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Debts of farmers and the proposed solutions

The Credit Bank was established in 1911, where it primarily aimed at achieving the liberation of the Egyptian farmer from the high rates of lenders and loans. And over the Bank was a helping hand and supportive for all farmers, providing them with the best types of seeds and fertilizers, and used to loan them the costs of livestock and poultry until the date of harvest, the farmer pays all the fees in return for little or very low interests. The Bank continued to help the farmers in this manner until 1931, until the separation of the Bank's credit and cooperative systems, and in 1976 there was the integration of credit and cooperatives and the Bank for Development and Agricultural Credit is the present form now.
Economists emphasized that the BDAC, was the target, which was set up for financing and shifting from agricultural activities to the financing of commercial activities, so the Bank is no longer an agricultural bank, it turned into a commercial bank. The BDAC as it stands now as a commercial bank is in the guise of agricultural and this can not be of help to the farmers, the benefits system is currently applied to the farmers leading them to the trap of loans and imprisonment.
Since the Government of Dr. Atef Sedki, former Prime Minister of Egypt, began the application of a package of policies of globalization and market liberalization in the agricultural sector, which would mean giving up on the farmers, and minimizing the role of cooperatives and the transfer of the Bank's activities to commercial. With Dr. Ganzuri's Presidency of the Council of Ministers and the government started to put its time to the cooperative sector for the real farmers and taken control of 50 billion pounds of funds. After that period, which ended with the Dr. Atef Ebeid, former Prime Minister of Egypt turned to the Government the removal of subsidies on agricultural production and began the privatization policy, and concluded that most of the sale of agricultural companies, and before the expiration of the mandate Dr. Ebeid, with the beginning of the first ministry of Dr. Ahmed Nazif, the Government has transferred the cooperative, the last things that stand with the peasants, the sick man can not even defend himself, rather than eight million farmers.
The BDAC is in a dilemma: the Minister of Agriculture and Land Reclamation, the recent decision to return all property and stores of agricultural cooperative associations, after control of the bank for a period that lasted for more than 32 years, and it should be noted that the property of the agricultural cooperative societies - 628 shops and 55 based on the level of the Republic Cooperative Union, according to the inventory of his property - which had been determined under the law No. 117 in 1976, the Agricultural Credit and Development Bank, and this decision is the second of its kind after the decision was issued in 1982, requiring the return of such property to the agricultural societies in six months, but had not been implemented time.
Although the decision of the Minister of Agriculture, signals the beginnings of a new crisis facing the Bank for Development and Agricultural Credit, because most of those renting the property to others, and the strange thing is that the bank did not pay the rent exploitation, where he was scheduled to pay the rental value of one pound of each month at the store , The strangest thing is that the stores and lease the property, which makes the process of return at this time is extremely difficult.
Farces of the BDAC: the BDAC, which has been established to facilitate life for the farmers by granting small loans with low interest rates and facilitated terms, has become today a vehicle sword over the necks of the peasants after being turned into a den of profiteering and brokerage at the expense of the simple farmer, and it is clear that the Bank officials to a considerable degree of experience and professionalism and the fabrication of tricks that exploit the ignorance of peasants and innate fear of all is the government and the permanent threat of imprisonment as to ensure their non-accountability law.
There is no doubt that the corrupt practices adopted by the officials of the Agricultural Credit and Development has produced a wide range of devastating effects on farmers, where the number of defaulters to repay their debts to the bank about 435 thousand clients a total of about 2 billion pounds, while the number of cases filed by the bank the peasants after they failed to pay to more than 23 thousand cases, with total loans of more than one billion pounds.
Political initiative: President Hosni Mubarak in the twenty-first of last February demanded the government to exempt small farmers than half of their debts owed to the Bank for Development and Agricultural Credit, and take the necessary measures to take on the public treasury such exemptions, and the speed of solving the problems of defaulters of bank loans, and providing all the necessary facilities for the payment of debts, of more than one billion and 900 million pounds, through the write-off of 50% of the debt, which would solve the problems of small farmers defaulting, totaling approximately 140 thousand rather than to send them the Government had given them a deadline for write-off payment of 25% of their debts, this time with the end of last March, which means the abolition of the earlier initiative of the Government and the President Mubarak's commitment to assignments to write off 50% from 25%. And the Government's commitment to assume about 800 million pounds, including 300 million pounds borne Development Bank and 500 million pounds that had been provided From the Ministry of Finance to be repaid to the Bank for Development and Agricultural Credit account defaulting loans.
