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Bread graft taxes Egypt's poorest

Officials say corruption is worsening a wheat shortage. Government-subsidized flour, meant for poor Egyptians, is often sold on the black market.

By Jill CarrollStaff writer / July 30, 2007


Every day throughout this largely poor city, throngs of Cairenes scramble to get their share of government-subsidized bread.

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Each person can buy as many as 20 pieces. And when the bakeries begin running low, the crowds begin growing restless. In many bakeries in the city's impoverished quarters, bakers have already built cages to protect them from customers not known for their patience.

Now that the country is facing a wheat shortage, parliamentarians are worried that cheap bread for the poor may become even more scarce.

But Hamdan Taha, first prime minister for supplies at the Ministry for Social Solidarity, says this problem has little to do with the wheat shortfall and everything to do with corruption.

If people weren't selling cut-rate government flour on the black market, "we could have a large amount of flour," says Mr. Taha.

As central as bread is to life here, so too is corruption in the subsidized flour system. Many public bakeries, which receive cut-rate flour from the government, sell their flour on the black market to private bakeries. To compensate for the lack of ingredients, the public bakeries, who cater to the poor, often make bread smaller and lighter and sometimes simply bake less.

One sack of subsidized flour costs about 16 Egyptian pounds, or almost $3. A sack on the black market fetches almost ten times as much.

To cheat the system, black market flour dealers sometimes bribe bakery inspectors, who work for low state wages, say sources in the government.

Members of Egypt's Parliament demanded this week that an emergency session be held to discuss the wheat shortage. Shortfalls in wheat imports caused a spike in demand and private bakeries (which cater to the country's middle and upper classes) have been buying up much of what is on the market, leaving government wheat inventories short, according to the independent newspaper Ad-Dustour. Parliament is on a break until November.

The government has tried some measures to stop the corruption, including tougher laws against corruption at bakeries last year and a proposal for a separate distribution system. But old habits have proven hard to break. Flour corruption, in tandem with a growing population, a shortage of public bakeries in poor areas, widespread poverty, and fluctuations in wheat production lead to periodic bread shortages particularly in poor neighborhoods.

A 2001 report by the International Food Policy Research Institute in Washington said corruption meant about 28 percent of wheat flour was lost to the black market. That along with subsidies on bread and other food distributed equally regardless of income meant only about a third of subsidy benefits go to the truly needy.

Inside a public bakery in the poor Al Waaili neighborhood, a veteran baker – eyelashes to trousers dusted in government-subsidized flour – points to a yellowed and crumbling notice on a column.

"It says make sure all the 30 [sacks of flour] are used for the bread. The government bakeries, they are selling this flour," says the baker, who only gave his name as Sayid and crows with pride that they don't sell their flour on the black market.

"But it's just the truth," he says as his boss tries to quiet him from disparaging other bakeries.