Al-Ahram Weekly 18 - 24 November 1999 Issue No. 456
Published in Cairo by AL-AHRAM established in 1875

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Bitter harvest for 'sweetest' sugar

By Fatemah Farag

Once, the sugar cane harvest in Upper Egypt was a time not only for hard work, but also for general festivities, as the machinery of the Egyptian Sugar Company factories were once again set in motion. This year, however, the mood is one of apprehension. Anxieties about the future of the national sugar industry have cast a shadow over preparations for the new season. For the past three years, public sector factories have found it extremely difficult to sell their product. The market has been glutted with cheap imported sugar. According to a recent government announcement, there are now 1.4 million tonnes of sugar in storage.

Responding to this sense of impending disaster on the ground, Prime Minister Atef Ebeid recently issued a series of statements addressing the crisis situation, albeit indirectly, in which he declared that sugar imports would not be allowed to affect the national industry adversely.

Ebeid also announced a number of measures to remedy the present situation. The government will pump large quantities of sugar into the market at 130 piastres per kilo of packaged sugar and 125 piasters per kilo for unpackaged sugar. These prices will not change before the end of Ramadan. Also, beginning this month, customs tariffs on raw sugar have been increased from 5 to 24 per cent and on refined sugar, from 10 to 26 per cent. However, Ebeid also made it clear that no restrictions would be placed on the import of sugar, and that Egypt would abide by the international trade agreements it had signed as part of the GATT process.

To get a clear sense of the magnitude of the challenge facing the industry, Al-Ahram Weekly decided to approach the producers themselves. The main gateway to the Kom Ombo Sugar Factory complex can be found in the centre of the town, on the aptly-named Sugar Company Street. It is a rambling complex, extending over 200 feddans, and made up of buildings which have every right to show their age -- the plant having been opened in 1890.

Production is scheduled to begin in the first week of December. Already, the factory is a hive of activity, as workers busy themselves to finish all the required maintenance tasks. "This is a crucial time," explained one employee, before he turned to attend to the requests of a long line of workers waiting at his door. "One third of our annual maintenance work is done in the month of November."

Everyone we met was very proud to be involved in sugar. "We are very protective of our industry," explained Abdel-Hamid Tantawy, the head of the factory. "For us -- by which I mean most people in upper Egypt, not just the factory workers -- sugar is a way of life. When we start production, the whole town comes to life, not just in Kom Ombo, but in Edfu, Armant, Abu Qirqas, Qous, Girga, Dishna, Naga Hamadi and El-Hawamdiya. Everywhere you look, there's a sugar factory close by."

Tantawy is a genial, thick-set man with heavy eyebrows. Everyone makes it plain to us that the only reason we are being allowed to interview him, as he sits behind his desk, is because production has not yet begun. Once the real work starts, he lives on the shop floor.

The workers have the respect not only of their managers and colleagues, but also of the wider community. Everyone in Upper Egypt is aware of the crucial role they play. "The factory is the most efficient part of the state," Hag Ahmed Awad, a farmer from the village of El-Edwa who sells the factory 50-feddans worth of cane every year, told us. "They take their work seriously and do not put on airs." Over in Edfu, Ibrahim Hussein Khalil, former head of the Sugar Cane Department at the Edfu Sugar Factory, a post from which he retired in 1994, explained: "The factory is organically linked to the communities around it. When farmers complained that we were not weighing their harvest properly, I would tell them: Do not be ridiculous. These are your children, your cousins. Are they going to cheat you?"

The central role played by the industry in the lives of many Upper Egyptian communities is well understood by senior officials at the Kom Ombo factory. "One of the company's major functions is social," Tantawy told us. "This is even more important than our economic role. We are the focus of employment in the area and an incentive for land reclamation. Here, sugar cane has huge social ramifications. Here, we manufacture sugar cane."

That is why the company signs contracts to buy cane in quantities well beyond its own capacity. "In this region, large areas of land have been reclaimed," Tantawy explained. "This is a continuous process, supported by state policy. We cannot refuse anyone who comes and asks for a contract, because we are responsible before the government for the implementation of the ambitious projects of the Ministry of Agriculture. That is why we accept the harvest even at times which are not cost-efficient for the factory."

