(Others) – Just as Egypt's late president Gamal Abdel Nasser garnered monumental popularity among Egyptian farmers by enacting a land reform law just a few months after he grabbed power in July 1952, President Mohamed Morsy has attempted to do the same, but without much success. In September, Morsy announced that all farmers' outstanding debts below LE10,000 taken from Egypt's Development and Agricultural Credit Bank (DACB) would be cancelled. While Egypt's small scale farmers were heartened by President Mohamed Morsy's promise this summer to cancel all farmers' debts under LE10,000 ($1,666), two months later, the farmers said the debt cancellations are only being applied to non-performing – i.e. delinquent –loans. According to Hashem Farag, a farmer in the small rural village of Bernesht south of Cairo and member of the small farmers' union, only nine farmers in the village have so far benefited from the president's decision. "While hundreds of the village's farmers believed the president's decision would improve their financial situation, only delinquents have seen their debts alleviated," said Farag. This contradicts earlier statements by the president. "There is talk that only delinquent debts will be written off," Morsy told a crowd of farmers in September. "This is wrong. All debts less than LE10,000 will be cancelled." "I hope bank employees will implement my decision," Morsy added. "I warn from any manipulation." Bernesht residents, meanwhile, continue to live in poverty, with dilapidated infrastructure and declining agricultural output. Raw sewage has overwhelmed a part of the village and the village's primary school is falling to pieces, while many farmers can't water their land given low water levels. Egypt's stretched finances makes upgrading the infrastructure a long term goal; forgiving small debts, however, seems as a more attainable. According to DACB President Mohsen El-Batran, the finance ministry has allocated some LE107 million ($17.8 million) to use for the purpose of cancelling the debts of 75,000 peasants, along with LE60 million for some 4,000 peasants in the Sinai Peninsula. Such amounts, however, were not enough to cover all farmer debts that meet President Morsy's criteria. El-Batran pointed out that only 'agricultural' loans that are partially subsidized at an interest rate of 6 percent were being cancelled. 'Investment' loans with an interest rate of 14 per cent, given according to the crops the farmer cultivates, will not be cancelled, he said. While many of Bernesht's farmers had hoped Morsy's initiative would ease their lot, these hopes have since been dashed. Bernesht resident Mamdouh Fahmi, for one, borrowed LE9,000 from the bank eight years ago, yet, although he has paid back between LE400 and LE500 annually, he still owes the bank some LE9,000. "I only pay the interest because I don't have enough money to repay the principal," he said. Beshir Mohamed, another local farmer, borrowed LE1,000 from the bank 20 years ago. Now his total debt stands at LE7,000. "I sold my only cow a few days ago to pay back LE3,000," he lamented. "I used to cultivate 40 carats of land; now, I have only three carats [1carat equals 175 square metres]." Farmer Amin Bayoumi borrowed some LE2,500 three years ago, but after his land was attacked by parasites, he was not able to pay it back. Accordingly, the bank allowed him to take out fresh loans, eventually raising his debt to LE12,000. Ironically, the bank considers him a good client even though he never paid back a penny. When asked about this, El-Batran advised peasants not to sign any documents without knowing first knowing their content. The problem, however, is that most village residents cannot read or write. "We know nothing about the bank system," explained Said Abdel-Ghani, another indebted peasant. "We agree to whatever they suggest, as we don't have any money to pay back our debts." Bayoumi's case is quite common. Many farmers have never paid back a piaster, but, due to loan recycling, they are considered performing clients. Therefore, they will not benefit from Morsy's decision. In the mid-1970s, the DACB became more of a commercial establishment. The bank needs profits to cover losses incurred by delinquent clients, but, in the process, it lost track of its raison d'etre – namely, helping small farmers. "Banks employees are given incentives on the loans granted," Beshir Saqr, a member of the Peasants Solidarity Committee, a NGO aiming to defend the rights of peasants, declared. "So in order to raise their income, bank employees do everything they can to encourage peasants to borrow – regardless of the latter's ability to repay them," Saqr added. In the 1990s, thousands of peasant debtors received jail terms for not paying their debts to the DACB. Under ousted Hosni Mubarak's regime, many initiatives were launched aimed at restructuring small peasants' debts, but none of these ever led to a solution. Making matters worse, many of Bernesht's indebted peasants began to face problems paying back their debts after a particularly bad harvest season some eight years ago, when the prices of tomatoes – one of the village's main crops – fell abruptly. Others suffered following an invasion of locusts in 2005. A few months later, an outbreak of foot-and-mouth disease killed much of their cattle.
