Tackling Egypt’s rising food insecurity in times of transition


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Presentation by Perrihan Al-Raffai at the event: “Tackling food security and nutrition in Egypt: challenges and opportunities” Launch of the findings from the Household, Income, Expenditure and Consumption Survey , Tuesday 21 May in Cairo, Egypt.

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Tackling Egypt’s rising food insecurity in times of transition

  1. 1. Tackling Egypt’s rising foodinsecurity in times of transitionContributors: IFPRI: Clemens Breisinger, Perrihan Al-Riffai, Olivier Ecker; WFP Egypt CountryOffice: Riham Abuismail, Jane Waite, Noura Abdelwahab, Alaa Zohery; Cairo University: HebaEl-Laithy, Dina ArmaniousWith support from: CGIAR Research Program on Policies, Institutions and Markets (PIM), theInternational Fund for Agricultural Development (IFAD), the World Food Programme (WFP), andthe Embassy of the Kingdom of the Netherlands in EgyptPresenter:Perrihan Al-Riffai
  2. 2. Owing to a succession of crises and shocks, foodsecurity started to deteriorate from 2005 onwards
  3. 3. Food subsidies have played an important rolein protecting the poor from recent crises Without food subsidies,national poverty may haveincreased from 25% to about34%Because: Subsidized food accounts fornearly 20% of poorhouseholds’ food expenditure Subsidized baladi breadaccounts for 71% of breadconsumed by poorhouseholds.
  4. 4. However, maintaining subsidies becomes moredifficult in times of rising budget deficitsSource: Ministry of Finance, Financial Monthly Bulletin, various issues.
  5. 5. There is significant potential for improving thecurrent food subsidy systemLosses and leakages across the baladi breadsupply chain are estimated at 30 percentThere is large scope for improving the targeting: The ration card system covers 73 percent ofnonpoor households But it excludes 19 percent of the mostvulnerable households!Increased poverty has resulted in an over relianceon cheap and calorie-dense foods, includingsubsidized commodities.
  6. 6. Following business as usual is not an option:Improved targeting and complementary programscould save costs and improve food security
  7. 7. Option 2: Improving supply chain efficiency willyield sizeable cost savings Short-term:– Liberalization of wheat prices should continue in line with pilots– Covering wheat stored in open bunkers (shonas) to reducelosses– Additional silos may be built in key locations—potentially by theprivate sector Medium-term– Replacement of ration cards with smart national ID cards,including those for bread, to improve monitoring and reduceghost users– Continue the program of fortifying subsidized wheat flour withiron and folic acid and subsidized cooking oil with vitamins Aand D, roll out fortification to the commercial sector, and reviseand enforce food-quality standards, particularly for wheat flourand baladi bread
  8. 8. Option 3: Improving targeting will yield sizeablecost savings and improve food security Short-term:– Encouraging self-targeting through mandatory registration todiscourage better-off households from using the food subsidysystem– Clarifying targeting objectives and criteria and regularlyupdating the data to include newborns and exclude those whohave died– Relying on geographic targeting for Upper Egypt and proxymeans testing for urban areas and Lower Egypt. Medium-term– The least vulnerable could be transitioned towards partialrations for baladi bread– For the non needy, ration cards are gradually phased out
  9. 9. Option 4: Complementing and providingalternatives to subsidiesTargeted nutrition interventions focusing particularly onmaternal and child nutritionVouchers could be used for specific commodities and targetgroups, such as pregnant and lactating women, to aid access towider dietary diversity.In-kind transfers are preferred by the most vulnerable,particularly in circumstances of high inflation and low marketaccess, whereas cash transfers could be used for the relativelybetter-off and in areas with good market access.Finally, conditional cash transfers and/or vouchers for educationor health services may be used to top off in kind assistance tothe most vulnerable.
  10. 10. Key messagesFood subsidies have played an important rolein protecting the poor from recent crisesFood subsidies are not designed to resolve allpoverty and nutrition-related challenges.Amend the current system to generate andscale up efficiencies to potentially lead up to atriple win; fiscal savings, reduced poverty andimproved nutrition outcomes.
  11. 11. Brazil halved child malnutrition within a decade…Key features of Brazil’s approach:Highest-level commitment: presidential initiative, ‘right-to-food’ statedin the constitution, and, state accountability.Integrative: National strategy (‘Zero Hunger’) coordinates programs from11 ministries.Establishment and close collaboration of two secretariats, food andnutrition and social protection.Targeted, large-scale poverty alleviation program with conditional cashtransfers (children’s school attendance and participation in child andmaternal healthcare and nutrition programs - ‘Bolsa Familia’)Large-scale nutrition interventionsInvestments in drinking water and sanitation infrastructureRegular process of monitoring and evaluation of progressSource: Ecker & Nene (2012) – Nutrition Policies in Developing Countries (IFPRI PN).
  12. 12. Recommendations going forwardLessons from other countries’ experiences and Egypt’s previoussubsidy reform attempts stress the importance of:Building credibility by promoting transparency of policies anddiscussions amongst the populationCreating an understanding (why should the rich get subsidies?)Managing expectations (what are people getting in return/whatare the alternatives to the existing subsidy structure?)Establishing a robust monitoring and evaluation system fordecision making, empowering policymakers to learn and becomeversatile during any reform process.Restructuring of the subsidy system is likely to be most successfulif it is integrated within the broader national strategy ofdevelopment and food security.
  13. 13. Thank you for your attention