The Minister of Agriculture indicated that this decision will benefit Strugglers who arrives out of debt in the loan granted them at 25 pounds and have not land more than five acres or less. And the last chance to deal with the defaulters will be June 30 next, and there will be others, but they will close the file after that date, because the initiative is in the light of the recent decision by President Mubarak to end the issue of defaulters completely. And then the bank will take all legal measures to preserve its rights against the funds and did not respond to the initiative and offered to settle debts.
Solutions and non-solutions: the crisis began when facilities provided by the BDAC failed to solve the problems of 140 thousand farmers in spite of the extended grace period to three times to solve the crisis of defaulters, and these facilities are two options, either a payment of 75% of the indebtedness and the waiver of the remaining 25% as well as the total interest and demurrage expenses and any administrative or judicial, or is struggling to pay 10% of the original debt and 10% during the year and the scheduling of the rest of the stock of debt on the 10-year rate of return of 5% per annum, in the latter case is the exemption of the total benefits as of the date of settlement and the delay fines.
The agricultural economists assert that the decision of President Mubarak to reduce the debts of farmers by 50%, followed by other decisions of any kind, a group of painkillers, as long as the policy of Development and Agricultural Credit Bank has been reformed, under the Ministry of Agriculture gave up on the farmer, who has been without afternoon protected. That is the cause of the reactions varied between the resolution and welcomed the idea of emptying its contents through the administrative machinery for some people, and those who believe that the problem still exists, and that there is a new problem farmers face in the next few years, before the final completion of the current crisis and the government has developed 10 years for the debt.
Ali Shakir, President of the BDAC, said that the number of beneficiaries of the decision to 40 thousand farmers, but it is a decision that he chose to under-measurement on the basis that it would not cover the majority of farmers, because the beneficiary of the exemption is less than the value of the loan for 25 thousand pounds, and those who have 5 acres and less, and therefore the number of beneficiaries of this resolution will not exceed 40 thousand of the total 140 thousand rather than to send them and there will be 90 thousand at risk of incarceration.
If all debts were defaulted on the Bank for Development and Agricultural Credit is billion nine hundred million pounds, it does not compare the indebtedness incurred by the Government on business two years ago, which amounted to 75% of the indebtedness of $ 26 billion.
So what's the solution? The Insurance Law is the solution and not to rely on the BDAC on the grounds that this type of institutional reform to the Government for the benefit of farmers. In this context, take the strategy of the Ministry of Agriculture until 2030 in the mind of a law to protect farmers and their produce against any risk, the law of interdependence, which can in which the farmer is insured for all of his cattle and for cultivation and land, which is an alternative to borrowing from banks, a project which known as the law of solidarity, who believed the future of agricultural crops for the 8 million farmers against any natural hazards, and others. It is a follow-up to the insurance fund and the peasant Aguetradhm loans in the event of any amounts from any quarter.
The Land Center asserts that the law alone is not enough, but there are several other things the government should do to get out of the agricultural crisis and the economic present and future, including the treatment of imbalances in agricultural policies, which resulted in a privatization and liberalization programs and the market economy without a social dimension into account, came against all of the farmers are not in favor of it, and the agricultural cooperative sector in turn, without the tutelage of the government, and emphasized the need to contract farmers to sell crops before harvest through companies that will support agricultural development schemes, and the financing of the Egyptian farmer of all classes, and the expansion of the reclamation and cultivation of land New to achieve self-sufficiency of strategic crops, and the provision of jobs in labor-intensive agricultural projects.
Amendment of the Act of the Principal Bank for Development and Agricultural Credit: the Ministry of Agriculture and Land Reclamation in the preparation of legislative amendments, which the ministry is willing to make to the Law No. 117 of 1976 passed a law the establishment of the Principal Bank for Development and Agricultural Credit, in the framework of the restructuring of the bank technically, financially and administratively what it can to maximize the banking service to rural and agricultural development continued and sustainable development.
The amendments were presented to the Ministerial Committee of the Political and Legislative Affairs, headed by Dr. Mufid Shehab, Minister of State for Legal Affairs and Parliamentary Councils, where it was discussed and approved and submitted to the Council of Ministers in preparation for submission to the People's Assembly and Shura and the most important amendments proposed in this respect are:
• Conversion of the Principal Bank for Development and Agricultural Credit from a holding company to a public sector bank called the Egyptian Agricultural Bank that has independent legal personality and remains a specialist in the financing of agricultural and rural development, a follower of Minister of Agriculture and Land Reclamation.
