Selling the Family Jewels

The largest producer of fruit and vegetables in the Middle East, Egypt exports most of its produce to earn foreign currency, and leaves little for the average Egyptian to consume

Divya Kolady

Selling the Family Jewels

Political turmoil and instability is robbing Egypt of its top revenue earner, tourism. The number of people visiting the country dropped nearly 50 percent from the same time last year.

uBt away from the ancient Pyramids, and picturesque deserts, by the river Nile, another revenue generator is proving to be surging. According to Egypt’s State Information Service, the country’s agricultural industry has been growing exponentially in recent decades. Their figures show that revenues from exports jumped from US$67 million in the 1980s to US$900 million by 2005. And over the past decade, crop production has increased 20 percent.

The agricultural sector employs 30 percent of Egypt’s entire labour force, accounting for some 14.8 percent of the country’s GDP.

Official figures show that agriculture contributes to 20 percent of Egypt’s commodity exports. While cotton and rice are the country’s main export crops, more and more Egyptian-grown fruit and vegetables are finding their way to supermarket shelves across the world.

In fact, Egypt is the world’s second biggest exporter of oranges by volume, according to statistics from the UN’s Food and Agricultural Organization. Citrus fruits make up 50 percent of total fruit production in the country. Grapes are also widely exported, with pome fruit and stone fruit also being cultivated. There has been a concerted effort to expand the country’s fruit growing area.

The road from Cairo to Alexandria is lined with mega-farms sprouting strawberries, mangos and citrus fruit bound for foreign shores. The area was desert just decades ago, but is now yielding the luxury produce, and most of it out of the reach of the average Egyptian. It’s rare to find a basket of strawberries at a local market, although the country is the world’s fourth largest producer of the fruit. Mainly in the domain of large scale farming businesses, the produce is geared for the lucrative export market. Just last year the US Department of Agriculture announced access for the Egyptian government to export strawberries to the US.

Nearly all of Egypt’s agricultural production takes place in some 2.5 million hectares (six million acres) of fertile soil in the Nile Valley and Delta. Warm weather and plentiful water permit several crops a year. This allows vegetable crops such as tomato, potato, cucumber, melons and others to be cultivated in the three seasons.

One of the most important crops for Egyptians are tomatoes, used generously in local and Middle Eastern cooking. Tomatoes are grown in three seasons, winter, summer and autumn – on about three percent of Egypt’s total planted area. But in recent times, the crop has been hit by huge losses as a result of the tomato leaf curl virus, blight and nematodes.

Potatoes are Egypt’s second most important vegetable after tomatoes, both in terms of cash value and tonnage produced. Trade in the spud has made Egypt the fifth largest exporter of potatoes by quantity globally.

The government says Egypt’s agricultural exports have huge potential, but they face severe limitations. The rate of population growth over the past decade is slightly higher than the increase in crop production, which means more will be needed to feed domestic demand.

The country suffers from an arid climate, with no effective rainfall except in a narrow band along the northern coast. So its main source of water supply is the Nile. Some desert lands are being developed for agriculture in Upper Egypt, but other fertile lands in the Nile Valley and Delta are being lost to urbanization and erosion.

The United States is a major supplier of wheat, corn, and soybean products, almost all through commercial sales. Egypt is one of the US’ largest markets for wheat sales. US agricultural sales to Egypt average US$2 billion annually. It’s hard to believe that in the 1960’s the country could provide all of its own grain requirements. But a concerted shift from wheat to cash crops for export has now made Egypt the world’s largest wheat importer, according to the UN FAO. Magda Kandil, of the Egyptian Centre for Economic Studies, says wheat is a sensitive issue for the Egyptian government. The price of grain has been the source of unrest historically. When protesters took to the streets of Egypt in January 2010, they had three key demands: “Bread, Freedom and Justice.”

The agricultural industry has managed to sidestep the current political crisis in the country, although analysts say the government’s frequent interference could undermine its resilience. Authorities have been known to put price controls on fruit and vegetables to keep consumer expenses down. Farmers say this adversely affects their margins, as they often pay double the publicly guaranteed prices in black markets for crop production inputs, and are sold diluted or ineffective products because of corruption and mismanagement.

The agricultural export industry remains in the hands of a few big businesses. Land is highly fragmented and with little help from the government, the small farmer struggles to cover costs.

Egypt’s agricultural subsidies are meagre, equalling two percent of national farm receipts, compared with OECD countries, where subsidies average around 30 percent.

According to Ayman Zohry of the Egyptian Society for Migration studies, lack of support for farmers is driving a population shift from rural to urban areas, which is endangering labour supply. A quarter of Egyptians who now live in cities were born in rural areas.

Recent directives from the European Union could also administer a blow to the Egyptian fruit and vegetables trade. The EU absorbs 42 percent of the country’s exports. The European Commission in Brussels is now making it mandatory for more samples to be checked. The EU is doubling the sample size it is checking from five to 10 percent for the total amount of vegetables and fruits exported to help reveal the amount of pesticides in Egyptian agricultural produce. They say it’s a measure to ensure Egyptian exports fall within EU standards.


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Selling the Family Jewels

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