Doctoral Dissertations

Date of Award

12-1969

Degree Type

Dissertation

Degree Name

Doctor of Philosophy

Major

Agricultural Economics

Major Professor

Luther H. Keller

Committee Members

Thomas J. Whatley, Merton B. Badenhop, Frank O. Leuthold, Hands E. Jensen

Abstract

The general objective of this study was to evaluate the potential role of livestock in an agricultural-industrial complex in the Middle East, and specifically for a potential site west of Alexandria in the United Arab Republic.

Several analytical models were developed to determine the optimum organization of crop and livestock activities in terms of six alternative goals. These were: (1) maximizing financial returns, (2) maximizing the present value of foreign exchange net credit, (3) maximizing calorie production, (4) maximizing effective protein production, (5) maximizing domestic employment, and (6) minimizing investment capital required for the agricultural complex.

Important sources of published data used in synthesizing live stock production coefficients were the various publications of the state agricultural experiment stations and extension services in the United States, publications of the United States Department of Agriculture and releases prepared by the Food and Agriculture Organization of the United Nations.

Data relating to basic resources and investments in the agroindustrial complex were developed by other members of the Middle East Study Group. Data pertaining to crops were synthesized by members of the agricultural sector of the study team.

The annual Income which was provided by various systems selected in each optimization model varied considerably. Relatively high levels of income were provided in the income, foreign exchange, and employment models, while income levels were much lower in the nutrition and investment models. The net return value, excluding water cost, in the income model was $27.8 million, as compared to only $5.6 million in the calorie model.

Employment which would be provided was also considerably higher in the income, foreign exchange, and employment models than in the nutrition and investment models. The man-hours of employment to be provided totaled 11.4 million man-hours in the employment model but only 2.8 million man-hours in the calorie model.

The quantity of calories and protein provided varied to a lesser extent among the models than did other alternative goal characteristics. The maximum quantity of calories, amounting to 1236 billion, was provided in the calorie model. The quantity of calories provided by the income model, on the other hand, was 556 billion. The maximum quantity of protein was provided by the protein model (50 million pounds). This compares with 34 million pounds of protein which were produced in the income model.

Livestock production was included in four of the six optimum systems developed by the various models. Although the greatest contribution of livestock was in terms of income and foreign exchange, contributions to the nutrition and employment goals were quite significant in some models.

In order to evaluate the sensitivity of net returns to the water desalination cost, the cost of water was deducted from the estimated income for each of the various optimization models at cost levels rang ing from $.10 to $.45 per thousand gallons. Break-even prices for water were also calculated.

Of the 13 sale crops analyzed, only five could break even with water production cost at $.20 per thousand gallons. Only two crops showed a break-even water price of as much as $.35 per thousand gallons, which is considered to be the most likely for about 1980.

The break-even water prices for the crop and livestock production systems selected in the six optimization models varied from $.09 per thousand gallons in the maximum calorie model to $.47 per thousand gallons in the maximum income model, The calorie model included no livestock in the production system, while the income model included livestock activities at the upper allowable levels.

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