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Food crisis: A daily quest for bread in Cairo

A 'bread crisis' that broke out in January has not subsided despite government efforts.

By Liam StackCorrespondent / June 6, 2008

Baking a living: At the Shalaby brothers' bakery in Cairo, a baker places more expensive, nonsubsidized bread in the oven. It sells for 5 cents a loaf.

Liam Stack

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Cairo

Every day at 4 a.m., Hagg Abdel Wahab walks down a narrow path past a simple coffee and tea shop to his bakery.

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For 40 years, this elderly man has donned a gray gallabeya robe smudged with white flour and baked thousands of small, round loaves of state-subsidized bread for the residents of the poor, densely packed Cairo neighborhood of Imbaba.

Mr. Wahab's balady bread is the basic staple of the Egyptian diet, and in recent months it has come to symbolize the economic problems facing this country of 75 million.

Egyptians are living through the worst food crisis in a generation, caught in a storm of stagnant wages, rising global food prices, rampant corruption, and a quickly advancing inflation rate that hit 16.4 percent in May. The price of basic commodities like bread, wheat, rice, and cooking oil has doubled since this time last year – prompting bread riots.

The riots are why Egyptian President Hosni Mubarak was a featured speaker among 40 government leaders at the three-day UN food summit that concluded Thursday in Rome. Mr. Mubarak called for an end to subsidies for biofuels because they are creating a "hazardous distortion to the present system of agricultural trade."

While Mubarak pushed for changes abroad, his government struggles to meet the basic needs of Egyptians.

Under a government order, bakers now start work at 4 a.m. to produce enough bread for everyone waiting in the city's bread lines, says Yasser Shalaby, who owns a bakery with his brother Said in another part of Imbaba.

Once at work, they labor under the careful watch of government supervisors. The supervisors ensure they bake through the day, but there are allegations that they participate in theft and smuggling as often as they prevent it.

Bread line violence in other parts of the city has led to brawls in which at least a dozen people have died since January.

Bread shortages have eased since government measures went into effect but inflation and high prices show no signs of ending anytime soon.

"Every day you hear about people killing each other in the bread lines, and for me it has been four months since I have been able to buy my family any meat," says Salah Mohamed Ali, an elderly fruit vendor in Boulaq, another poor neighborhood in Cairo.

Mr. Ali says people are economizing by cutting back on fruit purchases. So he's extended his hours by sleeping on the sidewalk under his cart, in case someone wants to buy something in the middle of the night. The price increases have turned bananas and oranges into luxuries.

"If people have to choose between buying a luxury and giving their children bread, then of course they are going to buy them bread," he says.

Rising prices have increased the demand for subsidized bread, which costs 5 piastes a loaf, less than 1 cent. Many who bought nonsubsidized bread for 25 piastes (4 cents) a loaf now scramble to cut household costs by buying the cheaper, lower-quality government bread.

Egypt's thriving black market in basic commodities is exacerbating what the local media calls "the bread crisis."

"Bakeries have a real incentive to sell subsidized flour on the black market because they get their flour from the government for 16 piasters (2 cents) a kilo and can sell it to others for 260 piasters (45 cents) a kilo," says Magdy Sobhy, senior economist at the Ahram Center for Political and Strategic Studies.

The government has announced a string of measures to put more money in people's pockets. In February, Mubarak ordered the military to begin baking and distributing bread in the country's major cities. On May 1 he promised public employees a 30 percent pay increase in his annual May Day address.

In May, the government announced the expansion of its food ration program to cover 55 million people, more than 70 percent of the population. Under the program, families can purchase 2 kilos of rice and sugar, 1.5 kilos of cooking oil, and 50 grams of tea per person for 15 Egyptian pounds ($2.80)

But public enthusiasm for these measures has been dampened by the realization that the government is paying for them by ending subsidies on gasoline and cigarettes. The prices for both gasoline and cigarettes jumped by 35 percent after parliament approved ending the subsidy, which the powerful Muslim Brotherhood opposition movement derided as "a conspiracy against the poor."

Despite the government efforts, Egypt's inflation is still rising and the black market appears to be thriving.

Back in Imbaba, few bakers are willing to talk openly about smuggling.

"Smuggling happens all over Imbaba," says Mr. Shalaby. "Smuggling is everywhere and everyone does it, but if you do it the government will catch you."

When asked what they thought about smugglers, Yasser's brother and their government minder march in to the bakery and angrily order everyone to leave.

"Don't be insulted by him," winked Shalaby. "He just doesn't want you to see all the wheat he is hiding in here."

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