Egypt sees wheat self-sufficiency for subsidy program by 2019
Egypt, the world's biggest wheat importer, can achieve self-sufficiency in wheat for its bread subsidy programme by 2019 if silo storage capacity is raised by 1 million tonnes annually, the agriculture minister said.
Though self-sufficiency has been cited by successive governments as a goal, Agriculture Minister Ayman Abou Hadid for the first time provided explicit details.
"What I mean by self-sufficiency is self-sufficiency in the wheat used to make the subsidised loaves of bread. This is 9 million tonnes," Abou Hadid told Reuters in an interview on Monday.
"We can achieve it six years from now on condition that every year we can build silos adding 1 million tonnes capacity at least."
The government of former Islamist President Mohamed Mursi had targeted wheat self-sufficiency by 2016 without explicitly stating whether this meant self-sufficiency for the subsidy programme or the country's entire needs.
Since the army ousted Mursi in July in response to mass protests against his rule, Gulf Arab allies have pledged billions of dollars to help shore up Egypt's fragile finances.
Egypt's current silo storage capacity is 1.5 million tonnes but the United Arab Emirates pledged part of its $4.9 billion aid package to Egypt to build 25 new wheat silos, each with a capacity of 60,000 tonnes. This would bring the country's storage capacity to 3 million tonnes by mid-2014.
"We are aiming and working hard for construction to end within six months," Abou Hadid said.
Egypt buys around 10 million tonnes of wheat a year from abroad through the state and private buyers. The state produces subsidised saucer-sized flat loaves of bread sold for less than 1 U.S. cent to millions of Egyptians. The programme costs 21 billion Egyptian pounds ($3 billion) a year.
Abou Hadid said he expected current annual state wheat imports of 5-5.5 million tonnes to remain the same for several years due to 2-percent annual population growth in the nation of 85 million people and urban sprawl eating into farmland.
"In 1980 we were around 41 million people. Today we are about double that number," Abou Hadid said. "Most of the population growth is among the poorer socioeconomic segments."
"If this average growth rate continues as is, we will maintain the same import levels." Asked whether he expected current import levels to remain as they were until 2019, he said "yes."
Cushion Against Shrinking Global Supplies
Egypt reduced imports in the past year as Mursi's government bet on a bigger domestic crop. However, industry experts said the policy left the country at least 900,000 tonnes short of the wheat needed for its subsidy programme.
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