Published on: Monday, January 23, 2023 – 7:05 PM | Last update: Monday, January 23, 2023 – 7:05 PM
One of the best decisions taken by the government in the recent period is to stop any new projects that include a dollar component in them, as well as raising the price of supplying a ton of wheat from farmers from 1,000 to 1,250 pounds, an increase of 25%.
Today, I will discuss the recent decision regarding wheat, which was announced by Dr. Mostafa Madbouly, Prime Minister, last Wednesday, in implementation of the directives of President Abdel Fattah El-Sisi.
The new price in numbers is 40% higher than the supply price of last year, and the goal is to encourage farmers to expand wheat cultivation, so that the government can collect 4 million tons of local wheat in the harvest season that will start next April, compared to 4.2 million tons in the previous year. Past.
In the estimation of Hussein Abu Saddam, head of the Peasants’ Syndicate, raising the price of the ardab of wheat achieves a high margin of profitability for the farmers, but what Abu Saddam says is that it is less than the world price.
Abu Saddam told CNN in Arabic that the average productivity of one feddan reaches 21 ardabas, with a total value of 27 thousand pounds, or about 904 dollars per feddan, compared to an average cost of twenty thousand pounds, 670 dollars, with an average profit of 7 thousand pounds per feddan, 234.5 dollars per acre.
In Abu Saddam’s estimation, too, the new price compensates for the high cost of production, because it is much better than last year’s price, which amounted to 850 pounds per ardab, “28.5 dollars” for the highest degree of purity, as well as an increase from the first price offering this year, which was announced at 1,000. EGP “33.5 dollars” before the planting season.
Once again, the government’s decision is very important and we should salute it for it, but there are many observations that we should pay attention to as long as we are talking about the need to support Egyptian farmers.
The first observation is that the change in the value of the Egyptian pound should be present in the pricing process, because the dollar at the beginning of last year was worth 15 pounds on average, and now its price has jumped to 30 pounds, which means that the pound has depreciated by nearly 100 percent.
One of the striking numbers is that the price of a ton of wheat before the outbreak of the Ukrainian crisis was about $275, at a time when the dollar was approximately equal to 15 Egyptian pounds, then its price rose with the repercussions of the war and exceeded $500.
Now the price of a ton on the International Wheat Exchange is $337, excluding shipping and unloading costs, according to Dr. Nader Noureddine, a well-known agricultural expert, who says in a message I received from him last week via WhatsApp, that this price is according to the last Russian wheat deal imported by the Ministry of Supply last week, and therefore it is The price of a ton in Egyptian pounds is 10110 pounds for a ton of Russian wheat, while it buys it from the farmer after the recent increase by about 8337 pounds, which is less than the international price of a ton by about three thousand pounds per ton, and if we add the costs of shipping and unloading, the price of an imported ton is almost five thousand pounds more. .
If the previous figures are correct, then the government should continue to consider more support for the Egyptian farmer, because he is the most deserving of care and support.
We all know that Egypt is the largest importer of wheat in the world, as it imports more than 12 million tons annually, representing more than half of its consumption of wheat, and we know that 80% of our imports came from Russia and Ukraine, and we know that we were almost the most affected by this crisis, and therefore One of the important lessons is the need to support Egyptian farmers and manufacturers in every possible way, at least to convince them to continue in agriculture and industry.
During my visits to my village in Assiut, and talking to many farmers, some of them say that the return from agriculture is no longer feasible, especially after the high costs of production, especially fertilizers and seeds, and some say that if he sold the land and put the return in the bank at 25% or even 17% interest, it would be more profitable. And his best.
The previous statement may be a result of the difficult conditions that the farmers are going through, and therefore we are all required to provide all possible support to farmers, especially those who grow basic crops such as wheat. And the manufacturers who provide us with important commodities for the local market, or export abroad and provide us with hard currency.
Once again thanks to the government and we are waiting for more.