The Egyptian government spends over $600 million on bread subsidies annually, reported the official MENA news agency. Egypt’s 66.5 million strong population consumes on average 180 million loaves of bread per day.
The Egyptian food subsidy system, which covers flat baladi bread, baladi flour, cooking oil and sugar, acts as an effective 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.
The current system is characterized by many setbacks, including high absolute costs, roughly equaling the nation’s total earnings from tourism and ineffective distribution among the needy, according to the International Food Policy Research Institute.
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.
In almost three decades, food subsidy costs have declined to around five percent of government expenditures, from a high of 14 percent in 1981–82. Unfortunately, cost reduction has been paired with a drop in the quality of state-subsidized food products. — (menareport.com)
© 2002 Mena Report (www.menareport.com )