Egypt sets new rules to maximise local wheat procurement

Egyptian farmers will have to sell at least 60 percent of their wheat to the government this season or risk losing financial support, according to a document circulated by traders, amid efforts by the state to offset disruption to Black Sea wheat imports.

The government has taken several steps to protect wheat supplies since Russia's invasion of Ukraine, which largely cut off shipments from Egypt's two top suppliers and left the North African country scouting for alternative exporters.

The Supply Ministry document said farmers would have to sell at least 12 ardebs (150 kg) of wheat per feddan (acre). A feddan usually produces an average of 20 ardebs. The rules also apply to any third party that purchased wheat from farmers before the decision was taken.

After meeting the quota, farmers would need a permit from the government to sell the rest of their wheat elsewhere. Farmers who fail to comply would be denied access to subsidised fertilisers in the summer, as well as any support from the Agricultural Bank of Egypt.

The rules also provide for incentives for farmers with plots of more than 25 feddans who sell 90 percent or more to the government, including subsidised fertilisers. No such rules have been applied to farmers in recent years.

The Supply Ministry and Agriculture Ministry could not immediately be reached for comment, and it was unclear if the rules had received final approval.

The Supply Ministry has said it is aiming to procure more than 6 million tonnes of wheat from the local harvest this season, 66 percent more than the quantity of wheat procured the previous year.

Officials have said existing wheat reserves and the local harvest will suffice for eight months of supplies for subsidised bread, which is available to about two-thirds of Egypt's population.

The government has also raised the amount it will pay farmers for their wheat and imposed a three-month ban on wheat and flour exports. It is expected to set a price for unsubsidised bread.