Agriculture has long been a critical pillar of Egypt’s economy, strengthened by the rich natural conditions around the Nile. The country produces an array of fruits, vegetables, cereals, cotton, sugar and livestock for both domestic consumption and export. Indeed, following the disruption of global supply chains due to the Covid-19 pandemic, the sector has taken on a renewed importance domestically, while experiencing an increase in demand for exports. The sector is also facing several other challenges including climate change, urbanisation and a fast-growing population that is straining water sources. Even so, the government is working to boost production through research-based policy reforms and technologies to move closer towards food security.
Another key focus has been long-term land and water use planning. The importance of these factors is underscored by the arid nature of the ecosystem, as well as its rapidly growing population, which reached 100m in February 2020. As the government focuses on food security and overall sustainability in its sector-focused policy roadmap, agriculture is expected to play a major role in moving the country forwards.
Oversight & Policy
There are several key government bodies that have a role in the sector’s oversight. The Ministry of Agriculture and Land Reclamation (MALR) handles agricultural policy implementation and increasing the amount of arable land through land reclamation programmes. It also works to enhance productivity, improve yields and grow exports of agricultural goods to international markets. The Ministry of Irrigation and Water Resources (MIWR) is also an important player. An estimated 80% of Egypt’s water is used by the agriculture sector, the majority of which is sourced from the Nile. Meanwhile, the government has a direct sectoral impact through the annual determination of both controlled procurement prices and indicative prices for crops. These affect farmers’ decisions about which crops to focus on during the year.
The sector is guided by the Sustainable Agriculture Development Strategy (SADS) 2030, which was originally drawn up in 2009. The strategy targets the use of technology to increase production and efficient utilisation of water resources, as well as supports land reclamation projects to increase arable land and establish new communities. In February 2019 the MALR and the UN’s Food and Agriculture Organisation (FAO) signed a technical cooperation protocol to update the strategy and included financing through the FAO’s Technical Cooperation Programme. The updated policy also includes workshops and training courses managed by the FAO.
Structure
The sector is dominated by small-scale farmers, many of whom use traditional farming methods. As such, the government has prioritised mechanisation and the adoption of innovative technologies, and has partnered with international organisations to meet these goals. In July 2015 the US Agency for International Development (USAID) began the Feed the Future Egypt programme to support local agri-businesses and increase food security. Across the Assuit, Aswan, Beni Suef, Luxor, Minya, Qena and Sohag governorates, USAID is working to connect small-scale farmers to domestic and international value chains, as well as incorporate technologies related to storage and irrigation. The organisation began another programme in August 2018 to help Upper Egypt and the Nile Delta Region modernise food technology and delivery systems, including those related to processing facilities, refrigerated trucks and irrigation.
Economic Contribution
Agriculture remains a vital part of the economy, even as efforts to diversify have reduced the sector’s representation in overall economic output. While agriculture contributed 29% of GDP in 1970, this figure averaged 13.2% between 2000 and 2017, according to the International Food Policy Research Institute (IFPRI). In the first half of FY 2019/20 the sector contributed around 12% to GDP, according to the Ministry of Planning and Economic Development, continuing the trend.
According the International Labour Organisation, 23.8% of the workforce was employed in the sector in 2019. This figure has steadily ticked downwards from roughly 50% in 1970, later to 39.3% in 1991 and 30% in 2009. However, employment in agriculture remains high in rural areas, with 55% of the workforce in Upper Egypt employed in the sector, according to USAID.
The authorities have consistently underlined the sector’s important role in reducing food imports and increasing self-sufficiency, both of which are necessary to assure food security. These targets have become particularly important in the current economic circumstances, as the 2016 devaluation of the pound made imports more expensive and the Covid-19 pandemic in 2020 disrupted global supply chains.
Land
Agriculture accounted for 3.8% – or around 37,300 sq km – of the country’s total land area in 2016, according to the World Bank. Due to the desert conditions of most of the country, only 2.8% of the total land area is arable, or 2.8m ha. This figure broke down to 0.03 ha per person as of 2016, significantly below the 0.20 ha for both Tunisia and Libya, 0.23 ha for Morocco and 0.11 ha for Saudi Arabia.
