ECC Platform Library

 

Food Price Shocks in Egypt

Type of conflict sub
Intensity 1.5
Region
Northern Africa
Time 1977 ‐ ongoing
Countries Egypt
Resources Agricultural / Pastoral Land
Conflict Summary As world commodity prices rose in 2007 and 2010, Egypt experienced significant food price increases, followed by strikes and protests. Beyond the food crisis...
Food Price Shocks in Egypt
As world commodity prices rose in 2007 and 2010, Egypt experienced significant food price increases, followed by strikes and protests. Beyond the food crisis however, the population’s grievances stemmed from a deep-rooted discontent with the Egyptian government.
Conceptual Model

Climate Change

In 2007-2008 and 2011-2012, extreme weather events in important grain export countries such as Russia, Ukraine and China, contributed to significant increases in global food prices.

Intermediary Mechanisms

Food price inflation in Egypt had significant impact on food security and living standards.

Fragility and Conflict Risks

The failure of the government to contain food price inflation contributed to the flaring of discontent with the autocratic regime of President Mubarak in 2011. Beyond the food crisis however, the population’s grievances stemmed from a deep-rooted discontent with the Egyptian government due to its failure to address rising unemployment and widening social inequalities.

Climate ChangeEnvironmental ChangeIntermediary MechanismsFragility and Conflict RisksSocial and Economic DriversMore frequent/intense extreme weather events reduce available natural resources.Economic developments lead to changes in land use.Changes in land use reduce available/usable natural resources.Reduced availability of/access to natural resources reduces available resources and ecosystem services.Reduced availability of/access to natural resources undermines state capacity.Reduced availability of/access to natural resources leads to volatile food prices.The perceived inadequacy of state capacity leads to growing discontent with the state.Food price volatility provokes growing discontent with the state.An increase in the frequency and/or intensity of extreme weather events, such as floods or droughts.More Frequent / Intense Extreme Weather EventsGrowing scarcity of essential natural resources.Natural Resource ScarcityA broad concept to cover economic growth in general but also specific economic changes or changes of incentives.Economic DevelopmentA change in the usage of environmentally relevant land.Land Use ChangeReduced availability of essential natural resources, such as land and water.Change in Access / Availability of Natural ResourcesReduced capacity of the state to fulfil basic functions deemed necessary by the population and/or reduced public support for state authorities.Reduced State Capacity and/or LegitimacyStrong fluctuations in the prices of foodstuffs, such as cereals or livestock.Volatile Food PricesChallenge to the state's legitimacy, ranging from peaceful protest to violent attempts at overthrowing the government.Anti-State Grievances
Context Factors
  • Water-stressed Area
  • Eroded Social Contract
  • Food Import Dependency
  • High Food Expenditure
  • High Unemployment
Conflict History

In the years 2007-2008 and 2010-2011, adverse weather events affected major food exporting countries, resulting in the rise of global food prices. In Egypt, a country highly dependent on imported food, this had major knock-on effects on food security and living standards, especially for poorer households. This situation arose at a time when the regime of President Hosni Mubarak was already coming under severe criticism for its lack of democracy, as well as its failure to address rising unemployment and widening social inequalities in Egypt.

In January 2011, protests demanding President Mubarak’s resignation erupted across the country, eventually leading to the Egyptian revolution of 2011. Although the origins and driving forces behind this uprising were multi-faceted, the fact that the Egyptian revolution should coincide with global food price spikes has led numerous experts and media outlets to draw a connection between the two events (Maystadt et al., 2014; Null and Prebble, 2013; Grossman-Cohen, 2011).

Soaring food prices as a factor of political instability
Changes in weather patterns and extreme climatic events make food production more difficult and lead to scarcer food resources. In 2010 for instance, drought affected the largest producers of wheat, i.e. Russia, Ukraine and China, resulting in a rapid increase in global food prices (see: Global food price shocks).

As a result of debilitating agricultural reforms, severe water scarcity, and thus low internal production capacities, Egypt remained highly dependent on food imports and was therefore particularly vulnerable to such a development (Bush, 2007). Indeed, the country satisfied nearly 60% of its demand with imported wheat; mostly from Russia and Pakistan (Zimmerman, 2011; Wojciechowski, 2015).

