Report No. 47547-EG Arab Republic of Egypt Linking Funding to Outputs Expenditures of the Ministry of Agriculture and Land Reclamation Issues Paper January 9, 2009 Sustainable Department Middle East and North Africa Region Document of the World Bank IMF International Monetary Fund MAD Ministry o f Administrative Development MALR Ministry o f Agriculture and Land Reclamation MCG Management Consultancy Group MoED Ministry o f Economic Development MOLD Ministry o f Local Development MoF Ministry o f Finance MPWWR Ministry o f Public Works and Water Resources MSEA Ministry o f State for Environmental Affairs MWRI Ministry o f Water Resources and Irrigation NASI National Authority for Social Insurance NGOs Non-Governmental Organizations NIB National Investment Bank NLRP New Lands Reclamation Program NWRC National Water Research Center PBDAC Principal Bank for Development and Agriculture Credit PER Public Expenditure Review SGB State General Budget SIFs Social Insurance Funds TOR Terms o f Reference TRIPS Trade Related Aspects o f Intellectual Property Rights UN UnitedNations UNEP UnitedNations Environment Program WB World Bank WFP World Food Program WTO World Trade Organization Vice President Daniela Gressani Country Director Emmanuel Mbi Sector Director Laszlo Lovei Sector Manager Luis Constantino Task Team Leaders Ayat Soliman / Alexander Kremer Acknowledgements This i s one o f a number o f papers to be commissioned as part o f the Public Expenditure Review conducted by the World Bank under the auspices o f the Ministry o f Finance. This particular was prepared by the World Bank in response to a request from H.E. the Honourable Minister for Agriculture and Land Reclamation. The team expresses i t s gratitude for the collaboration and support o f the Ministry o f Finance and the Ministry o f Agriculture and Land Reclamation (MALR). The study coordinator within the MALR was Dr. Saad Nassar, Advisor to the Minister. The study focal points were Dr. Adel Beltagy, Chairman o f the Agricultural Research and Development Council, Dr. Ayman Abu Hadid, President o f the Agricultural Research Centre, and Dr. Mohamed Abbas Mabrouk, Acting President o f the Desert Research Centre. The study would not have been possible without funding from the Government o f the Netherlands and the support o f the Netherlands Embassy in Cairo. The review was led by Ayat Soliman and Alex Kremer. Alex Kremer authored the review, drawing on papers by Lorenzo Marchesini (consultant), Jean-Marc Bisson (FA0 Technical Cooperation Programme), Taheya Sakr (consultant) and Adel Mostafa (consultant). The Peer Reviewers was Gershon Feder. Additional assistance and advice were provided b y Luis Constantino, Miria Pigato, Radwan Shaban, S. Ramachandran, Santiago Herrera, Sudhir Chitale, Ahmed Shawky, Enas Shabaan Mahmoud and Rasha Debes. TABLE OF CONTENTS 0 SUMMARY~....................................................,.,................................,..,.,,...,. EXECUTIVE 1 1 WHATIS THEREVIEWFOR ............................................................................................. ? 4 2 A CHANGING CONTEXTFOR THE MINISTRY OF AGRICUL TURE AND LAND RECLAMATION.................... ...................................................................................................... 7 3 THEMALR AND ITSEXPENDITURES............................ .................................................. 13 3.1 Organisational profile........................................................................................................ 13 3.2 EXPENDITURES OF THE M A L R ......................................................................................... 16 3.3 IMPROVING INVESTMENT EXPENDITURE: A QUESTION OF PROCESS ............... 19 3.4 DUAL ACCOUNTABILITY ........................................................... IN THE GOVERNORATES 22 3.5 STRENGTHENING THE MALR'S MANAGEMENT SYSTEMS ............................................... 22 3.6 STAFFINC.............................................................................................................................~~ 4 FOCUS ON THE RESEARCH CENTRES ............................................................................... 26 4.1 Background ........................................................................................................................ 26 4.2 THEARC ............................................................................................................................. 28 4.3 THEDRC............................................................................................................................. 34 4.4 Conclusions for the research centres...................................,............................................37 5 .' CONCLUSIONS BUILD THE LINKBETWEENFUNDINGAND OUTPUTS.............................40 REFE~NcEs.................. ......................................................................................................... 44 0 SUMMARY EXECUTIVE i. This is a review o f the on-budget expenditure o f the Ministry o f Agriculture and Land Reclamation. I t s modest aim is to describe the broad outline o f the Ministry’s expenditure and to identify key themes and issues. .. 11. The MALR’s share o f total public expenditure nearly halved over the 5 years to 2006/7. H a l f o f the real terms cut in spending has been in the form o f an 80% cut in investment expenditure. The management information systems are not in place that would tell decision-makers how the investment expenditure cuts will affect the farm sector’s performance. 1 ... 11. The post- 1984 hiring freeze has been implemented more completely in the MALR than in other departments. The result i s that 50% o f the Ministry’s staff will retire in the next 5 years. Reliance on temporary staff to fill the gaps will weaken the MALR’s morale, institutional memory and productivity. iv. Overall levels o f public spending on agriculture are not particularly l o w or particularly high by international standards. At LE 10,000, the average non-salary recurrent (Chapter 2) annual budget per employee appears adequate. So the main issue for the MALR i s more one o f expenditure allocation and efficiency than o f the overall budget envelope. V. The MALR’s expenditures reflect the situation o f the 1950s and 1960s, when production was planned and the emphasis was o n traditional crops. Since then, the sector context has changed completely: the M A L R ’ s aim i s to facilitate private sector production and the non-traditional crops are a major source o f growth. So the MALR needs to reallocate spending accordingly. vi. Within the MALR, public expenditure allocations are uncoordinated. The Diwan-e- Aam (or the Minister’s office) has the responsibility for co-ordinating the government’s support for agriculture. But it does not hold the basic information on expenditures, staffing, activities and outputs that would be required for oversight o f the sector. The rigid investment management procedures in place are not at all conducive to a results-oriented investment planning. vii. Frontline fieldworkers in the governorates’ agriculture and livestock directorates are remunerated by the governorate but rely on the Diwan-e-Aam for supplies (Chapter 2) and investment (Chapter 6) funds. This two-fold accountability leads to unnecessary bureaucracy and delays. v ... 111. The expenditures o f the Agricultural Research and Desert Research Centres (ARC and DRC) are a microcosm o f the MALR as a whole. Investment expenditures have fallen significantly, from 20% o f the budget in 2004/5 to 8% in 2006/7 and spending on supplies and services (Chapter 2) i s down to US$lO/person/year. This encourages 1 the A R C to shift its focus towards production for sale o n i t s 24,000 feddan o f prime land (approximately 100 h2). i x. So the MALR has become an “easy target” for expenditure cuts to achieve fiscal savings. The MALR will remain an “easy target” until it shows clearly and convincingly h o w it turns budgetary allocations into services for farmers. But reducing the MALR’s expenditures indiscriminately risks undermining i t s critical oversight, regulatory and knowledge-management functions. X. The sector strategy which the MALR i s preparing will only become reality if the MALR has the necessary skilled staff, management systems and budgets in place. A strategy that proposes ambitious targets without planning the resources to achieve them i s incomplete. xi. To sum up the review in one phrase, the MALR must link funding to out suggestions in this direction are proposed below. Ideas for consideration A.l. Creating a Management Information System which will permit the Minister and senior officials oversight o f the Diwan-e-Aam, Service Authorities and Economic Authorities under their authority. I t would cover: the responsibilities o f each organizational unit (OU), targeted and actual outputs from each OU, staffing levels, and budgeted and actual expenditures. This MIS would provide the information to link expenditures with activities and results. As a subset o f the MIS, setting up a human resources management system, geared towards maximizing the competence and efficient use o f the staff. A.2. Derive unit costs for the delivery o f standard agricultural service packages, as used in the health and education sectors. For example, h o w should it cost to deliver extension advice per farmer per year, pest management services per feddan per year or veterinary care per livestock unit per year ? U s e these as a basis for Chapter 1 and 2 budgeting. A.3. Building o n the recent restructuring study executed under the auspices o f the Ministry o f Human Resource Development, map the functions o f the various public organisations under the M A L R ’ s responsibility. O n the basis o f this exercise it would be possible to identifl: 0 opportunities for rationalisation and restructuring; 0 skills gaps and key positions; a performance monitoring system, to be integrated into the MIS. A consultancy company with international experience o f organisational development may be required to support this process. 2 A.4. O n the basis o f the above, discussing with C A O A a staffing strategy to fill key vacancies with new hirings, whilst allowing the overall process o f staff reduction to continue. This may involve transferring the work done by key temporary staff into permanent positions. B.1. Ensuring that the Diwan-e-Aam’s Economic Affairs Department has t he opportunity, s k i l l s and resources to perform economic investment appraisals. B.2. Conducting priority ex-post economic evaluations for land reclamation and researcl- expenditures. B.3. C r e a t e an expert committee with the trust both o f the M o E D and the MALR t c quality control the appraisal dossiers and makes appropriate recommendations. B.4 O n this basis, developing a mutual understanding between the MALR and the MoEC that o n the one hand investment proposals will be prioritized and o n the other they will be considered for funding o n the basis o f their merits. I C . l Developing contract-programmes between the MALR and each o f the Service Authorities and Economic Authorities, with output indicators linked t o budget inputs. I C.2. Deconcentrating non-staff operating budgets for Governorate staff to Governorate level. D.1 Reorganization o f accounts and creation o f an M I S system that relates financial inputs to service outputs. allocating funds through priorities through bottom-up analysis o f farmer priorities (ii) (competitive) contract-programs; D.4 Dividing the A R C and D R C each into three cost-centres: A core cost-centre: generating and disseminating knowledge for public goods (e.g. environment, on-farm water management, zoo noses) and social objectives (e.g. smallholder agriculture). This cost-centre would be funded through the MALR’s general budget, perhaps through a contract-programme arrangement. A production cost-centre: production for sale to farmers. This cost-centre 3 I would be self-financing from sales revenues. 0 A partnerships cost-centre, which would conduct research and dissemination activities commissioned by non-governmental entities, for example the private sector, international research bodies and donor organizations. I Each cost centre would bear i t s own variable costs and a share o f the centres’ fixed costs, based upon a transparent allocation formula. 1 WHAT I S THE REVIEW FOR? Rationale for the review 1. Agriculture i s at the heart o f Egypt’s economic and social development. I t accounts for around 14% o f the Gross Domestic Product (GDP), 20% o f the total exports and 30% o f the labor force. Close to 60% o f the total population lives in rural areas and most o f them depend on agricultural activities for their livelihoods. In addition to providing the basic food needs o f the population, agriculture produces the raw materials required for agro-industry. 2. The Egyptian farmer has achieved great increases in land productivity. Wheat yields in the early 2000s reached 6.3 - 6.5 tonnes per hectare, among the highest in the world and up from 4.8 - 5.4 tonnes per hectare in the early 1990s. Yields overall increased by 23% over 1991-2003’. 3. Since the 1980s the agricultural sector has been - in the Ministry’s own words - “at the forefront o f other sectors o f the national economy in initiating liberalisation and privatisation reforms.” The philosophy has been that the private sector and free markets perform commercial activities more effectively than the state; the role o f the state is then to focus on providing public goods such as regulation, information and knowledge. 4. This raises the question o f how the Ministry o f Agriculture and Land Reclamation (MALR) should adapt to the new context. At the time o f writing the MALR i s undertaking a major strategic review, entitled, “Upgrading the Agricultural Strategy 2030.” The Agricultural Research and Development Council is co-ordinating the strategic review. 9 working groups have been established. Each has produced an analysis o f the current situation and listed objectives for the future and constraints upon development. 5. A condition for the success o f any strategy i s that resources should be focused upon priority objectives. This review o f the expenditures o f the MALR can therefore serve as an input into the MALR’s strategic planning. 6. I t has not always been easy for those working on agriculture to obtain a clear picture o f the MALR’s expenditures. At a time o f rapid change in the sector environment and ’ Staff calculation: weighting each crop by i t s value. 4 budgetary envelopes it was felt that it would be useful simply to set out the M A L R ’ s main expenditure trends in a single profile. It i s therefore hoped that this review will support the annual budgeting work o f the Ministry o f Finance and the MALR. This would be achieved by providing an objective reference point o n key financial trends and issues. 7 . It must be pointed out from the outset that the senior management o f the MALR is generally aware o f the issues raised in this review and would welcome the implementation o f any sound and long-term solutions, as soon as possible. However, several o f these issues are wider in scope than the MALR and many o f the possible solutions would require the intervention o f other public entities with broader mandates. Definitions > In this report “MALR” or “Ministry” means all the entities dependent upon the Minister o f Agriculture and funded by the budget under his responsibility. P “Diwan-e-Aam” refers to seven administrative sectors, sometimes known as the “Minister’s Office”. P The Diwan-e-Aam plus the Service Authorities plus the Economic Authorities make the MALR. Scope of the review 8. Public expenditure on the agricultural sector includes the following categories o f spending: (a) In the Ministry o f Agriculture’s budget and executed by the Diwan-e-Aam (e.g. the preparation o f new legislation); (b) In the Ministry o f Agriculture’s budget, but executed by a Service Authority or an Economic Authority (e.g. a research programme o f the Agricultural Research Centre (ARC); (c) In the budget o f a Governorate, and executed by the Governorate’s agricultural officers; (d) In the budget o f another Ministry (e.g. the construction, operation and maintenance o f public irrigation schemes); or (e) In the form o f off-budget deficits o f Economic Authorities under the Ministry o f MALR (e.g. any P B D A C deficits incurred in providing services to farmers, and covered by growth in i t s liabilities). ( f ) In the form o f trading deficits o f parastatals under other ministries providing services to farmers (e.g. losses incurred by the National Cotton Company and the National Sugar Company as a result o f their sales o f inputs to and purchases o f crops from farmers). This form o f expenditure could be quite important where inputs or outputs are subsidised, which i s the case for electricity and fuel, for example. 5 This review covers only (a) and (b) above. A limited amount o f information will be presented on (c). For a more in-depth discussion o f public expenditures in the irrigation sector (d), the reader is referred to the note “Cost-Effectiveness and Equity in Egypt’s Water Sector” (World Bank, 2005), which is published o n the Ministry o f Finance’s website: www.mof.gov.eg . 9. The review’s modest objective i s to be an ‘‘issues paper”, in other words to outline the main features o f current expenditure trends and to identify key concerns and topics for possible future analysis. I t was f e l t that the MALR itself should have the opportunity first to consider the macro-level picture and thereafter identify any micro- level issues which would merit further analysis. 10. There were inconsistencies between expenditure data from different sources. The authors have made every endeavour to reconcile different sources. However, discrepancies between this review and other documents are inevitable. 11. A section o f the review focuses on the MALR’s research expenditures: mostly through the Agricultural Research Centre (ARC), but also through the Desert Research Centre (DRC). They are o f particular interest to the MALR, not only because o f their size, but also because they bring out the issues raised by the core and quasi-commercial activities o f the MALR. The review o f research expenditures i s an example o f the more micro-level approach which could be extended to other areas. Outline of the review 12. The note i s organised into 5 chapters. The Introduction describes the purpose and scope o f the review. Chapter 2 explains how the context o f the agricultural sector has changed, and the adjustment challenge that such change poses for the MALR. It describes h o w the MALR i s thinking about the future. Chapter 3 describes the structures o f the MALR and presents expenditure trends for the MALR down to Sector or Authority level. I t benchmarks Egypt’s public spending on agriculture against that o f other middle-income countries. It identifies some key issues to be addressed. Chapter 4 zooms in on the research institutions o f the MALR, the Agricultural Research Centre and the Desert Research Centre. Chapter 5 presents some ideas for senior decision-makers’ consideration. 