Sowing the right seeds
The government says it has a bumper wheat crop, but farmers and agricultural experts claim there is no cause to celebrate, Mona El-Fiqi
investigates the difference in opinion
Last week Minister of Social Solidarity Ali Meselhi, announced that his ministry had received 3.1 million tonnes of wheat from farmers. The amount is high compared to last season when it was estimated at 2.6 million tonnes. Meselhi added that the wheat amounts exceed the government's target at the beginning of the season, estimated at 2.5 million tonnes.
The reason behind this increase of wheat delivered to the General Authority for Food Commodities, according to Meselhi, is that the price offered by the government was very competitive. Moreover, the farmers are paid the price in cash, and on the spot. This amount of wheat costs the government budget LE5.2 billion.
Although the international price of wheat is equivalent to LE1,000 and the delivery price is LE1,600 per tonne, farmers, for many reasons, are unsatisfied. They believe that this price is unfair. "Farmers are the losers," says Mohamed Abdel-Qader, a farmer in Daqahliya governorate. "Farmers in all the country's governorates should stop cultivating wheat until they get their rights." Abdel-Qader added.
Farmers said that the cost of cultivation is very high due to the increase in prices of fertilisers and seeds. "A small bag of fertilisers jumped from LE33 to LE72, so I started to buy small quantities of fertilisers which only resulted in a decrease in the land's total productivity," Abdel-Qader lamented.
In order to encourage farmers to cultivate wheat, the government should raise the current delivery price from LE240 to LE450 per ardab (6.6 ardabs equal one tonne), according to Abdel-Qader. As things stand, if the government decides to maintain delivery prices at the current levels, Abdel-Qader intends to reduce the area of land he cultivates in wheat to cover only his family's needs.
Experts agree with farmers that the government's delivery price is unfair. The Wheat Committee, an affiliate to the Ministry of Agriculture held a meeting at the beginning of the season and recommended that the government should buy the locally produced wheat for not less than LE260 per ardab.
Nader Noureddin, professor of agricultural resources at Cairo University, told Al-Ahram Weekly that when the government insists to decide the wheat price in accordance with international prices, this causes great losses to farmers.
The government ignores the fact that European and American farmers are highly supported by their governments. Farmers in other countries are paid double the international wheat price as subsidies, but the case is different in Egypt.
"Farmers are not supported by any means," Noureddin said. "They buy fertilisers as well as seeds at high prices since the market value is left according to the forces of supply and demand. The cost of cultivating wheat is very high while the price is unfair."
Experts warn that farmers could end up refraining from cultivating wheat and that they might end up turning to other products which are more profitable for them. Noureddin said that farmers have already started to grow non- strategic products. For example, last year half a million feddans were cultivated in nuts -- which is more profitable for farmers.
To encourage farmers to cultivate wheat as well as other strategic products, experts say the government should subsidise fertilisers. "Low fertiliser prices will help farmers use enough amounts of fertilisers needed for wheat cultivation and the result will be 30 per cent increase in wheat production," says Noureddin. Currently, he says, high fertiliser prices discourage farmers from using them and the result is a 50 per cent drop in production.
The call to support farmers and provide subsidised fertilisers seems to be an international one. In a recent conference held in Rome, the Food and Agriculture Organisation (FAO) recommended that developing countries should support fertilisers at least for strategic food products to help in achieving food security, particularly when considering the current sudden increase of prices in food products in international markets.
Experts believe that supporting the agricultural sector is an important move the government should make as it does with the industrial, exports and banking sectors. Noureddin says the agricultural sector is in urgent need of support since the majority of landowners are small holders. According to Noureddin 70 per cent of landowners have less than one feddan and 90 per cent have less than five feddans.
Supporting the agricultural sector would help to reduce poverty since this sector is deteriorating and does not attract workers. The income of an agricultural worker is between six to 15 times lower than that of an industrial or commercial worker in the industrial or commercial sectors.
According to Noureddin, an additional reason to support the agricultural sector would be that such support would encourage farmers to cultivate wheat and thus help the country save large amounts of money paid out to import wheat. Last year wheat imports cost the government's budget LE18 billion.
For the past three years Egypt has ranked as the top wheat-importing country worldwide. Egypt's wheat imports in 2008 reached eight million tonnes while the total imports of the European Union countries registered only five million tonnes of wheat.
Egypt's total annual consumption of wheat is 13 million tonnes of which Egypt locally produces only 6.5 million tonnes.
"Importing wheat is not the solution to cover the gap between total consumption and production. We can produce 75 per cent of our needs," says Ali Sharefeddin, chairman of the Cereals Division at the Federation of Egyptian Industries (FEI).
To increase the cultivation of wheat, Sharefeddin says that Egypt needs a stable plan for the agricultural sector -- one that is not changed every time a new minister assumes office. "It is an issue of national security but the government does not handle it as it should," added Sharefeddin.
The Cereals Division at the FEI conducted a recent study on how Egypt can improve wheat cultivation and increase production to cover 80 per cent of local demand. The study recommended the establishment of a national council for cereals including rice, wheat and corn since they represent strategic food products.
Announcing delivery prices few months before the cultivation date to encourage farmers to grow wheat is also recommended. According to Sharefeddin, raising the wheat delivery price to LE300 per ardab would work well enough for farmers.