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An abandoned harvest?
Published in Al-Ahram Weekly on 18 - 10 - 2018

The government is being blamed by farmers, MPs and many experts for its failure to deal with an oversupply in the cotton crop after it increased the area cultivated this season by 100,000 feddans to reach almost 330,000 feddans nationwide.
Before the cultivation season, the Ministry of Agriculture and Land Reclamation announced that the minimum indicative price for purchasing cotton from farmers would be between LE2,500 and LE2,700 per qintar (150kg) according to its variety, in addition to an LE100 premium if farmers delivered their crops before 15 October.
The cotton-ginning companies affiliated with the Ministry of Public Enterprises and the Ministry of Agriculture said they were committed to buying and marketing the crop.
However, farmers are complaining that since the harvesting season started in August the agricultural cooperatives have been reluctant to take their cotton. Private traders have withdrawn from some of the deals they signed at the beginning of the season as the prices of imported cotton are lower.
The moves come at a time when farmers are already under pressure as the previously promised indicative prices did not cover cultivation costs due to hikes in the prices of fuel, seeds, fertilisers and labour. Last year cotton prices reached LE3,300 per qintar.
In response to the farmers' complaints, parliament's Agricultural Committee held an emergency meeting on Thursday to discuss the issue and asked for an explanation from the government as to why it was not buying the cotton supplied by farmers.
The committee members said that this would have a negative impact on farmers who had been encouraged by the government's indicative price to cultivate cotton.
Omar Marwan, the minister of parliamentary affairs, said the government was committed to its previous decisions, adding that the issue would be solved but needed time. The Agriculture Ministry is in talks with the banks for a loan to help the Spinning and Weaving Company purchase cotton from farmers who have been left with a problem of oversupply, according to the Al-Mal financial daily.
However, experts believe that the government lacks a comprehensive marketing plan for cotton to help Egypt regain its reputation worldwide. Ali Abdel-Rahman, a professor of economics at the Agricultural Research Institute in Cairo, said the government's refusal to buy the cotton is discouraging for farmers and could even end cotton production in Egypt.
“Its refusal to buy the harvest will make the farmers lose confidence in the government's indicative price in other strategic crops,” he added.
“The two-month delay in taking the harvest from farmers will lead to financial losses for the farmers while benefiting traders and exporters. The farmers will be obliged to sell their cotton to traders who will buy it at a cheaper price,” Abdel-Rahman explained.
Cotton cannot be used for other purposes, and even storing it can be dangerous because it can easily be damaged by fire. It also needs strict storage conditions.
“Farmers are financially supported worldwide to encourage them to cultivate strategic crops. However, in Egypt the farmers cannot even exercise their right to sell their crops at a reasonable price,” Abdel-Rahman said.
The costs of cotton cultivation have spiralled to reach between LE15,000 and LE30,000 per feddan, of which 50 per cent is paid as wages to people hand-picking the harvest due to a lack of machinery, according to Abdel-Rahman.
Cotton marketing has been a chronic issue for years, since over 95 per cent of weavers are not able to deal with the long-staple variety of Egyptian cotton. They can also buy imported short-staple cotton at 25 per cent less than the price of Egyptian cotton, according to Abdel-Rahman.
He suggested that the government should have made an agreement with the Egyptian Cotton Exporters Association to be responsible for marketing the cotton harvest both in the local and the international markets.
Since 1994, when the government liberalised the cotton trade, Egyptian cotton has suffered from a series of problems, starting from a lack of high-quality seeds, cultivation costs and the lack of a comprehensive marketing policy.
The liberalisation of the cotton market limited the government's role in the cotton trade and resulted in private traders and textiles producers making use of farmers for their own benefit, according to Abdel-Rahman. Moreover, the land cultivated with cotton has declined from three million feddans in the 1980s to around 300,000 feddans today.
“To help cotton regain its position, the government should control the whole process, including cultivation, trade and weaving, because cotton is a strategic crop for Egypt,” Abdel-Rahman said.
The government should not export raw cotton, but it should focus on added-value industries based on cotton, Abdel-Rahman explained. “The total value of raw cotton exports could be increased five times if it is exported to the international markets as fabric,” he said.
New investments should be directed to establishing high-technology factories to deal with the Egyptian long-staple variety of cotton, targeting the exports of expensive garments to international markets, he added.
According to the Central Agency for Public Mobilisation and Statistics (CAPMAS), Egyptian cotton exports during the period from December 2017 to February 2018 increased by 181 per cent to reach 379,700 tons, compared to 134,000 tons during the same period the previous year.

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