6 2 A CHANGING CONTEXT FOR THE MINISTRYOF AGRC I ULTURE AND LAND RECLAMATION The context in which the MALR now works has changed greatly since the Ministry took shape. In brief, the MALR was structured to be an instrument o f socialist planning and job-creation and now finds itself charged with facilitating market-led growth. This trend has created new priorities for the MALR which in turn require a reallocation o f MALR expenditure. Market reforms mean less expenditure needed on managing production 13. Until the 1980s the MALR had the responsibility o f planning and enforcing farmers’ cropping patterns. Preparing the land use plan, having i t approved, enforcing the plan and approving the quotas o f inputs, credit and output sales would have been the main day-to-day activity o f agriculture department staff. However, during the late 1980s cropping patterns were liberalised, except for cotton, rice and sugarcane. Currently the old controls only apply to rice, partly as a way o f managing the demand for irrigation water. 14. Managing the distribution o f subsidised inputs used to be a major activity o f the Ministry and its agencies in the field. But the government quickly withdrew from this function during the 1990s. Until 1991, the Principal Bank for Development and Agricultural Co-operatives (PBDAC), an Economic Authority under the Ministry o f Agriculture, had the monopoly o f fertiliser retailing. By 1994 i t s market share had fallen to lo%, while co-operatives handled 20% and private traders 70% (Saad, 2002). This naturally reduced the responsibilities o f the PBDAC, even though i t s employees s t i l l number around 70,0002. 15. The Government reduced its involvement in cotton production and marketing. Until the early 199Os, the public sector had a monopoly o f cotton marketing, which it used to tax farmers through l o w producer prices. By 1994, the private sector was allowed to trade between the farmer and the ginneries, although not to export cotton. By 1995/6 58% o f cotton was being delivered to gins by the private sector, and the share o f co-operatives had fallen from 85% the previous year to 17%. By 2001, 2 out o f 5 ginning companies had been privatised and 70% o f exports were in private sector hands (Mostafa and Holtzman, 2002). Until the 1990s the MALR had sold pesticide to farmers and performed in-field applications. By 2001, after providing training to pesticide companies and farmers, it had transferred these functions to the private sector, limiting i t s own role to regulation. 16. Egypt’s external trade environment also has implications for the role o f the MALR. The Ministry’s focus in the past was very much upon ensuring the production o f traditional crops through the planning system, but there is growing export potential for non-traditional crops. Egypt i s party to several international trade agreements under which agricultural trade liberalisation has been implemented during the last Source: MALR 7 decade: the World Trade Organisation (WTO), the Egypt-EU Association Agreement, the Greater Arab Free Trade Area (GAFTA), under which all inter-Arab trade was to be free by 2005, and the Common Market for Eastern and Southern Africa (COMESA)3. These international trade agreements have opened markets, particularly in the EU and the Gulf, to Egyptian exporters. We estimate, for example that 29% o f the EU’s MFN tariffs in 1995 for agricultural products were over 10%. B y 2007, however, this had fallen to 3% under Egypt’s preferential trade agreement with the European Union4. Trends in public administration 17. Although agricultural co-operatives used to be a big expenditure item for the MALR, they are now o f limited relevance. Following the introduction o f a centrally planned economy in the 1950s and 1960s, around 6,000 co-operatives were formed to serve as instruments o f the planning process: (i) directing and controlling agricultural production down to the individual farm level; (ii) providing farm inputs-including irrigation, pest control and extension services-to farmers at regulated and subsidized prices; (iii) purchasing farm products at fixed prices; and (iv) performing some other social and economic functions in the local community. With the planning approach now defunct, however, the co-operatives’ main activity i s fertilizer distribution. But it i s said that some 40,000 officers work as managers, clerks and accountants in the co- operatives with their salaries being paid by the state. Only an incentive payment i s drawn from the co-operatives (ibid.). 18. The MALR’s staff levels reflect Egypt’s old employment policies. During the 1970s and 1980s the Egyptian Government offered a guarantee o f public employment in the public service to university graduates and then to graduates o f vocational secondary schools and training institutes. It was also accepted that ministries had a social obligation to provide employment to some less skilled workers, even if their activities did not require it. The Ministry o f Agriculture provided tens o f thousands o f jobs during this period; there are now just over 20,000 staff in the Ministry proper, the diwan-el-aam, and around 34,000 in the Agricultural Research Centre, around 70,000 in the PBDAC and also around 20,000 temporary staff, After the balance o f payments crises o f the early 1 9 8 0 ~ a~hiring freeze was progressively enforced on the MALR from 1984. 19. Government i s committed to doubling civil servants’ salaries over 2005-2010 -- a commitment made at the start o f President Mubarak’s current term. Within this framework, the Government announced a 30 percent increase in base salaries in May 2008. Since the base wage i s about 30 percent o f the total take-home pay o f civil 3 On the imports side, there were significant reductions in the level o f bound tariffs, from an unweighted average for agricultural products of 62% in the pre-Uruguay Round base period to around 28% by 2004 (FAO, 2000). The level o f applied tariffs has fallen more slowly: the unweighted average was 19% in 1998 (ibid.) and 16% in 2007 (IFPRI, 2007). Source: author’s calculations using the TRAINS database, from the WITS application, with the WTO Agriculture method for calculating the ad valorem equivalent o f protection measures. Missing values for 2007 removed. 8 servants, the 30 percent base salary increase will increase the total wage bill by 10 percent in 2008. After 5 years, in 2013, all allowances related to the base salary will have to reflect the 30 percent increase. 20. The evolution o f the M A L R ’ s expenditures will also need to reflect a future emphasis on deconcentration and decentralisation o f government functions towards Governorate and District level. This direction was confirmed at the political level in the 2007 Party conference and i s being translated into an operational strategy by the Ministry o f Local Development. The evolution of market conditions 21 During the 1950s to the 1980s, the Ministry’s focus was upon planning smallholder/Old Lands production o f traditional bulk commodities. However, new market conditions for agricultural products are creating demand for a different kind o f agricultural service. 0 In the face o f high world commodity prices and tight international cereals markets, there is a political demand for larger commercial farms to raise Egypt’s self-sufficiency ratio in basic foodstuffs; 0 Growing market opportunities for high-quality Egyptian fruit and vegetables call for quality-oriented supply chains. 22 Self-sufficiency i s back on the political agenda. Food represents over 15% o f Egypt’s import bill (World Bank, 2008b). The country i s typically just over 50% self- sufficient in wheat and maize, and practically 100% self-sufficient in rice’. Domestic crop production is relatively stable from year to year because it i s nearly all irrigated from the Nile. 23. The tightening o f food markets during 2006-8 i s a major concern for Egypt. For consumers, higher food prices are superimposed upon accelerating inflation. Overall inflation in Egypt was 11% in 2007 and 14% in early 2008 (World Bank, 2008b). Relative to overall inflation, the food price index increased by 3% in 2007 and 6%/year in early 2008. These increases are felt most keenly by the poorest 40% o f the population, for whom food represents 45%-50% o f consumption. The trade and industry minister and the agriculture minister met farmers and exporters in July 2008 to discuss h o w to stabilize prices and increase production. The food price increases also have a fiscal aspect: in 2007, food subsidies cost 4% o f the government budget. This cost increases as the gap between market procurement prices and subsidised consumer prices widens. 24. So the Government has announced i t s intention to raise Egypt’s self-sufficiency in wheat to 75%6. This i s to be achieved by a shift towards commercial cereals farming, through a one-sixth increase in the area under wheat, measures to encourage the consolidation o f smallholdings and accelerated yield increases. FAOSTAT, 2003 data. 6 Daily News - Egypt, August 11,2008 9 25. There has also been rapid growth in demand for quality-differentiated fruit, vegetables and livestock products. This demand has come from the increasing numbers and purchasing power o f the Egyptian urban middle class, the tourist industry, and improved access to European and Gulf markets. Export growth for these commodities i s anticipated at 5 percent per year. From 1995 to 2003, the U S $ value o f horticultural exports increased by about 27 percent, whereas the US$ value o f traditional agricultural exports declined by about 7 percent. 26. However, the lack o f adequate storage, transportation, and the lack o f processing and marketing infrastructure constrain horticulture development. Post-harvest losses are estimated for at 60 percent for tomatoes, 40 percent for vegetables and 20 percent o f fruits (World Bank, 2006). The rapid rise o f supermarkets (Traill, 2006) and processed food products will increase the demand for fruit, vegetable and animal products that meet specific quality and timing characteristics. 27. As well as supporting the production o f bulk commodities, therefore, there i s an growing need for the MALR to support farmers with quality regulation and assurance, product innovation, marketing, advice on post-harvest issues and the integration o f smallholders into supply chains. These functions were not such high priorities when the ministry took shape in the 50s, 60s and 70s. The evolution of resources and technologies on the supply side 28. Agriculture’s success will increasingly be measured in terms o f water-use efficiency. The current water availability o f about 5,000 m3per feddan per year i s likely to drop to 4,000 m3per feddan per year by 2025’ - a decrease by 20 percent. Irrigation water will therefore be increasingly scarce. So it i s imperative to increase value-added per cubic metre o f water, meaning a shift towards intensive (drip and sprinkler) irrigation and high-value cropping. 29. The growing importance o f the New Lands and improved irrigation technologies will reinforce the MALR’s focus on quality-based supply chains. The New Lands are n o w around 20% o f Egypt’s crop land. The MALR’s target i s to expand them by 150,000 feddan per year, thus doubling their area by 2017. Target areas are located in Upper Egypt and Oases (New Valley Governorates), East and North o f the Suez Canal and in the South Valley. In the new lands, soils are mineral poor, sandy and calcareous, although well aerated and therefore unsuited to fieldcrop cultivation but highly suitable for the production o f horticulture crops. Irrigation schemes in the new lands are designed based on the understanding that farmers will use modern, high efficiency, irrigation technology (such as center pivots, linear move and drip irrigation). This level o f technology requires considerable on-farm investment. 30. One effect o f climate change will be to increase the focus on the New Lands relative to the O l d Lands. Sea-level rise will significantly reduce land availability in the northern delta, through flooding (and salt-water intrusion. 7 Source: Rural Development Policy in Egypt towards 2025, Alterra-rapport 1526, I S S N 1566-7197 (2008) 10 http://geology .com/sea-level-risehile-delta. shtml 31. Again, these supply-side trends mean that the MALR needs to reallocate funding to new priorities: horticulture, on-farm water management, and post-harvest supply chains. The MALR ’s strategic priorities 32. Government’s strategy for agricultural development i s contained in a 2003 document titled: “The Strategy o f Agriculture Development in Egypt until the Year 2017”. MALR i s presently updating the 2017 strategy so as to extend i t s horizon to the year 2030, and to adjust i t s contents to the Socioeconomic Development 6th Five-Year Plan 2007/08-2011/12. 33. The specific objectives o f the 2017 strategy are: (a) the expansion o f cultivated area by reclaiming new lands (horizontal expansion) (b) to increase irrigation efficiency in the old lands, and yields in both the old lands and the new lands (vertical expansion) (c) the increase in value added o f agricultural production (d) the promotion o f agricultural exports. 34. The instruments proposed to implement the 2017 strategy are very different from those o f the pre-reform period. The Ministry had once intervened by administering production plans, backed up by the distribution o f subsidised credit and inputs. As Table 1 shows, however, the activities proposed for 2003-2017 are focused regulation, information, knowledge and institutions, as well as public investment in irrigation. In other words the MALR wants to reposition itself as a provider o f public 11 goods, facilitating market-led growth, while farmers and other private operators make the production decisions. Table 1. The activities in the 2003-2017 strategy concentrate on facilitating private sector growth Instruments Direct involvement in Facilitating the private sector production Provision Planned Public Regulation Technology Support Informatio Other o f inputs production physical and market development for farmer n services and investment reforms and transfer groupings subsidies Objectives 1 - - - - - - - - Expansion o f cultivated area - - 1 - 2 1 - - Increase irrigation efficiency - 1 - 2 1 - - Increase value- added of - - - 3 2 2 1 2 production Increase exports - - - - - - 2 1 Conclusion 35. Agriculture is n o w operating in a new context, and the Ministry’s strategy has adapted to that context. The question for the expenditure review is: h o w can Government adapt the M A L R ’ s expenditure patterns to the new strategy ? 12 3 THEMALR AND ITS EXPENDITURES 3.1 Organisational profile Figure 2. Pr. ipal agriculture expenditures in FY 2006/7 j Minister of Agriculture Development I I 1 Diwan-eAam bn I Economic Authorities LE6.0 bn 1 Service Authorities LE1.1bn I Governorates Administrative bodies 36. The core o f the MALR i s variously known as the “Diwan-e-Aam”, the “Minister’s Office”, the “Ministry” or the “7 Sectors”. I t s total on-budget expenditures in FY06/07 were LE 681 million. It consists o f the: (a) Authorities Sector and Minister’s Office Affairs; (b) Economic Affairs Sector (c) Agricultural Guidance Sector; (d) Agricultural Services Sector; (e) Land Reclamation Sector; (f) Development o f Animal Wealth Sector, and, (g) Financial and Administrative Affairs Sector. Each of the 7 MALR Sectors consists o f a varying number o f Central Departments (26 in total) and each Central Department i s composed o f several General Authorities (109 in total)’. 37. The Diwan-e-Aam employs around 20,000 permanent staff and represents the Ministry’s headquarters function. However, it also includes secondees to senior positions in agriculture Directorates at governorate level (normally one Under- secretary and two Deputy Under-secretaries per governorate). For historical reasons, 8 These General Authorities are sub-units o f the 7 Departments and should not be confused with the Service Authorities or Economic Authorities, some of which are also titled ‘General Authorities’. 13 the Desert Research Centre (DRC) i s usually listed together with the Diwan-e-Aam as another Administrative Body, even though it has more in common with Service Authorities such as the ARC. I t s on-budget expenditures in FY06/07 were LE 56 million. Service and Economic Authorities 38. Two other categories o f organisation are included in the budget o f the MALR under the Minister’s responsibility: the Service Authorities and the Economic Authorities. Different documents sometimes name and group them differently. This review will refer to the following : Service Authorities: (a) Agricultural Research Centre (ARC) (b) General Authority for Land Reform (GALR) (c) Fund for Cotton Improvement (FCI) (d) General Authority for Soil Improvement (GASI) (e) Fund for Agricultural Land (FAL) (f) General Authority for Price Stabilisation (GAPS) (8) General Authority for Veterinary Services (GAVS) (h) General Authority for Fisheries (GAF) (i) General Authority for Lake Nasser (GALN) Economic Authorities (i) General Authority for Egyptian Agriculture (GAEA) (k) Principal Bank for Development and Agricultural Co-operatives (PBDAC) (1) General Authority for Construction and Development Projects (GACDP) 39. In terms o f staffing and expenditure, the Service and Economic Authorities are much larger than the Diwan-e-Aam. The total on-budget expenditures o f the service authorities were LE 1,098 million in 2006/7. Those o f the economic authorities were LE 7,847 million. Using the average wages and compensation cost per employee for the Diwan-e-Aam’, one can estimate that the Service Authorities employ around 65,000 people in total and the Economic Authorities around 15,000 people. However, the Principal Bank for Development and Agricultural Co-operatives, an Economic Authority, i s said by senior MALR staff to have approximately 70,000 employees. This presumably includes a large number o f part-time co-operative employees. Other entities 40. Three funds are mentioned as distinct entities in some documents, but their expenditures do not appear separately. These funds are the Cotton Insurance Fund, the Livestock Insurance Fund, and the Reclamation Land Fund. LE 10,076 per person in FY 06/07. 14 41. Each Governorate has a budget for agriculture which lies outside the budget and responsibility o f the Minister o f Agriculture. (It belongs to the budget o f the Ministry o f Local Development - MOLD).Governorates’ total agricultural sector expenditure in FY 2006/7 was LE 1.3 billion. Another LE 0.3 billion was spent on the Governorates’ veterinary directorates. Assuming that average salary costs in the Governorates are the same as for the Diwan-e-Aam, total employment in Governorates’ agricultural and veterinary services would be no less than 29,000. 