The Latest Developments in Romanian Agriculture

Roughly 145 million Euro were earmarked to the Romanian Agriculture Ministry as result of the most recent budget adjustment. The money will be used to pay compensations to farmers whose crops were hit by the drought this past summer. “The sum is to be distributed to farmers as soon as we process the applications from those who suffered the damage, the moment we are given the go-ahead from the European Commission, in written form, in keeping with the notification we are submitting”, Romanian Agriculture Minister Daniel Constantin said.

Constantin went on to say payments would be made in early or mid-December, immediately after the consent from the European Commission was received. Daniel Constantin also added that the surface area of the drought-hit farmlands, in various stages, accounted for 1.6 million hectares. “The number of those who are to receive those compensations stands at around 173,500, after the assessment we have received from county farming divisions or institutions subordinated to the prefect’s office. I should like to emphasize that 165,000 beneficiaries are natural persons”, the Romanian Agriculture Minister also said. Constantin also mentioned the categories of crops for which compensations will be given, will be given, under the form of state aid: maize grains, sunflower, soy beans, potatoes, beetroot, vegetables, fodder, pasture and hayfield. In another move, farmers who will get together in cooperative farms could benefit from a string of facilities, the Romanian Agriculture Minister announced.

Constantin made it clear that the benefits for farmers’ associations were laid down in a draft law which is being debated at the Finance Ministry. Associated farmers will be granted deductions or even tax exemptions, among other stipulations Daniel Constantin also said.

Daniel Constantin: ”There are 800,000 farmers who receive European payments from the Payments and Interventions in Agriculture Agency and who, in theory, pay the implicit income tax, and maybe the most important is the exemption from the property tax for the assets belonging the respective cooperative farms: farmland, livestock, farms, equipment used for the common activities. But the great change we would like to be able to operate through this draft law has to do with the fact that we intend to enable those who join in the cooperative farms to remain owners of their goods as well of what they jointly produce, on the respective cooperative farm, on condition that they put up for sale at least 50% of the products they obtained through their joint work, so that the respective association may fulfill the role for which it was set up.”

The National Rural Development Program over 2014-2020 will stand at 9.5 billion Euro. 

Daniel Constantin: “If we take the big farmers into account, they’re mainly interested in increasing their production. The National Rural Development Program has the role of letting farmers know they have the opportunity to integrate their production, to create groups of producers or modern cooperative farms, so that they can develop their yield and have production with added value; this time we exceed the stage we’ve covered in the last 25 years, when we tried to persuade farmers to associate in cooperative farms; in this new stage we encourage farmers in a very simple way: we grant them a larger number of non-reimbursable funds. Those who apply for funding as a group of farmers or as a cooperative farm receive by 20% more non-reimbursable funding. Furthermore, we’re trying to solve a problem we have spotted in the National Rural Development Program: there are no loan opportunities, there is no opportunity to offer guarantees for a loan when co-financing must be provided for European funds. And in this respect, discussions with banks are underway, they have already come up with a few packages, but we’re still waiting to put in place stimulating loan packages, so that this problem may be sorted out as well.”

According to the National Statistics Institute, the milk production in the first 8 months of the year was over 8 per cent smaller than in the similar period last year. However, imports increased by 4.4%. The drought and the scrapping of the milk quotas across the European Union equally influenced the situation, says the president of the “The New Farm” Cattle Breeders’ Association, Cornel Costeliuc. He told Radio Romania that although the financial aid was crucial for animal breeders’ associations, small farmers were still reluctant to get together, as most of them could not make any sense of the legislation in the field.

Cornel Costeliuc: ”The consultancy made accessible for the peasant does not exist at all. We would like the Agricultural Division to get involved in that to a greater extent. There are no Chambers of Agriculture in the rural areas. Consultancy is necessary for the peasants to understand the advantages of an association, within a cooperative farm, within any other association. For quite a while, we’ve been unable to set up a strong Chamber of Agriculture, capable of offering consultancy, of giving advice to the peasants or the farmers as to what they further need to do.”

Cornel Costeliuc also said the reported number of animals was on the wane, because the fodder had become expensive, but also because the price processors offered stood at half of what would be required for covering the expenses, while imported milk and dairy products were cheaper.