Director of Tenants Affairs for the 6th October Company for Agriculture Products, Mahmoud Ali, revealed that 4,000 acres of the company’s land was leased to Mixland and Shabrawy. The land was used to produce 6,000 tons of peanuts, noting that 40% of Egypt’s peanut exports come from Al-Salhiya in the Nile Delta.
He also noted that Daltex, Al-Alamia for Trading, Nahdet Misr and several other companies have contracted with the company to cultivate 8,000 acres of potatoes this season.
Approximately 5,000 acres of citrus crops lands were rented to the El-Gebaly Company for 15 years. Other lands will soon be leased to Daltex, SONAC, Egast and Al-Alamia Trading on the condition the investor provide a drip irrigation network, according to Ali.
Ali added that El-Gebaly Company has rented an additional 1,400 acres of citrus and another 1,400 of mangoes for five years, noting that a number of investors have rented already-cultivated lands for periods ranging between three to five years.
He said that the company has already begun signing rental contracts with a number of companies specialised in cultivating crops, like Maltex, SONAC, EGAS Agricultural for Seed Production, Agrualex Trading and Nahdet Misr.
Ali added that the company is considering leasing land to Agrualex for 10 years, to cultivate potatoes and establish a station for gather and preparing the products for export.
The company itself currently cultivates 30% of its lands itself and leases the remaining 70%. The land is leased using three financial systems: the first involves the company cultivating the land, the second, leasing the land to other companies, and the third, cultivating in cooperation with investors.
Ali said crops rented or cultivated in partnership with others are subject to the supervision of the company’s engineers. This ensures that fertilisers or pesticides do not harm the soil.
He added that the search for renting companies begins after the agricultural plan is laid out, and the spaces and types of crops that the company plans to cultivate every season are defined. The rental value of proposed plots is decided through conditions of contract. The variation between private and public offering is determined according to the crop, where strategic crops are private.
Ali pointed out that acre rental prices range between EGP 3,000 to EGP 7,000 depending on the crop and the period it takes to grow. The company is responsible for providing water and electricity to tenants, who may rent equipment from the company during harvest season.
He added that the company uses three kinds of rental contracts. The first are long-term contracts, used with for plots on which trees are cultivated that require drip irrigation, and the contract term ranges between 12-15 years. Investors reclaim and cultivate lands themselves for this type of contract, often cultivating citrus crops.
The second kind of contracts are short-term and range between three and five years, through which the trees to be harvested from lands owned by the company are bought. The majority of these crops are sweet fruits, like peach and apricots.
The third kind of contract is a funding rental for exports that provide high-quality seeds and market produce. This occurs on the condition that the company cultivates the land and follows up on the crop through the harvest. Following this, revenues are distributed amongst the parties according to their participation.