Agriculturalpolicies are crafted and implemented by the Ministry of Agriculture. The government relinquished landownership under its agricultural liberalization program and current governmentpolicies encourage domestic and foreign investments in new lands. While fertilizer and pesticide subsidyprograms were phased out in 2003, assistance to producers in the form of softloans, free irrigation, and subsidized electricity are maintained. With respect to market access, theaverage applied tariff was 5.8% in 2005. The bound rates for agricultural products were above applied duties formost products. The Egyptiangovernment still maintains a policy of price controls on cotton, wheat, andsugarcane.
Corn and Sorghum
á The Egyptian governmentapplies a 2% import tariff plus 1% for other port charges on corn imports.
á A 5% import tariff isapplied on all sorghum imports.
á Direct income supportwas provided to producers in 2005/06 because of low world prices.
á The government hasinitiated a subsidy program directed to textile mills to purchase affectedcotton varieties at prevailing prices of LE 100/kentar of seed cotton (a lintequivalent of about $0.53/lb).
á Egypt has removed allexport restrictions on its cotton, which may in turn lead to higher imports forthe domestic textile industry.
á Egypt maintains SPSregulations such as banning imports from countries affected by boll weevilinfestation. The U.S. is nowtreated as boll weevil-free by Egypt because risks are considered minimal dueto the ginning and baling process.
á The government providesinput assistance to producers to defray the costs of land preparation,pesticides, and planting seeds.
á A 5% tariff is appliedon rice imports.
á Egypt produces soybeanson a limited basis in the newly reclaimed lands. Production is hampered by favorable import prices and lowyields.
á Imports have beendeclining following the outbreak of Avian Influenza, which reduces imports ofsoybeans for the poultry sector.
á The Egyptian governmentapplies various import duties dependent on stage of processing. Currently, soybean imports are subjectto a 1% tax.
á The governmentadministers the sugar price policy and determines the delivery price ofsugarcane, which was increased from $23 to $28/MT ($0.08 to $0.10/lb raw sugarequivalent) in 2005/06. Under thepolicy, producers receive 60% of funds on delivery and the remaining 40% ispaid out at the end of the season.
á Sugar beet productionis also expanding; price is set by mills based on sugar content and premiumsare paid for early delivery.
á Current import tariffsare 2% for white sugar, 12% for raw sugar, and 22% for syrups and molasses.
á Additionally, thegovernment provides soft loans to sugar producers as an attempt to increasesugar production, especially in new lands.
á The government sets theprocurement price, which was recently increased from $208/MT ($5.66/bu) to$237/MT ($6.45/bu).
á Imports into Egypt aresubject to a 2% import tax.
EUROPEAN UNION (EU-25)
Recentreform of the Common Agricultural Policy (CAP) reduces support prices forselected commodities and introduces direct payments to producers based on croparea. Single Farm Payments (SFP)that will not require production will replace current direct payments at thediscretion of member states. Producer payments in the 10 new-member states will be phased in over a10-year period. These reforms movefrom a price support policy to an income support policy through decoupledpayments and farmers have more choices in their production decisions. These reforms include a renewedcommitment to rural development as new-member states are more dependent onagriculture for employment and economic activity.
Underthe Renewable Fuels Directive of 2003, member states would establish a minimumlevel of biofuels as a proportion of fuels sold from 2005, starting with 2% andreaching 5.75% of fuels sold in 2010. About 80% of biofuel production in the E.U. is biodiesel, which isproduced primarily from rapeseed. Fuel ethanol is mainly produced from cereals and sugarbeets.
Grains (Wheat, Corn and Sorghum)
á Supportmechanisms include a mixture of price supports and supply controls. Farmersremove a percentage of their arable cropland from production in order to receivedirect (coupled) payments. The cereal intervention subsidy is 101.3 euros/MT($5.94/cwt).
á Durum wheathas a 40% coupled payment in traditional production areas. Direct subsidy for durum wheat is 285euros/ha (roughly $149/ac).
á EU grainsreceive export subsidies to be price competitive on the world market.
á TRQin-quota tariff rates are 0%. Out-of-quota tariff rates are 86.9% for durum wheat, 71.5% for corn, and72.4% for grain sorghum.
á Subsidized exportlimits are 14.4 MMT (530 million bu) for wheat and 10.8MMT (427 million bu) forcoarse grains.
á A decoupledpayment of at least 65% of the 2000-02 historical payment will be madebeginning in 2006. A coupled payment of up to 35% will be allowed as anarea-based subsidy with a maximum base of 455,360 hectares (about 1 millionac), split between Greece, Portugal, and Spain.
- With the 2003 reform, the rice intervention price was reduced by 50% and annual intervention purchases were limited to 75,000 MT (1.7 million cwt). Direct payments compensate for the price reduction. Part of the payment is included in the SFP and part converted to crop-specific aid.
- á The rice intervention subsidy is 150 euros/MT ($8.80/cwt). A trade agreement with 49 least-developed countries reduces duties on unmilled rice from those countries to zero in 2009.
á The TRQ in-quota tariff rate is as low as 0 for some product lines and as much as 123.2%.
á The rice subsidized export limit is set at 133,400 MT (3 million cwt).
á A rapidly growing biodiesel industry is increasing demand for all vegetable oils in the EU-25.
á Oilseeds are imported duty free into the E.U.
á Soybean producers must set aside land at the same rate as other arable crops.
á CAP reform of 2003 introduced Carbon Credits which grant a payment of 45 euros/ha (about $24/ac) to growers of energy crops, including crops grown for the production of biodiesel and ethanol. Efforts are being made to increase this support to 90 euros/ha ($47/ac).
á The E.U. asserts that concessions it made to the U.S. under the Blair House Agreement to limit oilseed production are no longer valid. This is due to the equalization of compensatory payments for oilseeds and cereals, removing crop specific payments to oilseed producers.
á Reforms in the sugar sector follow that of other arable crops: decoupled payments and transition price support.
á A production quota system remains in place, but a quota buyback scheme has been introduced whereby growers staying in sugar beet production pay a levy which is used to compensate processors leaving the sector. Overall, the production quota is set to decrease by 25-30%.
á The sugar intervention subsidy is 631.9 euros/MT ($0.37/lb) but is set to reduce to 404.4 euros/MT ($0.24/lb) over the next 4 years.
á The sugar TRQ in-quota tariff rate is as low as 0% for some product lines and as much as 143.6%.
á The sugar subsidized export limit is 1,273,500 MT (1.4 million short tons).