Policies for the Future of Farming and Food in Egypt

Assessment and Recommendations

Assessment of performance

Agriculture is a strategically important sector for the Egyptian economy

As the second-largest economy in Africa, Egypt benefits from a diversified economic structure, a vast territory, and significant natural resource wealth. Although agricultural land accounts for just 4.1% of Egypt’s total land area – among the lowest worldwide – agriculture remains a strategically important sector. The sector accounts for 14% of GDP and 19% of employment, significantly higher than in OECD countries.

Government strategies put agriculture at the centre of Egypt’s structural reform agenda. Many of their objectives are aligned with the UN Sustainable Development Goals and can be examined through the lens of the OECD’s Agro-Food Productivity-Sustainability-Resilience Policy Framework:

• The National Agenda for Sustainable Development, or Egypt’s Vision 2030, is led by the Ministry of Planning, Economic Development and International Co-operation (MPEDIC) and highlights the importance of food provision for improving Egyptians’ quality of life and raising their living standards. It sets out quantitative targets to reduce malnutrition and stunting, streamline food subsidies, increase rural incomes and employment, and improve water use efficiency.

• The National Structural Reforms Programme was also developed by MPEDIC and includes agriculture as one of three priority sectors to diversify the economy. It outlines key actions to achieve food and water security, increase agriculture’s productivity and contribution to the economy, increase incomes of small farmers, boost agricultural exports, and enhance the sector’s resilience.

• The 2030 Updated Sustainable Agriculture Development Strategy was developed by the Ministry of Agriculture and Land Reclamation (MALR) in 2020, and is the main strategic document for the agricultural sector. It aims to achieve food security and improved nutrition, enhance sustainable agriculture, eradicate rural poverty, adapt to climate change, increase agricultural competitiveness, and create employment opportunities for youth and women. It outlines ambitious targets, including the objectives, set in 2020, to increase self-sufficiency rates for strategic crops (e.g. 67% for wheat in 2030), and significantly increase agriculture’s share of GDP and employment by 2030.

The targets to increase agriculture’s share of GDP and employment run counter to the development trajectory typically observed in other economies, where growth in manufacturing, industry and services tends to outpace that of agriculture. In Egypt, agricultural expansion has primarily been driven by large-scale land reclamation projects implemented by the government, which convert marginal desert lands for production. As a result, the total cultivated area has increased from 8.7 million feddans (3.7 million ha) in 2010 to 10 million feddans (4.2 million ha) in 2024, offsetting losses in fertile agricultural land in the Nile Delta due to urban encroachment.

Agro-food exports are a key driver of agricultural growth, and have risen to historical highs. In particular, exports of high value horticultural products have grown rapidly, with fruits, vegetables and their preparations accounting for more than half of agro-food exports in 2022‑24. Medium and large-scale commercial farms tend to be more productive and are better integrated with domestic supply chains and international markets. However, land ownership remains highly fragmented as a result of land reform policies adopted after the 1952 revolution, high population densities, and inheritance laws. Consequently, small-scale subsistence-oriented farms of less than 3 feddans (1.3 ha) still account for about 90% of farm holdings and approximately 40% of total agricultural land.

Productivity is rising, but not quickly enough to meet demand from a fast-growing population

Agricultural labour productivity has grown rapidly over the past two decades and is currently twice the global average, although it remains significantly lower than the average across OECD Member countries. The gap between agriculture and other sectors – in particular industry – has also narrowed.

Total factor productivity (TFP), which is the most comprehensive standard measure of agricultural productivity, grew steadily at 1.6% over the period 2012‑22, compared with the global average of 0.9%. While agricultural output growth has slowed considerably since the 1990s, TFP has remained an important source of growth, while the contribution of inputs, in particular animal feed and labour, has declined.

Ultimately, however, agricultural productivity has not kept pace with rising demand from Egypt’s fast-growing population. The population reached 116.5 million in 2024, is growing at 1.7% per annum, and is projected to reach 160 million by 2050. Population growth and rising incomes have generated growing demand for imported food products, with the value of agro-food imports increasing more than threefold since 2007 and the agro-food trade deficit expanding considerably.

Imports of some agricultural and food products are highly concentrated among few suppliers, creating vulnerabilities to trade disruptions

The cereal import dependency ratio, which indicates the share of net imports of cereals in the domestic supply of cereals, is very high at 43%. Egypt is one of the world’s largest importers of wheat, and the country also imports significant quantities of maize, soybeans and vegetable oils. Imports are also highly concentrated by country of origin. Despite efforts to diversify its trade partners, Egypt remains heavily reliant on the Russian Federation (hereafter “Russia”) and Ukraine for supplying over 70% of its wheat imports, and around one quarter of total agro-food imports.