The government introduced a policy of land reclamation to boost the area of arable land available for agriculture. Between 2011 and 2016 urban encroachment was estimated to overtake around 21,00 ha per year, up from the 13,000 ha per year between 1984 and 2007. The government aims to reclaim 150,000 feddans (63,000 ha) a year by 2030. In 2017 reclaimed land totalled 59,200 feddans (24,900 ha).
Crops
There are a wide variety of crops grown across the country, and overall production has increased by around 20% since 2010, Mohamed Negm, vice-chairman of International Cotton Researchers Association, told OBG. According to the “2019 Agricultural Review” by the Central Agency for Public Mobilisation and Statistics (CAPMAS), in 2017 the production of winter crops totalled 89.8m tonnes, while 48.1m tonnes of summer crops were produced. Both figures were up from the year before, when production measured in at 77.5m tonnes and 48m tonnes, respectively.
Cotton
Egyptian cotton is world renowned for its quality, and is processed into products including bedding and towels. While output declined after 2011 as the political crisis led to quality regulations not being enforced, strict rules were imposed in 2016, causing demand to pick back up. However, in April 2020 the US Department of Agriculture (USDA) revised its projection of cotton production downwards for the 2019/20 season, from 337,000 to 305,000 bales, citing lower-quality seeds and a whitefly infestation. The USDA expects this figure to fall further, to 215,000 bales in the 2020/21 season due to lower prices, which disincentivised farmers from planting the crop.
Top destinations for Egyptian cotton include India, which imported 118,000 bales between September 2019 and March 2020; Pakistan (66,787 bales); Bangladesh (15,245 bales); Greece (12,441 bales); Germany (6816 bales); Italy (4499 bales); and Turkey (4133 bales). Falling cotton production was reflected in reduced exports. Total exports fell by 38.6% yearon-year in September-November 2019, from 186,100 kantars (the official Egyptian weight unit for measuring cotton – equivalent to 45.02 kg), to 114,200 kantars, according to CAPMAS.
Cereals
To meet the needs of a growing population, the government has sought to secure sufficient access to basic cereals such as rice, maize and wheat. However, due to insufficient local production there has been a traditional reliance on imports, which has led to inflationary spikes whenever international prices increase abruptly. Wheat demand stands at around 20.4m tonnes per year, well above the expected 2019/20 yield of 9.2m tonnes, 3.6m of which the government will buy for food subsidies. As such, Egypt is the world’s largest wheat importer, at around 12m tonnes per year. The 2019/20 crop-growing season was severely affected by the Covid-19 pandemic in many global markets, with farmers placed under lockdowns and supply chains disrupted. However, Egyptian farmers were exempt from the country’s lockdown to help the country develop strategic reserves as other producers curbed exports. Notably, Russia – the main supplier of wheat to Egypt – placed an export limit of 7m tonnes for April to June, and exhausted its quota during the first month. As of May 2020 Egypt was looking to import an additional 800,000 tonnes over the course of 2020 to guard against further market turmoil. Rice is another key staple, although its high water consumption has driven the government to curb production. In early 2018 the MIWR reduced the allocated rice production area from 453,600 ha to 304,164 ha. To ensure the regulation was followed, fines were levied on farmers with rice plantations outside the maximum area determined by the ministry.
The FAO projected that in the 2019/20 season the country would produce 24.1m tonnes of cereals, 9m tonnes of which was wheat, 7.5m tonnes was maize, 6.7m tonnes was rice and 1m tonnes was other cereals. Total cereal production is expected to increase by 14.1% between the 2018/19 and 2019/20 seasons, with rice production rising by 66.8%, wheat by 2.3% and maize by 2.1%. Meanwhile, in the 2019/20 season approximately 3.4m feddans (1.40m ha) of wheat was planted, slightly up from the 3.3m feddans (1.37m ha) planted during the previous season.
