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Mixed harvest
Published in Al-Ahram Weekly on 13 - 12 - 2018

Egypt's agriculture sector saw improvements in 2018, with the government exerting efforts to increase the area of cultivated land by reclaiming land as well as upping penalties for building houses on agricultural areas.
However, many farmers suffered from an increase in production costs since fuel, fertilisers, seeds and wages have increased in price on the back of the floatation of the Egyptian pound and cuts in fuel subsidies. Farmers also complain of the lack of plans to market strategic crops such as wheat, cotton and rice.
The second phase of the government's mega-project to cultivate 1.5 million feddans was applied in 2018, providing 490,000 feddans for farmers and small investors. The project was launched in 2015 and is divided into three phases and covers eight governorates, among them the New Valley, South Sinai, Minya, Qena, Giza, Aswan, Ismailia and Marsa Matrouh.
Besides increasing cultivated land, another aim of the project, which costs LE60 to LE70 billion, is to help achieve self-sufficiency and fill the gap between food production and consumption in Egypt. It is expected to provide around two million job opportunities.
The harvest of the first phase came in 2016, and the infrastructure of the third phase is currently being built by Al-Reef Al-Masry, the company responsible for project management.
To preserve Egypt's arable land for cultivation, a law was issued in 2018 to raise penalties on those who build on agricultural land to two to five years in prison in addition to fines of between LE200,000 and LE1 million.
The first person who broke the new law was sentenced to three years in prison and fined LE200,000. The court verdict, passed in the Menoufiya governorate, also included demolition.
Since the 25 January Revolution, more than one million cases of illegal building have been registered. This has been especially the case in Menoufiya and Gharbiya, where there have been some 40,000 cases.
The local market also faced a shortage of fertilisers during the summer season of 2018. While the summer crops needed extra fertilisers, producers did not deliver the needed amounts according to deals with the Ministry of Agriculture and Land Reclamation.
The fertiliser companies delivered 618,000 tons of fertiliser during the period from March to June this year, instead of 1.34 million tons, according to figures from the Ministry of Agriculture. The companies prefer to export their products as this can be done at higher prices.
Minister of Industry and Foreign Trade Amr Nassar issued a decree in September to increase export fees on fertilisers to LE500 per ton instead of LE125 in response. The aim of the decision was to ensure local market needs of fertilisers and achieve a balance in the market.
While increases in international prices will help producers pay export fees, with prices for urea fetilisers reaching $320 per ton, they criticised the decree, saying that it aimed to increase the government's revenues because producers are not allowed to export unless they cover local needs.
Total exports of fertilisers increased during the first six months of 2018 to reach $548.2 million compared to $485.2 million last year.
Prices in the local market reached LE5,600 per ton of urea, which is sold in agricultural cooperatives at a subsidised price for LE3,290 per ton. The existence of two prices for the same product can encourage black-market activities, and the Ministry of Agriculture has formed committees to follow up the selling of subsidised fertilisers to ensure the application of subsidised prices.

BANNING RICE CULTIVATION: In an attempt to adapt to water shortages, the Ministry of Agriculture and Land Reclamation decided to limit the areas allocated for rice cultivation to 724,200 feddans in 2018 instead of 1.1 million feddans in 2017.
A feddan of rice needs 7,000 cubic metres of water, a large amount compared to other crops.
In 2018, rice cultivation was banned in 18 governorates, mainly in Upper Egypt, and charges ranged between LE3,000 to LE20,000 on farmers who violated the rules and cultivated rice in banned areas.
Some farmers cultivate rice since it brings good prices. Some experts also said that more than half of the land cultivated with rice was located in Lower Egypt near the Mediterranean Sea where it does not consume Nile water.
The government's strategy for rice saw it reduce the area cultivated in 2015 to 700,000 feddans, only to increase this to 1.1 million feddans in 2016 because of shortages in the market. It issued a decree to cut the land cultivated with rice to 700,000 feddans in 2017. Fearing a shortage of rice in local markets, the Ministry of Agriculture then increased the area again to 1.1 million feddans.
Local rice production was estimated at 3.3 million tons in 2017, and this figure was down to 2.8 million tons in 2018 leading to a gap between production and consumption. President Abdel-Fattah Al-Sisi gave permission to import rice with the aim of meeting local demand after limiting the areas allocated for rice cultivation.
This decision has turned Egypt from being a major rice exporter into an importer. In November this year, the Ministry of Supply and Internal Trade announced a bid to import rice to meet local market demand, expecting that Egypt will import around 500,000 tons of rice.

COTTON: Before the cultivation season for Egypt's “white gold” cotton, the Ministry of Agriculture and Land Reclamation announced that the minimum price for purchasing cotton from farmers would be between LE2,500 and LE2,700 per qentar (150kg), according to its variety, in addition to a LE100 premium if farmers delivered their crops before 15 October.
The decision aimed to encourage farmers to grow cotton in an attempt to protect the industry and regain Egypt's position in international markets. In response, cotton cultivated areas increased this year to 330,000 feddans, compared to 216,000 feddans last year and 131,000 feddans in 2016.
Total production reached 2.4 million qentar compared to 1.4 million last season and 700,000 in 2106, according to the Alexandria Cotton Association.
However, the government faced a problem of oversupply which continued for more than two months, with private traders being reluctant to buy locally produced cotton since the prices of imported varieties are lower.
Delays in buying cotton from farmers also made them lose confidence in the government's indicative price in other strategic crops and discouraged them from cultivating cotton. Many were obliged to sell their cotton to traders at cheaper prices.
The government has set out plans to restore this key sector by doubling the production of high-quality cotton after years of problems, yet experts have blamed the government for the lack of a clear marketing plan to help Egypt regain its reputation worldwide.
In 2018/2019, Egypt is expected to export around 65 million kg of long-staple cotton worth $150 million. In 1975, Egypt's exports of cotton were worth $540 million.

WHEAT: Despite an increase in land planted with wheat this year, the crop delivered by farmers to the government has been less than last season.
Last year, farmers delivered 3.4 million tons of wheat to the Ministry of Supply and Internal trade to produce Egypt's subsidised bread. Due to the increase in wheat cultivation from 2.9 million feddans in 2017 to 3.2 million feddans in 2018, the government expected to receive four million tons of wheat this year, but it only received 3.3 million.
In 2018, wheat production was estimated at nine million tons, compared to 8.4 million in 2017 and 9.3 million in 2016.
Some farmers store some of their wheat crop to cover their needs or sell it to private mills.
The subsidised bread system consumes 9.6 million tons of wheat, which means that the government will import six or seven million tons of wheat in 2018/2019, compared to 5.5 million in 2017/2018 and 4.4 million the previous year.
Egypt's total consumption of wheat in 2018 is expected to be 20.1 million tons, compared to 19.8 million tons in 2017. The increase in wheat consumption is attributed to an increase in the population.


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