This concentration represents an important strategic vulnerability, which became apparent in 2022 following the start of Russia’s war of aggression against Ukraine. The threat of disruptions to global grain supplies and fertiliser markets, along with export restrictions imposed by many countries around the world, created significant food price inflation in Egypt, stoking fears of food shortages. Strategic grain reserves helped to manage the situation, while the establishment of the Black Sea Grain Initiative and EU-Ukraine Solidarity Lanes helped to keep trade flowing, and ensured Egypt’s continued access to food imports.

Diversifying Egypt’s food import sources can help to reduce vulnerabilities to external shocks such as food price volatility, extreme weather events, conflict and supply chain disruptions. Further efforts to expand trade relationships across different regions can enhance resilience, improve price stability in the domestic market and facilitate efficient markets that are responsive to changes in demand and supply.

Tackling food insecurity and malnutrition is a major policy priority and challenge

Egypt has undergone a rapid nutrition transition since the mid-1970s and currently faces the double burden of malnutrition: the coexistence of chronic undernutrition and overnutrition amongst its population. This is a significant public health challenge: undernourishment is rising, nearly one-third of the population is food insecure, and despite some modest improvements in indicators of undernutrition, child stunting remains persistently high. At the same time, rates of overweight children and adult obesity are among the highest worldwide. Malnutrition generates substantial costs for the Egyptian economy, through a combination of productivity losses, reduced educational attainment, and increased health costs.

Staple foods such as cereals account for nearly two-thirds of the dietary energy in Egypt’s food supply, suggesting that there is room to improve nutrition and strengthen dietary diversity. However, the cost of a healthy diet in Egypt was 6.38 purchasing power parity (PPP) dollars per person per day in 2024 – significantly higher than the global average of 4.46 PPP dollars. In contrast, the cost of a diet based on the least expensive locally available starchy staples was just 0.68 PPP dollars. As a result, healthy diets that provide adequate calories and nutrients from a diverse range of food groups are unaffordable for the majority of Egypt’s population, while energy-dense staple foods remain abundantly cheap.

The policy approach to food security is centred on ensuring availability by supporting domestic production of staple crops…

This report assesses the performance of agricultural and food policy in Egypt using a set of internationally comparable indicators developed by the OECD to measure support to agriculture. Applied regularly in 54 OECD and emerging economies, these indicators, including the Producer Support Estimate (PSE), are used here for the first time for Egypt. They provide a comprehensive picture of how different policy instruments transfer resources to producers and consumers of agricultural commodities and influence production and market outcomes.

The results highlight how the government supports food availability by encouraging the domestic production of strategic crops such as wheat, maize and sugar cane. Farmers are offered guaranteed minimum prices to encourage planting, and the General Authority for Supply Commodities (GASC) under the Ministry of Supply and Internal Trade (MoSIT) undertakes large-scale domestic procurement. Depending on the year, the GASC may procure between one third and half of domestic wheat production at the government-set procurement price. In addition, tariffs and import requirements are applied to certain commodities to ensure high prices and protection for domestic farmers. While market price support mainly benefits producers of staple crops, fruits and vegetables are not supported, and livestock products are penalised by higher feed costs. Experience from OECD and emerging economies shows that market price support and other policies that target specific commodities increase the rigidity of the sector and prevent farmers from adjusting their production in response to changing conditions.

Large-scale imports of agricultural commodities also help to guarantee the availability of food. Over the past decade, wheat imports have represented nearly 50% of total wheat consumption, with the GASC accounting for about half of wheat imports through international tenders and direct purchases. Since December 2024, Mostakbal Misr Agency for Sustainable Development, an agency under the Egyptian Armed Forces, has been responsible for imports of strategic commodities previously undertaken by GASC.

In addition, the government maintains strategic reserves of staple commodities to ensure stability in the food supply and protect consumers from food price inflation. In recent years, investments to upgrade the storage infrastructure and expand the network of silos have considerably increased Egypt’s storage capacities and reduced losses and wastage. However, large-scale public stockholding programmes risk becoming very costly, can create distortions in domestic and international markets and reduce the capacity of the food system to respond to market signals.

