Despite Egypt’s largely arid landscape, a number of factors have allowed the country to develop as an agricultural centre, including the fertile belt surrounding the Nile, a widespread and advanced irrigation system, and year-round sunshine. However, in recent decades, Egypt’s fast-growing population has largely outstripped the development of its production capacity, leaving the country dependent on food imports even for basic staples, including wheat, since 1974.

This is set to change as part of the government’s export-focused economic reform efforts. Leaders in the agriculture sector are looking to new technologies and policy shifts that can not only make Egypt a self-sufficient producer, but also an exporter of agricultural commodities that contribute significantly to GDP.

Sector Status

Agriculture remains an important part of the Egyptian economy, even as other sectors have grown. According to a 2016 paper published by the International Food Policy Research Institute (IFPRI), although the contribution of agriculture to GDP and domestic employment has declined in recent decades, it has done so at a slower rate than many other developing countries. According to most current data available from the World Bank, in 2015 the value-add from agriculture accounted for 12% of Egypt’s GDP and 26% of employment. Egypt’s irrigation system dates back to ancient times but, despite international and local efforts, channels and pumping stations are still in need of renewal. According to the European Commission, Egypt’s area of farmland in production increased by 6.2% between 2003 and 2011. Agriculture policy is established by the Ministry of Agriculture and Land Reclamation (MALR), in coordination with the Ministry of Water Resources and Irrigation (MWRI). In February 2017 Abdel Moneim El Banna was appointed the new minister of agriculture and land reclamation, replacing Essam Fayed as part of a larger Cabinet reshuffle.

International Interest

The ministries are supported by the government-run Agricultural Research Centre, and are advised by a variety of international organisations, including the UN Food and Agriculture Organisation (FAO), the World Bank, the World Food Programme (WFP), and various development agencies and companies. In September 2017 the International Finance Corporation announced $150m worth of investments in Egypt’s agriculture industry in partnership with the local private sector. There is also increased interest from new partners. In August 2017 international press reported that Egypt and the Korea-Arab Society signed an agreement to build a $10bn agricultural city in the north-western Qattara Depression area. The city is expected to be completed in 2018 and will include 50,000 self-regulating greenhouses as well as a number of seawater desalination and solar power plants. A UK trade delegation of 14 companies – most of them new to Egypt – also visited Cairo in September 2017 to explore investment opportunities in the agriculture sector.

Given its strategic location, as well as free trade agreements signed with the EU, Turkey, COMESA and other MENA countries, there is potential for Egypt to become an export hub for the region, as well as for new markets further afield, including Australia and Canada.

Government Efforts

A long-standing priority for the government has been to shift the agricultural balance of trade. As noted in a 2017 FAO report, Egypt has the second-highest agricultural import expenditure as a share of export revenues in the region, at over 35%, second only to Yemen. There have been challenges on this front due to the November 2016 currency devaluation. In August 2017 the head of Egypt’s Agriculture Export Council, Abdel Hamid Al Demerdash, estimated sales from the export season at about $2.1bn, a decline from around $2.2bn in 2015, dampening hopes that the globally competitive prices of exports would result in high enough volumes to see increased revenue. However, the government has been taking steps as part of a longer-term strategy to reverse this trend and narrow the import/export gap, including the promotion of the growth of high-value crops like certain fruits and vegetables, as well as cotton (see analysis).

One key step has been to increase the area available for agriculture – currently only 3.8% of total land, according to the World Bank. To this end, 630,000 ha in the Western Desert is to be modified for agricultural and used to raise production. First announced in 2009, the effort is intended to develop arable farmland and distribute it to university graduates, local companies and foreign investment firms. Landholders will receive tax incentives on rents for 10 years. To date, irrigation wells have been drilled and crops planted in a pilot area of 4200 ha; the next phase will include 5000 additional irrigation wells. While projects like this represent promising efforts to raise production, sustainability remains a consideration when cultivating land away from the fertile belt around the Nile. “In Egypt, the cultivated area is about 25% former desert, and we see the fertility index per feddan (approximately an acre) decreasing because most new cultivated area is primarily desert, an expansion trend among both public and private players,” Richard Tutwiler, director of the Research Institute for a Sustainable Environment, told OBG.

Another important government initiative has focused on improving the overall quality of the produce to increase exports. In July 2017, following a decree from Prime Minister Sherif Ismail, the MALR began a programme to track the quality of agricultural products on the market by testing produce samples from various governorates at the Central Laboratory of Pesticide Residues and Heavy Metals. In August 2017 international press sources also reported on extensive efforts to reverse international bans placed on Egyptian produce from countries such as the UAE and Sudan, including strawberries and peppers.

