Since December and until next June, Egyptian farmers have been harvesting sugarcane, which locals indirectly rely on as a source of sugar.
The crop, widely cultivated in tropical and temperate regions, has caused problems for Egyptian farmers like those Ahram Online interviewed in a visit to Qena, an Egyptian province in the far south.
Farmers complain of the high interest rates of the state agricultural bank’s loans as well as the lack of profitability in the crop.
Egypt produces 1.5 million tonnes of sugar, and the crop takes up 47.7 percent of the total farmed area nationwide at 325,700 feddans. Of this total, 117,700 feddans, according to official data from last year, are located in Qena.
Mamdouh Fouad, a farmer with Upper Egyptian roots in his mid-fifties, told Ahram Online that mostly small and medium-scale farmers are tired of cultivating sugarcane due to its low profitability, but they do not have the opportunity to grow other crops.
He pointed out that the sugarcane fields, full of crops up to 20 feet tall, prevent other nearby crops from getting the benefits of the sun. This forces farmers to continue planting sugarcane, which they dub “the lazy crop”.
“We do nothing with sugarcanes but spreading the seeds, then add the fertilisers and pesticides and wait for it to grow for a year,” Fouad explained.
Fouad, who was wearing a ragged flowing robe, added that he has borrowed LE33,000 ($4,710) from the village’s agricultural bank to be able to bear the farming cost of two feddans of sugarcane, but his revenues from selling the crop were just LE32,000.
According to Fouad, the cultivation cost of one feddan of sugarcane – including fertilisers, pesticides, irrigation, labour and transport -- is estimated at around LE14,000. Only the large-scale farmers -- who don’t rely on loans from the banks -- are making profits.
High debts and low returns
Farmer Hussein Bassily, who wears a white prayer cap, told Ahram Online that the main problem is the agricultural banks’ high interest rates, exceeding 11 percent.
“Where is the initiative of dropping the debts of the small and medium-scale farmers?” Bassily asked.
During the 2012/13 financial year, former president Mohamed Morsi announced that all farmers' outstanding debts below LE10,000 would be cancelled.
In March of this year, the chairman of Egypt’s Public Bank for Development and Agricultural Credit, Atia Salem, told Ahram Online that there were plans to restructure debts for insolvent farmers, but the debts would not be cancelled.
“Dropping farmers' debts would mean the collapse of the bank and we plan to achieve profitability,” explained Salem.
The bank’s capital at present is equivalent to LE1.5 billion ($214,000,000).
Fouad added that the agricultural associations tasked with selling subsidised fertilisers to farmers halved their quotas in 2013, leaving farmers to buy the rest of the fertiliser they needed on the black market at double the price.
Talaat Abdel-Moneim, the managing director of one of the state’s agricultural associations in Qena, attributed the lack of fertilisers to a shortage of product from state-run factories, because of the ongoing energy crisis.
Low government prices
Qena farmer Haj Farouq told Ahram Onlie that most farmers are committed to supplying their harvest to the state’s sugar companies through annual contracts, with supply prices of LE360 per tonne.
The state-own companies receive around 85 percent of Egypt’s total production of sugarcane.
“The government’s offer is not enough, particularly for the low-income farmers. We need a raise, just like wheat,” Farouq deemed.
Farouq told Ahram Online that a feddan of sugarcane generates an average of 45 tonnes of sugar; however the value of the sugarcane stubble, which is left over after harvest has always been deducted from the offered price by the government.
In February 2013, under Morsi, the price offered by the government to the farmers of one ardeb (roughly 150 kg) of wheat was raised by LE20 to LE400 in order to boost local production.
Farmers also struggle to deal with the private sector according to Farouk, as contracts with the state’s sugar companies represent a guarantee that the farmers, who have been loaned from banks, will be able to repay their debts to the banks.
“It will be more beneficial if we deal with the private sector, but then we won’t be able to borrow from the agricultural banks,” he explained.
Bananas: an alternative crop
Egypt’s agriculture ministry recently decided to control banana farming by creating banana farming licences. Farmers who fail to get licences will not be able to get either their fertilisers or pesticides to cultivate the fruit.
Abdel-Moneim said that the government wants to push farmers toward the strategic crops again such as sugarcane and wheat.
“Bananas’ profitability is the reason behind the trend of farmers choosing to grow them; the revenues per feddan can hit LE30,000,” Abdel-Moneim said.
He said that there were around 300 feddans devoted to of wheat and sugarcane in his village, but in the early 2000s, farmers had turned 200 feddans into banana plantations.
“Governmental control efforts aim to save water, because bananas consume large amounts of water during the process of irrigation,” an official source from the agriculture ministry explained.
According to the ministry of agriculture's data in 2012/13, Egypt’s produces 1.1 million tonnes of bananas from 67,800 feddans nationwide, up from 62,000 feddans in 2010. Many of the banana plantations are located in Qena.