CM – Big fish in a shrinking pond: How an armed forces company built a fish farming monopoly

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On a cold night last December, 37-year-old Hassan * stands in front of a group of ponds on the fish farm that he inherited from his father and watches the fish move in the water. Hassan’s life was meant for him from birth: fish, food and ponds. “My whole family worked in fish farming. I was born and raised in this country, ”he remembers his childhood and youth in this place.

In his first years at work, Hassan was able to secure a stable life for himself, his wife, his son and his daughter. At that time there wasn’t much competition in fish farming in Damietta. « The state has encouraged investment in this area and the number of farms has been limited in the Middle East in general, not just in Egypt, » he says, pointing to his farm. “At first the land was fallow. My father took care of it to make it suitable for fish farming. And in 1983, with the establishment of the General Authority for Fish Resource Development, my father signed a contract with the authority to rent the land at an annual rate of 5 percent. “

Until recently, Hassan believed that the job he inherited 22 years ago would be his until he died. In 2018, the General Authority for the Development of Fish Resources made the decision to increase the rent for fish farms from LE 300 per feddan to LE 3,000 per feddan. Things didn’t seem to last that long for Hassan.

The entry of the National Society for Fisheries and Aquaculture, a company affiliated with the National Organization for Armed Forces Projects and the Framework, also contributed to this concern A 2018 decision granted exclusive market rights.

These new challenges threaten Hassan and all other fish farmers who are now facing a military competitor in the market with all the unfair market advantages enjoyed by the military. “We were shocked by the 2018 decision to increase the rent tenfold. And in case of non-payment, the land will either be confiscated or the farms will be destroyed by the state and the tenant could be imprisoned, « says Hassan. « I just hope I get half the support that the National Society for Fisheries and Aquaculture is getting, especially now that the rent has gone up along with the price of feed and electricity. »

Fish farming depends on two important pillars, namely water and location. Temperature also plays an important role in fish’s vital processes, including metabolism and reproduction, especially during spawning.

Fish are divided into species that can survive in cold water that can mate at 15 ° C or less , and those that survive in warm water that can mate at temperatures of 16 ° C or more. Tilapia, for example, has to live in temperatures between 20 ° C and 30 ° C to survive. They stop eating when the temperature drops below 16 ° C and are at risk when the temperature drops below 10 ° C.

One of the biggest challenges in fish farming is the potential for oxygen starvation in the fish, especially during the night, which can lead to her death. For this reason, it is important to choose a suitable location for fish farms that is near a water source and away from agricultural waste.

The production process of fish in Egypt differs depending on the type of fish. For example, meagers are widespread in the Diba Triangle in Damietta, where they grow an average of 3 grams per day and reach 1.5 kilograms per fish during their growth cycle, which lasts 10 to 12 months. Sea bass reach market weight in 18 to 20 months. Farmed fish take 10 to 12 months to breed and grow to over 1 kilogram. From April to October it takes six to seven months for tilapia to reach its full size, growing at a rate of 1.5 grams per day.

Egypt harvests 1.92 million tons of fish annually, 80 percent of which comes from fish farms come. Domestic fish farms and catches make up 79 percent of the local market, while imports are close to 500,000 tons of fish per year. According to CAPMAS, the fish productivity in Egypt has exceeded 250 billion LE in the last ten years. Egyptian fish imports fell 7 percent year-on-year from USD 905.1 million to USD 841.9 million in the first eleven months of 2020.

From the 1980s to a few years ago, the General Authority for the Development of fish resources regulates the entire fishing industry. Established by a 1983 law, the agency works under the Ministry of Agriculture to develop the national economy through the development of fisheries, conduct research to increase production, conduct pilot and model projects, develop training and advisory programs, and technical assistance in the field of fish to provide agriculture and the planning and implementation of national fish abundance projects.

The law allows fish farmers to rent farms and hatcheries under the jurisdiction of the General Authority for the Development of Fish Resources. To determine the value of the rent or the usufruct period, a contract is signed with an annual increase of 5 percent.

Hesham Mohamed, the owner of a fish hatchery in Alexandria, explains to Mada Masr that the agency has the task of selling their land to fish farmers to lease and supply them with eggs. « In the 1980s and 1990s, the agency helped us a lot by overseeing the fish farms and renting the land at extremely reasonable prices, » he says.

Several fish farming experts agree that the government has made vigorous efforts in recent years to pressure the Fish Resource Authority, the main authority responsible for fish wealth and farming in Egypt, to resign from its role.

