Estimating the Long Term Cost Functions for Sugar Cane in Qena Governorate, Egypt

(Yasser Abdul Hamid Diab and Dalia Hamed Shuwaikh and Atef Helmy Shimi)

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Abstract

This paper focuses on determine the optimal size of the farm and the optimal amount of production of sugar cane crop in the Qena Governorate. The goal of the study is to estimate the cost long-run function for the period 2002-2013 in order to determine the optimal size of the farm and the optimal amount of production of sugar cane crop along with economies of scale achieved by farmers in Qena Governorate. The study showed thatthe economies of scale was achieved by increasing the amount of production and reached its maximum with the production level which leads to cost minimization and this production estimated at 48.74 and 52.24 ton feddan (1 feddan = 0.42 hectare) for both crop types (plant and ratoon crops). The economies of scale increase along the diminishing part of the average total cost curve. This means that farmers can reduce the average cost of production unit through production expansion. After the lowest point on the average total cost curve, the economics of scale was decreasing in bothcrop types (plant and ratoon crops). Key Words: Costs, Economies of scale, Elasticity, Production, Sugar cane.
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