… and increasing access to food through the food subsidy system

The domestic and trade policies described above are implemented in conjunction with a costly and extensive food subsidy system made up of two components: a subsidy for baladi bread, which allows citizens to purchase five loaves of bread per day for EGP 1 (USD 0.02), and an electronic ration card programme, with a monthly allowance of EGP 50 (USD 1) per person that can be used to purchase from a list of 33 essential commodities. The current food subsidy system benefits nearly two-thirds of the population (about 60‑70 million people annually) and is not effectively targeted to the poorest households that need them most. Food subsidies also generate a high fiscal burden, costing the government an average of 1.4% of GDP per year over the past decade.

The combination of food subsidies to consumers and price support to producers provide contradictory policy signals. On the one hand, first-stage consumers saw their consumption expenditures increase by 16% through higher prices provided to producers in 2022‑24. On the other hand, final consumers received food subsidies that reduced consumption expenditures by almost 7%. As a result, on balance, consumers were penalised by agricultural support policies.

Food subsidies in Egypt have evolved considerably over the past century, and much can be learned from attempts by previous governments to reform the system. For instance, significant reforms were introduced after 2014 to further discipline expenditures, reduce leakage and wastage, and improve quality and consumer choice. However, while it is widely accepted that food subsidy reform is needed to target the beneficiaries most in need, over time these subsidies have become a powerful symbol of the social contract and have helped to maintain public trust and social stability. Maintaining the momentum of reforms has proven particularly challenging, as food subsidies are often used to mitigate the impacts of food price shocks and economic crises. This underlines the importance of identifying feasible reform pathways that balance trade-offs between fiscal sustainability, social protection, and public acceptance.

Egypt’s successful experience implementing the Takaful and Karama cash transfer programmes demonstrates that cash transfers tend to be more effective than in-kind support in targeting beneficiaries and reducing poverty. While expenditures on these programmes have increased considerably in recent years, cash transfers still represent a relatively small share – just 6% – of total public expenditures on subsidies, grants and social benefits.

Further efforts are needed to diversify diets and address Egypt’s nutritional challenges

While Egypt’s food subsidies have had some success in preventing rapid increases in poverty during times of crisis, they have been far less effective in addressing the double burden of malnutrition. Evidence suggests that the current system influences dietary patterns by encouraging overconsumption of energy-dense foods, including baladi bread and subsidised cooking oil, sugar, and rice. These dietary patterns generate significant costs linked to food insecurity and malnutrition, as well as hidden health and environmental costs.

Egypt is taking some important steps to strengthen nutrition: the government reintroduced the National Flour Fortification Programme in March 2025, which had been discontinued in 2012 due to a lack of funding. The programme is implemented in partnership with the World Food Programme and aims to tackle high rates of anaemia among children and women. Egypt also operates a national school feeding programme, providing schoolchildren with fortified snacks such as date bars. However, the distribution is irregular, and the coverage of the programme remains limited.

School meals can be an effective lever for addressing child malnutrition. Both Chile and Japan provide useful examples of successful school feeding programmes. As a member of the School Meals Coalition, Egypt can also benefit from the experiences documented in national school meals case studies developed by the Research Consortium for School Health and Nutrition.

Addressing water scarcity and improving natural resource management is critical

Agricultural production is highly concentrated along the Nile Valley and Delta, which account for just 4% of Egypt’s territory but host around 95% of the population. Land and water availability per capita have been declining as a result of population growth, urbanisation, and high population densities generating increased competition for scarce resources. Per capita water availability has fallen by nearly half since 1990 and is approaching 500 m³ per inhabitant per year, the threshold for absolute water scarcity.

Egypt faces significant agri-environmental challenges. Continued population growth, rising incomes and dietary shifts will place additional pressure on natural resources, while climate change and upstream developments in the Nile Basin could exacerbate water resource pressures. Furthermore, market price support policies often target water-intensive crops and do not help to induce required changes in crop patterns, while excessive application of nitrogen fertilisers is causing nutrient imbalances and resulting in soil and water pollution.

Current strategies focus on water supply and irrigation infrastructure development

Irrigation is a cornerstone of the development plans for Egyptian agriculture and of national agricultural policy programmes. The Ministry of Water Resources and Irrigation (MWRI) has developed several long-term strategies for water resource management, including the Second National Water Resources Plan 2017‑2037, and the Water Resources Development and Management Strategy until 2050 (published in 2017). Water User Associations (WUAs) also play an important role in ensuring the effective operation and management of irrigation infrastructure and drainage systems.

The current policy approach to support the agricultural sector as a whole (i.e. support for General Services) involves a heavy emphasis on investments in irrigation infrastructure and developing supply-driven technical solutions such as modern irrigation technologies, wastewater treatment and reuse, and improving the efficiency of water distribution. However, evidence suggests that irrigation efficiency improvements can – somewhat paradoxically – be associated with increased water consumption and demand, as farmers switch to more water-intensive crops and more efficient irrigation infrastructure limits return flows to the environment. This suggests there is scope to develop alternative market-based, regulatory and voluntary mechanisms to manage water demand.

