Egypt Food Security

Food Security in Egypt: Discussion on Food price Crisis, its Causes
and Effects, Policy Responses, and Recommendations
Introduction
Throughout modern history, Egypt has struggled with the issues of food security for its
population. Food subsidies is the major strategy for ensuring food security, but rising food prices
along with an inefficient targeting system is failing to help the most vulnerable population while
also being a burden on government. In 2012, the food subsidies costed the government about
4.33 billion US dollars.(Rohac 2013) Compounding this problem is the fact that food prices and
subsidies are politically sensitive subjects and any changes in a subsidy might cause riots and
protests. Thus, food security challenges are difficult to manage more than ever.
Rising food insecurity in Egypt concerns both the government and the general population. WFP
stated that an estimated 17% of population (13.7 million people) were food insecure in
2011(WFP 2013) and this number has been increasing. A series of food price shocks and an
increase in income poverty in the last decade predicted to be the main drivers of the rising food
insecurity. Economic access is highly co-related with food insecurity in Egypt.(Clemens
Breisinger 2013) This paper looks at Egypt’s food security status through analysis of trends in
food prices and the policy and programmatic actions adopted to mitigate its effects. Furthermore,
this paper discusses the impact of the 2008 global food price spike on the Egyptian population.
The effectiveness of policies and the action taken by the government will also be discussed via
analysis of some relevant indicators. Finally, this paper provides recommendations for improving
food security in future.
The 2008 Global FoodPrice Increase
Starting 2006 the prices of food commodities began to increase and as of 2008 the food prices
rose by more than 70%. By 2008 the prices of cereals were at their highest level in 30 years.
(Ahmed 2014) The prices of maize increased by 70% within months in 2006. The prices of other
commonly consumed food commodities like wheat, soybean, rice, and cooking oil also rose to
record levels. (UN 2011) According to Sachs, the three primary commodities for basic
consumption namely, wheat, maize, and rice tripled in real terms in the first six months of 2008,
only to fall to 1.5 times the price of 2005 later in the year.(Sachs 2012) The increase in the food
prices were attributed to several causes such as increased bio-fuel production, high petroleum oil
prices, increased food price speculation, increasing demands for food, low stock levels of grains,
and low yields of cereals due to droughts.(Naylor and Falcon 2010, Ahmed 2014) Some related
causes such as trade liberalization and decreased investment in agriculture were also attributed
for the food price spike.
Among a spectrum of causes for the world food price crisis in 2007-2008, the biggest
contributing factor was the increase in demand for maize for ethanol production. Before 2006-
2008 period the developed world (mainly United States of America and developed countries in
Europe) were pushing for more biofuels, which was obtained from maize and rapeseed, as an
alternative source of energy. This increased demand for maize diverted the usage from human

