Egyptian agriculture and the Toshka project: Reclaiming the land

01 August 2003
Molokhia, the national dish of Egypt, is not to everyone's taste. But if you have a particularly good bowl of cooked mallow you might murmur 'fayoum' to yourself as you settle back in your seat. The Fayoum oasis to the west of Cairo is so famed for the quality of its fruit and vegetables that it is used locally as a culinary term of praise.

Famed, that is, in Egypt. Agriculture is one of the mainstays of the economy, comprising 14 per cent of gross domestic product (GDP) and employing more than a quarter of the local workforce. But most of the best products never leave the country. Of the 1 million tonnes of edible grapes grown in 2001 - most of them near Fayoum or Nuberiya in the Nile Delta - only 10,000 tonnes ever reach foreign markets.

That figure may seem negligible, but it is a vast improvement on the 2,000 tonnes exported only three years ago. By boosting these high-value exports, the government has been hoping to slowly chip away at the $1,300 million annual food trade deficit it has accrued over the past few decades. Devaluation of the local currency has helped to boost the potential value of goods such as grapes, citrus fruit and herbs, and small-scale programmes for reforming farming practices have ensured that overall food exports are now forecast to grow by 3.4-3.8 per cent a year over the next decade.

Without the assistance of the US Agency for International Development (USAID), which provides about $20 million a year for agricultural reform projects in Egypt, much of this would not have been possible. 'We have been supporting the agriculture sector for 25 years, mainly in the areas of institutional development and research, but in the past five years or so we have switched our policy to supporting the private sector,' says Anne Williams, head of USAID's local agriculture and export development programme. 'The main aim now is to increase the volume of exports, so we have extended our support programme to those smallholders producing for export. providing them with information on foreign markets and helping them sign contracts directly with exporters.'

Another key feature of the reform programme is water conservation. According to USAID, by 2025 per capita water availability in Egypt is expected to fall by more than 40 per cent to 600 cubic metres a year. 'Water really is the big issue,' says Hani al-Kolaly, executive director of the Horticultural Export Improvement Association, which has been working alongside USAID in training smallholders. 'Farmers are used to using flood irrigation but the aim now is to manage water resources better by using drip irrigation.'

The doubling of the population over the past 30 years has also reduced the average size of holdings to a point where few rural Egyptians can make a living from farming alone. So where the private sector has been attempting to maximise the use of existing land, the public sector has concentrated on creating more of that land. Under a programme drawn up by the Irrigation & Water Resources Ministry, the government is planning to reclaim about 3.5 million acres of land from the desert by 2018 - an area one and a half times the size of Lebanon.

'Egypt has some very, very good farmers, and they are exceptionally good at managing small-scale plots of land and managing water resources,' says a European food industry analyst. 'They are also particularly good at land reclamation. If you fly over the Delta, you can see that the line between farmed green land and the desert is absolute. The reclaimed land is just as good as the old land adjacent to it.'

The new focus of attention is not the river delta, however, but the deep desert of the south. The centrepiece of the reclamation programme now is the 550,000-acre Toshka project, first presented to Egypt in 1997 as the personal vision of President Mubarak, after whom the water lifting station at the heart of the scheme - the largest in the world - is named.

Built by Swedish-owned Skanska Cementation International and Japan's Hitachi Corporation, the $450 million pumping station was officially opened in January and at full capacity will lift some 29 million cubic metres a day from Lake Nasser via a four-kilometre inlet canal. The water is then conveyed some 50 kilometres along the Sheikh Zayed Canal before being channelled into four sub-canals, the main branches of the Toshka irrigation system. About 237 kilometres of canals are being built for the scheme.

As the first major tenant of the reclaimed region, Prince Alwaleed bin Talal's Kingdom Agricultural Development Company (Kadco) is responsible for developing the first tract of land - which in itself will be the biggest single commercial farm in the world. 'Kadco's business plan extends up to 2010, when all the 100,000 feddans would have been developed,' says the company. 'It is a continuous stream of activities that expands over the development period until the full completion of the project.'