42. Other major expenditures on agriculture l i e outside the agriculture sector budget altogether. The subsidies o f the Ministry o f Water Resources and Irrigation (MWRI)” for irrigation amount to around LE 1.8 billion per annum (World Bank, 2007). Despite the liberalisation o f most agricultural markets, the Government still intervenes with support prices for wheat and administered prices for sugar (Casing et al., 2006). The cost to the budget o f price support varies from year to year, and has not been calculated for 2008. But with high world prices, the transfer from Government to farmers through price support i s likely to be low. 43. So, as Figure 3 shows, there are several different definitions o f “agriculture public expenditure”. The Diwan-e-Aam i s the focus o f the senior officials in Cairo headquarters, but it represents less than a tenth o f the MALR’s LE 7.8 billion spending; the vast majority belongs to the Service and Economic Authorities. Add in the agriculture and veterinary sectors in the Governorates and the total comes to LE 9.4 billion. Irrigation subsidies bring the total to around LE 11 billion. Figure 3 , Four different definitions of public expenditure on agriculture LE 681 million Agriculhrre and Irrigation c. LE 11 billion lorecurrent plus amortized capital expenditures on quasi-private goodshervices) 15 3.2 OF THE MALR EXPENDITURES 44. This section will see how Egypt’s spending through the MALR and Governorates’ agricultural and veterinary directorates matches up against other countries’ spending on agriculture. Then it will ask how spending i s changing over time, and see where i s the growth and where the decline in expenditure. International comparisons 45. H o w does Egypt’s spending on agriculture match up against other countries’ ? A good indicator i s the value o f public spending on agriculture as a percentage o f the value o f agricultural GDP. We compared Egypt’s public spending on agriculture with that o f other middle-income countries with per capita GDP o f less than $10,000 per year. (Unfortunately the most recent data are from 199911.) Public spending on agriculture ranged from 1% o f agricultural GDP in the Philippines to 23% in Tunisia. Egypt was in the middle o f the range, at 11%. The reductions in public spending on agriculture since 1999 w i l l probably have pulled Egypt down, but it i s still within the normal range. Figure 4. Public expenditure as a percentage o f agricultural value-added, 1999 20% 15% 10% 5% 0% Note: middle-income countries with GDP per capita < $10,000. Source: World Bank Public Spending dataset Trends in expenditure 46. The MALR’s share o f total public expenditure nearly halved over the 5 years to 2006/7. As Table 2 shows, the real expenditure o f the MALR and i t s Authorities (row 5) fell by 31% over 2001/2-2006/7. The MALR’s Diwan-e-Aam, i t s Service Authorities and the Economic Authorities all experienced expenditure cuts. Total 11 Source: World Bank Public Spending Dataset 16 public ex enditure in Egypt, however, increased by 18% in real terms between 2001 and2006 p2 . 200 112002 200512006 200612007 1. MALR Diwan-e-Aam 1,011.7 573.8 536.7 2. 9 Services Authorities plus DRC 1,007.1 932.9 908.2 3. Sub-total (1+2) I 2,018.8 I 1,506.7 I 1,444.9 I 4. 3 Economic Authorities I 6,960.2 ~ -1 4,418.4 I 4,737.0 I 5. Sub-total (3+4) 6. Governorates 7. Other en ti tie^'^ no data available 8. Sub-total 111 (6+7) Total (Sub-totals I+II+III) 47. Table 3, Table 4 and Table 5 show how the expenditures o f the Diwan-e-Aam, the Service Authorities and the Economic Authorities have changed over 200 1/2-200617 in real terms, The striking point i s that the total expenditure o f the MALR has fallen by a third while staff expenditure (chapter 1) has been maintained and purchases o f goods and services (chapter 2) have only fallen slightly. This i s because investment expenditure i s now approximately 70%, 60% and 100% lower in real terms for the Diwan-e-Aam, Service Authorities and Economic Authorities respectively. The total o f investment expenditure in real terms f e l l by around 80%. Note that the years under comparison, 2001/2 and 2006/7, are five years apart, so this i s not the result o f variation in investment spending across the planning cycle. 48. Within Chapter 1, the savings from retirements are being cancelled out by increases in salary bonuses. These were around 30% o f basic salary in FY 2006/7, 40% in FY 2007/8 and 60% in FY 2008/9. The MALR i s negotiating for 75% in FY 2009/10. These bonuses are officially described an incentive for extra work, but are applied to all staff. They are said to be usually higher in revenue-generating ministries than in service ministries such as the MALR, but this could not be verified. 49. The biggest single expenditure flow i s the Chapter 4 (subsidies, grants and social benefits) spending o f the General Authority for Construction and Development Projects (GACDP). This was LE 5.0 billion in 2001/2, LE 3.8 billion in 2005/6 and 12 General government final consumption expenditure (constant 2000 US$). Source: WB/GDI database. 13 i.e. Protecting Biological Diversity and Nature Views & National Water Research Center 17 LE 5.0 billion in 2006/7. In 2006/7 this item was 64% o f the MALR’s entire expenditure and 7 times bigger than the Diwan-e-Aam’s expenditure. 50. The main job o f the GACDP i s to execute the non-irrigation components o f land development projects. This expenditure represents capital investment. However, since GACDP i s an Economic Authority, it i s managed as a Chapter 4 subsidy to the GACDP rather than as a Chapter 3 public investment project. So it is not subject to the usual scrutiny and control o f the M o E D M A L R investment budgeting process. 5 1. The MALR may therefore wish to conduct a detailed public expenditure review o f the GACDP, given the high volume o f expenditure. This review could examine the economic rate o f return o f land development spending, and the cost-efficiency o f the GACDP’s execution. It could also assess the procedures in use to identify, appraise and evaluate land development investments. Table 3 Expenditures by budget chapter, in constant FY 200112 prices. M A L R Diwan-e-Aam Ewenditures F Y 2001102 F Y 2005106 F Y 2006107 Chapter 1 - wages and compensation o f employees 129.8 159.1 153.1 Chapter 2 - purchase o f goods and services 111.0 103.3 124.0 Chapter 3 (old) - investment 563.3 Chapter 3 (new) - interest 10.6 5.4 Chapter 4 - subsidies, grants and social benefits 207.6 6.2 11.3 Chapter 5 - other current expenditures 0.4 0.4 Chapter 6 - investment 203.3 166.9 Chapter 7 - acquisition o f financial assets 23.7 18.2 Chapter 8 - Repayment o f loans 67.2 57.4 Total MALR Diwan-e-Aam in Constant PricesI4 Source: Basic data sourced in May 2008 from the MoF by the PER-Agriculture Issues Mission, CPI Table 4. Nine Services Authorities and DRC. Expenditures by Budget Chapter, in Constant FY 2001/02 Prices all values in LE million I Expenditures I I FY2001102 I FY2005106 I FY2006/07 I Chapter 1 - wages and compensation o f employees 475.8 547.9 540.6 Chapter 2 - purchase o f goods and services 161.6 98.9 120.3 Chapter 3 (old) - investment 286.3 14 The correction factor applied to nominal values so as to obtain the values in constant prices of FY 2001/02 is based on the consumer price index (CPI). FY 2001/02 = 1.0000, FY 2005/06 = 1.143, FY 2006107 = 1.269. 18 Exoenditures ~ I all values in LE million FY 2001/02 I FY 2005/06 I FY 2006107 Chapter 3 (new) - interest 0.3 0.3 Chapter 4 - subsidies, grants and social benefits 83.4 28.4 62.1 Chapter 5 - other current expenditures 70.8 76.7 Chapter 6 - investment 177.6 105.3 Chapter 7 - acquisition o f financial assets 4.8 0.0 Chapter 8 - Repayment o f loans 4.0 3.1 Total Services Authorities in Constant Prices I Source: Basic data sourced in M a y 2008 from the MoF by the PER-Agriculture Issues Mission, CPI I Table 5 Expenditures by budget chapter, in constant FY 2001/2 prices. M A L R Economic Authorities Expenditures all values in LE million FY 2001/02 FY 2005/06 FY2006/07 Chapter 1 - wages and compensation of employees 86.5 118.1 Chapter 2 - purchase of goods and services Chapter 3 - investment (OW Chapter 3 - interest (new) Chapter 4 - subsidies, grants and social benefits Chapter 5 - other current expenditures Chapter 6 - investment Chapter 7 - acquisition of financial assets Chapter 8 - Repayment of loans Total Economic Authorities in Constant Prices Source: Reworked constant prices, other data sourced in May 2008 from the MoF by the PER-Agriculture Issues Mission 3.3 IMPROVING INVESTMENT EXPENDITURE: A QUESTION OF PROCESS 52. The investment expenditures o f the MALR have decreased much faster than those o f the Egyptian Government overall. The investment expenditures o f the Egyptian Government overall rose from LE 19.8 billion in FY 2001/2 to LE 23.8 billion in FY 20O6/7ls, a decline in real terms o f only 5%. 53. The largest source o f savings within the MALR has come from requiring the Economic Authorities to finance any investment from their own resources. The IsPurchase o f non-financial assets. http://www.mo f.gov. eg/English/publications/Reports+and+Indicators~gyptian+Economic+Monitor+- +March2008.htm 19 ending o f the Economic Authorities’ budgetary investment spending accounted for 49% o f the fall in the MALR’s investment expenditure o f this, 85% was due to the General Authority for Construction and Development Projects (GACDP) and the remainder to PBDAC. The cut in budgetary funding for PBDAC investments i s in line with the idea o f the bank as a (potentially) commercial operation. The GACDP cut represents a shift away from public infrastructure investment through this entity. 54. The cut in public investment through the MALR i s part o f a broader trend, in which private investment in the sector, though low, i s beginning to fill the gap. Agriculture attracted 5.0 percent o f total investments in FY 2006/0716, which i s relatively low compared to the sector’s contribution to GDP. In FY 2006/07 total investment in agriculture amounted to LE 7.8 billion, a value that has remained essentially constant (in nominal terms) since FY 2004/05. Public investment in agriculture, estimated at LE 2.4 billion in FY 2006/07, has declined since FY 2000/01 when it was LE 2.9 billion; private investment increased from LE 4.3 billion in FY 2004/05 to 5.4 billion in FY 2006/07.” 55. The investment budgeting and planning process i s such that one cannot say whether the investment cuts w i l l significantly affect the agriculture sector’s performance. The MALR responds to the MoED’s circular with a long-list o f investments proposed by Diwan-e-Aam sectors and aggregated by the Economic Affairs Sector. The M o E D responds with a lower budget envelope. The MALR’s second-round proposal i s lower than the initial proposal, the reductions usually being achieved by cutting the cost o f individual projects rather than eliminating projects altogether. The MOED then determines the final l i s t o f approved investment projects. The MALR may make within-year reallocations o f up between projects o f up to 20% o f the project value. Any greater reallocation requires written approval o f the MoED. 56. The MoED’s counter-proposals are usually much lower than the MALR’s initial proposal. For example the MALR’s request for 2007/8 was for LE 2.6 billion, and the MoED’s counter-proposal was LE 0.8 billion. Perhaps the most striking feature o f the investment planning process i s that little if any analysis o f the rationale and economic justification for the projects i s shared either within the MALR or between the MALR and the MoED. The process therefore seems like “bargaining” rather than a collaborative effort to focus public resources on productive investment. It i s nobody’s fault; all those involved are doing their jobs to the best o f their abilities given the procedures in place. 57. Such a budgeting process systematically weakens the quality o f investments. It discourages the MALR from being realistic and selective in i t s initial proposal. I t gives the MoED an argument for cutting MALR investment budgets. I t encourages the MALR to spread i t s budget thinly over a number o f projects because unfinished projects w i l l have a priority claim on funding the following year. The MALR does 16 Source: Egypt State Information Service (2008) and the Egyptian Economic Monitor (March 2008). 17 Source: Review of the Public expenditures for Agricultural Research in the Ministry of Agriculture and Land Reclamation, Table 1Annex, FA0 Report (2008). 20 not have the authority to reallocate funding between projects or to create a reserve, so budget i s tied up in problem projects while successful projects run out o f funds. The outcome i s weak prioritisation, high administrative costs, a breakdown o f trust within the administration, slow investment implementation and a large amount o f costly capital tied up in incomplete investments. Construction projects tie up funds in unusable incomplete facilities. Research programs, which by their nature require 4-5 years’ continuous funding, are interrupted before they can deliver conclusions. 58. I t should be emphasised that these problems are common to many line ministries. Indeed, one o f the perceived advantages o f the new block grants from the Ministry o f Local Development to Governorates i s that it gives local government the resources to complete unfinished line ministry investments. Box: Balouza The unpredictability o f investment allocations creates inefficiency and waste. The difficulty o f reallocating allocations adds to the problem. The Balouza Research Station o f the Desert Research Center (DRC) i s a single illustration o f a broader malaise. Between Port Said and Lake Ardabil in North’Sinai, the Balouza Research Station i s intended to provide cropping models for settler beneficiaries o f the nearby land development “mega-project”. In fiscal year 2007/8, LE 11 m i l l i o n were allocated under Chapter 6 to begin construction o f the station. In FY 2008/9, however, only LE 1 m i l l i o n were allocated, bringing construction to a halt. The result i s that significant costs have been spent, zero benefits are being generated, and line ministry officials are discouraged from putting effort into rational investment planning in future. 59. A strengthening o f the investment budgeting process could involve: 0 Ensuring that the Diwan-e-Aam’s Economic Affairs Sector has the appropriate skills, resources and opportunity to be involved in the preparation o f economic investment appraisals. This should apply to the projects o f the Service and Economic Authorities as well as o f the Diwan-e-Aam. Priority economic evaluations being conducted for land reclamation and agricultural research activities. Both land reclamation and agricultural research will be at the heart o f the MALR’s two-pronged strategy o f “horizontal” and “vertical” expansion. B o t h will be key components o f any strategy to increase food self-sufficiency. In both cases the required data from past years are available and major expenditures are being discussed for the future. Ensuring that a party who has the trust both o f the M o E D and the MALR vets the appraisal dossiers and make appropriate recommendations; O n this basis, developing a mutual understanding between the MALR and the M o E D that investment proposals will be prioritised o n the one hand and considered according t o their merits o n the other; and that proposals to reallocate funds between projects will normally be approved quickly. The current investment planning process makes it difficult to judge whether the cuts in MALR investment funding are justified. The MALR has ambitious goals for agriculture. 21 I t i s therefore recommended that the MALR strengthen the rationale and economic justification for its investment plans. 3.4 DUAL ACCOUNTABILITY I N THE GOVERNORATES 60. An important question for further study i s whether budgets for purchases o f goods and services (chapter 2) are reaching front-line staff in the Governorates. Many developing countries’ agriculture ministries have a very l o w ratio o f goods and service expenditure to staff numbers. This means that front-line staff cannot serve farmers effectively, for lack o f fuel etc.. In Egypt, the basic ratio o f chapter 2 spending per employee seems to be o f the order o f LE 10,000 or $1,850 / person / year. At first sight this does not appear unreasonable, especially when one considers that there i s not enough work for all these employees. 61. In the Governorates’, however, agriculture units 97.7% o f 2006/7 spending was for salaries (chapter 1). In their veterinary units 94.8% was on salaries. The ratio o f salary (chapter 1) to goods and services (chapter 2) expenditure i s at least 20 times higher in the Governorates than in the Diwan-e-Aam. With almost no access to non- staff budgets, Governorate staff would be dependent upon the Diwan-e-Aam for any fuel, equipment and supplies that they need to serve farmers in the field. This i s a serious problem for their effectiveness. 62. The agriculture and veterinary sector employees o f the Governorates have technical accountability to the MALR, through the M A L R ’ s Diwan-e-Aam’s secondees to Governorate level. They depend on the MALR for supplies (Chapter 2 funds) and most investment resources. However, the agriculture staff o f the Governorates have administrative accountability to the Governor. This two-fold accountability reduces their effectiveness; it creates more paperwork and delay and i s said to create opportunities for illicit personal gain. According to the MOLD,the Government’s intention i s to increase the Governor’s responsibility for supplies and investment funds, so that agricultural services can be co-ordinated at the Governorate level. 63. As noted above, improving on-farm water-use efficiency i s a precondition for future agricultural growth. This requires close co-ordination between MALR and MWRI officers in the field. The ministries’ vertical, centralised command structures currently impedes their collaboration. The deconcentration o f Chapter 2 and 6 budgets to Governorate level would therefore make it easier for the field staff o f the two ministries to work together effectively. 