Several Issues with Budget for Agriculture 2013
It is getting clearer what funds will be channeled from the national budget towards agriculture. At the moment there are BGN 239 mil. scheduled for additional payments and government subsidies. These are going to be redistributed towards producers of sheep, goat, beef, vegetables and tobacco. For the first time since 2007 grain producers will not be getting national payments. Instead 2013 will be a “good” year for the producers of chicken and pork which will be compensated for the EU regulation on humane treatment of animals.
The main conclusion that can be drawn from the debates in the Parliament Committee on Agriculture is that the government doesn’t really know why it is subsidizing certain sectors, should it be doing that or what the effects of certain policies could be. The main motive behind changes in Budget 2013 is the coming elections.
The most damaging and populist decisions is to spend BGN 73 mil. on tobacco producers. This sector was completely liberalized this year which would have led to competition showing which producers can survive in a market environment and would have shown that tobacco production is a viable sector without subsidies. At the same time, nothing was done to provide people in the tobacco sector with alternative employment opportunities because subsidies in 2011, 2012 and 2013 were based on tobacco production for the 2007-2009 period instead on being based on projects for buying live animals, seed, etc. According to GERB’s MP Emil Dimitrov this model has to be kept for “social” purposes. However we believe that there is a separate ministry which deals with social issues. The worst part is that what the Ministry of Agriculture does will result to more people needing welfare support from the government.
The second problem comes from the philosophy of agricultural subsidies. There is none. There is no thinking about what the Bulgarian government does in this area could be harmful. Today it seems that no one in the Ministry of Agriculture has ever considered what could be the consequences of five years of privileges for the grain production sector. Now when the effects are more or less visible funds are getting pulled out of this sector and transferred to the dying stock-farming industry. Financial support for the latter is expanding and may soon include all kinds of exotic animals like camels and why not hedgehogs. Bureaucrats are focused on the falling numbers of animals so they are subsidizing that. Government officials lack the imagination to figure out there is little value in animals that do don’t produce anything of value or quality. If this sector has to be subsidized at all it should be done on a project basis for improvement of herd genome, for the purchase of new, selected animals for investments in equipment and facilities.
It is high time to be understood that the problem of Bulgarian agriculture is not the lack of subsidies but the over-subsidized competition in the EU. And also that Bulgaria has a say in the formation of the Common Agricultural Policy.
