets, 1975-1981.. .......................... 1-2 Table 1-3. Recurrent and Capital Budget, Ministry of Health 1974-1981...............................1-2 Table 1-4. Consumption of Wheat by Rural and Urban Expenditure Groups in 1979/1980...............1-3 Table 1-5. Trends in Consumer Price of Cereals Relative to All Food and Beverage Items and All Items ......................................... 1-4 Table 1-6. Egyptian Imports of Wheat and Wheat Flour 1973/1974 to 1980/1981..... ...................1-4 -vii- LIST OF FIGURES Text Figures Page Figure 1. Trends in Egypt's Wheat Supply Since 1949.........8 Figure 2. Nominal Protection Coefficients for Major Crops, 1950-1979................................9 Figure 3. Producer Price of Wheat Relative to Other Crops, 1949-1981.... .................................. 10 Figure 4. U.S. Proportion of Egypt's Total Food Aid, 1960-1981......................................12 Appendix Figures Page Figure B-1. Trends in Egypt's Annual Rate of GDP Growth and Food Aid as a Percentage of Imports, 1952-1981....................................B-2 Figure G-1. Cropping Patterns in Egypt, 1952-1979.........G-10 Figure H-1. Supply and Demand for Wheat in Eygpt...........H-3 Figure 1-1. Government of Egypt Total Expenditures and Combined Ministry of Agriculture/Ministry of Irrigation Expenditures, l974-1981/1982. ..I-5 Figure 1-2. Percentage Share of Total Capital Budget Received by Ministry of Agriculture (MOA)/ Ministry of Irrigation (MOI) and Selected Ministries, 1974-1981/1982 ................... 1-6 Figure 1-3. Percentage Share of Total Recurrlent Budget Received by Ministry of Agriculture (MOA)/ Ministry of Irrigation (MOI) Plus Institutions and Authorities, 1974-1981/1982... ............................1-7 Figure 1-4. Percentage Shares of Selected Social Service Ministries, Recurrent Budget, 1974-1981/1982.. .............................1-8 Figure 1-5. Lorenz Curve Analysis of Wheat Distribution in Egypt, 1980/1981.. ........................1-9 Figure 1-6. Impact of Change in Relative Food Prices on Dietary Patterns.........................I-10 -viii- FOREWORD In October 1979, the Administrator of the Agency for International Development initiated an Agency-wide ex-post evaluation system focusing on the impact of 4ID-funded projects. These impact evaluations are concentrated in particular sub- stantive areas as determined by A.I.D.'s most senior executives. The evaluations are to be performed largely by Agency personnel and result in a series of studies which, by virtue of their comparability in scope, will ensure cumulative findings of use to the Agency and the larger development conmunity. This study of the impact of A.I.D. PL 480 Title I: The Egyptian Case was conducted in January 1982 as part of this effort. A final evaluation report will summarize and analyze the results of all the studies in this sector, and relate them to program, policy and design requirements. -ix- SUMMARY Background Food
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