Sugar
The government has increasingly been looking to sugar as an agricultural commodity, especially in light of the food subsidy programme, which has long included sugar. Production of the good is concentrated around the refineries in Upper Egypt, with 77% of sugar cane production in Egypt occurring in the region. Approximately 2.4m tonnes of sugar was produced in 2019, up from 2.2m tonnes the previous year, according to the MALR. In 2019, 248,000 feddans (104,200 ha) of sugar cane was grown, while 584,600 feddans (245,500 ha) of sugar beet were planted. Average production for both rose, with sugar cane production increasing from 33.8 tonnes per feddan to 34.8 tonnes per feddan, and that of sugar beet from 18.4 tonnes per feddan to 18.7 tonnes per feddan.
Exports
According to the FAO, the agriculture sector accounts for around 20% of total exports and foreign exchange. Even though international trade volumes dropped by 33% due to the Covid-19 pandemic, demand for Egyptian agricultural exports rose in the first four months of the year, El Sayed El Quseir, minister of agriculture and land reclamation, told local press in May 2020. Agricultural exports from the beginning of 2020 through mid-May of that year reached 3m tonnes, more than half of the 5.4m tonnes exported during the whole of 2019. The US, the EU, Russia, the Netherlands and Australia were the top purchasers of Egyptian agricultural goods. In the first quarter of the year citrus fruits were the main product exported (1.2m tonnes), followed by potatoes (550,000 tonnes), onions (150,000 tonnes) and strawberries (20,000 tonnes). The country also exported a significant volume of garlic.
Egypt’s agriculture sector expanded into new markets in the first quarter 2020, with the country beginning to sell dates to Australia, citrus fruits to Brazil, oranges to New Zealand and potatoes to Mauritius. Ahmed El Attar, head of the Central Administration for Plant Quarantine, told local press in April 2020 that he expected that agricultural exports would reach 5.5m tonnes over the course of the year, outpacing the volume exported in 2019.
Water
Around 98% of Egyptians are concentrated along the Nile Valley and its Delta. Egypt’s dry climate and arid landscape mean it relies heavily on water from the Nile for its agricultural irrigation. Close to 100% of Egypt’s arable land is irrigated. Climate change is an ongoing concern, and greater levels of water scarcity could emerge due to unsustainable irrigation (see analysis). An August 2018 report from the IFPRI found that the Egypt will suffer from water scarcity and a fall in grain productivity of 11% by 2025 if current irrigation practices are not improved. Indeed, as of late 2019 the annual water quota dropped below 550 cu metres per person, meaning that the country is suffering from water poverty.
SADS 2030 introduced a goal to improve irrigation efficiency in 8m feddans (3.4m ha) and reduce the area of planted rice from 1.7m feddans (714,000 ha) in 2007 to 1.3m feddans (546,000 ha) by 2030, thereby saving an estimated 12.4bn cu metres of water. To this end, there has been a gradual shift towards alternative irrigation techniques, including flood-to-drop irrigation. In June 2019 the FAO installed a drop irrigation system across 30 feddans (12.6 ha) in the Siwa Oasis to serve as an example of sustainable water consumption. Additionally, in November 2019 the MIWR and MALR launched an irrigation modernisation programme, using methods such as drop irrigation, bubble irrigation and fog spraying.
Egypt’s access to water could be further complicated due to the Grand Ethiopian Renaissance Dam project, located more than 2500 km upstream on the Blue Nile River in the Benishangul Gumuz region. Once complete the $4.5bn project will be Africa’s largest hydroelectric dam, but it has been a point of contention between Ethiopia, Sudan and Egypt due to the threat of water restrictions from the Nile. In late May 2020 Ethiopia announced the dam was 73% complete and that it would start to fill the dam’s reservoir in July.
Research & Education
Egypt continues rely to a degree on foreign food producers, with the country importing around 40% of its food needs at a cost of around $2.5bn a year, according to the FAO. The authorities hope to reduce this figure substantially through research into crop diversification and alternative means of growing year round.