Fertiliser subsidies are substantial, and high use of fertiliser and pesticides contribute to soil and water pollution

The government indirectly subsidises the production of fertilisers by providing discounted natural gas to fertiliser manufacturers and requiring them to allocate 55% of their production to MALR, which then sells the fertilisers to farmers at a below-market subsidised price. Fertilisers are targeted to producers of strategic crops – especially wheat farmers – with land holdings of up to 25 feddan (10.5 ha). Overall, budgetary expenditures for inputs, investment or credit on the farm amount to 1% of gross farm receipts.

Evidence suggests that fertiliser subsidies may be contributing to overapplication of fertilisers in Egypt, causing higher nutrient surpluses and negative consequences for soil and water pollution. In particular, the excessive application of nitrogen fertilisers combined with the reuse of agricultural drainage and wastewater affects soil quality, while large nutrient surpluses pose risks to water quality.

Despite a strong legislative framework covering the registration, handling and use of pesticides, there are several gaps in the implementation of pesticide regulations. The expansion of pesticide usage poses risks to human health and water quality. Reducing application rates could result in improved food safety outcomes as well as improved market access for exports.

A complex institutional landscape creates challenges for policy co-ordination and implementation

Agricultural and food policies are managed by a diverse range of ministries and government agencies. MALR is the main ministry overseeing the agricultural sector, and its responsibilities include fertiliser subsidies, credit programmes, agricultural R&D, extension services, and land reclamation projects. However, other ministries are also active in the agriculture and food sectors. MoSIT administers the food subsidy system, oversees procurement of domestic wheat by the GASC, and manages the government-owned silos and grain storage infrastructure. MWRI is responsible for developing and maintaining irrigation infrastructure, while MPEDIC oversees rural development initiatives and implements the Decent Life (Haya Karima) initiative. The Ministry of Investment and Foreign Trade (MIFT) is responsible for formulating and implementing trade measures. In addition, numerous state- and military-owned enterprises operate across the entire agriculture and food value chain with the aim of regulating the market and controlling food price inflation, generating significant impacts on the competitive landscape and business environment.

The large range of government ministries and the proliferation of strategic documents, sometimes with overlapping responsibilities and objectives, inevitably creates challenges for policy co-ordination. Some preliminary steps have been taken to strengthen inter-ministerial co-ordination on agricultural and food policy, including through the establishment of a National Committee for Food and Nutrition Systems under the Prime Minister’s office in 2023. Nonetheless, substantial challenges for the co-ordination and implementation of Egypt’s agricultural and food policies remain.

While some progress has been made, current support policies represent a high burden for the economy and are not well targeted towards improving food security, nutrition, or environmental sustainability

Egypt is confronting profound challenges in terms of food insecurity, malnutrition, and threats to soil and water resources. These are appropriately identified as priorities under Egypt’s strategic programmes, along with ambitious targets and policy measures to address them. However, the current policy approach is not well targeted to address these challenges, and could be strengthened.

Some progress has been made, with support to Egyptian farmers falling to 10% of gross farm receipts in 2022‑24, compared to 21% in 2000‑02. The current %PSE is lower than the average for OECD Member countries (13%), but higher than the average for emerging economies (7%). That said, agricultural support policies place a significant burden on Egypt’s economy, amounting to 2.8% of GDP in 2022‑24. This comes from a combination of producer support (fertiliser subsidies and market price support for staple crops), general services for the sector (primarily expenditures on R&D and irrigation infrastructure), and consumer support (food subsidies).

The OECD’s Producer Support Estimate (PSE) methodology can shed light on the distribution of support across different commodities and the range of policies and programmes implemented by various government ministries and agencies. However, limited data and information on budgetary expenditures and transfers from SOEs constrains the capacity to analyse agricultural policies and hinders transparency. Continued engagement with the OECD, including through its annual Agricultural Policy Monitoring and Evaluation exercise, can help to address these data gaps and ensure greater transparency to better inform policy development in Egypt.

Policy recommendations

1. Strengthen food systems co-ordination to oversee policy interactions and facilitate reforms to meet multiple goals

The achievement of food systems objectives requires co-ordination across all relevant government ministries, agencies and other stakeholders. Given the complex institutional landscape in Egypt and the multiple goals pursued by food systems policies, strengthening policy co-ordination across the various actors involved in the agriculture and food sectors is essential to assess and manage trade-offs between competing policy tools and objectives, and effectively exploit potential synergies.

