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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: L’EGYPTE COTEMPORAIE, Revue Scientifique arbitrée Quart annual, De la Société Egyptienne d’Econnomie Politique de Statistique Et de Législation, LE CAIRE , Vol. LXXXVI, No. No. 445, (July 1997): pp. 3-21.

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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 oftechnological changes and economic liberalization on agricultural labor employment and Productivity. The analytical procedures included was 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. All economic criteria, derived from the normative approach analysis,in this study showed that the growth in production and maximization of income must rely upon physical and biological technologies (new varieties, fertilizers and mechanization of farm operations. Rural development programs and economic development plants should create employment opportunities for such excess agriculture labor,either in agricultural related industries of non-agricultural small industries in villages or other economic activities in rural towns, in order to keep agriculture growing at an economic competitive performance.

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