Egypt's food subsidies, importantfor ensuring political stability, do not target specificgroups. The subsidies were introduced during Second WorldWar and have never been targeted. Egyptians seem to perceivefood subsidies as the most concrete benefit they receivefrom government spending. Seen as an entitlement, foodsubsidies are politically sensitive. Section two gives thehistorical background of the food subsidy system anddiscusses past and planned food subsidy reforms, sectionthree analyzes the geographical allocation of subsidizedfood items and how the allocation corresponds to populationand poverty distribution, and section four analyzeshousehold participation in food subsidies by income groupand geographic region. Section five uses all thisinformation to measure the cost of subsidies that do notreach intended consumers, or the system leakage, and thepotential cost savings from excluding the richest groupsfrom food subsidies. In section six, the key findings aresummarized and a vision for long-term reforms is outlined.
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