Want a Stable Egypt? Send Food Aid

February 7th, 2011 at 7:03 am David Frum | 13 Comments |

| Print

Question for Americans cheering on the Egyptian protesters:

Are you prepared to renew US food aid to Egypt?

The US ended food aid in 1992. Most of the $1.3 billion Egypt receives from America is offered in the form of credits to buy military equipment.

But Egypt still needs food. Egypt was a country of 10 million in 1900, 20 million in 1950, 40 million in 1980, and is 80 million today. Egyptian agricultural production has not remotely kept pace with this population surge. Result: Once the breadbasket of the Mediterranean, Egypt today is reputed to be the world’s largest food importer.

Over the past few years, the life of food importers has grown uncomfortable. Food prices have risen, including the conversion of much US agricultural land to corn for ethanol production.

For Egypt, the rise in food prices has a direct impact on state finances. Egypt subsidizes the price of bread for its urban poor. Yes, subsidization is a crazy policy. Subsidization invites black-marketeering. It invites theft. It invites waste. Which may help explain why poor Egypt uses almost twice as much wheat per capita as rich Germany.

Yet the fact is: cheap bread is about the only assistance that Egypt provides its poor. Withdraw cheap bread, and you get revolutions – as nearly happened when Anwar Sadat tried to end the policy in 1977.

Mubarak did not end the bread giveaway. But as the price of wheat surged after 2005, Egypt struggled to afford the policy. Subsidies for food and fuel (energy is also subsidized) cost the state 18 million Egyptian pounds in 2001, almost 25 million Egyptian pounds in 2003, almost 30 million in 2004, and almost 69 million in 2005.

2005 was the year that Egypt launched a new round of economic “reforms.” One of those reforms was to cut subsidies. Which in turn put pressure on supplies of cheap bread.

Here’s a vivid report on what happened next from the Washington Post:

CAIRO — The line started forming before dawn, as soon as the day’s first call to prayer had faded from the trash-strewn streets of the Egyptian capital’s Zelzal neighborhood. Men began pounding on the green metal shutters of the district’s sole bakery.

“Aish! Aish!” — Bread! Bread! — the stubble-faced men yelled, shouting through the grillwork at bakers laboring over a dented, gas-fired oven. Cursing and pushing, the men thrust crumpled currency through the spaces in the grille.

“Have mercy! Have mercy on us!” a woman in a dusty black head scarf and abaya yelled.

Across Egypt this year, people have waited in line for hours at bakeries that sell government-subsidized bread, sign of a growing crisis over the primary foodstuff in the Arab world’s most populous country. President Hosni Mubarak has ordered Egypt’s army to bake bread for the public, following the deaths of at least six people since March 17 — some succumbing to exhaustion during the long waits, others stabbed in vicious struggles for places in line.

Economists and analysts say the crisis exposes the government’s inability to fulfill the decades-old pact between ruler and ruled here: As long as the country’s authoritarian system has supplied cheap bread, its people have put up with the squelching of political rights and economic opportunity. For Egypt’s more than 30 million poor, subsidized bread means survival.

In Zelzal, a grid of raw concrete tenements built by the government for people displaced by a 1992 earthquake, Hikmat Mustafa Ibrahim, a 62-year-old widow, emerged from the crush of men, women and children besieging the bakery. After a 3 1/2 -hour wait, Ibrahim had 30 round pockets of bread, about 25 cents’ worth. It would form the bulk of the day’s food for her family of six. Ibrahim sat down hard on a flat stone. “Finally!” she gasped.

That was April 2008. Since then, the bread situation has only got more dire, as Egypt’s budgets have tightened.

Egypt’s main export earners include (1) tourism (2) oil revenues from the Sinai fields (3) Suez canal tolls and (4) remittances from Egyptians working abroad.

But tourism has been badly damaged by a series of terror attacks directly targeting foreign visitors, most spectacularly the July 2005 bombings of the resort of Sharm el Sheikh that killed 88 and wounded 200.

Oil revenues have almost vanished as production in the Sinai dwindles and domestic demand rises.

Canal tolls have declined with the post-2008 decline in world trade. Ditto for remittances.

At first Egypt borrowed more, pushing the national debt up to 80% of GDP. A poor country can only borrow so much however, especially when so many richer countries are borrowing at the same time.

So the government did what it felt it must. It cut back subsidies. (We don’t know how much; the Egyptian state is not very transparent about its finances.) The bread lines lengthened. Discontent boiled. And eventually the protests erupted.

