Reference Date: 18-February-2016
FOOD SECURITY SNAPSHOT
Average levels of cereal crop production; import requirements estimated to remain at same level during 2015/16 marketing year
Inflation rates increasing, electronic ration card gradually rolled out
Planting of winter grains concluded in December
Planting of 2016 winter crops for harvest from mid‑April 2016 was concluded in early December 2015. In some areas, heavy rains and local flooding challenged field work. Preliminary figures, released by the Ministry of Agriculture and Land Reclamation in early January 2016, show a slight decline in the area planted to wheat (1.326 million hectares in 2015/16 compared to 1.418 million hectares in the previous year) although the figure is likely to be revised. The Ministry also reported normal availability of fertilizers, which in the past were seen as a constraint to production.
Average cereal harvest gathered in 2015
The 2015 cereal harvest, at 21.7 million tonnes, was slightly up from the level of the previous year and more than 300 000 tonnes above the past five-year average. At 9 million tonnes, wheat production was estimated to remain on the same level as the previous year but some 7 percent above the five‑year average. On the other hand, maize production was estimated to be below the average but slightly above 2014.
Since the 2013/14 season, the Government maintained high procurement prices, at EGP 420/ardeb (USD 400/tonne of wheat) to encourage additional planting and discourage switching to other crops. In November 2015, the Government announced that it would replace fixed prices with direct subsidies, providing each farmer with EGP 1 300/fedan (USD 162/fedan or USD 68/hectare) up to a maximum of 25 fedans per farmer. The Government would then purchase local wheat at the average global wheat prices prevailing during the harvest time. Following objections from farmers and agricultural cooperatives who argued that the current levels of support using fixed procurement prices were already insufficient and that the change would further decrease income and feasibility of farming, the Government revered back to previous supported prices of EGP 420/ardeb.
A national silos construction project is reported to be progressing well and is expected to increase the country’s wheat storage capacity from 1.5 million tonnes to almost 5 million tonnes; the new infrastructure is also expected to contribute to the minimization of post‑harvest losses.
Efforts are underway to increase water and land productivity as well as to utilize drought‑tolerant, higher‑yielding wheat varieties. Among other initiatives, the African Development Bank approved a USD 50 million loan for the Egyptian National Drainage Programme to develop or improve irrigation systems and to avoid water logging and soil salinity. According to the Government, the programme is expected to boost crop productivity by 15 to 21 percent for selected strategic crops, including wheat, and increase farm income by 40 percent for a typical 1 hectare farm.
In the livestock sector, in July 2015, the Government announced an increase in the funding to the “Veal Project” by EGP 300 million (USD 38 million) to make red meat more affordable. The original “Veal Project”, established in 2012 with EGP 450 million (USD 58 million), aims to improve livestock rearing to increase the rate of self-sufficiency in meat production by providing micro‑credit loans to small farmers at a low interest rate of 4‑7 percent, compared to the prevailing market rate of 16‑20 percent. High input costs and large share of imported feed are the main constraints preventing livestock expansion.
Cereal import requirements forecast at average levels
Egypt remains the world’s largest wheat importer. Wheat imports for the 2015/16 marketing year (July/June) are estimated at 11 million tonnes, about the same as the previous year and the average for the last five years.
The overall cereal import requirements in the 2015/16 marketing year (July/June) are forecast at around 19.3 million tonnes, about the same as the previous year and 9 percent higher than the five‑year average.
The country’s position with regard to tolerated ergot level is not clear at the moment. In January 2016, the General Authority for Supply Commodities has allowed for a 0.05 percent ergot level (in line with the Codex Alimentarius), while the Central Authority of Plant Quarantine demands shipments to be completely free of ergot.
Inflation rates increasing, electronic ration card system for food gradually rolled out
The annual food and beverage inflation rate was almost 15 percent in December 2015, compared to 8 percent in August 2015, supported by sharp increases in fruit and vegetable prices.
Egypt is progressing on the rolling out of the ration card system for food subsidies. Subsidized bread continues to be sold at the same subsidized price of EGP 0.05 per loaf (free market price of EGP 0.35 per loaf) with a maximum of five loaves of bread per person. Bakers are no longer allowed to buy wheat flour at subsidized prices but will be reimbursed by the Government based on sales data gathered from the smart cards. The new ration card system provides citizens with 20 private and Government‑procured products, including meat. It also aims to provide more balanced diets to the poor by extending the choice of commodities and contribute to the fiscal consolidation. Reports indicate that overall consumption in the areas where smart cards were already introduced decreased between 15 and 35 percent, presumably decreasing waste. A similar card system is being considered for fuel distribution.
According to UNHCR, as of December 2015, there were 120 000 registered Syrian refugees in Egypt.