Absence of national priorities and targets: these sum up the main problems that Bulgarian agriculture faces. This has been the conclusion of the Economic Research Institute at the Bulgarian Academy of Sciences (BAS) following a major survey on how European financing was being spent during the first programming period 2007-2013 under the Environment Operational Programme, the Common Agricultural Policy and the Rural Development Programme.

BAS economists have found that Bulgaria has absorbed about 80% of financing under these programmes to the tune of roughly 6.3 billion euro. Despite substantial financing no clear priorities have been formulated so far. In this way European funding has not contributed to the development of a competitive sector of agriculture able to deliver high added value.

“Priorities are diluted”, comments Associate Prof. Ognyan  Boyukliev. “It looks as though the aim is to absorb financing, rather than achieve results, revive agriculture and make it a leading sector again. Since 2007 when European money started to flow into Bulgarian agriculture, the gross added value has decreased, however the country's GDP has remained relatively stable. Financing has mostly gone to support grain production. Annually, Bulgaria produces about 3.5 to 4 million tons of grain on average. Twenty-five years ago it produced 14 million tons. Today this country is one of the big grain exporters but 25 years ago grain was not exported but used as fodder transformed into products with added value such as milk and dairy products, bread etc. Twenty-five years ago Bulgaria was a major fruit and vegetable producer and easily satisfied the needs of the domestic market. Currently, grain accounts for 80% of the country's produce.”

And if grain makes just 5% of added value, in a tourist's plate added value is twenty times more, the economist explains. From grain production Bulgaria loses about 750 million leva in added value and thousands of jobs. According to Boyukliev Bulgaria has got no large territory so therefore it cannot compete with big grain producers such as Kazakhstan, Ukraine, the United States and Canada:

“Whether grain, tomatoes or apples are produced - the subsidy is just the same. Many of Bulgaria's agricultural producers are urban companies which in fact pump out the subsidy. Some of them are big farmers; others are investors looking for the fastest access to cash. In this case we should not blame the companies, but the national policy. If the aim has been a good absorption rate, yes, it has been achieved; absorption has been quite successful.”

One shortcoming of Bulgaria's agricultural policy is the absence of competitive family companies. Payments mostly go to large companies: 3-4 percent of farmers have absorbed 78 percent of subsidies. Small and medium farmers have incurred losses in two ways: they get smaller subsidies because payments are per area of farming land. On the other hand, they do not have the capacity to prepare projects for financing under European programmes. In Poland a similar problem has been fixed with the cooperation of the Academy of Agriculture. This has not happened in Bulgaria though.

European financing has been absorbed in full compliance with the law but because of the absence of national mechanisms aimed to urge producers to convert grain into fodder or to engage in grain-based production with high added value, the overall effect for the economy is unsatisfactory. No policies are available to encourage production of climatically unique products such as fruit and vegetables, honey, attar of roses, oriental tobacco, milk, white and yellow cheeses and others.

English Daniela Konstantinova