Tuesday,17 October, 2017
Current issue | Issue 1275, (17- 30 December 2015)
Tuesday,17 October, 2017
Issue 1275, (17- 30 December 2015)

Ahram Weekly

Farmers adapt to changing industry

High production costs and lack of marketing have become commonplace problems for farmers growing crops. Mona El-Fiqi listens to the inhabitants of one village

Economy
Economy
Al-Ahram Weekly

Mit Nagi is a typical Egyptian village located on the Cairo-Mansoura road, 70 km north of Cairo. Affiliated to Daqahlia governorate, its population is estimated at 10,000, the majority of whom earn their living by growing crops.

Mit Nagi is considered a relatively lucky village since it has enjoyed all the basic services of electricity and water networks since the 1970s; in the 1990s a sanitation system was built.

The village is set within what is considered one of the richest agricultural lands of the Delta. Farmers depend on the Nile to irrigate their lands. They mainly plant vegetables, rice and wheat.

Although young people are keen to get university degrees, they never think of selling their agricultural lands. Many of them work as employees, teachers and accountants but they insist on monitoring their crops with the assistance of workers during daylight hours.

Mohamed Abdallah, who works with the Principal Bank for Development and Agricultural Credit, said he works on his land during his two off days while depending on hired labour during the rest of the week.

While the lands are rich and water is available, Abdallah said that high production costs and lack of marketing of some crops are major problems for farmers in Mit Nagi.

The cost of fertilisers increased from LE75 to LE100 for a 50-kilo bag at the agricultural cooperatives and reached LE150 on the market. Added to this are the high wages of agricultural workers and the escalating costs of equipment used to cultivate the land.

The choice of the kind of crops to cultivate depends on many factors. It is prohibited to grow rice in Mit Nagi, like many other villages in the Delta, after the government decided to severely restrict the farming of this water-intensive crop. But farmers often break the law.

Being a cheap and good source of carbohydrates, rice is eaten by many people. It is also a lucrative Egyptian export crop and employs thousands of workers.

“I choose to grow rice rather than corn in the summer season because I keep some of the harvest for my family’s needs,” Abdallah said.

Farmers who were caught cultivating rice last year paid a LE100 fine. Even before restrictions were imposed on the cultivation of rice, marketing of the crop was always been a problem.

The case is the same with cotton. Sayed Metwalli, a 56-year-old farmer from the same village, said that last season he planted one feddan of cotton but collected the harvest last month. Now, he is unable to sell it.

“Traders usually buy cotton from us but this year’s harvest is still stored at my house and I need the money. I don’t know what to do.”

The problem of cotton marketing was exacerbated when the government decided in January 2015 to cancel the cash subsidy of LE1,400 per feddan it had introduced in 2015 for cotton producers.

The high cultivation costs, together with low local and international demand for Egyptian cotton, particularly the long-staple variety, were the main reasons behind cancelling the subsidy, according to the minister of agriculture.

At the beginning of the season, a ministry statement advised farmers not to cultivate cotton unless they had the means to market it, as many spinning companies refuse to buy local cotton, which is much more expensive than imported cotton.

As for wheat, in previous years the government set a local procurement price for the local produce that was above global prices to encourage farmers to grow the crop.

However, the government recently said it will buy locally produced wheat at the average global price starting next season. Under the new system, the government will provide cash subsidies to farmers who grow wheat in an attempt to avoid smuggling. Farmers will get LE1,300 per feddan to a maximum of 25 feddans per farmer.

In the 2015 season, Egypt offered a fixed price of LE420 per ardab, which is equivalent to 150 kilos. But the price, which was higher than the international price by around $180, encouraged smugglers to import Russian wheat and ell it to the government as locally produced.

Some farmers are not pleased with the new system. Said Mohamed Ismail: “Under the new system, receiving LE1,300 per feddan means that I am obliged to sell to the government the wheat regardless of the international price, which has yet to be determined.”

