KANSAS CITY, MISSOURI, US —It’s almost impossible to overstate the importance of bread in the lives of Egyptians. The most popular bread in Egypt is a flatbread called “aish baladi.” Aish means “life,” which is how Egyptians have perceived bread since ancient times. Bread is considered a commodity that Egyptians cannot live without in their daily diet.

Historically, when the ability to obtain bread is threatened, either due to shortages or affordability issues, civil unrest has soon followed. In the early 2010s, a protest called the Arab Spring took place in Egypt and other Middle East countries as the price of bread rose by 37% during a time when unemployment also was soaring.

Thus, of equal importance is wheat, the grain processed into flour that is used to bake bread. It was a dramatic rise in wheat prices in 2007 and 2008 — not unlike the recent surge in the wheat market — that led to the bread crisis and political unrest in Egypt a decade ago.

To ensure food security and prevent unrest, the Egyptian government subsidizes bread to the tune of $2.9 billion per year — accounting for just over half of its entire food subsidy program. The government faces a bit of a quandary in that Egypt only produces about 9 million tonnes of wheat annually because of land and water scarcity due to its desert climate, and therefore is highly dependent on wheat imports.

It perennially ranks as the world’s top wheat importer with annual intake at around 12.5 million tonnes. Ensuring the import supply chain runs smoothly is of the utmost importance.

Recognizing an opportunity to improve Egypt’s wheat importing process, the United Nations’ Food and Agriculture Organization (FAO) and the European Bank for Reconstruction and Development (EBRD) are collaborating on a project aimed at streamlining and optimizing the country’s ability to import wheat.

“Bread consumption in Egypt is high — one of the highest in the world,” Dimitry Prikhodko, FAO senior economist involved in the project since it began in 2014, told World Grain. “With the growing population, what we are seeing is total wheat consumption for food and feed purposes is increasing.

“Right now, we’re talking about 12.5 million tonnes of wheat imports per year, but 9 or 10 years from now imports will have to increase to 15 million tonnes per year just to feed the growing population.”

In 2015, the FAO conducted an exhaustive review of Egypt’s wheat supply chain to identify weaknesses and offer solutions. Among its objectives was to enhance the private sector’s role and improve the lines of communication between the public and private entities.

During their analysis, the FAO found that inspections of imported wheat were inefficient and sometimes rejected loads that could have been accepted. The inspectors had been using a zero-tolerance policy on shipments for phytosanitary issues that was stricter than international standards and would have been considered safe in most countries.

“What we’ve done is engage the Egyptian government to provide assistance in assessing these risks,” Prikhodko said. “For instance, with ergot there was a bit of confusion between international standards for phytosanitary measures and the international standards for food safety.

“The Codex Alimentarius food safety standards do allow 0.05% of ergot, but Egypt at that time had a stricter requirement and some vessels were rejected. There was also confusion about poppy seeds and how to treat them in international trade.”

The FAO estimated that lowering grain price premiums by lessening the number of phytosanitary or quality related rejections in Egypt could result in $430 million in savings over a 10-year period.

“There was a substantial savings opportunity specifically in reducing risks to private investors and grain traders,” Prikhodko said. “At that time, Egypt was in the news with a number of high-profile rejections of wheat from a number of countries; all the major suppliers were affected. What the FAO as a technical agency has done to address this problem is to provide substantial expertise to Egyptian authorities to provide risk analysis to correctly assess the risks with imported pests.”

The FAO also followed up with training of 900 inspectors as well as private sector participation on issues such as proper grain sampling, quality testing, fumigation and other services. The result has been a more streamlined inspection process that relies more on private inspection services.

“Egypt has approved more companies to conduct inspections of government shipments,” he said. “We consider that a major achievement.”

Another tweak to the system that the FAO is working to implement involves transitioning to paperless e-phytosanitary certificates, a digital transaction method that is more secure and reduces costs.

Prikhodko estimates that by going paperless, Egypt will no longer have to issue 200,000 paper phytosanitary certificates each year to process cargoes, including grain.

“The paperless certificates are issued by government inspectors and transmitted through the servers of the United Nations to the importing countries,” he said. “It involves much faster processing and there’s also far less risk for forgery of information on an e-phytosanitary certificate.”

The FAO has been working on implementing the digital system for the last two years and is waiting for the Egyptian Central Administration of Plant Quarantine to complete development of a national system, Prikhodko said.

It is estimated that Egypt’s state grain buyer, the General Authority for Supply Commodities (GASC) was able to reduce the country’s wheat import bill this year by 13% due to the implementation of an integration information system that controls the management, transportation and trading of wheat.

With progress being made on the software infrastructure, another goal that must be realized, Prikhodko said, if Egypt is to optimize its food security, is modernizing its grain “hardware infrastructure.”

“This is where our partners from the development banks come in,” he said. “They have big grain supply companies as clients, and they are the ones investing in infrastructure.”

What that will entail is modernizing grain handling equipment and increasing storage capacity at the port terminals, which are among the most congested in the Middle East.

“I think there has already been quite substantial investment there,” he said. “At the moment it’s mostly by the government, but we have also seen some private sector investment in the ports.”

A more long-range infrastructure goal is to utilize barge transportation to move grain along the Nile River, Prikhodko said. He noted that the EBRD has financed barge transportation systems in other countries that has reduced the burden on their trucking industries.

“Right now, in Egypt, all 12.5 million tonnes of wheat are moving by trucks through very densely populated areas,” he said. “The Nile can be used as a navigation channel to supply grain to Cairo and work to the same extent that the Mississippi River works in the United States.”

Prikhodko explained that 60% of annual wheat imports are handled by the government through tenders issued by the GASC and is targeted for its bread subsidy program, while the private sector supplies its wheat to the Egyptian milling sector where it is converted into bread, pasta or other wheat products.

“The Egyptian government and the private sector are destined to work together,” he said. “They are operating as market players in the same market. I think from that standpoint we are quite happy that we have facilitated and established a dialogue on the specific sector issues that I have mentioned.”

And because of this cooperation, Prikhodko is optimistic that the protests like the one he witnessed in the streets of Cairo in June 2013, when the FAO and EBRD met there to discuss the project, will not return. His hope is the work they are doing will help prevent that scenario by ensuring that Egyptians continue to receive their daily bread at an affordable price.

“Bread is so fundamentally important in the Egyptian culture and diet,” he said. “It plays an important role and touches the hearts of Egyptians.”