Agriculture  in Egypt is a modest part of the GDP and of trade but accounts for a majority of the people, including the more vulnerable.Data on production and trade is scanty at present or difficult to access, although there are plans to greatly improve it in the coming years. A number of Ministries are involved with different aspects. The Ministry of Agriculture handles farming, Ministry of Trade and Industry agri business.

 

The adverse trade balance in millions of dollars:

  

 

The deficit in the trade balance is compensated for by earnings from services. Egypt enjoys substantial earnings from the Suez Canal and an estimated tourism arrivals of near 10 million per annum. It also has substantial exports of industrial products, and oil and gas. All these other areas offer a great deal of potential and, in a way, that has led to relative neglect of agriculture which also increases income disparity.

 

 

The leading produce consumed in the country is:

 

 Consumption  of leading produce                    millions of tonnes

 

Vegetables                                                               19.55

Cereals                                                                    17.13

Fruits, excl wine                                                         9.89

Wheat                                                                       9.41

Tomatoes                                                                   6.07

Paddy Rice                                                                4.48

Maize                                                                        4.38

Sugar                                                                         3.98

Starchy roots                                                              1.65

Pulses                                                                       1.31

Grapes                                                                       0.99

Dates                                                                         0.99

Bananas                                                                     0.79

Vegetable Oils                                                            0.42

 

However, the country imports more agricultural produce, $ 3.8 billions while exporting around $ 1.1 billions.

 

Egypt has great potential to increases its production and narrow that trade imbalance. It has a comparative advantage to produce but the sector has sadly been neglected for a long time. This neglect has led to roughly half the poppulation being left out of the major strides taken in the economy. The Government is anxious to remedy the situation. Moreover, growing prosperity has led to a growing supermarket sector that needs higher quality produce.

 

 

 

Sugar Cane                                                            16.20

Tomatoes                                                                7.55

Wheat                                                                     7.38

Maize                                                                      7.05

Paddy Rice                                                              6.67

Sugar Beet                                                              5.60

Potatoes                                                                  2.60

Oranges                                                                  1.80

Watermelons                                                           1.63

Grapes                                                                    1.25

Dates                                                                      1.13

Onions, dry                                                              1.05

Eggplants                                                                1.00

Bananas                                                                  0.88

Sorghum                                                                  0.80

Pumpkins                                                                0.71

Tangerines                                                               0.66

Cucumbers                                                              0.62

 

Source: FAO estimates

 

Production  (70%) is mostly by smallholders although some more sophisticated supply chains have developed to cater for quality produce demanded by supermarkets and hotels.

 

 

Egypt enjoys priveleged access to various markets, including the EU, Arab countries, Turkey and South and East Africa. This presents a good opportunity to develop exports.

 

 

Egypt has a significant surplus of rice and is a leading exporter. Exports amount to roughly $ 1.1 billion but there is a trade imbalance with far more being imported.

 

 

Egypt imports around $ 3.8 billion of agricultural produce makig it a major market for potential suppliers.

 

 

 

Although Egypt has a surplus of rice, it has a defficit of wheat and maize and needs to import edible oils and oilseeds. Imports of wheat nd maize alone are of higher value when combined than all agricultural exports from the country.

 

 

An estimated 70% of agriculture is by smallholders who have, in the past, not received much active support. This has changed and the Government is minded to assist but the assistance from donors tends to focus on agri business relying on that to provide the engine for growth and modernisation. However, it is difficult to see how poverty can be alleviated without tackling what impacts on half the population.

 

What smallholders need is to be organised to be able to deal with business and an infrastructure in the way of an integrated cold chain to improve handling. Solutions need to be tailored to their specific needs in the Egyptian context. Although SMEs can be the priamry vehicle for a system, there can be no solution without direct financial assistance to small farmers. This may not please everyone idelogically but farmers are in a week bargaining position and need to be organised to be financed. 

 

The elephant in the room is the lack of finance to smallholders that does not allow them to change practice. Small farmers are a bad credit risk in the eyes of bankers and, in any case, credit is difficult to channel to many small borrowers. Transaction costs are too high. An alternative preferred by some is to help NGOs and SMEs to help organise the small farmers into efficient supply chain solutions. But without credit it is difficult to see how this strategy can be effective unless the latter are enabled to pre finance production.

 

Egypt needs to move focus to higher value crops in the way of diversification as well as in terms of better quality. At present, Egypt exports surplus rice and imports wheat. Cereals are usually of low value, it may be better not to export so much rice but instead to export higher value fruits and vegetables and produce more edible oil.

 

 

Egypt supplies a negligible part of global trade except maybe for rice and cotton. Yet it enjoys irrigation in many areas, low labour costs when compared to competitors and low energy costs. With inputs to smallholders it would be possible to make use of the existing cultivated area more effectively. In addition, there is scope or increasing land area available as well as shifting the focus of production to higher value crops, thus increasing earnings.

 

The primary information not available to smallholders in particular is knowledge of market opportunities for crops. It is all too tempting to see this as a need to communicate wholesale prices despite the fact that it is of little use to know prices that you cannot take advantage off. A study of the seasonality and supply of different crops in markets of greatest potential would allow planning to encourage production to exploit the opportunities. A prime target, helped by lowering of tariffs and increase in quota to the EU, is to look at the possibility of supplying higher value crops out of season. The country has regions that could increase the window of availability. Supply to export markets could be supplemented by a growing domestic market.

 

Of course, there would have to be a critical mass of production to develop markets, both, in terms of logistics and market interest. A critical mass requires a system that would lead to production, collection and freight in a good condition with lower wastage rates. It also requires developing means of routing funding to smallholders and to SMEs interested in organising the production and purchase of produce. Money is likely to be a critical factor given the poverty of the smallholders. It is not easy to organise and has not been easy in any developing country. Not only is it difficult filter money to those who need it but those who could do so often have idelogical objections to state supported systems.

 

 Market development and promotion capacity is lacking. Others in the Mediterranean Region (Morocco, Israel, Cyprus to name a few) have overcome this obstacle and developed strong brand identity through marketing on behest of a supply chain. There are important lessons still to be learnt.The three examples quoted developed infrastructure and exports to the EU decades ago.