Egypt's Agriculture export increases: a mixed blessing
On Monday, 6 June, the Egyptian Agriculture Export Council announced that it expects a major jump in vegetable exports to the EU since the E. coli scare has hit the European produce market hard. Council Chairman Sherif Al-Beltagy has predicted a LE2 billion jump in exports compared to 2010.
According to the UN Food and Agriculture Organization, agriculture makes up 15 per cent of Egypt’s GDP and employs more than one third of the labour force.
Exports of crops like grapes, potatoes and green beans, some of Egypt’s biggest agricultural exports to Europe, are on the rise as a result the recent E. coli outbreak, trade agreements with the EU, and Russia’s most recent period of drought. El-Beltagy says produce exports to Russia have almost doubled in the last year. “Last year’s production was about 260,000 tonnes. This year we are at about 470,000.”
Egypt’s proximity to European markets, when considering greater shipping costs from sub-Saharan Africa and Asia, makes it an attractive trade partner if the country’s farmers succeed in adapting to foreign “private voluntary standards.”
Ministry of Trade and Industry records show Egypt shipped almost $720 million (about LE4.3 billion) worth of agricultural goods to Europe last year. In June 2010, a European Commission Regulation went into effect eliminating customs on nearly all agricultural products originating in Egypt. None of the exceptions are on Egypt’s most exported or highest valued crops.
The value of agricultural exports to Europe has more than doubled since 2007, falling slightly last year, but now rising again according to the ministry.
Lead economist at the Egypt Centre for Economic Studies, Dr. Magda Kandil, is somewhat sceptical that the export boost will meet expectations as the EU tightens regulations on food safety. “Regulations in Europe are likely to be tougher. I think Europeans are likely to become extremely guarded and reserved. They are not going to create an avenue for further risk,” says Dr. Kandil.
El-Beltagy sees this as an incentive for farmers to improve agricultural practices and lower production costs, improving domestic food-quality in turn. “The impact on the local market will be good,” says El-Beltagy. “If you are sending, for example, one tonne to the packhouse to be sorted and exported it is not all going to Europe or other countries.” He says up to 40 per cent of higher quality produce, free of pesticides and other residue, stays in the country.