Egypt approves price rise intervention for key foodstuffs
The Egyptian cabinet agreed on Thursday to stop the rising prices of key food commodities such as bread, and cooking oils. The government already spends over $600 million on bread subsidies annually.
According to Egypt's Minister of Information Safwat El-Sherif, a proposal will be implemented with a few days is expected to cost the government between 2.5 and three billion Egyptian pounds ($400 to 480 million). He said subsidies will either be provided in the form of direct support to Egyptian families or through the increase of goods purchased by state-owned companies.
The increase in bread prices is linked to a national flour shortage caused by a poor wheat harvest last year, exacerbated by production problems at mills and higher international wheat prices.
Egypt’s 66.5 million strong population consumes on average 180 million loaves of bread per day. Due to the state’s explicit mandate to ensure access to basic food supplies for its entire population, locals do not tolerate increases in the price of food staples. Riots were ignited in 1977 after the government attempted to slash bread subsidies, leaving the Egyptian leadership no choice but to adopt a gradual approach to economical reform.
The nation’s food subsidy system, which covers flat baladi bread, baladi flour, cooking oil and sugar, acts as a social safety net. Bread and flour prices are subsidized for the entire population, while oil and sugar reductions are available only to the poor through a ration card system. — (menareport.com)
© 2004 Mena Report (www.menareport.com)