Western Agricultural Economics Association (1995)

 A New Method of Estimating Stochastic Production Functions

 Safer H. Al-kahtani, Bader El-Din E. Sofian

Agricultural Economics Department, College of Agriculture, King Saud University, Saudi Arabia

Abstract. The purpose of this paper is to develop a new method of estimating productive inefficiency of frontier production functions. A composed additive disturbance term, as the sum of symmetric and non-positive random variables, is specified. Normal equation is derived to estimate the coefficient and inefficiency measures.

 Ranking Method of Measuring a Specific Farm Technical Inefficiency

 Safar H. Al-Kahtani and Badr El-din E. Sofian

 Department of Agricultural Economics, College of Agriculture, King Saud University, Riyadh, Saudi Arabia

Abstract. Ranking method is used to measure a specific farm technical inefficiency for greenhouse, dairy product, and table-egg farms. The advantage of this technique is its simplicity over other complicated estimators. Moreover, it does not require a composed error term which allows OLS to be good estimators. Results are reconciled with economic logic of existing constant returns to scale in agricultural frontier production functions. Results show that efficiency is predominating in large farms.

 

Economic Analysis of Potato Demand in Saudi Arabia

Safer H. Al-Kahtani, Khalid Al-Hamoudi

Agricultural Economics Department, College of Agriculture, King Saud University, Riyadh, Saudi Arabia

Abstract. A Linear Approximation Almost Ideal Demand System (LA/AIDS) was used to fit import and domestic data for potato in four importing and one domestic markets. Significance level of estimated marginal shares, expenditure elasticities, signs of own price Slutsky parameters, and Cournot own price elasticities indicated that the model fit the data reasonably well. The results indicate that increasing potatoes expenditure by 1% will increase the demand  for domestic production by 2%  compared with 0.58% and 0.29% for Egyptian and  Syrian potatoes respectively, while potatoes imports from other countries will decrease by 0.52%.  Results of price elasticities indicated that if domestic price increase by 1% would result to decrease domestic demand for potato by 1.58%. Increasing price of Syria, Lebanon, and other countries by 1% would result to increase domestic market share by 0.13%, 0.15%, and 0.01%, respectively. The result illustrated that the demand for domestic potato has a strong preference while for other sources were substantially weaker.

Agricultural Economics ( JIAAE) 12(1995)

Estimating Preference Change in Meat demand In Saudi Arabia

Safer H. Al-kahtani, Bader El-Din E. Sofian

Agricultural Economics Department, College of Agriculture, King Saud University, Saudi Arabia

Abstract. The purpose of this paper is to investigate preference change in the demand for meat subject to random coefficient in Saudi Arabia .A Fortran 77 program has been designed to estimate the demand function for meat using kalman filtering techniques and maximum likelihood approach. The initial values of the coefficient and covariance estimates are essential prior information in the Kalman filtering techniques. Results provide substantial random coefficient in red meat, implying important structural change occurs in red meat more than poultry and fish demand.

Economic Analysis of World Demand for Dates Export in Saudi Arabia

Safar H. Al-Kahtani

Department of Agricultural  Economics, College of Food and Agriculture Science, King Saud University

Abstract. The objective of this paper is to study the local dates ( marketing problems, cost, and margins) , imported world market share of  Saudi dates and other export competitors, demand elasticity estimation, and predicting the Saudi dates export in terms of value and quantity. The results illustrated that, Kuwait was ranked number one among other importing Saudi fresh dates with about 10 million Riyal in year 2004. While Yamen was ranked number one of importing Saudi dry and maknose dates with about 18.9 and 9 million Riyal in year 2004,       respectively. Marketing margins for alsokkre, albarhe, alseilage, nabbot safe, monefe, and rotana dates types were 14.1, 6.1, 2.9,2.7,1.6,2.6 Riyal/Kg ,respectively. Farmer share out of retail price for the dates type were 40.6%, 50.1%, 56%, 57.5%, 72.2%, and 63.6%, respectively. The results concluded that high marketing margins and low farmer share which indicated the weakness of marketing efficiency for dates in Saudi Arabia. High price risk was considered the most marketing problem facing dates farmers in Saudi Arabia.

AGRICULTURAL MARKETING IN THE KINGDOM  OF SAUDI ARABIA: EXISTING SITUATION, PROBLEMS, AND SOLUTIONS

Safar H. AL- Kahtani , Mohamad H. AL- Qunaibet, Sobhy Mo. Ismaiel , Husain . Hebaisha

Department of Agricultural  Economics, College of Food and Agriculture Science, King Saud University.