1.1. Commission an independent expert analysis of the role of government agencies, SOEs and MOEs in the agriculture and food value chain, and implement a strategy to reduce their interventions in markets

• [Short term] Commission a report on government interventions in the agriculture and food value chain to be undertaken by independent experts. The report could focus on identifying all government agencies, state-owned enterprises (SOEs) and military-owned enterprises (MOEs) that are active across different parts of the value chain, the type of measures and interventions undertaken by each of them, their sources of finance and the implications of their presence for market efficiency, private investment, and competition. The purpose of the report would be to bring clarity and transparency to the current policy environment to facilitate reform.

1.2. Develop a participatory approach to food systems policymaking, facilitating the transparent discussion of strategies, goals and policy tools

• [Short term] Embrace a food systems approach that oversees the interactions across different policy domains to achieve multiple objectives relating to food security, nutrition, incomes and livelihoods, and environmental sustainability. Actively facilitate a public debate on the different objectives and priorities for food systems, involving a broad range of stakeholders including farmers, co-operatives, government, industry, and consumers to better understand and define the priorities and policy interactions. Focus on a single strategic document for agriculture and food systems that help to have a common understanding of the challenges and trade-offs. Feasible reforms need to balance fiscal sustainability, social protection, and public acceptance, ensuring that no one is left behind, particularly during proposed reforms on food and fertiliser subsides (recommendation 5.2 and 6.4), while using the new policy levers provided by the expanded cash transfer programmes (recommendation 5.3).

1.3. Develop and implement a co-ordination mechanism to oversee food systems and monitor their performance

• [Medium and long term] Given the multiplicity of interventions from different ministries, government agencies, SOEs and MOEs, design an effective mechanism to clarify the role of each entity, define the limits of their interventions, and oversee the efficiency and direction of the entire policy package. Possible options include enhancing the capacity of the National Committee for Food and Nutrition Systems, or leveraging the MPEDIC as a co-ordinating Ministry to identify policy incoherences, propose reforms, and implement more efficient policy approaches to the sector. The development of new co-ordination mechanisms should be undertaken carefully to avoid an increasing number of institutional structures that expand bureaucracy.

2. Improve the availability, transparency and quality of data, particularly data on agricultural public expenditures and agri-environmental indicators

Improving the availability, quality and transparency of data, particularly relating to public expenditures and market interventions for agriculture, is essential to facilitate more informed and evidence-based policy analysis and design. Given the diversity of public actors intervening in input and output markets, it is urgent to enhance the quality of the data and ensure their transparent publication for public scrutiny. Data availability could also be strengthened for indicators on environmental performance and nutritional outcomes. Further engagement with international organisations can help to build institutional capacity and facilitate the adoption of best practices.

2.1. Ensure that information and data on annual public expenditures and transfers to SOEs and MOEs is publicly accessible for all investments and programmes that support agriculture

• [Short term] Building on the results of the report on government interventions in value chains (see recommendation 1.1), take action to improve the availability and quality of data and analysis to understand the net impact of policy efforts in place, avoid potential contradictions, and enhance synergies. Conduct further analysis and consultations to ensure there is a single source of sufficiently granular data on agricultural public expenditures through a common accounting system that can be used by all ministries, including information on fertiliser subsidies, concessional loans, land reclamation, irrigation infrastructure, extension and advisory services, research and innovation, and food subsidies.

• [Short term] Proactively promote the access to these data by experts from academia and international organisations, allowing them to analyse and learn about policy impacts and experiences. Facilitate the public diffusion and discussion of the results of this analysis. Commit to enhancing co-ordination across different ministries and agencies to improve and consolidate the available information on agricultural and food policies into a single source.

• [Short term] As part of the way forward, consideration could be given to building on the work conducted with the OECD with an enhanced commitment to further co-operate in the annual Agricultural Policy Monitoring and Evaluation exercise. This would be a concrete means of ensuring a continuous process of improvements to data and analysis, peer learning, and benchmarking of policy with other countries.

2.2. Strengthen the quality and availability of data processed by MALR and CAPMAS and reinforce their capacities to provide and publish high-quality statistics

• [Medium and long term] Strengthen the quality and availability of data processed and provided by MALR and CAPMAS, including data on public expenditures for agriculture. Leverage the resources of the Agricultural Research Centre to establish databases and facilitate policy discussion more proactively, promoting linkages between academia and policymaking.

• [Medium and long term] Improve the availability of agri-environmental indicators, including data on water quality and nutrient surpluses at the local level.

