Egypt will introduce a smart card system for subsidised bread nationwide by July, in an attempt to curb corruption and smuggling, Supplies Minister Khaled Hanafi said on Sunday.
A pilot scheme was launched in the Suez Canal city of Port Said on Sunday and will be implemented in other cities next week.
"The new system will ... save the subsidies allotted for bread, which cost 22 billion Egyptian pounds ($3.15 billion) a year, from being wasted and leaked," Hanafi said in a statement.
Egypt is the world's largest importer of wheat, purchasing around 10 million tonnes a year, and provides the poor with subsidised loaves sold for the equivalent of one U.S. cent.
Profiteers have exploited the system and many feed bread to livestock because it is cheaper than animal feed.
The government is under severe financial pressure and spends around a quarter of its budget on subsidies of food, which also cover rice, sugar and oil, and energy.
Egypt has undergone three years of economic and political turmoil since a popular uprising ousted Hosni Mubarak in 2011.