Performance of Egyptian Agricultural Exports: Reality, Challenges and Proposed Policies
The agricultural sector accounts for about 11.2% of GDP and employs about 23.8% of total employees in Egypt. However, the sector’s relative importance has declined substantially over the past decades, as opposed to the higher relative importance of both industry and services sectors.
The development of agricultural exports is one of the most important goals of planners of agricultural economic policies in Egypt, which depends on expansion and diversification in the production and export of products and crops in which Egypt enjoys a competitive advantage in global markets, especially vegetable and fruit crops.
The future of Egypt depends on achieving a big leap in its exports, which is an important source for providing the foreign exchange needed to advance development, and the agricultural sector is the most capable of optimal allocation of natural and human resources to provide the local market with its needs, create new job opportunities and attract more domestic and foreign investments And then achieve the target growth rates.
Therefore, this research paper aims to analyze the development of agricultural exports in Egypt, the obstacles they face, the measures that have been taken, and some proposed solutions to avoid banning Egyptian exports. Finally, the paper ends with the policies that can be followed to enhance the performance of agricultural exports in Egypt.
The most important results of the study were as follows:
The total agricultural exports amounted to 5,19,411 tons during the period from January 1, 2022 to October 4, 2022.Citrus fruits ranked first in agricultural exports in 2022, with 1,632,936 tons exported. Potatoes ranked second, with 855,920 tons exported. Citrus fruits represent 45% of the total agricultural crops exported, followed by potatoes 16%, onions 8%, fodder 4%, and grapes 3%, during the period (September 2020-June 2021).
Egypt accounts for 38% of the world’s orange exports, at a value of $662 million, and 8% of the world’s fresh and dried onion exports. Egypt’s grape exports increased by 13% during the 2020-2021 season, and the European Union countries are the main importers of Egyptian grapes, and Egypt is looking forward to entering new markets such as Argentina and New Zealand.
Egypt is the world’s foremost exporter of frozen strawberries, and strawberry exports grew by 59% in 2021, registering $244 million compared to $153 million in 2020.The Arab countries are in first place with 41% of the most important importing conglomerates of Egyptian agricultural earners during the period (September 2020 – June 2021), followed by European countries outside the European Union with 25%, followed by EU countries with 19%, Asia with 11%, and Africa with 1% of total Egyptian agricultural exports.
First: Analysis of the agricultural development exports in Egypt
The total agricultural exports amounted to 5 million 19 thousand and 411 tons during the period from January 1, 2022 to October 4, 2022, while it amounted to about 5 million, 640 thousand and 144 tons of agricultural products in 2021, an increase of 486 thousand and 768 tons over 2020, which amounted to 5 million and 153 thousand and 376 tons.
The total agricultural exports of citrus fruits in 2022 amounted to 1,632,936 tons, in addition to exporting 855,920 tons of fresh potatoes, ranking second in agricultural exports after citrus, while 343,022 tons of onions were exported, ranking third in exports.
In 2021, the total agricultural exports of citrus fruits amounted to one million 805 thousand and 893 tons, in addition to the export of 650 thousand and 340 tons of fodder beets, ranking second in agricultural exports after citrus fruits, while 614 thousand and 424 tons of potatoes were exported, ranking third in exports. Onions ranked fourth in agricultural exports, with a total of 276,141 tons. While grapes ranked fifth in exports, with a total of 143,450 tons, while Egypt’s potato exports ranked sixth, with a total quantity of 113,598 tons. Egypt’s exports of pomegranates ranked seventh with a total of 86,629 tons, followed by mangoes in eighth place with a total of 38,132 tons.
