Luxor4u

Egypt has just bought Russian wheat and Egypt is the largest buyer of Russian wheat in the world which is surprising because even Russian experts say the quality is “not too good” http://www.producer.com/daily/russia-wh ... -problems/. In the recent past the government of Egypt has agreed and rejected Russian imports for impurities.

It was not always the case because in the early 1950’s Egypt imported about 5% of its wheat. Its now 60%. Oddly local production has not gone well even though the government pays local farmers 15-25% more than the international price.

The wheat will be used for subsidized baladi bread which sells at about 1/5th to 1/30th its real cost leading to Egyptians consuming 3 times the world average of bread per head or about 210 kg’s per head per year. It seems that city areas get more of the subsidy per capita than rural areas and until recently the middle classes got a share.

Therefore international wheat is bought by the taxpayer to be sold at huge losses to local bakers and even more money is lost on the purchase of local wheat.

Egypt is the largest buyer of wheat in the world and has been this for many decades whilst its domestic production has been poor and not improving over the past 10 years. The problems in agriculture seem deep and linked to 70 year old heavy state planning and control. Indeed no country with state control of agriculture does very well in feeding itself.

By way of contrast Australia produces more than 24 million tons from about 50,000 farmers (possibly as few as 30,000 – almost all of them family farms) whilst Egypt produces about 8 million tons from a 4.3 million wheat farmers.

Australian wheat farms are large scale, non irrigated, laissez faire, low rainfall, low land productivity/fertility, high technology/science, drought afflicted and capital intensive whilst Egyptian wheat farms are very small scale (majority less than 1 hectare), always irrigated, state controlled, high wastage, some of the most fertile land in the world, low technology/science and low capital intensive.

In addition government run systems responsible for milling and storage seem to waste about 20-30% of the wheat they are responsible for, use primitive and over-staffed milling processes, bake 40% of the bread and allocate private baking licenses to political allies.

We export almost all we produce whilst Egypt has been the largest importer of wheat in the world for several generations – often around 12 million tons a year or 150% more than it produces. It imports about a further 9 million tons of cereals and its total imports of cereals/wheat grows at a much faster rate than its population.

In fact this year the 30/50,000 Australian wheat farmers will export more than twice what the whole of Egypt consumes and three times what it 4.3 million farmers produce.

In Australia, production and productivity has increased whilst Egyptian production has been basically the same for 10-15 years. This is odd because wheat growing in Egypt is a heavily regulated Nasser style industry with 10’s of thousands of bureaucrats managing it, farmers forced to grow it and forced deliver it to state controlled ‘silos’. However government training of farmers is not good and farmer access to loans from the Government Agricultural Bank hard.

None of these controls or limits on capital apply to large scale, overseas investors or corporate farmers in Egypt. As is often the case the weak are regulated and the rich free.

Al Ahram’s coverage of agriculture is about as informed as the Cairo elite is on rural issues generally. Its recent very large report on a very small purchase of Russian wheat by the Government of Egypt makes the ‘positive’ point that the deal was a good one because wheat export prices are going down. A 5 second check of market prices shows they couldn’t be more wrong. http://english.ahram.org.eg/NewsContent ... west-.aspx

http://www.fao.org/giews/countrybrief/c ... p?code=EGY

http://www.weeklytimesnow.com.au/agribu ... 340ae4d1bb

http://www.fao.org/3/a-i4898e.pdf

http://www.al-monitor.com/pulse/origina ... onomy.html

Last year the government announced a plan for wheat self sufficiency which Egyptian agricultural academic experts describe as a ‘fantasy’. http://www.thearabweekly.com/Opinion/53 ... ufficiency. In 2103 it announced that self sufficiency (a 150% increase in production) would be achieved by 2019 but local production has barely moved since that time. http://www.egyptindependent.com/egypt-s ... gram-2019/. Another government announcement in 2016 said that 80% self sufficiency would be achieved by 2018. http://www.china.org.cn/world/Off_the_W ... 392951.htm

Missing from al Ahram is the fact that the currency devaluation means the overseas purchase will cost twice the Egyptian pounds it costed last year – so 12 million tons will cost about $US2.4 billion. Other food imports added to this will exceed the total revenues from all exports and be more than half the total yearly tourism revenues at the present time.

As good as tourism is, Egypt needs to make a lot of money from other sources just to pay for food imports.

Maybe reform of agriculture to improve its productivity could be the way to go?

Maybe reform of agriculture to improve its productivity
could be the way to go?

You might think so.

I couldn't possibly comment .

newcastle wrote:

Maybe reform of agriculture to improve its productivity
could be the way to go?

