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.
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