3. Progressively shift the focus of policy towards nutrition targets and innovation, while gradually reducing support for staple crops and the overall burden of agricultural support for the economy

There is an urgent need to reform government interventions in the agricultural sector, reducing market price support and other policies tied to the production of specific commodities in Egypt. Reforms should improve the sector’s productivity and ability to respond to market signals to deliver food with the quality and diversity that is required to meet nutrient intake requirements and prevent malnutrition, while enhancing resilience through more diversified trade relationships.

3.1. Reconsider national production goals and increasingly shift the focus of policy from self-sufficiency to food security and nutrition

• [Short term] Reconsider the need to set targets for production, cultivated area, and self-sufficiency ratios for individual agricultural commodities. Ensure that existing natural resource constraints, in particular relating to land and water, are taken into consideration when setting targets. Increasingly shift the focus of policy objectives beyond food availability and self-sufficiency, to improvements in dietary and nutritional outcomes (see recommendation 5).

3.2. Reform agricultural support, reducing market price support for staples and fertiliser subsidies, and reorienting budgetary support towards innovation

• [Medium and long term] Significantly reduce and redesign support measures that create inefficiencies in output markets and burden the economy, while reorienting budgetary support toward investments in R&D and innovation to boost productivity (see recommendation 4.1). Reducing the overall burden of support to the economy implies reducing interventions in input markets, in particular fertiliser subsidies (see recommendation 6.4) and reorienting food subsidies toward nutrition-positive investments (see recommendation 5).

3.3. Facilitate trade, reduce red tape and regulatory burdens at the border, and promote free trade agreements that could allow for greater trade diversification

• [Medium and long term] Pro-actively facilitate the free access to imports and exports of agricultural commodities and food products by private sector actors to let them respond to consumer needs and market demand, reducing the government’s role in the process. Reduce tariffs and other border measures that hinder trade. Streamline and enhance the transparency of import licensing procedures for agricultural and food products to ensure that they are applied in a predictable, timely, and non-discriminatory manner. Refrain from restricting or banning imports and exports.

• [Medium and long term] Given the concentration of imports and the need to diversify trade partners, prioritise the promotion of more ambitious and diverse free trade agreements. The purpose would be the development of new markets for Egyptian exports of high value agri-food products, while diversifying the sources of imports of grains and other staples for which Egypt is likely to remain a large importer.

3.4. Maintain a relatively small and efficient strategic grain reserve that reduces costs and facilitates market responsiveness

• [Medium and long term] Maintain a small and manageable public strategic grains reserve, limiting the costs of public stockholding and reducing spillovers in agricultural markets. Ensure that grain reserves are only used to provide relief during crises and to mitigate supply chain disruptions, rather than controlling market prices. At the same time, facilitate private sector investments in the operation of grain storage infrastructure to enhance the capacity to respond to sudden changes in market conditions.

3.5. Strengthen the role of the private sector in agro-food markets and reduce inefficiencies created by market interventions from government agencies, SOEs and MOEs

• [Medium and long term] In line with the recommendation on government interventions the agriculture and food value chain (see recommendation 1.1), reform and liberalise the input, output and food distribution markets, allowing first-stage buyers to benefit from more competitive market prices, and increasing responsiveness to consumer demand. Building on the recent regulation on tax and fee exemptions for SOEs, leverage the recently created SOE unit under the Prime Minister’s Office to undertake relevant reforms in relation to SOEs and MOEs, ensuring greater transparency around their activities, including their ownership structure, subsidiaries and affiliates, and access to financing and government benefits. Ensure that SOEs are on a level playing field with the private sector, both in terms of taxation and non-tax benefits such as access to land.

• [Medium and long term] Leverage the experience of OECD countries to reform and limit the role and market power of SOEs and MOEs, while facilitating private investment. Reform the GASC and gradually phase out minimum guaranteed prices and domestic procurement programmes, reorienting funds to support those most in need of assistance. Progressively reduce the role of Mostakbal Misr Agency for Sustainable Development in importing strategic commodities, as well as the involvement of the Holding Company for Food Industries and National Service Projects Organisation in the agriculture and food value chain.

4. Enhance the Agricultural Knowledge and Innovation System as the main tool to support production by improving sustainable productivity

Shift the focus of agricultural policies from production to productivity, by reorienting support from incentives to produce or use specific commodities or inputs, to supporting farmers to find innovative and sustainable solutions that are adapted to local realities.

