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"Egypt's Future Depends on Agriculture and Wisdom."
A Summary
Today the entire world is aware that our food supply cannot meet the demands of the world population. How can that be possible? In our high tech world, we can fix every technology, visit Mars, and cure diseases. Why can’t we feed the people of the world? The answer is agricultural development. It is never complete and rarely current. About the time we think we have all the problems solved, there is a new pest or a new disease or just more people. World leaders and financial institutions tire of hearing about the problems facing farmers and food processors. Haven’t we done all that? No we have not; it is a continual process. For the last 20 years support for agriculture has not been a priority. Now it is!
Most international agencies now recognize that something must be done, but what? According to Nathaniel Don Marquez (121), Asian NGO Coalition for Agrarian Reform and Rural Development (ANGOC), many international summits and conferences have declared that there is an urgency to save agriculture from its demise. Beyond policy changes, the restructuring of global governance and institutional reforms are needed. Commitments must be translated into actions leading to a renewed interest in agriculture and a return to the basic objective of food security.
In “Egypt’s Future Depends on Agriculture and Wisdom” I describe the history and present day efforts and limitations of agricultural development in Egypt as an example of the history and results in most developing countries.
Agriculture is a major economic issue in Egypt. It is an issue as a local food source, for international trade, for balance of payments, land use and water use and as a basic product for food and fiber manufacturing. Hence every aspect of the economic structure of the country relates to agriculture. Banking, transportation, tax and tariff structure, subsidies, local and international markets and health are all part of the agricultural system of a country. Not to mention politics, of course.
Agriculture's contribution to Egypt’s GDP is gradually diminishing, but it is still an important activity. Even though only 3% of the total land area is arable land, agriculture accounted for 13.9% of GDP in fiscal 2005 and 28% of total employment in 2000/01.
For over 5000 years the farmers of Egypt created a civilization based on the union of the land and the Nile river. It was one of the earliest civilizations and it had a profound influence on the region. Agriculture created most of Egypt's wealth. Grain, vegetables, fruit, cattle, goats, pigs and fowl were grown, and fish from the Nile were caught, and eventual surpluses, after deduction of the various taxes, were sold on the markets.
One person of more recent years who lead Egypt into the modern era in the early 1800’s was Muhammad Ali Pasha. An unusual visionary who knew how to use the talent and support of his advisors, his leadership expanded Egypt's influence and its agricultural technology into the surrounding countries. (76) He learned that British textile manufacturers were willing to pay good money for cotton, Ali ordered the majority of Egyptian peasants to cultivate cotton at the exclusion of all other crops. At harvest time, Ali bought the entire crop himself, which he then sold at a mark-up to textile manufacturers. In this way, he turned the whole of Egypt's cotton production into his personal monopoly. His successor built the Suez canal and put Egypt on the road to a powerful economic unit., but there continued to be many challenges.
Continuous changes in the economy, structure, scientific basis and international standing of agriculture throughout the world had serious impacts on Egypt. By the middle of the 20th century, Egypt was faced with severely limited land and water, arid conditions, an inadequate educational system, food shortages, health problems and internal conflict. Egypt’s leaders recognized the need for help and developed cooperative projects with the support of western countries including Canada, Germany, France and the United States. Experiments of every type were tested. Many things worked and yielded improvement and many did not. It is however a story about the largest Arab country and its interactions with the western world in an attempt to improve its agricultural efficiency and hence the quality of life of its people. The events of this period provide a background for developing countries and donor countries. They are a foundation for the continued development of Egypt and the other MENA countries.
The Arab Republic of Egypt is in 2 continents, Africa and the Sinai Peninsula in Asia. It is the 15th most populous country in the world and the second most populous in Africa after Nigeria. It has one million square kilometers (386.6 square miles) of land of which less than 4% is cultivated for crop production. The 79 million people live on 40.000 square kilometers.
To discuss Egypt is to discuss the Nile. It is formed by three tributaries, the Blue Nile, the White Nile, and the Atbara. The White Nile rises from its source in Burundi, passes through Lake Victoria, and flows into southern Sudan. There, near the capital city of Khartoum, the White Nile meets up with the Blue Nile which has its source in the Ethiopian highlands, near Lake Tana.
The river then flows north through Lake Nasser, the second largest man-made lake in the world, and the Aswan Dam before splitting into two major distributaries just north of Cairo. In ancient times, the number of distributaries was much greater, but slow water flow, human interference, and the accumulation of silt had led to the disappearance of many of the distributaries. This has effectively led to the desertification of large stretches of Egyptian land.
