Egypt’s Very Silly Decision To Grow More Rice

It’s not particularly the decision here itself which is wrong as Egypt plans to grow more rice to cut the import bill. It’s the entire madness of the manner in which the decision to plant more rice was made. Because a central bureaucracy simply isn’t the right place to be making the decision about which crop is planted in which field. There’s just no way that even bright people sitting in Cairo know what should be planted in the Delta. As Hayek’s Nobel lecture pointed out, there’s no way they could even in theory.

So, this is just very silly indeed:

Egypt’s Agriculture Ministry said on Wednesday it would grow about 1.1 million acres of rice in the 2019 season, up from 800,000 acres last year, in an effort to reduce the country’s import bill. The North African nation began importing rice, a crop it typically had in surplus, in 2018 to save water. Cairo increased fines for illegal rice cultivation last year and decreed that just 724,000 feddans could be planted. A feddan is roughly one acre. That marked a sharp drop from the officially allotted 1.1 million feddans for 2017 and the 1.8 million feddans grains traders believe were actually grown that year. “The increase in acreage is to decrease the rice import bill and stabilize its price,” Ahmed Ibrahim, a media official at the Agriculture Ministry, told Reuters. Rice cultivation had been slashed in an effort to conserve vital Nile river resources as Ethiopia builds a $4 billion dam upstream that Cairo fears could threaten its water stocks.

And here’s the correct way to do it. That irrigation water – yes, obviously, since the Pharaohs Egyptian agriculture has depended upon that, whether it be from the Flood or from the more modern dams – should be properly priced. And then leave farmers to it.

The why of this should be obvious but to explain for any progressives out there. This is because different rice cultivation techniques, different cultivars themselves, use different amounts of water. So, if we’re in a water scarce environment the correct answer is to change technique and or cultivar. Or, obviously enough, crop. That’s three different choices. And those bureaucrats in Cairo just aren’t going to know, cannot know, what is the correct mix of the three for any specific acre of land in the country of Egypt. Since they can’t know they shouldn’t be the people making the decision.

The farmers should face market input prices. Then be left to get on with it. In that manner we get whatever the people who actually know – the people who can see, touch and feel their fields – is the right mixture of output given the available inputs and then off we can go to fill up the holes from the international markets.

The point being that this is too complex a decision to plan, thus we’re left with having to use prices and markets.

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Sounds suspiciously like Saudi arabia’s government plan to make themselves self sufficient in wheat – which they actually achieved (even exporting wheat for some years) Unfortunately the subsidies given to producers were ruinous and the wheat cost 3 or 4 times the price of what could be purchased from the US to produce. As an added bonus the production rapidly depleted the water acquifer that supplied Saudi Arabia with fresh water. Genius. On a related note I’ve often wondered why Arabs have as part of their staple diet bread, when the area they live in seems totally unsuited to the… Read more »