The Bakeries Division at the Federation of Chambers of Commerce warned during a meeting with Supply Ministry officials that about 6,000 subsidized bakeries, or roughly 20% of all subsidized bakeries, could cease operations under the planned shift to cash subsidies, a member of the division’s board told Al Manassa.
The source, who requested anonymity, said the change could cut subsidized bread production and consumption by up to 40%, as ration card holders may opt to spend their subsidy on other basic goods, threatening the viability of thousands of bakeries.
Prime Minister Mostafa Madbouly recently announced that the government aims to convert food subsidy support from in-kind assistance to a cash-based system during the next fiscal year.
Last week, Supply Ministry spokesperson Ahmed Kamal told Al Manassa that proposals under discussion would provide between 200 and 350 Egyptian pounds ($4-$7) per person each month. His comments came after Supply Minister Sherif Farouk revealed last Tuesday that subsidized bread would cost 1.5 pounds ($0.03) per loaf under the new system.
Outlining the plan, the source said the government would replace each citizen’s bread allocation with a fixed cash value, shifting from the current loaf-based model to a monetary allowance tied to each beneficiary.
He added that citizens would be free to buy as much bread as they need, with the cost deducted from their subsidy balance. “If someone takes 10 loaves, for example, 15 pounds will be deducted from their balance, and so on,” he said.
The bakeries division member said allowing consumers to use the value of their bread subsidy to purchase other rationed goods could lead many households to cut bread consumption, especially since a four-member household currently receives 20 loaves a day under the existing system.
He added that the Supply Ministry plans to allow subsidized bakeries to produce and sell unsubsidized bread alongside subsidized bread, while increasing bakeries’ profit margins to offset lower demand. However, he said those measures would not be enough to keep all bakeries operating under the new system.
“The size of the profit-margin increase will be discussed next Sunday during the coordination meeting between the ministry and the General Bakeries Division,” he said.
Subsidized bakeries produce about 250 million loaves a day for ration card holders. Under the current system, each beneficiary receives five loaves a day at a price of 20 piasters per loaf after the government raised the price in 2024 from 5 piasters.
