The Egyptian government has allocated EGP 473.2 million ($67.6 million) in the budget of fiscal year 2013-2014 to extend support to farmers.

Last year, the government had spent EGP 183.9 million ($26.2 million) on farmer support plans. A report compiled for Minister of Finance Ahmed Galal shows that during last three years more than EGP 1 billion ($143 million) were allocated to boost agricultural output and support farmers.

The report highlights that out of the total budget allocation; an estimated EGP 340 million ($48.5 million) will be used to support the interest rate differentials on vegetable production loans provided by the Principal Bank for Development and Agricultural Credit (PBDAC). The government will be paying 6 percent of the interest rate on agricultural production loans submitted by PBDAC, while the farmers will be required to pay only 5 percent.

Galal points out that the treasury will allocate EGP 112.9 million ($16.1 million) to enforce the presidential decree to exempt farmers who have difficulty in repaying the loans. It is expected that the government’s decision will be strongly supported by the farmer community, especially those farmers who have defaulted on their loans.

With the population expanding at a rapid rate, Egypt is focusing on improving productivity in the agricultural sector to ensure food security. The Egyptian agricultural sector is plagued by shortage of diesel fuel and fertilizers, which limits the output by small farmers.