Egypt proposes doubling cash rebate for bread subside

Egyptian Ministry of Supply is considering doubling the cash incentive for a programme aimed at encouraging citizens to reduce the consumption of subsidised bread in exchange for reducing the share of citizens’ daily loaves of bread by 20%.

Egypt currently distributes five loaves per person per day, since the start of the system to distribute bread with smart cards in April 2014.

But a report prepared by the Directorate General for Studies and Cost Research at the Ministry of Supply and Internal Trade proposed an increase the so-called bread points to 0.20 Pounds per loaf instead of 0.10 Pounds, where it currently stands. At the same time there will be a cut in the quota from five to four loaves per day.

Citizens currently get 10 Piasters for each loaf not purchased from their share at the end of each month, and he can use the proceeds – the so-called bread points – to buy goods. The subsidized bread is sold at five Piasters per loaf.

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Government sources told Reuters last week about the proposal which aims to reduce bread consumption.

“The consumption of subsidized bread is between 2.5 to 3.8 loaves a day for every citizen, given the digital data provided by the companies of smart cards, which are used by 81 million citizens to spend their share of subsidized bread,” the ministry’s report said.

The report recommended that the balance of the new points, would be best spent on foods such as rice and pasta, as they are “bread substitutes that could be used to change the current consumption patterns.”

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The report added that the average consumption of wheat for every Egyptian citizen is 180 kg per year, whereas the world average is 85 kg.

Egypt subsidizes about 68.8 million citizens through about 20.8 million ration cards. To this end the government allocates 50 Pounds per month for every citizen registered on the system.