AGRICULTURE, TRADE, AND POVERTY IN EGYPT 73
A 20 percent reduction in customs duties was granted for some other groups of commodities for five years. The Egypt-Turkey Free Trade Agreement was also signed in 1998. It was intended to boost trade, investment ties, and cooperation by using Turkey as a gateway for Egyptian products into the E.U. market. In turn, Egypt serves as a gateway for Turkish commodities in the Middle East and Africa. An FTA has been created on a bilateral basis between Egypt and Jordan. Although one might think that the large number of FTAs implies relatively open trade policies, some have expressed concern about the proliferation of regional and bilateral agreements. The United Nations Development Pro- gramme notes that “there are difficulties in administering different rules of origin and diverse customs treatments related to various agreements. Adapting to different standards, laws and regulations may lead to delays in implementation” (UNDP 2005a, 96). The report proposes pursuing multilateral trade liberalization through the WTO and simultaneously working on trade facilitation through means such as streamlining customs procedures.
Poverty and Household Budget Patterns
This section describes the living conditions and sources of income of Egyp- tian households, with particular emphasis on small-scale farmers. The main source of data is the Egypt Integrated Household Survey carried out by the International Food Policy Research Institute in 1997–98. Analysis of the sur- vey suggests that 62 percent of the households are in Lower Egypt, while the remainder are in Upper Egypt (Table 4.2). Lower Egypt’s landscape is domi- nated by the Nile Delta at Alexandria. The delta region is well watered and crisscrossed by channels and canals. Upper Egypt is a narrow strip of land that extends from the cataract boundaries of Aswan to the area south of Cairo. Historically, the land in Upper Egypt was more isolated from activities in the north. Nationally, 54 percent of the population resides in urban areas. Lower Egypt is more urbanized, while Upper Egypt is more rural. We define a farm household as a household relying on crop or livestock production. Only about one-third of the households in Lower Egypt are engaged in farming compared to more than half in Upper Egypt. More than three- fourths of farmers reside in rural areas; the remainder are in urban areas. Farm households represent about 70 percent of rural households and 18 per- cent of urban households. In terms of welfare, more than 60 percent of the poorest households are rural, and two-thirds of the poorest households are classified as farm households.
Poverty
Our study used per capita consumption expenditures to measure family well- being and poverty. As shown in Table 4.3, the national average consumption expenditure per capita in 1997/98 was LE 1,782 (US$517 at the 1998 exchange
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