In January 2011, a price hike in international food markets led to inflation of nearly 20% in Egyptian food prices. These increasingly expensive food supplies put pressure on households with low incomes, making basic nutrition unaffordable for the 42% of the Egyptian population living below the poverty line. This desperate situation was an integral driving force behind the Tahrir Square protests which eventually led to Hosni Mubarak’s downfall in February 2011.
Egypt’s economy has plummeted to new depths after a year of protests and unstable politics. In a country where households spend on average 38.1% of their income on food, providing citizens with secure and affordable food sources is unsurprisingly one of the most pressing issues for the government, and failure to improve the current situation might lead to further social unrest in 2012. A host of economic and geopolitical factors, however, will make the task of establishing food security extremely difficult.
As Professor Jane Harrigan, an academic at the SOAS Food Centre, argued in a recent talk on food security, Middle East and North African countries are particularly sensitive to the caprices of international markets because the region’s water scarcity ensures domestic food production is low. Harrigan estimates that these countries must necessarily import around 50% of the calories consumed by their populations.
Food security is increasingly pressing for Egypt. Rapid population rises have led to the construction of more residential areas on the fertile strip of arable land which surrounds the River Nile, greatly reducing the productivity of the agricultural sector. Equally, this population growth has increased demand for food.
Oil-rich countries can often protect their citizens against price hikes in the food market as a rise in food prices often correlates with a rise in oil prices. Increased oil revenues can be reintroduced into the economy through food subsidies which soften the blow of inflated food prices. But Egypt’s oil resources are not substantial enough to justify this cushion, and its subsidy spending is spiralling out of control. Ibrahim Saif recently noted in a paper for the Carnegie Middle East Centre that Egypt’s “spending on subsidies now represents more than 10% of GDP”.
Egypt’s reliance on international food markets means it is at least partly at the whim of international events outside its own control, and food security for many countries has become a serious geopolitical issue. For instance, fires in Russia, droughts in China and floods in Australia and Pakistan in 2010 damaged some of the world’s most productive agricultural sectors; fears about domestic food security caused the world’s leading food exporters to put in place export bans, leading to the food price inflation which was a catalyst for Egypt’s revolution in 2011.
Crucial to the Tahrir Square protests were, of course, Mubarak’s decades of human rights violations as well Egyptians’ general hopes for greater democracy, but Egypt’s lack of food security was also essential to the widespread social discontentment.
In his interview with The New Left Review, Hazem Kandil outlines the social contract which he believes has existed for decades between Egypt’s citizens and the ruling military elite. The main element is that “people understood that they were trading their political rights for social welfare”, essentially compromising their quiescence for political and economic stability. Clearly, this social contract had been eroding for many years before 2011, but the severe effect of 2010’s food price inflation on living standards in Egypt may have been the tipping point for many Egyptians.
This factor is reflected in the results of the recent parliamentary elections. The majority of Egyptians decided not to back the leftist and liberal parties whose greatest offering was the promise for radical democratic change. Instead, they have voted for the Islamist parties who have long been the only source of community support in Egypt due to the indifference of public institutions and the weakness of the private sector. While the Muslim Brotherhood and Al Nour parties profited from the fact that they were banned organisations during Mubarak’s tenure in power, which gives them the common perception that they are free from the corruption, it was largely their comprehensive social welfare programs which got them such impressive gains in the election. As they have been elected on this platform, the Islamist parties will be under pressure to reduce food prices and provide Egyptians with an affordable standard of living.
Jane Harrigan noted in her talk that a number of Middle East and North African countries are now seeking food sovereignty, or a form of food security which is not as vulnerable to fluctuations in the international food market. Saudi Arabia, for example, has tried to solve problems of food supply by increasing domestic food production. Hopes were pinned on the government’s desert irrigation scheme which was meant to boost the domestic agriculture sector by transforming large areas of desert into fertile tracts. The scheme ended up costing billions of dollars, and 80% of the country’s water supplies were directed towards an industry sector which only accounts for 12% of its GDP. It was abandoned in 2008.
Economically, it makes no sense for Egypt to pursue similar schemes. Many economists have observed that it would be more sensible for Egypt to direct its water sources towards industries for which there is a large export market, and then to use the export revenues to subsidise food purchases. However, this plan would demand a lot from Egypt’s manufacturing sector, which is currently in a state of disarray following a series of strikes at the end of 2011, and also means that Egypt would still be heavily reliant on the international food market.
A third, more innovative solution to Egypt’s lack of food security has emerged recently. Egypt has been buying large tracts of agricultural land in Sudan and South Sudan after Africa’s newest country put agricultural land up for sale. Outsourcing domestic farming to agricultural land in another country is still a relatively new method of trying to overcome food security issues, and accusations of population displacement and local worker abuse has made it is a controversial issue.
For the last year, Egypt’s transitional government has addressed the problem of food prices by increasing public sector wages and its food subsidy. The food subsidy now accounts for a disproportionate amount of the budget, and the government will not be able to continue these short term strategies in the future. Furthermore, it is unclear how effective these subsidies are at protecting Egypt’s poorest families. Egypt’s expensive bread subsidy could be tailored so that it more effectively delivers economic aid to the section of the population who need it most. Food coupons and rationing are a more targeted way of delivering economic aid than a general food subsidy. However, nationwide subsidies on products such as bread are a political talisman as well as a form of economic aid – removing or reducing these expensive subsidies comes with a lot of political stigma, and the new government will be nervous about doing so at this early stage.
The newly elected government may find that food security becomes its bête noir. As food inflation continues to soar in Egypt, the pressure on the government to find a solution to this problem will increase. However, as there appear to be no straightforward solutions to Egypt’s reliance on international food markets, this problem may well be the cause of social unrest in future as it has been in the past.
Corrections were made to this article 13/2/2012:
It had stated that food exporters increased tariffs in 2010. This has been changed to: "put in place export bans".
Saudi Arabia's abandonment of its food sovereignty policy in 2008 was added.
The article had stated that South Sudan had put one fifth of its agricultural land up for sale. This was a rumoured rather than actual government policy. Large sales of land do take place but the one fifth figure is incorrect and has been removed from this article.
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