consumption to ethanol production.(UN 2011) Similarly for bio-diesel production, the use of
rapeseed had also increased which might have possibly reduced its availability for vegetable oil
production. Similarly, the prices of petroleum oil trebled between January 2007 and July 2008,
thus increasing the cost of producing, processing, and transporting agricultural products.(UN
2011) Increased market speculation in agricultural commodities prices worsened this issue and
consequently led to price volatility and higher food prices. Amidst all of the simultaneous issues,
the grain reserves throughout the world did not have sufficient amounts to release to the world
market. In addition, cereal supply decreased due to droughts in grain producing nations such as
Australia, which had poor wheat yield year.
Other long term causes such as free market and trade liberalization policies played a role as
many developing countries depended on cheaper grains available in the world market rather than
actively investing in agriculture and domestic production of major grains. Although this strategy
was beneficial to the consumers when the world prices were low, it proved to be a flawed when
the food prices spiked. The sudden price spike left import dependent government and consumers
vulnerable to the world food prices. Hence, the food price crisis of 2008 had a major impact on
the people of many countries like Egypt, Burkina Faso, Cameroon, Guinea, Indonesia, Mexico
etc.(UN 2011)
FoodPrice Increase in Egypt
Effects
The consumers and Egyptian government felt the severity of the food price spike to a great
extent. The Central Agency for Public Mobilization and Statistics (CAPMAS) stated that food
prices had increased by 12.4 % from 2006 to 2007. (Beinin 2007) The prices of vegetables
increased by 37.6 %. By March 2008, the CAPMAS noted increases in the consumer food basket
of 24 % in urban areas and 27 % in rural areas. Vegetable oil increased by 45 %, and bread
prices increased by 48 %. The rising food price inflation drove the consumer price index (CPI)
inflation at the highest of 23.6% in August, 2008. The government also felt the impact of the
rising food prices as it spent $2.74 billion dollars (US) on food subsidies. (Slackman 2008) This
was greater than the amount spent in health and education sectors. The total fiscal cost of the
food subsidies reached 3.8 billion US dollars, and this amounted to about 2% of the total GDP in
2008/2009. The total burden of food subsidies remained high in the years following the food
price shock in 2008. The data from the Ministry of Finance shows that food subsidies were 2.41,
4.69, and 4.33 billion US dollars in the years 2009-2010, 2010-2011, and 2011-2012
respectively.(Rohac 2013) The breakdown of 2012-2013 subsidy budget shows that bread,
vegetable oil, and sugar are the major subsidized items in Egypt.
Causes
Various factors caused the 2008 food price shock in Egypt. A cumulative effect due to a variety
of short term and long term causes worsened the food price crisis. The most important and
immediate cause of increased domestic food prices was the spike in the global food prices.
Egypt, a major importer of food and grain products, relies hugely on imports from other
countries to ensure food supply for its growing population. Only 50-60% of the wheat, maize,
and bean consumption is sustained by domestic production.(Ahmed 2014) Seventy to eighty
percent of barley and sugarcane consumption is sustained through production while this number

is about 30% for vegetable oil and only 5% for soybeans and other oil crops. This dependence on
food imports caused a rapid transmission of global food price into domestic prices. It is
important to mention that the avian influenza outbreak in 2006 negatively affected poultry
production, and may have worsened the prices of poultry meat. The World Bank estimated a
price transmission of international to domestic food prices at 60%- 80%. (Ahmed 2014) Thus,
increased world prices left a substantial impact on domestic food prices.
The corrupt and ineffective food subsidy system compounded the problems of increasing food
prices. Black marketing, corruption, ineffective monitoring of food market led to subsidized
wheat being sold at very high prices in Egypt. This trend is described by Sachs, where she notes
how government subsidized wheat flour was used by bakers for producing cheap breads but sold
them in the private black market at high prices by colluding with corrupted officials. (Sachs
2012) This inefficient food subsidy scheme, black market, and distribution issues were leading
causes for rapid increase of food prices within a short period of time.
Other underlying causes played a role in the domestic food price crisis. Rapidly growing
Egyptian population led to import dependency. Over the years, food production has increased,
but it is nowhere near the demands of the growing population. Furthermore, Egypt has limited
land suitable for cultivation with most arable land around the Nile River and the Nile Delta. The
inefficient public milling systems in Egypt was another important underlying cause for the
helplessness during food price crisis. Egyptian government is heavily involved in the process of
importing wheat and providing it to 126 mills operated by 7 public companies. The inefficient
and old public mills, helped by low or no taxes, underperformed when compared to the
technologically efficient private mills. The lack of competition via state involvement
compounded with corruption and black marketing were some underlying causes of the high food
prices and led to the inability for controlling price shocks.
Implications
There were political, social, and nutritional implications of the 2008 food price spike and the
years following it. Severe political consequences of the sudden food price were agitations against
the government and the protests against poor governance, corruption, and the rising food prices.
(Sachs 2012) In the years following, the rising food prices were identified as one of the key
factor for the toppling of then government in 2011. Similarly, social implications was
widespread as most of the households in Egypt (whether urban or rural) were net food buyers.
The food price crisis severely hit the poor and vulnerable households as many families went
from being food secure to food insecure. Poor households spend significant portion of their
income on food thus leading to food insecurity. Indeed, the poorer households were severely
affected because the correlation between poverty and food security is evident in Household
Income, Expenditure, and Consumption Survey (HIECS) survey in Egypt. This survey showed
that the income poverty increased from 19.6 % in 2004 to 25.2% in 2011.(Clemens Breisinger
2013) The same survey notes that 77% of rural population and 72.1 % of the urban population
stated the food price spike as the main reason for a financial shock among their households
(WFP 2013) Many poor households, especially in rural areas, had to buy food on credit or
borrow food. Certainly, it is appropriate to state that the food price crisis along with stagnation in
income or purchasing power are the major drivers of poverty. Finally, there were nutritional
effects due to food price increases. Households resorted to decreased variety in diets and