Despite high subsidies, especially on bread, food prices in Egypt rose to record heights: consumer food prices in 2011 were twice that of 2007 (FAO, 2016). In 2008, Egyptians spent on average 38% of their income on food, a share rising to over 50% for poorer households. These prices had significant impact on food security and living standards (Washington State University, 2008; Ghoneim, 2012).

The failure of the government to contain food price inflation - especially rising bread prices - became a major source of political grievance and contributed to the flaring of discontent with the autocratic regime of President Mubarak (Hanley, 2011; Ciezadlo, 2011).

A general political crisis
Indeed, Egypt was already gripped by a profound political crisis at the time global food prices peaked.

Unemployment and widening social inequalities
In particular unemployment and rising social inequalities were a major source of grievance for many Egyptians (Bush, 2007; Bush, 2010). In 2008, one fifth of the population lived below the national poverty line (Kliger, 2008). Structural adjustment measures and privatisation policies harking back to the 1970s, which were meant to lower public debt and restore the trust of foreign investors, resulted in sizeable cuts to public spending and subsidies directed at the poorest part of the population (Tinoco, 2013). Unemployment remained consistently high - especially among those aged under 30 (accounting for more than 85% of the unemployed population: Lowrey, 2011 ) - with almost no increase in salaries, therefore deepening the feeling of unfairness amongst young Egyptians (Tinoco, 2013).

Failed agricultural reforms and loss of rural livelihoods
Rural populations were particularly disadvantaged (Bush, 2010; Wojciechowski, 2015). Poor management of the agricultural sector and significant cuts to farmer subsidies, as part of structural adjustment policies in the 1980s and 1990, in combination with growing water scarcity (seeSecurity Implications of Growing Water Scarcity in Egypt) undermined domestic food production and worsened rural poverty (Bush, 2007; Breisinger, 2012).

Beginning in the 1970s, Egypt progressively switched to producing non-food crops with higher export-values. This was an attempt to boost export revenues and satisfy domestic food demand with cheap grain imports from the U.S. (Baragona, 2011; Bush, 2010). As a result, however, Egypt’s agricultural deficit more than tripled in less than 10 years. The World Bank blamed this failure on poor agricultural management, a lack of skilled business management and poor post-harvest processing (Bush, 2007). Furthermore, Mubarak’s government put an end to the provision of input, marketing and credit supply to small-scale farmers in 1987. Without government support, only the richest were in a position to invest in the infrastructure necessary to grow the selected non-food crops for exports (Bush, 2007). Thereafter, a reform undid measures to secure tenure and low fixed-rents for small-scale farmers (Prosterman, 2011). Land-owners took back their land and land rents skyrocketed, making it difficult for small-scale farmers to bear such costs (Bush, 2007).

These developments not only fuelled discontent with the government, but also contributed to make Egypt highly dependent on food imports and thus also particularly vulnerable to global food price shocks (Prosterman, 2011).

Corruption, lack of democracy and violent repression
Popular grievances with Mubarak's regime were also deeply linked to the president's authoritarian rule. Protests had already erupted in 2005 in an attempt to prevent Mubarak from running for president for a fifth time and to demand a reduction of the president’s powers (Stimson, 2013).

The violence used by the government to silent opposition and the endemic corruption in the country, which increased with the liberalisation reforms, were also main sources of discontent (Tinoco, 2013; Bush, 2007). Corruption, whether it came from public servants or the government, benefited a small elite and contributed to the exclusive character of the regime (Hanley, 2011; Stimson, 2013; Tinoco, 2013).

A history of 'bread-riots'
In 1977, an attempt by the Egyptian government to remove bread subsidies, as required by the International Monetary Fund (IMF), sparked bloody riots, known as the ‘bread riots’, which caused over 800 deaths (Brinkman and Hendrix, 2011). A similar episode re-occurred in 2007-2008, when Mubarak's government announced a reduction of subsidies, but finally stepped back (Cohen and Garett, 2010). Egyptians, however, experienced difficult access to bread, and panic over a new bread shortage brought deadly protests again, with violence in bread queues and demonstrations to denounce shortages of subsidised bread (Berazneva and Lee, 2011). In fact, strikes and protests in reaction to rising living costs and other issues had become increasingly frequent since 2004, although they are prohibited under Egyptian law (Tinoco, 2013).

