The functioning of the Egyptian food-subsidy system during food-price shocks

Egypt has an extensive system of food subsidies which provides bread and other basic staples to the population at low prices. This article examines the functioning of the food-subsidy system during two recent periods of rapid food-price inflation to evaluate its effectiveness as a social safety net. Three aspects are considered: the difference in rural and urban policies, the price differentials between subsidised and free-market goods, and the extent of coverage of the system. The study finds that the food-subsidy system mitigated some negative impacts for the population, but exacerbated other challenges.