ABSTRACT
The intricacies of Egyptian agriculture are such that indirect effects, i.e., effects other than the immediate results of changes in relative factor prices, play an important role in explaining the demand for mechanical technology. Linear programming models handle these interdependencies very well. Of particular significance in the Egyptian case is the demonstration that a number of apparently unrelated policies, such as fuel subsidies, livestock concentrate subsidies, cotton and rice taxes, etc., all tends to work in the same direction, namely the substitution of machines for animal power. This chapter presents further detailed comparisons of model results at financial and economic prices. Such comparisons are the primary methodology for examining the links between public policy and the demand for various types of mechanical technology. The importance of farm size reflects the fact that mechanization of threshing and winnowing induces large labor savings.