The outcome of the power struggle in Egypt remains uncertain. But the outcome of the economic struggle is easy to foresee: whoever emerges with power – including Mubarak himself should he survive – will want to resume food subsidies to allay public discontent. Yet Egypt’s economy will be in even worse shape post-protests than before.  No democracy in Egypt can survive without an early improvement in the bread situation. So how to pay? International help seems the obvious answer. Yes, reform will be needed in time. Bread is needed now. Which leads back to the first question for those Americans who urge democracy upon a food-short Egypt: How much would you be willing to see America contribute?

It’s no good wishing for a new form of government if you then deny that government the means of survival.


Recent Posts by David Frum



13 Comments so far ↓

  • jerseychix

    While they do need food aid, they need to be able to grow more of their own food.

    My very good friend did her PhD on the state of nutrition in Egypt and the effect of food subsidies on health. The picture is bad. There is an enormous public health cost to having what is essentially a bread based diet.

    We need to help them with better agriculture, an actual green revolution, and better nutrition.

    They need a more diverse economy as well. They are not, like the rest of Africa, going to be pulled into a true information economy based on food aid.

  • balconesfault

    Egypt has a fertility rate well above the global average. Perhaps if they want to have a better standard of living, it’s time for them to educate their people.

  • Want a Stable Egypt? Send Food Aid | FrumForum — Daily Great Food

    [...] the original: Want a Stable Egypt? Send Food Aid | FrumForum Related Posts:Bread Is Life: Food and Protest in Egypt – Ecocentric – TIME.com It's [...]

  • NRA Liberal

    I dunno, doesn’t sound very “conservative”. Isn’t this “breeding dependency”? Teach a man to fish, and all that. Are we going to let the rabble of Egypt hold the gun of unrest to our heads? [/sarcasm]

  • Carney

    Food prices have risen, including the conversion of much US agricultural land to corn for ethanol production.

    Argh. Et tu, Frum? Parroting Malthusian quacks? Food vs. fuel is a tired, repeatedly disproven myth.

    Even while ethanol corn production went up several fold in the last decade, food corn production did not go down, it went UP, by 45%. It’s not an either-or.

    Why? In part because there is huge huge slack unused capacity in our ag sector, including unused cropland and arable land.

    Even ethanol corn helps feed us because after the starch is taken out to make fuel, the remainder, a high-protein byproduct called distillers grain, is used as animal feed for meat livestock – animal feed that would need to have been grown anyway.

    For the full article, see here:

    http://www.thenewatlantis.com/publications/in-defense-of-biofuels

    Its author is NOT a corn farmer, nor has any ties to the industry. He’s a nuclear and aerospace engineer.

    • sweatyb

      Well, that article was thoroughly un-sourced. But even accepting it at face value, ethanol corn production is not a good deal. It costs too much energy to create. The resulting product is less efficient than gasoline. And there’s no way that we can create enough of it to make a significant impact on our dependence on foreign sources.

      Drifting off-topic here, but why subsidize this unpromising technology when there are many more promising options out there?

      • Carney

        sweatyb, you’ve blundered into even more tired myths about ethanol.

        “Ethanol corn costs too much energy to create.” Wrong.

        If measured by BTUs, joules, etc., the most unfriendly sound studies find an energy return on investment of “only” 1.3. Find me a financial return on investment with a guaranteed return of 30%!

        If measured by the far more geostrategically important figure of petroleum in vs. ethanol out, you get at least 10 and even 20 gallons of ethanol for each gallon of oil used to make it, according to the most comprehensive survey done on the topic, in “Science” in 2006.

        “The resulting product is less efficient than gasoline. ” Ethanol gets less miles per gallon than gasoline, but so what? It burns clean, it frees our economy from oil shocks, and it doesn’t fund terrorism. If ethanol was our standard fuel, would you support a switch to gasoline on the grounds of only needing to fill up twice a month on gasoline instead of three times on ethanol, and thus accept smog (which kills 40,000 Americans a year), oil crashes (like 1973, 1979, 2008), and terrorism?

        “And there’s no way that we can create enough of it to make a significant impact on our dependence on foreign sources. ”

        First, we already have made a significant impact. If you’d read the article, you’d have noted that ethanol saved us $90 billion in 2008, and denied $180 billion of revenue to OPEC. No wonder they’re mad and spamming the debate with anti-ethanol FUD, including via high-priced PR firms, oil-funded think tanks, etc.

        Second, there’s huge capacity for expansion.

        Third, yes, corn ethanol can’t do it all, but that’s a good thing. That means we can give our farmers all the business they can handle, and then have more left over for desperate poor tropical farmers. Not all “foreign sources” are the same. I’d far rather a poor Haitian sugarcane farmer get a piece of the US fuel action than a terrorism-spreading Mideast petro-tyranny. Also, ethanol can be made in worthwhile quantity from at least 17 plants grown worldwide; nobody can “corner” the market for it as OPEC has for oil (78% of world reserves to our 3%). So no governments can nationalize the sector, band together, and dictate prices to a helpless captive world market, using the artificially high revenue to fund themselves and spread extremism.