Conflict has never been far from the banks of the Nile. Its source is in central Africa; its value to the 10 countries through which it flows and the total dependence of Egypt and Sudan on this life line have always made the political and biological life of the river a source of conflict.
In 1959 an agreement for the full utilization of the Nile water was signed between Egypt and the Sudan allocating 55.5 billion cubic meters per year for Egypt and 18.5 for the Sudan.
In Egypt 88 percent of the water is consumed in agriculture. About 96 percent of the economically active population in Egypt is engaged in agriculture and Egyptian agriculture is entirely dependent on irrigated land. Egypt’s desperate need for enormous quantities of water is therefore abundantly clear as is its need for efficient use of its limited land suitable for crop production
Egypt Recognizes Food Gap Problem
By the middle of the 20th century, it became obvious that Egypt’s food supply was in serious trouble. In 1960, for example, Egypt had been almost self-sufficient in wheat production. By 1980, the country was importing about three-fourths of its wheat needs. This alarming gap due, resulted in increased attention being devoted to agriculture. The 1982 U.S. Presidential Mission on Agricultural Development in Egypt (PMADE) focused major attention on the rapidly widening food gap in Egypt, and recommended a number of specific actions to deal with the problem.
Recommendations were made for significant policy reforms that would have an impact on the problem by (1) making conditions more favorable for enhanced food production and, (2) slowing down the rate of gain in food demand. It was pointed out that cheap food, made possible by extensive government subsidies, was, in part, responsible for increasing per capita utilization by contributing to excessive waste.
In its report entitled "Strategies for Accelerating Agricultural Development" (102), PMADE addressed many policy issues. For example, the report emphasized that government policies were acting to seriously constrain the growth of Egypt's agricultural sector and recommended that the Government of Egypt (GOE) "Permit agricultural output and input prices to move toward world price levels." The report emphasized that "correcting distortions in relative prices received and paid by farmers is central to using resources in the agricultural sector more efficiently and reducing Egypt’s growing dependence on imported food."
Major emphasis was placed on the need for strengthened research and extension programs aimed at increasing agricultural output. This recognition resulted in the initiation of a new cooperative project financed by USAID and called the National Agricultural Research Program (NARP).
National Agricultural Research Program (NARP).
In early 1994, USAID Egypt requested that Tropical Research and Development, Inc., of Gainesville, Florida, organize an assessment team of U.S. specialists to evaluate the performance and impact of the Egyptian National Agricultural Research Project (NARP) and recommend the nature of future USAID support. Their report recognized the NARP as a tremendous accomplishment.
"Egypt is in the midst of a dynamic agricultural transformation, highlighted by unprecedented yield gains and production of its major crops. For a country that has limited arable lands and water supplies and that already enjoys high crop yields, this is a tremendous accomplishment. This progress has resulted, primarily, from effective research programs and significant policy reform during the past 10- to 15-year period. Yield growth in major Egyptian crops can only be described as phenomenal over the past decade. Productivity gains for many crops have been exceptionally great since the early 1980s. Moreover, since 1981 Egypt’s agricultural performance far exceeds the average for the rest of the world in rate of gain in the indices of total agricultural production, agricultural production per capita, total food production, and food production per capita. It should be noted, as well, that with 31 of 32 major crops, Egypt exceeded world average yields. With two crops, Egyptian yields were the highest in the world. For several other crops, Egypt ranked second or third in the world in average yield.
During NARP, there was a sharp increase in production, with a distinct slowing in the rate of increase in food utilization. When projected to the year 2000, these changes show a potential food gap of some 4.5 million tons. This gap is about 17 percent of the projected gap that would have occurred in 2000 based on extrapolations of the trends in 1980.
During the assessment team’s visit to Egypt, we were asked a very pertinent question by a USAID official: "If Egypt is making all these advances in agricultural production, why is there need to continue support for further research-related activities in agriculture. Isn’t this task now done so that we can move on to address other needs?" The simple answer to that question is that research to improve or maintain efficiency and productivity in agriculture is never done-never finished. Today we are learning that lesson again.
Egypt, because of its very limited arable land and water resources, is probably more dependent on research to expand food production than any other country in the world. Moreover, the primary beneficiary of such research is the consumer, who is served by having not only an adequate supply of food, but also higher quality and less expensive food as well. Therefore, the need for a high-quality, productive agricultural research program is vital to a sound economy and a stable political future. While much has been achieved through past support of agricultural research, much more effort was needed.
