The president of Egypt wants to increase the price of subsidized bread, in order to partially finance schoolchildren meals. A sensitive topic as bread is a central piece of the Egyptian diet.
On August 3, the president of Egypt El Sisi visited an expanded food industrial complex in Sadat city in the northwest of Cairo. The newly built factories will aim to help provide school meals for 13 million children.
The president then explained that the EGP 7.7 billion (US $492 million) necessary to fund the project, which is currently capable of feeding schoolchildren only three out of five days, would be taken off ministries.
In order to find these financial resources, he asserted that “the price for a loaf of bread, offered at 5 piastres will have to increase. It’s not reasonable to have 20 loaves for the price of 1 cigarette”.
Aish Baladi bread, a typical Egyptian flatbread similar to pita, has been subsidized in Egypt for about 60 years, set at a price that didn’t change since 1989.
Egypt is also the world’s largest importer of wheat while food prices have been increasing globally.
Baladi bread distributed to almost 70 million people
Egyptians are able to receive 5 loaves of bread for 5 piastres each (5 cents of the Egyptian pound) as part of the state-sponsored food support.
An unsubsidized loaf of bread costs about 60-65 piastres (US $0.04).
Subsidized food like sugar, oil, rice or tea have been historically more regulated than bread, with the use of quotas, and more recently ration cards. In 2014, instead of flour, Egypt subsidized a number of loaves of bread, capped at 5 per person per day since then, reducing the black market on wheat.
In July 2021-2022, about 120 billion loaves would be distributed to 67 million people for a state budget of 45 billion pounds (US $2.9 billion) out of the £87 billion ($5.6 billion) of annual food subsidy.
The minister of Supply and Internal Trade, Ali El Meselhi, is going to work on the president’s directive to present a plan to the government.
The Deputy Head of the Bakeries Division of the Cairo Chamber of Commerce supported the President’s decision, although “long overdue”, as he considers most people waste public money by buying bread that feeds the black market or animals.
Food subsidy, a sensitive topic historically
Last year, the government already revised the weight of a loaf of bread, and considered replacing the food subsidy system with cash payments, as it argued it could save about £26.5 billion ($1.7 billion) a year.
“The current subsidy system has many flaws. It allows wealthy and financially comfortable classes access to ration cards and subsidized goods, many of which then appear on the black market”, El Meselhi justified in 2020. An explanation the minister had also given in 2019 for reducing the number of beneficiaries.
The cost of living and reforms of the subsidy system have been recurrent hot topics in Egypt. But rarely has a change in the price of bread concretely come to the table. Because bread, as a central piece of the Egyptian diet, is particularly sensitive for the population.
In 2017, protesters marched in the streets in fear of a slash of bread subsidies. During the 2011 revolution, “bread, freedom and social justice” was the rallying chant of mass protests. In 1977 already, the Egyptian bread riots against the termination of state-sponsored food led to the deaths of about 70 Egyptians in two days.
About a price increase of bread in the near future, “I will take the responsibility of the change;” the president assured.
- Half-baked, the Other Side of Egypt’s Baladi Bread Subsidy, Barcelona Center for International Affairs, 2015, Free access
- Understanding Poverty and Inequality in Egypt, World bank, 2019, Free access
- Egypt: Food subsidies vs cash, Ahram, January 2020, Free access