Subsidy Shift

The goal of providing affordable basic staples such as bread, rice, vegetable oil and sugar to Egypt’s most vulnerable population segments remains an understandable policy concern. However, the implementation of the subsidy programme has attracted criticism for what is seen as unsustainable design. Established in the 1950s the policy has led the government to purchase domestically produced wheat at or above global prices and then both sell the produced flour at below market prices and provide subsidies for consumers purchasing the bread. This has made Egypt one of the highest food-subsidy providers in the region, outstripping neighbouring countries like Morocco, Tunisia, Algeria and Jordan.

In August 2017 the government moved away from subsidising the production process by implementing a new policy in which subsidies would only be provided for final bread products. The shift is expected to reduce the state’s costs by at least 5%.

According to the FAO, this means that transactions along the production chain from state-run buyers to millers, as well as from millers to bakers, would be conducted at market prices, while bread will still be sold at subsidised prices to consumers, with the government paying the bakers the difference in production costs.

Water Resources

Accessing sufficient freshwater remains a core challenge in Egypt’s arid climate. According to the Central Agency for Public Mobilisation and Statistics (CAPMAS), the sector accounted for 81.5% of the total use or 62.1bn cu metres in 2015/16. Furthermore, renewable freshwater resources per capita have been declining since the 1950s as population grows and regional competition for control of the Nile becomes increasingly tense. Some estimate that the 600 cu metres per capita of water supply each year will fall below the 500-cu-metre threshold by 2025, which is considered “absolute water scarcity” by the FAO.

This issue is becoming more salient with the ongoing construction of Ethiopia’s Grand Renaissance Dam, which could decrease Egypt’s access to the Nile by around 25% for at least three years, although this could be much longer depending on factors such as the filling of the dam ahead of operations. However, Egypt continues to maintain dialogue with Ethiopia in order to minimize any disruption in this regard. As of January 2018 construction on the dam was more than 60% complete. Given that in FY 2015/16, 72.8% of Egypt’s renewable water resources, or 55.5bn cu metres, came from the Blue Nile, this is a concern for agriculture. “Priority for water supplies will always be for drinking and domestic use, and as the population rises, there will always be more demand for this; any cuts in the case of demand exceeding fresh water supply will be from agriculture,” Safwat Abdel-Dayem, professor emeritus at the National Water Research Centre, told OBG.

Water Solutions

The World Bank’s “Enabling the Business of Agriculture 2017” report noted that Egypt still has a way to go when it comes to integrated management of these limited resources, ranking below countries like Morocco and Jordan. The government has taken steps to address the water shortage issue, manifested in the drafting of the new water resources and irrigation bill in July 2017, which calls for penalising farmers who grow water-intensive crops, including rice, outside specific authorised land plots and enhancing integrated water use in all sectors. In addition, the Farm-level Irrigation Modernisation Project is being implemented by the MWRI and MALR, focusing on both structural improvements and increased awareness of water conservation methods. “We need to modernise both the ‘hardware’ of canals and pipes to reduce losses, as well as the ‘software’ of improving farmers associations to ensure local communities share responsibilities for the water situation. Technology by itself will not be enough to achieve the objective of sustainable agricultural production. You need good management and awareness as well,” Abdel-Dayem, told OBG.

Another effort to close the gap between supply and demand is improving wastewater treatment programmes that allow Egypt to reuse drainage water for agriculture. “We need to accelerate the pace of wastewater treatment facilities. The problem with the infrastructure for treating wastewater from domestic sources is that it needs to be developed enough to be proportional to the expansion in drinking water,” Abdel-Dayem told OBG. Since the late 1950s, Egypt’s drinking water supply has developed quickly, while the treatment of wastewater from domestic uses did not develop at the same rate. This left coverage of waste-water treatment availability in the range of 40-50%, 85% of which was in urban areas and 15% in rural areas, which attracted interest from the World Bank, German development bank KfW, the Swiss Development Bank and the Islamic Development Bank. In addition, the Holding Company for Water and Wastewater, which created a plan for water and sanitation, forecasts $3.5bn of investment in wastewater treatment up to 2020.

Hydroponics, a farming technique that allows for the growth of plants in pH-balanced water rather than soil, is also an emerging domestic industry, as shown by the rise of firms like Egyptian Hydrofarms. The technology removes the need for harmful pesticides and also allows for water conservation. “In the last five to six years, a sophisticated, niche high-end market for hydropononics has developed that highlights the organic nature of products of the technology,” Tutwiler told OBG.

