CAIRO: The Ministry of Social Solidarity is currently considering halting the production of subsidized bread costing 10 and 20 piasters to produce higher quality loaves at 15 piasters, and compensating citizens directly through salary allowances.
The decision includes transforming traditional bakeries to higher-end ones capable of producing a 150-gram loaf sold for 15 piasters using flour that has a rate of extraction of 76 percent instead of the flour currently which has an 82-percent extraction rate.
Bakery owners will be allowed to decide whether or not to continue producing the five-piaster loaves, putting into consideration the consumption needs of the geographical areas they serve.
The proposal was initially met with the approval of bakery owners, who demanded more moves to lift bread subsidies, warning that the move to produce 15-piaster loaves will lead to overcrowding at bakeries offering bread at lower prices.
Commenting of the proposal, Farag Wahba, head of the bakeries unit at the Cairo Chamber of Commerce, told Daily News Egypt, “The decision reflects the confusion of the ministry. They are hesitant about transforming bakeries into higher-end ones and at the same time they are afraid that other bakeries would buy the subsidized flour that they receive [at competitive black market prices], he said.
He suggested that the ministry lift subsidies on bread altogether and allow bakeries to compete freely in price and quality instead of forcing them to produce the five-piaster loaves. He believes that the ministry is planning to cancel the production of the cheaper bread gradually but is delaying it until the appropriate time.
If approved, the proposal is scheduled to come into effect next July.
The Ministry also plans to pay a daily quality incentive of LE 5 for every 100 kilograms of flour baked.
However, bakeries committing violations such as illegally reselling subsidized flour and not abiding by quality standards or pre-fixed prices, will not be eligible for the incentive.
