Bakers, millers protesting new contracts CAIRO: The ongoing conflict between government-subsidized bread bakeries and the Ministry of Social Solidarity (MSS) has reached a new height this week with bread producers now threatening to take their case to the High Constitutional Court if the ministry does not agree to amend its new proposed contract. Hassan Mohammady, secretary general of the Bakeries Division in the Federation of Chambers of Commerce, says he hopes upcoming meetings with Minister Ali Moselhy and Prime Minister Ahmed Nazif can resolve the dispute. The next option, he says, is to challenge the contract s constitutionality. We re not opposed to the idea of signing a contract with the government, says Mohammady. But that contract cannot put the entire burden of bread quality on the bakers alone because they do not control the entire process of production. Moselhy is trying to push forward new contracts with flour mills on one end and bakeries on the other to improve the quality of subsidized-bread and cut down on black-market selling of subsidized wheat and flour, while continuing to make available bread at LE 0.05 per piece. The moves on both fronts have been with strong resistance with millers and bakers, claiming the new contracts are unfair. For bakeries, MSS is pushing a new voluntary contract with bakers that it claims puts the ministry in charge of flour quality and bakers in charge of bread quality. Bakers, the contract states, have the right to refuse flour if they find it unacceptable. All [MSS] is saying is we are responsible for providing high quality flour, so the bakeries should be responsible for providing high quality bread in return. It s that simple, says Fathy Abdel Aziz, head of the Central Authority for Distribution in MSS. We re trying to convince people to enter into this contract. That is why we made it optional. Abdel Aziz says the new contract puts a five-member board in charge of supervising bakeries and citing subject-to-appeal, non-criminal violations. The old system put bakeries under the mercy of Ministry of Supply officers who had long held a reputation for demanding bribes and had the power of citing criminal charges. Those who choose not to sign on will not be punished, says Abdel Aziz, but will have to abide by the old system and submit to GASC check-ups. But Mohammady says most bakeries do not have the necessary equipment to test flour quality. Moreover, in a closed system, he says bakers cannot even afford to refuse low quality flour that might be put out by the ministry. He says he welcomes a new contract but MSS should put more trust in bakers. If we are the producers of this product, we re also the consumers of this product, says Mohammady. So we have a vested interest in producing a quality product . These [bakers] are the same people that held the country up during [the wars of] 1973 and 1967. Is this how we thank and honor them, by throwing them out on the street? Abdel Aziz says the bakers fears are unfounded. He says the ministry is only aiming to ensure subsidy money is not wasted and that only quality bread reaches consumers. Moselhy recently decided to increase the bread-production subsidy budget by LE 1 billion to total LE 9 billion annually. More than LE 700 of the increase will be allocated to bakeries, with the rest going to milling and storage, says Abdel Aziz. Any change must be hard to accept at first, says Abdel Aziz. And we ve always said we re open to negotiation on any part of the contract the bakers decide is unacceptable or unfair. On the milling side, MSS will soon require flour mills to import their own wheat, extract flour and compete in public tenders to provide the ministry with the best prices. No date for implementation has been announced by the ministry. The millers have asked for a three-year period to prepare for the new system, but complain the ministry is unwilling to grant them the time. Hassan Badawi, head of the Mills Division in the Federation of Egyptian Industries, says in order to produce the minimum of 9,000 tons of flour in three months, as required by the ministry, the average mill will need LE 10 million just to import the wheat. The sum, he argues, is far beyond the capabilities of the average mill. Egyptian flour mills have traditionally relied on purchasing wheat imported by the Ministry of Supply, which was dissolved in Dec., 2005. The General Authority for Supply Commodities (GASC) is now responsible for importing and distributing wheat.
