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Impact of technological changes and economic liberalization on agricultural labor employment and Productivity

Soliman, Ibrahim and Ewaida, Osama (1996): Impact of technological changes and economic liberalization on agricultural labor employment and Productivity. Published in: CONTEMPORARY EGYPT Quarterly Annual Journal Issued by Egyptian Association for political economy, statistics And legislation Cairo , Vol. Year 8, No. No. 445, (July 1997): pp. 3-18.

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Abstract

Egypt has passed dramatic economic changes over the last two decades. Such program has different impacts on agricultural sector performance, including the mechanization, expansion and substitutability for human labor. Therefore the objectives of this study are to assess the impacts of technological changes and economic liberalization on agricultural labor employment and Productivity. The analytical procedure is the estimation of crop production function for rice before and after the economic reform application in agricultural sector. The study used two field survey data in two sucessive periods conducted in "Sharkia Governorate". It was concluded that the optimum allocation of inputs for rice production implied to decrease the human labor use on farms, even though, under the export border price of rice. It means that such major crop in Egypt as a case study of the agricultural sector can not provide a feasible employment opportunity for human labor. To reach amaximum income from such agricultural activities a less labor intensity should be used. Positive analysis approach showed that the employment of human labor has decreased by almost one-fourth due to all technological changes and economic reform policies practiced over the last decade. The normative approach analysis (least cost combination of inputs), showed that the human labor employment should be decreased by about two-thirds, in order to maximize income. 4 In order to maintain agriculture growing at an economic competitive performance, all economic criteria, derived from the production function analysis in this study showed that the growth in production and maximization of income must rely upon a package of physical and biological technologies (new varieties, fertilizers and mechanization of farm operations). Rural development programs and economic development plans should create employment opportunities for the excess agriculture labor –beyond the economic density. Such opportunities should be either in agricultural related industries, non-agricultural small industries in villages or other economic activities in rural towns.

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