But the Toshka scheme as a whole, which is estimated to have already cost the Egyptian government more than $3,000 million, is not without its critics. As with any major water project in the Middle East - the creation of the Aswan High Dam in the 1950s is a case in point - observers quickly fall into the pro and anti camps. 'The problem is the scale of the project. As far as the engineering is concerned it can be done, but the worry is that the concept gets so big that the government takes its eye off the inherent problems and it ends up becoming a white elephant,' says the analyst. 'If you're talking about investment, the only big number to date is the amount of seed capital the government has sunk in - and that could be only 10 per cent of total capital expenditure needed. That's not to mention the political capital the government has invested in the project.'

But in a country where about 97 per cent of the rapidly expanding population live on 5 per cent of the land, the benefits of land reclamation are as much social as they are agricultural. More than 2 million people are expected to relocate to the Toshka depression, and millions more are expected to settle in lands to the north watered by a planned extension of the scheme. This brings with it associated challenges, as many of those being resettled in Toshka will come from urban areas and will need intensive training to cope with one of the most difficult farming environments in the world. Critics of the scheme have also voiced concerns that Egypt may not have enough water, and that the desert soil is unlikely to support the high-value fruit and vegetables being targeted for export.

Kadco is not particularly concerned about the first of these objections. As the company spokesperson points out: 'Water is guaranteed for the project as long as there is water in the Nile.' But Egypt already consumes most of the 55.5 billion cubic metres (bcm) of water to which it is entitled under the 1959 Nile-sharing agreement with Sudan, and Toshka needs about 5 bcm a year.

Another serious question that still has to be answered concerns the suitability of the local soil, which is rich in iron but has far fewer nutrients than the rich silt of the Nile floodplain. An experimental farm set up by Kadco in 2001 to the northeast of the terminus of the first canal has already established - using local well water - that the ground is capable of supporting grapes, tomatoes and other high-value products. But so far the company has not established which crops can be grown on a sustainable, long-term basis, although some form of crop rotation will be necessary.

'Production. depends on the crop mix built over the development period,' says Kadco. 'The crop mix is rather dynamic depending on continuous market conditions and gaps between supply and demand for different products.'

In other words, the jury is still out. The wild climate fluctuations in the desert also pose a challenge for future Toshka farmers. 'Alwaleed's experimental farming has proved that they can do it, but the underlying problem is that this is one of the most inhospitable parts of the country, particularly in the summer. In Toshka as a whole you are going to need expertise, forward planning and strict water management to ensure you're not just growing coarse grains that you can buy cheaper on the world market,' says the European analyst. 'Even then, it's hard to make the big numbers add up if you're air-freighting watermelons.'

The government has invested a considerable amount of capital in basic infrastructure, including upgrading the 200-kilometre highway between Toshka and Aswan and other road links to the north along the Nile. 'The main issue in Upper Egypt is transportation - you need to grow crops that are not going to be damaged on the journey to the airport,' says Al-Kolaly. 'At the moment most produce has to be transported at night, which is not very efficient, so refrigerated trucks are a big advantage.'

USAID earlier this year opened a refrigerated storage hangar at Cairo airport. Agricultural exports from Toshka not transported by road will fly north via the airports at Aswan and Abu Simbel.

But for all the logistical problems thrown up by Toshka, there are clear economic and social imperatives that will continue to drive the project forward. And the vast artificial oasis has a competitive edge over European producers in terms of cheap labour and production costs. Fears that the large-scale production envisaged at Toshka could hit existing smallholders are also unfounded, claims Kadco: 'The advantage of the south is that you can produce crops more than a month ahead of European countries. [while] the main competitive advantage in Toshka is the ability to produce earlier than Northern Egypt by four-six weeks. As a matter of fact, Toshka is extending the market window for exports from Egypt.'

Digby Lidstone

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