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Globalization Challenges to Egypt’s Production Sectorsagricultural exports in particular, in order tobe able to import enough food to ensurefood security and to achieve self-reliance.This can only be done through an upgradingof the marketing system and tradeinfrastructure, especially in the areas of postharvest [meaning?] and transportation.Lowering the costs of Egyptian productsthrough improvement of productivity, withthe assurance of high quality, is the key tocompetitiveness in the internationalmarkets. Further, Egypt has to transform itsfresh and raw products into processed onesin order to improve its terms of trade and tocreate more job opportunities and increasevalue added.Farm Price VariabilityThe combined process of APR, themembership of Egypt in the WTO and theincreasing forces of globalization have had astrong impact on Egypt’s price structure.Agricultural prices have become moresensitive and responsive to internationalforces. They fluctuate from one season toanother and also from year to year. Theopenness of the Egyptian economy to theinternational market may lead to a widerange of price fluctuations. This priceinstability naturally creates an unstable farmincome stream, which is harmful to theagricultural sector, particularly smallfarmers, in terms of farm investment,production plans and poverty.In most countries, whether developed ordeveloping, price stabilization schemes arein force to protect the population againstsevere price fluctuations. In Egypt, theAgricultural Price Stabilization Fundcompensates farmers in the case of a drasticdecrease in farm prices. However, this Fundneeds to be supported with sufficientfinancial resources and an effective mechanismfor its efficient operation.The impact of globalization is felt not onlyon farm prices but also on prices forconsumers, especially for basic food. Egyptimports around fifty percent of its foodconsumption needs, mainly wheat. In casesof irregular and large increases in majorfood prices, the cost for the urban poor willbe very high. The GOE would therefore bewise to be ready to intervene to ensure thatbasic food needs for the poor are met at areasonable cost.Germplasm (Genetic Resources)One particular sub-sector of agriculture isplant germplasm, which provides a particularlyarresting counter-example to globalization.Restricted germplasm flows among nationsare causing potentially adverseconsequences for agricultural developmentin developing countries. This restrictedmovement is due to the monopolisticpractices of multinationals which, throughprivatization and mergers, have acquiredmost of the valuable genetic resources(Table 3.8).In order to expand food production for itsgrowing population, Egypt has to strengthenits research institutions to generate newvarieties, and to seek partnerships withinternational agricultural research centers,especially in the field of genetic improvementsin basic food crops.In most countries,whether developed ordeveloping, pricestabilization schemesare in force to protectthe population againstsevere pricefluctuations.Table (3.8)Changing Structure of the “Plant Genetics” IndustryMajor RemainingCompaniesMONSANTO (PharCorporationAVENTISDUPONTSEMINISDowChemicSyngenta (PendingFTC approvalConglomeratesAgr Evo Rhone-Poulenc HoechstScherinDow ElancoNovartisAstrazenecaAgricultural CompaniesBiotech CompanieSeed CompaniesAgracetus Calgene IMillennium Pharma DekalbAsgrow HolcFoundation seeds CargillInt’l plant B Int’lHumanscienceCuragPioneerHybrAsgrowRoyalSluisPlant Geneticplant Tec NunhernsVa plantGenetic SunSeeds Can limagrainVegetableGeneMycogenRibo PharmaeuticalMycogenunit AgriseedsCiba-SandozNorthrupKingS&Hilleshog seedsRog Co.Mogen1nt’1 N.V.Japan TobaccoAdvantaEgypt Human Development Report 2000/2001 - 49