The above analysis illustrates that food prices were by no means the only or major cause of the 2011 revolution in Egypt, but rather a factor contributing to and exacerbating a range of existing grievances against president Mubarak's regime.   

 

 

Resolution Efforts

Curbing food price inflation
The Egyptian government has taken several measures in response to the food price crisis, among which two important policies to mitigate food price inflation. First, a tax on rice exports has been implemented, to limit the amount of food exported abroad. These levies have been accompanied by agricultural production policies, such as the strict monitoring of rice and a regulation to limit water use in rice farms. This situation has encouraged farmers to switch their production to other crops. The export tax has, however, showed ineffective as traders managed to get around it, hence the government decided to ban rice exports in 2008, with continuous adaptive changes in the policy (Ghoneim, 2014). These policies did not have the expected results. At the beginning, domestic prices decreased. However, when the ban ended, traders began exporting rice they stored at high international prices, thus making domestic prices rise again. Domestic production of rice has also been harmed by the ban.

In April 2008, the government reduced tariffs on many imported commodities. Nonetheless, as tariffs were already very low, this measure did not help to reduce inflation (Ibid.; Brown, 2008).

Ensuring better access to food
Food security has been targeted by government policies, but also by international organisations. As illustrated in a study led by the World Food Programme (WFP) and the Egyptian government, the main issue in Egypt is not food availability, but rather the access of households to it (WFP, 2015). To reduce the direct impact of the crisis on the population, the government has supported food subsidies with broader allocation of ration cards, and increased wages and cash transfers. These policies were led by the Ministry of Social Solidarity supported by the General Agency for the Supply of Commodities (GASC), interacting with other ministries. Their coordination was essential in the implementation of these food policies.

Food subsidies witnessed a growing share of public expenditure, representing 2% of GDP in 2008-2009, growing from EGP 9.5 billion planned in 2007-2008 to over EGP 21 billion the next year. They have been significantly increased for baladi bread, oil, rice and sugar (Ghoneim, 2012). In 2014, however, the subsidy system still suffered from structural issues being fiscally unsustainable, while food security was still undermined by high levels of wastage (Power, 2014).

The ration cards system has been reformed to extend the pool of beneficiaries and reach young people and vulnerable groups (e.g. recipients of government cash transfers, widows), so that in 2008, 79% of the Egyptian population was eligible. Furthermore, quantities of food items on the ration cards have been increased and their prices adjusted by several decrees (Ghoneim, 2014; Ahmed, 2014).

Whilst these measures have protected the poorest to some extent, they remained limited and represent high fiscal costs. Low income households receive proportionally less subsidies and about 19% of them do not even benefit at all from the subsidy system (Ghoneim, 2012; WFP, 2008; Lorenzon, 2016). Other problems lie in corruption, inefficient logistics and difficulty to access ration cards without the required documents. While the current subsidy system is highly unsustainable in the long-term, the population strongly relies on it. Reforms in this policy thus need to occur gradually to avoid renewed social unrest.

Progressive changes have been made under Sisi's government, such as a smartcard bread rationing scheme introduced in 2014 to reduce waste and costs of the subsidy programme (Lehane, 2014). The government has also attempted to lead stronger reforms by imposing austerity measures to improve the fiscal situation of the country. While discussing a USD 12 billion loan with the IMF, it plans to further cut subsidies and privatise state-owned companies, which can adversely affect some Egyptians’ food supply (Farid, 2016).

Social policies
Cash transfers have been doubled, targeting more beneficiaries, and employees from the public sector have seen their wages rise by 30% in 2008 (Ghoneim, 2012). Cash transfers should be further encouraged as they are often considered to be the most efficient policy to improve the situation of Egyptian households in place of in-kind food provision (Power, 2014; Lorenzon, 2016; Ghoneim, 2014).

Stocking policies
The government has also been leading a local procurement policy to buy wheat from farmers by offering farmers higher prices to encourage them to grow wheat. However, due to the lack of available wheat storage and because farmers still had incentives to sell to traders, the policy did not have a significant impact in the first place, apart from motivating the creation of new wheat storage (Ghoneim, 2014). A company from the United Arab Emirates (UAE) has rented grain silos in Egypt for Egyptian consumption, under the condition that the UAE can access the grain in the case of a food emergency (Scott, 2015). For several years, this measure has been hindered by the smuggling of foreign wheat, which the government tackled by banning the trading of imported wheat in 2016 (El Wardany, 2016).

