Farmers say Egypt's wheat crop hopes are "a dream"

Mon Apr 15, 2013 1:55am EDT

* Egypt eyes 4-5 million tonnes from local flower this year

* Imports curbed due to economic crisis, currency shortage

* Farmers say lack water, fuel, seeds to boost output

By Yasmine Saleh

MINYA, Egypt, April 15 (Reuters) - Egypt's Islamist-led government must be dreaming if it expects a bumper wheat harvest over the next six weeks that will save the country billions of dollars in imports, says farmer Farid Boshra Abdel Malek.

"How can they expect any increase in wheat production when they are not providing us with water, fuel for our machines or much-needed enrichment seeds?" said the wheat grower in Matay village, near the city of Minya in the lush but slender Nile valley that is this desert nation's granary.

"They are giving us nothing and expecting more."

Farmers say Cairo is over-optimistic in expecting a significant increase in this year's crop as their long-standing complaints about bad fertiliser, shortage of irrigation water and of plant-enhancement seeds remain unresolved.

New worries about a shortage of diesel fuel to power pumps, tractors and trucks to bring in the harvest and transport it have added to the uncertainty.

"Only God knows how much we will harvest this season, given the problems, but we are doing our best," farmer Hana Munir said.

Egypt, the world's top wheat importer, aims to cut imports this year by around 10 percent, hoping a bigger home crop and modified storage will help the most populous Arab state keep its 84 million people in low-cost subsidised bread.

The country has endured political and economic turmoil since the overthrow of autocratic President Hosni Mubarak in 2011. Foreign reserves have fallen from $30 billion to $13.4 billion - less than three months' imports - raising doubts about the state's ability to import basic foodstuffs such as wheat.

Egypt usually imports about 10 million tonnes a year, which might cost it just over $3 billion. But this year the state says it will buy only around 4-5 million tonnes abroad, hoping to get the rest from local production.

"For the government to expect 4 to 5 million tonnes of local wheat for bread is a dream, a nice dream but nothing more than that," said Abdel Malek, who owns a 13 feddan (5.5 hectare) farm in one of Egypt's biggest wheat-producing regions.

A bread shortage in 2008 and similar problems in the 1970s provoked riots at a time when protests were not as routine as in post-revolutionary Egypt, where any lack of bread is likely to trigger violence, if not another uprising. Small protests have already begun in some villages in Minya over bread shortages.

"OVERESTIMATIONS"

Minister of Supply Bassem Ouda told Reuters this month that bread is the top priority for his administration since he took office in a cabinet reshuffle earlier this year.

"The old regime's policy was never in favour of Egypt or our local wheat crop, and it treated farmers badly as it used to humiliate any Egyptian, but that era has ended," said Ouda, who is from the Muslim Brotherhood movement, which supports President Mohamed Mursi.

He forecast a 9.5 million tonne domestic wheat harvest, of which about half ends up in government flour mills. Egypt would sign import deals, if needed, only with countries that "fit our plans, time schedule and give us the best offers and credit facilities", Ouda added.

A ministry official who asked not to be named said Egypt would always need to import wheat. Local production could be increased if the government improved soil and fertilisers and worked harder to solve farmers' problems, but that would take years, he said.

The latest U.S. Department of Agriculture report on Egypt forecast production will increase 2.3 percent to 8.7 million tonnes this year due to an expanded area under cultivation. But it said diesel fuel shortages could disrupt the harvest.

"The trade and other knowledgeable interlocutors estimate Egyptian wheat production at about 6-7 million tonnes," it said.

"The government is forecasting wheat procurement (from local farmers) at 4 to 5 million tonnes, but this appears unrealistic.

"The government is setting import procurement and wheat stock policies based on (significant) local crop production overestimations."

It forecast that Egyptian wheat imports would have to rise to 8.5 million tonnes in the fiscal year beginning in July from 8 million tonnes in the current year, which was sharply down from 11.65 million tonnes in 2011/12.

USDA said wheat stocks are likely to plunge below 1 million tonnes by June 30 because the economic crisis has crippled purchases from the world market. The government has held off imports to save hard currency and says it still has 2 million tonnes in reserve, enough to last 81 days. The United States is one of Egypt's main suppliers, along with Russia and France.

ENHANCED FIELDS

Aiming to harvest 1.4 million hectares from April 15 to May 20, the government is pioneering a technique that smoothes fields so farmers can plant more wheat on the same area.

It announced plans last month to build 150 silos before the 2014 wheat harvest and said in February it would raise the price it pays for local wheat to 400 Egyptian pounds ($58.30) per ardeb (150 kg) up from 380 pounds. Many existing silos are outdated and contribute to loss of grain.

"We have over 2,000 fields to demonstrate a new style of planting that saves up to 25 percent of soil-enhancement seeds and water and has already been implemented in Sharqia," said Salah Moawed, a senior agriculture ministry official.

As a result, the Nile delta region of Sharqia, one of the biggest wheat growing areas, is expected to nearly double the amount it harvests to 1.4 million tonnes this year, according to deputy minister of agriculture there Mohy el-Din Mahmoud.

According to Moawed, Egypt grows 9 to 9.5 million tonnes of wheat a year but more than half never reaches the market.

"We waste a lot of our production due to the lack of proper storage as we only have silos to store up to 5 million tonnes, besides losses during harvesting and transport," he said.

Farmers keep back some wheat to make their own bread, to feed livestock and for seeding in the next season.

"We are not putting any pressure on the farmer to plant wheat, but we are giving him incentives and solving his problems to make him want to do so," Moawed said.

But Minya farmer Mohamed Hussein said: "We don't feel there is a government that cares about farmers. We never protest, we don't do anything except work and eat. Yet no one ever looked at us or took our problems seriously."

FARMERS' PROBLEMS

Matay farmers gather daily to talk over their problems and ease stress during a mid-day break before they go back to work.

According to Abdel Malek, farmers complain of a decrease in the Nile water coming from Ethiopia and the government's failure to provide them with enough subsidised seeds and fertiliser.

"Subsidised fertiliser costs 75 Egyptian pounds a 50-kg bag, while we pay 150 pounds for the same amount on the black market to meet our needs," farmer Gerges Ayad said.

Urban sprawl is also eating into available farming land.

"A lot of good agricultural land has been used for housing as the government does not have money to build multi-floor houses and only builds one or two-floor homes, so it has to build more to cope with the increasing population, which is eating up our land," farmer Abdel Malek said.

Egypt's economic crisis has also hit fuel supplies hard.

On two visits to Minya this month and in late March, only one in five filling stations had the low-grade diesel fuel that farmers use, and there were long queues of trucks and buses.

But Moawed said the ministry of petroleum had been briefed to make sure farms received enough fuel in harvest time. ($1 = 6.8604 Egyptian pounds) (Reporting by Yasmine Saleh; Editing by Paul Taylor and Will Waterman)