Following NARP and its success, the US and European institutions continued to work with Egypt on the issues identified by NARP. Progress continued in many areas, but the identification of continuing problems continue to limit productivity and supply of food.
Cooperative Programs following NARP
Agricultural Technology Utilization and Transfer (ATUT)
With the conclusion of NARP, it was clearly recognized that much of what had been done in this program needed to be continued and expanded. Research had to be expanded in the areas of horticulture and field crops. Extension and technology transfer capability was still immature and needed improvement. New varieties were needed with improved resistance to pests; tolerance to environmental stress and efficient use of water. Further it was clear that improved and expanded research in the basic sciences of genetics and biotechnology would be essential factors for such accomplishments. The project which was developed with USAID for this mission was (ATUT). It was active from 1995 to 2002. (10,14,15, 32, 45, 48, 55, 85, 91, 99) Specifically, ATUT aimed to: improve agricultural technologies in Egypt by identifying and transferring to the private sector improved horticultural production, post harvest handling and marketing technologies, by developing a carefully focused, improved collaborative strategic research program aimed at resolving the major constraints to increased productivity of selected staple crops such as rice, corn, wheat and fava bean, and by supporting the expansion of research and use of biotechnology.
ATUT was successful in improving yields in the field crops and horticultural crops. The ATUT approach was to focus the project on upgrading production and on export sales, rather than marketing. Hence it became clear that this approach was short sited and did not adequately address the development of systems for gathering and disseminating market intelligence and for strategic market analysis and planning.
One of the most important deficiencies, however, was the failure to recruit and train local associates for the technical team.
Agriculture-Led Export Business(ALEB)
ALEB was designed to provide technical assistance and support to Egyptian food processing companies, ancillary service firms, and trade associations. (8,14, 15, 33, 64)
ALEB attempted to capitalize on unexploited export marketing, particularly in the European Union and the Gulf and Middle East, and helped to develop processed food for exports and for producers who sell only domestically. This development resulted in the establishment of the Food Export Council. “The FTC will be run as a demand-driven private business in every sense of the word," Berzi says, "with the overall objective of helping the Egyptian food industry develop into world-class exporters. We will tackle issues like accreditation, hygiene, food safety, technical assistance, testing and professional training."
Agricultural Policy Reform Program (APRP)
The APRP has helped the Government maintain progress on liberalizing agricultural markets and removing policy barriers to private sector participation in agriculture. The government has moved from being the major actor in all realms of economic activity to a role of providing the legal and regulatory framework necessary for the private sector and to the support of market driven trade and investment.
APRP has clearly shown that the public and private sectors need to work together as partners to take advantage of each one's distinctive competencies/ capacities.
Reform progress is still incomplete in cotton, cooperatives, pesticide licensing, registration of dealers, and field supervision and research and extension. There is serious danger of back-sliding on fertilizer use and supply. The wheat sub sector, particularly the milling industry, has significant government intervention, a set of policies that seem to work at cross-purposes, and an overcapacity problem.
Serious concerns persist about the local capacity to do applied policy research and extension. Such work continues to be heavily dependent upon expatriate-led technical assistance teams. No consensus emerged on how to lessen this dependence and develop sustainable local capacity.
Agribusiness linkages for Egypt (Aglink)
Ag Link was a 7 year initiative which made an impressive contribution to transforming and strenghtening the Egyptian livestock sector. It increased the quality and availibilty of milk and meat for local consumption, created a substantial rural employment base and stimulated trade linkages with the US. Aglink was awarded first place ranking for three consecutive years by Price, Waterhouse Cooper based on the number of recomendations adopted, services delivered and trade linkages facilitated.
Aglink increased the productivity, efficiency and sustainability of large commercial, medium and smallholder clients by providing technical assistance and training in basic technologies such as animal nutrition, health and farm management, trade development, association development and facilitating access to credit.
However, deficiencies in the system of collecting and disseminating market information to farmers, producer associations, cooperatives, and industry associations remain and there is a continued need assistance in the basics of association management. A lack of credit is a major limitation for all aspects of the animal industry.
Agricultural Exports and Rural Income(AERI)
This program worked to provide flexible and appropriate technical assistance and grants to support agriculture trade associations that are of critical importance for expanding volumes of high quality agriculture products (dairy and fresh or processed horticulture) for export and the domestic market.