Strawberries ranked ninth in exports with a total amount of 35,538 tons, while beans ranked tenth in agricultural exports with a total of 28,565 tons, garlic ranked eleventh with a total of 19,193 tons, and guavas ranked twelfth. With a total of 16,887 tons, while watermelon got the thirteenth place in agricultural exports, with a total of 9,474 tons, and pepper got the last place, with a total of 8,590 tons. This is illustrated by the following diagram:
Figure No. (1) The most important agricultural exports during 2021
Source: Audio and Visual Information Center
The following figure shows the extent of the increase in the quantity of Egyptian agricultural exports in 2021 compared to 2020
Figure No. (2) Egyptian agricultural exports in 2021 compared to 2020
Source: Ministry of Agriculture, Egyptian Land Reclamation
Figure 2 shows an increase in the amount of Egyptian exports of agricultural earnings in 2021 by about 10%, which is equivalent to 2.2 million tons
Table No. (1) Egyptian agricultural exports distributed among the most important items during the period (September 2020 – June 2021)
Source: The General Authority for Export and Import Control, Foreign Trade Data
Table No. (1) shows the most important varieties of Egyptian agricultural crops exported during the period (September 2020-June 2021), where citrus represents 45% of the total agricultural crops exported, followed by potatoes 16%, onions 8%, fodder 4%, and grapes 3%.
Table No. (2) Egyptian agricultural exports distributed to the most important geographical conglomerates during the period (September 2020 – June 2021)
Source: The General Authority for Export and Import Control, Foreign Trade Data
Table No. (2) shows the most important blocs importing Egyptian agricultural crops during the period (September 2020-June 2021), and Arab countries are in first place with a percentage of 41%, and European countries outside the European Union with a percentage of 25%, followed by European Union countries with a percentage of 19%, then Asian countries accounted for 11%, then African countries accounted for 1% of the total Egyptian agricultural exports.
The following chart shows examples of some of these blocs:
Figure No. (3): Total Egyptian agricultural exports according to importing countries during the first half of 2021
Source: The General Authority for Export and Import Control, Foreign Trade Data
Figure No. (4): Total exports of agricultural commodities during the period (January 2019 – February 2020) in thousand tons
Figure 4 shows the development of Egyptian agricultural exports during the period (January 2019 – February 2020), where exports experienced a volatility of 7 million tons in March 2019, fell in June 2019 to less than 6 million tons, continued to fluctuate, and then declined during January and February until approaching 5 million tons in February 2020.
Indicators show that Egyptian merchandise exports achieved a slight increase during the first quarter of 2020, amounting to 2% and recording $6.7 billion, compared to nearly $6.6 billion last year, according to the latest report issued by the Ministry of Trade and Industry. And that the agricultural crops sector came in fourth place in terms of the values achieved for Egyptian exports in the first quarter of 2020, after it recorded the value of exports of $821 million during that period in 2019, as the building materials sector came in first place with a value of $1.5 billion, and chemicals and fertilizers in the center. The second, with a value of $1.25 billion, then the food industry, with a value of $881 million.
It also indicates the most important markets receiving Egyptian exports during the first quarter of 2020, represented in the following: the UAE with a value of $747 million, the United States with a value of 381 million, Italy with a value of $385 million, Saudi Arabia with a value of 380 million, and Spain with a value of $241 million.
Second: Obstacles facing Egyptian agricultural exports
– Obstacles to optimal use of export energy: It includes the lack of effective marketing of Egyptian products in foreign markets, with the high cost of subscribing to overseas exhibitions even as part of the government’s cost but still high with a large number of competitors, and the low level of port services with high transportation costs.
– Constraints on export capacity: The cost of production is increased as a result of higher prices of production inputs, such as higher wages compared to productivity level, insufficient capital with difficult access to credit, tighter conditions and requirements for access to finance, also higher prices of other inputs, and increased cost especially after foreign exchange rate liberalization.
– Obstacles to the prohibition of certain exported products: Irrigation water is contaminated as a result of the dumping of waste, both sewage and agricultural, resulting in contamination of agricultural products, and Egyptian exports are therefore rejected. Many countries have banned a range of Egyptian crops, including strawberries, peppers, pomegranates, guava and grapes.
For example, Saudi Arabia banned jasmine and guava, and some other countries followed the same approach, such as Bahrain. Some Arab countries submitted letters to the Egyptian agricultural quarantine stating that the procedures for entering Egyptian agricultural exports in general were tightened, as the two countries demanded an attached certificate showing that shipments conform to the limits allowed for residues Pesticides according to international standards “Codex”, with a certificate of analysis indicating that attached to the exported shipments.