Abstract. The importance of this study stems from its full and integrated coverage of agricultural marketing problems in the Kingdom which represented a major source of complaints for producers especially with the recent developments in local and international markets. The objectives of this research were to: identify the actual marketing practices for some vegetable and fruit products, determine its marketing efficiencies and impediments, and suggesting practical and applicable mechanisms to increase the marketing system efficiencies. Secondary data were obtained from official sources. Primary data were obtained from two sources. The first was the frequent field trips to central wholesale markets and the observed field practices, visits with commercial chambers, meetings with officials and market participants, and researchers’ reports. The second source was the results of the questionnaires applied to representative samples of all participants in the marketing system in different areas of the kingdom, specifically farmers, date producers, wholesalers and retailers, importers, incorporated agricultural companies, and vegetable and fruit cold storage facilities.

The research utilized both the analytical and descriptive methods. These methods include, among others, simple statistical indicators, stationary tests such as ADF test, multiple regression, transportation models, and concentration measures such as Gini coefficient, Herfindahl – Hirschman index, Lorenz curve, and seasonal index numbers.

The final report of the study consists of: introduction, literature review, methodology, questionnaires, and a review of the general features and actual marketing practices for some vegetable and fruit products in different areas of the Kingdom. Also, a description of  the general features and characteristics of the study’s field samples were presented , analyses of the market problems from the view point of the participants were presented, Analysis of the marketing system efficiency for the studied commodities (tomatoes, cucumber, potatoes, onions, watermelon, honey dew, grapes, oranges, khalas, barhi, and sukari dates, and some other fruits) were presented. The study focused on specific items concerning marketing efficiencies including price levels, marketing margins, evaluation of market integration and equilibrium in time and place dimensions. In addition, the aspects of marketing in its form dimension, marketing risks and information were analyzed. Finally, based on the study’s results, methods to improve vegetable and fruit marketing systems and applicable mechanisms were suggested. These mechanisms include: organization of production and supply to secure market equilibriums in prices, time, and place. Emphasizing the importance of product preparation for marketing through grading, packing, storage, and shipping. Improving infrastructure of the exciting central markets and building new ones along with organizing transactions and enforcing effective auctions. Making a comprehensive and accurate market information and data base available for all marketing system agents. Organizing the procedures of foreign labor replacement in agricultural production and marketing. Supporting agricultural cooperatives to play an effective role in increasing marketing efficiencies through improving market coordination and achieving market equilibrium and integration and making use of economies of scale in marketing services. Finally, utilizing WTO rules and the Kingdom’s commitments to improve marketing efficiencies of fruits and vegetables.

Marketing Margins for Vegetable and Fruit Crops in Saudi Arabia

Safar H. Al-Kahtani            Mohammed A. Al-Feel

Department of Agricultural Economics, College of Food Science and Agricultural, King Saud University

Abstract. The objective of this paper was to study marketing margins for some vegetable and fruit crops in Saudi Arabia in order to find out some indicators about marketing system efficiency for these crops. Primary data of different regions was collected. The sample survey covered producers, wholesalers, and retailers. The results indicated that marketing margins for tomato, cucumber, potato, onion, watermelon, and cantaloupe were 0.97, 1.27, 0.80, 0.92, and 0.90, Riyal/Kg, respectively. However, 25% out of the margin located between wholesaler and retail price, and 75% located between farm and wholesaler price. Farmer share out of retail price for the same crops were 52.5%, 51.5%, 47.8%, 45.6%, 44.2%, and 50.2%, respectively. Marketing margins for alsokare, alborhe, alselege, nabot safe, monefe, and rotana dates were 14.1, 6.9, 2.9, 2.7, 1.6, and 2.6 Riyal/Kg, respectively. Farmer share out of retail price for the same dates types were 40.6%, 50.1%, 56%, 57.5%, 72.2%, and 63.6%, respectively. The results concluded high marketing margins and low farmer share for vegetable and dates which indicated the weakness of marketing efficiency for these crops in Saudi Arabia.

