11 - 17 January 2001
Issue No.516
|
Al-Ahram Weekly On-line 11 - 17 January 2001 Issue No.516 |
||
| Published in Cairo by AL-AHRAM established in 1875 | Current issue | Previous issue | Site map | ||
Agricultural policies under fire
An ad hoc People's Assembly committee will begin its hearings next week on the impact of the liberalisation of agriculture policies. The committee was struck following severe criticisms by more than 150 MPs regarding a wide range of issues pertaining to agriculture. Deputies came down on policies including the liberalisation of the structure for marketing crops and pricing, the decline in the export of produce and the credit and banking policies for farmers.
Abu Bakr El-Basel, head of the Assembly's Agricultural Committee, told Al-Ahram Weekly that the committee, which was formed at the request of many deputies, will conduct an evaluation of the entire agricultural sector. Explaining the position of these deputies, El-Basel said that they believe that there should be more coordination among government ministries on policies affecting farmers. A lack of coordination, they say, was evident in the recent sugar and rice crises which adversely affected millions of farmers. Such a situation can only be rectified, according to El-Basel, if "the current conditions of the agricultural sector are subjected to a series of open discussions between officials and MPs."
The ad hoc committee will comprise the chairs and two representatives from each of parliament's committees for agriculture, irrigation and water resources, economic affairs and budgeting and planning. To fulfill its mandate, the committee will call on economic and finance experts from the state and private sector to offer their assessment of issues affecting agriculture.
For most deputies, it was no surprise that agricultural policies topped the priorities of the newly elected People's Assembly. El-Basel said that Egypt "is still an agricultural economy and half of the workforce is involved in agriculture." So when reports on the recent rice and sugar crises were presented by the Agriculture Committee, deputies seized upon the chance to launch a wide-scale attack on what they call "the conflicting policies of Prime Minister Atef Ebeid's government."
The report on rice took to task the ministries of agriculture and economy for the dramatic decline in the volume of Egyptian exports of this commodity. "There has been a total lack of coordination between the two ministries in this respect during the last two years," asserted the report. The reasons for its severity are clear when figures for 2000 are examined. With some 3.4 million tons of rice going to domestic consumption and 307,000 sold abroad, slightly less than 2 million of a total 5.8 million tons of rice produced in Egypt during 2000 languishes in storage. Deputies said the Economy Ministry could have done more to promote rice exports through its wide network of commercial representation offices in Africa, Asia and Europe
Failure to sell such vast quantities of rice caused heavy financial losses for almost one million farmers. "Most of these farmers are currently heavily in debt to the Agricultural Development Bank because the returns on the crop were too low for them to pay their debts," the report said.
Rice farming is a new activity for some of these farmers as the land used for the cultivation of this crop increased considerably with the liberalisation of agriculture policies. Prior to this, stringent regulations governed land use stipulating where and when crops could be grown. Because rice, which uses a great deal of water, was viewed by farmers as lucrative, it has subsequently been cultivated at the expense of other crops.
Deputies were particularly vociferous about the failure to enforce the LE500 a ton price for rice announced a year ago by Prime Minister Atef Ebeid. As a result, said MP and chief of presidential staff Zakaria Azmi, farmers fell prey to a group of private sector wholesalers who worked together to bring the price per ton of rice down to LE350. Nasserist MP's, who led the criticism of the policies for rice, said that Agriculture Minister Youssef Wali's recent announcement that the LE500 a ton price would be upheld, came too late.
In its report on sugar, the Agriculture Committee said the recent leap in its retail price from LE1.30 to LE3 per kilogramme was unjustified given that Egypt's three sugar-producing companies have almost 400,000 kilogrammes in their stores. Detailing the shenanigans in the sugar market during the last year, the report asserted that the decrease in duties on the commodity put consumers at the mercy of importers and wholesalers and jeoporadised local producers.
When duties were decreased on sugar, said the report, the market was flooded with cheap imports which threatened local sugar. As a result, the government intervened by raising duties to 26 per cent and distributing huge quantities of sugar to public sector retailers to be sold at a subsidised price of LE1.30 per kilogramme.
Although this inexpensive sugar was provided for the benefit of consumers, wholesalers took the opportunity to enrich themselves by purchasing this sugar in bulk and reselling it at higher prices to private sector retailers. In response to this move, customs duties were reduced again, the report explained.
But wholesalers were not the only ones to get rich due to these developments. Zakaria Azmi asserted that importers made LE800 million by flooding the local market with imported sugar.
While many deputies agreed that the market was being controlled by people who had little concern for consumers or domestic producers, they differed on the measures necessary to rectify the situation. Mounir Fakhri Abdel-Nour, a Wafdist MP and entrepreneur, argued that the government should not intervene by imposing higher duties on imported sugar to protect local companies. "Local companies should learn to live in a free market," Abdel-Nour said. In contrast, Abul-Ezz El-Hariri, a leftist MP, argued that imposing free market economics on the sugar market might lead to the destruction of local sugar companies which are not strong enough to compete with their foreign counterparts.
Minister Wali revealed that although the cost of local sugar is LE1,500 per ton (compared to LE1,350 for imported sugar), the government, for social reasons, sells the ton to retailers for LE1,300. "The government is keen not to burden citizens with any additional costs. The problem, however, is that this policy should not last forever. The price for this strategic crop must reach equilibrium to preserve the financial interests of sugar growers, employees of sugar companies and consumers," Wali said.
El-Basel told Al-Ahram Weekly that the ad hoc committee will probably witness stormy debates over agricultural policies in general. "Most of the deputies -- many of the new ones, in particular -- are involved in the agriculture sector and are anxious to tell people that they are powerful enough to change the policies of this sector to their favour," said El-Basel.
© Copyright Al-Ahram Weekly. All rights reserved
 |
|
|||||||||||||||||
| ARCHIVES Letter from the Editor Editorial Board Subscription Advertise! |
WEEKLY ONLINE: www.ahram.org.eg/weekly Updated every Saturday at 11.00 GMT, 2pm local time weeklyweb@ahram.org.eg |
 Al-Ahram Organisation |
