GIEWS Country Brief: Egypt 18-February-2016

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  • 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 21.8 million tonnes, was slightly up from the level of the previous year and more than a half million 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.