The sweetness of the sugar cane harvest is optimal between January and mid-April. However, to accommodate the increasing amounts of sugar cane being grown, the factory now has to process cane in December and May as well. "If you calculate what this means for the company, you will find we make nothing but a loss out of it," said Tantawy. "At those times, every kilo of sugar requires 13 to 14 kilos of cane. Compare that with January, when for every kilo of sugar I only need 10 kilos of cane."

This is a paradox the company will continue to face as long as land continues to be reclaimed and the price of sugar cane remains constant. Tantawy spelled the implications out for us. "Today, we take cane from 50,000 feddans," he said. "Ten years ago it was 35,000 feddans. That is an increase of over 30 per cent."

The sugar companies are prepared to swallow the bitter pill of inefficiency, however, because their mandate includes a social role. They are not simply machines for making money, as Tantawy was at pains to stress. He gave us another illustration of how this commitment translates into policy: "In one day during the juicing season, we process 1,200 cars. Each car needs about ten workers, which means you are responsible for the employment of 12,000 workers per day outside the factory fence. Within the fence, if we calculate there are 1,500 seasonal workers, 800 temporary workers and 1,700 full-time staff, then we employ about 5,000 people. That is close to 20,000 workers every day -- and we have not even calculated the number of farmers who are involved in the process!"

The month of November is the contracting season. Farmers come to the factory to arrange contracts for the year 2001. Armed with these pieces of paper, they can then go the bank and obtain loans which will give them enough to live on for another year. Yet this apparent service is in fact just another pitfall awaiting the unwary. This time, the victims are the farmers themselves.

Khalil explained the trap to us. "The way the system works," he said, "the farmer can get a contract 12 months in advance of actual harvesting, by way of which he can get a loan that will feed him and his children for a whole year. He lives off the debt and makes very little. The loans he gets on the feddan amounts to around LE2500. When he eventually sells, he will probably make around LE4000. By then he owes the bank LE3000, so he nets LE1000. What do you think that will cover for a family of five?"

Khalil's family grows cane for the factory like many others. "I think the farmers who grow sugar in our area are like people on drugs. The new land laws have drastically increased the rent -- can you believe it is now about LE1,500 per crop to rent a feddan of land? Most people average around two feddans per family. Then there is the bank, the cost of fertiliser and water. It's a hard living."

The condition to which today's cane farmers have been reduced is especially distressing for Khalil. He was one of the first men to be employed by the Edfu sugar factory when it was built in the early '60s. At the time, the land round about did not grow much sugar cane. "The government insisted on building a factory in the area, however, and what they built had the capacity to process 1,150,000 tons of cane," Khalil told us. "For the first ten years, the factory only worked three months a year at less than half capacity. Then, a more directive policy was introduced, people were put under pressure, and the farmers eventually started growing more cane. It was not easy to get people to grow something they were not used to. It was the policy of the government that really changed the agricultural map of the area. Anyway, we finally reached the factory's one million ton capacity -- 15 years later."

The factory naturally offered services and generated a kind of wealth in an area where both money and modern facilities had previously been scarce. According to Khalil, "the companies played a very important role in the lives of their workers. We had all kinds of benefits like housing or transportation, trips and health care. Today, it is no longer the same. Today all people can hope for is their salaries at the end of the month."

When asked about the ramifications of state policy, Khalil seems unconvinced that they were always positive.

"In the early sixties, we could still grow traditional crops here," he told us. "But the state policies have created a modern generation of farmers. For the farmer, cane is a product which does not require much effort. You plant it and then you wait 12 months to reap the harvest. In addition, you usually have to employ people to harvest and carry the crop. It is not like other products where you have to harvest twice a year, and there are certain stages you really have to be involved in personally. The original farmer has become extinct."

Khalil's son, who cultivates ten feddans of sugar cane, smiles at his father's words, before adding: "He sometimes has very little sympathy for the farmer." Upon being checked, the old man acquiesces: "Of course, I should add that even if a farmer was to make the effort to return to the traditional crops, the income he would make would not be worth the effort. We used to be famous for our fava beans, but that was when the earth was more hearty and the climate better. Now there are the water shortages. In our heat, if you have a more delicate crop such as vegetables, and the irrigation doesn't reach you on time, and this happens again and again, then you stand to lose your whole crop. Then what?"

