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AGRICULTURE, TRADE, AND POVERTY IN EGYPT 69


maize, beans, and potatoes. It has a comparative disadvantage in producing water-intensive crops such as rice and sugarcane (Madcour and Abou Zeid 1996).


Agricultural Trade Patterns


Egypt’s total imports were US$29 billion in 2004–06, of which agricultural imports represented US$4 billion, or one-eighth of the total. As in many coun- tries in the region, wheat is the most important agricultural import (see Table 2.4). Over 2004–06, Egypt imported an average of US$873 million in wheat per year, making it the largest wheat importer in the world. Wheat is a politically sensitive commodity, because bread is the main staple food. Wheat produc- tion and marketing were strictly controlled until market reforms in the 1980s and 1990s. Agricultural input and output markets have been liberalized to some degree, but the government maintains subsidies on some types of bread and attempts to boost domestic production by restricting imports of wheat and flour. Egyptian wheat production is able to cover about 55–60 percent of domestic requirements. The second largest agricultural import is maize. Maize demand is rising due to its use as animal feed. In 2004–06, Egypt’s average total export revenue was almost US$27 bil- lion per year (World Bank 2008b),2 about US$2 billion of which was earned from petroleum oil exports.3 Agricultural exports were US$1.2 billion, about 4 percent of the total and 11 percent of the merchandise exports. Fruits and vegetables are the most important category of agricultural exports, account- ing for 31 percent of the total. In this category the main exports are potatoes, oranges, onions, and tomatoes, exported mainly to the E.U. Rice and cotton each represent 22–24 percent of agricultural exports. Egyptian cotton has long fibers and is considered some of the best in the world, fetching high prices on international markets. The average annual value of cotton exports was US$265 million in 2004–06, although cotton revenue has been quite vola- tile. Cotton is also used in Egypt’s textile sector, which produces cloth and garments for domestic use and for export (see Table 2.5).


Agricultural and Trade Policy Agricultural Policy


Agricultural policy in Egypt has been characterized by heavy intervention by the government in setting prices, granting marketing monopolies to state


2 This figure refers to exports of goods and services. Excluding services (including tourism and


revenue from the Suez Canal), merchandise exports were only US$15 billion. 3 ITC (2008).


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