The Kingdom of Saudi Arabia (KSA) has set Vision 2030 to reduce the total dependency of the country oil sectors, diversifying the economy and achieving sustainable food security. This necessitated conducting this study which aimed at estimating and analyzing the association and impact of selected agricultural subsectors (dates, honey, fish, chicken, and cattle) on Agricultural Growth Domestic Product (AGDP) of KSA, and identifying the leading subsector in the economy that might substantially affect AGDP and other subsectors. Unit root test, Johansen co-integration, vector error correction model (VECM), multiple regression techniques, and impulse test were used in analyzing the secondary data that covered the period from 1985 to 2017. Results revealed the presence of long-run co-integration between designated variables. Only the coefficient of adjustment parameter for dates (as dependent variable) is negative (−5.42) and significant (critical t value = −2.52 with p = .02), meaning that the model was able to correct its past-time disequilibrium. Furthermore, short-run causality was noticed between few variables. The regression analysis results indicated the existence of positive and significant relationships between the dependent (AGDP) and each of the independent variables: cattle (0.83; p = .00), honey (50.05; p = .06), and chicken (0.07; p = .00). On the contrary, results of the impulse tests showed that the cattle subsector is leading in the economy. Accordingly, cattle, honey, and chicken subsectors should be given high priority in the government investment policy.
An attempt was made in the study to understand the nature of the market integration. The study was based mainly on monthly wholesale price of sorghum in four market locations; namely Khartoum, Elobied, Gdarif and Damazin. Sorghum wholesale price series was used for the period from January 2012 to December 2016. Unit root test, Johnson co-integration test and Error Correction model were used to disclose stationary series, the long run relationship and short run relationship between these markets, respectively. The result showed that, long run relationship was indicated between all pairs of markets, except between Khartoum and Elobied market (consumption or deficit market). Long run equilibrium indicated adjustment to surplus markets (Gadarief and Damazin). This result may be interpreted by the fact that these markets are connected by good communication and transportation. From ECM model, Wholesale sorghum prices in all markets (higher price) quickly fall back towards Gadarif market whereas Gadarif adjusts back to Khartoum. Also, higher wholesale prices in Damazin quickly fall back towards all markets. There is short run causality running from: Gadarif and Damazin to Khartoum, Gadarif to Elobied and Khartoum to Damazin market. Long run equilibrium indicated adjustment to surplus markets (Gadarief and Damazin).This result may be reflected to good communication and transportation between the markets.
This research used FAO statistical data to test the causality between production, area and yield for Sudan's three major food crops; sorghum, wheat and millet. Results indicated a sizable gap in yield between Sudan and some selected top producing countries for the selected crops. Two-way causality was observed from production to area and vice versa for sorghum crops, accentuating horizontal expansion, while the lack of causality observed from yield to output omitted the impact of vertical expansion. The non existence of any causality for wheat crops indicates the exclusion of both vertical and horizontal expansion, a result that could be explained by the unsuitability of the Sudanese climate for wheat growth. Causality results for the millet crop suggest the absence of causality between production, area and yield in all directions, which can be attributed to low yield, which is itself due to the lack of recommended technical packages required for enhanced production. The research recommends emphasis on vertical expansion to develop plans for sustainable agriculture in Sudan. Further recommendations focus on upgrading the efficiency of current agricultural production systems through the application of appropriate technological packages. Regarding the wheat crop, the study recommends in-depth integrated research on comparative advantage, developing heat-tolerant varieties and the economic feasibility of growing wheat in Sudan.
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