as part of the IFPRI-Egypt Seminar Series- funded by the United States Agency for International Development (USAID) project called “Evaluating Impact and Building Capacity” (EIBC) that is implemented by IFPRI.

1. IFPRI EGYPT SEMINAR: "ADVANCING THE FOOD SYSTEM
FOR GROWTH, JOB CREATION AND BETTER NUTRITION
IN EGYPT"
FATMA EL ZAHRAA AGLAN, AGRICULTURAL SPECIALIST
THE WORLD BANK

2. TABLE OF CONTENTS
1. Sectoral Context: Presenting challenges and opportunities.
2. Vision 2030: Highlighting the evolution of the food system and the importance of digital
transformation
3. A Proposal: Egypt as a Highly Efficient Agricultural Producer and Supplier
4. The Means: Leveraging private investment to increase agricultural market’s competitiveness and
efficiency

3. SECTORAL CONTEXT
Agriculture and agribusiness
combined contribute to about 35
percent of GDP, and provide jobs
to a quarter (25.6%) of the
population
Tremendous market potential
(i) untapped export potential is
around US$16 billion, this is three
times the current export levels.
(ii) domestic food market could
reach US$90 billion by 2030
The governorate level share of
poverty is positively correlated
with the share of employment in
primary agriculture. For example,
Upper Egypt has more than 30%
employed in agricultural
production
Although only 10% of agricultural
products are currently processed,
they account for approximately
50% of exports. This indicates
significant opportunities to
increase processing and move
towards higher-value processed
foods.
Egypt has a negative agricultural
trade balance, estimated at US$ 11
billion in 2014. About 40 percent
of total (ag and non-ag) export
revenue is spent on ag imports
The share of public investment in
the sector has decreased from
about six percent in 2004 to less
than four percent in 2014

4. KEY CHALLENGES
Inefficiencies Along Key Agricultural
Value Chains
• The losses along key value chains
range between 10 percent and 50
percent, averaging around 30
percent. About half of the losses
result from poor, or lack of, access to
logistics and marketing
infrastructure.
• Poor skills and poor access to new
technologies affect sector
development. There is a need to
upgrade the formal education, as
well as skilling in the sector, as the
current level and sophistication of
skills do not meet requirements of
modern agriculture and agribusiness
sectors.
• Lack of extension services, prevent
farmers from receiving advice on
good practices and suitable
technologies, which would help
Jobs and Incomes
• Most of the jobs in
agriculture are seasonal,
irregular and informal
• Jobs shrinking in
agriculture as they shift
to manufacturing and
services as a result of
structural changes.
•A high share of jobs in
the agriculture sector
require little or no
technical or business
skills discouraging
education/skill upgrading
and resulting in low pay.
Water Scarcity
• Low water use efficiency,
exacerbated by population
growth and climate change
effects, intensifying the water
scarcity issue.
•
• 2. Over 86 percent of Egypts’
water is used for agriculture.
Irrigation on the “old lands” is
mostly inefficient flood irrigation,
with water use efficiency of
around 30 percent.
• 3. Agriculture in the desert,
drawing non-renewable water
resources (e.g. the Nubian
Sandstone Aquifer), carries
additional market risks related to
natural resource sustainability,
additionally consumers in the
developed countries increasingly
demand more sustainable
products.
Sector Fragmentation
• 80% of farming units in the country
are under three Feddans
(predominantly along the Nile River
valley). Such high fragmentation of
land deters competitiveness and
does not allow for use of machinery
in land cultivation (which would
increase production efficiency), and
it also limits access to markets for
the smallholder farmers due the
small volumes produced by the
highly fragmented farming units.
• Farmer cooperation is
underdeveloped as the existing
cooperative system does not work
well.
• Aggregation is difficult due to lack
of infrastructure, resulting in
fragmented value chains and lesser
interest of Egypt’s agricultural
products to the global markets.

5. STRENGTHS AND OPPORTUNITIES
Strengths
 Relatively high crop yields
 Extended & multiple growing seasons
 Competitive advantages identified in dairy, horticulture,
poultry and fish.
 Reforms to investment and licensing processes have
improved business environment
 Subsidy reform has reduced distortions in the sector (but
also increased production costs)
 Historic name recognition
Opportunities
 Geographical location provides easy access to major
markets
 Membership of multilateral and bilateral free trade
agreements and harmonization
 Relatively developed port and sea transport
infrastructure network
 Consistent climate and rich natural endowments
 Fast-growing domestic market (estimated at US$90 billion
by 2030)
 Devaluation of EGP has increased the competitiveness of
the sector
 Untapped potential (to triple agricultural exports) through
increased efficiency

6. VISION 2030: DOING MORE WITH LESS
Wealthier
urbanized
population and
diversified diets
Structural Transformation
More
competitive,
efficient and
resilient
Digital Transformation
Shift towards
value addition,
agro processing
and food
More jobs moving up the value
chain
 Increasing Agricultural Market Efficiency: With current
population at 97 million, growing at 2.56% annually,
Egypt needs to be able to achieve food security and
nutrition, and produce high quality and safe food products
and decrease its food loss and waste (averaging at 30%).
 Job Creation. According to CAPMAS, the agricultural
sector is the highest single contributor to employment
(20.5%). By enabling inclusive job growth through the
diversification towards high-value crops, decreased
value chain inefficiencies, and wider access to
markets, the agricultural sector can further contribute to
Egypt's sustainable growth.
 Inclusion of Women and Youth. 75% of the unemployed
in Egypt are between 15 and 29 years old. Promoting
growth of agricultural and rural SMEs, the digital
solutions may encourage youth to remain in commercial
in high-tech, sustainable agriculture.

7. A PROPOSAL: TOWARDS INCREASING COMPETITIVENESS,
EFFICIENCY AND SUSTAINABILITY.
0
20
40
60
Seed
Fertilizer
Machinery
Finance
Markets
Transport
Water
ICT
Egypt All countries Low income Lower mid-inocme
Source: EBA, The World Bank
One of the tools developed by the World bank is the Enabling the Business of
Agriculture (EBA) report. To inform policy through cross-country benchmarking.
Egypt as a Highly Efficient Agricultural Producer and Supplier
• Apply resource- and climate- smart precision agricultural
production and logistics to existing lands to maximize
agricultural productivity, improve sustainability of the use
of natural resources, and ensure timely response to
markets
• Develop strong value chain linkages and spatial solutions
(agri-industrial hubs) in the sector, reduce losses and
waste and improve efficiencies along the value chains,
including smallholder value chains
• Enable cross-sectoral synergies, such as integrated
agriculture-aquaculture systems, could further improve
smart utilization of scarce natural resources and open new
market opportunities.

8. ENABLING PRIVATE INVESTMENT AND SUPPORTING
SMALLHOLDERS
Example: Tunisia Food system
Of $5.4 million in GDP generated by $1
million investment in agro-processing,
about 1.3 million is taxes, 2.8 in salaries
and 1.8 in profits – and this does not
include the 26% of induced GDP growth.
Source: Madhur Gautam, Lead Economist, The World Bank adapted from Steward Redqueen. (2012) “Modeling the Socio-
Economic Impact of Potential IFC Investments in Tunisia.”
This shift requires:
• Enabling Environment
• Investment in physical infrastructure
• Upstream and downstream linkages

9. EGYPT: ENABLING PRIVATE INVESTMENT AND COMMERCIAL
FINANCING IN INFRASTRUCTURE