3.5 STRENGTHENING THE MALR’S MANAGEMENT SYSTEMS 64. As noted above, the MALR i s currently undertaking a large-scale strategic planning exercise to the year 2030. Thematic working groups have submitted proposals for sector growth based on am ambitious expansion o f the Ministry’s activities. However, a strategy can obviously only succeed to the extent that the Ministry has the management processes to implement it. 22 65. First, the Diwan-e-Aam does not hold basic information o n the Service and Economic authorities for which it i s responsible, or the sector units in the Governorates. The Diwan-e-Aam’s Directorate-General for Finance and Administration i s only responsible for the expenditures and staff o f the Diwan-e-Aam itself. Breakdowns o f staffing and expenditures o f a Service or Economic Authority are only held within that authority. There i s no single document which sets out the roles and responsibilities o f each component o f the public agricultural “complex”. 66. Second, complete information on revenues retained by the Service and Economic authorities may or may not be held by the Ministry o f Finance, but are not held by the Diwan-e-Aam. Most Service and Economic authorities use their own resources and full information on these resources i s often not shared. Economic and some Service Authorities are not obliged to involve the Diwan-e-Aam in their budget negotiations with the Ministry o f Finance. There are indications that the MALR budget replenishes their accounts when needed with the result that these transfers are not recurrent and do not appear in every budget exercise. 67. Third, there are no visible measures o f the MALR’s outputs. One can get a rough impression o f other ministries’ performance by observing standard development indicators such as school attendance, class size, immunisation rates, under-five and maternal mortality, investment approvals, water connections, sanitation coverage, irrigated area and so on. But the Diwan-e-Aam has no such framework by which to oversee the performance o f public agricultural institutions. Without a clear definition o f the MALR’s outputs, it i s also hard to make a case for increased funding. 68. In such circumstances it is difficult for the Diwan-e-Aam to ensure consistency and co-ordination in the MALR’s activities, staffing and expenditures. N o t only does this reduce the MALR’s day-to-day effectiveness; it also reduces the likelihood o f the current Strategic Planning exercise being translated into real organisational change. Finally, the Diwan-e-Aam’s limited oversight o f the overall resourcing o f public agricultural services is likely to make it difficult to have an objective discussion o f appropriate levels o f funding with the Ministry o f Finance. 69. I t is therefore recommended that the Diwan-e-Aam should equip i t s e l f with a Management Information System (MIS). The purpose o f the MIS would to provide the standard information required for the Minister and senior officials to oversee the activities for which the Diwan-e-Aam i s responsible. As a first step, it would cover, preferably in real time : 0 The responsibilities o f each organisational unit; 0 Staffing levels by organisational unit, function and grade; 0 The expenditures o f each organisational unit. 0 The outputs o f each organisational unit. Linking expenditures to outputs i s essential to ensure internal performance management and to justify the MALR’s staffing and financial resources18. 18 A nationwide exercise to set up performance monitoring for researchers i s ongoing. Implementing these recommendations would give this exercise some real impact within the MALR. 23 70. Around August 2008, an organisation study o f the MALR was completed under the auspices o f the Ministry o f Human Resource Development (MHRD). Building on this exercise, the MALR should not be in a position to identify: 0 opportunities for rationalisation and restructuring; 0 skills gaps; 0 a performance monitoring system, to be integrated into the MIS. If required, the MALR may enlist the support o f a consultancy company with international experience o f organisational development to support this exercise. 3.6 STAFFING 71. I t i s well understood that the employment policies o f the 1960s and 1970s have l e f t the MALR with more employees than it needs, creating excessive Chapter 1 expenses. Making staff redundant i s politically impossible. The total value o f chapter 1 expenditures does not therefore indicate the M A L R ’ s human resource capacity. What matters i s the MALR’s ability to place staff with appropriate skills in key technical and managerial positions. 72. As will be seen below, the current hiring freeze and natural retirements will reduce the MALR’s staff numbers rapidly. The focus should therefore be on ensuring that any attempt that the MALR makes to redynamise i t s operations should be backed by adequate skilled and motivated staff in key positions. 73. Egyptian ministries usually circumvent the hiring freeze by hiring temporary staff. Across the public service, there are about 300,000 temporary employees out o f a total workforce o f about 1,800,000 (World Bank, 2008). Temporaries n o w number around 20,000 on the MALR’s budget, o f which around 1,360 are within the Diwan-e-Aam. They are on renewable contracts o f up to one year. The growing number o f temporary staff i s said to affect the morale o f permanent staff, who may be receiving lower remuneration for similar work. It also affects continuity and institutional memory. 74. A very high retirement rate provides an opportunity to rebuild the MALR with a streamlined structure and appropriate skills mix. The hiring freeze has l e f t the MALR with an ageing and shrinking workforce (Table A.8). The median age o f Diwan-e- Aam employees i s 55, meaning that half the workforce will retire in the next five years, by 2013. In ten years, by 2018, 70% o f the workforce will have retired. Only 7% o f the Diwan-e-Aam’s staff were born in 1969 or later. In 2006, the reduction in staff amounted to 3,025 people, and in 2007 to 2,949 people (Unfortunately it was not possible to obtain information o n the ages o f MALR staff outside the Diwan-e-Aam.). 75. The age profile o f the MALR’s Diwan-e-Aam i s very different from that o f the public service as a whole. The median government employee i s in the 40-44 year-old range, about 13 years younger than the MALR Diwan-e-Aam’s median employee. The MALR’s staff numbers peak just before retirement age whereas the overall public service spreads smoothly across the age range. This means that the hiring freeze has been applied much more completely in the MALR since the 1980s than elsewhere. 24 Figure 5. The staff of the MALR’s Diwan-e-Aam are older than those of the public service overall 50.0 m 40.0 n . . Q) p 30.0 -+- Owrall E 5 20.0 - -t - MALR $ rc 10.0 0 0.0 Source: MALR, Central Authority for Administration and Organisation 76. This lack o f a persuasive organisational vision may be why the MALR has been unable to make a case for new hirings as other ministries have. I t i s therefore recommended that the MALR should include an exercise to identify key staffing requirements as part o f any organisational restructuring and strategic planning process. Such a framework o f activity targets could be used to identify key skill requirements and justify new hirings and/or retraining programs. Staff grading 77. The MALR’s staff i s classified according to 7 grades. The top grade i s referred to as “high”, and the other 6 grades are ranked, from the highest to the lowest level, as grade first to grade sixth. The distribution o f MALR Diwan-e-Aam staff by grade i s skewed towards the higher grades. About 20 percent o f the staff falls in the lower grades, sixth, fifth or fourth, while top grades (high and first grade) account for about 33 percent o f the staff (Le,, on average, one top grade manages two lower grade staff). Another 33 percent fall in the third grade. 78. Within the Diwan-e-Aam there appear to be some imbalances between sectors. The Minister’s Office i s in terms o f staff numbers the most endowed MALR Sector, accounting for 25 percent o f total staff employed by the Diwan-e-Aam. However, the Animal Wealth Sector accounts for only 1.1 per cent o f MALR staff. This figure raises a concern, as: (i) it i s low in absolute terms; (ii) it i s in sharp contrast with the important role livestock plays in the Egyptian agricultural economy; (iii) it i s at odds with the objectives o f the 20 17 agricultural strategy, with particular reference to the promotion o f the livestock sub-sector and poultry, not to mention development o f the fisheries sub-sector (iv) good animal health and meat processing i s critical for human health, and strong co-ordination o f veterinary services i s crucial for dealing with epidemics such as avian influenza. The Economic Affairs Sector, accounting for about 9.5 percent o f the total staff, also appears somewhat understaffed, particularly if one considers the importance, under the new role envisaged for MALR, o f policy 25 definition, strategy setting and project and program design, supervision, monitoring and evaluation. 79. Overall, the distribution o f the Diwan-e-Aam’s staff by profession does not raise any particular concern. Office, administrative and finance/accounting staff make up about 30 percent o f the total, which does not appear at all to be excessive; staff with a technical degreehackground (agriculture, engineering, and technicians) accounts for about 47 percent o f the total. 4 FOCUS ON THE RESEARCH CENTRES 80. Agricultural research can yield high economic returns. The box shows estimated economic rates o f return for blocks o f countries. Given i t s natural and human resources, Egypt should be able to attain higher rates than the median for Africa, perhaps 40% and more. Estimated Economic Rates o f Return (ERRs) for applied research Region No. o f ERRs reported Estimated median ERRs Africa 44 3 7% Asia 120 67% Latin America 80 47% OECD 146 40% Source: Economic impacts o f agricultural research and extension. Handbook o f agricultural economics. Evenson (200 1) 8 1. Between them the Agricultural Research Centre and the Desert Research Centre employ around 36,000 people, nearly twice as many as the Diwan-e-Aam. The Ministry specifically requested that this review should pay particular attention to these organisations. Many o f the themes discussed above for the MALR as a whole apply to the A R C and DRC. 82. The lack o f suitable information/data was a major limitation to the scope and progress o f the review. Nevertheless, although incomplete and sometimes from conflicting sources, the data assembled are sufficient for the purpose o f assessing the overall financial situation in both research centers and identifying the main issues and challenges facing them. 4.1 Background 83. As noted above, Egypt plans to increase agricultural production by reclaiming and exploiting new lands (“horizontal expansion”) as well as by increasing productivity (“vertical expansion”). Agricultural research i s meant to contribute to the latter, essentially by developing improvedhew crop varieties (higher yielding, less water demanding and more stress resistant) as well as by actively promoting livestock development (cattle and small ruminants, poultry and fisheries). The A R C i s focusing its activities on the cropped (mainly irrigated) areas whereas the D R C i s covering the 26 desert regions constituting more than 95% o f the country’s territory. Through their own extension workforce (see later), the centers are also expected to lead the process o f transferring improvedhew technologies and practices to farmers and livestock owners. 84. As Table 6 indicates, the total public expenditures for the ARC and DRC have declined in real terms, as a share o f public expenditure and as a share o f agriculture’s contribution to GDP. Table 6. Declining public funding for the MALR’s research institutions I Billion LE, current 2000/1 2004/5 2005/6 2006/7 prices Gross Domestic Product g 332.54 506.51 581.14 684.43 Agricultural GDP z/ 58.4 75.29 81.77 94.75 Part of agriculture in GDP 18% 15% 14% 14% ’ Total public expenditure 96.1 162.5 201.7 234.9 Public investment in agriculture 2.9 3.2 2.8 2.4 Private investment in agriculture 4.3 5.2 5.4 Million LE, current prices Public funding of : ARC 407.57 392.76 390.9 DRC 49.88 57 45.37 Public funding of ARC and DRC 457.45 449.76 436.27 - as share of agricultural GDP 0.61% 0.55% 0.46% - as share of total public expenditure 2.82% 2.23% 1.86% - 11 At factor cost. - 21 Including forestry and fisheries. Source : Central Agency for Public Mobilization and Statistics, Ministry of Finance, Central Bank of Egypt, Ministry of Economic Development, ARC and DRC. 85. H o w does funding for the ARC and DRC match up against the situation in other countries? Comparisons could be misleading since the two centers are not the only organizations carrying out agricultural research in Egypt. For instance, there i s the Water Research Center under the aegis o f the Ministry o f Public Works and Water Resources and also, reportedly, other research activities being carried out in the fields o f forestry and fisheries. On the other hand the expenditures o f the ARC and DRC include non-research activities such as production and extension. Therefore, the level o f 0.46% o f agricultural GDP in Table 1 should be seen as an approximation. It i s nevertheless encouraging when compared to the average o f 0.53% in Year 2000 for 27 all public agricultural R&D spending ’in the developing world (including Brazil, China and India)lg. Private funding for agricultural research in Egypt i s said to be limited for n o w and most o f it (strictly speaking) consists o f investments in quality control systems for the exportation o f agricultural products. 86. Because o f the staffs age structure in the A R C (inverted pyramid) and to a lesser extent in the DRC, it i s said that several senior researchers will be leaving over the coming years and very few will be replaced due t o the hiring freeze. Without new recruitments, the staff actual skills mix could become increasingly unsuitable. Particularly for knowledge based organizations such as the centers, an effective human resources strategy accompany efficient financial management. 4.2 THEARC 87. The A R C was set up in the 1970s and i t s official objectives are to “increase crop productivity and quality for ensuring food security, optimize the use o f land and water, promote up-to-date technologies to reduce input costs and increase net returns to farmers”. These objectives should essentially be achieved by: “(i) developing and releasing new high-yielding early maturing varieties and hybrids, also resistant to pests and tolerant to adverse conditions, (ii) producing high quality breeder and foundation seeds to cover farmers’ needs, (iii) developing improved cultural practices for the new varieties and hybrids, and (iv) carrying out extension and training programs in collaboration with the MALR t o transfer improved technologies to farmers.” 88. The A R C i s not able to track the allocation o f expenditures between research themes. Linking expenditures to research activities is essential to ensure the allocation o f resources in line with the sector’s strategic priorities. For example, the traditional emphasis o n germplasm and yield improvements may need to be shared with new priorities: post-harvest issues, product quality and on-farm water-management. An MIS that l i n k s spending to research themes would be a powerful tool for managing such a shift. 89. There are three vice-presidencies: for research, production and extensiodtraining. The center’s 16 institutes and 12 laboratories are under “research” 0 46 regional and field stations are under “production” and provide most o f the plant materials and services for sale (more o n this subject later); 0 The “extensiodtraining” vice-presidency has an extension workforce composed o f 628 extension specialists: slightly more than half in the center’s central administration for extension and the rest in the regions. In line with the center’s responsibility in terms o f technology transfer to the farmers, these specialists are primarily in charge o f organizing and monitoring the activities o f the MALR’s extension agents. In support to this, one o f the institutes (agricultural extension. and rural development) i s meant to develop improved methodological tools for extension work. l9 See the CGIAR’s Agricultural Science and Technology Indicators database. 28 The MALR i s has stated that i t will place all extension services under the ARC. The details remain to be clarified. The A R C has a board o f directors chaired by the Minister o f the MALR and also composed o f key persons in the center, the Advisor to the Minister as well as representatives from the DRC, the Academy o f Scientific Research and Technology, state universities and the private sector. The composition o f the board i s therefore weighted towards the A R C i t s e l f and the MALR. Increased representation o f outside interests (e.g. farmer organizations, business associations) generally improves the accountability and performance o f public agricultural research institutions. ible 7. Expenditures and staffing of the ARC LE millions, current prices Actual (200617) Staff I 1 Crop productionlprotection 115.19 18.4% 10341 30.1% Horticultural Crops Institute 30.39 2580 Plant Protection Institute 28.99 2688 Field Crops Institute 17.22 1965 Cotton Crops Institute 12.86 1170 Plant Pathology Institute 8.76 584 Agr. Pesticides Lab 6.71 608 Sugar Crops Institute 6.42 552 Gene Bank 1.68 20 Agr.Genetic Engineering Institute 1.63 174 Date Palm Lab 0.53 Food processing 18.51 2.9% 1283 3.7% Food Technology Institute 13.20 968 Quality Control Institute 2.97 50 Food & Feed Lab 2.34 265 Livestock development 80.94 12.9% 6022 17.5% Animal Production Institute 33.71 2516 Animal Health Institute 28.28 2255 Vet. Serums & Vaccines Institute 12.41 789 Animal Reproduction Institute 5.09 381 Veterinary Control Lab 1.05 81 Poultry Production Lab 0.40 Soil and water developmentlconservation 14.96 2.4% 1962 5.7% Soil, Water and Environment Institute 14.96 1962 Agricultural extension 18.25 2.9% 1397 4.1% Central administration for agr sxtension 11.47 830 4gr. Extension & Rural DeveloDment Institute 567 29 I C ’I LE millions, current ’ prices . Actual (200617) staff I/ Fishery development 3.50 0.6% 144 0.4% Aquaculture Lab 3.50 144 Farming systems development 42.50 6.8% 3131 9.1% Central administration for agr. engineering 29.02 2359 Agr. Engineering Institute 7.77 714 Agr. Systems Lab 4.16 58 Experimental green houses 1.55 Socio-economy 6.34 1.0% 692 2.0% Agr. Economics Institute 4.74 692 Design & Statistical Analysis Lab 1.60 Climate change 0.17 0.0% 30 0.1% Agr. Climate Lab 0.17 30 Administration of research stations 66.45 10.6% 3394 9.9% General Administration 260.77 41.6% 5973 17.4% Total 627.58 100.0% 34369 100.0% - 11 Including the researchers, assistants and support staff. Source : Agricultural Research Center. 90. Table 7 gives a picture (as complete as possible) o f the center’s expenditures and staffing in Fiscal Year 2006/7. The main items are for general administration which accounts for 42% o f the expenditures and 17% o f the staff, crop productiodprotection with 18% o f the expenditures and 30% o f the staff, and livestock development with 13% o f the expenditures and 18% o f the staff. The expenditures associated with the research stations could not be broken down by subject-matters but it i s assumed that crop productiodprotection and livestock development would constitute the bulk o f their activities. 