Ragab,, H., Huissen, Z. (2005). A FIELD STUDY OF PRODUCTION FUNCTION AND COSTS OF SOME AROMATIC AND MEDICAL PLANTS IN FAYOUM GOVERNORATE. Journal of Agricultural Economics and Social Sciences, 30(10), 5983-5999. doi: 10.21608/jaess.2005.208481
Hoda M. Ragab,; Z. M. Huissen. "A FIELD STUDY OF PRODUCTION FUNCTION AND COSTS OF SOME AROMATIC AND MEDICAL PLANTS IN FAYOUM GOVERNORATE". Journal of Agricultural Economics and Social Sciences, 30, 10, 2005, 5983-5999. doi: 10.21608/jaess.2005.208481
Ragab,, H., Huissen, Z. (2005). 'A FIELD STUDY OF PRODUCTION FUNCTION AND COSTS OF SOME AROMATIC AND MEDICAL PLANTS IN FAYOUM GOVERNORATE', Journal of Agricultural Economics and Social Sciences, 30(10), pp. 5983-5999. doi: 10.21608/jaess.2005.208481
Ragab,, H., Huissen, Z. A FIELD STUDY OF PRODUCTION FUNCTION AND COSTS OF SOME AROMATIC AND MEDICAL PLANTS IN FAYOUM GOVERNORATE. Journal of Agricultural Economics and Social Sciences, 2005; 30(10): 5983-5999. doi: 10.21608/jaess.2005.208481
A FIELD STUDY OF PRODUCTION FUNCTION AND COSTS OF SOME AROMATIC AND MEDICAL PLANTS IN FAYOUM GOVERNORATE
Agric. Economic Research Inst., Agric. Research Center
Abstract
Medicinal and aromatic plants are considered to be among the top and most important agricultural nontraditional crops in Egypt. This i~ due mainly to the multiple uses of the medicinal and aromatic plants, both direct use orland indirect use, in many fields. These fields are not exclusive to the medical treatment, production of perfumes and cosmetic products, extra. The competitive advantage that Egypt enjoys with regards to the production of the medicinal and aromatic plants is the quality of product, plus the appearance of the crops earlier than any other competitive producer. That gives Egypt a competitive edge in exporting these medicinal and aromatic plants.
The study aims at studying the status quo with regard to the production, costs of some selected medicinal and aromatic plants in Egypt during the period of 1988-2003. These selected medicinal and aromatic plants are represented in chamomile, Marjoram, and Sweetbafil. In addition, studying cost production and cost functions at Fayoum governorate. Fayoum governorate was chosen due to the fact it occupies the second rank in Egypt with regards tc cultivated areas of medicinal and aromatic plants after Menia governorate.
ThE study illustrated that the cultivated area in Mid-Egypt governorates represent about 62 per cent of the total cultivated area of medicinal and aromatic plants as an average for the period of 2000-2003 The tota ( ash value of these plants was estimated to be about LE435 million in the year of 2003. The findings also demonstrated that there had been a decrease in the production of chamomile; however, the decrease was not statistically significant. However, the production of
both Marjoram and Sweetbafil had increased by about 14.5% and 5.97%, respectively during the study period. Chamomile production costs had increased per ton, using current prices, with an annual increase of 3.86% during the period of 1988-2003, the increase in costs were statistically significant. While the production costs per ton decreased with about 3.22% and 14.8%, respectively, however, production costs per ton, using current prices, decreased by 5%, 7%, and 14%, respectively, as compared to annual average costs of each during the study period. When production functions were estimated for these selected crops, estimates indicated that the best fit was accomplished when the double logarithm form was used for all of them. With regard to chamomile, there was a positive correlation between production quantity, machinery used in hours, quantity of seedlings, and quantity of manor used in cubic meters. However, there was a negative correlation between production quantity and quantity of phosphate fertilizers. Total production elasticity for chamomile indicated an association between returns and economies of scale. In other words, an increase in the aforementioned factors with about 1% would lead to an increase in the production of chamomile by about 1.01 %.
The findings also illustrated that there is a positive correlation between the quantity of production of MarjOram and machinery used per hour, human labor in hours, quantity of seedlings, and quantity of manor in cubic meters. However, there was a negative correlation between production quantity and quantity of phosphate fertilizers. Total production elasticity for Marjoram was 1.48 that indicates the association between returns and economies of scale. In other words, an increase in the aforementioned factors with about 1% would lead to an increase in the production of Marjoram by about 1.48%.
The findings also illustrated that there is a positive correlation between the quantity of production of Sweetbafil and machinery used per hour, human labor in hours, quantity of seedlings, and quantity of phosphate fertilizers used. However, there was a negative correlation between production quantity and human labor. Total production elasticity for Sweetbafil was 1.07 that indicates the association between returns and economies of scale. In other words, an increase in the aforementioned factors with about 1 % would lead to an increase in the production of Sweetbafil by about 1.07%.
The findings indicated that the best fit for cost function is the cubic form for the three crops. The analysis also revealed that cost elasticity quotient is less that one for the three crops and reached about 0.94,0.74, and 0.79 respectively for the study crops. That means the production of chamomile, Marjoram and Sweetbafil is still in the first stage of production.
The study suggests the following recommendations:
1. The state and farmers should put more emphasis on the medicinal and aromatic plants in Egypt. These plants aren't given the proper attention that is provided to other less important crops, especially for the three crops: Chamomile, Marjoram, and Sweetbafil;
Consistency and stability of production extend the trust and sense of dependability in the Egyptian production worldwide; and export abroad
3. More attention should be given to manor fertilizers, especially for chamomile and Marjoram, and to give Jess quantities of phosphate fertilizers due to its negative impact on productivity of these two crops;
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