The government is encouraging greater innovation in the agriculture sector by working with universities and international organisations to develop scientific agricultural research that informs policy. In March 2019 it was announced that Cornell University in New York would partner with Cairo University to create a Centre of Excellence in Agriculture. The programme is part of a $30m USAID initiative to form three centres of excellence in leading Egyptian universities, with the Massachusetts Institute of Technology partnering with Ain Shams University to establish a Centre of Excellence in Energy; and the American University in Cairo partnering with Alexandria University to develop a Centre of Excellence in Water. The collaborations will increase the capacity of local educational institutions, with each centre using applied research and innovation to address challenges to Egypt’s development. Also part of the programme are scholarships, updated university curricula and teaching methods, joint research projects and academic exchange programmes between the two countries.
A redoubled focus on education will introduce workforce-ready students with experience and expertise into the sector. Additionally, developing the sector through research and innovation will inform policy that reflects the reality of the sector, as well as support the adoption of modernised farming practices to strengthen smallholder farmers’ businesses. According to CAPMAS, in the 2017/18 academic year around 6.3% of students in secondary technical education were studying subjects related to agriculture, forestry and fisheries. Agricultural production would greatly benefit from more students pursuing such a degree or certificate, especially as programmes adopt increasingly innovative and research-based curricula.
Subsidies & Food Security
Egypt subsidises basic necessities at an annual cost of approximately LE86bn ($5.3bn). The country has both a bread subsidy – which benefits around 83m people – and Tamween ration cards, the holders of which have access to a food subsidy programme. The ration cards were issued to around 70m people as of July 2019, according to the IFPRI. Throughout 2019 the Ministry of Supply and Internal Trade worked to remove from the programme Egyptians whose income was considered too high to qualify for subsidies goods to alleviate the subsidy bill.
While there have been calls to reform the system, the subsidies are seen as key to ensuring food security in a country where 33% of the population was officially below the poverty line in 2018. The country was 61st out of 117 countries in the 2019 Global Hunger Index, while Jordan ranked 48th, Algeria 27th and Tunisia 23rd. Affordability, quality and food safety are impediments to food access. However, in 2019 the National Food Safety Agency received its executive regulations. The new independent authority aims to protect consumers by ensuring all food consumed, distributed, marketed or produced in Egypt meets high food safety and hygiene standards.
Greenhouses
Boosted agricultural production will be key to food security, and agriculture authorities are looking to greenhouses to bridge the food gap. In August 2019 the second phase of a national greenhouse programme – 1300 greenhouses spread across 10,000 feddans (4200 ha) – was inaugurated along the country’s northern coastline. The first phase, inaugurated in February 2018, also saw the establishment of 1302 greenhouses across 100,000 feddans (4200 ha).
The project, which is the largest of its kind in the Middle East, pilots a method for maximising the use of land for agriculture while rationalising the use of water. Production in the greenhouses is expected to reach that of about 1m feddans (420,000 ha) of traditional fields and could supply up to 20m Egyptians with food. Greenhouses use up to 70% less water than traditional farming methods, and have the ability to support the production of seasonal crops year round. Once the remaining phases of the greenhouse initiative are complete in 2021, an additional 7853 greenhouses will have been established across 87,500 feddans (36,750 ha) throughout the Ismalia, Fayoum, Beni Suef and Minya governorates.
The MALR and the military have been cooperating for years, with the MALR and the Ministry of Military Production having signed a protocol in November 2017 to increase cooperation in the mechanisation of the sector, with the military agreeing to manufacture equipment and machinery necessary for enhanced agricultural production. According to Mohamed Al Assar, brigadier general and the minister of military production, the military is well positioned to tap its advanced technological know-how to manufacture machinery in line with the needs of the local market.
Outlook
Despite challenging global factors, Egypt’s agricultural sector continues to thrive, as production of top crops such as sugar increase and the country’s products tap into new markets, even amid the Covid-19 pandemic. Indeed, agricultural exports are strong, and by mid-May 2020 Egypt’s exports were more than half of those of the whole of 2019. New research and innovation initiatives will be key in teaching the next generation of farmers and sector officials modernised methods, with the hope that these technologies will in time trickle down to the country’s small-scale farmers. The focus on rationalising water use and food security, as well as limiting the potential impact of climate change, will set up the sector for a strong future.
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