zaterdag 19 mei 2012

The Future of the Common Agricultural Policy in Romania 2014 - 2020

Between 2014 and 2020, over 386 million euros will be allocated for supporting agriculture in the European Union. As announced by the European Commissioner for Agriculture, Romania’s Dacian Ciolos, the Common Agricultural Policy remains the main beneficiary of the EU budget, valued at 1025 billion euros. The EU strategy for the 7-year period is mainly aimed at boosting the economy once again through the development of research and innovation, investment in green energy, the acquisition of organic products, guaranteeing food safety, as well as the creation of new jobs.

One new feature is that the budget bill addresses a series of key principles, the first and foremost being that the European Commission will focus on obtaining actual results, rather than absorbing as much money from community funds as possible. The second principle is that of conditionality, meaning that money will be allocated on the basis of commitments made by member states for obtaining stable results. The rules will be simpler, clearer and more transparent, resulting in reduced bureaucracy. Another principle is that of flexibility, meaning funds will be more easily transferable from one budget line to another, depending on priorities.

The EU’s budget bill will, for the first time, allocate funds for agricultural research, will finance consortia and collaborations between laboratories and research centers, agricultural producers and professional associations, as well as structures dealing with professional organization and consultancy. 3.5 billion euros in total, meaning an average of 500 million euros per year, will be allocated for crisis situations on the food market. These include scenarios like those caused by the bird flu, E-coli or dioxin contamination. The future CAP will bring Romanian farmers even bigger subsidies, Dacian Ciolos assures.

The European commissioner says that at community level, a harmonization of these subsidies is required, given the currently large discrepancies between sums allocated to different countries: “The Commission will propose increasing subsidies for farmers in Romania and other countries currently benefiting from amounts of money far below the community average. We are unlikely to see subsidies brought to the same level for all countries, as this would be hard to justify. Production conditions vary from one country to another and even from one region to another, so the system we are going to propose will even allow for differentiation of subsidies between different regions of the same member country.”

While long-standing members of the Eu are granted subventions following a historical criterion, receiving a fixed amount of money each year, new members are subject to new conditions, until they catch up with the more developed nations. There are currently two ways of allocating subsidies as part of the CAP. At present, the European average per land area unit is 260 euros.

Florin Marius Faur, head of the Agency for Payments and Interventions in Agriculture, told us more: “Romania still has limited experience in the area of European subsidies. Romanian farmers only began to benefit from payments per land area unit in 2007. Initially, 50 euros per unit were allocated for Romanian farmers, and that sum has so far grown to nearly 100 euros. Through the new CAP, between 2014 and 2020, the subsidy could be increased to over 200 euros per unit, bringing Romanian farmers much closer to those in older EU member countries. We have 900 million euros allocated for this year, and we’ll have 1.1 billion next year. This money comes from the European Agricultural Guarantee Fund and is made available exclusively for payments per land area unit.”

One issue in Romanian agriculture continues to be the widespread fragmentation of plots of land. Over one million Romanian farmers are currently benefiting from payments per land area unit, of which some 900 thousand own between 1 and 5 hectares of land. That is why, in order to merge plots of land, the Romanian authorities will grant between 30 and 100 euros per hectare annually to owners aged over 55 who lease their plots for periods of 5 to 15 years. Those who sell their plots under these conditions will receive 200 euros per hectare, according to the law. The authorities in Bucharest believe that merging plots will make agriculture more productive.

Dacian Ciolos: “For certain member states, including Romania, the sums received for investing in modernizing agriculture are, to my mind, just as important as the subsidies received. Because, if we were to heavily increase subsidies for Romanian farmers, and if we were to provide almost none of the 40-60% co-financing funds for purchasing equipment, building processing plants, or helping young farmers and so on, then I think that Romanian farmers would face tough competition against other parts of the EU where these investments have already been made.”

In the new CAP there is increasing talk about concepts like environmentally friendly agriculture, and according to specialists, Romanian farmers fall into this category. The European Commission is going to present the legislative package on the 2014-2020 Common Agricultural Policy on 12th October 2011, and it will then be discussed by the European Council and the European Parliament. The new CAP should enter into force on the 01 January 2014.

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