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Egypt inches toward far-reaching food subsidy reform

Egypt inches toward far-reaching food subsidy reform

Despite spending close to $5.5 billion a year on food subsidies, Egypt remains criticised for encouraging waste and distorting agriculture. Looming elections make fate of any reforms uncertain.

October 1, 2011 1:21 by

…it depends almost solely on the Nile for fresh water, and when upstream African states want to use more for themselves.

Advanced irrigation techniques, such as pivot systems that sprinkle water more efficiently, would mean more water available for land reclamation.

Experts say farmers using these techniques and helped by private investment could expand output of cash crops for export toEurope and elsewhere. That might not cut the wheat import bill, but it would generate more hard currency to pay for it.

“We need to adopt the agriculture for export concept,” Beshai said.

Such reforms of agriculture have been discussed for years in Egypt but have often failed because of poorly functioning government bureaucracies and red tape, which make investing in the sector a challenge. Many of Egypt’s farmers own very small holdings which make changing growing practices and the creation of large, economically efficient farms difficult.

But success with food subsidy reform could encourage the government and the private sector to press ahead with wider changes to the agricultural sector, while freeing up some government money to promote them. (By Maha El Dahan; Editing by Andrew Torchia)

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