Agricultural Exports and Rural Income through the small horticultural activity trained about 6,119 small and medium sized growers.
Egyptian Research for Agriculture Today
At the beginning of the 20th century the Ministry of Agriculture (MALR) proceeded with the established technical divisions with research capabilities. These endeavors culminated in the creation of the Agricultural Research Center (ARC) in the early 1970s. (5)
Over the past two decades, numerous achievements have been realized, including the development of new varieties, improved agronomic practices, livestock development, maintenance of the national herds and better food processing techniques. New crops and animal breeds have been introduced and research has been dedicated to problem- solving, side by side with basic science. The overarching goal has been to maximize the economic return per unit of land and water.
There is one topic that is an important consideration in every type of research affecting plants, animals, and microorganisms. That topic is biotechnology or genetic engineering or molecular biology. Whatever specific term one uses, it is a powerful tool for the modification of the genetics of an organism. It is an extremely important method of reducing pesticide overuse; it is a means of accelerating the development of new strains of beneficial microorganisms as well as plants and animals. However the almost miraculous benefits of the method bring with it the problem of misunderstanding and rejection.
They also bring with it the question of the use of patents; another important issue in the development and marketing of new varieties.
Soil and Water Research
The search for ways to achieve sustainable agriculture and natural resource management requires changes in the traditional approach to problem solving. Researchers must cross the boundaries of their individual disciplines; they must broaden their perspective to see the merits of indigenous knowledge; and they must look to the farmer for help in defining a practical context for research. This change in vision is under way in various degrees throughout the research community, but the pace of change is slow. (143)
Two key indicators of deterioration in agricultural systems are declines in the quality of the soil and of the water. Poor management of either of these resources quickly leads to decreases in farm productivity.
However the lack of any emphasis on extension of the resulting information continues to be the major problem for Egypt and the region associated with the use of the Nile waters.
Cotton Research
Cotton research has for over 20 years only maintained yields. Yields have not surpassed the levels of the early 1980s. The rest of the world has experienced steady increases in cotton yields. To catch up with the current Israeli level of cotton production is not possible with a business-as-usual approach to cotton research. Considerably greater focus and expenditure are needed. The present research system has been effective in maintaining yields in the face of the usual forces tending to reduce them. It must now focus additionally on what is needed for rapid yield increase.
It often appears that the decisions and regulations of the government interfere with the success of the cotton industry more than does the lack of research and extension.
Hegazy stressed the need to use advanced technology and genetic engineering to develop more productive varieties. Six countries, namely the US, Russia, China, Pakistan, Brazil and India, were able to increase their cotton production by using advanced technology.
The most significant requirement for biotech crops is that they must satisfy a clear agronomic, environmental or social need and can bring demonstrable benefit to local farmers. The trait(s) must be tailored to local needs. Full recognition and value should be placed on locally developed and adapted germplasm during any implementation of biotech cottons. The ongoing importance of conventional breeding efforts through public or private institutions should not be lost in an era of biotechnological advances.
As of 2008, biotech cotton has not become a commercial item in Egypt, but it is being studied thoroughly and perhaps will be part of the new effort to improve the quality and productivity of cotton in Egypt.
Crop Production Research
The world’s demand for food is enormous. The global demand for cereal grains over a 25-year period shows that the industrialized countries account for roughly 15% of this demand while developing countries account for 85%. (Sirageldin. 144). The same is true for meat products. When it comes to roots and tubers, the demand in the most industrialized countries will account for less than 3% of production while in developing countries 85 to 95% will be used. And as new, urban lifestyles lead greater numbers of people to consume more fats and less fiber, more fast food and fewer home-cooked meals, developing countries face a double challenge – widespread hunger on the one hand and rapid increases in obesity, diabetes, cardiovascular diseases and other diet-related diseases on the other.
While this points to the ongoing importance of international trade in food, it also points to the need for a transformation in the efficiency of agriculture in developing countries if these food requirements are to be met. It is argued that increasing yields, and not increasing the cultivated areas, is the only viable option to meet the increasing demand for food at less dollar expense and less damage to and better protection of biodiversity and endangered ecosystems.
The question of whether it is possible to combine the best science and the best management for crop production by the smallholder farmer. In developing countries, the problems are compounded by poor infrastructure for transporting food to urban centers. Long distances, bad roads, and urban crowding cause spoilage of 10 to 30 percent of produce in transit.
