In the past few years, Egyptian farmers called the cotton crop “White Gold”. This is a very clear definition of what cotton means to Egyptians. However, the different policies and systems affected the Egyptian agriculture in the past 100 years, affected the cotton industry in turn. The value of raw cotton is about 50% - 60% of the costs of yarn. This put raw cotton as a fatal element in the textile industry. This research will review the Egyptian cotton policies in the past 100 years. This research includes four parts: the first part is the history of the cotton policies in Egypt. In this part the regulations and policies in the different periods from 1898 to 2001 will be summarized.

The second part deals with the effect of the cotton policies on its production and trade in Egypt. In this part a detail review of the cotton production, export and import will be done to link between the policies in each period and the cotton production, area, yield, export, and import.

The third part deals with the analysis of the current situation of cotton price policies in Egypt. In this part, the nominal protection coefficient (NPC) as a measure to the market distortion will be used to analyze the cotton price policies in the last ten years. In addition, the NPC analysis will be performed for the Extra Long Staple and Long Staple cotton as well. The analysis showed that the price distortion exists in the LS cotton. The LS cotton fits with the textile technology in Egypt. Then the government gives incentive to farmer to plant the LS varieties. In the past five years there was no market distortion in the ELS cotton. The farmers just receive the economic value of their cotton.

The last part is the conclusion and recommendations. In this part the research focuses on the importance of linking between cotton production and textile industry as parts of one body. The privatization of the textile industry and the liberalization of cotton production and markets should be done at the same time. This will insure a successful implementation of the policy reform programs.