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Posts Tagged ‘food subsidy’

The UN Food and Agriculture Organization Food Price Index in January 2011 exceeded the peak of the 2007-2008 food price crisis. When it comes to food, the boundaries between stability and disorder are easily crossed. In how far increases in food prices stand at the bases of the unrest now seen in the Middle East is unclear but it is clear that food prices can be an important factor in causing civil unrest and a catalyst for anti-government protests. Egypt has been at the epicenter of recent unrest in the Middle East. With more than 40% of the population living on less than 2$ a day, volatility of food prices can easily contribute to instability and unrest on the streets.

While Egypt’s economy has grown over the past ten years, progress in human development has been uneven. It has proven difficult to improve the situation of the poorest and most vulnerable. Forty per cent of Egyptians live on less than $2 a day. The proportion of extreme poor (inability to meet the basic food needs) has even increased in recent years. Soaring food prices are the main driver behind the increase in the proportion of people living in extreme poverty; this share increased from 5.4% to 6.4%; this means 5-6 million people are unable to meet basic food needs, let alone basic housing.

This is Amira, a divorced lady of 70 with bad eyesight and hearing. She shares her tiny house with a 12-year old orphaned girl whom she takes care off. Amira sleeps on a hard bed and her toilet consists of a hole in the floor of her tiny house. All she owns is 4 chickens and the rest of her possessions are contained in a few plastic bags. She used to have 15 chickens but she lost 11 due to disease; possibly bird flu. She lives of a small pension of 55 Egyptian Pounds (EGP), this is equivalent to 5.8 United Kingdom Pounds (GBP) per month and occasionally receives charity in the form of food or money from well-off villagers. She sometimes earns a few Egyptian pounds by selling a few eggs. The vast majority of her money is spent on food and she will regularly have only tea and dry bread for her meals. Women support one fifth of Egyptian households, these households are especially vulnerable because of lack of income-generating opportunities as women have lower levels of education, public participation and poorer access to health and vocational training than men. The few chances open to women of earning money are often limited to seasonal labour, petty trade and poultry keeping.

This is Rehan, she is 29 year old, she lives in her mother’s house with her 9 year old daughter; both women are widowed. Like her mother, Rehan did not go to school but she decided to take adult literacy classes a few years ago and can now read and write. Her daughter is in primary school.

This is Rehan’s daughter and her mother. The household depends on a monthly pension of 250EGP (26.3GBP) in addition to a monthly gift of well-off villagers of 20EGP (2.1GBP) to 40EGP (4.2GBP). The household owns 5 chickens, which regularly provide eggs for household consumption. They spend about 150EGP (15.8GBP) on food every month; this is about 54% of their total budget. Most of the rest is spend on water and electricity costs and school expenses such as materials, school uniform, and private lessons for her daughter, which cost 8EGP per week. Private tutoring –both within rich and poor households- is very common in Egypt and is needed to compensate for the low quality of public education and to supplement the low pay of teachers in the public sector.

Poultry keeping is a major component of the livelihoods of the poor in Egypt providing income and a cheap source of high quality protein. Poultry keeping is one of a few income generating activities available to women and the simultaneous impact of bird flu which is now endemic in Egypt and soaring food prices have affected women’s economic empowerment and well being. Income from poultry is often spent on children’s needs such as education, while eggs form an important source of protein for children.

In order to cope with the simultaneous impact of bird flu and soaring food prices many households changed their diets in favour of plant based protein such as lentils or beans instead of animal protein in the form of meat and fish which are much more expensive.

Molokeya (Jew’s Mellow) is a typical Egyptian dish. Here women are separating the leaves from the stems. The leaves will be used to prepare a sort of soup. Molokeya is usually eaten with rabbit, which is considered an expensive delicacy. Less well off households will replace the rabbit with chicken or offal meat.

Bread is the cheapest as well as most important food item in Egyptian diets. Supplying cheap bread has been a key principle of government policy for decades as it is regarded crucial for ensuring social stability. Two thirds of Egyptians eat subsidized bread and the state meets 96% of the cost. About 85% of Egypt’s bread is subsidised, this equals about 230 million loaves a day. Subsidized bread is distributed via bread stalls such as this one

However any changes to this subsidy system in a country where 40% of the population live on less than $2 a day can create volatile situations. This fragile state became visible in April 2008 when bread shortages, as a result of the surge in food prices, sparked civil unrest. Some people lost their lives and many were wounded. The UN Food and Agriculture Organization Food Price Index in January reached a new historic peak, rising for the seventh successive month and exceeding the peak of the 2007-2008 food price crisis. When it comes to food, the boundaries between stability and disorder are easily crossed. In how far increases in food prices stand at the bases of the unrest now seen in the Middle East is unclear but it is clear that food prices can be an important factor in causing civil unrest and a catalyst for anti-government protests.

For privacy reasons fictive names have been used in this blog.

