The Bank’s Role in Contract Farming

Egypt imports yellow corn at a considerable amount that is estimated at one billion and 700 million dollars. Thus, if the state encouraged the farmers to grow corn and strategic crops it will save millions of dollars. Indeed, the state approved the contract farming system which means drawing up an advance contract with farmers at a declared price before planting the crop in order to encourage them. The initiative will start with the yellow corn.

There is a full coordination between the Ministry of Agriculture and the Egyptian Company for Agricultural and Rural Development-one of Agricultural Bank of Egypt’s companies- and the Societies and Poultry Federation where the company will buy the yellow corn from the farmers and market it to the Poultry Federation or feed factory owners. The bank will carry an experiment in Upper Egypt this year because of the low percentage of humidity in the crop. In order to store corn, its humidity percentage shall be in the range of 12-13% while the humidity percentage in Lower Egypt reaches 20%; therefore dryers are needed in order to reduce the humidity percentage to 12%. So, there will be coordination with the Ministry of Agriculture, the governors, and the Ministry of Local Development to establish driers in Lower Egypt.


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