Evaluation of Food Rationing and Subsidy Program

Egypt’s food rationing and subsidy system has been a mainstay of the government’s longterm policy of promoting social equity and political stability. There is an increasing pressure to reform if not eliminating the subsidy program. Few studies were carried-out to evaluate the current subsidy system. The aim of this study is to assess the consumption of subsidized and unsubsidized bread, identify the factors affecting dispensing rationed foods and to determine consumer’s opinion towards the subsidy program. The subjects of this study were 204 employees from Alexandria University hospitals. Data were collected by direct interview using a predesigned questionnaire. Data were collected on the socioeconomic characteristics of the family, purchase of subsidized balady and unsubsidized shami and fino bread. The fate of the subsidized bread and consumers’ suggestions to improve its quality were assessed. The rate of dispensing foods through ration cards was determined. Consumers’ opinion of the nutritional values of the subsidized foods and the preferred mode of subsidy were recorded. The results show that subsidized balady bread was consumed by all social strata, the percapita share of low socioeconomic groups was more than 3 loafs daily. Shami and Fino bread was consumed mostly by high income bracket. The results show that 14.2% of the balady bread was wasted and 10.8% was refrigerated. The majority (46.7%) recommended no change in the current bread subsidy system and 28.9% recommended improved baking. The quantity of foods dispensed by ration card varied with the type of food. The whole quantity of allocated sugar was dispensed by 78.0% of the sample compared with tea which was least collected (49.5%). Poor quality was the main reason for not dispensing the whole quantity, however, it was reported by some consumers that the rationed quantity of sugar and oil exceeded their needs. The results show that 48.0% of the sample believed that food subsidy improves nutrition while 28.9% reported that it has no effect. The present card system of delivering subsidized food was preferred (52.0%) fearing that cash subsidy will not be enough (54.7%) or will be associated with a sharp increase in food price.


INTRODUCTION
Egypt's food rationing and subsidy system has been a mainstay of the government's long-term policy of promoting social equity and political stability.It has been a major component of the social safety net for the poor, guaranteeing the availability of affordable stables and minimizing the adverse effects of recent economic reform and structural adjustment. (1)Food rationing Bull High Inst Public Health Vol.39 No. 3 [2009]   began as a temporary measure in Egypt in 1941, with a goal of helping Egyptians cope with food scarcity and inflation resulting from World War II.The initial system was not targeted to the poor, but was instead set up to provide necessities such as sugar, kerosene, edible oil, and tea. (2)Wheat, in turn, was not rationed, but was subsidized in the years following the war. (3)Following "July Revolution" in 1952, agrarian reforms marked the beginning of extensive government involvement in the production, marketing and distribution of most agricultural products, which lasted until the start of liberalization of state agriculture in 1987. (4) the mid-1960s, ration cards were used for the distribution of a small number of goods and did not always involve price subsidies and were designed as a quantityrationing system.In general, spending on food subsidies remained a modest percentage of the government's budget, and the role of food subsidy policies was primarily to ensure the support of essential food items. (5)The costs of the expanding system continued to grow and the subsidy system was becoming increasingly unsustainable.By 1981, almost all the population had ration cards, of which 97 percent were the more highly subsidized green ration cards. (6) 1982, a process of reforming the food subsidy system was initiated.This was achieved by reducing the number of subsidized foods, reduction in the number of people on the ration card system and a has only a limited effect on calorie intake (7) .This was attributed to the low take-up rates and low purchases of subsidized goods.The reasons for the low take-up rates and use were not clear. (8)On the other hand, targeted fruit and vegetable subsidy among low-income women in special supplemental nutrition program proved to be very effective in increasing fruit and vegetables consumption. (9)Tortilla subsidy in Mexico was followed by a better nutrient consumption and improved the nutritional conditions of the poor and marginated urban sector of the society. (10) was even reported that public housing subsidy may protect the family from excessive pressure on their food budget and was associated with improved nutritional status in young children among low income families. (11)spite achieving a significant reduction over the past two decades, the absolute cost of food subsidies in Egypt is still high relative to the benefits received by the poor.The program is not designed to improve the nutritional status of the vulnerable groups.The subsidy scheme is under great pressure from international organizations to be eliminated.The whole debate of food subsidy in Egypt centers on economic and social consideration without Bull High Inst Public Health Vol.39 No. 3 [2009]   paying any attention to its nutritional impact. (12) view of the limited studies on food subsidy in Egypt, this study was initiated to evaluate the current food subsidy program, assess the consumption of subsidized and unsubsidized bread, identify the various socioeconomic factors affecting the intake of subsidized foods and to determine consumers' opinion towards the subsidy program.

