Sun, Mar 02, 2014 - Page 14 News List

Cairo finds smart way to slash food bill: bread e-cards

By Maggie Fick  /  Reuters, PORT SAID, Egypt

People line up to buy subsidized bread at a bakery equipped with a smart card system on Monday in the Suez Canal city of Port Said, Egypt.

Photo: Reuters

A device resembling a credit card swiper is revolutionizing some of Egypt’s politically explosive bread lines and may help achieve the impossible: cutting the country’s crippling food import bills.

Authorities who hope to avoid protests over subsidized loaves sold for the equivalent of US$0.01 have turned to smart cards to try to manage the corrupt and wasteful bread supply chain that has been untouchable for decades.

If it succeeds, the pilot project in the Suez Canal city of Port Said could be used as a model for food and fuel subsidy reform throughout Egypt, where bread — known in the local Arabic dialect as “life” — is the main staple.

“This is an urgent project,” said Ali Attria, an official from the Egyptian Ministry of State for Administrative Development who has helped manage the trial.

Egypt, the world’s largest importer of wheat, purchases about 10 million tonnes of the grain a year, draining its hard currency reserves to provide the poor with a disc-shaped loaf.

The government spends approximately US$5 billion a year on food subsidies, which also cover items such as rice, oil and sugar. A slide in the Egyptian pound’s value since December 2012 is pushing up the bill, as much food has to be bought for US dollars on international markets.

In addition, profiteers exploit the system, while many people feed bread to their livestock because it is cheaper than animal feed.

Despite this, one cash-strapped government after another has resisted attacking the problem, fearful that cutting subsidies could be political suicide. Former Egyptian president Anwar Sadat triggered riots when he cut the bread subsidy in 1977, while deposed Egyptian president Hosni Mubarak faced unrest in 2008 when the rising price of wheat caused shortages.

When Egyptians rose up against Mubarak’s rule three years ago, one of their signature chants was: “Bread, freedom and social justice.”

Before he was deposed by the army in July last year, Former Egyptian president Mohamed Morsi and his Muslim Brotherhood began working to ensure that bread was delivered efficiently to those who truly need it — a move designed to win over the public.

Distrustful of state bureaucracy, the Morsi administration relied on mainly Islamist non-governmental organization to clean up the bread mess. In Port Said, they decided to take a gamble by using government authorities and although Morsi is now in jail, the program is starting to yield results.

At a simple metal kiosk in front of an oven, a smart card scanner hangs on a wall between windows that open onto two orderly, gender-segregated lines of people waiting to buy bread. Those who have complaints about the new system can call a hotline — the civilized scene was unthinkable just a year ago.

“There was congestion, people were coming from outside Port Said to buy our good bread in bulk,” bakery co-owner Adel Hassan Shater, 63, said, referring to the once-thriving black market. “Now things are organized and this is better for everyone.”

The now year-old program in the port city of 650,000 has enabled Cairo to keep tabs on individual bread consumption via the electronic cards that are already used for other subsidized goods, such as rice and sugar.

Smart card-holders are allowed five loaves per family member per day, a number officials hope can be reduced eventually.

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