This paper goes beyond the “business” case for agricultural value chain development and presents an economy-wide framework to make the “development” case. We show that there are several key transmission channels that determine the economy-wide impacts of promoting various value chains, including forward and backward economic linkages, price responses, and net employment effects. These impacts all matter for household incomes, poverty, and dietary diversity. Results for Egypt show that agricultural value chain development generates economy-wide growth as well as growth in the agri-food system, but the impacts on employment suggest that agricultural growth can create new (and better) jobs in and beyond the agri-food system, but not necessarily more jobs. The results also show that productivity-driven agricultural growth in all crops is pro-poor and improves nutrition. However, potential adverse effects of livestock-led growth show that growth acceleration in single sectors can be negative, highlighting the importance of a systems analysis or, in our case, an economy-wide analysis. It is clear that no single sub-sector is best at achieving all the development outcomes examined. Moreover, the ranking of value chains by their development outcomes differs across sub-national regions. As such, results from this paper may provide useful decision support for the government and its development partners to select value chains depending on their priority development outcomes.

This policy note summarizes an evaluation of public investment options for Egypt’s agri-food system conducted by the International Food Policy Research Institute in collaboration with the Ministry of Agriculture and Land Reclamation of the Government of Egypt and Cairo University. We quantitatively assess the expected economy-wide impacts of investing in four promising agricultural value-chains: dates, poultry, olives, and medicinal and aromatic plants (MAP). As part of the analysis, a range of agriculture-related public investments along the value-chains are considered, including spending to expand farm production and promotion of downstream agri-processing and marketing. We use two IFPRI structural models. The Rural Investment and Policy Analysis (RIAPA) economywide model is used to capture linkages between economic sectors, households, and rural-urban economies and to measure changes in economic growth, household welfare, and employment within and beyond the agri-food system. RIAPA is linked to the Agricultural Investment and Data Analysis (AIDA), the second model, which tracks investment impacts and costs over time. Inter alia, we find that: Investments into each of the four agricultural value chains enhance growth, create additional employment opportunities, improve household welfare, and reduce poverty. The MAP and poultry value chains are the most promising value chains with regard to all four evaluation criteria. However growth generation is largest if investment is concentrated in the MAP value chain, while investment into the poultry value chain has the strongest impacts on job creation and poverty reduction. Investments into primary production and processing, besides having a strong direct impact on the value chain growth, generate significant indirect effects inside and outside the agrifood system. These indirect effects are largest for the MAP value chain.

This study presents opportunities for transformation to low carbon agrifood value chains through scaling up successful climate-smart agriculture (CSA) practices. The study draws upon data from 173 Farmer Field Schools (FFS) conducted by the Food and Agriculture Organization of the United Nations (FAO) as part of the IFAD-funded ‘Sustainable Agriculture Investments and Livelihoods’ (SAIL) Project, implemented by the Ministry of Agriculture and Land Reclamation (MoALR) in Egypt. The study assesses the potential for increasing farmers’ incomes, decreasing greenhouse gas (GHG) emissions, and improving water-use efficiency (WUE) following the implementation of CSA interventions. It also analyses sustainable value chain production models for selected crops, with the goal of establishing climate-smart value chains that are economically feasible and present financial investment opportunities for small investors.

Highly vulnerable to the effects of climate change, heat waves in Egypt are increasingly severe and frequent, raising the already high evaporation rate, accelerating crop transpiration, increasing soil aridity and elevating water requirements for both human and agricultural consumption in a country where water is imported. The forecasted spike in rainfall variability will affect flow of the Nile River, increasing both drought and high-flow years. While Egypt must produce more food for its rapidly growing population and confront high levels of child malnutrition, agricultural performance is slowing due to inefficient use of land, labour, water and energy along with environmental degradation and limited access to new technology, all of which favour increased incidence of pests and disease. Having tested climate smart agriculture (CSA) in four of Egypt’s most significant value chains – dairy, dates, maize and wheat – the authors demonstrate that CSA practices, technologies and policies will increase agricultural productivity and incomes, strengthen resilience to climate change and improve mitigation of its effects. These important, evidence-based findings have bearing well beyond Egypt’s borders. This publication is part of the Country Investment Highlights series under the FAO Investment Centre's Knowledge for Investment (K4I) programme.