Subjects and methods
The subjects of this study were sampled from the administrative staff and workers at Alexandria university hospitals.The criteria for selection were that the subject should be married, having a family and holding a ration card.The minimum sample size calculated using Epi-Info version 6.0 and an alpha error of 0.05, a null hypothesis of 75% consuming subsidized foods with 6% precision was 201.
Each subject was privately interviewed to explain the objectives of the study and to gain his approval to participate in the study.
Response was highly positive and many of them were very keen to express their opinion regarding food price subsidy.
Data were collected by direct interview

Results
The results show that the mean percapita share of bread was The mean daily share of unsubsidized shami bread was significantly lower by almost all the groups investigated.
However, the mean share of shami bread was higher than subsidized bread among high income families, X = 1.71 and food. (13)lady bread and flour subsidies were not designed to serve the poor alone, since these foods are available to any consumer, while there is a very widespread perception that self-targeting has resulted in balady bread and flour being relatively more consumed by the poor, a high percentage of bread and flour subsidies go to the non poor. (14) is assumed that only the lowest quality bread is subsidized and that rich community will buy better quality products.
However, as subsidized bread is cheaper than animal fed, many poultry and cattle growers abuse the effort of the government to provide subsidized bread for the low income groups.
The results of this study show that subsidized balady is consumed by all socio-economic strata, however, the rate of consumption showed significant variation (table 1).The mean daily share of balady bread was more than 3 loafs daily for low The percentage of wasted bread was much lower than that reported in 1992 which amounted to 20.8%. (15)Although the drop in bread waste occurred over 18 responsible for that.Improved baking will contribute significantly to reduce bread wasted .A small proportion of the subjects who were mostly with university education and better income recommended an increase in the price of bread.They postulated that such hike in the price should be used to improve the quality and the taste of bread, reduce the waste and the use of subsidized bread in feeding animals.
In contrast to bread and flour subsidies, sugar, oil, rice and tea subsidies are explicitly designed to be targeted.
These food are dispensed through the ration card.The quantities actually dispensed from each food varied considerably.The whole allocated quantity of sugar was dispensed by 78% of the subjects compared with 49.5% of the allocated tea (table 5).It was of interest to note that 22.3% of the subject did not dispense the rationed subsidized sugar either partially or completely (table 5).The main reason for doing so was that the allocated quantity exceeded their needs (48.9%), poor quality (26.7%) and almost one quarter of the sample could not afford to purchase the whole quantity of subsidized sugar (table 6).
The quantity of ration cooking oil exceeds the needs of some families and was dispensed completely by 71.6% of the subjects.However, 29.3% of the subjects reported that the quality of oil is poor.This is true, rationed oil is usually turbid and its odor is some times not acceptable. (16)collected oil is usually sold on the black market to small restaurants that do not pay much attention to quality.
Rice is a very popular food, it comes second to bread as the source of calories.
More than 28.0% of the subjects did not collect the whole allocated quantity.It was reported that card rice is of poor quality (44.2%).There is a large difference in the quality between subsidized rice and that available on the market.The difference in the price is not too large which encourages the family to purchase better quality rice from the free market (table 6).
Tea was the most unaccepted rationed item and was dispensed by only 49.5% of the families.The main reason given was its poor quality (table 6).
Tea may be considered the national drink and is consumed several times daily.It replaces fruits as it is the habit to have a glass of sweet tea shortly after meals.Unless the quality and taste are good, tea will not be accepted by the consumer.Available data show that the card system is poorly targeted.More than 25% of the poor families do not carry a ration card because of the bureaucratic steps necessary to acquire a ration card. (17)other major problem of the food subsidy program is the volume of leakage of those subsidies to the high income bracket. (18)In slow reduction in subsidies by reducing the weight of subsidized food, or replacing it by a more expensive version.Bread price was increased by this strategy to 5 piasters in 1988, without popular protest.In 1996, the government introduced unsubsidized version of fino bread and 72 percent extraction flour used for the preparation of shami bread.The result of these frequent policy steps has led to a reduction of subsidized foods to sugar, oil, rice and tea which are dispensed through the ration card and subsidized balady bread which is sold freely.Consumer price subsidy have been studied on a variety of fronts, particularly the economic and social impact of such programs, its negative impact on the national economy and the leakage of these subsidies to the rich.Surprisingly few studies have focused on their nutritional impact.The nutritional impact of food price subsidy depends on the nutritive value of the subsidized food, the degree of subsidy and the ability of the beneficiaries to purchase the subsided foods.Kochar (2005) found that India's subsidy program income group, large size families and those with limited education.Low income families can not afford the price of shami of fino bread which is 4-5 times, higher than the subsidized bread.When the head of the family faces the problem of inflation and low income, he has no alternative other than purchasing a large number of loafs of subsidized bread that is less expensive than any other source of calories.Better educated small families with higher income, consume more of the shami and fino bread and reduce their consumption of balady bread which requires a strong effort to purchase from over-crowded bakeries.It is postulated that fino bread is used by all families to prepare sandwiches for their school children.The fate of the purchased subsidized bread was also affected by the socioeconomic characteristics of the family.Low income families who suffer from the burden of inflation consume 83.1% of the purchased bread, high income bracket consumed less (59.6%) but they refrigerated a higher percentage of the bread (21.2%).High income families with better education consumed a relatively lower proportion of the subsidized bread but because of the difficulty in obtaining this bread, they were more keen to keep the excess by refrigeration.In the mean time, it was noted that 14.2% of the purchased bread was wasted, such proportion was as high 19.2% among high income families.This is mostly due to the poor quality of the bread which becomes inedible if kept without refrigeration for few hours.
The nutritional value of subsidized foods is very poor, rice, oil, sugar are calorie rich foods and bread could cover a good portion of the daily caloric requirement, however, they are very poor in vitamins and minerals, the protein contents of rice and bread are relatively low and are of poor biological value.The results show that 48% of the sample believed that subsidy program improved their nutrition.The university educated subjects who have a limited knowledge about nutrition believed that it has partial or no effect on the nutrition of their family members (table7).The composition of the subsidized foods dispensed through the current program can not contribute to improving the nutritional status of the vulnerable groups of the society.