Update: Supply Ministry rescinds cuts in bread subsidies following protests
Bread from a Cairo bakery - Courtesy: www.shutterstock.com
 
Supply Minister Ali Meselhy announced during a press conference on Tuesday evening that the Supply Ministry would rescind the planned reduction in the quota of subsidized bread allocated to those without subsidy smart cards.
The press conference comes after protests erupted in several governorates over the last two days in reaction to the proposed subsidy cuts.
The Supply Ministry issued a statement on Wednesday morning, stating that the bread quota will range from 750-3500 loafs of bread for bakeries servicing those without smart cards. The Supply Ministry will issue 100,000 smart cards to citizens in six other governorates.

Demonstrations broke out in several Egyptian cities on Tuesday after the Supply Ministry announced the cuts.

The protests started on Monday, when bakeries reported the amount of subsidized bread had dropped from between 1,000 and 4,000 to 500 loaves a day, subject to the specific bakery.

Protesters demonstrated in several areas in Alexandria, with hundreds demonstrating in Dekheila, according to an eyewitness who spoke to Mada Masr on condition of anonymity. Police forces formed a cordon around protesters and diverted them before dispersing them, the eyewitness added.

Hundreds of others protested in Alexandria’s Attarin neighborhoodand and dozens of others in Manshiya neighborhood, cutting off the tramway, while other protesters near the Assafra train station in Alexandria blocked the tracks.

Police talked with protesters and an officer told them the Supply Ministry’s decision would be rescinded.

Dozens also demonstrated in Giza’s Warraq neighborhood in greater Cairo. Eyewitnesses said police arrested several protesters but later released female detainees, prompting families to head to the police stations where their male relatives were being detained.

Tuesday’s demonstrations are the latest in a string of protests this week against bread shortages as a result of the Supply Ministry’s decision to require Golden Card bakeries to record and report the amount of subsidized bread given to beneficiaries with faulty or lost smart cards.

Protests also occurred in cities in the governorates of Kafr al-Sheikh, Minya and Assiut on Monday.

In Kafr al-Sheikh’s Dessouk, protesters using temporary non-electronic cards complained they were not given subsidized bread, and protesters in Minya chanted, “we want bread,” opposite governorate offices.

Mahmoud Youssef, deputy supply minister for Minya, said the decision to limit subsidized bread was taken after a government committee found bakeries were illegally dispensing it, according to a local report.

The Supply Ministry said minister Meselhy would hold a press conference at 7 pm on Tuesday in relation to the issue.

The Egyptian government developed its food subsidy system in 2015 to limit fraud, replacing the old system of giving subsidized flour to bakeries to one in which subsidies are based on the amount of bread sold, which is recorded on smart cards.

The price of subsidized bread is five piasters a loaf, with the 33-piaster difference from market prices carried by the state.

Inflation reached almost 30 percent last January. The price of the basket of goods (a fixed set of consumer goods that economists use to track inflation) — which carries the largest weight in the consumer price index — increased by 38.6 percent in January 2017, compared to the previous year, caused partly by increases in the cost of grain and bread by approximately 65.5 percent, according to Egypt’s Central Agency for Public Mobilization and Statistics (CAPMAS).

Egypt has implemented a number of economic policies as part of a deal to secure a US$12 billion IMF loan in recent months. The government introduced a Value Added Tax last September, followed by a cut in fuel subsidies in November and the devaluation of the Egyptian pound to almost half its former value.

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