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June 19, 2008

Egypt encourages decreased rice cultivation, increased maize

Egypt will urge farmers to reduce rice plantations for corn as part of a government plan to cut rice exports by 67 percent and reduce corn imports.

``This is part of a strategy to save irrigation water and increase our grain production,'' said Abdel Azim Tantawi, chairman of the government's Rice Research Center. ``We export a lot of rice and import a lot of expensive grains; we have to create some balance.''

The government, Africa's biggest importer of corn, aims to reduce the size of rice fields to 1.1 million feddan (445,154 hectares) from 1.7 million feddan, said Tantawi, whose center advises the government on policy and forecasts the nation's crop. That would cut annual rice exports to 400,000 metric tons from 1.2 million tons, he said.

``Farmers are growing rice irrationally because it is expensive, but that destroys other strategic crops and consumes most of the water,'' he added. Tantawi didn't explain how the government would implement its plan.

Rice growers use about 7,000 cubic meters of water (1.8 million gallons) an acre, double the amount used to irrigate an acre of grain, he said.

Rice, the staple food for half the world, reached a record in April as exporters including Egypt, Vietnam and India halted sales to guarantee local supplies. Egypt this month extended a ban on exports from October to April to force exporters to sell their stockpiles into the local market and reduce prices.

Rising food prices, coupled with record energy costs, have caused riots in countries including Egypt -- several protesters have been killed in recent months.

Egypt more than doubled the prices of corn and wheat it pays local farmers for the grain to encourage them to bolster production. The government plans to use 20 percent corn in the bread mix to cut spending on wheat.

Record grain prices have prompted Egypt, the world's second- biggest wheat importer, to raise bread subsidies by about two- thirds to 15 billion Egyptian pounds ($2.8 billion) a year, equal to 5.5 percent of the national budget.

Inflation was 19.7 percent in May, the highest in at least 10 years, driven by a 27 percent increase in food prices.

Bloomberg

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