Khalil sits back and broods. "Of course, you must also realise that the income you can make from cane is not that much. If the farmer didn't get bank loans and just lived off of the actual income, it would not be worth the effort either. Twenty-five years of my life, my job was to increase the land available for sugar cane. The more cane was grown, the more we were seen as successful. If I was still at the factory, I would be devastated by what is happening today."

Even as we speak, however, this year's contracts are being signed. Everyone is living in anticipation of the start of production, which is scheduled for the first week of December and will continue until mid-May. Ahmed Bastawy is an agricultural engineer in the Sugar Cane Department at the Kom Ombo factory. Last Tuesday, Bastawy and his colleagues were out in the fields taking samples for a final forecast before harvest. "We have to cover all the land that is being cultivated with sugar cane, even if the farmers are not contracted to the Kom Ombo factory," he explained. "Then we are responsible for notifying farmers as to when they have to deliver, and they make their harvest plans accordingly. We call this the 'breaking plan', because cane is harvested by breaking the stem off just above the lowest mark. The roots are left in the ground for five years before they are changed. The date of the harvest is important, because the next harvest will take place exactly 12 months later."

Despite the fact that the factory is already struggling to keep up with the rapidly increasing volume of cane that is delivered to it, farmers are complaining that they have suffered greatly as a result of the "security belt" -- the precautionary clearances imposed by the government in 1992 in an attempt to minimise the danger of attacks by Islamist militants on main roads, railway lines and the river Nile.

"We have been devastated," Hag Awad asserted emphatically. "There were never any terrorist operations here, and yet they razed 200 metres of cane crop on both sides of the Nile, the railway tracks and the main roads. In effect, they were executing a death warrant on huge expanses of the most fertile land." He paces up and down the blue carpets that cover his large guest room, before pausing to explain: "Sugar is a national commodity. It is a commodity which must be protected. Some people say that the cane takes too much water. But we are willing to put in modern irrigation systems. Besides, in the last three months of the crop's life, it is not given any water at all. The bottom line is that I cannot grow anything else and make a living." Awad stops, sits down and glares at me. "Do you know that the first thing a new-born child suckles in our parts is a piece of sugar cane?" he asks accusingly.

The neighbourhood irrigation officer who was with us requested that his name be withheld. But he did tell us that although sugar cane did take more water than other crops, it was the only crop that could not only stand up to the heat -- temperatures make beetroot an impractical alternative in these southern governorates -- but also bring in cash. "Besides, we are signing permission sheets for people on newly reclaimed lands to grow sugar cane," said the officer. "That is much more costly. It would be better if they freed up the 'security belt' and let people grow there."

Awad chimes in, "We are the only people who should be given the right to vote on such state policies. In parliament you have a member for the governorate of Sharqia, and he says, 'Raze the cane.' What does he know? Many people are afraid to voice their needs. Those of us who have searched for a solution have become totally lost in our travels between the Ministries of Supply, Agriculture and the Interior."

In the meantime, the only solution imaginable is more credit. "The banks are out to get you," lamented a farmer who grows cane for the Edfu factory. "They offer all kinds of loans to people who are desperately in need of them. There is what they call an 'investment loan', which people take out when they have a child who is going to get married. There is a 'camel loan' and a 'sugar loan'. If you know the right people, you might be able to get a loan on a larger piece of land than you actually own. Every year you pay, but you're still sinking further and further into debt. On paper, you think you are alright, but in reality you are living on the edge of a knife. We have been pushed into an urban life. People can no longer really live as farmers. But they haven't been given the means to live the modern life either."

Farmers may worry about quantity, but quality is an issue too. "No one seems to be concerned with the quality of the crop itself or the research we need to find better, sweeter strains," says Khalil. "Every strain of sugar cane has a lifespan of 30 years. After that, it loses much of its quality and becomes highly susceptible to disease." Khalil speaks from experience. "We experimented with three or four types, the best of which was number 310. However, in the end it fell foul of a disease called tafahoum, which is just like cancer. This disease swept through the whole crop. All the farmers use the type of cane chosen for them by the Ministry of Agriculture and the Sugar Company. For about 20 years now, we have been using the C9 strain. Even if it does not get sick, it will decrease in quality. Yet it seems that the research departments have not been testing any new options. This is a problem no one seems to want to talk about. If C9 gets sick now, the whole crop could be wiped out and all of us ruined. Instead of just one option, you would have expected them to have two or three alternatives ready."

