Egypt's looming bread crisis

Too busy to blog right now, but you should definitely watch this and follow the coverage of the growing crisis over bread shortages in Egypt:

Also read:

FT.com / In depth - Egypt weighs cost of daily bread

Al-Ahram Weekly | Economy | Fuelling rumours and discontent

BBC NEWS | World | Middle East | Egyptians hit by rising food prices

Dar Al Hayat - Bread before the elections

BBC NEWS | Middle East | Man shot in Egyptian bread queue

Comments

[Frederik]

As Timothy Mitchell shows in his brilliant "Rule of experts: Egypt, Techno-Politics, Modernity", one reason for Egypt's need to import wheat despite the quality and size of its arable land is USAID. When US farmers faced a major crisis (in the 50s, 60s?), they were desperate to dump their surpluses on the world market. USAID (embraced by the Egyptian bourgeoisie) thus promoted a change in the diet habits of Egyptians, more meat, less bread. That means less wheat, more feed for livestock has been grown on Egypt's arable land.

Plus, Egypt's agriculture like few other sectors is still dominated by state planning and I can imagine wheat bureacrats are struggling with what's going on on world markets.

At least this time the army comes in half-way into the crisis (Mubarak called on them to bake bread), and not after (when it was called in to restore calm during the 80s bread riots).

[mbk]

I'm no economist, but isn't the bread crisis related to the bigger problem of inflation and rising food prices across the board? I mean, bread is still readily available for those of us who can afford to pay a little more for it. The problem is for people with limited and/or fixed incomes that depend on subsidized bread - especially when bread becomes their main staple as prices for other food items go through the roof.

I see Timothy Mitchell's point that USAID and PL 480 had a major effect in changing dietary habits and agricultural patterns in Egypt - and made Egypt's food supply more vulnerable by linking it to the fluctuating world market for wheat and other commodities (if I'm understanding his argument correctly). But I don't think we can really blame USAID for this one. Like I said, I'm no economist, so I don't really know why inflation has increased lately, but government mismanagement of the bread subsidy program is obviously a big part of the bread problem - (i.e. theft of subsidized wheat, the limited number of bakeries in poor areas). Then there are the larger and related issues in the labor market (wages that are low and not adjusted for inflation, unemployment, etc) and in the provision of social assistance....

But the important question really isn't why this is happening, but what are they going to do about it? I mean, this is the chance for Mubarak and Co. to bite their lips (ala Bill Clinton), give the "I feel your pain" speech, and then unload a kickass emergency response to the situation. They have the power and resources usurp the "helping the poor" mantle from the MB and totally blow them out of the water.

[Mink]

mbk, most commentators agree cereals' prices inflation is driven by two main factors: (1) growing demand for meat (and feedstock) in India, China, from the expanding middle classes (2) biofuel - which is not produced from wheat yet, but the sudden demand for maize has had a knock-on effect on other cereals. Including rice (Egypt just froze rice exports because global prices are going through the roof).

Among the two factors I mentioned, the biofuel drive is more dangerous, because it is throwing the system out of balance quite suddenly. American biofuel subsidies policy is insanely stupid on all counts (energy, climate change, food security) and it is hurting the poor throughout the world who have to compete with SUV fuel tanks. All signs are showing this is set to accelerate.

For more see http://www.theoildrum.com/node/2431 and
specifically about Egypt, Morocco http://www.theoildrum.com/node/3690