School feeding programmes
Whilst a school feeding programme to increase school attendance was already implemented in Egypt, its outcomes remained limited, as it excluded many rural areas. The World Food Programme further supports these policies by providing food to community schools with focus on girls education from rural areas. Supported by European Union funding, the programme has been scaled up in 2015 to reach over a million children in vulnerable areas (WFP, 2015). Beyond food incentives to push education and prevent malnutrition, the WFP also encourages better monitoring and responding to food security risks, in particular through an appropriate safety net reform. Poor communities should be able to adapt to market shocks, and hence agricultural productivity be improved (Ibid.).

Investing in land abroad
The global food and fuel crisis pushed companies and governments to invest in land abroad, a phenomenon often described as ‘land grabbing’ (see: Global Land Grabbing). Qalaa Holdings, one of the biggest equity finance firms in Africa, is an Egyptian company, which has invested in land in Sudan and South Sudan to secure food supply in the region (Ayeb and Bush, 2014; Dixon, 2014).

Improving agricultural productivity 
As the rural population suffers from a high level of poverty and unemployment, local and international civil society organisations have been supporting farmers to build capacities and increase the productivity of their land (Ghoneim, 2014). USAID, for instance, has been leading programmes to create jobs, empower farmers, help them increase their earnings and facilitate access to markets (e.g. supply contracts with companies) (USAID, 2016). Co-operatives supposed to support farmers have additionally failed to achieve their goal due to their inefficiency and inactivity partly caused by corruption, understaffing and insufficient funding (Ghoneim, 2012). Although the agricultural sector in Egypt can hardly achieve self-sufficiency, current production can still be significantly improved in terms of productivity and waste reduction. The country could highly benefit from better management of agriculture and food supply chain (Power, 2014).

Intensities & Influences
conflict intensity scale
Intensities
International / Geopolitical Intensity
Human Suffering

Influences
Environmental Influences
Societal Influences

Manifest Crisis
Violent Conflict Yes
Salience within nation National
Mass Displacement None
Cross Border Mass Displacement No
Resources
Agricultural / Pastoral Land
Resolution Success
Reduction in geographical scope There has been no reduction in geographical scope.
Increased capacity to address grievance in the future The capacity to address grievances in the future has increased.
Grievance Resolution Grievances have been partially addressed.
Causal Attribution of Decrease in Conflict Intensity Decrease in conflict intensity at least partially the result of conflict resolution strategies.
General opencollapse
Country Data in Comparison
ConflictNoData Created with Sketch.
Fault Lines Defining Conflict Parties
Purely Environmental | Cultural   ♦   Occupational   ♦   Economic   ♦   Urban / Rural   ♦   National / International conflict   ♦   Sub-national political


Actors
Participation Conflict Party     Conflict Resolution Facilitator
Egyptian population
Functional GroupCivil Society
Geographical ScaleInternal Grassroots
Egyptian government
Functional GroupPublic
Geographical ScaleInternal National
World Food Programme (WFP)
Functional GroupPublic
Geographical ScaleExternal
United States Agency for International Development (USAID)
Functional GroupPublic
Geographical ScaleExternal
Entry Points for Resilience and Peace Building
2 Humanitarian & Development aid School feeding policies are supported by the World Food Programme (WFP) and the European Union.
2 Reducing dependence on specific supplies Local and international civil society organisations have been supporting farmers to build capacities and increase the productivity of their land. Furthermore, Egyptian companies have invested in land abroad as a way to increase food supply in Egypt.
2 Containing (effects of) price volatility The Egyptian government implemented an export tax on rice, and reduced tariffs on imported commodities in an effort to curb food price inflation. However, neither measure assisted in reducing inflation. The government also implemented a subsidy system, but it has been proven to be unsustainable.
Further Details opencollapse
Conflict Characterization
Character of the contested good Private good: Can be owned and is depleted from use.
Structure of decision-making power / interdependence Asymmetric: The power to affect the environmental resource is unequal.
Broad conflict characterization Resource capture is not present.
Ecological marginalization is not present.
Data of involved Countries
Resources and Materials opencollapse
Conflict References References with URL
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Topics

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All countries will need to adapt to some of the environmental, social and economic impacts of climate change that are already unavoidable. Food security, livelihoods, water resource availability and public health are some affected areas. People living in poverty are more vulnerable, having a lower capacity to adapt. Thus, it is essential to promote resilience building. The adaptation and resilience aspects need to be mainstreamed into planning by policy makers and the private sector as well as integrated into development strategies.

