Egyptians turn to agriculture for stability and income amid economic uncertainty

Egypt is witnessing a surge in demand for agricultural land that has pushed up prices for potential buyers and renters, who include an increasing number of ordinary Egyptians struggling with an economic downturn and the soaring cost of food.

In a country that is more than 90 per cent desert, most of the land suitable for agriculture lies near the banks of the Nile, where annual flooding over millennia has deposited a layer of nutrient-rich silt to create what is commonly known as "black land". Farther from the river is "yellow land", where the soil is sandier and less fertile, requiring the use of irrigation systems and fertiliser for farming.

Demand has led to a steep rise in the prices of both types of land, according to Alaa Madina, a farmer and land broker in Menoufia province just north of Cairo.

"Individuals, the state, the private sector and foreign investors have all been steadily showing more interest in agricultural ventures in Egypt over the past four years," said deputy agriculture minister Mohamed Fahim. "However, there is a limited amount of viable land, so the increased demand has raised prices, especially for renting land."

Soaring food prices, a struggling economy and the availability of hundreds of thousands of hectares of newly developed agricultural land has sparked a surge in interest in the sector from Egyptians and foreign investors alike, according to Mr Fahim.

The rising demand more than tripled the cost of leasing farmland since 2022, said Mr Madina. In the fertile Nile Delta region, a feddan (0.42 hectares) of black land, so named for its dark, alluvial soil, was leased for 20,000 Egyptian pounds ($416) a year in 2022. This year, the average rent for the same land is 65,000 pounds, he said.

Since 1990, the amount of land viable for agriculture has nearly doubled to reach 4 per cent of the country's total area, according to a report from the World Bank.

An estimated 6 million feddans of prime black land have been farmed since ancient times, according to Mr Fahim. This land was confiscated from large estate owners and redistributed among families, both rich and poor, by President Gamal Abdel Nasser after the overthrow of the monarchy in 1952.

Even in the less desirable yellow land, rent has climbed from about 10,000 pounds per feddan in 2022 to 30,000 this year. Purchasing prices have also risen, with a feddan of black land now costing about 2 million pounds and yellow land about 500,000 pounds, Mr Madina said.

Yellow land is more sandy than black land on account of the lower rate of water which reaches it. This is why developing it often requires constructing a reliable water supply as the land is farther from the river.

The government has developed 3.5 million feddans of yellow land through various projects. This has involved flattening the land, digging groundwater wells for irrigation, building roads and connecting remote areas to the power grid.

"There is undoubtedly rising interest in agricultural ventures in Egypt which can be traced back to Covid-19," Mr Madina said.

"The pandemic ended many jobs, particularly service-sector jobs in cities like Cairo. This not only made many people return home to the provinces to wait it out, it also encouraged many to start working in agriculture because it was the only possible option amid all the closures."

The soaring cost of food has been a key driver of the agriculture boom. Inflation hit 32.5 per cent in April before declining slightly to 28.1 per cent in May, still nearly triple the rate in March 2022 when the economic crisis began.

"After watching prices at markets increase month by month since 2022 and struggling to afford basic food items, many Egyptians began to think that they could be the ones selling the crops at high prices, they started to see it as very profitable, especially as other industries started to shut down because of the dollar shortages," Mr Madina said.

More than 55 per cent of employment in Upper Egypt is agriculture-related, according to this year's data from the US Agency for International Development. The sector also accounts for 28 per cent of all jobs in Egypt, according to the agency.

"Millions work in agriculture, it's always been a big sector in Egypt. But since 2022, millions more have migrated to it from other sectors. I really am not exaggerating, millions of Egyptians since 2022 have made the move into agriculture," the deputy minister said.

"This includes thousands of new landowners and renters, but also the workers they employ, their number is far higher than land owners," he said, adding that each time a piece of land is rented, more people with different specialities need to be hired for the venture to succeed.

"The growth is not just in land rentals or purchases, it's also in the size of the sector itself and all the industries related to it."

