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

A parallel effort to issue smart cards to drivers to monitor fuel consumption is not yet operational, but is likewise aimed at gathering data that the government can refer to when drafting its subsidy reform policies.

Egyptian Armed Forces Commander-in-Chief General Abdel-Fattah al-Sisi, who ousted Morsi after mass protests against his rule, is expected to run for president and win in elections due within months.

However, even if al-Sisi, who became immensely popular after crushing Morsi’s Muslim Brotherhood, delivers on his promises of bringing elections and political stability, he will still have to carefully manage the sensitive bread issue.

The top military commander, who is also Egypt’s minister of defense and deputy prime minister, could showcase the Port Said project and spread it to other cities in the country of 85 million where poverty is widespread.

Safwat Emar, the Egyptian Ministry of Supplies’ top official in Port Said, said that the project is hitting the people at the heart of the problem: dishonest bakers.

Yet eradicating greed will not be easy in a country plagued by corruption. Bakers producing state-subsidized loaves siphon off flour provided by the government and make a killing in the black market. The federal flour is then baked into loaves sold at private bakeries at prices beyond the reach of the poor.

Bakers have long been able to cheat authorities because consumption data is hard to come by. At Port Said’s Freedom Bakery, owner Mahmoud El Kefery said he works closely with state monitors who check data registered by his smart card readers and allocates his daily flour supply accordingly.

His customers seem satisfied: “We like systems and we want things to be organized so there can be security and everyone can get their fair share,” government employee Baseema El Bani said.

After presenting her green plastic card in a transaction that resembled purchasing a latte at a coffeeshop, Bani folded her stack of loaves and placed them in a shopping bag.

Before the smart card system was introduced, the bakery would often run out of loaves by midday, before the mother of five got off work, leaving her empty-handed. Bani blamed the shortages not on low supplies, but on people who abused the system.

What is clear is that the government — short on foreign currency and in dire need of fuel imports — cannot afford to keep funding the inefficient system.

Egyptian Minister of Supplies Abu Shadi recently estimated that the nation’s food subsidies bill amounts to 35 billion pounds (US$5.03 billion) a year.

Surprisingly, the smart card effort in Port Said has not provoked protest from consumers or resistance from bakers who stood to profit from the old system, but implementing the program nationwide would be a daunting task. Attria cites bureaucracy as chief hurdle.

Port Said, known nationally for its high-quality bread, was seen as a safe site for a pilot, but progress there should still be considered an achievement.

“It is a difficult decision to change the bread subsidy system, but it is possible,” said Magdy El Hennawy, a former army officer who helped the government launch the nationwide smart card system for other commodities.

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