In August 2015, the Ministry of Planning decided to reduce the budget of the General Authority for the To reduce the development of fish resources for the 2014/2015 financial year from LE 160 million to LE 120 million in order to cut the overall budget of the Ministry of Agriculture considerably. The consequences of this decision were extremely damaging for fish farms, according to an official from the agency, who spoke to Mada Masr on condition of anonymity. He said the budget cut was preventing the agency from fulfilling its primary role in supporting and developing fish farms, which in turn was affecting the productivity of the agency’s affiliated fish farms.

On August 27, 2019, the government submitted a to the House of Representatives Proposed bill for the protection and development of lakes and fish abundance. The bill made way for the creation of a new body, the Authority for the Protection and Development of Lakes and Fish Resources, to take responsibility for the management and regulation of fishing areas, lake fish farms and artificial fish farms. In addition, the agency would be tasked with planning, planning and executing fish farming projects in different governorates.

Although the law is still under discussion, some fish farming experts believe that parallel action will be taken to the General Authority for Fish Resource Development to undermine. On December 26, the President’s Spokesman, Bassam Rady, released details of a meeting between President Abdel Fattah al-Sisi, Prime Minister Mostafa Madbouly, Agriculture Minister Al-Sayed al-Quseir, General Mohamed Amin, an adviser to the President on financial affairs, Lieutenant Osama Rabie . the chairman of the Suez Canal Authority and General Hamdy Badeen, the director of the National Society for Fisheries and Aquaculture. The meeting took place a few weeks after Sisi issued a decree allocating nearly one million feddans in Toshka to the National Society for Fisheries and Aquaculture.

Although the Minister of Agriculture who oversees the General Agency for the Development of Fish Resources , attended the meeting, the official head of the agency was absent. According to Mohamed Shehab, a fish farming researcher without the head of the agency and his members reflects the state’s persistent policy of marginalizing the agency. Shehab added that neither the head of the agency nor any of its members were aware of the Toshka assignments.

In contrast, the National Society for Fisheries and Aquaculture, which belongs to the Organization of National Aid Projects of the Armed Forces, has an increasingly larger one Role taken on.

“The National Society for Fisheries and Aquaculture has become more important than the General Authority for the Development of Fish Resources. There are officials in the Ministry of Agriculture and the Department who wholeheartedly believe that other authorities are now responsible for the abundance of fish in Egypt, ”said Ahmed al-Sharaky, a former fish resources authority engineer and owner of a fish farm.

According to its official website, the National Society for Fisheries and Aquaculture was established following a ministerial decree by the Prime Minister in November 2014. During a multi-project opening ceremony in November 2017 that Sisi attended, the company’s chairman stated that he expects production to reach 60,000 tons per year.

Over the past few years, this government has repeatedly attempted the National Service Projects Organization to allocate state-owned land for investment in fish farming, most recently the one million feddans from Toshka.

In August 2016, Sisi issued a decree to redistribute 490 feddans, originally intended for tourism projects in Ain Sokhna, to fish farming companies. In 2016, the Official Gazette published a series of presidential decrees, one of which was to redistribute 2,815 Feddan’s state-owned land in Ghalioun, Kafr al-Sheikh, to the National Service Projects Organization for use in fish farming projects. November 2017, Sisi opened the first phase of the Berket Ghalioun project for fish farming, which was set up in an area of ​​4,100 feddans at a cost of LE 1.7 billion. According to the former Governor General of Kafr al-Sheikh Sayed Nasr, two training, research and development centers have been set up as part of the project, a hatchery on 18.5 feddans that houses 2 billion shrimp eggs and 20 million saltwater fish, a 119 -Feddan drainage pond and an industrial area of ​​55 feddan.

According to two sources, an academic and fish farm owner who spoke to Mada Masr on condition of anonymity, the Ghalioun project was originally started by a group of fish farming professionals, university professors and agricultural researchers before it was handed over to the General Authority for the Development of Fish Resources, which it then handed over to Hamdy Badeen and the national society.

The project also set up a farmers’ cooperative with a company that provides production services in the field fish farming and finances from the European Social Fund is ned. The cooperative would provide services to non-competing fish farms across the country that raise fish for the local market. However, the two sources told Mada Masr that the productivity of the Ghalioun project was low in relation to its expenses and size.

An agricultural engineering professor and expert in fish farming, who spoke to Mada Masr on condition of anonymity , says the private sector’s frustration with state fish farms is not due to its high yields. Rather, the frustration of the private sector is due to the low production costs of state farms, which are directly attributable to their exclusive access to energy use. As a result, small fish farmers cannot sell their products at similarly competitive prices, said the expert.

