EGYPT: Wheat subsidy system under strain

Egypt spends about US$1 billion a year to subsidize bread to feed its poorest people/Photo: IRIN

Milad Nadim, 49, from Helwan city near the southern outskirts of greater Cairo, needs to be on the street by 6am daily to stand in a long queue for subsidized bread, or his children will go hungry. He says he often waits 3-4 hours to get the bread, but insists he has no option.

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Russia’s 15 August decision to ban wheat exports – on which Egypt was heavily dependent – highlighted Egypt’s dependence on imports, sent international wheat prices higher, and appears to have caused some disruption in flour supplies to bakeries.

“The absence of cheap Russian wheat means the government will have to stretch the small budget to buy more expensive wheat in its bid to keep the poor silent,” said Abdurrahman Kheir, an Egyptian legislator and member of the opposition Progressive Unionist Party. “Failure threatens social and political unrest,” he added.

Egypt, which imports 40 percent of its wheat needs, pays US$3 billion a year to subsidize food (around a third of the subsidy goes on bread) in a bid to feed its poorest people. According to the 2010 Human Development Report, 20 percent of Egypt’s 80 million people are “poor”.

According to some estimates, Egyptians consume 220 million loaves of subsidized bread per day, and millions of poor Egyptians waste inordinate amounts of time queueing for this basic necessity. Egyptians consume an average of 180kg of flour a year, whereas individuals in other countries consume 80kg a year at most, according to Noamani Nasr Noamani, deputy chairman of the General Authority for Supply Commodities (GASC), a government office responsible for wheat imports.

Ali Sharaf, head of the Grains Section at the Egyptian Industries Federation, is confident GASC will be able to fill the gap left by the absence of Russian wheat.

“Current wheat reserves will cover local needs for four months at least,” he said, adding that Egypt had managed to find alternatives to Russian wheat “quickly” from suppliers in France, Argentina, Australia, Canada and elsewhere.


However, the Russian export ban will inevitably cause disruption, according to Sharaf, and might explain why there have been an increasing number of scuffles at bread queues across the country.

A 25-year-old Egyptian from Qena, 700km south of Cairo, died on 15 August after a fight broke out in a bread queue, according to the independent daily al-Masri al-Youm.

Local media have been reporting bread price rises and the appearance of smaller loaves. Al-Masri al-Youm said some bakery owners had reduced loaf sizes and were selling the flour thus saved on the black market.

Independent bakeries which used to sell bread for the equivalent of 4 US cents are now selling it for the equivalent of 6 US cents. At state-run bakeries a loaf goes for the equivalent of 0.88 US cents, media reports say.

The ruling National Democratic Party, which is preparing for parliamentary elections in October and presidential elections early next year, has repeatedly insisted that turmoil on the international wheat market will not affect the wheat subsidy system.



[This report does not necessarily reflect the views of the United Nations]