Biodiversity & Livelihoods

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Cities

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Civil society is the first victim of environmental pollution, under-development and conflicts. Economically disadvantaged and politically marginalized population groups are particularly affected by violent conflicts as well as increasing resource degradation. Simultaneously, civil society is a fundamental pillar for implementing sustainable development. It contributes in many ways to strengthening conflict prevention and plays a significant role in the peaceful and democratic development of states. It must be supported to strengthen civil rights, adherence to human rights in general and democratic participation.

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Climate change resulting from the emission of greenhouse gases represents one of the vital challenges for international environmental policy. Flooding, droughts, shifting of climate zones and increasingly frequent and intense extreme weather events will have serious economic and social consequences for entire regions. The climate problem is also directly linked to the question of future energy generation.

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Conflict Transformation

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Early Warning & Risk Analysis

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Energy

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Gender

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Land & Food

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Minerals & Mining

In the past, the discovery and tapping of valuable or strategic resources like valuable minerals, oil and natural gas, particularly in developing and emerging countries, has often led to large scale environmental contamination and negative development. The "resource curse" of some countries shows that the wealth from resource yields is frequently unfairly distributed; instead of serving development it advanced the formation of corrupt elites and in some cases even led to conflicts and civil wars. Measures in various sectors and at all levels are important in order to use the potential of these natural resources in a manner that is sustainable and prevents conflicts.

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Private Sector

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Security

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Sustainable Transformation

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Technology & Innovation

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Water

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Regions

Asia

The environment in Asia is already under tremendous pressure as a result of the unsustainable use of land, forests, water and even air in many regions. Climate change will only exacerbate these challenges. Rising sea levels will likely endanger densely populated areas, changes in the monsoon patterns can strongly impact agriculture, melting glaciers will increase long-term water scarcity, and extreme weather events such as heavy rainfall and cyclones can pose further hazards.

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Central America & Caribbean

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Europe

As one of the most developed and most densely populated regions in the world, Europe makes heavy use of its resources, resulting in difficult trade-offs and negative consequences for the environment and ecosystems. Land is used for settlements, agriculture and dense infrastructure, creating problems of soil degradation. Water resources are stressed due to unsustainable agricultural practices. Despite nature protection policies, Europe continues to lose biodiversity at an alarming pace. Some of these trends are exacerbated by climate change, which is expected, for instance, to lead to shifts in water availability.

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Global Issues

Resource scarcities, environmental pollution and climate change are not limited by national borders, but often have a transboundary or even global impact. These issues interact with political stability, governance structures and economic performance, and can trigger or worsen disputes and violent conflicts. Exacerbating some of these trends, climate change is likely to lead to the degradation of freshwater resources, declines in food production, increases in storm and flood disasters and environmentally induced migration. All these developments pose potential for conflict.

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Middle East & North Africa

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North America

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Oceania & Pacific

In Oceania, population growth and economic development trends put a strain on oceanic and island ecosystems. Freshwater scarcity, overexploitation of fisheries, loss of land biodiversity, forests and trees, invasive species, soil degradation, increasing levels of settlement, poor management of solid and hazardous waste and disproportionate use of coastal areas are some of the problems. Climate change exacerbates most of these trends, while also raising questions about the future sovereignty of some island states.

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South America

South America has diverse and unique ecosystems and is very rich in biodiversity. Weak natural resource management, land disputes and extreme weather events bring about significant challenges for the region. While South America accounts for relatively few CO2 emissions, the changing climate will alter its ecosystems and greater climate variability will lead to more hurricanes, landslides, and droughts.

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Sub-Saharan Africa

In many African states, environmental security issues rank high on the political agenda. Throughout the continent, countries suffer from water scarcity, food insecurity and energy poverty. These chronic and worsening resource scarcities have severe livelihood implications and are exacerbated by political conflicts over access to and control over these resources. Climate change may seriously threaten political and economic stability in Africa. It may also put a severe strain on the capacities of states and societies to co-ordinate activities, to communicate and to organize.

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