Egypt: Agricultural solidarity in the balance

Ahmed Abdel-Hafez, Saturday 2 May 2020

Discussion has resurfaced on the Agricultural Solidarity Fund after farmers across Egypt have been shouldering losses owing to bad weather

Agricultural solidarity in the balance
(photo: Reuters)

President Abdel-Fattah Al-Sisi approved a bill establishing Egypt’s Agricultural Solidarity Fund (ASF) in 2014, with the aim of supporting farmers in natural disasters, such as floods, storms, and the invasion of pests and diseases affecting the productivity of agricultural land.

However, six years later, the executive regulations of the law have not been issued, rendering it ineffective. Discussions about the ASF resurfaced in mid-March when farmers complained about the damage to their crops as a result of the “Eye of the Dragon” storm the nation endured for three consecutive days earlier in the month.

The General Federation of Agricultural Credit Associations said governorate authorities had distributed applications to farmers whose crops had been affected by the storm. However, no official statements have been made on compensating the farmers for their losses, leading the farmers to restart discussion about the ASF law that has been suspended for years.

Sayed Khalifa, head of the Agricultural Syndicate, said he hoped “the executive regulations of the ASF law will be issued soon in order to set up a fund that can be used to compensate farmers in times of crisis.”

The losses wheat farmers have sustained may lead them to abandon cultivating wheat next year.

Khalifa said there were already two funds overseen by the Ministry of Agriculture that could pay compensation to poultry and livestock producers if their birds and animals are hit by epidemics affecting production.

Under the 2014 law, the ASF is supposed to be composed of resources provided by the Ministry of Agriculture, allocations from the state budget, insurance premiums paid by those insured by the ASF, grants and donations accepted by the board of directors, returns on investments, and revenues from activities.

The law states that the board of directors of the ASF has the authority to determine insurance premiums and the maximum compensation payable, as long as this does not exceed 70 per cent of its balance in one fiscal year. The ASF draws up insurance contracts with farmers to provide protection against environmental risks and crop diseases. The farmers receive a lump sum when the term of the contract ends or compensation if crops are damaged.

Salah Abdel-Meguid, head of the National Committee for the Improvement of Wheat, said the law was an incentive for farmers to sell their crops to the government since it allows it to sign contracts with farmers before planting. Farmers are then obliged to supply their crops to the governmental bodies they have signed contracts with.

MP Tarek Hussein believes it is unlikely that the House of Representatives will discuss the agricultural solidarity law in its current session because the agenda is already packed due to the decrease in the number of parliamentary sittings and committee meetings owing to the coronavirus crisis and the adoption of preventive measures against the pandemic.

*A version of this article appears in print in the  30 April, 2020 edition of Al-Ahram Weekly 

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