From liberalisation to self-sufficiency: Egypt charts a new agricultural policy

Marwa Hussein, Thursday 28 Apr 2011

Self-sufficiency in wheat and subsidies for peasant farmers: a new language being heard at the Ministry of Agriculture

(Photo: Reuters)

Self-sufficiency of wheat, and ideas about subsidies for peasants: a new language is heard at the Ministry of Agriculture, yet it awaits to materialise in concrete policies

A promising wheat harvest season started a few days ago. The agriculture minister promises to keep up the momentum.

Shortly after he came to office, Minister of Agriculture Ayman Abu-Hadid spoke of self-sufficiency in wheat to be used in subsidised bread in two years time. Many officials at the ministry are in favour of government support for peasants.

The plan of the minister is to reach nine million tonnes of wheat production in two years — the amount needed to produce the subsidised bread, a staple in the diet of Egyptians. This target is reachable when we know that wheat production is expected to reach 8.1 million tonnes in 2011. It only takes increasing persistently-low productivity.

“The productivity of a wheat feddan (roughly an acre) in Egypt is of 18 erdab (2.7 tonnes) while it can reach 24 erdab if well served,” explains Mohsen El-Batran, head of the Economic Affairs Section in the Ministry of Agriculture.

However, the plan is not seen by many as enough, first because the hoped increase is less than 10 per cent of Egyptian total consumption of wheat, at 15 million tonnes. "It's quiet negligible," says Gamal Siam, senior advisor at the Centre for Agricultural Economic Studies (CAES) in the Faculty of Agriculture at Cairo University.

“Producing nine million tonnes doesn’t mean attaining self-sufficiency. Egypt will remain the biggest wheat importer worldwide. The ministry's long term strategy also doesn't include the term self-sufficiency. Its maximum ambition is to reach 63 per cent self-sufficiency,” he explains.

As for increasing productivity, it is not easy. “Wheat productivity was stable at a low of 18 erdab per feddan for more than 10 years. Moreover, it decreased to 15.2 erdab (2.4 tonnes per feddan) in 2010," notes Siam, labelling this a "sign of failure of national agriculture policy".

In Siam's eyes, to reach nine million tonnes, government needs to distribute high-productivity seeds on a nationwide scale, while such seeds are used in only 30 per cent of wheat lands at present.” “To implement this plan, a revision of policies is needed,” he adds. “First, the services of agriculture guidance, that really deteriorated, should be brought back with efficiency. Second, small peasant farmers need more facilities and support,” states Siam.

After 20 years of agriculture liberalisation policies, peasants, who mostly own small fractions of land, find it hard to service land requirements because of the high costs of inputs and labour. “Cooperative should be brought back to help peasants increase production and to save them from the increasing control of big agribusiness,” believes Abdel Salam Gomaa, known as the "wheat godfather".

Ideas that the ministry start to take in consideration, but to which extent?

“We should make it up to the peasants,” admits El-Batran.

\He recognises the difficulties peasants are facing since the liberalisation of the sector that started by input liberalisation and was followed by land rent liberalisation. “The prices of agriculture inputs increased highly after the liberalisation of the sector, while the price of the crops didn’t rise at the same levels, which made it unrewarding for peasants. American and European farmers benefits from subsidies; why not the Egyptians?” El-Batran wonders.

El-Batran assures that Egyptian peasant farmers will be subsidised as part of a new policy aiming to increase production and help the sector employ around eight million persons. “If we count the families, and industries that depend on agriculture, we will find that 40 per cent of the population depends, whether directly or indirectly, on agriculture to earn its living,” says El-Batran.

This new language at the ministry comes after years when the idea of self-sufficiency was seen as old fashioned, liberalisation being the main target. Egyptian agricultural policy was focused on cash generating crops that can be exported, like fruits and vegetables.

The most famous example is the cantaloupe of Youssef Wali, minister of agriculture between 1982 and 2004, that spread in Egypt in a few years. The idea was to export high-priced horticulture products to raise enough money to finance the import of cheap cereals. The consequences: Egypt imports 60 per cent of its wheat, 50 per cent of its fava beans, 90 per cent of edible oils, and the list goes on.

The policy did not prove a complete failure, as there were few food shortages and no famines. But precarity was the name of the game.

But in 2008, the global food crisis proved this policy unsafe, and also costly. The question of self-sufficiency was raised again strongly after the price of staple crops rose in the international market.

The Egyptian budget endured high costs for this rise in prices, especially in wheat, corn and sugar. Self-sufficiency jumped to the fore also with the political uprising that led to the collapse of the Mubarak regime, in particular because of its close link to national security.

This year's harvest appears set to rise because of the mild winter compared to last year.

Due to largely to prevailing poverty, per capita wheat consumption in Egypt is the highest worldwide, at an average of 168 kilograms per year. In consequence, Egypt imports six to seven million tonnes of wheat per annum, making it the largest wheat importer worldwide, a situation that the Pharaohs, the main exporters of wheat thousands of years ago, couldn’t imagine.

Until 1950, Egypt enjoyed self-sufficiency in wheat. “Egypt started to import wheat at this time to cover the needs of the British troops. After 1952 Revolution, wheat consumption increased when the government started to generalise bread made from wheat, while before, in the countryside, people mainly consumed bread made from maize,” recalls Abdel-Salam Gomaam, president of the Grains Centre in the Ministry of Agriculture, known as the "father of Egyptian wheat".

He calls to go back to this mode of consumption, to partially solve the problem.

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