91. At first glance, it seems that the general administration - composed o f the general office plus the central administration for activities in “experimentation” (including agricultural machinery) and extensiodtraining, have a disproportionate share o f the total expenditures given that most o f the center’s activities should be in the field. 92. Table 8 presents the overall revenues and expenditures for selected years. The decline in public funding has been more than compensated - in terms o f source o f funds - by 30 the proceeds from the sales (examples: foundation seeds and vaccines) and services provided (example: lab testing and technical advice in horticulture). In fact, the saledservices accounted for 36% o f the total revenues in 2006/7 (LE 224.67 million or around US$ 42 million) compared to 27% in 2004/5. This substantial increase in saledservices encourages a shift towards activities directly linked to “production” as opposed to research work2’. There is the real possibility that the A R C becomes a production rather than a research center. 93. The expenditure on goods and services (Chapter 2) per employee i s o f the order o f LE 1,OOO/persodyear, a tenth o f that in the Diwan-e-Aam. At around $1O/persodmonth, this appears inadequate for applied research. But given the history o f over- recruitment, it is probably unrealistic to expect all 36,000 staff to be meaningfully employed. Also, as noted below, some o f the ARC’S revenues come from production and sales. Table 8 R Resources Public funding 11 407.57 392.76 390.9 Saleslsenrices 21 160.83 168.74 224.67 Others - 31 16.98 10.32 12.01 Total resources 585.38 571.82 627.58 Part of sales in total 27% 30% 36% - 11 Ministry of Finance and National Investment Bank. - 21 From seeds, vaccines, lab tests, etc. (25% to MoF, 75% to ARC). 31 Grants and external loans. Note : Proceeds from sales of agricultural produce goes entirely to the MoF. Expenditures Investments 41 116.19 57.38 47.97 Operations 469.19 514.44 579.61 -salarieslcompensations 333.53 402.35 438.47 -others 21 135.67 112.09 141.14 Total expenditures 585.38 571.82 627.58 Part of investments in total 20% 10% 8% Part of salaries in total expenditures 57% 70% 70% Buildings, vehicles, equipmentlmaterials, etc. - 51 O&M, agricultural inputs, interest on loans, etc. Source : Agricultural Research Center. *’ This i s exacerbated by the fact that some o f the proceeds are used for financial incentives to the staff involved in production. 31 94. The share o f investment in the center’s total budget has also declined from 20% in 2004/5 to 8% in 2006/7 (LE 47.97 million or around US$ 9 million. Moreover, the part o f salaries/compensations in the total expenditures has increased from 57% to 70% over the same period. This situation reduces the margin for financial management by the center’s authorities. 95. The investment funds available for the 6th Plan represent only around one quarter o f those approved for the 5th Plan. All institutes are allocated less investment funds except the animal health institute and the veterinary serums/vaccines institute as well as a newly created gene bank for crops. Livestock development as a whole i s allocated 40% o f the funds in the 6th Plan compared to 17% in the 5th Plan. This comparatively larger allocation i s reportedly because o f the growing needs to buy feeddconcentrates for the animals on station. Climate change has been eliminated from the 6th Plan. The criteria for allocating the funds could not be determined clearly. 96. The ARC owns and operates 24,000 feddan (around 100 km2)o f prime agricultural land. This i s about 0.3% o f Egypt’s cultivated land area. The ARC reports that it generates revenues o f around LE 16 million per year, o f which LE 14 million i s retained by the ARC. The ARC’s revenues work out at LE 580 per feddan owned per year. Average agricultural value-added per cultivated feddw in Egypt in 2005 was LE 4000. The MALR should therefore study what land area i s required for core research purposes, and whether the economic return on the remainder could be improved by some other arrangement. 97. The ARC’s information/data systems have been set up for traditional public finance administration and are not really suited for planninghudgeting by priorities and objectives. Most o f the data are collected and kept manually, and salaries/compensation are treated separately from other expenditures. The result i s that simple tables showing the total amount o f money budgeted and spent annually by each institute and laboratory are not readily available21. Furthermore and probably as a consequence o f this situation, very few output targets and practically no impact targets are set against the annual funds allocated to each institute. In these conditions, it i s difficult for the management to carry out any form o f results oriented planning/budgeting. The Ministry o f Administrative Development has agreed to assist soon in upgrading the center’s systems. It i s hoped that the goal w i l l be to restructure the systems and not simply to “computerize” the existing ones. 98. There are very few data available for assessing the ARC’s benefits to agriculture in quantitative terms. Yield improvements are often mentioned as possible indicators. But, according to the figures provided by the Field Crops Institute, the average yields for important crops such as wheat, sorghum and barley have not increased since 2002 21 The preparation o f Table 8 proved to be quite difficult and lengthy, and i s still incomplete. 32 (2.7, 2.4 and 1.2 tons per feddan respectively 22) whereas the yields for rice and corn have increased by less than 10% 23, For livestock, average milk/meat yields are said to be lower than possible due to suboptimal animal feeding. But, in any event, yield improvements would not only be due to research; they also depend on the extension workforce deployed on the ground - most o f it being in the MALR - and the climatic conditions, even perhaps better credit facilities. In addition, using the market value o f any additional production as indicator would be highly questionable since prices fluctuate quite independently o f research. O n the other hand, i t i s likely that a non- negligible part o f the center’s benefits i s derived from genetic improvements that prevent yield declines over the years as opposed to creating increases - for example: the development o f more stress resistant crop varieties and animal breeds. Furthermore, it i s likely that the centers’ extension workforce, under the present circumstances, amplifies the positive impacts o f the research work by helping improve the adoption rates - by farmers and livestock owners - o f the better technologies/practices developed. The A R C is also responsible for the quality control o f food products (bread/bakery, meat/dairy, processed horticulture) and agricultural inputs (fertilizers, seeds, animal feed). These additional activities result in other benefits to the food industry and consumers (essentially better quality o f basic food, at lower prices) as well as to the environment. A systematic/complete evaluation o f all these benefits will almost certainly be required for justifying the wide-ranging support now needed. 99. The potential benefit o f placing extension services under the A R C i s that it will strengthen research-extension linkages. However, there i s a risk o f over-centralization that should be addressed when the restructuring i s being implemented. I t i s important for efficiency and local co-ordination that administrative and financial deconcentration o f agricultural services towards Governorates should continue. Since the A R C i s not represented in Governorates, there i s a risk that the shift o f responsibility could lead to re-centralization. The function o f the A R C should therefore be to provide field agents with information, training and professional development; administrative and financial management o f extension services should take place at the Governorate level. There i s a risk o f an ARC-led extension service becoming top-down. As noted above, the governance structures o f the A R C are somewhat inward-looking. I t s workforce and organizational culture is more scientific than socio-economic or farmer-driven. I t i s therefore essential that the A R C should develop management systems that elicit and respond to farmer demand and priorities. The A R C should reflect on h o w it can boost i t s socio-economic capacity, base its work program on bottom-up assessments of farmer priorities, and involve farmers in the execution o f on-farm research. ’*Some 6.58, 5.8 and 3.0 tons per ha respectively. 23 Field crops cover more than 70% o f the cropped areas. 33 4.3 THEDRC 100. The D R C became a separate organization, under the aegis o f the MALR, in 1990. Its general mandate i s to carry out research for developing Egyptian deserts and newly reclaimed areas 24 and its main objectives are “to : (i) investigate desert potential for agricultural development, (ii) carry out studies on behalf o f government institutions, societies and small landholders, and (iii) prepare postgraduate research assistants and scholars for higher studies in the field o f scientific research.” There are two vice-presidencies, for projects and scientific studies, a general administration for training/extension, four research divisions with field experimental stations and specialized laboratories. The board o f directors i s chaired by the center’s President and also composed o f the two vice-presidents, the heads o f the four divisions as well as representatives from the ARC, MALR and the private sector. 101. The D R C has at various times been attached to the Ministry o f Construction and Development, the Academy o f Science and the Ministry o f Land Reclamation. I t became part o f the MALR when the Ministry o f Land Reclamation merged with the Ministry o f Agriculture. (This contrasts with the ARC, which was always part o f the Ministry o f Agriculture). There i s concern within the D R C that its institutional history and small size make it particularly vulnerable to investment budget cuts. 24 More than 90% o f the country’s population live in the N i l e Valley and the Delta. 34 Divisions I 1 27.33 54.9% 920 42.2% -Water Resources and Desert Soils 10.81 342 - Ecology and Dryland Ag ricu Itu re 9.81 319 - Animal and Poultry Production 4.12 152 - Socioeconomic Studies 2.59 107 Experimental Stations 13.87 27.8% 488 22.4% Administration and Finance - 21 8.62 17.3% 773 35.4% Total 49.82 100.0% 2181 100.0% - I / Expenditures and staff for the divisions include the corresponding laboratories. Staff Includes researchers, technicians/assistants (permanent and on fixed terms). - 2/ Including for train ing/extension . Source : Desert Research Center. Note : The expenditures include investments as well as operation costs comprising salaries (see Table 81. 102. Table 9 gives a picture (as complete as possible) o f the center’s expenditures in 2006/7 as well as the staffing. The total expenditures (investments and operation costs including salaries) are estimated at LE 49.82 million (around U S $ 9 million) and the number o f staff at 2,18 1 (including researchers, assistants). The four divisions account for 55% o f the expenditures and 42% o f the staff, with “water resources and desert soils” and “ecology and dryland agriculture” representing more than 70% o f the total. The former i s specifically in charge o f groundwater resources development and soil evaluation in deserts and newly reclaimed lands, and the latter o f developing environment friendly agricultural technologies and practices. The expenditures associated with the experimental stations could not be broken down by subject- matters but it i s assumed that the bulk o f their activities would relate to the two divisions just mentioned. Similarly to the ARC, the DRC has a general administration for training/extension. 35 rable 10. Revenues and ExDenditures of DRC (LE millions) Resources Public funding I / 49.88 57 45.37 Saleslservices 21 3.78 2 4.45 Total resources 53.66 59 49.82 Part of sales in total 7% 3% 9% - 11 Ministry of Finance. - 21 Lab testing, sales of animals and vegetal materials, etc. Expenditures Investments z/ 26.14 29.36 14.05 Operations 27.52 29.64 35.77 salariedcompensations 24.88 27 31.37 -others 41 2.64 2.64 4.4 Total expenditures 53.66 59 49.82 Part of investments in total 49% 50% 28% Part of salaries in total expenditures 46% 46% 63% - 31 Buildings, vehicles, equipment and materials (including temporary workers). - 41 Mainly O&M and agricultural inputs. Source : Desert Research Center. 103. Table 9 presents the overall revenues and expenditures for selected years. The public funding o f the center has slightly declined since 2004/5, to reach LE 45.37 million (around US$ 8 million) in 2006/7. This has not been totally compensated by the proceeds from the sales and services provided, which amounts to LE 4.45 million (around US$ 0.8 million) or 9% o f the total budget in 2006/7. The share o f investments in the center’s total budget has substantially declined, from 49% in 2004/5 to 28% in 2006/7 (LE 14.05 million or around U S $ 2.6 million). Also, the share o f salaries/compensations (mostly fixed costs) in the total expenditures has increased from 46% to 63% over the same period. Similarly to the ARC but to a lesser extent, the DRC’s authorities have therefore limited room for financial management. It i s worth pointing out that the DRC’s public funding and staff size represent respectively 12% and 6% o f ARC’S. 104. The DRC’s informatioddata systems are computerized although, as in the case o f the ARC, they are set up for traditional bookkeeping and not for management 36 accounting. The management, well aware o f this constraint, i s in the process- o f reorganizing data processing. As for the ARC, there are very few data available for assessing the center’s benefits in quantitative terms. For instance, research against desertification constitutes an important part o f the center’s work program and the results - through biological as well as mechanical means - are obviously documented. However, the final benefits to agricultural development and the environment remain to be analyzed. 4.4 Conclusions f o r the research centres 105. The A R C and D R C are involved in genetic improvement (plant and animal) with seemingly great potential in terms o f yield increases, stress resistance and adaptability. For instance, the Horticultural Crops Institute reportedly i s producing virus-free seedlings and propagating superior strains as well as new nonLtraditiona1 fruit and vegetable materials, using tissue culture. This results in increased crop production, which are also more diversified and stable25, and lower production costs. Similarly, crossbreeding livestock strains which are better adapted to small-farmer and/or to desert conditions will create numerous benefits. 106. Both centers’ initial response to the financial constraints has been to expand the proceeds from sales/services, particularly in the case o f the ARC. These proceeds serve to supplement the non-staff budget and also to provide pay incentives to the staff involved in production activities. Commercial production i s not necessarily wrong, but there i s a real danger that the staff focuses i t s attention more and more on production-oriented activities at the expense o f research. And a proper balance between the two types o f activities can only be maintained if there i s efficient monitoring, based on measurable indicators. The existing informatioddata systems - s t i l l mostly manual in the case o f the A R C - is not designed for this purpose. 107. More flexible procedures can make expenditure more productive. Research i s a creative process with uncertain outcomes. Management must be able to systematically reallocate the funds available (and staff if possible) according to the progression o f the various activities being carried out. The MALR Diwan-e-Aam can attach measurable research objectives to funding “blocks” to be granted annually to the centers ; in effect, setting up a mechanism o f contract-programs with output and impact indicators. This would necessitate that the centers upgrade their informatioddata systems and start planning/budgeting by objectives. As in many other countries, the MALR’s funding research centers could be awarded through a competitive grants scheme to encourage relevance and efficiency. 108. Rationalizing the respective responsibilities and activities between both centers would also improve cost effectiveness. Synergies and economies o f scale are probably being missed by not working more closely together. For example, both centers are active in the fields o f livestock and crop production development. It i s recognized that the two centers cover different agro-ecological systems (essentially ’’ Stable meaning less subject t o yield declines due t o stress (pests, heat, salinity, etc.). 37 deserts versus crop lands26).,it i s quite possible that the two could make substantial gains in money and time by, for instance, pooling skilled staff, facilities and equipment in plant and animal breeding. Savings could also be achieved by sharing a number o f their general administration services, starting with accounting. 109. However, it i s clear that the division o f labor between the A R C and the D R C i s not 100% clear, and that this i s a cause for concern on both sides. Before the merger o f the Ministry o f Agriculture, which controlled the A R C and the Ministry o f Land Reclamation, which managed the DRC, the overlaps my have been less apparent. Also growing importance o f the New Lands means that the traditional distinction between D R C themes (sandy soil, groundwater, land reclamation, salinification) and A R C themes (alluvial soil, agricultural production, livestock production) no longer holds up. It i s therefore increasingly necessary to clarify the centers’ respective roles. 110. The ARC-DRC division o f labor is o f course part o f a bigger issue: how to co- ordinate Egypt’s many agricultural research organizations: the ARC, the DRC, the Universities, the National Research Center and the Water Research Center. The Council for Agricultural Research and Development has a co-ordination role, but lacks institutional status and authority. Also, the modalities for funding and allocating the newly-decreed Fund for Agricultural Research and Development remain to be clarified. Effective co-ordination and demand-led resource-allocation are needed to ensure that research funds are spent efficiently and without duplication. 