In advance of the outset of the wheat harvest season next month, wheat growers have asked the government to set less complicated conditions on the purchase of their crops. They also expected the government to raise its official purchasing price–which currently stands at LE270 per ardeb (5.62 US bushels)–due to falling global prices.
According to farmer Hussein Abdel Aziz, farmers’ profit margins would still remain low even if the government raised purchasing prices since production costs per acre had also increased.
The Ministry of Solidarity has drawn up committees–consisting of representatives of agricultural development banks, the supply police and the state-run Export/Import Control Authority–mandated with obtaining wheat from farmers and ensuring it was up to ministry specifications.
The Finance Ministry has reportedly allocated more than LE5 billion for the payment of farmers upon delivery of the crop.
Many wheat growers fear that the government will deduct any outstanding debts to public-sector banks they may have from the agreed-upon purchasing price. Others fear similar deductions if their crops fail to meet ministry specifications, especially in regard to hygienic packaging.
They called for less stringent conditions to be set by the ministry. Under current Finance Ministry regulations, wheat must be packaged hygienically and must be free of insects and residue.
Ali Abdallah, member of the Egyptian Chamber of Grains Traders, noted that global wheat prices had fallen from US$192 in January to US$178 in February, representing a 7-percent decrease.
"This decrease favors the government," said Abdallah. "Because some dealers used to pay farmers more than the government in hopes of reselling later when global prices go up."
Translated from the Arabic Edition.