Marketing Costs and Profitability Measures Analysis of Fruits and Vegetables in Retailing in Riyadh

Safar H. Al- Kahtani, Sobhy M. Ismaiel, Ibrahim, M Al-Manna

Dept. of Agric. Economics, Coll. Of Food and Agricultural Sciences, King Saud University

Abstract. The aim of this research is to study the agricultural marketing status for most important vegetables and fruits in order to define marketing efficiency and limitations and afterwards to suggest the scientific solution and practice mechanism of marketing system efficiency for vegetables and fruits. The research relied on primary and secondary data. The primary data has collected by two methods. first full, by visiting Riyadh city municipal and its branches and Riyadh chamber of commercial and industrialism in addition to field observations , second full, gathering questionnaire out of random sample survey which represent all forms and types of vegetables and fruits marketing channels in Riyadh city.  The size of the sample survey was equal to143 retail tradesman. The study illustrate marketing cost analysis derived from data field attainment average cost marketing for total products vegetables between (0.11- 0.37 R/Kg) with average amount 0.27 R/Kg. The average marketing costs for fruits products was between (0.10-0.44 R/Kg) with average amount 0.28 R/Kg. marketing costs of fruits products was more costly than vegetables products. To improve marketing efficiency, the study recommends the following; building up marketing companies or agriculture Co-operative society, watching and organizing market systems, providing marketing information, and unifying packaging weight for each product.

Post Harvest Technology Impact on Marketing Loss and Economic Resources losses for important vegetables and fruit crops in Saudi Arabia

Safar H. Al-Kahtani                          Adel M. Kaleefah

Agricultural Economics Department, College of Food Science and Agriculture, King Saud University, Riyadh, Saudi Arabia

Abstract. The aim of this paper is to estimate the marketing loss and economic resources losses for important vegetables and fruit crops in Saudi Arabia and also to study the relation between post harvest technology and marketing efficiency. Primary data form different regions was collected for this paper. Sample survey included producers, wholesalers, importers, and retailers. The results illustrated that the highest marketing loss for producers was the tomato and fig with 17% and 19.8%, respectively. Grape and cucumber were the highest marketing loss for wholesalers and importers with 22.8% and 21.3%, respectively. For retailers, imported grape and some types of dates were the highest marketing loss with 15.9% and 15%, respectively. Due to the marketing loss for the crops covered in this paper, other economic resources such as land, water, and fertilizer will face losses by 25.94 thousand hectare, 599.4 million cubic meters, and 9.43 thousand ton, respectively.

Optimal Transportation and Storage Models of Important Vegetables Crops in the Kingdom of Saudi Arabia

Sobhy M. Ismaiel    Safar H. Al khahtani

Dept. of Agric. Economics, College of Foods Science and Agriculture, King Saud University

Summary. The objective of this research is to specify and estimate spatial and time distribution models fore Potatoes, Onions, Tomatoes and Cucumber. Transportation Model was utilized in order to minimize storage and transportation costs. The Analysis relied on Secondary, technical and primary data about local production, imports, consumption needs for each location and month and storage and transportation costs of vegetables under investigation. The Equilibrium Flows between regions and months were estimated. Accordingly, it was concluded that Northern province is considered the price base region for Potatoes while both spring and autumn seasons. It is also the price base region for Cucumber except while the months of January- February and April.   Eastern province is considered the price base region for Onions, Tomatoes while February and March, and for Cucumber while January and February. Northern province is the price base region for Tomatoes while November, December- January, June, October- December. Southern province is price base region for Cucumber in April.

Using Linear Programming Techniques to Construct a General Equilibrium Model (GEM) for Saudi Arabia

Safar H. AL- Kahtani

Department of Agricultural Economics, College of Food and Agriculture Science, King Saud University

Abstract. The main objective of this paper is to construct and validate the General Equilibrium Model (GEM) using linear programming algorithm. The results of the GEM solution are almost identical to the base year SAM 1980/81. This implies that the GEM has been correctly specified and it is ready for comparative static experiments. Reducing agricultural subsidies has a significant impact on all commodity and factor prices. On the contrary, the rest of the world and investment sectors are not affected.

Using Co-Integration Equations to Study Economic Aspect Of Agricultural Development Sector in Saudi Arabia

 Safar H. Al-Kahtani        Adel M. Kaleefah

Agricultural Economics Department, College of Food Science and Agriculture, King Saud University

Abstract. The objective of this study is to measure the development of agricultural sector along with economic factors that responsible for productivity over the period 1985-203. Econometrics method has been applied, particularly unit root tests and co-integration equations such as two stages Engle and Granger (E-G) and Johansen and Juselius (J-J) methods. The results indicate the following findings: 1- The growth of farm income has increased by 3.1% per year over the period of the study, 2- The agricultural sector has achieved low economic development, 3- The change of labor, fixed investment, and  agricultural machinery, by 10% will cause farm income for each land unit to change by 0.6%, 2.1%, and -0.9% due to E-G method and by 0.5%, 24.4%, and -5.6% due to J-J method ,respectively. 4- The study recommend to evaluate efficiency of agricultural investment and machinery use in order to increase productivity efficiency of agricultural sector, and hence to increase its share in gross national income.