Horticultural Research Institute
Horticulture has a special role. The dependence on low- cash generating commodities for agriculture cannot generate enough income for rural inhabitants. Horticultural crops can be a salvation for such a situation. Another point here is related to the dependence on cereals as the main, and probably the sole constituent of diet. Malnutrition is expected due to the lack of vitamins and other food supplements. Horticultural crops provide the necessary supplements to assure a balanced diet for a healthy population. Horticulture also offers potentials for small value-adding activities that could help in generating income for rural areas and create opportunities.
Urban and peri-urban farms already supply food to about 700 million city dwellers, one-quarter of the world's urban population. Urban agriculture involves using small plots such as vacant lots, gardens or roof tops in the city for growing crops and even for raising small livestock or milk cows.
A comparison of recommendations from the USAID Global Horticultural Assessment Priorities with those of the Horticultural Research Institute (HRI) is generally favorable, but HRI has no priorities for marketing information and structure and it is short on the post harvest issues. HRI does show a very strong focus for education and extension and for genetic resource conservation and development.
Animal Agriculture
Animal agriculture in the developed world has become increasingly science and knowledge based and where this model has been applied there has been enormous success. To deal with the increasing consumer demand for animal protein across the globe, improvements in productivity will not be sufficient. Genetic improvement is essential, but the loss of biological diversity is a major concern.
While industrial production with the same few breeds is spreading all over the world, local breeds are becoming extinct. The loss of some 8000 breeds have been reported to the United Nations Food and Agriculture Organization (FAO), by most of its 190 member governments. More than 100 breeds were reported extinct during the past century.
Clearly, the gains from genetic selection and improvement are important and in a world with a rapidly expanding population, the benefits will be obvious and will tend to be dominant. It is equally clear that there are real concerns. One is genetic diversity. The corn disaster of the 1970’s is an example that should never be forgotten.
As Egypt looks for opportunities to expand its animal productivity and marketing opportunities in Europe, it will need to look at the pluses and minuses carefully, but wisely. The need for decisions based on scientific knowledge and social issues is further evidence that the quality of research in Egypt is one of the most important factors in the country’s future.
Genetic Engineering Research Institute
In their continuing efforts to improve their agriculture, scientists at the Agricultural Genetic Engineering Research Institute (AGERI) in Cairo employ modern biotechnology to develop new ways to improve agricultural production.
AGERI is the primary institute responsible for managing agricultural genetic engineering research in Egypt. The Donald Danforth Plant Science Center and AGERI have recently initiated several research projects that employ
biotechnology to improve Egyptian agriculture.
Egypt is fortunate in having one of the best centers of GE research in the Mediterranean region. Much of the future growth and improvement of plant and animal food production will depend on the accomplishments of this Institute.
It is important to recognize that such research is not inexpensive and hence to be effective and productive, it will need the best financial and political support possible. Political support because there are so many organizations that delight in doubting the safety and efficacy of this scientific process.
The ongoing research projects undertaken at AGERI are focused on problems facing Egyptian agriculture. The immediate objectives are to utilize cellular and molecular biology methodologies to develop and deliver transgenic elite cultivars resistant to biotic and a biotic stresses and have the potential to cause a significant impact on crop productivity, the economy and the environment.
Agricultural Economics Research Institute
The studies of AERI will focus on local and international economic changes and methods of estimating the agricultural national income as well as the potential of
access to the world markets of agricultural production and to open new markets and improve the marketing information system.
Food Technology Research Institute
The FTRI is principally responsible for the methods of improving quality of food products to cope with the international measures needed for exportation and improving processing procedures in the field of bread and bakery products, dairy products, fish and meat products as well as processed horticultural products.
It must also ensure that these methods and technologies are understood and available to the processing and export businesses.
Summary Comments Regarding Research
We are told repeatedly that the crisis in the World food supply is not one of production but of distribution and that the solution is political. Nevertheless, even if structural solutions improve food distribution, world population will soar from 6 billion to 10 billion, or thereabouts, by 2050. This increase in population will necessitate a vast increase in the amount of food produced. At the same time the area of useful agricultural land is shrinking and, in many cases, deteriorating in quality.
To maintain the historical gains in animal productivity, scientific knowledge through research must continue to advance. Relevant investment in agricultural research is needed throughout the world in developed and developing countries to maintain food production and to achieve agricultural sustainability.