increased the consumption of cheaper food. (WFP 2013) This increased consumption of
calorically dense food and reduction in nutritionally rich foods like meat, fish, and poultry.
Policyand Programmatic Response
Food Subsidy Scheme
During the food price crisis period, people started protesting against general inflation, corruption,
and stagnant salaries. The early programmatic responses of the Egyptian government were
political in nature and aimed at nullifying these protests and riots against the government. These
responses can be criticized as reactionary measures rather than well thought-out policy response.
Egyptian government announced the arrests of about 12,000 people for selling flour in the black
market. (Sachs 2012) This “populist” response was solely to improve the reputation of the
government and an effort to show that the government was taking some meaningful action. It is
no secret that corruption and black marketing in food subsidy market was rampant well before
the global food price crisis. Similarly, a 30% increase in wages for public sector employees was
announced to counter the rising inflation and high food prices.(Mulat Demeke 2009) As the low
paid civil workers were one of the poorest people, this response hoped to nullify protests against
the government sector. Once again, it is fair to say that this was a populist response rather than a
long term policy response. Finally, the government used the military, which had a favorable
opinion from the public, to take over production and distribution of breads. This response
resulted in bigger political consequences. The military hoped to improve efficiency in production
and hoped to end bakery lines throughout the country. In the coming days, the public perception
of military improved as they were much more competent in providing food to the population. In
Egypt’s historical and socio-political context, the favorable opinion of military over the then
present government played an important role in the 2011 Egyptian revolution.
Along with an apparent “patch-up” job against the protests and riots, some food security policies
were implemented. Egypt has traditionally relied on food subsidy measures to keep its
population food secure and modifications to the food subsidy scheme was the main policy
strategy in this case too. The food subsidy scheme was expanded and the number of ration card
holders increased from 41 million people to 63 million people within a year.(WFP 2013) Thus,
the subsidy scheme covered about 81% of the total households in Egypt. The aim of this subsidy
expansion was to relieve vulnerable households from the price shocks as poor households mainly
depended on subsidies for the consumption of bread, oil, sugar, and rice. (WFP 2013) The
modification in the subsidy doubled the amount of rice entitled at subsidized price through ration
cards. In contrast, items such as beans, lentils, and pasta were removed from the subsidy system.
Despite the expansion of the subsidy scheme, the effectiveness of the subsidy strategy can be
debated. The subsidy provision for “Baladi” bread has always suffered from inefficiency and
significant losses throughout the supply chain. Even in 2013, an estimated loss of up to 30%
occurred in the bread system due to manufacturing, storage, and distribution inefficiencies.
(WFP 2013) Corruption and leakages in the black market further compounds the problems.
These existing problems in 2008 resulted in higher market prices of bread. Hence, the impact of
the subsidies on mitigating price shocks was much less than it should have been. Egyptian

