Abstract
The Egyptian population is the largest and fastest growing in the Arab world,
a dynamic which is putting
considerable pressure on the government to help
improve the domestic food outlook; particularly
pertinent in a country
possessing inadequate water supplies and limited arable land. Egyptian
agriculture
has made notable strides in recent years, as privatisation
reforms have helped facilitate greater levels of
productivity, while
increasing domestic income has meant that consumers, more than at any other
time,
are becoming more adventurous in their consumption choices. BMI' s
latest Egypt Agribusiness Report is
published as the global recession
continues to cast an economic shadow, while fears of a swine flu
pandemic
gather pace.
In a particularly reactionary response to the swine flu
outbreak, the Egyptian government ordered the
slaughter of the country' s
entire pig herd, estimated to be in the region of 300,000 beasts.
Notwithstanding
the virus only being spread by human-to-human contact, as
opposed to animal-to-human, the state seems
determined to quell the
potential for mass hysteria in a Muslim country still getting to grips with
instances
of avian flu. Despite having a relatively small pork industry,
the cull still represents a complete loss of
earnings to the small number
of farmers making a living out of the industry. A positive to be gleaned
for
other livestock farmers is the increased availability of feed grains
at favourable prices, which could
continue long after the crisis
subsides.
So as to encourage a greater level of agricultural production,
private-led development reforms have been
made, predominantly via the
selling of state-owned enterprises, which have indeed had the desired
effect.
Foreign direct investment flows have been liquid, although it
should be noted that a large proportion of
such capital is leveraged
through firms with interests in sectors - such as tourism - which have
suffered
markedly during the financial crisis. Furthermore, water
availability remains a real problem; per capita
water consumption is
already below recognised international standards and with the production of
staple
goods, such as rice, using large volumes, Egypt' s relatively weak
irrigational capacities are being
stretched to the limits.
In addition
to the pace with which the population is expanding, rapid urbanisation and a
move towards
industrial and service-based employment has severely impinged
on already limited agricultural land, yet
the government seems extremely
focused in its efforts to improve agricultural capacity and has seen
considerable improvement made in the outlook of late. The reclamation of arid
desert land has helped
expand domestic arable acreage, particularly in the
North of the country.
Private commercial farmers have done much to improve
the outlook, spurred on by government initiatives
to make farming more
attractive. Graduates have been encouraged to get into husbandry with low
interest
loans and free animals to start them off; this has fuelled a
marked upswing in those wanting to work
rurally, particularly so
considering the congestion of the major cities and diminishing employment
potential. The disbursement of modern technology has helped the cultivation of
a variety of fruits and
vegetables to such a degree that exports to
neighbouring countries are possible.
Despite the growing land constraint
and scarcity of water, BMI considers the strides made in Egyptian
farming
sufficient enough to lead to output growth through 2009 and beyond in the
majority of grains
covered in our outlook. The development of
agro-industrial zones for intensive farming, together with
improved levels
of irrigation, will provide a backdrop against which higher productivity
husbandry can
occur.
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