Emerging technologies must also be nurtured and employed effectively. Genetically modified foods are currently at a stage where they could flounder or bring great benefit. Their existence is threatened as the result of perceived but, in many cases, unfounded safety considerations and the ensuing negative public response. The development of technologies can be slowed down and even lost in an incompatible social context. Genetic technologies have a bright future in agriculture as well as in medicine. With proper oversight and risk assessment they can provide great benefit in the difficult times ahead.
Agriculture’s Role in Economics and Employment
Agriculture is an issue as a local food source, for international trade, for balance of payments, land use and water use and as a basic product for food and fiber manufacturing. Hence every aspect of the economic structure of a country relates to agriculture. Banking, transportation, tax and tariff structure, subsidies, local and international markets and health are all part of the agricultural system of a country. Egypt is no exception. Agriculture is the country’s largest employer accounting for about 28% of the labor force and 13.9% of the GDP in 2005.
Agricultural production is intensive and yields are high, but only 3% of land is arable. In spite of land reclamation, the area under cultivation remains about constant because of urban and industrial expansion. With no land expansion and population growth, Egypt will remain one of the world’s largest food importers. Some 95 % of local production is consumed domestically despite the increased emphasis on cash crops for export.
The growing population of Egypt needs employment and rapid agricultural growth results in the quickest employment growth. Agricultural growth of 5% can be achieved through increased productivity, efficiency and competitiveness and could result in about 500,000 jobs. This profound impact on employment growth requires major improvements in policy matters; however, policy constraints continue to prevent Egypt from fully realizing the comparative advantage it has in most commodity systems.
Should Egypt focus on urban or agricultural growth? It is rural and agricultural growth, not urban or industrial growth that reduces poverty and increases demand for labor. These findings are consistent with the fact that agriculture drives the demand for labor through its demand for goods and services produced in the large, labor-intensive, rural non-farm sector.
GDP growth depends largely on the ability to expand production in the tradable sectors, while employment growth depends largely on increases in (domestic) demand for non-tradables.
When agriculture grows rapidly, demand for labor grows rapidly; when urban tradables grow rapidly, GDP grows rapidly. A structure weighted towards agriculture is weighted towards benefits to labor; a structure weighted towards urban tradable items is weighted towards fast growth in GDP. Urban tradables grow primarily through increase in the capital stock. Agriculture tradables grow largely through technological change.
Treating “rural” and “urban” poverty as somehow separate and in competition with each other for resources is not only a conceptual mistake, but a remarkably short-sighted view of the problem. In fact, successful rural development generally stimulates and supports urban development. Conversely, urban growth is a powerful stimulus to food production, especially by small farmers.
The projected expansion of the urban population in Asia and Africa, from 1.7 to 3.4 billion over a period of only 30 years, and the reduced level of available resources, stress the need for a more imaginative but pragmatic response.
Testing the Role of Commodities and Efficiency in Agricultural Growth
In this discussion, employment increase and poverty reduction are used interchangeably because increased employment is the means by which growth reduces poverty.
The World Bank has made frequent use of an average relationship between overall growth and poverty reduction. On average a 2.1 percent decrease in poverty levels is associated with a 1 percent increase in the economic growth rate.
An analytical model for Egypt, finds that, compared with pro-manufacturing policies, pro-agricultural policies have a more positive impact on household welfare in general and the poor in particular. It also shows that improved market access for agricultural exporters and reduced transaction costs in foreign trade reinforced the effect of generally positive policies toward agriculture.
Raising farm incomes—which can be achieved through technological change and globalization—increases the demand for output and hence for labor in the massive rural non-farm sector that is home to the bulk of the poor and underemployed.
That is why agricultural growth is not only important to growth in national income, but also absolutely vital to growth in employment and reduction of poverty.
This section of the report describes the commodity composition for a high growth rate for Agriculture. Farmers make decisions about resource allocation among specific commodities. Much of investment, institution building, and policy are also commodity specific.
For all commodity groups, two inputs, water and fertilizer, are particularly important to achieve strong growth rates. Fertilizer is already used at very high rates in Egypt. Increasing the efficiency of fertilizer use will favor higher farm incomes as well as being environmentally sound. Efficiency of water use is also critical to achieve strong growth rates.
As success is achieved on export markets with non traditional crops, horticulture will become increasingly a tradable commodity with demand not constrained by the domestic market. Horticulture uses rather little land relative to its value of output. However, even though high in general, Egyptian yields lag well behind what can be achieved with current technology.