The agriculture expansion encompasses small farmers in the Nile Delta as well as large investors farming reclaimed desert lands. These projects have shifted land ownership dynamics, with rents previously paid to Bedouin tribes now going to the state or military, which have become like "the people's landlord", Mr Madina said.

The military has formalised many areas, by developing and leasing them, and relocated the Bedouin who lived there to other regions, especially in less remote desert areas such as Al Dabaa and Wadi Natroun.

Farmers prefer to deal with the military because they are quick to send machinery to dig canals, flatten land and provide any necessary assistance to farmers who can potentially face various issues after they have signed their leases, Mr Madina said.

The National spoke to Ahmed Issa, a 38-year-old resident of Cairo’s Nasr City neighbourhood, who recently leased a new plot of black land of about 12 feddans in the Nile Delta's Beheira province, two hours north-east of Cairo, where he plans to grow potatoes.

“I recently came into some money and for a few months I had been looking for a viable business venture that was secure, something that could help me and my family make ends meet. With everything getting so expensive, everyone’s looking for something to do on the side,” said Mr Issa, an Uber driver whose family owns a carpentry shop.

“I hadn’t really considered agriculture at first, but many people I consulted with advised me to look into it. The costs to start a small farm are not as high as opening a restaurant or purchasing a car and driving it for Uber, and it comes with the benefit of being able to plant crops to feed my family.”

Water concerns

As agriculture expands, water security is a crucial factor, which Mr Fahim calls a "rare resource in Egypt that has to be guided wisely".

The government has capped production of water-intensive crops and made the use of modern irrigation methods compulsory in reclaimed desert areas. Water security has taken on new urgency amid a dispute with Ethiopia over its construction of a dam on the Nile.

For local small-scale farmers, affording to expand is a challenge given the soaring cost of living. But large investors, especially foreigners, have benefited from looser land ownership rules and a cheaper Egyptian pound following four currency devaluations. The increase was significantly invigorated by the lifting last year of a cap on the amount of land a foreigner can own, which used to be limited to two 4,000-square-metre properties, each in a different city.

"For a foreign investor who is converting their currency from dollars, dirhams or rials, an agriculture project in Egypt is going to be enticing for the costs it saves alone," Mr Fahim said. "Everything is cheaper – labour, seeds, fertilisers, land."

The government and military have promoted agriculture by investing in irrigation systems, electricity networks and road links in far-flung areas. In the past, private investors had to shoulder these costs. "Now the situation is much more different as the government is bearing those costs itself," Mr Fahim explained. "The development has made lands as far away as the New Valley in the Western Desert viable for farming."

Egypt's military plays an outsize role in the nation's economy, controlling a vast network of companies involved in industries from construction and manufacturing to agriculture and consumer goods. This "military economy" has expanded significantly since President Abdel Fattah El Sisi, a former general, took power in 2014.

Military-affiliated companies often receive preferential treatment in government contracts, subsidies and tax breaks. In the agricultural sector, the military has been deeply involved in the government's desert reclamation projects, providing engineering expertise and infrastructure development, Mr Madina said.

The agriculture drive dovetails with Egypt's urgent need to curtail its dependence on imported staples as it grapples with an external debt load equivalent to 96 per cent of GDP this fiscal year. In May, the President launched a project to reduce the $3.7 billion spent annually on food imports by increasing domestic crop production, though critics called the savings target unrealistic.

Despite the risks inherent in farming, including climate factors, Egyptians see few other options. "For people looking to increase profits because of high food prices, costs aren't so high because it is a seasonal activity and it can be done with very low costs," Mr Madina said, listing crops such as potatoes, mangoes and olives now being planted from the Nile Delta to the reclaimed desert valleys.

The rush for farmland is altering Egypt's human and physical geography because the reclaimed lands in the desert, which have grown following various reclamation initiatives, constitute the largest shift in Egyptian agricultural activities outside the Nile Valley.

This is something that previous Egyptian presidents have tried to do but ultimately found unfeasible. It has also made farmers who have never worked in the desert relocate to reclaimed lands to conduct contract farming for the state, changing the way Egyptians have conducted agriculture for centuries around the Nile Valley.