Management of the subsidized fertilizer system in five governorates has been handed over to the Future of Egypt for Sustainable Development Authority, paving way for the authority to take over the system nationwide starting in October and changing the way that farming is organized in the country, an official in the cooperatives sector of the Agriculture Ministry told Mada Masr. He added that farming cooperatives, which play a key role in the distribution system, “will largely disappear from the scene in the coming years.” Fertilizer management adds a new portfolio to a set of national supply and distribution activities, previously managed by various state entities, that the Future of Egypt authority has acquired in recent years. Since the beginning of August, Future of Egypt has been responsible for managing the delivery of fertilizer from factories to agricultural associations in villages across Daqahlia, Sharqiya, Beheira, Port Said and Ismailia. It has also been given full responsibility for the distribution of fertilizer allocations for crops, checking them against agricultural census records, the official said. “Starting with five governorates serves as a trial that will be rolled out across the rest from October,” the official said, which “means cooperatives will largely disappear from the agricultural scene in the coming years,” explaining that cooperatives’ main role was to organize and coordinate the fertilizer portfolio, delivering products in coordination with the Agriculture Ministry from fertilizer factories to the village-level agricultural associations that deal directly with farmers. The move expands Future of Egypt’s role in fertilizer distribution. In July, the authority began managing part of the supply of unsubsidized fertilizer in cooperation with agricultural cooperatives. Under that arrangement, Future of Egypt procures fertilizer from manufacturers and supplies it to the cooperatives, which sell it to farmers on its behalf at prices the authority has set — currently below market rates. A sack of unsubsidized urea is sold for LE1,000 and ammonium nitrate for LE975, compared with the open-market rates of between LE1,400 and LE1,600 per sack. Agricultural association managers and ministry sources who spoke to Mada Masr acknowledged that corruption is widespread in the fertilizer distribution system and described the authority’s takeover as aiming to tighten oversight and control. But they also pointed out that the change leaves intact the structure that allows such corruption to occur. It is therefore likely to continue, they said, albeit under new management. Agricultural associations are responsible for distributing government-subsidized fertilizer to farmers under a decades-old scheme backed by the Agriculture Ministry. Under the scheme, associations in each village survey all farmland and the crops being grown. Those figures are then used to determine the amount of fertilizer needed, which is supplied through the cooperatives operating under the Agriculture Ministry’s branch of the General Cooperatives Federation. The new system under Future of Egypt effectively replaces the cooperatives federation in supplying fertilizer, as well as taking over the distribution function handled by agricultural associations. The associations will continue to conduct the agricultural surveys. The main agricultural administration in each of the five governorates has instructed village-level agricultural associations to survey their fertilizer stocks and record the capacity of all their warehouses, a manager of one of Beheira’s associations told Mada Masr. The administration has informed them that Future of Egypt will assume overall responsibility for the fertilizer portfolio from October, they said. The trial began in Beheira at the start of August, the manager said. Associations were grouped around centralized distribution points, replacing the previous system in which each association had its own distribution warehouse. Associations with larger storage facilities will be selected to serve as storage and distribution centers, with fertilizer allocated to farmers according to the surveys conducted by the associations themselves, with Future of Egypt-appointed personnel handling the distribution, the manager explained. A manager at an agricultural association in Gharbiya confirmed the same arrangement. They told Mada Masr that the deputy head of the governorate’s agricultural administration called to inform them “verbally” that the system will be rolled out in October, without any formal correspondence. They were asked to submit documents relating to fertilizer allocations and surveys, and they were also asked about the storage capacity available at their association, which is to be prepared and handed over to Future of Egypt officials. Under the new arrangements, Future of Egypt will oversee procurement, pay manufacturers, handle fertilizer delivery and collect payments from farmers, effectively assuming much of the role previously played by the agricultural associations, according to the cooperatives sector official. The Beheira association manager believes that the new system is going to reduce the workload for association employees. But they also warned that managing fertilizer distribution could prove difficult for “the soldiers” of Future of Egypt, which is managed by Air Force pilot Colonel Bahaa al-Ghannam, if they lack sufficient expertise in the way the system works. Agricultural employees work with dozens of farmers’ smart cards, survey records and entitlement data daily. Shifting the task to personnel without previous experience in agricultural work could therefore require a period of training, they said. But since the new arrangement is already being implemented on the ground, they believe Future of Egypt personnel should work alongside association employees for a while during the agricultural season, to allow them to learn how surveys and distributions are conducted and how to deal with farmers, before taking full control of the system. The main problem behind the restructuring of the subsidized fertilizer system is the process of determining which agricultural areas are entitled to receive fertilizer, a second source in the ministry told Mada Masr. Inaccurate surveying can create a gap between the amount of qualifying agricultural land that actually exists and the area recorded by the cooperatives and registered with the ministry. As a result, the ministry can distribute more fertilizer than is needed for the crops and farmers, creating opportunities for association employees to retain surplus quantities of the subsidized fertilizer to leak onto the open market, the source said. The misallocation or over-allocation of subsidized fertilizer to certain areas can also create supply bottlenecks elsewhere. Addressing the problem requires tighter control over both surveying and distribution operations as well as linking entitlements to actual cultivated areas and crop data rather than relying entirely on figures recorded by agricultural cooperatives, the source said. That would reduce opportunities for manipulation or the undue receipt of subsidized fertilizer. The re-organization of fertilizer management and distribution is partly intended to address these gaps and tighten oversight, the source added. But while the stated reason for handing the fertilizer portfolio to Future of Egypt is to combat corruption within agricultural associations, one of the main challenges this endeavor will face is that the new arrangement still separates the surveying process from fertilizer distribution, according to the Beheira manager. Association employees will continue to record land and crop data, while Future of Egypt personnel handle distribution. That leaves the door open for corruption because, the manager argued, the root of the problem lies in the survey records, not in the distribution process itself. The second Agriculture Ministry source said the Central Administration for Agricultural Directorates has sent letters to the ministry’s undersecretaries in the five governorates, emphasizing the need to conduct an “actual survey” of all crops, including those grown in violation. The administration stressed in the letters that the survey is “a procedure to prove and record the actual situation on the ground and is not linked to whether the crop is entitled to [subsidized] fertilizers or not.” It also warned against delaying the entry of survey data or entering figures that do not reflect conditions on the ground, according to the source. From its beginnings in land ownership and development, Future of Egypt has increasingly assumed a role in managing the domestic and imported supply of strategic national goods like rice and wheat, gaining legal character as a state body earlier this year with a set of officially sanctioned powers and exemptions from oversight.The post Future of Egypt to take over subsidized fertilizer system first appeared on Mada Masr.