There is also a problem related to the timing of shipments, as it is necessary to adhere to the dates stipulated in the contracts, which caused Egypt’s former exit from the international cotton markets. Agricultural goods transported by fast-damage air cargo, such as grapes, strawberries, guava and beans, are among the most significant and serious problems facing Egyptian agricultural exports and are related to Egypt Air’s intervention so that the slowness does not result in serious losses to exporters and refusal to receive them from importing countries.
Third: the measures taken to increase agricultural exports
The Egyptian government has taken a number of measures to increase agricultural exports of vegetables and fruits. These measures are as follows:
-Intensifying the work of the technical devices for agricultural quarantine in the ports and border crossings to facilitate the export of agricultural crops in accordance with international standards around the clock.
-Opening new markets to increase exports of vegetables and fruits, and working 24 hours for agricultural quarantine inspectors to increase exports abroad.
-Introducing agriculture in all the initiatives announced by the Central Bank and the government to face this crisis.
-Coordination between the Ministries of Agriculture, Trade, Industry and Finance to solve all agricultural export problems.
-Not to close any workshops, mattresses, or packing stations for agricultural exports (while undertaking to take the required health precautions in accordance with the law).
-Applying tracking systems for export products during the stages of cultivation, production, packaging and export, and strict procedures are followed in accordance with international standards for export quality. In this regard, the government issued Resolution No. 670 of 2017 between the Ministries of Agriculture and Industry to set standards for vegetable farms and packing stations wishing to export.
Fourth: Proposed Solutions to Avoid Banning Egyptian Agricultural Exports
-Activating the role of agricultural and informational guidance regarding export conditions and international standards, in addition to using the latest international methods in cultivating, transporting and preserving the Egyptian product.
-Intensifying technical committees for agricultural quarantine at various export sites at border crossings, sea and land ports, and sorting and packing stations to facilitate control over agricultural exports.
-Tightening control over exported Egyptian products to ensure their conformity with the standard specifications of the importing country, along with establishing protocols with them on how to deal with violations or mismatches in specifications, which limits the exclusion of the Egyptian product from competition.
Putting severe penalties on agricultural companies that work in the field of export and that export products that do not meet the specifications because they harm the reputation of the Egyptian agricultural product.
Fifth: Proposed policies to promote agricultural exports
A number of policies can be proposed to maintain the competitive advantage of Egyptian agricultural exports. The proposed policies are as follows:
-The importance of economic incentives for farmers being an integral component of agricultural policies, whether short or long term, especially since the farmer makes his production and marketing decisions based on an analysis of the cost and return associated with each of them.
-Supporting small farmers, given that they are negatively affected more than others, in light of the failure to activate the laws of contract farming and agricultural solidarity.
-Scheduling the debts owed by farmers and granting them loans on easy terms and small interest to urge them to continue the activity and encourage others to engage in the activities of the agricultural sector.
-Transforming all forms of in-kind support provided to farmers into cash support so that the support reaches those who are actually entitled to it, and the crisis of fertilizer distribution is eliminated every season, in addition to its contribution to reducing the consumption of chemical fertilizers.
-Securing Egypt’s needs of strategic crops, the most important of which is wheat, by cultivating it in coastal areas, so that the agricultural area can be increased without at the expense of other crops in which Egypt enjoys a high comparative advantage in production, in anticipation of any future price hike or any export restrictions for strategic crops.
-Finally, it is necessary to continue to closely monitor food price levels and to tighten the supervision of food commodity markets. Through accurate knowledge of market movements, the Government will be able to manage the integrated market by guiding farmers and producers to make logical production decisions and combating speculation in the stages of food supply chains, as well as monitoring the quality and safety of food products and preventing producers’ and consumers’ practices that may negatively affect food markets.
It is also necessary to work on ways to immediately support farmers and agricultural and food productive enterprises, such as providing temporary subsidies to farmers and supporting production inputs, reducing funding costs and facilitating access, and reducing or delaying tax, insurance and rental bills.
