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Where did the subsidy go?
Published in The Egyptian Gazette on 20 - 08 - 2011

CAIRO - Nothing has changed in the agricultural sector; conditions before and after the outbreak of the revolution are the same, or have become even worse.
It seems that remnants of the former regime have recommended their followers to continue plundering the agricultural sector. Their violations have caused Egyptians to be deprived of food they need and include filching LE 1.6 billion ($2689 million), namely the fertiliser subsidy offered annually by the State.
Consequently, farmers and cultivators are buying fertilisers produced locally at high prices, exceeding the global price, while the Ministry of Agriculture is turning a blind eye. The prices of most agricultural requirements, such as fertilisers, are expected to continue to rise. Shortages in the market are no new thing, having occurred in 2007, when the price per tonne of fertiliser tonne ranged between LE 700 and 800 before disappearing from the local market.
At that time, the then Minister Amin Abaza started to point out the cost to the State, which it could ill afford, in subsidising fertilisers, while claiming that the farmers and cultivators were making excessive use of these products.
He called for the necessity of liberalising the fertilisers market, since the agriculture sector had already been liberalised. Abaza then decided to raise the price of a tonne from LE 800 to LE 1,500. However, to meet their needs, the users had to resort to the black market and pay LE 3000 per tonne.
A lack of fertilisers for agricultural land is a nation-wide problem, affecting farmers and cultivators in both Lower and Upper Egypt.
One farmer, Ahmed Taha, complained to Al-Akhbar Arabic newspaper of the State's slowness in finding a solution to this problem.
He and his colleagues went to the Agricultural Association to receive their quota of fertilisers, but they have not received their quota and the officials claim that the fertilisers have not yet one.
However, Ali and colleagues discovered that the products had already come and had gone down the black market road to stores in the private sector.
The farmers have not been able to do anything, due to there being no controlling body that could respond to their complaints, farmer Soliman el-Saadani, told Al-Akhbar.
Hussein Abdel-Salam also complains of being robbed of the subsided fertilisers and asks who can save the oranges and vegetables on his land at Sadat City, Menufia Governorate, which crops are threatened due to the lack of fertilisers.
Another cultivator, Mohamed Attallah questions in whose interests is it to buy a tonne of fertiliser at LE 4000 while it is exported for only LE 3000. So, where did the subsidy go?
The annual production of fertiliser reaches 17 million tonnes, including eight million allocated to the local market, which is less than its needs, while the remainder is allocated to the export market.
These problems are being intentionally created and exacerbated claims agricultural engineer Mohamed Gomaa, who points out that cultivation during the summer season requires more fertilisers than in the winter season.
However the rules of the game are controlled by both the fertiliser plants and the agent. The plants have decided on the quantity needed and, according to privatisation regulations, the State has no authority over a plant in its production.
Only two of Egypt's nine fertiliser plants are owned by the State, while the other seven were sold to Egyptian and foreign investors, who prefer to export their products rather than meet the needs of the local market.
Additionally, the distribution is controlled by a number of agents, one of whom is a brother of the former minister, whose policies resulted in a market monopoly.
Although the current Ministry of Agriculture Salah Youssef asserts that he is sparing no efforts in raising fertiliser production to meet the increasing demand, a couple of fertiliser plants are insufficient to cope with the needs of the local market.


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