Egypt. Good start to the wheat season

This year’s wheat harvest will be one of the best in terms of area under cultivation, according to head of the Egyptian Farmers Syndicate Hussein Abu Saddam.

Some 3,650,000 feddans (a feddan is slightly larger than an acre) were cultivated this season, the largest area ever, according to Abu Saddam. Moreover, as an incentive to farmers, the government has set a record price of LE1,500 per ardab (about 150 kg) for the wheat it purchases from them this season. This is 74 per cent higher than last year’s price, according to Minister of Finance Mohamed Maait.

Ashraf Kamal, professor of Agricultural Economy at the Academy of Agricultural Research, is equally upbeat. “This is an outstanding season thanks to the government’s strong policies in favour of farmers,” he said. He pointed out that the government had initially set the price of an ardab of wheat at LE1,250, but then raised it to LE1,500 in sufficient time before the agricultural season began.

“So far, it looks like this is going to be a great season in the light of the hike in the purchasing price for local wheat,” Kamal said. Setting a decent price and announcing it well before the sowing season was the best incentive the government could offer to encourage farmers to plant a crop, Kamal said.

The government has always pursued this policy with strategic crops. Most recently, it applied it to seed oil and animal feed crops such as corn, millet, soybeans, and sunflowers.

Wheat is a priority crop because the more abundant the local crop, the less wheat the country needs to import. Domestic production covers between 40 and 45 per cent of what is needed. Egypt produced around 10 million tons of wheat last year and imported around 11 million.

According to Kamal, the harvest season, which started at the beginning of April and lasts until the end of August, began in Upper Egypt and the New Valley before beginning in the central governorates and the Delta.

The government has also taken a number of measures to make it easier for farmers to deliver wheat to government silos. “It has set up 439 collection points for wheat close to harvest areas in order to ease the transport and freight burden on farmers,” said Abu Saddam. “Also, it has accelerated the payment process so that now farmers can receive their payments within 48 hours. Obstacles have been minimised, and farmers are given encouragement through guidance seminars.”

The Ministry of Supply had taken better decisions this year than last year, he said. Last year it required farmers to deliver a minimum of 12 ardabs of wheat, whereas this year delivery is optional. The government has also prohibited using wheat in fodder manufacture and to feed livestock and fish, and it has cautioned against shipping wheat from one governorate to another without notifying and receiving approval from the Ministry of Supply. The purpose is to curb stockpiling and monopolistic practices on the part of some traders.

Abu Saddam anticipates a crop yield in the neighbourhood of 10.5 million tons of wheat. “This year, the government has set a target of four million, and I expect it will have no difficulty in meeting its target,” he said. He went on to explain that among the reasons for the high wheat productivity this year was the high quality of the seed that had been made available to famers and the excellent weather conditions for growing wheat.

Haj Galal, a wheat farmer from Upper Egypt, agreed that LE1,500 per ardab was a fair price for wheat this year when compared to LE850 last year, especially for farmers who had large areas of land under cultivation. He also approved of the government’s decisions regarding the distribution of subsided coarse bran, a milling by-product.

Minister of Supply Ali Moselhi has announced that the government will disburse 10 kg of coarse bran from the ministry’s wheat mills for every ardab of local wheat received at collection points. The farmer or trader will be required to submit a photocopy of the document that certifies the delivery of the harvested wheat to the collection point, stating the quantity, place and date.

According to Kamal, one of the greatest problems farmers face, apart from bad weather conditions, is the fragmented structure of land tenure. “A small farmer, with only a quarter or even three-quarters of a feddan of land, finds it hard to afford to hire a special truck to take his harvest to the silos. So, his only option is to sell it to a trader to deliver it for him even though he will receive a smaller amount of money for his wheat than he would directly from the government.”

Mohsen, a small farmer from Qalioubiya who owns half a feddan of land, is in the position Kamal described. He told Al-Ahram Weekly that “I’ll sell my crop to a trader who’ll pay me LE1,430 per ardab, which is less than the government rate, to deliver it to the government silo. But then, I’ll have a problem getting the coarse bran to use for animal feed because the government gives the bran directly to the people who deliver the wheat.”

“I’m not sure how the trader is going to deal with us. Will he agree to give me the subsidised bran? Normally, it costs LE11 a kg in the market.”

On 7 May, Moselhi cautioned traders and anyone else who delivered wheat on behalf of small farmers against trading in the subsidised bran that the government distributes in exchange for local wheat deliveries. The intermediaries are obliged to turn over the bran to the farmers and could be subject to legal action if they fail to do so, he said.

Kamal told the Weekly that in addition to incentivising local wheat cultivation, the government has also taken other measures to ensure a sufficient domestic wheat supply. It has diversified its wheat imports, especially in the wake of the Russian-Ukrainian war. These two countries together account for 30 per cent of the world’s grain exports.

Currently, the government imports wheat from Bulgaria, Romania, Serbia, Canada, Argentina, Australia and other countries, Kamal said. “This keeps prices down and helps the government avoid having to pay unfair prices.”

Tags: Egypt, wheat, imports