CAIRO: A long-term plan to reform the agriculture sector and solve the prevailing shortage of fertilizers is currently in the works, the government announced on Sunday.
Following a ministerial meeting in Alexandria, Prime Minister Ahmed Nazif requested that Minister of Agriculture Amin Abaza find a solution to the shortage of fertilizers in the market that has affected this year’s planting season.
The government has decided to pour a 1.6 million ton supply of fertilizer into the market and monitor all distribution outlets through agricultural banks and private sector aid. The Ministry of Agriculture will purchase one million tons of fertilizer from factories in the Free Zone Area as well as 600,000 tons from the state-owned Helwan factory.
Since May, farmers have been complaining about the increase in the cost of fertilizer, which resulted in a significant shortage in the market. Black market peddlers capitalized on the shortage by buying huge stocks, further draining the market and raising the price to profit from those in need.
“Our production is twice our consumption. Egypt produces 15.5 million tons, half of which is produced by state-owned factories and the other half by Free Zone Area factories in Egypt, Magdy Rady, Egyptian cabinet spokesperson, told the press. According to the government, Egypt’s agriculture consumption is only 8.6 million tons.
The shortage resulted from farmer’s inexplicable increased consumption of nitrogen-based fertilizer due to its low price in the summer season – utilizing the fertilizer at levels that exceed the rate of production during the season.
The Ministry of Agriculture’s new long-term plan, which will be implemented starting next season, will set stringent measures against black market sellers. It will also educate farmers on how to utilize alternatives to nitrogen-based fertilizer to prevent another shortage crisis in the future, Abaza said.
“The only solution to prevent this shortage from happening every year is to liberalize the fertilizer market, Mahmoud Saeed, member of the Egyptian Fertilizer Retailers Association (EFRA) told Daily News Egypt. EFRA has been calling for the liberalization of nitrogen-based fertilizer “to encourage selling and export investments in the Egyptian market, instead of building export-only businesses, he said.
Egypt has maintained a ban on exporting fertilizer since 2003 as a result of shortages in the local market, which twice threatened the planting season.
The pricing of fertilizer is another issue the government should address. “The government should lift the limits on fertilizer prices, Saeed said. The government should also consider providing farmers with monetary subsidies to aid them during times of similar shortage.
Many farmers depend on loans from the Bank of Development and Agriculture Credit to buy fertilizers and other agricultural needs. In April, the bank increased interest on loans by 20 percent, resulting in a standoff between the bank and 5,000 sugar cane farmers who escaped legal prosecution for not paying their debts.