CAIRO: The Ministries of Agriculture and Trade and Industry met this week with food producers and exporters in an effort to curb food prices in preparation for Ramadan, which is set to begin Sept. 1.
Absent were sweeping proposals that might harness punishing food prices, the ministries instead made modest proposals designed to sustain the country through Ramadan, typically a month of heavy consumption.
The talks centered specifically on controlling prices of dairy products, poultry, meat, and rice.
“In Ramadan, the government makes lots of efforts to make the prices work, said Abdel-Fatah El-Gabaly, head of economic research at Al-Ahram Center for Political and Strategic Studies.
Using tariff levels as leverage, the ministries demanded that poultry producers strive to keep prices low. They did this, notes a Beltone Financial report, by “emphasizing that if prices rise, the government would remove the duties permanently.
Prices of poultry had skyrocketed over the first four months of 2008, from LE 6 per kg in January to LE 10.75 per kg in April, according to Dr Mohamed El Shafei, vice chairman of the Poultry Council of Egypt. Prices have declined slightly since April, settling at LE 9.5 per kg in June. Industry experts worry that increased demand in Ramadan could drive the prices back up.
In another important move, the Minister of Trade and Industry announced his intention to remove the sales tax on a number of inputs used in the production of dairy products, poultry, meat and rice. That decision is still pending discussions with the Minister of Finance.
The ministries had already placed LE 300 tariffs on exports of many of these same agricultural inputs in an effort to increase supply domestically.
El-Gabaly, an expert on Egypt’s economic issues, argued that in addition to increasing the food supply, which the latest report from the Ministry of Agriculture seems to suggest is a priority, the government needs to tread softly in enacting reforms in the coming months so as not to roil the delicate economy.
“I think the government should not take any decision that could affect the inflation rate over this month, El-Gabaly argued.
These high-level government discussions come at a time in which the Egyptian economy is in a perilous position and many fear that many of the country’s poorest could go hungry during Ramadan if troubles persist.
Last year, NGOs collected donations and subsequently distributed tens of thousands of food rations to Egypt’s neediest who were incapable of affording meals for themselves – and that was before the latest round of economic troubles.
Forty percent of Egyptians live below the poverty-line, making no more than $2 per day.
