Supply minister announces new food subsidy system
Minister of Supply Khalid Hanafi - YOUM7 (Archive)

CAIRO: The government will adopt a new system for food subsidies, Minister of Supply Khaled Hanafy announced Tuesday, adding that the plan aims to widen the range of commodities provided to customers.

The new strategy takes into account the interests of citizens and the owners of bakeries, the minister said during a tour in Port Said, according to Youm7.

He added that it would increase the economic and professional efficiency of bakeries.

Egypt’s extended system of subsidies on bread and fuel poses a heavy burden on the state budget.  The minister said Sunday that food subsidies alone cost the government 30 billion EGP ($4.31 million) this year.

“People will be allowed to choose from a larger range of products like milk, fruits and vegetables according to each family’s needs,” spokesperson of the Ministry of Supply Mahmoud Diab told Ahram Online Tuesday, referring to the new plan.

He added that the government was finalizing the introduction of  smart cards to implement the new system, which would also help to contain increasing fraud.

Bakery owners are often accused of selling subsided flour on the black market at higher prices.

The minister had said, during an interview with CBC TV channel March 11, that he intends to liberalize flour prizes to prevent black market trade.

As the world’s top wheat importer, food security is a sensitive topic in Egypt. Former President Anwar Sadat decided to cancel bread subsidies in 1977, resulting in mass demonstrations that forced him to withdraw the decision.

Since then, governments have hesitated to accept a loan from the International Monetary Fund, because the conditions of such a loan would predictably involve heavy reforms to the economy and the subsidy system.

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