Fruits & Vegetables

As high-value crops, fruits and vegetables are a key focus for increasing exports. According to CAPMAS “Egypt in Figures 2017” report, the production of high-value fruits has expanded in recent years; notably, the production of palm dates increased by 15% between 2014 and 2015, while citrus fruits grew by 5.6% and soya beans by 17.5%.

Exports of Egyptian vegetables, fruits and legumes amounted to $2.2bn in 2016 and there is additional potential to increase production and export of highvalue fruit and vegetables. “The expansion of production of vegetables and fruits has been remarkable during the past 15 years. If you travel on the desert road from Cairo to Alexandria, you will see a lot of orchards growing fruit, at least half of which goes to export,” Abdel-Dayem told OBG. “This will improve the food trade balance for Egypt, which now imports 50% of its grains consumption. And there is already a big role for the private sector, as most of these farms belong to individuals and private companies.” Tutwiler also noted the improved export quality and investment from international donors in supporting horticulture and high-value crops. “In general, this success has been driven by large-scale commercial farms that import new technologies, with a lot of smallholders feeding these larger exporters,” he told OBG.

As detailed in a March 2017 FAO report, two of the highest-potential crops are oranges and table grapes. Oranges are the largest crop grown in Egypt, taking up 520,000 acres of cultivated area, with exports that comprise almost 12% of world exports by value. Table grapes are also a promising crop for export, with increasing numbers of high-quality local producers and export values rising, in spite of almost constant yields and decreasing production overall since 2008.

Despite this increase, local consumption of these products remains low. According to the WFP, the average household spends 40.6% of its income on food, but one in three Egyptians has poor dietary diversity. This has been getting worse, as local consumption of vegetables has been trending downward from 136.6 kg per capita consumption in 2012 to 101.7 kg in 2015.


According to the WFP, Egypt is the world’s largest importer of wheat, making it especially vulnerable to global food price fluctuations. Indeed, as noted by CAPMAS, in 2015 Egypt was only 49.1% self-sufficient for wheat, and 56.2% for maize. FAO forecasts put cereal crop production in 2017 at average levels, with import requirements expected to remain at same level during 2016/17, at around 20.8m tonnes. Wheat imports specifically are estimated at 12m tonnes. Increasing the volume and efficiency of cereal production is a priority. By 2030 authorities aim to boost the yield per feddan by 3.6 tonnes for wheat, 5.2 tonnes for rice and 5 tonnes for maize, and to expand the cultivated areas available for crops like sorghum and barley. The strategy also intends to reduce pre- and post-harvest losses, which exceed 10% in cereals, by creating heartier varietals and improving transportation and storage facilities.

Poultry & Livestock

As Egypt’s burgeoning population becomes urbanised, there has been a demonstrated growth in demand for poultry and livestock, particularly pre-prepared products that are easily purchased at an organised retail outlet. As noted in the FAO’s “2017 Africa Sustainable Livestock Country Brief for Egypt”, livestock imports have increased as demand outstrips supply, with local meat production, for example, only covering 74% of the demand in 2013.

The FAO estimates demand for livestock products will skyrocket between 2015 and 2050, with consumption of beef, milk, poultry and eggs increasing by over 400%, 300%, 1100% and 480%, respectively. To boost local production, a 2017 decree was issued to organise poultry farm licensing such that small farms are consolidated into a larger operation, increasing efficiency.


Although the climate is arid, Egypt is surrounded by the Mediterranean and Red Seas, the Suez Canal, assorted lakes and the Nile. In recent decades the country has developed aquaculture, which officially surpassed more traditional capture fishing in 2003. According to the CAPMAS “Egypt in Figures 2017” report, seafood production rose by 2.5% between 2014 and 2015, reflecting a decreased reliance on sea sources (-4.5%) and an increased reliance on fish farms (4.9%). This is part of a longer trend; as detailed in a 2015 research paper on the status of Egypt’s fisheries published in Reviews in Fish Biology and Fisheries, a quarterly academic journal, on the status of Egypt’s fisheries, total production in 2012 was approximately 1.4m tonnes, triple the 457,036 tonnes produced in 1997, with 75% of this from aquaculture.


Egypt’s status as a regional agricultural hub and its focus on significantly improving its current agricultural practices should help the country continue to provide opportunities for market entrants. Attaining the goals set for both self-sufficiency in staples and increased export targets will require continuous technology updates and expertise.

Should these planned improvements to irrigation systems and water management protocols come to fruition, alongside an efficient supply chain to ensure quality control of crops, Egypt will be well positioned to take advantage of its strategic location between potential trade partners across the MENA region.