government should have done better work especially in monitoring of bread supplies and market
prices.
Another criticism of the widely used subsidy policy was the ineffective targeting of the subsidies
which also resulted in a significant economic burden on the government. Data from the HIECS
survey from Egypt showed an even distribution of the food subsidies among all wealth quintiles
with a high urban bias distribution. (Rohac 2013) The per capita subsidy benefits for Baladi
bread ranged from 17-24% in all wealth quintiles. The per capita subsidy benefits for other food
items such as oil, sugar, and rice were also similar. (Annex 1) Vulnerable households, mostly in
rural areas, holding informal jobs and without assets such as land or property, were excluded
from the food subsidy scheme due to lack of paper work. (WorldBank 2009) Richest quintile of
population received 12.6% more consumer benefit than poorest. Higher expenditure group
received 20% higher consumer benefits from ration cards than the lower expenditure. (Al-
Shawarby 2010) Hence, the food subsidy scheme was flawed. A World Bank report stated, “[i]f
leakages are eliminated and coverage is narrowed, the government of Egypt (GoE) could save up
to 73 percent of the cost of food subsidies”
Finally, the removal of items like lentils and beans as subsidized items did not improve the
dietary diversity and nutritional status of the vulnerable people. The impact of the global food
price increase was felt by the consumers as the domestic prices of non-subsidized items like meat
and lentils significantly increased. In terms of food security, the swapping of subsidy items
defeated the whole purpose of providing access to nutritious food for a healthy life. Rather, it
encouraged people to consume a limited set of subsidized foods.
Apart from the food subsidy scheme Egyptian government utilized various trade policy tools to
reduce the impact of the high international food prices. Egypt was one of the many countries that
released the imported grain stocks, mainly wheat, at a subsidized price. This measure sought to
cushion the high international food prices. The impact of this strategy was not significant as the
government had kept the imported stocks of wheat very low. Hence, the releasing the limited
stocks of wheat made no difference in the market wheat prices or the food security of the
country. Overall, this policy tool proved to be nothing more than a checkmark in the list of
policies.
Trade Policies
The government implemented some trade policies such as reduction or elimination of import
tariffs and export bans on various food items. Egypt drastically reduced import tariffs on various
commodities in order to keep the food prices low. Starting from 2008, tariffs on food items like
rice, oil, sugar, milk and cheese products were eliminated while tariffs on other items such as
butter was reduced. (Aboulenein, Laithy et al. 2010) Similarly, rice and soybeans became exempt
from custom tariffs. Even a year earlier in February 2007, Egypt government reduced the import
tariffs on 1114 items which included many food items.(Aboulenein, Laithy et al. 2010) Along
with changes in tariffs Egyptian government decided to put an export ban on rice starting in
April 2008. This export ban had an immediate impact on the market prices of rice. During the
export season in October 2007, the market price for rice was USD 750 per ton. (Aboulenein,
Laithy et al. 2010) After the export ban, the rice prices dropped to about USD 330 per ton
compared to the prices in April at USD 450 per tons within a few months. Hence, export ban

reduced the market prices significantly and stalled the climactic rise of rice prices around export
season.
Overall, the application of trade policy tools, especially reduced tariffs and export ban, helped
the Egypt control prices during the food crisis. Although the high dependence on imported food
meant that international prices were transmitted to the domestic consumers, trade policies did not
allow prices to spiral out of control. In summary, given the circumstances trade policies during
the 2008 food crisis can be considered as successful policy tools.
Other Efforts
Egyptian government has carried out some programs to improve food security of the population.
The government contributes to pension funds of the civil servants and also uses cash transfer as a
mechanism to help people cope with increasing food prices. (Ahmed 2014) In 2015, the
government of Egypt announced the first conditional cash transfer programs to 53,000 poor
households in Assuit and Sohag regions of Egypt. (Mounir 2015) This program required families
to send their children to school. In the program, about USD 45 is allocated to each family and
additional money is given for upto three children being in school. Similarly, a dignity program
targeting old and disabled program has also rolled out.
These social safety program was definitely a step in the right direction for the Egyptian people
and the government. In practice, cash programs allow households to use the money according to
their needs and preferences. As poorer households use most of their income for food, this
program is likely to help families be food secure. Furthermore, cash programs are much easier to
monitor and control once a system is established. This reduces corruption, leakages, and
logistical concerns when compared to the in kind food transfer. Egyptian government must push
forward with this initiative which is likely to reap benefits to both poorer families and the
government.
There were significant interest in agricultural programs after the food price crisis. Egyptian
government focused on increased agricultural outputs via land reclamation measures and
improvement in agricultural practices. On September, 2014 the government announced the start
of the first phase of a plantation project in 1 million acres in Western desert areas. This project
was a confident and decisive plan by the government to use 4 million acres of underdeveloped
land for agriculture.(Aman 2014) This project was also a part of the National Agricultural
Development strategy (2030) formulated for development of agriculture. So far land reclamation
measures by the government has been praised.
Egyptian government has made efforts to improve food and nutrition security via s school
feeding program for children. About 5.5 million poor children out of eligible 12 million children
are covered under this program. This program aimed to improve enrollment and attendance
especially among girls and discourage child labor practices. The goal of this program was
improvement of early education to about 60% in 2010. (WFP 2015)
Role of International Actors
Following the food price crisis, an FAO led initiative developed a five year investment plan for
2009-2013 in the range of USD 770-830 million. (Ahmed 2014) These funds, in collaboration
with both private and public sectors, addressed food security and nutritional challenges among

