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Development in Agriculture and Rural Areas of Bulgaria

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Development in Agriculture and Rural Areas of Bulgaria From Study implementing full EU CAP in the first seven years of full EU Membership and the Potentials for improvements Development in agriculture and rural areas of Bulgaria Iordan Velikov From Study implementing full EU CAP in the first seven years of full EU Membership and the Potentials for improvements Development in agriculture and rural areas of Bulgaria Iordan Velikov Iordan Velikov had various involvements with the implementation of CAP instruments in Bulgaria since 2000. In the period 2000-2004 he was working in the Ministry of Agriculture, where he participated in the elaboration of the National Strategic Plan for Rural Development under SAPARD and then was responsible for monitoring and reporting the implementation of three SAPARD measures associated with rural infrastructure and diversification of the rural economy. In the period 2006-2010 he has participated in various evaluation projects for the Rural Development Programme 2007-2013, and more specifically: the ex-ante evaluation 2006-2007, the ongoing evaluations in 2008 and 2009, the midterm evaluation 2010. Iordan Velikov is a master in Strategic Management form Sofia University with various short term trainings and specializations in various aspects of the CAP, the agriculture policy and the broader regional development the 2000-2004 in various new and old EU Member states, Japan and the USA. Published by: Friedrich-Ebert-Stiftung Regional Project for Labour Relations and Social Dialogue in South East Europe Tadeusa Koscuska 8/5 11000 Belgrade, Serbia Tel.: (381 11) 3284 255 Tel.: (381 11) 3285 513 Fax: (381 11) 2629 632 [email protected] In cooperation with: European Federation of Food, Agriculture and Tourism Trade Union (EFFAT) Rue de Fossé-aux-Loups, 38 box 3 B-1000 Brussels, Belgium Tel.: (32 2) 218 77 30 Fax: (32 2) 218 30 18 [email protected] Author: Iordan Velikov Responsible: Roland Feicht, Friedrich-Ebert-Stiftung, Regional Project for Labour Relations and Social Dialogue in South East Europe Cover Design and Layout: ISSstudioDesign, Belgrade, Serbia [email protected] Pictures: Cover, 5, 29, 123, 151: Roland Feicht 13, 17, 89: Goran Pavlov The views expressed in this publication are not necessarily those of the Friedrich-Ebert-Stiftung, EFFAT or of the organisation for which the authors work. The text is an online publication available at www.fes.de and www.fessoe.de Free download; Commercial use of all media published by the Friedrich-Ebert-Stiftung (FES) is not permitted without the written consent of the FES. Belgrade, Serbia 2013 ISBN: | 5 Foreword The study at hand of Iordan Velikov is a comprehensive analysis of the development and the rural areas in Bulgaria. It has been commissioned by the Regional Project of the Friedrich-Ebert-Stiftung (FES) for Labour Relations and Social Dialogue in South East Europe in cooperation with the European Federation of Food, Agriculture and Tourism Trade Unions (EFFAT). Its aim is to contribute to finding solutions for the further development and modernization of the agribusiness into a competitive sector providing jobs and income with decent working conditions in Bulgaria and the Western Balkans Region. We would like to express our sincerest gratitude to Iordan Velikov for this in-depth analysis and for his policy recommendations. This paper is closely linked to the study of Radmila Grozdanic about the situation and possible perspectives of agribusiness in the Western Balkan countries, also published by FES and EFFAT this year, which has already contributed significantly to the evaluation of the performance of this economic sector in the region (http:// library.fes.de/pdf-files/bueros/belgrad/10206.pdf). Both, the FES and EFFAT hope that these two studies may contribute to the encouragement of all political authorities and social stakeholders in order to develop and promote the potential of the agriculture and the food sectors in this Development in agriculture and rural areas of Bulgaria 6 | Foreword region. In this respect FES, EFFAT and the Regional Council of the Agriculture Trade Unions in South East Europe together organized in Ohrid/Macedonia in November 2013 a conference about the perspectives of the agribusiness in South East Europe where both papers were presented and discussed. The Regional Council decided at the conference to prepare a common declaration with the vision and the demands of the trade unions vis-à-vis the agribusiness in South East Europe. Belgrade, December 2013 Roland Feicht Director, Friedrich-Ebert-Stiftung, Regional Project for Labour Relations and Social Dialogue in South East Europe | 7 Contents Introduction 13 1. ExECutIVE Summary anD polICy rECommEnDatIonS 17 2. Recent DEVElopmEnt