111. Finding alternative (sustainable and long-term) sources of funding would obviously alleviate the financial constraints. So far, private f i r m s have been buying goods (plant materials, etc.) and services (lab testing, etc.) from the two research centers, as well as investing on their own in quality control for export (even hiring specialists from importing countries). There i s n o w a need to see to what extent private companies and/or their associations are prepared to enter into more progressive and durable relationships with the centers - for example: co-funding o f multi-year research programs or even joint ventures; in genetic improvement, seed production, etc.. Other forms o f partnerships could also help. These could be at the national level (non-governmental and civil society organizations, public and private universities, as well as at the international level (with CGIAR research centers and international organizations such as the Food and Agriculture Organization, the International Fund for Agricultural Development and the International Food Policy Research Institute). Universities should be involved since they prepare the next generation o f scientists. They can provide senior students with relevant knowledge who can normally handle (at modest costs) the first phases o f some o f the research work and thereby acquire useful practical experience for later. Furthermore, farmers and livestock owners should be represented on the governing boards o f the organizations involved since they are the ultimate beneficiaries and their guidance i s indispensable for setting research priorities. 26 On the livestock side, for example, the ARC tends to focus on cattle and buffaloes, and on meat and milk production, while the DRC’s emphasis i s more on small ruminant and camel breeding. 38 112. Most countries n o w separate agricultural research from production for sale. This confers a number o f advantages. Production is subject to market discipline, so land and other resources are used more efficiently. Also public expenditures on research are more transparent once the cross-subsidies are eliminated. And once public expenditures become more transparent, they can be linked to outputs and thus controlled more effectively. 113. A less challenging option would be to re-configure the accounting and funding arrangements for the A R C and D R C into three overall cost-centres for each entity: 0 A core public cost-centre: generating and disseminating knowledge for public goods (e.g. environment, on-farm water management, zoonoses) and social objectives (e.g. smallholder agriculture). This cost-centre would be funded through the MALR’s general budget, perhaps through a contract-programme arrangement. 0 A production cost-centre: production for sale to farmers. This cost-centre would be self-financing from sales revenues. 0 A partnerships cost-centre, which would conduct research and dissemination activities commissioned by non-governmental entities, for example the private sector, international research bodies and donor organizations. Each cost centre would bear i t s own variable costs and a share o f the centres’ fixed costs, based upon a transparent allocation formula. The advantages o f this arrangement would be many. First, the MALR Diwan-e-Aam, the Ministry o f Finance and the M o E D would see clearly what are the outputs o f the financial contributions to the A R C and DRC. This would strengthen the research centres’ position in budget discussions. Second, the research centres would be able to perform their commercial activities on a commercial basis, without the current unknown cross-subsidy to research. Third, the research centres’ management would have much greater ability to allocate resources effectively within their institutions. 114. However, a disadvantage o f cost-center accounting i s that it gives management discretion over the allocation o f fixed costs between research and production. Cross-subsidies and poor financial transparency could therefore persist. 115. The research centers need to make a stronger case for their budget. 0 A robust economic evaluation o f their impact could be commissioned from an organization with the trust o f the MALR, the M o F and the MoED. The current estimates do not have official status, and make the unrealistic assumption that all yield increases can be attributed to research. There are established methodologies for attributing agricultural growth to research. The International Center for Agricultural Research in the Dry Areas (ICARDA), for example, has experience o f these analytical techniques. Re-organization o f the accounts and creation of an MIS system could show more clearly the relationship between financial inputs and service outputs. (At the moment this relationship i s quite obscure to those outside the centres, which may explain the fall in funding.) For the ARC, ensure that the assistance now being planned by the Ministry o f Administrative Development i s not only about 39 computerizing the existing systems but also about restructuring them to allow planning/budgeting by objectives. For the DRC, provide similar assistance to help the center restructure i t s existing systems (already computerized). A research strategy document for the MARL 27, which should set clear priorities for research in the ministry, on the basis o f quantifiable criteria and measurable indicators 5 CONCLUSIONS : BUILD THE LINK BETWEEN FUNDING AND OUTPUTS 116. The MALR’s resources are shrinking rapidly. Investment expenditure is in free-fall. Unless hiring policies are changed, i t s staffing levels will drop dramatically over the next 5 years. 117. From a macro-perspective, this i s easy to understand. At a time o f growing fiscal pressures, price subsidies and public service pay increases, all public expenditure comes under tight scrutiny. Any expenditure that cannot demonstrate a clear social, political or economic benefit i s vulnerable. In these circumstances, the MALR i s an easy target for expenditure cuts. Everybody agrees that the MALR i s s t i l l overstaffed, and its outputs are less visible than, say, the schools, health facilities, roads, canals and water supply systems o f other ministries. 118. But from a sectoral perspective, the MALR i s increasingly called on to deliver support for productivity increases, extension o f the cropped area and high-value supply chains. This comes at a fiscal cost: if the argument for funding i s not proven, the default option at a time o f fiscal stress is rightly to cut funding. The challenge for the MALR i s therefore to demonstrate how it can turn public funding into service outputs for farming. This i s a matter o f strengthening internal management systems. Until the link between funding and outputs i s better understood, nobody can judge whether the current expenditure allocations are too high or too low. This goes for the MALR as a whole or for any sub-unit o f the MALR. 119. The MALR i s preparing a new agricultural sector strategy to the year 2030. I t sets ambitious goals for the sector. But unless it also shows how the MALR’s systems, staff and budgets will be used to deliver such goals, it i s incomplete; it gives the targets but not the means to achieve them. The present review o f public expenditure in agriculture should therefore be seen as an input into the agricultural sector strategy. 120. This report has considered the MALR overall, and the A R C and D R C in a l i t t l e more detail. O n the basis o f the above, i t s central recommendation i s to build the link between funding and outputs. 121. The Government has significantly liberalized the agriculture sector environment since the early 1990s. The MALR’s role i s now seen as facilitating ’’An all-inclusive agricultural research strategy for the country would be larger in scope (see paragraph 85). 40 market-led growth, rather than directing production and the strategy to 2017 fully reflects this. The ongoing work to update the strategy for agriculture to 2030 focuses o n ambitious product-by-product growth outcomes. (The aim to become 75% self- sufficient in wheat i s one o f them.) The next step i s to define what the Government will deliver in terms o f outputs to make these outcomes possible; and then to make a case for the resources needed to deliver those outputs (Figure 6). Figure 6. Output targets are the link between planned outcomes and budgeting EXECUTION MF/MED FUNDING OUTCOMES PLANNING 122. Clearly a brief and broad review like this one cannot be expected to develop precise, recommendations o n such complex and important issues. A detailed plan of action should be adopted after consultation between all the departments concerned and after taking appropriate advice from experts with international experience in organizational development. However, the matrix below (Table 11) contains some ideas which may merit consideration. Table 11 Ideas for consideration A. 1. Creating a Management Information System which will permit the Minister and senior officials oversight o f the Diwan-e-Aam , Service Authorities and Economic Authorities under their authority. I t would cover: the responsibilities o f each organizational unit (OU), targeted and actual outputs from each OU, staffing levels, and budgeted and actual expenditures. This MIS would provide the information to link I expenditures with activities and results. As a subset o f the MIS, setting up a human resources management system, geared towards maximizing the competence and efficient use o f the staff. 41 A.2. Derive unit costs for the delivery o f standard agricultural service packages, as used in the health and education sectors. For example, h o w should it cost to deliver extension advice per farmer per year, pest management services per feddan per year or veterinary care per livestock unit per year ? U s e these as a basis for Chapter 1 and 2 budgeting. A.3. Building on the recent restructuring study executed under the auspices o f the Ministry o f Human Resource Development, map the functions o f the various public organisations under the M A L R ’ s responsibility. O n the basis o f this exercise it would be possible to identify: 0 opportunities for rationalisation and restructuring; skills gaps and key positions; 0 a performance monitoring system, to be integrated into the MIS. A consultancy company with international experience o f organisational development may be required to support this process. A.4. On the basis o f the above, discussing with C A O A a staffing strategy to fill key vacancies with new hirings, whilst allowing the overall process o f staff reduction to continue. This may involve transferring the work done by key temporary staff into permanent positions. B.1. Ensuring that the Diwan-e-Aam’s Economic Affairs Department has the opportunity, s k i l l s and resources to perform economic investment appraisals. B.2. Conducting priority ex-post economic evaluations for land reclamation and research expenditures. B.3. Create an expert committee with the trust both o f the M o E D and the MALR to quality control the appraisal dossiers and makes appropriate recommendations. B.4 On this basis, developing a mutual understanding between the MALR and the M o E D that on the one hand investment proposals will be prioritized and on the other they will be considered for funding o n the basis o f their merits. I I C . l Developing contract-programmes between the MALR and each o f the Service Authorities and Economic Authorities, with output indicators linked to budget inputs. (2.2. Deconcentratingnon-staff operating budgets for Governorate staff to Governorate I level. 42 I D.l Reorganization o f accounts and creation o f an M I S system that relates financial inputs to service outputs. I D.2 Formulatingand implementinga results-basedresearch strategy: (i) identifying priorities through bottom-up analysis o f farmer priorities (ii) allocating funds through (competitive) contract-programs; I D.3 Performing an economic evaluation o f the centres’ impact (see above). I D.4 Dividing the A R C and D R C each into three cost-centres: 0 A core cost-centre: generating and disseminating knowledge for public goods (e.g. environment, on-farm water management, zoonoses) and social objectives (e.g. smallholder agriculture). This cost-centre would be funded through the MALR’s general budget, perhaps through a contract-programme arrangement. 0 A production cost-centre: production for sale to fanners. This cost-centre would be self-financing from sales revenues. 0 A partnerships cost-centre, which would conduct research and dissemination activities commissioned by non-governmental entities, for example the private sector, international research bodies and donor organisations. Each cost centre would bear i t s own variable costs and a share o f the centres’ fixed costs, based upon a transparent allocation formula. 123. These recommendations define some priority areas for future expenditure analysis. These are: 0 To develop a system o f management accounting linking outputs with expenditures, beginning perhaps with the Diwan-e-Aam, the A R C and the GACDP. 0 To do an in-depth public expenditure review o f the GACDP (land reclamation). 0 To identify critical staffing/skills requirements and the Chapter 1 budgetary cost implications. 0 To estimate unit costs for the provision o f standard agricultural services, to estimate appropriate Chapter 2 budget allocations. 0 To estimate ex-post and ex-ante the economic return on ARC, D R C and land reclamation activities. 124. Facing rural poverty and now soaring food prices, Egypt i s counting on i t s farmers to solve i t s most pressing development challenges. I t is essential that they should be backed by an efficient and adequately funded agriculture ministry. It i s hoped that this review will make a small contribution to the discussion among Egyptian decision-makers o f how to achieve such an important goal. 43 REFERENCES Cassing J., Nassar S., and Siam G. (2006) Distortions to Agricultural Incentives in Egypt. Agricultural Distortions Research Project Working Paper 36, December 2006 FA0 (2000) Agriculture, trade and food security issues and options in the WTO negotiations from the perspective o f developing countries. Volume 2, chapter 4. IFPRI (2007) Impact o f Trade Liberalization on Agriculture in the Near East and North Africa. Mostafa A. and Holtzman J. (2002) The impact o f policy reform on the cottodtextile sub- sector. In: The impact o f the agricultural policy reform program in Egypt 1996-2002 - conference proceedings. htt~://www.abtassociates.com/reports/IA3O.pdf MALR (2003) The strategy o f agricultural development in Egypt until the year 20 17 Omran M. (2002) History o f agricultural policy reform in Egypt. In: The impact o f the agricultural policy reform program in Egypt 1995-2002 - conference proceedings. http://www.abtassociates.com/reports/IA3 O.pdf Pohlmeier L. (2002) Promotion o f agricultural co-operatives services : a review o f project activities and lessons learnt. Volume 1. Main report. Saad A. (2002) Fertiliser production and marketing in Egypt. In : The impact o f the agricultural policy reform program in Egypt 1996-2002 - conference proceedings. http://www.abtassociates.com/reports/IA3 O.pdf Trail1 W. B. (2006) The rapid rise o f supermarkets. Development Policy Review 24:2, 163- 174. World Bank (2005) Cost-effectiveness and equity in Egypt’s water sector. Egypt Public Expenditure Review. http://www.mof.g;ov.eg;/En~lish/Main%2OTopics/Public%2OExpenditure%2OReview%2O- %20Policv%20Notes. Accessed 13 August 2008. World Bank (2006) Upper Egypt - Challenges and Priorities for Rural Development. Report no. 36432 World Bank (2007) Arab Republic o f Egypt Public Expenditure Review : Water Sector Note #2. The Efficiency and Equity o f Water Subsidies: Spending Less for Better Water Services. Report no. 40 119. World Bank (2008) Egypt: Government Employment and Wage Policy, June 2008, 44 World Bank (2008b) MENA Economic Developments and Prospects 2008: regional integration for global competitiveness. 45 STATISTICAL ANNEX 46 Table A. 1 Review of Public Expenditure in Agriculture Issues Paper Egypt's Cropping Pattern 2005f06 -I crop yi area as a production in area in feddan percentage of tons tonsffeddan tonsfha total wheat 2,985,286 8,140,962 2.7 6.8 43.2 rice 1,459,534 6,125,311 4.2 10.5 21.1 summer maize 1,940,261 6,866,525 3.5 8.8 28.1 Nile maize 317,109 83 1,509 2.6 6.6 4.6 barley 147,217 167,024 1.1 2.8 2.1 sugarcane 321,383 16,317,317 50.8 126.9 4.6 sugarbeet 167,327 3,429,565 20.5 51.2 2.4 cotton 656,586 0 0.0 0.0 9.5 flax 16,345 69,094 4.2 10.6 0.2 soybean 20,084 25,831 1.3 3.2 0.3 groundnuts 148,234 199,558 1.3 3.4 2.1 sesame 67,742 306,434 4.5 11.3 1.o sunflower 35,022 34,477 1.o 2.5 0.5 oranges 224,404 1,940,422 8.6 21.6 3.2 lemons 39,913 334,435 8.4 20.9 0.6 mandarins 95,861 7 11,464 7.4 18.6 1.4 grapes 160,005 1,391,749 8.7 21.7 2.3 mangoes 139,433 416,951 3.0 7.5 2.0 bananas 51,165 922,592 18.0 45.1 0.7 apples 65,441 578,249 8.8 22.1 0.9 peaches 79,399 409,651 5.2 12.9 1.1 plums 2,725 13,657 5.0 12.5 0.0 figs 78,370 192,253 2.5 6.1 1.1 guava 37,850 283,685 7.5 18.7 0.5 pomegranate 5,399 27,196 5.0 12.6 0.1 apricot 20,491 105,901 5.2 12.9 0.3 pears 8,394 40,498 4.8 12.1 0.1 olives 118,382 314,450 2.7 6.6 1.7 potatoes 300,662 3,167,430 10.5 26.3 4.3 tomatoes 495,381 8,391,223 16.9 42.3 7.2 squash 95,736 729,772 7.6 19.1 1.4 green beans 52,028 245,905 4.7 11.8 0.8 dry-beans 45,165 52,284 1.2 2.9 0.7 sweet potatoes 27,201 318,933 11.7 29.3 0.4 garlic 26,028 242,495 9.3 23.3 0.4 watermelons 168,995 1,874,105 11.1 27.7 2.4 melons 19,895 262,403 13.2 33.0 0.3 cantaloupes 60,343 625,187 10.4 25.9 0.9 strawberries 12,032 157,279 13.1 32.7 0.2 green-peas 58,306 245,183 4.2 10.5 0.8 cowpeas 15,616 60,222 3.9 9.6 0.2 artichokes 19,268 181,928 9.4 23.6 0.3 eggplants 109,822 1,155,919 10.5 26.3 1.6 okra 16,827 113,490 6.7 16.9 0.2 cabbages 42,942 515,477 12.0 30.0 0.6 spinaches 5,897 49,277 8.4 20.9 0.1 cauliflowers 11,375 113,562 10.0 25.0 0.2 --- table continues on the next page --- 47 Table A.1 (continued) Review of Public Expenditure in Agriculture Issues Paper Egypt's Cropping Pattern 2005106 yi j area as a crop area in feddan production in percentage of tons tonslfedda n tons/ha (*) total cucu m bers 70,680 650,350 9.2 23.0 1.0 peppers 80,370 543,341 6.8 16.9 1.2 onions 156,335 1,925,159 12.3 30.8 2.3 camomille 9,483 7,935 0.8 2.1 0.1 marjoram 3,569 6,357 1.8 4.5 0.1 fennel 2,207 3,394 1.5 3.8 0.0 aromatic plants 3,306 69,943 21.2 52.9 0.0 caraway 3,564 3,086 0.9 2.2 0.1 spear mint 2,677 4,854 1.8 4.5 0.0 pepper mint 420 997 2.4 5.9 0.0 hibiscus 9,186 5,031 0.5 1.4 0.1 basil 5,302 13,599 2.6 6.4 0.1 coriander 14,455 12,966 0.9 2.2 0.2 anise 2,216 1,313 0.6 1.5 0.0 cumin 5,142 2,722 0.5 1.3 0.1 Total (**) 6,916,973 I I 100.0 Note: (*) 1 feddan = approx. 1 acre = approx. 