Egypt has a strong comparative advantage in extra-long staple cotton, but Egypt must focus on what is needed for rapid yield increase. The present research system has been effective in maintaining yields in the face of the usual forces tending to reduce them. It must now focus additionally on what is needed for rapid yield increase. Similar statements can be made for other internationally traded commodities including maize, wheat and rice.
Egypt has highly productive agricultural resources that are reflected in high crop yields. Such conditions are normally highly responsive to the new opportunities offered by technological advance and the forces of globalization.
There is an implicit assumption that new lands will be allocated optimally and will be comparable in quality to past additions. It also is assumed that sufficient increase in water use efficiency will occur to meet the rapidly growing urban needs without productive loss in agriculture. These are all heroic assumptions. For them to become reality will require continuing attention to water use policy and the making of hard decisions about where new water will be allocated. In this context, difficult conflicts between the best allocation for employment and national income growth and broader national objectives will have to be resolved.
Not Achieving the Comparative Advantage
Thus, the solution to Egypt’s employment problem can be met only with major efforts in agricultural employment as well as accelerated growth of the urban, tradable goods and services sector. It is not a matter of one or the other, it is a matter of the total of both sectors.
The importance of the task is challenging and enormous. A recent statement from the Office of the Minister of Commerce and Industry of Egypt in July of 2007 estimated that one million new jobs are needed in Egypt each year.
Horticulture could be the Future
Egypt enjoys a significant comparative advantage in the production and export of high value horticultural products. This comparative advantage is based on a number of factors, including favorable agro-climatic conditions, physical proximity to important markets and counter-seasonal production capabilities. The growth in industry cohesiveness and sophistication and an increasing awareness on the part of government toward the importance of private sector primacy in decision-making are also important factors.
However, education, research and extension systems do not meet the needs of the horticultural industries. The governmental processes need to be more positive; There is a lack of adequate market intelligence, and agricultural leaders must take responsibility for major issues.
The initial competitive advantage of production and sales will not be maintained without explicit efforts to do so. Market prices are declining both absolutely and in relation to Egyptian prices. Egypt will have to reduce the delivered cost of its products to remain competitive. This will have to be accomplished through the adoption of new technologies. These include inadequate post harvest facilities, costly transportation, need for approval of varieties and pesticides, tariffs and sales taxes, high commercial financing, and inadequate technical and management skills.
The farming practices employed for Egypt’s principal horticultural crops, grown by hundreds of thousands of small and medium-sized holders principally for domestic demand, can be improved and thereby increase rural income. Costs can be reduced, yields increased, and quality improved through the introduction of even low-technology, low-cost techniques. This has not been accomplished because of a lack of well trained horticulture extension advisers. It is also essential that there is a broad base of cooperation with all government entities involved in the export sector, including the Ministry of Foreign Trade (see food council) and the Ministry of Transportation.
One of the most urgent of these specific problems is the impending imposition of the EUROGAP protocol being promulgated by major European retailers. This embodies food quality assurance measures combined with social and environmental responsibility standards. Failure to meet those standards will deny Egyptian horticultural products access to current European markets and will prevent entry into new EU markets.
While the focus is on exports, the Egyptian horticulture industry should not lose sight of the fact that there is also a growing demand for higher quality foodstuffs in the domestic market, led by five-star hotels, up-market restaurants, fast food chains and an increasing number of supermarkets.
Food Export Council
New activity in the food processing industry fueled record industrial growth of 5.1% last year as companies tapped lucrative Gulf and European markets. Members of the new Food Export Council are convinced they can grow last year’s $500 million in exports to $3-4 billion within a decade.
Quality control has never been Egypt’s forte, to say the least. Across all sectors, industry’s failure to meet international quality standards has been one of the biggest obstacles to the penetration of foreign markets. Last year, the Ministry of Foreign Trade and Industry began overhauling its existing centers and establishing new ones. There are now a total of 13, ten of them sectoral and three cutting across industry lines for packaging, clean production and total productivity management. All of them are adopting proactive, client-centered business models.
According to Tawfik, head of the Food Export Council, the processed food sector has the capacity to export something in the range of $3-4 billion per year, an ambitious goal in light of today’s $500 million figure. But he and others on the export council are convinced they can make it happen.” Tawfik says. “Everyone has to carry his own weight — we can’t always have to look to the government to bail us out.