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Revolutionary dreams on a peasant’s budget

Two revolutions in the offing, yet with soaring production costs and steep loans, Egypt's farmers are still as troubled as ever before

Salma El-Wardani , Friday 17 Jun 2011
Farmers (Photo by Mai Shaheen)
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Six a.m. Ahmed Abdul Hadi wakes up and rushes through breakfast. If he misses sunrise his already meagre earnings will suffer.

Within minutes 70-year-old A’am Abdul Hadi, as the peasants know him in Kafr Baheeda village in Meet Ghamr, Daqahleyya, is knee-deep in water. With members of his extended family, he will be bent over planting rice all day. They have to do everything right -- there's no room for trial and error.

The toil of farming is one thing, but a sense of futility too is becoming a daily experience for Abdul Hadi, who has worked in the paddies for 65 years. He has farmed other people’s land his whole life, barely scraping a livelihood for his family.

Abdul Hadi rents seven feddans to farm for a total of LE5,000 per year, but that is a small fraction of his outgoing costs. Sometimes, he says, he barely manages to break even.

For last year's rice crop, per feddan, Abdul Hadi paid LE1,000 for water, LE450 for fertilisers, LE450 for seeds and LE300 for seedbeds. Renting a tractor cost a one-off LE150, but hiring labour to transfer the seeds into the fields, following ploughing and flooding, cost LE1,000. In a six-month season he spent a total of LE3,200 plus LE 2,500 for rent, making his overall expenditure LE25,050.

Each feddan produces three tonnes of rice, yielding a total of 21 tonnes which he sells for LE1,200 each, bringing in LE25,200. Last year Abdul Hadi’s net profit was LE150 ($25). Abdul Hadi earned another LE1,500 from selling dairy products -- he also owns a herd of cattle -- raising his net income in six months to LE1,650 ($278). He had to support a family of seven on about LE9 per day.

 

Happy tidings?

But there was cause for optimism after 25 January; perhaps the revolution would bring the farmers in Meet Ghamr happy tidings, the way the July Revolution of 1952 had done. When Egypt’s first post-25 January budget was announced in June, the interim government said farming subsidies would be increased to LE2.53 billion ($425.7m).

The figure makes up only 0.4 per cent of the fiscal year's total budget spending of LE634 billion ($120bn), but it marks a slight improvement on the LE2.51bn ($422.3m) farming subsidy of 2010-2011.

Good news for Egypt’s five million families of small-holding farmers? It seems not.

"Subsidies take the form of indirect support for farmers," says Dr Mohsen El-Batran, the head of economic affairs at the Ministry of Agriculture and Land Reclamation. "This 2.5 billion is paid by the government to the Ministry of Social Solidarity and Social Justice, which transfers them to the Development & Agricultural Credit Bank, which then hands them to farmers in the form of fertilisers, seeds and other supplements."

In this way, El-Batran explaind, the government can support farmers by contributing to the input without exercising control. It was left to Ibrahim Ageena, the head of the Sergana Agriculture Cooperative in Meet Ghamr from 1996 to 2004, to reveal a different, interesting fact. "The co-ops don’t recognize tenants,” he said. “They can only deal with the legal landowners."

This means the subsidy lands in the lap of the landlords, leaving those who do the work in poverty.

"The 1992 law regulating relations between owner and tenant resulted in this drop in the status of farmers, and with the government only recognising contract-holders, it is getting even worse," says Reem Saad, associate research professor in rural Egypt at the American University in Cairo. "This has created two clear social strata in rural Egypt: the landowners, who have everything; and the peasants, who have nothing."

The decree, which Saad dubs "the law for throwing tenants out", came into effect in 1997. It is cited by historians as part of the ‘de-Nasserisation’ of Egypt kick-started by President Sadat in 1970.

Before the 1992 law, agricultural rent contracts were transferable from one generation to another, giving the families the security and incentive to make long-term investments. In addition, rent rates were fixed by the state. It took the law five years to be implemented, and since then, all existing contracts were terminated and lands handed back to their owners.

According to Saad, the law has caused land rents to rise more than threefold, giving landowners the right to evict tenants after five years. It has thus altered agrarian relations across the country, giving way to the black market. "Because the blind cooperatives only consider owners and not the real farmers who need subsidies, the owners are able to resell the subsidies they get from the state -- pesticides, seeds -- at an even higher price than the market," she explains.

Over the last two weeks, as a result, Egypt has seen a grave fertiliser crisis as the black market pushes prices up more than 100 per cent in some villages.

 

The credit vampire

Sitting on the land he rents in Kafr Baheeda, cradling his five-year-old grandson, Abdel Hadi remembers the security that farmers could enjoy in the time of Nasser. "The government was a partner, a supervisor and a legal body that defended our rights too," he says.

A nostalgic, rose-tinted view, some say. But since 1970 the shift has been harsh; with these kinds of problems in the rural sector (according to IMF statistics for 2010, 13.5 per cent of the country’s GDP), Egypt's food security may be at risk.