the most vulnerable people in Egypt. Some examples of programs include “Intensification and
diversification of agricultural system” and “Marine Resources programme in Red sea”. Likewise,
WFP also increased its annual country fund in order to help government deal with food
insecurity, poverty, and nutritional problems in the country. Both of these organizations continue
to provide support to the government’s agricultural initiatives.
Effects of Policies andPrograms
In order to examine the effects of various programs and policies, this paper will look at the trends
of some indicators over the years. First, there has been a noticeable improvement in the food
prices of Egypt. From 2010 to 2015 food inflation has been in decline, but there are periodic
spikes as seen in Figure A below. The periodic spikes in the food inflation might be due to
reaction in the international food market or domestic supply and demand changes. Further
investigation and disaggregation of data within Egypt might be needed to predict the causes for
these spikes.
From Figure A, a declining trend in food price inflation is seen. However, one must be careful in
interpreting the association between food inflation decline and the implementation of policies
and programs. There are multiple aspects such as world food prices, changing import-export
taxes and regulation, and agricultural product supplies that might be related with the domestic
food prices. Moreover, this finding does not prove that poor and vulnerable household were
capable of purchasing nutritious food with the help of the social safety net mechanisms. Various
reports and commentaries suggest that the bread subsidy program is still ineffective, corrupt,
urban-biased, and poorly targeted.
Figure A

In contrast to the subsidies, the investments and interests in agricultural programs seems to be
paying dividends. Figure B shows a steady increase in GDP from agriculture from 2008 to 2015.
Annual estimates of GDP from agriculture has increased steadily over the years from 2008 to
2015. Government’s increased focus on agricultural programs such as land reclamation and
investments in agriculture seem to be responsible for this increase of agricultural outputs.
Figure B
Broader economic issues such as income level and unemployment play an important role in
ensuring economic access to food as most households (both urban and rural) are net buyers of
food. Figure C shows that Egypt’s GDP per capita PPP is steadily increasing over the years.
From 8990 USD in 2006, the GDP has climbed to 10791 USD in 2014. This is a considerable
increase within 8 years.

Figure C
However, the benefits of the GDP has not been distributed equally across all wealth quintiles.
Figure D below shows that unemployment rate jumped from about 8.5 percent in early 2011 to
12% after the Egyptian revolution and since 2011 it has been around 12-13%. The expansion of
Suez Canal, which accounts for 8% of the world’s maritime trade, might bring much needed
boost in the Egyptian economy and help create more jobs. No matter what the gains from the
Suez Canal expansion might be, it is guaranteed that without reducing unemployment Egyptian
government cannot reduce its expensive food subsidy system and ensure food security for its
population.
Figure D

World Bank indicators also corroborates that the GDP gain has not been distributed to the poor
and vulnerable households. Figure E below shows that the national poverty head count ratio was
at 25 % of the total population. Further disaggregation of data shows that urban poverty head
count ratio was at about 15% and the rural was at about 33%. Furthermore, a lot of people fall in
the “near poverty” group where a significant price shock can push them into poverty and food
insecurity. (WFP 2013) This high rate of poverty and the considerable gap between geographic
regions shows that Egyptian government still needs to provide employment opportunities in
order to ensure the access dimension of food security. Looking at the rising poverty rates and
rising consumer price index together as in Figure E, this need is further highlighted.
Figure E
The study of food and nutrition specific indicators also shed some light into the possible impacts
of actions and policy measures after 2008 food price crisis. Data from 2012/13 HIECS survey in
Table 1 shows that food expenditure comprises 34% and 41.4% of the total expenditure for urban
and rural households respectively. On closer examination the expenditure on bread and cereals,
cooking oil, and sugar is relatively very low compared to meat and vegetables. This relatively
low expenditure on bread, oil, and sugar clearly shows the impact and role of large food subsidy
scheme among the general households.
0
5
10
15
20
25
30
35
0
50
100
150
200
250
300
350
400
1998 2000 2002 2004 2006 2008 2010 2012 2014 2016
Ratio(as%oftotalpopulation)
ConsumerPriceIndex
Years
Consumer PriceIndexand Poverty Head CountRatio as per
National poverty Line
Consumer price Index National Poverty Head Count ratio
Rural Poverty Head Count ratio Urban Poverty Head count Ratio
Source:World BankData Indicators