4.1. Invest in the network of actors to facilitate knowledge transfer between government, industry, research and extension services, and farmers

• [Short term] Strengthen the extension and advisory services provided by MALR, merging them with the irrigation advisory services delivered by MWRI, and refocusing advice towards entrepreneurship, sustainable productivity and digital technologies. Use the extension services to support the creation of partnerships between farmers, researchers and other stakeholders with common interests to facilitate the flow of knowledge and the participation of farmers in the creation and adoption of innovations. Promote the active role of co-operatives, farmers organisations and WUAs in co-creating innovative solutions to improve productivity and reduce water consumption.

• [Short term] Promote the internationalisation of Egypt’s R&D institutions, including the Agricultural Research Centre, Desert Research Centre and National Water Research Centre. Strengthen co-operation and build partnerships with agricultural innovation systems across the MENA region and in OECD Member countries.

5. Reform the food subsidy system to target those most in need, improve nutritional outcomes, and reduce the fiscal burden

Reforming Egypt’s food subsidies is both complex and particularly challenging. Given Egypt’s specific economic and social context, reforms should be undertaken gradually with clearly communicated timelines, and transitional social assistance should be provided to ensure that the poorest and most vulnerable segments of the population are not negatively affected. That said, progress is needed: reducing the fiscal burden of food subsidies is essential to free up the resources needed for nutrition-positive investments and to support the transition towards healthier diets.

5.1. Develop and implement a transparent and participatory approach for a far-reaching food subsidy reform

• [Short term] Leverage Egypt’s past experiences with food subsidy reform to improve transparency and strengthen oversight and accountability mechanisms in the food subsidy system. Design and implement real-time tracking, third-party audits and community feedback channels to enhance trust in the system. Develop a process for continuous monitoring and assessment of the costs and performance of the food subsidy system.

• [Short term] Develop a participatory approach to account for different and conflicting needs and expectations of stakeholders, and to build social consensus around the reform. A communication strategy would be important to explain the rationale and benefits of the reform, focusing on potential improvements to public health and nutritional outcomes.

5.2. Design targeted food subsidies that benefit the most vulnerable

• [Short term] Develop the capacity to identify poor households (e.g. the lowest quartile of the population in the income distribution), and re-design food subsidies to reach the most vulnerable segments of the population. Learn from other countries’ experiences, such as Indonesia’s BPNT programme, and develop a unified social registry and strengthen the use of proxy means testing to more effectively identify and target vulnerable households. In particular, a modernised beneficiary identification and delivery system could facilitate targeting using assets and income data, national ID systems, and other socio-economic indicators. The United States’ Special Supplemental Nutrition Programme for Women, Infants and Children (WIC) also provides a useful example for targeting support to low-income vulnerable populations at risk of malnutrition.

5.3. Gradually target food subsidies to a smaller share of the population, while scaling up cash transfers to the most vulnerable segments of the population

• [Medium and long term] Improvements in the targeting of food subsidies could be undertaken in three steps. First, implement a pilot programme in a selected number of governorates, using proxy means testing to identify beneficiaries and electronic cards to transfer the subsidy. Second, assess the results using surveys to understand the extent to which the programme is reaching the most vulnerable segments of the population. Finally, redesign the targeting method in response to the results and implement it across the whole country.

• [Medium and long term] Scale up the Takaful and Karama cash transfer programmes, which have been successful in reaching the poorest households. Greater use of cash transfers will help poor households in the transition to targeted food subsidies and allow them further flexibility in their food choices, while reducing the inefficiencies and leakages associated with commodity-based systems. Leverage digital solutions such as smart cards or mobile payments to reduce administrative costs and enhance transparency.

5.4. Reduce subsidies for bread, sugar, cooking oil and other energy-dense foods in favour of a wider variety of micronutrient-rich foods

• [Medium and long term] Phase out administered prices for subsidised foods and allow them to vary with market prices to reduce distortions and fiscal pressures. Progressively transition the baladi bread subsidy from an in-kind subsidy to an electronic voucher-based programme included as part of the ration card programme.

• [Medium and long term] Use the food subsidy scheme to facilitate healthier nutrition choices. Reduce subsidies allocated to baladi bread and other energy-dense foods such as sugar, cooking oil and rice. In parallel, increase the share of subsidies for fruits and vegetables in the ration card programme, along with other micronutrient-rich foods that are important for child nutrition.

5.5. Design low-cost nutritious meals, enhance the school meals programme, and promote nutritional education

• [Medium and long term] Invest in the design of low-cost nutritious meals to be offered in schools, in collaboration with the School Meals Coalition and national organisations such as the National Nutrition Institute. Healthy meals can be targeted to children at schools in underprivileged areas as well as to low-income households, learning from the example of Chile’s school meals programme.

