A looming global food crisis highlights the need to revitalise the agricultural sector worldwide. Sherine Abdel-Razek examines local prospects The summit on soaring food prices, convened by the UN Food and Agriculture Organisation (FAO) in Rome last week stressed the need for raising food production by half by 2030 in order to meet increased demand. UN Secretary-General Ban Ki-Moon urged nations to seize a "historic opportunity to revitalise agriculture" as a way of tackling the food crisis through lowering food prices and alleviating poverty. According to the World Bank's World Development Report 2008, around 75 per cent of the world's poor live in rural areas mainly dependant on agriculture. In fact, agriculture is a source of livelihood for an estimated 86 per cent of rural people, and provides jobs for 1.3 billion smallholders of land or landless workers worldwide. In Egypt, the figures are just as striking. Some 29 per cent of the population in rural areas live in poverty, compared to 23 per cent of urban inhabitants. Representatives of nations across the globe attending the UN summit agreed to channel $2 billion to fund research for new seeds, building irrigation canals and spread fertiliser use. All these steps are dubbed by many as the second green revolution. Egypt, where agriculture contributes 16 per cent of GDP is following suit. The cabinet on Sunday revealed a strategy to increase investments in the sector from the current LE4 billion to LE25 billion within five years, with the aim of increasing agricultural exports and the sector's stake in GDP growth. Where these investments will be used is an important question, as revealed at a seminar organised by the World Bank at Cairo University's Agricultural Research Centre last week. The seminar, dedicated to applying the findings of the World Development Report Agriculture for Development, highlighted the fact that a major part of investments is offered in the form of input subsidies, benefiting rich farmers more. The report said that experiences in countries worldwide proved that in most cases the economic benefits of input subsidies, like helping the poor or providing safety nets, are much less than the cost of subsidies. The document called for "market smart" subsidies, which either phase out after achieving their purpose or are linked to vouchers and matching grants. Malawi, for example, adopted a scheme through which vouchers were distributed only to those who participate in a public works project. Wealthier farmers are less likely to participate in these projects, so only poor farmers will benefit. When redeeming the coupon, farmers are paid in cash almost one third of the retail price of fertilisers. Expressing reservations over local subsidies on inputs such as seeds and fertilisers, Hamed El-Shiati, chairman of Shoura Group, called for replacing this system with insurance systems. These would enable farmers to hedge against increases in prices, as well as environmental and climate changes. Upgrading the sector through better education of the manpower and providing it with state-of- the-art technology were two recommendations given by participants at the seminar. "Channelling more investments to agricultural education, especially in secondary schools which graduate 130,000 every year, is a must," said El-Shiati. One of the main problems facing landowners is limited resources, including bank reluctance on rural finance and the great discrepancy between large- and small-sized farms in terms of means of production and transportation. Smallholdings characterise Egyptian agriculture -- about 50 per cent of holdings have an area less than one feddan, farmed by tenant families or the landowner. Those usually cultivate for subsistence with the marginal surplus sold on the market. "We have two parallel kinds of farms -- an old outdated one and a state-of-the-art private farm," explained Tarek Tawfik, head of the Food Industry Chamber at the Egyptian Federation of Chambers of Commerce (EFCC). "What we really need is to lift standards of the old land to bring it up to date with European standards." Tawfik added that one way to deal with this is producer organisations, or resorting to collective action between small farmers which will allow them to bargain for better prices. The World Development Report noted that in Latin America, the share of rural subsidies provided by the government is higher where there is more political power of producer organisations. Water management cannot be underestimated either, especially that Egypt faces water disputes with the Nile Basin countries. "Figures show that up to 50 per cent of water is wasted in old lands," stated Tawfik, adding that this is due to outdated irrigation systems which need to be replaced. But waste is not confined to water, he asserted, since the lack of post-harvest infrastructure and inefficient transportation result in wasting significant portions of the transported harvests. Even in the case of wheat, studies put the wasted percentage at around 30 per cent during handling and transportation. Using new techniques in cultivating the land might be an exit from the current bottleneck in production. "Egypt has to depend more on genetic engineering, a sector which needs a lot of investments, but will increase the quality of production by reducing the use of hazardous chemicals for pest control," argued panelist Ayman Abu Hadid, president of the Agricultural Research Centre. According to FAO, only 3.5 per cent of Egypt's land mass is classified as agricultural, the majority of which is located along the Nile and its Delta. However, it remains one of the most productive agricultural countries in terms of the yield per feddan thanks to the high fertility of the soil, including rich silt brought from the Nile Basin. Another factor is the long growing season, which can accommodate three crops per season.
