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Securing the future of baladi bread, October 2015

06 October, 2015

 FAO and the EBRD are working to increase the efficiency of Egypt’s wheat sector

A technical workshop on phytosanitary measures affecting Egypt’s grain imports was organized on 28 September by the European Bank for Reconstruction and Development (EBRD) and the Food and Agriculture Organization of the United Nations (FAO). On the occasion of this workshop in Cairo, representatives from the Egyptian wheat sector
, the country's public authorities and regulators, and international experts discussed the importance of international phytosanitary standards, their application and the need to step up public-private dialogue in this area.

Wheat is a fundamental part of the Egyptian diet, particularly in light of the very high per capita consumption of bread. Egypt is also the world’s largest importer of wheat. Wheat imports will remain essential for Egypt’s food security in the long term, given the country’s limited arable land and water supply, and considering its population growth.

The Egyptian wheat import supply chain is characterized by heavy food losses and its efficiency could be significantly improved. FAO and the EBRD are working together to initiate public-private dialogue in Egypt’s grain sector, which is aimed at finding ways to reduce inefficiencies along the grain supply chain.

“Working with both private agribusinesses and public authorities on the efficiency of Egypt’s grain supply chain, we could help attract private investment and address pressing needs in this strategic sector,” said Gilles Mettetal, EBRD Director for Agribusiness.

Scope for increasing private sector involvement to improve food security

 FAO and the EBRD recently conducted a review of the Egyptian wheat sector in order to better understand its challenges, identify the primary bottlenecks, and pinpoint opportunities for enhancing policy dialogue and attracting additional private investment.

Study recommendations highlight the benefits of a greater private sector role for increasing the efficiency and reducing costs in grain supply. For example, the government could rely on privately built silos to store domestic wheat, reduce the complexity of its wheat import tenders and improve data quality and transparency.  

The study pointed out that the recent Baladi programme reforms aimed at reducing waste and inefficiency are welcomed. In March 2014, the government launched an ambitious reform of the Baladi programme, introducing a smart card system with the objective of modernising the country’s long-established tradition of bread subsidies.

Launching an effective dialogue between the public and private sector would improve trust between the government and private stakeholders to work together to enhance the efficiency of grain procurement and storage.

Bringing wheat sector representatives and policy makers around the table

 In June of this year, the EBRD and FAO organized the first workshop on wheat supply chain inefficiencies, which convened more than 40 senior government officials, representing all the agencies and ministries involved in Egypt’s wheat sector as well as major grain trade representatives, who account for most of the country’s private sector wheat imports.

“In the first workshop, we discussed ways to reduce expenditures related to quality inspections of imported grains by utilizing private sector surveyors at the time of grain loading instead of costly government inspection. We now need to take it one step further by consolidating industry views and discussing other technical issues along the supply chain,” said Dmitry Prikhodko, Economist with the FAO Investment Centre.  

Yasser Ahmed Abbas, the Vice Chairman of the Internal Trade Development Authority, confirmed the Minister of Supply’s commitment to improve the overall efficiency of the wheat import chain and his willingness to work together with the EBRD and FAO to achieve this goal.

The June workshop was an occasion for constructive discussion among key stakeholders in the Egyptian wheat sector about the high cost of inspections, the complication of wheat import tenders, and the need for a unified industry voice in dialogue. It was also agreed that the existing phytosanitary measures related to the "freedom from" ragweed (also known as ambrosia) in imported grain should be further explained and discussed with public and private stakeholders.

In response to this strong interest, FAO and the EBRD organized a second technical workshop on 28 September 2015 to facilitate discussion on existing phytosanitary measures, applicable international phytosanitary standards and import control practices with the objective of bridging the positions of public regulators and the private sector in Egypt.

More than 30 people from both the private and the public sector attended the workshop, including representatives from the International Plant Protection Convention (IPPC), a whole team from the Central Administration of Plant Quarantine (CAPQ) of the Ministry of Agriculture and Land Reclamation of Egypt, and the General Authority for Supply Commodities (GASC). Lively discussion followed presentations by the IPPC and CAPQ on the economic rationale of the freedom from ambrosia measure. CAPQ expressed its readiness to further discuss the measure in line with the applicable international standards.   

Looking ahead  

Steps are underway to establish a wheat suppliers’ association in Egypt to consolidate the views of the industry on sector issues, develop possible solutions and facilitate future discussions with the government. The EBRD and FAO are committed to facilitating the public-private dialogue on technical issues and improving grain market transparency to stimulate the private sector investment needed to ensure the future of Egypt’s food security. 

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