Acknowledgements

The information in this blog is based on interviews carried out by my colleagues and me in Suhag, Assuit, Menia and Fayoum governorates in the months of October and November 2010. This research was part of my PhD research exploring how HPAI and the food crisis have affected the food security and livelihood situations of rural households in Egypt.

I’d like to thank FAO for providing the opportunity to do my PhD research during an FAO assignment

I’d like to thank Eman Abdel Raouf, Arwa El Naggar, Gebril Mahjoub Osman and AbdelHakim Ali for translations and good company.

The International Livestock Research Institute (ILRI) has reproduced, edited and published my post under the title: Food and Egypt: Did high food prices help stir the public revolt?

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A story of garbage and pigs

‘Uncertain times in Egypt’: a small feature in Farming Matters magazine produced by ileia

All the photos posted on my blog are owned by me and they should not be used without my permission

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Bread, art and politics; how can these be possibly related? Somehow they are I found out a few days ago. I already knew that bread and politics are closely linked in Egypt as supplying cheap bread has been a key principle of government policy for decades as it is regarded crucial for ensuring social stability. Bread is the cheapest as well as most important food item in Egyptian diets.

Since WWII Egypt has provided basic necessities such as vegetable oil, kerosene, sugar, bread and tea to its population as a way to assist the people with coping with inflation and scarcity resulting from the war. In the 1960s and 1970s the food subsidy system expanded and became part of broader social welfare programs which included subsidies for non-food items and services such as transport, housing, soap and cigarettes. Where under Nasser government spending on consumer subsidies was modest, under Sadat the share of government spending on subsidies accounted for 14% of total government expenditures in 1981 and included as much as 18 food commodities. As part of the Economic Reform and Structural Adjustment Program (ERSAP) there was a sharp decrease in consumer subsidies between 1990 and 1994 and the establishment of a free exchange market. However, the subsidy on bread was not removed and is still heavily subsidised today.

A man carrying bread from the bakery to the subsidized bread shop

Here people are buying bread at one of the government subsidized bread stalls. Bread is being spread on the car to cool down as it comes straight from the bakery around the corner.

Men waiting for their bread to cool down

Two girls catching up while waiting for their bread to cool down

Two thirds of Egyptians eat subsidised bread and the state meets 96% of the cost. About 85% of Egypt’s bread is said to be subsidised, this equals about 230 million loaves a day. I normally buy three loafs of unsubsidised bread at the local bakery for 1 Egyptian pound (EGP) (equal to US$0.18 or €0.14); subsidised bread only costs  5 piaster a piece so 15 piaster for 3 loafs of bread (equal to US$0.026 or €0.021). This makes subsidised bread seven times cheaper than unsubsidised bread. This raises questions about the long term economic sustainability of the subsidy system and also raises questions about vulnerability to the c word which I should probably not mention here (the word ends with orruption…). However making changes to this subsidy system in a country where 40% of the population live on less than $2 a day can create volatile situations. This fragile state became visible in April 2008 when bread shortages, as a result of the surge in food prices, sparked civil unrest. Some people lost their lives and many were wounded.

What has art got to do with this? I haven’t quite found out the details yet but I came across this piece of art when I visited the 33rd General Exhibition 2010 in the Palace of Arts here in Cairo.

As you can see it depicts Egyptians from different social classes all over Egypt. Laid out in front of them are hundreds of loafs of bread or Baladi Aish as they’re called here; the type of bread that is subsidised and distributed by the government. Clearly the artist had some sort of socio-political commentary. Unfortunately I can only guess as to what his or her reasons are for making this piece of art. There was no name tag or a description of the work to be found. But I am determined to find out more about this piece of work and the artist who made it as I’m eager to get an insider’s view on this issue. As soon as I’ve managed to find out more about the artist and the meaning of his/her work I will share it here.

To be continued…

Sources I used for this blog:

Allam, A. and D. Williams. (2008). “Egypt’s Rising Food Prices Swell Bread Lines, Deficit.”   Retrieved 26 May, 2009, from http://www.bloomberg.com/apps/news?pid=20601110&sid=amxCfY1PA_ek.

EIU (2008). Egypt Country Profile 2008. London, Economist Intelligence Unit.

Gutner, T. (1999). The Political Economy of Food Subsidy Reform in Egypt, International Food Policy Research Institute (IFPRI).

ISFP (2009). Country responses to the food security crisis: Nature and preliminary implications of the policies pursued. M. Demeke, G. Pangrazio and M. Maetz. Rome, Agricultural Policy Support Service, Food and Agriculture Organization.

McGreal, C. (2008). “Egypt: bread shortages, hunger and unrest.”   Retrieved 1 July, 2010, from http://www.guardian.co.uk/environment/2008/may/27/food.egypt.

Slackman, M. (2008). “Egypt’s Problem and Its Challenge: Bread Corrupts.”   Retrieved 1 July, 2010, from http://www.nytimes.com/2008/01/17/world/africa/17bread.html

All the photos posted on my blog are owned by me and they should not be used without my permission

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