"I believe the problem lies in a vague agricultural strategy designed to serve the interests of the ruling elite,” says Adel William, director of Sons of the Soil, a human rights centre. “As a result, farmers suffer terrible economic conditions, unemployment and poverty in villages nationwide."

William even speaks of a "mass clinical depression" sweeping the farmers of Egypt.

"The new generation is willing to do anything to abandon agriculture. They might even sell everything they have so they can immigrate illegally to Europe," he says. "They know they might die but they think that's better for them than their miserable life here, mired in debt and unemployment."

At his centre, which fights for the rights of Egypt's peasants, William and his colleagues keep authorisation letters and documents.

One bank document shows a loan agreement between the Development and Agricultural Credit Bank and a farmer living in the Delta. The loan was signed in 2007 with an initial value of LE15,000 and the huge annual interest of 17 per cent. The amount due by this farmer has reached LE56,000.

The Development and Agricultural Credit Bank was founded back in 1977 to provide farmers with loans for new technology to improve productivity as well as banking services in local and foreign currency. "Just like other institutions founded in those days, the bank has made it its business to suck the life blood out of some 470,000 needy farmers through high interest rates," says William. Now, he adds, it will take much more than fair banking credit to help an impoverished and increasingly desperate agricultural sector.

"The solution is to help farmers who feel hopeless, worthless and helpless. This can happen through developing the countryside, allowing the agriculture co-operatives to resume a stronger role, as well as other forms of government control."

 

Agricultural reform

Sporadic peasant rebellions against rampant inequalities in the early days of the republic culminated in the July Revolution's pledge of agrarian reform. The new Nasser-led regime sought to implement this through extensive intervention, implementing land-reform programmes, extending irrigation system, reclaiming land and regulating input and output prices as well as land use.

Responsibility for agricultural control fell on the rural cooperatives, which were the principal hope for boosting agricultural production and phasing out the feudal system. With the open-door (infitah) liberalisation policies of the 1970s and 1990s under Sadat and Mubarak, the co-operatives were gradually marginalised.

"The government shouldn’t have a heavy hand on co-ops," says Dr Adel El-Beltagy, chairman of the Agricultural Research and Development Council (ARDC). "Its role should be reduced to giving licences, setting the wider legal framework and providing technical support for farmers. We don’t want to crush the farmers’ backs. My suggestion is to merge small cooperatives into one economically viable entity," El-Beltagy says.

El-Beltagy led the 2009 research team that produced the ARDC's 'Sustainable Agricultural Development Strategy Towards 2030' (SADS 2030) report. It said Egypt has to move towards "achieving comprehensive and social development based on a dynamic agricultural sector capable of sustained and rapid growth, while paying special attention to helping the underprivileged social groups and reducing rural poverty". One of the main lessons learned from past strategies, according to the researchers, was that "fragmentation of agricultural holdings constitutes a serious impediment to development."

But this view is not without its loopholes.

According to Reem Saad, "It’s not necessarily true that property fragmentation [small-holding farmers] leads to poverty, nor is the concentration of lands in the hands of some large-scale farmers the key to a solid agriculture strategy," she says.

Traditional farming communities based on small land plots, she argues, have always been the backbone of the Egyptian economy.

"Under the old system of small farmers [before the implementation of the 1997 tenant law], peasants felt secure enough to grow the crops needed locally at prices set by the government," she says. "We can’t just blindly follow IMF liberalisation policies regardless of economic and social implications. These strategies have forced farmers into unfair competition with subsidised products from big companies and from other countries."

 

Old and new

A report by Mohamed Abou-Mandour from the International Centre for Advanced Mediterranean Agronomic Studies, entitled ‘Structural Adjustment Programs in Egyptian Agriculture’, was highly critical of the impact of Egypt's structural adjustments on the farming sector. It said these moves led to drops in the incomes of landless farmers' and "enticed a large number of tenants to rescind their contracts and leave the land to the landlords".

These transformations, the report added, led to the increase of landless farmers, the concentration of agricultural holdings, and the consequent instability of landlord-tenant relations. "This discourages long- and medium-term investments in the rented areas, which may lack stability and continuity," it concluded.

Abdul Hadi knows very well that farmers are facing a critical situation, but he refuses to leave his land.

"I was born a farmer and I shall die a farmer. If I left the land, who else would work on it?" he says, arguing with Mahmoud Thabet, a young accountant who works with a company recycling rice straw on the land next to his, who will keep waiting in vain. "If you have a losing trade, why go on in the very same way and with no resistance?" he asks.

"I’m not saying farmers should leave their lands, and I can't say that because my whole extended family are farmers. I’m just saying a people who have had such a big revolution should work on developing their mind-set and finding solutions rather than just waiting for the new government to change conditions."

And true to his word, three days after Mubarak was toppled, Mahmoud, along with other residents of his village, Sahraget Al-Kobra, started a self-funded group called Youth for Change; their aim is to develop their hometown.

"I dream of our village becoming an attractive place with many job opportunities just like the city,” Mahmoud says. “I dream that one day when I have a child I will make his life happier without having to go away and work in the city, seeing him once a year."

 

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