Ismail said that last year the government bought wheat at LE420 per ardab, “which was a reasonable price.” He sold the harvest at LE390 per ardab to a trader who collected wheat from farmers in the village and delivered them to government centres in the governorate. Ismail said that he was ready to lose LE30 per ardab to avoid bureaucratic red tape during the delivery.

“The value of subsidies provided to farmers should be examined to guarantee that it will be enough to cover high production costs,” said Ali Abdel-Rahman, a professor of agriculture at the Agriculture Research Centre.

Abdel-Rahman said the new system might lead to a reduction in wheat quality and productivity if farmers are not pleased with the subsidies. He said farmers will not care about improving the quality and increasing productivity, which is currently between 18 to 20 ardab per feddan. They will deliver poor-quality wheat if the price is not deemed by them to be fair.

Egypt’s annual wheat consumption is estimated at 20 million tons, eight of which is locally produced and the remaining imported. Egypt is the world’s largest wheat importer.

 

 

An extra 1.5 million feddans

WITH LESS than four per cent of its total lands currently cultivated, Egypt still has the potential to increase its agricultural production.

In November 2015, the cabinet approved the establishment of a public company with a capital of LE15 billion to be responsible for the mega-project land reclamation of one and a half million feddans, spearheaded by Abdel-Fattah Al-Sisi as part of his presidential campaign.

It will establish zones for agricultural investments and start laying the groundwork for utilities, basic infrastructure, roads and housing necessary for each area to develop.

The project, which will be applied in phases, gives priority to Upper Egypt and the Western Desert. Around 420,000 feddans will be developed in the west of Upper Egypt’s Minya governorate.

Around 116,000 feddans will be located in Farafra in Al-Wadi Al-Gedeed governorate, while the third priority area will be Toshka, where an agricultural mega-project in the Hosni Mubark era started but was halted due to poor planning and mismanagement.

Eighty per cent of the reclamation project will depend on underground water while the remaining 20 per cent will be covered by the Nile. The drilling of 600 wells is underway in various parts of the Western Desert such as Toshka and Farafra. The national land reclamation project includes digging over 5,000 water wells at a cost of LE6 billion.

The Ministry of Agriculture announced that it signed agreements and cooperation protocols with 26 local, Arab and foreign companies during the country’s investment conference held early this year in Sharm El-Sheikh to reclaim 670,000 feddans.

However, experts said applying such an ambitious plan would not be easy due to the shortage of water in Egypt.

Ali Abdel-Rahman, a professor of agriculture at the Agriculture Research Centre, said Egypt’s share of Nile water is not enough for its current levels of consumption. In the past, its share of 55 million cubic metres of water provided 300 to 600 cubic metres per individual.

The share has not changed since the 1950s and no longer meet the needs of a rapidly increasing population. The individual annual share of water is down to between 50 and 60 cubic metres. The agriculture sector consumes currently 80 per cent of the available water and Egypt does not have enough underground water to cover the needs of cultivating extra lands, according to Abdel-Rahman.

“The shortage of water, high cost of production and the need for comprehensive housing complexes are the biggest problems facing the national project,” Abdel-Rahman said.

If it wants to be practical, the government should start with a small piece of land. The plan to reclaim a million and a half feddans is “showy” rather than realistic, according to Abdel-Rahman.

Also, the high cost of imported seeds and fertilisers would increase costs, especially when added to it the cost of building housing complexes to encourage people to move to these new zones, according to Abdel-Rahman.

If the government provides infrastructure and facilities, farmers say they are ready to move to new zones where they can own larger pieces of land.

Mohamed Abdallah said that one of his neighbours has already sold his land in Mit Nagi at a high price and bought cheaper but larger tracts of land in Al-Nobariya. Abdallah said many of his neighbours have moved out with their families to new zones affiliated to Alexandria, including Al-Nobariya and Abees.

Abdallah said that because the population in the village is growing, farmers are obliged to build houses on their agricultural land, thus breaking the law. He said it would be better if the government would provide farmers with other alternatives in order to build houses in the new zones.

 

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