CAIRO — The Egyptian Ministry of Supply and Internal Trade has come up with a plan to replace the in-kind bread subsidy system with a cash bread subsidy system. This comes as part of the Egyptian government's attempt to fully convert to a cash subsidy system under the reform required by the International Monetary Fund. A cash bread subsidy system means floating the price of a loaf of bread, which, for several decades, has been subsidized by the government.

During a July 29 press conference, Egypt’s Minister of Supply Ali al-Muselhi said each citizen who qualifies for the subsidy receives five loaves of bread daily, at 5 piastres each (about a third of a US cent). The spokesman for the Supply Ministry, Mohammed Suwaid, said the production of one loaf of bread costs 57 piastres (about 3 US cents).

According to the Ministry of Finance, 76.8 million Egyptians, the vast majority of the population, benefit from bread subsidies and are entitled to about 140 billion loaves per year.

Muselhi told the Masrawy news website that under the plan, each citizen who qualifies would receive 75 Egyptian pounds (roughly $4.20) at the beginning of each month as a direct cash subsidy to purchase bread at an unsubsidized price. He said this system would guarantee that these subsidies reach the proper recipients without intermediaries. “Citizens will buy a loaf of bread at its unsubsidized price. The subsidy will be disbursed in cash instead,” he said.