ADVERTISEMENT

ADVERTISEMENT

Egypt changes wheat farmers' subsidy system

CAIRO - Egypt will start buying local wheat from farmers at the average global price starting next season changing the way it subsidizes its wheat growers, the cabinet said in a statement on Thursday.

1868055+worldnews.jpg

CAIRO - Egypt will start buying local wheat from farmers at the average global price starting next season changing the way it subsidizes its wheat growers, the cabinet said in a statement on Thursday.

In previous years Egypt annually fixed a local procurement price for Egyptian wheat that is above global prices in an attempt to encourage farmers to grow the crop.

But the high price has led to smuggling, in which foreign wheat, mostly Russian, is sold to the government, falsely labeled as Egyptian.

Under the new system, the government will directly subsidize wheat farmers by granting each of them 1,300 Egyptian pounds ($161.89) per feddan at a maximum of 25 feddans per farmer, the statement said. One feddan is equal to around one acre.

Supplies minister Khaled Hanafi told Reuters in a July interview that a new subsidy system was being studied for introduction in 2016.

ADVERTISEMENT

In the 2015 season, Egypt offered a fixed price of 420 pounds per ardeb, which is equivalent to about 150 kg. The price was about $168 a ton to $200 a ton higher than the international market.

A record 5.3 million tons was subsequently purchased from local farmers, up from 3.7 million tons in 2013-14, amid evidence of smuggling. Traders say as much as 1 million tons of that could be foreign wheat but the supplies ministry has repeatedly denied the claim.

Egypt will continue to subsidize sugar farmers at 400 Egyptian pounds per ton, the statement said.

Related Topics: WHEATCROPS
What To Read Next
Commercial farmers in Nebraska, the Dakotas, and Minnesota start using drones for spraying, seeding.
This week on AgweekTV, we hear about North Dakota corporate farming legislation and about WOTUS challenges. Our livestock tour visits a seedstock operation and a rabbit farm. And we hear about new uses for drones.
Kevin and Lynette Thompson brought TNT Simmental Ranch to life in 1985. Now, their daughter, Shanon Erbele, and her husband, Gabriel, are taking over the reins, and their sale is for Feb. 10.
Gevo will be making sustainable aviation fuel in Lake Preston, South Dakota. Summit Carbon Solutions plans to capture carbon emissions from the facility.