Mahmoud Salem, the former head of production and operations administration at the General Agency for the Development of Fish Resources, repeated this assessment and described the competition between the owners private fish farms and the National Society for Fisheries and Aquaculture as almost « nonexistent ».

« The National Company for Fisheries and Aquaculture has hardly any production costs, especially because it has factories that produce feed specifically for the company, » he says .

Although the company’s productivity remains rather limited in relation to total production in the country, the company’s influence has affected small investors. “The National Society for Fisheries and Aquaculture sells at a lower cost than me because there are no production costs. It also outperforms everyone when it comes to industrial resources like access to freshwater and saltwater farms, water pumps, an abundance of electricity, non-payment of annual rents, and own factories to make feed, « says Hassan.

Hassan added that most traders prefer to shop at the National Company for Fishery and Aquaculture because of their low prices. “As such, we suffer a lot of losses due to the low prices in the market,” he says. Sometimes Hassan is forced to sell his fish and shrimp at a lower price so that he can narrow the gap between him and his military competitor. “The loss can increase to 30,000 LE during a shrimp production cycle. This also applies to sea bream and sea bass, ”he adds.

In addition, the National Society for Fisheries and Aquaculture is exempt from corporation tax and VAT.

According to Hesham Mohamed, owner of the fish hatchery in Alexandria, General Hamdy Badeen assured fish farmers during a meeting Mohamed attended in April 2019 to discuss the Ghalioun project that the company’s owned farms were being set up for export. However, according to Mohamed, this is difficult to achieve.

“There is not a single fish farm in Egypt that exports to Europe because it does not have the quality certificates required to export to the European Union. This is because Egyptian law prohibits the use of fresh water in fish farms. Most companies rely on wastewater, ”says Mohamed. “We used to export large quantities to the Gulf States, but after taxes of LE 12,000 per ton of fish were levied, exports were stopped. Even after the decision was revoked in 2017, the Gulf States did not import from Egyptian fish farms as they had already moved to other markets such as China and Indonesia, which exported at lower prices. “

The competitive challenges of the National Society for Fisheries and Aquaculture are not the only problem that private fish farmers face. In 2018, the General Agency for the Development of Fish Resources took the decision to increase the rental value of a Feddan from LE 300 and 400 to LE 7,700 before it was lowered to LE 3,000, which has led to a crisis between the farm owners and the agency. According to Salem, who says many people who work in the fishery are considering giving up the job altogether.

Salah al-Roudy, a 40-year-old fish farmer, is a case in point. For many years he worked in fish farming in the village of Diba on the outskirts of Port Said, where the majority of the population is dependent on fishing and fish farming.

When Roudy first started fish farming, he reached the profit margin on a sea bream production cycle and sea bass up to 35 percent. However, since 2018 he has suffered enormous financial losses and is in debt following the rise in feed prices, electricity charges and rent. « The rent for the land used to be LE265 per Feddan, but after 2018 it rose to LE3,000, so I decided to leave the country, » he says.

« I told the authorities that I the land and the cost of its maintenance will give up. But I was told that from 2018 on, even if I stopped farming, I would have to pay my debts, ”he adds. “The production cycle for sea bass and sea bream takes two to three years. It was impossible to pay the rent after it multiplied. “

Roudy had to look for an alternative job that could secure a life for him and his family. “I started working as an electrical appliance retailer. I would buy a device and sell it to people in the neighborhood for little profit. There was no other solution. I have two children in private schools and don’t know how to pay their school fees next year, ”he says.

Two years ago, a presidential decree was passed declaring all northern lakes as border regions. Sayed, former head of production and operations administration for the General Authority for Fish Resource Development, threatened to refer farm owners to military tribunals if they did not pay LE3,000 per feddan rent Little did Roudy know that his dream of making a stable living by farming fish would eventually land him in jail after accumulating debt and failing to pay rent. In December 2018, he was shocked to discover that three military lawsuits had been filed against him for failing to pay his debts as of May 2018, even though he had left the country. « I was very scared of walking around without the case paper so that I would not be arrested at any checkpoint, » he says.

Although the government has decided to shift the accumulated debt, Hassan, like Roudy, is considering giving up fish farming. « I spent so much money on this project and the state didn’t give me any support, » he says. « If the state wants to take my land away and compensate me for the costs I paid to cultivate it, I’ll be ready to go tomorrow. »

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