Table1:The urban/rural expenditurepatternonfood andnon-alcoholicbeverages(HIECS
2012/2013)
Food Group Percentage Expenditure
Total Egypt Urban Rural
Foodand Non-AlcoholicBeverages 37 34 41.4
Breadand cereals 5 3.9 6.2
Meat 11 10 12.1
Fishand seafood 2.5 2.5 2.5
Milk,cheese andeggs 4.9 5.1 4.8
Oilsandfats 2.5 2.1 2.9
Fruit 2.6 2.4 2.8
Vegetables 5.5 4.6 6.4
Sugar,Jam, honey,Chocolate and
Confectionery 1.4 1.3 1.5
Otherfoodproducts 0.7 0.6 0.7
Non-AlcoholicBeverages 1.4 1.3 1.4
Source: Extracted fromCAPMAS 2014
Furthermore, nutrition data for children under 5 years in Table 2 also shows the need for
improvement in food security and access to nutritious food. Although the rates of stunting have
seen significant improvements across all demographic regions, the rates of wasting have
worsened. This might be an indication of a recent reduction in consumption of nutritious food.
However, direct causal relationship between nutritional indicators and food prices or food
policies cannot be established. Usually other factors such as environment, WASH practices,
sanitation, health care, diseases can also effect the rates of stunting or wasting among children.
Table2:DHS estimates ofundernutritioninEgyptianchildrenunderfiveyearsofage
DHS 2003 DHS 2005 DHS 2008 DHS 2014
Percentage
of Stunted
Children
Urban Governorates 15.03 18.69 22.70 15.96
Lower Egypt- Urban 12.89 16.25 38.22 16.92
Lower Egypt- Rural 14.34 20.12 32.85 16.45
Upper Egypt- Urban 21.47 29.97 23.26 26.63
Upper Egypt- Rural 25.05 33.87 26.87 23.29
Frontier
Governorates
- 26.06 28.66 14.54
Total 19.86 26.78 28.63 19.66

Percentage
of Wasted
Children
Frontier
Governorates
- 6.68 5.94 16.35
Total 4.7 4.97 7.1 10.41
Percentage
of
Underweight
Children
Frontier
Governorates
- 5.21 4.03 6.88
Total 7.89 5.48 5.89 6.24
Source: Egypt DHS Data
Finally, a negative effect of the subsidy program might be the high rates of obesity among the
population. DHS 2014 estimates have shown that about 86% of women aged 15-49 are either
overweight or obese. (DHS 2015) Many nutrition experts hypothesize that subsidizes causes
disparity in the price per calorie of energy dense food and nutrient dense food. Consumers who
are constrained by income and price disparity choose energy dense food over nutritious and
diverse food. (Asfaw 2007) Subsidized energy dense foods like bread, which are palatable and
accessible to the Egyptian population, further exacerbates overweight and obesity problem
among adults. (Asfaw 2007) Lower prices of Baladi bread and other commodities like sugar and
oil was correlated with overweight and obesity. (IFPRI 2000) Hence, the high rates of obesity
might be largely due to the subsidies in Baladi bread, oil, and sugar.
To conclude, the policies and programs implemented after the food prices did have some impact
in the food security of Egypt. The expansion of subsidies program may have protected many
households from the price shocks and consequently kept them above poverty lines. However,
inefficiency and poor targeting of these programs might have reduced the impact of the food
subsidies, especially amongst vulnerable population. The long term effects of trade policies
cannot be explained without a detailed analysis of the frequent changes in taxes, regulations,
domestic markets, and import-export laws. However, the trade policies did play an important role
in controlling prices immediately after 2008. Agricultural investments and programs were the
most promising sectors for improving Egypt’s domestic food security. Government’s confident
and sustained interest in land reclamation and agricultural programs have improved agricultural
outputs and GDP from agricultural outputs. Egyptian government is carrying out conditional
cash transfer as a possible strategy to help poor households. This is a welcome sign and might be
the beginning of a break away from the politically sticky food subsidy polices. Equally

