Toward a stronger wheat sector in Egypt
From technical consultations to public-private policydialogue, FAO’s work with the Egyptian Government and partners on Egypt’s wheat sector is leading to greater efficiency, regulatory changes and an environment more conducive to private sector investment. Egypt is one of the world’s largest wheat importers, owing to its limited agricultural land. Almost two-thirds of the total wheat supply is used to produce baladi bread, a staple flatbread.
The wheat sector has strategic importance, and the State is heavily involved at all levels of the wheat value chain, from subsidized fertilizers to subsidies for the final product. This has skewed the market and distorted incentives for private sector investment. While reducing public subsidies and relying more on the private sector promise significant cost savings, reforms are politically sensitive.
FAO’s foundation work – beginning with a joint analysis with the World Bank of Egypt’s wheat supply chain in 2011 and culminating in a thorough sector review with the EBRD in 2015 – enabled the Organization to play a leading role in public-private dialogue on sector reform in 2017 through an EBRD-funded project.
Following the dialogue, the Government removed costly inspection requirements at foreign ports and clarified import plant quarantine regulations. Domestic wheat procurement prices moved closer to import parity prices. The dialogue also led to the creation of the Egyptian Grain Suppliers Association, the first private sector institution giving grain suppliers a voice in discussions with the Government. FAO strengthened the technical capacity of the Association’s members and public institutions on grain fumigation, international grain quality standards and sampling procedures and regulated pests.
Later in the year, FAO, the EBRD and the World Bank, in collaboration with the Government, organized a high-level agricultural investment forum, where the country’s new investment law was presented. During the event, FAO signed a memorandum of understanding with a large Ukrainian grain trading firm to strengthen the efficiency of Egyptian companies involved in grain production, storage and transportation. The Government of Egypt also reaffirmed its commitment to promoting sustainable investment in agriculture by signing a joint declaration with the three institutions.
“This project was awarded one of EBRD’s ‘Policy Movers and Shakers Awards’,” said Iride Ceccacci, Principal Economist at the EBRD. “The awards, already in their third year, recognize the efforts and achievements of staff on projects that successfully combine investment with significant policy reform.”
Image by Nasser Nouri via Flickr (CC BY-NC-SA 2.0)