Bread graft taxes Egypt's poorest

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

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.

"It's common, but [done] in a very secret way," says Samir Gamal Abdel Salim who runs Grand Bake, an upscale private bakery. Public bakeries, he says, pile the sacks of flour in big trucks or cars at night and drive them to their black market customers.

"It's much easier for them to sell this flour rather than making bread. They are selling this flour to any bakery and they will get profit without any effort, and a lot of profit. But [black marketeers have] to be very careful," he says.

He said the private bakeries mix in the lesser quality subsidized flour with the regular flour so customers, paying a premium, don't notice the difference.

"I prefer if there is no subsidy at all and they use the subsidy in another field, because this subsidy is for bad people to get rich," says the tall, lanky owner of the public bakery in Al Waaili who asked his name not be used because of the sensitivity of the subject. He says government inspectors sent to weigh and measure the bread are often bribed.

Politicians learned their lesson about trying to reduce the expensive subsidy 30 years ago. Egyptian President Anwar Sadat tried to reduce subsidies on some foods including some bread and flour in 1977, sparking riots that threatened the stability of his government and the proposal was quickly withdrawn. Since then, debate about Egypt's subsidies has centered on how to more equitably distribute them, not do away with them.

Abu Somaa ekes out a living from several jobs and lives on subsidized food. He works a government factory job during the day and at a private bakery in the Al Waaili at night, selling bread he could never afford. He uses a nickname because he says it's illegal to have a government job and another job. He is afraid he will lose the bakery job that earns him a crucial extra $3.50 a day.

He hands out bread at the bakery counter and during lulls in his 12-hour shift, piles bread atop a wooden lattice longer than he is, balances it on his head, and rides a bicycle a few blocks away to sell it at a meager profit.

"This is my [work] and [it was] my father's work," he says, next to the bakery as the sunset call to prayer floats down on the tiny side street among donkey carts, tumbled-down buildings, and men sipping tiny glasses of coffee at rickety tables in a cafe in a rubble strewn lot.

"Life is very hard. There are lots of people like this. So many people don't have enough money. They are doing this rather than becoming criminals," he says.

Gamal Fouad Naguib, a sugar company employee, bends down in a narrow alley by a busy public bakery, sorting his hot, subsidized bread on newspaper on the ground to cool.

"My salary is not enough to buy the bread [at the private bakeries]," so he comes here everyday or so to collect his 20 pieces of bread for about 17 cents. But on the days he works late and public bakeries have either run out or closed down, he has to go to the private bakeries that are at least four times as much.

While Mr. Taha, says corruption is "the main problem," he then back peddled, perhaps sensing the sensitivity of the issue, "There's no problem, no problem... It's not a lot. It's not a real problem. Just some people doing this who [are] very weak and they sell it, but it's not a huge problem," he says.