0.4 ha; (**) berseem is not included in the list of crops. Source: Rural Development Policy in Egypt towards 2025, Alterra-rapport 1526, ISSN 1566-7197 cropping index Year cropped area cultivated area cropping index 2000 11.2 8.1 138 FY 2005106 14.9 8.5 175 48 Table A.3 Review of Public Expenditure in Agriculture Issues Paper Nile Water Use I n Egypt in billion m3 2007 2017 Ag ricuItu re 58.0 64.0 Municipal 5.4 6.6 Industry 5.5 8.5 Navigation 0.2 0.2 Total 69.1 79.3 Total available water 71.2 76.6 Excess 2.1 -3.3 I I Source: Ministry of Agriculture and Land Reclamation, Upgrading the Agricultural Strategy to 2030 (2008, power point presentation, unpublished). Table A.4 Review of Public Expenditure in Agriculture Issues Paper Budget Chapters by Old and New Classification Method Old Classification in Budget Chapters Chapter 1 wages and compensation of employees = current expenditures for salaries & wages of staff and temporary employees, including consultancy services Chapter 2 purchase of goods and services = all other current expenditures Chapter 3 investment Chapter 4 subsidies, grants, social benefits New Classification in Budget Chapters Chapter 1 wages and compensation of employees = current expenditures for salaries & wages of permanent and temporary staff, including consultancy services Chapter 2 purchase of goods and services = all other current expenditures Chapter 3 interest = interest on domestic and foreign loans Chapter 4 subsidies, grants, social benefits Chapter 5 other current expenditures = current expenditures for traveling, representation, etc. Chapter 6 investments Chapter 7 acquisition of financial assets Chapter 8 repayment of domestic and foreign loans Relationship between Old and New Classification in Budget Chapters Old Chapter 1 - New Chapter 1 Old Chapter 2 - - New Chapter 2 Old Chapter 3 - New Chapter 6 Old Chapter 4 - New Chapter 3 + New Chapter 4 + New Chapter 5 + New Chapter 7 + New Chapter 8 49 Table A.5 Review of Public Expenditure in Agriculture Issues Paper Exports of Selected Agricultural Produce Exports of Selected Crops Tq-xF increase/ ' 1995 2003 decrease US$ x million as a O/O of total value traditional crops barley 2,810.2 2,931.4 4.3% 4.1% 4.3% cotton lint 10,148.1 8,058.3 -20.6% 14.8% 11.8% maize 10,880.7 11,137.4 2.4% 15.8% 16.3 O/o rice 7,474.2 7,075.9 - 5.3% 10.9% 10-4% sorghum 830.8 726.0 - 12.6% 1.2% 1-1Yo sugarcane 3.3 3.6 9 .1Yo 0.0% 0.0% sugar, refined 6,556.4 5,784.6 - 11.8% 9.5% 8.5% wheat 16,855.6 16,015.2 - 5.0% 24.5 O/o 23.5% sub-total traditional crops 55,559.3 51,732.4 -6.9% 80.9 O/o 75.9% non-traditional crops grapes 1,952.4 3,134.7 60.6 O/O 2.8% 4.6% lemons & limes 739.6 967.8 3 0.9% 1,1Yo 1.4% mangoes 291.5 560.4 92.2% 0.4% 0.8% olives 28.2 34.7 23.0% 0.0% 0.1% beans, dry 1,264.6 1,162.3 -8.1% 1.8% 1.7% cabbages 418.8 522.4 24.7 O/o 0.6% 0.8% garlic 390.0 625.0 60.3 O/o 0.6% 0.9% onions 1,219.9 1,365.6 11.9% 1.8% 2.0% eggplant 151.7 227.8 50.2% 0.2% 0.3% okra 1.8 2.1 16.7 O/o 0.0% 0.0% tomatoes 2,799.5 4,241.9 51.5% 4.1% 6.2% potatoes 2,329.2 1,851.5 - 20.5o /' 3.4% 2.7% sub-total on-traditional crops 11,587.2 14,696.2 26.8% 16.9% 21.6% aromatic, medicinal and oil plants sesame seed 497.4 541.8 8.9% 0.8% sunflower seed 1,039.4 1,156.7 11.3% 1.7% sub-total aromatic, medicinal & oil plants 1,536.8 1,698.5 10.5% 2.2% 2.5% total 68,683.3 68,127.1 -0.8% 100.0% 100.0% Source: World Bank Report No. 36432-EG - Arab Republic of Egypt, Upper Egypt - Challenges and Priorities for Rural Development, Policy Note (June 15, 2006) 50 Table A . 6 . 1 Review of Public Expenditure in Agriculture Issues Paper Number of Employees in Financial and Administrative Sector of MALR by Grade and Profession Grade High First Second Third Fourth Fifth Sixth total occupational profession Agricultural 1 2 1 1 0 0 0 5 Engineering 0 0 0 0 0 0 0 0 Law 0 0 0 0 0 0 0 0 Administrative Development 32 46 84 62 0 0 0 224 Finance and Accountancy 45 84 81 77 0 0 0 287 Libraries and Documents 0 5 4 11 0 0 0 20 Art and Media 0 0 0 23 0 0 0 23 Medical 17 26 42 71 0 0 0 156 Pharmaceutical 0 0 0 0 0 0 0 0 Social Services 13 18 10 17 0 0 0 58 Security 0 0 0 0 0 0 0 0 Agriculture, Nutrition and Lab Technicians 0 0 0 2 3 0 0 5 Technical Engineering 0 2 1 3 4 0 0 10 Nursing and Public Health 0 16 25 14 6 0 0 61 Office 106 242 306 559 209 95 0 1,517 Unqualified Office 0 6 13 16 9 5 0 49 Artisanal for Agriculture and Nutrition 0 0 0 0 0 0 1 1 Artisanal Occupations for Machines and Workshops 0 1 0 2 7 5 0 15 Artisanal for Transportation 0 0 0 0 0 0 0 0 Artisanal for Art and Architecture 0 0 0 0 0 0 0 0 Supporting Services 0 0 3 138 101 128 96 466 total 214 448 570 996 339 233 97 2,897 Source: Data collected in May/lune, 2008 from the MALR during the Ag-PER Issues Paper Mission 51 Table A.6.2 Review of Public Expenditure in Agriculture Issues Paper Number of Employees in Animal Wealth Sector of the MALR by Grade and Profession Grade High First Second Third Fourth Fifth Sixth total occupational profession Agricultural 9 14 8 15 0 0 0 46 Engineering 0 0 0 0 0 0 0 0 Law 0 0 0 0 0 0 0 0 Administrative Development 2 3 9 5 0 0 0 19 Finance and Accountancy 2 7 5 6 0 0 0 20 Libraries and Documents 0 0 0 0 0 0 0 0 Art and Media 0 0 0 1 0 0 0 1 Medica I 0 0 0 0 0 0 0 0 Pharmaceutical 0 0 0 0 0 0 0 0 Social Services 0 0 0 0 0 0 0 0 Security 0 0 0 0 0 0 0 0 Agriculture, Nutrition and Lab Technicians 0 0 2 9 0 0 0 11 Technical Engineering Assistance 0 1 1 3 2 0 0 7 Nursing and Public Health 0 0 0 0 0 0 0 0 Office 30 18 24 25 6 3 0 106 Unqualified Off ice 0 0 0 0 0 0 0 0 Artisanal for Agriculture and Nutrition 0 0 0 0 0 0 0 0 Artisanal for Machines and Workshops 0 0 2 2 1 3 0 8 Artisanal for Transportation 0 0 1 2 4 0 1 8 Artisanal for Art and Architecture 0 0 0 0 0 0 0 0 Supporting Services 0 0 0 5 3 5 3 16 total 43 43 52 73 16 11 4 242 Source: Data collected in May/June, 2008 from the MALR during the Ag-PER Issues Paper Mission 52 Table A.6.3 Review of Public Expenditure in Agriculture Issues Paper Number of Employees in Land Reclamation Sector of the MALR by Grade and Profession grade High First Second Third Fourth Fifth Sixth total occupational profession Agricultural 100 108 42 290 0 0 0 540 Engineering 2 2 5 2 0 0 0 11 Law 1 3 4 7 0 0 0 15 Administrative Development 14 28 30 18 0 0 0 90 Finance and Accountancy 14 44 26 42 0 0 0 126 Libraries and Documents 0 1 1 0 0 0 0 2 Art and Media 0 0 2 12 0 0 0 14 Medical 0 0 0 0 0 0 0 0 Pharmaceutical 0 0 0 0 0 0 0 0 Social Services 3 5 2 8 0 0 0 18 Security Occupations 0 0 0 0 0 0 0 0 Agriculture, Nutrition and Lab Technicians 64 47 39 94 208 0 0 452 Technical Engineering Assistance 3 27 14 94 77 0 0 215 Nursing and Public Health 0 0 0 0 0 0 0 0 Office 27 79 122 201 125 10 0 564 Unqualified Office 0 0 0 0 0 0 0 0 Artisanal for Agriculture and Nutrition 0 0 0 0 0 0 0 0 Artisanal for Machines and Workshops 0 2 8 11 35 46 10 12 Artisanal for Transportation 0 7 14 10 25 13 14 83 Artisanal for Art and Architecture 0 3 7 12 7 3 5 37 Supporting Services 0 0 0 63 27 18 25 133 total 228 - 356 316 864 504 90 54 Source: Data collected in May/June, 2008 f r o m the MALR during the Ag-PER Issues 2,412 Paper Mission 53 Table A.6.4 Review of Public Expenditure in Agriculture Issues Paper Number of Employees in Agricultural Services Sector of MALR by Grade and Profession grade High First Second Third Fourth Fifth Sixth total occupational profession Agricul t urat 395 417 195 535 0 0 0 1,542 Engineering 7 8 15 6 0 0 0 36 Law 0 10 12 19 0 0 0 41 Administrative Development 27 24 53 15 0 0 0 119 Finance and Accountancy 25 37 31 35 0 0 0 128 Libraries and Documents 0 2 3 0 0 0 0 5 Art and Media 0 0 0 8 0 0 0 8 Medical 0 0 0 0 0 0 0 0 Pharmaceutical 0 0 0 0 0 0 0 0 Social Services 1 2 1 2 0 0 0 6 Security 0 0 0 0 0 0 0 0 Agriculture, Nutrition and Lab Technicians 193 317 206 230 410 5 0 1,361 Technical Engineering Assistance 17 20 11 102 48 0 0 198 Nursing and Public Health 0 0 0 0 0 0 0 0 Office 46 98 124 392 80 15 0 755 Unqualified Office 0 0 5 2 0 0 0 7 Artisanal for Agriculture and Nutrition 0 6 10 8 10 1 3 38 Artisanal for Machines and Works hops 0 20 12 15 40 38 25 150 Artisanal for Transportation 0 10 20 23 38 10 12 113 Artisanal for A r t and Architecture 0 2 3 13 8 5 5 36 Supporting Services 0 0 0 120 42 95 47 304 total 711 973 701 1525 676 169 92 4,847 Source: Data collected in May/June, 2008 from the MALR during the Ag-PER Issues Paper Mission 54 Table A.6.5 Review of Public Expenditure in Agriculture Issues Paper Number of Employees in Agricultural Guidance Sector of the MALR by Grade and Profession grade High First Second Third Fourth Fifth Sixth total profession Agricu Itura I 305 298 103 467 0 0 0 1,173 Engineering 4 3 13 3 0 0 0 23 Law 0 0 0 2 0 0 0 2 Administrative Development 4 8 38 16 0 0 0 66 Finance and Accountancy 18 38 22 40 0 0 0 118 Libraries and Documents 4 9 10 8 0 0 0 31 Art and Media 5 24 21 28 0 0 0 78 Medical 0 0 0 0 0 0 0 0 Pharmaceutical 0 0 0 0 0 0 0 0 Social Services 0 0 0 2 0 0 0 2 Security 0 0 0 0 0 0 0 0 Agriculture, Nutrition and Tech n icia ns 165 70 89 81 132 0 0 537 Technical Engineering Assistance 4 9 4 56 50 0 0 123 Nursing and Public Health 0 0 0 0 0 0 0 0 Office 22 77 98 239 40 8 0 484 Unqualified Office 0 0 0 0 0 0 0 0 Artisanal for Agriculture and Nutrition 0 19 103 192 145 91 47 597 Artisanal for Machines and Workshops 0 5 15 14 19 29 15 97 Artisanal for Transportation 0 28 45 50 75 42 21 261 Artisanal for Art and Architecture 0 21 47 58 35 39 13 213 Supporting Services 0 0 0 85 33 67 29 214 total 531 609 608 1341 529 276 125 4,019 Source: Data collected in May/June, 2008 from the MALR during the Ag-PER Issues Paper Mission 55 Table A.6.6 Review of Public Expenditure in Agriculture Issues Paper Number of Employees in Minister's Office Affairs Sector of MALR by Grade and Profession grade High First Second Third Fourth Fifth Sixth total profession Agricultural 546 512 217 312 0 0 0 1,587 Engineering 18 16 25 19 0 0 0 78 Law 11 18 19 25 0 0 0 73 Administrative Development 20 26 76 17 0 0 0 139 Finance and Accountancy 39 59 47 52 0 0 0 197 Libraries and Documents 12 8 7 1 0 0 0 28 Art and Media 49 43 30 , 36 0 0 0 158 Medical 0 0 0 0 0 0 0 0 Pharmaceutical 0 0 0 0 0 0 0 0 Social Services 6 7 4 12 0 0 0 29 Security 0 6 5 0 0 0 0 11 Agriculture, Nutrition and Lab Technicians 96 277 56 127 146 0 0 702 Technical Engineering Assistance 31 35 19 84 68 0 0 237 Nursing and Public Health 0 0 0 0 0 0 0 0 Office 88 196 220 458 132 57 0 1,151 Unqualified Office 0 1 2 1 1 0 0 5 Artisanal for Agriculture and Nutrition 0 0 7 7 9 6 0 29 Artisanal for Machines and Workshops 0 46 30 35 58 63 38 270 Artisanal for Transportation 0 35 74 86 102 37 36 370 Artisanal for Art and Architecture 0 15 28 30 59 36 10 178 Supporting Services Occupations 0 0 0 102 77 86 75 340 total 916 1,300 866 1,404 652 285 159 5,582 Source: Data collected in May/June, 2008 from the MALR during the Ag-PER Issues Paper Mission 56 Table A.6.7 Review of Public Expenditure in Agriculture Issues Paper Number of Employees in Economic Affairs Sector of MALR by Grade and Profession grade High First Second Third Fourth Fifth Sixth total profession Agricultural 212 209 98 783 0 0 0 1,302 Engineering 0 3 2 1 0 0 0 6 Law 0 0 0 3 0 0 0 3 Administrative Development 8 14 24 8 0 0 0 54 Finance and Accountancy 12 28 25 31 0 0 0 96 Libraries and Documents 0 1 1 0 0 0 0 2 Art and Media 0 0 0 5 0 0 0 5 Medical 0 0 0 0 0 0 0 0 Pharmaceutical 0 0 0 0 0 0 0 0 Social Services 0 1 1 1 0 0 0 3 Security 0 0 0 0 0 0 0 0 Agriculture, Nutrition and Lab Technicians 49 26 17 63 103 0 0 258 Technical Engineering Assistance 2 3 6 47 23 0 0 81 Nursing and Public Health 0 0 0 0 0 0 0 0 Office 25 64 107 155 55 7 0 413 Unqualified Office 0 0 0 0 0 0 0 0 Artisanal for Agriculture and Nutrition 0 0 0 0 1 0 0 1 Artisanal for Machines and Workshops 0 2 3 2 ' 5 11 0 23 Artisanal for Transportation 0 2 10 5 10 3 4 34 Artisanal for Art and Architecture 0 0 0 0 0 0 0 0 Supporting Services Occupations 0 0 0 27 18 13 21 79 total 308 353 294 1,131 215 34 25 2,360 Source: Data collected in May/June, 2008 from the MALR during the Ag-PER Issues Paper Mission 57 Table A.7.1 Review of Public Expenditure in Agriculture Issues Paper Total employees at MALR by Grade and Profession grade High First Second Third Fourth Fifth Sixth total I profession Agricultural 1,568 1,560 664 2,403 0 0 0 6,195 Engineering 31 32 60 31 0 0 0 154 Law 12 31 35 56 0 0 0 134 Administrative Development 107 149 314 141 0 0 0 711 Finance and Accountancy 155 297 237 283 0 0 0 972 Libraries and Documents 16 26 26 20 0 0 0 88 A r t and Media 54 67 53 113 0 0 0 287 MedicaI 17 26 42 71 0 0 0 156 0 0 0 0 0 0 0 0 23 33 18 42 0 0 0 116 0 6 5 0 0 0 0 11 567 737 409 606 1,002 5 0 3,326 57 97 56 389 272 0 0 871 0 16 25 14 6 0 0 61 344 774 1,001 2,029 647 195 0 4,990 0 7 20 19 10 5 0 61 0 25 120 207 165 98 51 666 0 76 70 81 165 195 88 675 0 82 164 176 254 105 88 869 0 41 85 113 109 83 33 464 0 0 3 540 301 412 296 1,552 total 2,951 4,082 3,407 7,334 2,931 1,098 556 22,359 Source: Data collected in May/June, 2008 from the MALR during the Ag-PER Issues Paper Mission 58 Table A.7.2 Review of Public Expenditure in Agriculture Issues Paper Percent Distribution of Employees by Grade and Profession in MALR High First Second Third Fourth Fifth Sixth total Drofession Agricultural 7.0% 7.0% 3.0% 10.7O/o 0.0% 0.0% 0.0% 27.7 O/o Engineering 0.1 010 0 -1 010 0.3% 0.1% 0.0% 0.0% 0.0% 0.7% Law 0.1% 0.1% 0.2% 0.3% 0.0% 0.0% 0.0% 0.6% Administrative Development 0.5% 0.7% 1.4% 0.6% 0.0% 0.0% 0.0% 3.2% Finance and Accountancy 0.7% 1.3% 1.1010 1.3% 0.0% 0.0% 0.0% 4.3% Libraries and Documents 0.1% 0 .1Yo 0.1010 0.1% 0.0% 0.0% 0.0% 0.4% Art and Media 0.2% 0.3% 0.2% 0.5% 0.0% 0.0% 0.0% 1.3% Medical 0.1% 0 .1010 0.2% 0.3% 0.0% 0.0% 0.0% 0.7% Pharmaceutical 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% Social Services 0.1% 0 -1 010 0 * 1010 0.2% 0.0% 0.0% 0.0% 0.5% Security 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% Agriculture, Nutrition and Lab Technicians 2.5% 3.3% 1.8% 2.7% 4.5% 0 * 0% 0.0% 14.9% Technical Engineering Assistance 0.3% 0.4% 0.3% 1.7% 1.2% 0.0% 0.0% 3.9% Nursing and Public Health 0.0% 0.1% 0 -1 Yo 0.1% 0.0% 0.0% 0.0% 0.3% Office 1.5% 3.5% 4.5% 9 .1010 2.9% 0.9% 0.0% 2 2.3% Unqualified Office 0.0% 0.0% 0.1% 0.1% 0.0% 0.0% 0.0% 0.3% Artisanal for Agriculture and Nutrition 0.0% 0.1Yo 0.5% 0.9% 0.7% 0.4% 0.2% 3.0% Artisanal for Machines and Works hops 0.0% 0.3% 0.3% 0.4% 0.7% 0.9% 0.4% 3.0% Artisanal for Transportation 0.0% 0.4% 0.7% 0.8% 1.1% 0.5% 0.4% 3.9% Artisanal for Art and Architecture 0.0% 0.2% 0.4% 0.5% 0.5% 0.4% 0 .1Yo 2 .1010 Supporting Services Occupations 0.0% 0.0% 0.0% 2.4% 1.3% 1.8% 1.3% 6.9% total 13.2% 18.3% 15.2% 32.8% 13.1% 4.9% 2.5% 100.0% Note: Reworked based on data collected in May/June, 2008 from the MALR during the Ag-PER Issues Paper Mission 59 Table A.7.3 Review of Public Expenditure in Agriculture Issues Paper Percent Distribution by Grade at MALR by Grade and Profession grade High First Second Third Fourth Fifth Sixth total Agricultural 2 5.3 O/o 2 5.2% 10.7% 3 8.8 O/o 0.0% 0.0% 0.0% 100.0% Engineering 20.1% 20.8% 39.0% 20.1% 0.0% 0.0% 0.0% 100.O% Law 9.0% 23.1 O/o 26.1O/o 41.8% 0.0% 0.0% 0.0% 100.O% Administrative Development 15.0% 21.0% 44.2 O/o 19.8 O/o 0.0% 0.0% 0.0% 100.0% Finance and Accountancy 15.9% 3 0.6% 24.4% 29.1% 0.0% 0.0% 0 * 0% 100.0% Libraries and Documents 18.2% 29.5% 29.5% 22.7 O/o 0.0% 0.0% 0.0% 100.0% Art and Media 18.8 O/O 2 3.3% 18.5% 3 9.4% 0.0% 0.0% 0 * 0% 100.0% Medical 10.9% 16.7% 26.9% 45.5% 0.0% 0.0% 0.0% 100.0% Pharmaceutical 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% Social Services 19.8 O/o 28.4% 15.5% 3 6.2 O/o 0.0% 0.0% 0.0% 100.0% Security 0 * 0% 54.5 O/o 45.5 O/o 0.0% 0.0% 0.0% 0.0% 100.0% Agriculture, Nutrition and Lab Technicians 17.0% 22.2% 12.3% 18.2 O/o 30.1% 0.2% 0 * 0% 100.0% Technical Engineering 6.5% 11-1Yo 6.4% 44.7 O/o 31.2% 0.0% 0.0% 100.0% Nursing and Public Health 0.0% 26.2% 41.0% 2 3.0% 9.8% 0.0% 0.0% 100.0% Office 6.9% 15.5% 20.1% 40.7 O/o 13.0% 3.9% 0.0% 100.0% Unqualified Office 0.0% 11.5% 3 2.8 O/o 3 1-1 o/o 16.4% 8.2% 0.0% 100* 0% Artisanal for Agriculture and Nutrition 0.0% 3.8% 18.0 O/o 3 1-1 010 24.8 O/o 14.7 O/o 7.7% 100.0% Artisanal for Machines and Works hops 0.0% 11.3% 10.4% 12.O% 24.4% 28.9% 13.0% 100.0% Artisanal for Transportation 0.0% 9.4% 18.9% 20.3 O/o 29.2 O/o 12.1% 10.1 Yo 100.0% Artisanal for Art and Architecture 0.0% 8.8% 18.3O/o 24.4% 23.5% 17.9% 7.1% 100.O% Supporting Services 0.0% 0.0% 0.2% 34.8 O/o 19.4% 26.5% 1 . 9 1o/o 100 * 0% Note: Reworked based on data collected in May/June, 2008 from the MALR during the Ag-PER Issues Paper Mission 60 Table A.8 Review of Public Expenditure in Agriculture Issues Paper Number of Employees in MALR according to Date of Birth Year of Birth Number of Employees Year of Birth Number of Employees 1948 1,222 1967 43 1 1949 2,416 1968 338 1950 2,724 1969 286 1951 2,395 1970 177 1952 1,103 1971 211 1953 538 1972 173 1954 487 1973 193 1955 580 1974 127 1956 672 1975 117 1957 608 1976 117 1958 802 1977 80 1959 806 1978 46 1960 344 1979 55 1961 333 1980 30 1962 594 1981 8 1963 4 11 1982 11 1964 440 1983 3 1965 456 1984 4 1966 565 1985 6 2413 su b-total 17,496 total 19,909 Note: Same source states the total number at 22,359 Source: collected in May/June, 2008 from the MALR during the Ag-PER Issues Paper Mission 61 0 0 0 0 0 0 0 0 Y b U 3 VI .- U .- Y W .- aa n b - 5 3 2 ? .- 8 2 a, VI a, 5 U C m m 0 \ h 0 0 N t: L e m u VI LL 0 II *. W P 3 0 VI VI W % - 0 a E Lc VI 8 .- VI Y 0 E 3 C 3 VI m 0 zl U - a C C m m .- C U a, VI U 0 E 0 0 m VI 3 C c VI Y C W 8 L 0 Y -0 C Lc 0 K W a C .- 0 5 m m 3 X Y a I n a, m r W L .- VI a s! m P ar C m L 3 a 5 0 B m m - 0 M .- .- Y b 5 2 91 'E 0, v) 0, W 0 5 \ b U 0 c 0 m N c .- U 0 2 e VI L P .- U m c .- E '0 z a - m U 5 LL J a LL 0 r?5 0 E ? - E .. a, as .. a, t! - aJG t! 3 m e n u 3 0 vr + .E c .- 0 vr E U a - e U C s aJ 5 r 9 U c m L J a U a m r U r 9 (c 0 e! 3 Y 73 c J a a X w m 2 Table A . l O . l Review of Public Expenditure in Agriculture Issues Paper Administrative Bodies, Services and Economic Authorities Expenditures by Budget Chapter . PI 2001/2002 expenditures LE x million Chapter 1 Chapter 2 Chapter 3 Chapter 4 wages and purchase of subsidies, total compensation goods and investment grants, social of employees services benefits - Administrative Bodies: MALR stricto sensu 129.8 111.0 563.3 207.6 1,011.7 DRC 18.7 2.7 19.7 0.0 41.1 Sub-total Administrative Bodies 148.5 113.7 583.0 207.7 1.052.9 - Services Authorities: ARC 294.4 74.5 98.8 15.4 483.1 GALR 100.7 5.9 5.2 4.4 116.2 FCI 1.1 6.1 0.0 0.0 7.2 GAS1 19.2 0.6 69.5 11.4 100.7 FAL 0.1 5.7 0.0 18.7 24.5 GAPS 1.4 0.1 3.7 0.2 5.4 GAVS 14.9 39.8 27.4 2.6 84.7 GAF 17.3 24.1 36.9 9.2 87.5 GALN 8.0 2.1 25.1 21.5 56.7 Sub-total Services Authorities 457.1 I 158.9 266.6 I 83.4 I 966.0 - Economic Authorities: GAEA 4.7 28.2 0.3 12.3 45.5 PBDAC 62.5 343.4 85.8 495.5 987.2 GACDP 19.3 392.7 473.2 5,042.3 5,927.5 Sub-total Economic Authorities 86.5 I 764.3 559.3 5,550.1 6,960.2 Grand Total 692.J 1 1,036.9 1,408.9 5,841.2 8,979.1 Source: Data sourced in May 2008 from the MoF by Ms. Taheya Sakr, consultant for PER-Agriculture Issues Mission 64 N? LDrl LnW LD $2 h 19 h0 N zg ggg mm N " 9 0 0 VI P a 1 ' z J a P X . u 1 N h0 1 9 9 9 9 ? 