Aid & Development

Egypt gives green light to rice imports amid water shortages

North Africa

Farmers in Egypt were appalled by the government’s decision to start importing rice and limiting the areas allocated for rice cultivation as part of its strategy to contain the water crisis. Despite the Government's claim that this will break the rice market monopoly, farmers say they are the ones most affected.

Egypt’s President Abdel Fattah al-Sisi gave the go-ahead for the government’s strategy to import rice with the aim of meeting local demands, after limiting the areas allocated for rice cultivation to adapt to a water shortage. The presidential decision, which turns Egypt from a major rice exporter into an importer, came during Sisi’s meeting July 8 with Prime Minister Mostafa Madbouli and Minister of Supply and Internal Trade Ali al-Meselhi.

The meeting dealt with a host of files, including the Supply Ministry’s strategy to ensure the availability of essential, strategic crops besides controlling the local market, according to presidential spokesperson Bassam Rady.

In light of this strategy, Sisi agreed to allow rice imports into the country, assigning the General Authority for Supply Commodities to publicize rice in the upcoming year and determine adequate prices for this important crop in cooperation with the Agriculture Ministry.

Rady said that Sisi sent his directives to intensify price control procedures and put an end to the market monopoly and commercial fraud.

Egypt’s government officially announced its intent to open doors for rice imports on June 6, when then-Prime Minister Sherif Ismail announced that such imports would help provide enough rice stocks so that the majority of citizens can find rice easily.

The country started to suffer from the rice crisis in 2016, when citizens failed to find it in markets. At the time, traders were under fire over claims that they stock rice bags so as to sell them at higher prices. Actually, the government’s import program demonstrates its desperate attempt to avoid public uproar that may stem from a shortage of rice, which is a staple of the typical Egyptian diet.

While this move has been seen as a serious attempt by the Egyptian government to deal a bitter blow to rice monopolists, farmers complain this decision hit them the hardest, adding to their burdens.

“Definitely it is a step backward. No Egyptian citizen who genuinely loves his country can be happy with this decision, which supports foreign farmers at the expense of Egyptian ones,” Farmers Syndicate head Hussein Abu Saddam complained to Al-Monitor.

Egypt will now turn into an importer, wasting hard currency and making the country incur hefty losses, Abu Saddam added.

“Claiming this move will curtail monopoly is groundless. Those greedy traders will monopolize the imported rice as they are doing with the local one. Lack of monitoring is the key reason lurking behind such malpractices,” Abu Saddam said. Monopolies are combated by law and not by imports, he stressed.

Abu Saddam elucidated that local consumption amounts to around 3.5 million tons. The current area cultivated with rice produces approximately 3 million tons. “This means that the deficit is nearly 500,000 tons. Such deficit can be met by growing and introducing other low-water rice varieties as well as adopting modern irrigation techniques,” he said.

It is worth mentioning that Egypt’s Ministry of Irrigation and Land Reclamation issued in January a decision to decrease area allocated for the water-intensive rice from 1.14 million acres last year to only about 750,000.

This decision came within the framework of the ministry’s broader plan to rationalize water consumption in agriculture, which is the largest water consumer in Egypt.

The Irrigation Ministry is grappling with numerous water challenges haunting the country in light of the limited water resources, growing population and the nightmarish, anticipated decrease in Egypt’s share of the Nile River following the construction of the Grand Ethiopian Renaissance Dam.

However, in May the government agreed to add 104,000 acres to rice cultivation, a matter that brought total rice cultivation area up to 850,000 acres.

“Limiting rice agriculture is posing a serious threat to many lands, making it vulnerable to soil salinity. Rice cultivation is not the reason lurking behind water concerns in Egypt,” Abu Saddam confirmed.

Egypt’s executive and legal authorities also took certain decisions to tighten the grip over rice cultivation by introducing imprisonment as a tool of punishment.

Egypt’s parliament in April finally approved certain amendments to Agriculture Law No. 53 of 1966, which were later ratified by Sisi on May 21. Under this bill, the government is authorized to determine certain areas to cultivate water-intensive crops like rice and sugar cane. It can also prohibit the cultivation of particular crops in certain areas. More importantly, this law stipulates that those who do not abide by the ministerial decisions shall face up to six months in jail and shall be fined a maximum of 20,000 Egyptian pounds (around $1,123).

Furthermore, Agriculture Minister Ezz El-Din Abou Steit on July 10 warned traders of stockpiling rice to get high profits, saying that they “will regret” the move. He also announced that rice prices will remarkably decline by early September.

“Allowing rice imports into Egypt were highly expected and an inevitable consequence of the amended agriculture law. Those imports will help fill the gap arising from limiting rice cultivation,” professor of agricultural economy at the Desert Research Center Sherif Fayyad told Al-Monitor.

Fayyad, meanwhile, said he is against imprisonment as a sanction, adding that the agricultural research centers should not be blamed for not introducing new varieties. “The government allocates a meager part of its budget to scientific research. Of course, we the researchers can provide new varieties with higher productivity and less water consumption, but we need adequate financial support,” he said.

Despite this heated debate, the import program found much applause by Agriculture Ministry spokesperson Hamed Abdel Dayem, who told the state-run Al-Ahram that these imports will help ensure stability in rice prices in local markets. The competition between the public and private sectors in general will help offer competitive prices, he added.

“Apart from the economic and political reasons behind such a decision, the imported rice will not be appealing for Egyptians. They adore the taste of Egyptian rice,” Abu Saddam concluded.

Image: Reuters

Article: Al-Monitor