Optimum Wheat Production in Saudi Arabia

Safar H. AL- Kahtani

Department of Agricultural Economics, College of Food and Agriculture Science, King Saud University

Abstract. The objective of this paper is to find the optimum wheat production under competitive market and with government intervention.  At support price of 2000 S.R per ton, The results provide that wheat production should be 1.004 million tons and the market clearing price is 1834.5 S.R per ton.

 

Res. Bult, No (64), Agric. Res. Center, King Saud Univ.,PP.(5-19), 1997

A Target MOTAD Analysis of Tomato Production in The Riyadh and Kharj Area

Safar H. AL-Kahtani                                     Hussien A.Hebicha

Abstract. A target MOTAD model was developed to evaluate tomato Production practices in the Riyadh and Kharj area based on expected net returns and risk. Production practices considered include the traditional system (TRAD), unconditioned plastic greenhouses (GHP), and three type's production systems utilizing air-conditioned greenhouses (CGH1, CGH2 and CGH3). Targets to cover total production costs and total cost plus additional profits were modeled. Results indicated that CGH3 is the most profitable on average and had the lowest potential for losses. GHP was intermediate in both average profitability and risks. TRAD had the lowest profitability and the highest risk. CGH1 and CGH2 were not included in the optimal farm plans at any level of target income. Expected net returns and risk (measured as the expected sum of negative deviations of the solution results from targeted income ) are important factors shown to affect production practices chosen by the model.

Analysis of Costs and Performance of Farm Mechanization for Cereal Crops in Riyadh Region

 Y.A. Alamri, S. H. Alkahtani, S. M. Ismaiel, and  S. A. Imam.

Department of Agricultural Economics, College of Food Science and Agriculture, King Saud University, Riyadh.

Abstract. The aim of this study is to analyze the farm mechanization costs for cereal crops at Riyadh region. The results illustrated the farm mechanization average cost was about 963.8 Riyals / hectare. However, the average cost has decreased from 1685 Riyals / hectare for farm size less than 100 hectare to 576 Riyals / hectare for farm size larger than 200 hectare. The mechanization costs include; the annual depreciation costs ( 398 R/h ) , repairing and maintenance costs ( 288 R/h ) , labor costs (210.8 R/h ), and machines operation costs ( 66 R/h ). The farms have spent a lot of investments on farm machines about one third of their net annual revenues; the net annual revenues have reached about 309% compared to the investments in farm machines. The study has evaluated the relative size standard of the invested capital in mechanization related to both of laborer number and the farm production of wheat and barley, and the farm size represented by its area, it has reached 193.02 Riyals/laborer and 4.6 Riyals/ton and 9.04 Riyals/Hectare. The invested capital economic average revenue in the sample mechanization has reached 0.8% and the direct operation cost of the land preparation for farming has reached 400 Riyals/hour, and for irrigation, it has reached 210.5 Riyals/hour, and for the harvester 241,99 Riyals/hour. The real cost of farm machines employment of the land preparation process for farming has reached 402 Riyals/hour, and 211 Riyals / hour for irrigation, and 243 Riyals/hour for harvesting machine.

The Current State  of Farm Mechanization in Cereal Crops in the Kingdom of Saudi Arabia

 Y.A. Alamri, S.H. Alkahtani, S.M. Ismaiel, S.A. Imam

 Summary. The Kingdom of Saudi Arabia has paid attention to the farming sector development, through the development plans, in all its aspects by introducing the modern technology, one of the aspects of such modern technology is farming mechanization to farms Cereal Crops. The purpose of this paper is to Analysis the current status of the farm mechanization in the Kingdom. The results show an increase in the tractors and harvesters numbers during the period 1983-2000, and an increase in the average area of cereals (wheat and barley) served by tractors during the period 1983-1993 and their reduction during the period 1994-2000 and an increase in the average area of cereals served by harvesters during the period 1983-1993 and their reduction during the period 1994-2000. The total annual decrease of medium-range loans, machines, pumps, farm autos and irrigation systems Kingdom wide has reached 133-7,3-4,8-2,6-18,9 million riyals at reduction rate reached 9% - 7% - 4% - 11% and 14% respectively during the period 1403 to 1420 H. The same period subsidies for machines, pumps and farm machines Kingdom wide have been reduced during the period from 1403 – 1420 H at the average of annual reeducation reaching 11 and 11 million riyals at the reduction rate of 5% and 7% respectively.