anD outlook oF thE agro-FooD SECtor 29 2.1. Macroeconomic indicators 2007-2013 29 2.2. Agro-Food Outlook 39 2.2.1. External trade and competitiveness 56 2.2.2. Social issues, employment, social dialogue 68 2.3. Organic production 80 2.3.1. Organic land, certified producers and products 81 2.3.2. Organic market 84 2.3.3. Support bodies and services 86 3. agro-FooD polICy Support 89 3.1. Agricultural Policy and Budgetary Support 91 3.1.1. Agricultural policy measures 92 3.1.2. Market and direct producer support measures 102 3.1.3. Structural and rural development measures 108 3.1.4. General measures related to agriculture and food industry 109 3.1.5. Budgetary support to agriculture and food industry 112 3.2. The Agricultural Knowledge and Information Systems 113 3.3. Research and Innovation 119 Development in agriculture and rural areas of Bulgaria 8 | Attachments 4. ChallEngES 123 4.1. Related EU-directives and implementation 125 4.2. Climate Change and environmental risks 127 4.2.1. Domains of countries response to risks 127 4.2.2. Climate change and environmental risks mitigation 127 4.3. Free trade agreements, food safety and standards 129 4.3.1. Free trade agreements 129 4.3.2. Food safety rules, standards and implementation 129 5. SWot analySIS 135 5.1. SWOT of agricultural policy and support services 135 5.2. SWOT analysis of agriculture structure 138 5.3. SWOT analysis of livestock, meat and milk 141 5.4. SWOT analysis of fruits and vegetables 142 5.5. SWOT analysis of new products, modification type of products 143 5.6. SWOT of external macro- and micro-environmental actors 145 5.7. SWOT of market opportunities /internal strengths and weaknesses 147 5.8. SWOT of critical actors 148 6. ConCluSIonS anD polICy rECommEnDatIonS 151 | 9 list of tables table 1 Major population and economic indicators 31 table 2 Structure of the Bulgarian economy 2009 and 2012 33 table 3 Changes in overall population as well as in the villages and the rural areas 35 table 4 Age structure of population per urban and rural areas in 2011 36 table 5 Education structure of population per urban and rural areas in 2011 37 table 6 Economic activity in BG and per rural and urban areas in 2011 38 table 7 Output from major plant production branches in 2011 39 table 8 Output from major animal production branches in 2011 40 table 9 Output from less significant agricultural branches in 2011 41 table 10 Major trends in agriculture 42 table 11 Dynamics in the UAA and major animal and poultry herds 44 table 12 Trends in the number of holdings and farmlands of the holdings in total and per holding land-size class 46 table 13 Dynamics in the structure of the holdings in animal breeding 47 table 14 Dynamics in the contribution of agriculture to employment 48 table 15 Hours worked per employee, thousands of hours 49 table 16 Distribution of the Standard Output volume, in 000 EUR, per major type of farm specialization and farm holding size 50 table 17 Structure of breeding sows per size of pig farms in 2011 52 table 18 Structure of cow milk farms in 2011 53 table 19 Dynamics in the agriculture input prices and the producer prices 55 table 20 Importance of international trade with agri products 56 table 21 Agricultural trade in 2011 57 Development in agriculture and rural areas of Bulgaria 10 | Attachments table 22 Trade with agriculture commodities per economic communities, countries and regions in 2011 and 2012 60 table 23 Trends in productivity in the economy and in the agriculture, forestry and fishery sector 62 table 24 Distribution of machinery per type of holding in 2010 65 table 25 Distribution of holdings and irrigated areas per type of irrigation technology in 2010 66 table 26 Trends 2008-2012 in average salary in selected economic activities, monthly, in EUR 68 table 27 Indices of prices, household incomes and real expenditure in 2005-2010 70 table 28 Social vulnerability trends in 2005-2010 71 table 29 Changes of purchasing power of households, calculated by total income average per capita, 2001=100 74 table 30 Expenditures in million BGN from the consolidated state budget, per function, by the 31st December each year 77 table 31 Areas for production of organic produce 2006- 2011 81 table 32 Areas of organic cultures 2011- 2012 82 table 33 Number of animals for organic produce 83 table 34 Number of registered operators for organic produce 84 table 35 Number of organic items, shops and trade turnover for organic produce in 2008 85 table 36 Authrorized payments for Campaigns 2010 and 2011 104 table 37 Graduates having earned a diploma for professional qualification in narrow spheres of knowledge after 8th grade of secondary education 114 table 38 Graduates having earned a degree in higher education in narrow spheres of knowledge 115 | 11 list of Figures Figure 1. Main agri exports in 2012 58 Figure 2. Main agri
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