You might think so.

I couldn't possibly comment .

We will just have to wheat and see on that one.

It's a total travesty when you compare these stats to the days of the ancients, when Egypt was essential to the survival of the Roman Empire and other countries.

The problem is that today Egypt's population alone outnumbers the whole population of the Roman empire at it height.

Horus you are correct and I agree with you but maybe the point is that technology and plant breeds have moved on in some places. Its also true that the current farming population of Egypt is now about 2/3rd of the total Roman Empire population. With better breeds and a much larger farming population you would expect output to substantially increase - particularly per head of the farming workforce. Nevertheless, and its hard to prove, I think its true that farm output per head of the farming population has decreased since 1952.

Figures are not available but I think its true that judged by its farming workforce output per head would be amongst the worst in the world - but this is a complex question that needs to take climate, water and technology into account and to compare like with like. Alas this is work that the FAO and WHO stays well away from whilst the UN does huge work to compare skills, regulatory and tax regimes etc between world countries.

The collection of agricultural data in Egypt is amazingly small - or maybe its just its publication that's small - so its very difficult to have a total picture let alone an informed opinion.

Weight and blame should be given to 70 years of UN agriculture 'expert' reports which have been coy and diplomatic - and rarely useful or frank. Its been 70 years of systematic decline and no-one has blown the whistle.

What I find interesting is that the Mubarak cowboy free enterprise was rarely (except for Toshka - which failed) applied to agriculture. So whilst they wanted full market capitalism it was only to apply to select urban activities - and only to benefit urban groups. De-regulation and market forces were never applied to agriculture which has always been run on Stalinist lines. Before this it could feed itself. Since then even though there has been a plant revolution, herbicides and pesticides and improved farming science and machinery - its gone backwards - whereas most other poor countries have gone forwards.

The above points are about agriculture generally - not just wheat.

Productivity and production of food is an issue because if anything is clear its that climate change will reduce water, increase heat/evaporation, put food production under pressure and increase food prices. Something for Egypt to think about because it could create both problems and opportunities.

Some 20 yrs ago or so, I met an Australian farmer who was on holiday in Luxor - a very interesting man.

He farmed considerable acreages mostly in Queensland. He was very disturbed by the concentration of farming in Egypt on Sugar Cane. He didn't know that at that time farmers couldn't afford commercial fertiliser unless they grew sugar cane, because the fertiliser for sugar cane was subsidised,

His point was that a lot of land in Queensland was very badly affected by growing sugar cane and he actually said " Sugar cane is a marsh grass. It loves the silt on the banks of the Nile, but basically keeping the fields as a semi-permanent marsh destroys the soil structure and makes it unsuitable for following crops." He estimated that in less than a further 20 years the production of farming could fall by 50%.

Fortunately about 10 years ago security problems made sugar cane growing right up to roads illegal and that may have helped to prevent a disaster.

I have often looked at Google from Satellite of our farm on the West Bank and noticed there are areas where nothing grows well, be it Mangoes or other domestic crops. I moved on to check the Neighbours and sure enough they had problems too. Our Farm previously belonged to a large sugar producing company, not local farmers. The whole area was down to sugar cane - except where the locals had made their way into the middle and had about 2 acres of grazing for their animals. It didn't matter to them apparently because it belonged to a company and not a person. Unfortunately that attitude remained for a number of years.

The other thing that must be taken into account is the lack of annual flooding, back in the day the land would be in effect washed allowing any build up of mineral salts in the soil to be removed and then a rich sedimentary deposit of around 1mm thick was laid down with each inundation. This does not happen any more and instead water is needed to be pumped for irrigation and when water is used in this manner it evaporates more quickly and leaves salts behind in the soil which do not get removed, parts of America are now finding this out. In Pharaonic times they could produce several crops per year from this flooded land with little additional irrigation required.

My friends brother in law has a very large sugar plantation, along with his two other brothers. He was telling me one day when I was invited to visit, on the West Bank, that they harvest twice a year, grow sugar for no more than three consecutive years, then revert to other crops for five years to recondition the soil, but he said that many do not give the ground a rest because then, four years ago, the returns were grater from sugar than other root crops or grain.

My garden of a couple of acres on the east bank was a vineyard and grew fruit trees mainly. After I took it over as I had been an organic grower in the UK I appropriated huge quantities of FYM from DHs farm which aroused his interest.

As he had given up growing sugar and was growing Mangoes and what I call domestic crops he did an experiment. Half of each plot of maize, wheat etc he gave a liberal dressing of FYM and no fertilizer, the other half had commercial fertilizer.

I never managed to get FYM from him again.