interesting topics of broader economic development, income and employment are not discussed
in detail in this paper; nevertheless, these issues has a significant impact on food security in
Egypt.
Recommendations
Being a country with large population and limited arable land, Egypt continues to face food
security challenges. As a country, Egypt has to maintain decisive policies and monitor its
implementation in order to tackle the rising food insecurity. Food subsidies, poverty reduction,
agriculture growth, and employment opportunities are the key sectors needing reforms.
Food subsidies, one of the largest welfare programs in the country, needs improvement if Egypt
wants to achieve its food security goals. Deregulation of food products and prices seems to be a
necessity sooner or later. Government’s involvement in the entire procedure of purchasing,
storing, milling, and distributing grains is highly ineffective and of significant cost burden.
Hence, gradual privatization and liberalization of the grain market needs to be pursued.
However, pursuing these policies are easier said than done. Since food subsidies are socio-
politically charged topics, government wants to control every aspect of the system. As evident in
2008 and 2011, Egypt has a history of protests when changing the subsidies policies and food
prices. Government’s vested interest in controlling the supply side of subsidies serves as an
inertia factor in this case and overcoming this is a significant challenge on its own.
Having noted the challenges, opportunities for improvements in the government run food
subsidy system exists. Improvement in logistics and a proper monitoring system is likely to
reduce leakages of subsidized bread into the private market. Similarly, public mills upgrade to
make it technically efficient and less wasteful is likely to help with food security measures. In
addition to improving public mills, grain storage needs to be improved in order to keep adequate
levels of grain stock in the country. With grain stocks, the fluctuations in world food price can be
cushioned and consumers can be protected. Here again, notable challenges in implementation
exists, with corruption being one of them. Many public bread sellers and officials stand to profit
from a leaky system. Furthermore, during world food price spike sellers stand to benefit from
artificial shortages and jacked up prices. Thus, good governance and adequate monitoring is
needed for improving the system.
Next, Egypt needs to reduce poverty and improve employment opportunities in order to make its
population food secure. Both urban and rural poverty rates are very high despite increased GDP
per capita over the years. This points to the rising inequality within Egyptian population and the
need to protect the poor and the vulnerable households. One of the strategy that aids poorer
households is conditional cash transfer initiatives. Cash transfer, based on criteria such as
sending children to school, serves to help poor families through additional income and also
improves children’s education. In future, there is a possibility that Conditional Cash Transfer
(CCTs) can replace food subsidies schemes as the most prominent safety net program in the
country. And why not? Once proper administrative structures and monitoring mechanisms are in
place, cash is much easier to handle logistically and less likely to be misused. Furthermore, CCT
targeting and coverage can be easier in rural areas as it does not require a physical market
presence like food subsidies mechanism. Egyptian government has rolled out a new Conditional
Cash Transfer program and it will be exciting to look at the early results of this initiative.

While CCT can help poorer households with supplemental income, creating employment
opportunities and stimulating economy is a complex challenge. Due to political instability and
poor governance, economic growth has languished below what it should have been. Tourism
sector, which contributes a significant portion to the total GDP, has been hit hard by political
instability and in recent years terrorism is a major security challenge. Amidst this situation, there
is a new wave of optimism and growing national pride among Egyptians, especially after the
expansion of Suez Canal. Egyptians remain hopeful that economy will improve and provide
people with much needed employment opportunities.
Finally, the government’s investment and interest in agricultural programs needs to be sustained
to keep up the momentum for agricultural sector’s long-term development. Egypt’s agricultural
outputs have increased over the years and investments in agriculture and land reclamation seems
to pay dividends. Although it is certain that Egypt will have to rely on food imports to assure
food security, the increase in agricultural outputs is likely to improve dietary diversity and
nutritional status of the Egyptian people. It is also likely to help reduce the prices of non-
subsidized items like fruits and vegetables. All of these gains matter as poorer household resort
to the consumption of cheaper subsidized foods during a price shock. The decreased in dietary
diversity is correlated with the rising rates of obesity. Hence, increase in local agricultural
outputs should remain a priority in Egypt. To conclude, improvement of food subsidies system,
reduction of poverty, creation of employment opportunities, and investment in agricultural
sectors are the likely keys to achieve food security in Egypt.
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