In late May in Nubaria, an agricultural area reclaimed from the desert in northern Egypt, farmers and officials watched as a combine harvester roared across a wheat field, swallowing up the tightly packed golden stalks before belching out a stream of fat grains.
The “model field” has been used by the ministry of agriculture to showcase modern techniques aimed at maximising yields and reducing water use.
“I am expecting a good crop of 3.75 tonnes of wheat from each feddan [slightly larger than an acre],” said Mohamed Abdallah, the farmer who owns the land. The traditional irrigation style produced as much as a third less grain, he said.
Farmers and officials said soaring grain prices in the wake of Russia’s invasion of Ukraine have underscored the importance of the local wheat market in Egypt, the world’s biggest grain importer.
As global supplies tighten, the Egyptian government is determined to get its hands on as much of this year’s crop as it can, and it has been leaning on farmers to sell back 60 per cent of their harvest. Longer-term, the state is working to boost output through promoting techniques such as those used in Nubaria, hoping that by 2025 the local crop could meet as much as 65 per cent of its needs, up from 45 per cent.
Critical for the government is its subsidised bread programme, which uses about 9mn tonnes of wheat per year and serves 70mn people, or just over two-thirds of the population. Five loaves of subsidised bread cost 1.5 cents, compared with 4 cents for one unsubsidised loaf. In a country where more than half the population fits definitions of poverty, the provision of cheaper bread has been seen by successive regimes as crucial to warding off hunger and ensuring social stability.
Egypt spent an average of $3bn on wheat imports annually before the war, but rising prices mean that could reach $5.7bn, the International Food Policy Research Institute has said, adding to the strain on a heavily indebted country. Cairo devalued its currency in March and is now seeking a loan from the IMF. Gulf countries, aware of the potential destabilising impact on the most populous Arab nation, are channelling about $22bn in deposits and investments to support its economy.
Usually, much of the grain for subsidised bread is imported, though increasingly the government wants to use more of the local crop. Thanks to “ideal weather”, Reda Mohamed Ali, who heads the government’s National Campaign for Improving the Wheat Crop, anticipates a domestic crop of 10mn tonnes or more this year, 10 per cent greater than last year.
The government wants to buy at least half of this yield for the subsidised bread programme, up from a third last year. It has decreed that farmers have to hand over 60 per cent of wheat harvested this season and that grain cannot be transported without permits. Breaches can result in fines and prison terms.
As an incentive, the government increased its procurement price for local wheat by 22 per cent to about $320, still $160 less than the price on the international market, a difference that has provoked some grumbling among growers.
With local stocks, Egypt officials have said they will have enough wheat reserves until December or January. But by this month, as harvesting neared its end, wheat delivered to the state had reached only 3.5mn tonnes. In an apparent attempt to maintain the flow of grain to state silos, and to keep it out of the hands of private traders who may offer more money, last week the cabinet banned wheat sales to anyone other than state buyers until the end of August.
In Nubaria, farmers said they sold more than their quotas to the state because it paid promptly. They were also mindful of the risks of breaching laws.
“Cars transporting grain need permits and letters from the local agricultural co-operative,” said Nour Attia, a farmer. “The army keeps an eye on vehicles and no car can get through toll stations if it doesn’t have permission.”
Some complained about the price. One small farmer noted that it was cheaper to keep his grain to feed his livestock than to buy corn. “Everything is expensive now,” he said. “We have to use fertilisers like potassium which are not subsidised.”
His complaints were echoed by Hamada Salama, a farmer in another part of Nubaria who sold his entire wheat crop from 100 feddans to the state. “The price is not good compared to the costs,” he said. “But the state has been able to control the entire process from land to silo.”
Underlining the importance to the country of their output, Ali told farmers during the ministry of agriculture event in Nubaria, that “you shouldn’t bargain with your country for a higher price during a crisis. The wheat you hand over now comes back to you in the shape of a [cheap] bread loaf.”