• [Medium and long term] Develop new policy initiatives on child nutrition and education by expanding the school feeding programme, and providing a broader variety of nutritious foods to school children. Nutrition education initiatives should be brought to schools to build knowledge and awareness about nutritious diets among the new generations. The example of Japan’s Shokuiku initiative to integrate school lunches and nutritional education into the school curriculum could be a reference.

6. Strengthen the sustainable management of Egypt’s natural resources for agriculture, developing policies to reduce water demand and fertiliser use

Addressing water scarcity, land degradation, and the pollution of soil and water resources is essential to the long-term sustainability and resilience of Egypt’s agricultural sector. Priority areas for reform include water management, and reforming fertiliser subsidies that damage soil and water quality.

6.1. Improve coherence between water management strategies and broader strategic documents

• [Short term] Ensure that sectoral water-related strategies such as the Water Resources Development and Management Strategy until 2050 and the Second National Water Resources Plan 2017‑2037 are updated to align with objectives and targets in broader strategic documents (e.g. 2030 Updated Sustainable Agriculture Development Strategy, Egypt’s Vision 2030). Long-term strategic documents should be easily available for public discussion and co-ordination among stakeholders, and for the scrutiny and analysis of experts.

6.2. Pursue policies that rationalise water use, improving soil moisture conservation, and ensuring the environmental sustainability of land reclamation

• [Short term] Continue work on canal rehabilitation and support the diffusion of efficient irrigation systems in old lands as a priority measure to reduce water losses.

• [Short term] Conduct robust environmental assessments for newly reclaimed agricultural areas from desert land to ensure long-term sustainability and improve climate resilience.

• [Medium and long term] Develop soil moisture conservation techniques, including through the use of on-farm soil moisture sensors. Establish high-resolution soil moisture maps with remote sensing technologies to identify water-stressed areas and optimise irrigation scheduling. Promote the development of online irrigation advisory services, drawing from the example of Italy’s IRRINET.

• [Medium and long term] Strengthen the capacity of WUAs, ensuring they have sufficient funding and resources to implement participatory integrated water resource management and more effectively manage water demand.

6.3. Step up enforcement of pesticides regulations, closing existing implementation gaps

• [Short term] Step up enforcement of laws and regulations relating to pesticide usage and increase training of certified pesticide applicators, to reduce the risk of counterfeit pesticide usage.

• [Short term] Further disseminate best practices on pesticide application, and strengthen extension and advisory services to help farmers adopt integrated pest management practices and reduce demand for pesticides.

6.4. Reduce the subsidies to fertilisers and reorient budgetary support to investments in the Agricultural Knowledge and Innovation System

• [Medium and long term] Fully reflect the cost of fertiliser subsidies in national budgets and track the quantities of subsidised fertiliser provided to farmers. Gradually reduce the existing fertiliser subsidies along with implicit support to the fertiliser industry, ensuring that application rates do not exceed the recommended quantities per feddan set by MALR.

• [Medium and long term] Redirect the savings from reformed fertiliser subsidies to support investments in agricultural R&D and innovation, incentivise the adoption of more environmentally sustainable farming practices, and ensure that the most vulnerable farmers affected by the reforms are eligible for temporary transitional assistance (e.g. through the cash transfer programmes).

• [Medium and long term] Encourage farmers to reduce fertiliser usage to levels in line with crop-specific technical recommendations, and improve nitrogen use efficiency rates. Promote site-specific fertilisation strategies, encourage more diverse application of different fertilisers, and focus extension and advisory services on best practices in fertiliser application.

6.5. Develop market-based, regulatory and voluntary mechanisms to manage water demand

• [Medium and long term] In the absence of water pricing, develop alternative approaches to reflect explicitly or implicitly the value and scarcity of water used in agriculture. Increase the coverage of accurate water measurement and monitoring infrastructure, including irrigation metering for branch canals and mesqa (tertiary canals), and, when possible, on-farm metering of water consumption.

• [Medium and long term] Consider providing incentives for farmers to plant varieties with shorter crop cycles or varieties that are less water-intensive and more tolerant to salinity. These could be combined with regulatory measures such as zoning regulations to restrict the planting of water-intensive crops.

• [Medium and long term] Consider introducing performance-based incentives for water savings at the level of WUAs. The distribution of water allocations to WUAs could be combined with financial incentives to reward farmers or WUAs for efficient water use, which are linked to verified reductions in total water withdrawals. Water savings could be verified through a combination of remote sensing, flow measurements, and periodic field inspections.