Egypt changes bread subsidies to curb imports

[DJKeefy]

Egypt is changing the way it subsidises bread in a bid to better supply its most vital staple and reduce wheat imports by the world’s biggest buyer of the grain.

Rather than fund the production of bread made from the grain bought locally or via international tenders, the government will from August only subsidise the final sale of bread, according to the Supply Ministry. The new system aims to reduce wheat and flour smuggling, lower subsidy costs by at least 5% and curb wheat demand by 5% to 10%.

Egypt is closely watched by the wheat market because it spends billions of dollars on grain each year to provide bread for its 90mn people. The country is trying to clamp down on smuggling and make sure it doesn’t pay more than necessary to help feed its population, half of which live near or below the poverty line. Any reduced wheat demand may also help add to a global glut of the grain after years of bumper harvests. “The new system will reduce waste and cut the cost of monitoring all the stages of production, eliminating the black market,” Supply Ministry spokesman Mohamed Suwaid said by phone yesterday.

Under the new system, the state-run buyer will sell local and imported wheat to public and private mills, and those mills well sell flour to bakeries to make bread that the government will then subsidise, he said. Currently, the government pays millers to turn wheat into flour and then pays bakeries to make bread, before subsidising the final product.

“This will cut smuggling, save wheat and eventually reduce imports,” Suwaid said, adding that it will lower subsidy costs by at least 8bn Egyptian pounds ($447mn). It may “also improve bread quality, because now millers and bakeries will be paying for their own goods,” he said.

http://www.gulf-times.com/story/556350/ ... rb-imports

[carrie]

So no more subsidized flour for the people?

[Mad Dilys]

The poor bake their own bread - however it will increase sales and profits to the bakers.

[newcastle]

So no more subsidized flour for the people?

The subsidised flour was not going to the people....it was going to the bakeries.

What they then did with it led to a considerable "leakage".....unscrupulous bakers have long bought up cheap subsidized flour and sold it on the black market، costing the state millions of dollars a year in squandered subsidies.

[newcastle]

@ Keefy

Thank you for posting the Gulf News article in full.

Unsurprisingly, this Qatar-based outfit has been added to the list of sites blocked in Egypt.

[Dusak]

The flat we rented for the first six months here was directly opposite a local bakery. Twice it was raided as he was selling sacks of flour on the black market, as we witnessed most nights from our sixth floor balcony. There was never enough bread during the day time selling for the people, many fights to watch. Also well known collectors from just as well known restaurants, business that were not entitled to buy this cheap product to sell on. But each time he was raided, two days later he was up and running with a new subsidized stock of flour, the previous stocks were confiscated. These folk are well versed in finding ways to out do any form of restricted selling to make their cash, no matter how they change things for the so called better.

[newcastle]

The poor bake their own bread - however it will increase sales and profits to the bakers.

Can you clarify why you think so?

The test of the new system will be whether people can still receive their allocation of 5 loaves per day at 5 piastres each.....preferably without queuing all day.

If they can....then no problem.

If the bakeries demur, drag their feet , or whatever - then expect protests. In principle, the bakeries should not be concerned as the government pays them the difference between the cost of production and the 5 piastres they receive. How they react to the removal of their opportunity to milk the state at the expense of everyone else remains to be seen.

As Dusak says, they are renowned for finding creative ways to cream off subsidies, supposed to assist the poor, in order to feather their own nests.

[A-Four]

Throughout world history there have always been special rules and laws that governed the price and weight of bread, the staple diet of the poor in the Western world, from ancient Egypt to the Greeks, and on to the plebs of the Roman Empire, even in the days of the Emperors this such commodity was free in the city of Rome, as a gift of the Emperor.

So in truth the nations of the world knew how to keep its citizen in check long before the French Revolution. In 1266 a law was passed in England that lasted until 2008 that guaranteed that the bread had to weigh 800 grams, which was known as the loaf, and as most of our grand parents would have known the so called half-loaf being 400 gram. In 2008 the law was changed to allow the 600 gram, first produced by Tesco,........so I believe.

It is almost unbelievable that today in Egypt we find the bakeries are able to operate in such a fashion, there are so many tricks performed by these people. For example, most sell the subsidised floor to the poor as what is commonly called 'weighted', in other words mixed with grit to bulk out the weight. The bread sold by these such bakeries are very often sold under-weight with the attitude of take it or leave it.

Just before the so called (some may remember I have always called it this, simply because the real one has still to come) revolution, the government in Egypt was preparing a new law that would prevent the bakeries selling direct to the pubic and that ALL purchases had to be through local grocers shops, similar to how we see this as a normal practice, unfortunately other events occurred.

Other than Cairo, I no longer have friends living in Egypt in the places where it is possible to get a independant attitude to life in Egypt, believe me this certainly cannot be grasped in Luxor or its West Bank,.......and of course certainly not the so called 'man made' places such as Hurgarda or Sharm El Sheikh.

[A-Four]

Having written my most recent post above, I do not want to sound dis-respectful to the local ex-pats in Luxor and the West Bank, but during my time in Upper Egypt I often visited friends far away from Luxor, and it was at these places that I saw the real plight of the poor as they waited for up to five hours for two or three bread rolls.

I do note Dusak's comments though above with regards fights in Karnack, I was not aware of when I lived on the WB, we certainly were not aware of such shortages, until my last few days in January before the trouble in Cairo occurred, which I witnessed they were called 'the bread riots' where hundred attended, that was according to El Ahram, I was there, I saw thousands, and the police made no attempt to engage.

Be careful of the 'truth' of the press and Internet if you are an ex-pat, instead, I suggest to quote the good Dr here,........keep em peeled. .