The complexity of the issues has one's head spinning. Is all the effort that goes into Egyptian sugar really worth it? It's a question that would shock anyone involved in the industry. "Our sugar is so sweet," one Edfu official told us. "It is much better than that Cuban sugar."

Living on the edge of a knife: Soon farmers will harvest their cane and in the meantime workers at the Kom Ombo Sugar Factory get machines ready for the incoming harvest. As everyone goes about their work, shoulders are burdened with questions regarding the future photos: Khaled El-Fiqi

Overseeing maintenance at Kom Ombo, Engineer Mahmoud Hussein Abdel-Hafez explains the sugar extraction and refining process. "We have three production lines which work 24 hours a day during the season. We break up the cane into fine threads, like konafa, in that way we can extract the juice easily. It is a Jews' industry," he adds, "every little bit of by-product is utilised and there is no waste at all."

The machinery around us may not look like much, but we were assured that the Egyptian industry is fully up to date with the most advanced sugar extraction and refining technologies.

The rest of the process, described in very simplified terms, goes as follows: Part of the pulp that is left over from the crushing phase is sent to the boilers, where it is burned and the steam used to generate electricity which operates other sections of the factory. Another part of the pulp is sent to be used in other industries. In Kom Ombo, it is used in manufacturing compressed plaques, or MDF; in Edfu, it helps feed a paper plant. Meanwhile the juice is sent to the front of the factory, where it is treated with additives to remove impurities. These impurities are then taken to an area called el-morashahat el-tiyniya where they are picked up by farmers who use them as fertiliser.

The purified juice is heated under pressure, and undergoes a first phase of evaporation. At the end of this process the prix of the juice (the percentage of solid materials in solution) has been increased from 14-15 per cent to 65 per cent, forming a syrup which is then set to be cooked. By the time the concentration process has been completed, the prix will have reached 98 to 99 per cent. The final step is for the grain to be separated out from the remaining liquid, then dried and packaged. Hussein explained that it was Egyptian engineers who invented the Egyptian Diffusion Device, which is now used all over the world.

Sugar is not the only product to be obtained from this process. As well as feeding the wood and paper industries, by-products are also used in the making of alcohol and perfume. At the end of our tour of Kom Ombo, we were treated to a neatly wrapped package of assorted perfumes, "So that you can see for yourself the quality of our by-products," in the words of our host Tantawy. Inspecting our Lavender, Star, Lemon and Regency fragrances on the way home filled the airport lounge with scents blessed with an extraordinary staying power, if little else.

Once the process is completed, the packaged sugar is sent to the warehouses. "The company used to be able to sell everything -- that is, up to three years ago," said a vexed Tantawy. "Today, our company has 835,000 tonnes which have still not been marketed. All of this is Egyptian sugar. It is stagnating as a result of the chaotic way in which we import sugar. The importers bring in second-rate sugar at very low prices. It is a serious challenge, even when the quality of Egyptian sugar is definitely higher."

A worker at Edfu adds, "The sugar in the storage houses of our factories is last years' product. If there were to be a fire or severe rains, or even if there were no natural disasters, the sugar will get solidified if it is stored for too long. It might even have to be put through the refining process all over again to make it fit for human consumption."

Currently, the Kom Ombo plant processes 12 thousand tonnes of sugar a day. There were plans to increase this quantity to 18 thousand tonnes, but according to Tantawy, they have had to be put on hold. Yet despite so many setbacks, he added, "we have been reassured by the position taken by the prime minister and the president to protect national industry."

Repeated requests to interview senior officials at the Sugar Company's head office in Cairo met with a stone wall. However, as far as those working in the fields and on the shop floor are concerned, the dangers confronting the industry are clear.

"Basically, I think the main danger today is the GATT agreement, which has allowed imported sugar to flood our markets at very low prices, cheaper than the cost of producing sugar in Egypt," Khalil concluded. "To me, the government seems to be fighting with itself. The farmer wants his money, and the company is drawing down its accounts to cover its responsibilities, and of course the debt to the bank means more interest, so we are talking about huge sums. It has become a problem which is much bigger than the people you see here, whether they are the farmers or the workers at the factory."

In the meantime, the people in Aswan suggest you buy Egyptian. "You want to know which is Egyptian sugar?" asks Hag Awad. "Look for the sugar that dissolves fully in your tea and does not leave any particles. Search for the sugar with the best sweetness in the world."

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