        “why subsidize this unpromising technology when there are many more promising options out there?”

        It’s not about “promise” – ethanol is already by far the #1 alternative fuel, used right now in the real world. There are over 2,300 E85 stations, up from 50 in 2001,

        http://e85refueling.com/

        and dozens of vehicles in all classes from major manufacturers.

        http://www.growthenergy.org/images/uploads/flexfuel_vehicle_guide.pdf

        Now, there are other alcohol fuels, most notably methanol. FULLY flex-fueled vehicles are also able to use methanol and other alcohols. Methanol can be made from natural gas, coal, or ANY biomass at all, including crop residues (like the leaves, stems, and corncobs from ethanol corn farms, multiplying per-acre fuel yield), fast-regrowing plants (bamboo, hemp) and weeds that need periodic clearing anyway (kudzu, water hyacinths), even trash and sewage. Methanol is, unsubsidized, cheaper than gasoline, even after accounting for mileage.

        I support making methanol AND ethanol compatibility a required standard feature in all new gasoline cars – it only costs automakers $130 per new car at the factory.

        And I support measures to encourage battery electric vehicles. But alcohol fuels are cheaper, easier to transition, and more practical.

  • valkayec

    Kind of off topic, but if you’re interested in young Egypt’s points of view, check out his influential blogger. http://www.sandmonkey.org/2011/02/03/egypt-right-now/

    it’s certainly far different than we hear in American media or from politicians.

  • talkradiosucks.com

    Carney, that’s a very interesting article that I need to read. Thanks.

    I would say, though, that even if true, while that successfully argues against Frum’s specific point — “the conversion of much US agricultural land to corn for ethanol production” — it may not address the larger point. If we are using excess crop capacity to grow corn for ethanol, could we not instead be using that excess capacity to grow food for consumption?

    Edit to add: I’ll be curious to see if another important resource is addressed in that article — water.

    • Carney

      If we are using excess crop capacity to grow corn for ethanol, could we not instead be using that excess capacity to grow food for consumption?

      World hunger is not caused by under-production of food. Indeed we already produce such a cornucopia that the US and EU buy up and warehouse the surplus to prevent a price collapse that would bankrupt what few family farmers are left. Much of that is then dumped on the domestic and world food aid system.

      Most world hunger is caused instead by the abundance of food being kept out of a given nation or area, by violent conflict, extreme repression, or natural disaster. The rest by catastrophic economic mismanagement and attendant extreme poverty. Trying to pull food prices down to the level of the extremely destitute is futile and destructive; far better to fight poverty itself.

      Which ethanol and methanol can do – giving poor farmers a cash crop to earn hard currency with and enter modernity, leaving subsistence behind.

      As for water, very little corn is irrigated (about 16%) and almost no ethanol corn is.

      Read:

      “Energy Victory: Winning the War on Terror by Breaking Free of Oil” by Dr. Robert Zubrin
      “Turning Oil Into Salt: Energy Independence Through Fuel Choice” by Gal Luft and Anne Korin
      and
      “Beyond Oil and Gas: The Methanol Economy” by Dr. George Olah (Nobel Prize Winner in Chemistry) and others

      See Zubrin giving a talk to Google:
      http://www.youtube.com/watch?v=NLRuGUPkyh4

  • ScoopAway

    Egypt was a country of 10 million in 1900, 20 million in 1950, 40 million in 1980, and is 80 million today.

    It’s not just a matter of more food that’s needed, it’s a matter of not reproducing more inhabitants than the land can feed.

    Using these figures, the population in Egypt seems to be doubling about every 30 years. If the same rate of growth continues, there will be approx. 160 million Egyptians in 2040. What will be the source of the food for them then? Don’t say the U.S. – we’ll also have far more people to feed than we do now. So will almost everyone else.

    • Carney

      What Malthusians don’t understand is that people aren’t just alimentary canals, consuming resources and producing waste. They also have hands and brains, and create resources, or added value to resources, with ingenuity and work.

      Even while world population has spiked up in the last several generations, SO HAS WEALTH, including on a per-capita basis. As a proportion of mankind, there’s less hunger than ever.

      Per acre crop yields rise relentlessly. As the article I linked above shows, just corn in the US is up more than 17% since 2003 alone. Iowa produces more corn than all 50 states did in the 1940s. The Third World is especially ripe for modern efficient production with drastically improved yields.

      Some of the most densely populated places in the world – Hong Kong, the Netherlands, are among the most prosperous and pleasant, while sparsely populated Congo is a hell.

  • Saladdin

    Nice try, but it won’t work. Wasn’t the latest thing on youcut the ending of foreign aid?