Reducing Postharvest Losses

In the OIC Member Countries

ii)

Consumer support – heavily subsidised price of

baladi

bread (accessed using

smart-card system since 2015), and government ownership of 12% of bread

baking capacity

iii)

Public investment in improved grain storage facilities and state trading

iv)

Public support to general services (crop breeding research, phytosanitary control

etc.) (FAO, 2015)

Whilst these government interventions aim to secure national food security, political stability

and act as a vital social safety net for the 25% of Egyptians living below the poverty line

(World Bank, 2011), there are unintended outcomes. These include:



the high subsidised procurement price to encourage wheat production in Egypt

also

encourages fraud as cheaper imported wheat is sold on as or blended with

domestically produced wheat (Wally, 2016)



large volumes of flour being resold on the black market (FAO, 2015)



significant extra costs/inefficiencies due to government involvement in cereal

procurement, storage and milling compared to if the process was liberalised



increasingly complex tender documents, import requirements and processes



poor quality of many of the

shouna

storage open bag-stack arrangements cause

qualitative and quantitative losses due to exposure to weather and pests, plus labour,

bag and handling costs are high due to large number of employees, complex

procurement system and security guarding; failed fumigations are reported (El-

Lakwah, 1995)



Inefficient management of government storage facilities at the ports lead to long

turnaround and loading times, delays in port and increased demurrage costs (FAO,

2015).

In 2014, the government spent ~USD$357 on subsidising the price of domestic wheat

Some suppliers suggest imported wheat prices are higher for the government than for private companies by roughly USD

6-7/tonne, plus a further USD 0.50-0.75/tonne for government inspections at the port of loading compared to using private

inspection services at a cost of about USD 0.25/tonne. Additionally, the “freedom from ambrosia seeds” rules in force mean

that if a shipment is declared to include ambrosia, additional costs of USD 12-15/tonne are incurred. This risk converts into

higher prices for Egypt’s wheat imports.

Including the strict and subject-to-change-without-notice import specifications (e.g. ergot tolerance), and short notice

GASC tenders, e.g. 7 weeks from tender originating to delivery of the wheat – which leads to suppliers incurring additional

costs and some potential supply origins being unable to participate (FAO, 2015).