• The BDAC should be incorporated in the Egyptian Agricultural Bank and may establish branches and units within or outside the country to achieve its objectives.
• The Egyptian Agricultural Bank should be under the supervision of the Central Bank of Egypt and be subject to the provisions of Act No. 88 of 2003, as amended, the issuance of central bank and the banking system and currency. • The Bank should follow the latest systems, techniques and financial operational management practiced in the international banking facilities.
• The separation between commercial activities and banking activities of the Bank, the Bank may establish or participate in companies for the marketing and trade of agricultural products and agricultural production.
Fears of foreign control on food security: economists and parliament experts have warned of approving the draft law prepared by the officials of the BDAC in coordination with the Ministry of Agriculture, to be presented to Parliament soon, because it contains all of the diversion of the World Bank to the holding Bank-stock company, and here lies the risk of agricultural development in Egypt needs to finance the development and there is no origin without funding, and the two types of funding, the first self-financing, and the second funding through borrowing, it is known that 42% of farmers have holdings in Egypt less than acres, and therefore need to borrow for the maintenance of the collection until the harvest and marketing, and it is accepted that the Bank for Development and Agricultural Credit Bank is the only specialist in the granting of agricultural loans by 80%, as well as it provides the agricultural production of fertilizers, seeds, pesticides, etc. and distribute to the agricultural cooperatives and obtained by the peasants, and then pay the price, in the case of the Bank's contribution to the company, it will come out of the development process to the business, in addition to the failure to ensure that shareholders who buy and read the Board of Directors, and thus can be in control of the Board of Directors of the foreign countries or hostile, and here Sitgmon food security in Egypt, which is a real disaster.
In the light of the above, the BDAC is the next target of globalization according to all evidence on the ground, and by authorizing officials repeatedly that the process of restructuring the bank actually began, under the debt crisis of the peasants of the bank. Hence it is imperative for the Land Center for Human Rights as one of the civil society organizations to defend the issues of farmers, in order to receive their economic, social, cultural and even political rights, under the auspices of the Freedoms Committee at the Journalists Syndicate to make an initiative that is the first of its kind to help solve the crisis defaulting farmers with the Bank, and the protection of this Bank, which is the main artery of agricultural development in Egypt of the abduction of globalization.
The Center is presenting this initiative with consideration to the views of all experts, specialists, researchers and all national forces in order to activate this initiative and put the following questions in order to achieve the desired result:
1) How can the debt crisis of the peasants with the Bank be settled under the current situation for both parties?
2) What are the mechanisms for the implementation of the settlement of the crisis between the Bank and the peasants?
3) What is the proposals on the new Bank law to be issued to regulate the relationship between the Bank and the farmer?
4) What are the guarantees which could avoid a repetition of the crisis with the Bank defaulting farmers in the future?
5) What is the public perception of pattern and form of the relationship between the BDAC and farmers to achieve the interests of both parties at the local and national levels?
Workshop Agenda
10:30 A.M. – 11:00 A.M. Registration & Acquaintance
11:00 A.M. – 11:20 A.M. Opening Session
Mr. Karam Saber, Executive Manager of the LCHR Mr. Mohamed Abdel Qudus, Head of the Freedoms Committee at the Journalists Syndicate
11:20 A.M. – 01:30 P.M. First Session
Live testimonies for non-equivalent conflicts between farmers and the Bank
Headed by Mr. Mahmoud Murtada, Head of the Center for Alternative Development
01:30 P.M. – 02:00 P.M. Break
02:00 P.M. – 04:30 P.M. Second Session
The LCHR Initiative
Dr. Usama Bedir
Land Center for Human Rights
Views of experts: farmers, the Bank and agriculture, one last chance
Headed by Mrs. Shahenda Meqlid
One of the founders of the Farmer's Union under establishment
First View
Dr. Usama El Bahnasawy
Professor of Agrarian Economy, the Faculty of Agriculture, Al Azhar Unicersity
Second View
Dr. Fakhry Shusha
Professor of Agrarian Economy, the High Institute for Agrarian Cooperatives
Third View
Dr. El Khouly Salem
Rural Sociologist, Faculty of Agriculture, Al Azhar University
Fourth View
Mr. Saad Hajras
Editor in Chief of the World Today Newspaper
Fifth View
Dr. Sherif Fayad
Professor of Agrarian Economy, the Desert Center