Egypt continues to depend on imports to feed its people. Also farm prices have increased as a result of the reform policy to the benefit of the rural economy (see Table 8).
There are voluntary procurement or floor prices for wheat, corn, rice, and for the first time since 30 years, cotton. Sugar cane prices are still set by the government, but prices of all other field crops, vegetables and fruits are subject to market forces.
The government has cancelled mandatory cropping pattern, thereby allowing farmers to grow whatever crops they want.
The only restrictions are for rice and cotton, where for the former water availability is an important factor in determining the area allocated. The government allocates also specific varieties of rice and cotton to be cultivated in designated areas in order to unify the varieties cultivated in the same area.
Consumer prices are determined according to the market forces for all the commodities except for vegetable oils, sugar, and bread. The first two are still provided under ration card system to around 90% of the Egyptians at subsidised prices.
Local pita (Balady) bread sells at LE. 0.05/loaf while costing about LE. 0.12/loaf.
At free market prices, you find all items of food available in the governmental outlets, at higher quality level in the private sector stores.
The relatively high inflation rate (10%), the impact of GATT on import prices and the decision of the Ministry of Economy not to allow any food product to enter Egypt unless it has a more than half of its original shelf-life are all important factors in rising market prices for the foodstuffs during 1993/95 years.
Egypt is making significant progress in liberalising its agricultural trade regime. One of the government's policies is to encourage agricultural exports to improve the trade balance as well as the balance of payments.
The main export crops are cotton, rice, citrus, potatoes, and onions.
The quantity of rice exported during 1993 amounts to about 250.000 tons. The majority of rice exports are handled by the private sector which buys milled rice from public sector plants for export.
The subsidy on bread, vegetable oils, and sugar helps assuring that basic nutritional needs are met throughout Egypt. Bread prices are expected to be increased gradually until they match market prices. At the same time its quality will be also improved.
In the short run, it is not expected that the subsidy on bread will be completely abolished, since it is the main element in the Egyptian diet.