Minister of Supply Khaled Hanafy (Photo: courtesy of Ministry of Supply)
Egypt's populous Giza governorate started distributing bread through smart ration cards on Monday as part of the new bread subsidy scheme.
Some 600 bakeries began offering a maximum of 5 loaves of bread to each individual holding a smart ration card with 1,338 more bakeries expected to follow suit in the coming period.
In the launch of the new scheme in Giza on Monday, the minister of supply, Khaled Hanafy, called on citizens who do not have smart cards to apply for them in order to benefit from the scheme.
In July, the ministry of supply introduced a new food subsidy system through which citizens are obliged to use smart ration cards to get their specified ration of bread with LE15 issued on a monthly basis issued to individuals for a range of 20 commodities.
The new bread scheme introduced a ceiling to the number of loaves available to individuals for the first time as well as removing subsidies from the wheat supplied to bakers.
Subsidised bread is sold at the unchanged subsidised price of LE0.05 per loaf – far lower than the LE0.35 price on the free market, with a maximum of five loafs of bread per day for each individual.
Egypt's government aims to counter smuggling and cut state spending on wheat.
Egypt, the world’s biggest importer of wheat, purchased 3.7 million tonnes of local wheat and also bought 5.46 million tonnes of wheat from abroad during the 2013-2014 fiscal year which ended June 30.
Though food subsidies increased to LE31.6 billion in the 2014/2015 budget compared to LE30.8 in the 2013/2014 budget, they represent four percent of total expenditure in 2014/2015 budget compared to 4.2 percent in 2013/2014.