Bakers protest in Egypt over subsidy changes
Hundreds of bakery owners and workers on Tuesday blocked entrances to Egypt's supply ministry to protest a new government plan to raise the price of flour used to produce subsidised bread and penalise bakery owners found committing production violations.
The new pricing arrangement means bakers will now have to buy a 100-kilogram bag of flour for about LE286 ($42), rather than the subsidised rate of only LE16 ($2.3) per bag.
"We've been protesting for almost three days now," said Mahmoud Abd El-Hamid, a bakery owner from the canal city of Ismailia. "The government can't burden bakery owners simply because they want to liberalise the bread supply system."
"The plan is unfeasible and will cost us lots of money," he said.
Bakery owners, many of whom came from outside Cairo for Tuesday's protest at the supply ministry, shouted slogans denouncing the perceived 'injustice' against them and accusing ministry officials of corruption.
"The supply ministry puts production costs for 1050 loaves of bread at LE80 ($12), while the real cost is closer to LE120 ($18)," said Mohamed Farouq, a baker from Egypt's northern Daqahliya governorate. "How are we supposed to sustain our businesses this way?"
Bread prices have remained largely unchanged since the 1980s, thanks to a policy of frequent government intervention aimed at stabilising subsidised bread prices. Until today, the price of a single bread loaf remains at a mere five piastres – less than $0.01.
The government has often accused bakeries of selling subsidised flour on to the black market rather than using it to produce bread for the citizenry – one of the main reasons for its move to liberalise flour prices.
Protesting bakers also criticised the system of penalties that will be applied to bakers who fail to respect the specifications laid down by the ministry.
"The penalties are too harsh; production errors happen all the time," said Mohamed Dorra, head of the Ismailia Bakers Association. "We cannot endure these additional financial burdens."
Supply Minister Bassem Ouda has asserted that most Egyptian bakers had accepted the new scheme, and has threatened to sue any bakers who halted their bread production.
Nevertheless, Dorra said that bakers were "staging peaceful protests and will continue to do so until the government responds to our demands."
In a related development, the government recently announced plans to implement a 'smart card' system within the next two months aimed at rationing subsidised bread.
- Fully booked for post-sanctions business: Iran's five star hotels are buzzing with Western business delegations
- The source of all brain drain: Lebanon's university graduates downbeat about their future prospects
- Is Erdogan's party waging a 'holy war' against the free market economy?
- Costs and benefits: the tough economics of hosting the World Cup
- Mind the gap: descripancy between income and social development persists in the Middle East
- Bread price fluctuations to be introduced in parts of Egypt.
- Jordan introduces smart card to save bread
- Going after their daily bread: is Egypt's food subsidy reform all about getting Egyptians to eat less bread?
- Lebanon's bread-price clash minister v. bakes
- Egypt: President orders army to solve bread crisis