A new smart-card system was supposed to help eliminate corruption in state-subsidized wheat. It may have done the opposite. REUTERS/Asmaa Waguih
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By last May, ministry data shows, wheat reserves had fallen to just 435,000 tons, enough for about two weeks' supply and far below the stock of three to four months normally held by the state.The Egyptian government denied that it faced a wheat shortage.The government has said the new system stopped that overreporting.Last June, the Supplies Ministry said that thanks to Egypt's bountiful harvest, it had bought a record 5.3 million tons of domestic wheat, up from around 3.5 million tons a year in the previous few years.The traders, millers and former ministerial adviser who spoke with Reuters also allege that companies sold imported wheat to the ministry as Egyptian wheat so they could receive the better subsidized price.According to Gad, in the scramble to fill the massive wheat shortfall FAC sold the government wheat which did not exist.Gad told Reuters there was not enough space at the company's silos to hold all the wheat FAC said it had sold. Last month the government reversed a plan to reform the Egyptian wheat subsidy system.
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