4 ? 9 9 9 ' 0 0 0 o o c clo 0 0 0 0 o?J?$ CON T - OD L - m Y B 8 3 n m r U - h L 3 n m 6 - a b Y n (0 r U - v) L p! 0 m r U - t L p! n m r U - m 9 9 9 9 9 9 9 ? ? * L 0 0 0 0 0 0 0 0 0 0 al Y -r n m 6 - ye"! 1 N L al 0 Y m r V I - rl L p! n m 6 - VI .- al U 0 m aJ > .- c1 m X w J t "!a? o mm hco d 9 9 9 9 9 9 9 99 ? 0 0 0 0 0 0 0 0 0 0 ? ? ? ? 9 9 9 99 h 4 0 0 0 0 0 0 0 0 - . I . w W cn U 3 m W 5 9 9 9 9 9 9 9 c9'4 cq ' 0 c N O o o o o o mro 2 L n er a . C C t u n c I- U Y C C C n 2 E VI U W > C CI W 5 L e 8 C (0 C E 9 9 9 9 9 9 h L"? h Y- R o o o o O N mrl d O rc N VI W P a " 0 9 "! 9 ? ? 9 1hP? '4 m m 0 0 o o w bo o N - VI a! Table A.12 Review of Public Expenditure in Agriculture Issues Paper Agriculture Expenditure 2006107 t Purchase Total Budget Change Goods All values in LE Thousand Wages Interest Subsidy Others investment and 2006-2007 over Services 2006-2007 2005-2006 2005-2006 1. Protecting Biological Diversity and Nature Lands Protecting Biological Diversity and Nature 17,222 7,411 0 19 109,500 134,185 101,246 32,939 32.5% Views Total 1 17,222 7,411 - 0 19 33 I 109,500 134,185 101,246 - 32,939 32.5% 4 2. Research and Development Desert Research Centre 29,961 3,170 42 161 10,000 43,371 37,578 5,793 15.4% Agricultural Research 353,000 23,859 467 18,798 19,480 38,100 453,704 403,246 50,458 12.5% Center Water Research Center 26,096 2,105 0 21 2,846 17,000 48,068 44,229 3,839 8.7% Total 2 409,057 29,134 509 18,980 22,363 65,100 545,143 485,053 60,090 12.4% 3. Agriculture and Irrigation 3.1 Agriculture Ministry of Agriculture 196,464 34,941 7,161 8,425 31,728 279,347 296,199 -16,852 -5.7% Main O f k e Sub-total 3.1 196,464 34,941 7,161 8,425 31,728 279,347 296,199 -16,852 . -5.7% 3.2 Agricultural Directorate at Governorate level 1 Cairo 13,797 224 0 10 3 0 14,03 12,983 1,051 8.1% 2 Geza 31,209 320 0 40 7 0 31,576 28,843 2,733 9.5% 3 Calubea 63,138 365 0 65 8 0 63,576 58,174 5,402 9.3% 4 Garbea 117,134 452 0 106 16 0 117,708 108,836 8,872 8.2% 5 Mnofea 132,040 601 0 150 15 0 132,806 121,187 11,619 9.6% 6 Kafer AI-Sheek 71,447 685 0 70 27 0 72,229 66,835 5,394 8.1% 7 Dakhalea 117,603 517 0 110 23 0 118,253 110,191 8,062 7.3% 9 Deemyat 20,237 158 0 20 7 0 20,422 18,848 1,574 8.4% 3 ACEskandarea 29,257 480 0 17 9 0 29,763 28,114 1,649 5.9% 10 Mattroh 3,706 613 0 1 5 0 4,325 3,939 386 9.8% 11 Beherra 112,598 670 0 83 43 0 113,394 104,013 9,381 9.0% 12 Por-said 7,862 137 0 5 2 0 8,006 7,241 765 10.6% 68 Table A.12 (continued) Review of Public Expenditure in Agriculture Issues Paper Budget Agriculture Sector b y Governorates 200 6107 Purchase Total Budget Change Goods All values in LE Thousand Wages Interest Subsidy Others investment and 2006-2007 over Services 2006-2007 2005-2006 2005-2006 13 AI-lssmaelea 29,612 194 0 15 6 0 29,827 26,679 3,148 11.8% 14 AI-Soweess 5,568 124 0 2 4 0 5,698 5,172 526 10.2% 15 AI-Baher AI-Ahmarr 3,062 674 0 1 5 0 3,742 3,307 435 13.2% 16 Shemal Saynai 11,071 74 1 0 5 4 0 11,821 10,551 1,270 12.0% 17 Ganob Saynai 2,897 302 0 5 4 0 3,208 2,865 343 12.0% 18 AI-Sharkea 104,584 553 0 76 52 0 105,265 93,365 11,900 12.7% 19 AI-Faumm 37,200 343 0 25 26 0 37,594 33,708 3,886 11.5% 20 Banne-Suwef 60,980 333 0 45 17 0 61,375 55,568 5,807 10.5% 21 AI-Menea 58,390 550 0 60 30 0 59,030 53,282 5,748 10.8% 22 Asuott 69,870 3,352 0 40 33 0 73,295 66,175 7,120 10.8% 23 AI-Wadde AI-Jaded 7,301 1,315 0 27 3 0 8,646 7,921 725 9.2% 24 Sohag 53,180 4,120 0 45 30 0 57,375 52,795 4,580 8.7% 25 Kana 36,716 5,276 0 25 10 0 42,027 39,074 2,953 7.6% 26 Aswan 24,290 4,334 0 25 8 0 28,657 24,823 3,834 15.4% 27 Ai-Akssoor City 4,318 559 0 6 4 0 4,887 4,448 439 9.9% Sub-total 3.2 1,229,067 27,992 0 --1,079 401 0 1,258,539 1,148,937 109,602 9.5% 3.3. Others Agrarian Reform 6.1% Commission 124,550 5,300 0 655 450 5,900 136,855 129,037 7,818 Improving Cotton Quality 1,395 97 0 4,658 5 0 6,155 6,155 0.00 0.0% Fund Staff for Land Improving 0 6 24 15,000 40,373 58,905 -18,532 -31.5% 23,993 1,350 Project Agricultural Land Fund 114 145 0 15 22,511 0 22,785 10,785 12,000 111.3% Agricultural Budget Fund 2,199 74 0 12,611 1 1,500 16,385 17,803 -1,418 -8.0% Sub-total 3.3 152,251 6,966 0 17,945 22,991 22,400 222,553 222,685 -1 32 -0.1% Total 3 69,899 --- 7,161 27,449 24,020 54,128 1,760,439 1,667,821 92,618 - 5.6% 4. Livestock 4.1 Veterinary Directorate in the Governorate 1 Cairo 12,789 960 0 54 31 8 14,121 12,888 1,233 9.6% 2 Geza 11,070 146 0 13 5 11,234 10,220 1,014 9.9% 3 Calubea 11,516 644 0 8 529 12,697 11,828 869 7.3% 4 Garbea 23,642 151 0 12 3 23,808 21,398 2,410 11.3% 5 Dakhalea 17,676 485 0 16 257 18,434 16,887 1,547 9.2% Table A.12 (continued) Review of Public Expenditure in Agriculture Issues Paper Budget Agriculture Sector including the Governorates 2006/07 Purchase Total Budget Change All values in LE Thousand Wages Subsidy Others investment 2006-2007 over Services 2006-2007 2005-2006 2005-2006 6 Mnofea 19,595 345 0 13 352 0 20,305 18,585 1,720 9.3% 7 Kafer AI-Sheek 14,855 386 0 11 166 0 15,418 14,140 1,278 9.0% 8 Deemyat 5,146 197 0 5 44 0 5,392 4,992 400 8.0% 9 AI-Eskandarea 4.718 574 0 38 294 0 5,624 5,058 566 11.2% 10 Mattroh 1,517 283 0 2 10 0 1,812 1,633 179 11.0% 11 Beherra 10,936 507 0 8 644 0 12,095 9,822 2,273 23.1% 12 Por-said 2,473 85 0 2 2 0 2,562 2,367 195 8.2% 13 AI-lssmaelea 5,389 144 0 6 58 0 5,597 4,994 603 12.1% 14 AI-Soweess 1,518 106 0 1 5 0 1,630 1,489 141 9.5% 15 At-Baher AI-Ahmarr 1,044 230 0 2 22 0 1,298 1,143 155 13.6% 16 Shemal Saynai 2,189 216 0 1 2 0 2,408 2,171 237 10.9% 17 Ganob Saynai 1,196 185 0 2 2 0 1,385 1,231 154 12.5% 18 AI-Sharkea 24,768 240 0 21 6 0 25,035 22,542 2,493 11.1% 19 AI-Faumm 9,993 191 0 7 10 0 10,201 9,479 722 7.6% 20 Banne-Suwef 14,235 329 0 10 9 0 14,583 12,874 1,709 13.3% 21 At-Menea 11,135 158 0 9 4 0 11,306 10,227 1,079 10.6% 22 Asuott 13,984 742 0 5 10 0 14,741 13,786 955 6.9% 23 AI-Wadde At-Jaded 2,269 519 0 2 1 0 2,791 2,478 313 12.6% 24 Sohag 9,250 779 0 8 9 0 10,046 9,424 622 6.6% 25 Kana 5,366 902 0 3 3 0 6,274 5,868 406 6.9% 26 Aswan 4,253 784 0 5 5 0 5,047 4,330 717 16.6% 27 AI-Akssoor City 1,200 169 0 1 2 0 1,372 1,271 101 7.9% Sub-total 4.1 243,722 P 265 -2,772 0 257,216 233,125 -- 24,091 10.3% 4.2 Others Veterinary Services 20,588 844 10,015 21,452 93,373 76,261 17,112 22.4% Commission Sub-total 4.2 20,588 844 - 10,015 21,452 93,373 76,261 -- 17,112 22.4% Total 4 264,310 1,109 12,787 21,452 350,589 309,386 41,203 13.3% 70 Table A.12 (continued) Review of Public Expenditure in Agriculture Issues Paper Budget Agriculture Sector by Governorates 2006107 Purchase Total Budget Change All values in LE Thousand Wages Goods Interest Subsidy Others investment and Services 2006-2007 5. Fisheries 5.1 Others Fishing and Hunting 28,106 18,724 87 124 2,122 38,000 -14,027 -13.9% Fish Production Development Commission 25,760 17,342 0 122 2,088 10,000 55,312 57,266 -1,954 -3.4% Sub-total 5.1 53,866 36,066 87 246 4,210 48,000 -1 5,981 -10.1% Total 5 53,866 36,066 87 246 4,210 48,000 142,475 1 158,456 -15,981 -10.1% 6. Grand Total (1 to 5) 2,322,237 193,441 7,757 1 47,803 I 63,413 1 298,180 2,932,831 2,721,962 210,869 7.7% 79.2% 6.6% 0.3% 1.6% 2.2% 10.2% 100.0% .......................... ----------. __ _ _ _ _ __ __ _-_-_ -- _ _ _-_ _ .- . _ _ _ _ - - _ _ _ _ __ _ _ _ _- _ _. _ _-_ - _ _-_ -_ - _ _- _ _-_ - _ --------- 7. Grand total according to table 2,701,738 1,000,502 98,267 48,153 95,361 1,431,960 5,375,981 5,174,297 received from MALR 8. Difference between 379.501 807,061 90,510 350 31,948 1,133,780 2,443,150 2,452,335 Grand Total 7 and 6 Source: Mr. Alex Kremer, WB-Headquarters, Senior Sector Economist, Middle East and North Africa Economic Support Unit, May 2008 71 Table A.13 Review of Public Expenditure in Agriculture Issues Paper Summary Agriculture Expenditure for Selected Fiscal Years ~ ~ ~~ All values in LE million I Summary of agriculture expenditures I ---I- A. MALR stricto sensu - wages and compensation of employees 129.8 (12.8%) 181.9 (27.8%) 194.3 (28.6%) - purchase of goods and services 111.0 (11.0%) 118.1 18.0% 157.5 23.1% Sub-total wages plus goods and services 240.8 (23.8%) 300.0 (45.7%) 351.8 (51.7%) - investment 563.3 (55.7%) 232.5 (35.5%) 211.9 (31.2%) - others 207.6 (20.5%) 123.7 (18.6%) 117.7 (17.1%) Total MALR stricto sensu I 1,011.7 (100%) I 656.2 ( 100%) I 681.4 (100%) I B. 9 Services Authorities + DRC - wages and compensation of employees - purchase of goods and services Sub-total wages plus goods and services - investment - others Total 9 Services Authorities + DRC C. 3 Economic Authorities - wages and compensation of employees - purchase of goods and services Sub-total wages plus goods and services - investment - others Total 3 Economic Authorities D. 27 Governorates - wages and compensation of employees - purchase of goods and services Sub-total wages plus goods and services - investment - others Total 27 Governorates E. Other Entities - wages and compensation of employees - purchase of goods and services Sub-total wages plus goods and services - investment - others Total Other Entities F. = A.+ B.+D.+ E. - wages and compensation of employees - purchase of goods and services Sub-total wages plus goods and services - investment - others Total F = A,+ B.+D.+ E. 72 Table A.14 Review of Public Expenditure in Agriculture Issues Paper Organizational Set-up Ministry of Agriculture and Land Reclamation Sector One : Authorities Sector and Minister's Office Affairs One 1: Central Department for Minister's Office Affairs 1. General Authority for Technical Office Affairs 2. General Authority for t h e Cabinet and Communications 3. General Authority for Security 4. General Authority for Field Follow-up and Monitor 5. General Authority for Public Relations and Rural Media 6. General Authority for Citizens Services 7. General Authority for People's Assembly and Shoura Council Affairs 8. General Authority for Legal Affairs 9. General Authority for Monitoring Financial and Administrative Affairs 10. General Authority for Analyzing and Responding t o the Central Agency for Auditing Reports One 2 : Central Department for Engineering Affairs 11. General Authority for Projects' Engineering Planning 12. General Authority for Agricultural Machines 13. General Authority for Work Shops and Technical Affairs 14. General Authority for Electrical and Mechanical Projects 15. General Authority for Coordinating Projects and Agricultural Affairs in COMESA Member One 3: Central Department for Training 16. General Authority for Training Planning 17. General Authority for Agricultural Statistics 18. General Authority for Follow-up and Monitor 19. General Authority for Implementing Agricultural Training 20. General Authority for International Training Center and Development in Mariout One 4 : Central Department for Information and Supporting and Documenting Decision Making 21. General Authority for Computers 22. General Authority for Libraries and Documentation and Micro-film 23. General Authority for Information Center 24. General Authority for Publishing and Translation 25. General Authority for Supporting Decision Making One 5 : Central Department for Directorates' Affairs 26. General Authority for Agricultural Legislations 27. General Authority for Agricultural Affairs One 6: Central Department for Agricultural External Relations 28. General Authority for Agricultural International Egyptian Center 29. General Authority for International Studies 30. General Authority for International Organizations and Conferences 31. General Authority for International Relations 73 Sector Two : Economical Affairs Sector Two 1: Central Department for Agricultural Economics 1. General Authority for Agricultural Census 2. General Authority for Agricultural Statistics 3. General Authority for Food Security 4. General Authority for Statistical Estimations by Samples Two 2: Central Department for Agricultural Planning 5. General Authority for Planning Agricultural Investment Projects 6. General Authority for Agricultural Economic Resources 7. General Authority for Agricultural Policies Sector Three : Aaricultural Guidance Sector Three 1: Central Department for Agricultural and Environmental Guidance 1. General Authority for Guidance and Developing Agricultural Crops 2. General Authority for Agricultural Culture 3. General Authority for Agricultural Museums and Fairs 4. General Authority for Training and Youth Employment and Rural Development Three 2: Central Department for Horticulture and Agricultural Crops 5. General Authority for Fruits 6. General Authority for Vegetables 7. General Authority for Medical Plant and Perfumes Production 8. General Authority for Palm Cultivation Three 3: Central Department for Land and Water 9. General Authority for Water on Field Level 10. General Authority for Fertilization and Soil Improvement Three 4: Central Department for Plant Protection 11. General Authority for Combating Insecticides 12. General Authority for Grass Hopper 13. General Authority for Mice 14. General Authority for Combating Insecticides and Protecting Plants in North Delta 15. General Authority for Combating Insecticides and Protecting Plants in South Delta 16. General Authority for Combating Insecticides and Protecting Plants in East Delta 17. General Authority for Combating Insecticides and Protecting Plants in Canal and Sinai 18. General Authority for Combating Insecticides and Protecting Plants in North of Upper Egypt 19. General Authority for Combating Insecticides and Protecting Plants in South o f Upper Egypt Three 5: Central Department for Tree Plantation and Green House and Environment 20. General Authority for Tree Plantation 21. General Authority for Green House 74 Sector Four : Aaricultural Services Sector Four 1: Central Department for Land Protection 1. General Authority for Trespassing and Public Services Projects 2. General Authority for Protecting Agricultural Land in Governorates 3. General Authority for Project Implementation on Desert and Reclaimed Land Four 2: Central Department for Seeds Production 4. General Authority for Screening Stations 5. General Authority for Marketing and Seeds Distribution 6. General Authority for Commercial Affairs 7. General Authority for Seeds Production Affairs in Governorates Four 3: Central Department for Examining and Approving Seeds 8. General Authority for Plant Protection Office 9. General Authority for Developing Seeds 10. General Authority for Field Inspection 11. General Authority for Gin-mill 12. General Authority for Approving Seeds 13. General Authority for Seed Detection Affairs in Governorates Four 4: Central Department for Agricultural Detention 14. General Authority for Agricultural Detention in Cairo Sea and Cargo Village 15. General Authority for Agricultural Detention in Port Said and North Sinai 16. General Authority for Agricultural Detention in Suez and South Sinai 17. General Authority for Agricultural Detention in Cairo and South of the Valley 18. General Authority for Agricultural Detention in Alexandria and near t h e Delta Four 5 : Central Department for Agricultural Cooperation 19. General Authority for Direction and Cooperation 20. General Authority for Financial and Cooperative Follow-up 21. General Authority for Cooperative Marketing Sector Five : Land Reclamation Sector Five 1: Central Department for Horizontal Expansion 1. General Authority for Planning and Evaluating Land Reclamation Projects 2. General Authority for Follow-up on Implementation o f Land Reclamation Projects Five 2: Central Department for Settlements 3. General Authority for Examination and Distribution 4. General Authority for Fresh Graduates and Small Producers Settlements 5. General Authority for Engineering Affairs 6. General Authority for Agricultural Affairs for Land Reclamation Five 3 : Central Department for Development of New Lands 7 . General Authority for Development in East of the Delta and Sinai 8. General Authority for Development in West of the Delta and Matrouh 9. General Authority for Development in Upper Egypt and New Valley 10. General Authority for Social and Environmental Affairs 75 Sector Six : Develomnent of Animal Wealth Sector Six 1: Central Department for Animal Production 1. General Authority for Genetic Improvement 2. General Authority for Animal Wealth 3. General Authority for Poultry 4. General Authority for Fishery Wealth Data Six 2: Central Department for Agro-processing Industries and Production Inputs 5. General Authority for Fodder 6 . General Authority for Agro-processing Industries 7. General Authority for Agriculture Support Services Sector Seven : a Seven 1: Central Department for Financial Affairs 1. General Authority for Budget 2. General Authority for General Minister's Office (Dewan) Accounts 3. General Authority for Purchases and Inventories 4. General Authority for Financial Analysis and Final Accounts 5. General Authority for Local and Foreign Finance Seven 2: Central Department for Administrative Affairs 6. General Authority for Administrative Regulations 7. General Authority for Administrative Training 8. General Authority for Employees' Affairs 9. General Authority for Accruals 10. General Authority for Administrative Affairs Seven 3: Central Department for Medical Services 11. General Authority for Medical Affairs 12. General Authority for Treatment Affairs Ministry of Agriculture stricto sensu Total 7 Sectors Total 26 Central Departments Total 109 General Authorities 76 Table A . 1 5 Review of Public Expenditure in Agriculture Issues Paper Governorates: Population, Areas and Capital Cities Governorate Population Area (krn.2) Area Capital Ad Daqahiiyah 4,985,187 3,471 1,340 AI MansOrah AI Bahr al Ahrnar 288,233 203,685 78,643 AI Ghurdaqah AI Buhayrah 4,737,129 10,129 3,911 Darnan hOr AI FayyOrn 2,512,792 1,827 705 AI FayyOrn AI Gharbiyah 4,010,298 1,942 750 Tanta AI Iskandariyah 4,110,015 2,679 1,035 AI Iskandariyah AI Isma' iliyah 942,832 1,442 557 AI Isma'iliyah AI Jizah 6,272,571 85,105 32,859 AI liza h AI MinOfiyah 3,270,404 1,532 592 Shibin al Kawm AI Minya 4,179,309 2,262 873 AI Minya AI Qahirah 7,786,640 214 83 AI Qahirah AI QalyObiyah 4,237,003 1,001 387 Banha AI Uqsur 451,318 55 21 AI Uqsur AI Wadi al Jadid 187,256 376,505 145,369 AI Kharijah Ash Sharqiyah 5,340,058 4,180 1,614 Az Zaqaziq As Suways 510,935 17,840 6,888 As Suways Aswan 1,184,432 679 262 Aswan AsyOt 3,441,597 1,553 600 AsyOt Bani Suwayf 2,290,527 1,322 510 Bani Suwayf BOr Sa'id 570,768 72 28 BOr Sa' i d Durnyat 1,092,3 16 589 227 Durnyat Helwan Helwan 3anOb Sin# 149,335 33,140 12,795 At Tur Kafr ash Shaykh 2,618,111 3,437 1,327 Kafr ash Shaykh MatrOh 322,341 212,112 81,897 Marsa MatrOh Qina 3,001,494 1,796 693 Qina Sharnai Sinal 339,752 27,574 10,646 AI 'Arish 6th of October 6th of October City SOhaj 3,746,377 1,547 597 Suhaj 29 Governorates 72,579,030 I 997,690 385,210 Source httD://www.statoids.com/uea.htrnl (Last updated: 2008-04-30) Population: 2006-11-11 Census (no data for Helwan and 6th of October Governorates) 77