Elaboration of ongoing and mid-term evaluation of the RDP 2007-2010, Bulgaria
The European Agricultural Fund for Rural Development
BULGARIA Ongoing and Mid-Term Evaluation of the RDP 2007- 2013
MIDTERM EVALUATION OF THE RURAL DEVELOPMENT PROGRAMME OF BULGARIA Covered Period: 2007-2009
30th December 2010
The European Agricultural A project implemented by Agrotec SpA Fund for Rural Development: Europe investing in rural areas
MIDTERM EVALUATION OF THE RURAL DEVELOPMENT PROGRAMME OF BULGARIA 1
Elaboration of ongoing and mid-term evaluation of the RDP 2007-2010, Bulgaria
Abbreviations
AWU Annual Work Unit
BG-RDP Rural Development Programme of Bulgaria
The EU Common Agriculture Policy having two main pillars: Market Organization and Rural CAP Development
CEQ Common Evaluation Questions
CMEF Common Monitoring and Evaluation Framework
ESU Economic Size Unit
GAEC Good Agriculture And Environmental Conditions
HNV High nature value
LFA Less favored areas
MA Managing Authority
MIS Monitoring and Information System
N 2000 Natura 2000 compensatory payments either in agriculture or forestry sector
NAAS/RAAS National/Regional Agriculture Advisory Service
NVZ Nitrate Vulnerable Zone
OER Ongoing evaluation report as set in CR 1698/2005
SAPS Single Area-based Payment Schemes
SFA-PA State Fund Agriculture – Paying Agency
SGM Standard Gross Margin
MIDTERM EVALUATION OF THE RURAL DEVELOPMENT PROGRAMME OF BULGARIA 2
Elaboration of ongoing and mid-term evaluation of the RDP 2007-2010, Bulgaria
List of evaluated BG-RDP measures
N M Code MEASURE NAME
1 112 Setting up of young farmers
2 121 Modernisation of agricultural holdings
3 141 Supporting Semi-Subsistence Farms Undergoing Restructuring
4 143 Provision of farm advisory and extension services in Bulgaria and Romania (According to Annex VIII. (years 2007-2009))
5 211 Natural handicap payments to farmers in mountain areas
6 212 Payments to farmers in areas with handicaps, other than mountain areas
7 214 Agri-environmental payments
8 223 First afforestation of non-agricultural land
9 226 Restoring forestry potential and introducing prevention actions
10 321 Basic services for the economy and rural population
11 322 Village renewal and development
12 431.2 Sub-measure 2: Acquisition of Skills and Animation for Potential Local Action Groups
13 511 Technical Assistance
14 611 National Complements to Direct Payments
MIDTERM EVALUATION OF THE RURAL DEVELOPMENT PROGRAMME OF BULGARIA 3
Elaboration of ongoing and mid-term evaluation of the RDP 2007-2010, Bulgaria
Contents
A BBREVIATIONS ...... 2 L IST OF EVALUATED BG- RDP MEASURES ...... 3 1 E XECUTIVE SUMMARY ...... 20 1.1. Purpose of the report ...... 20
1.2. Evaluation methodology...... 20
Evaluation questions ...... 20
Evaluation criteria ...... 20
Data collection ...... 20
1.3. The NRDP objectives and its implementation context ...... 21
NRDP objectives ...... 21
NRDP implementation context ...... 22
1.4. Conclusions and recommendations ...... 23
Conclusions ...... 23
Recommendations ...... 29
2 I NTRODUCTION ...... 37 2.1. Purpose of the report ...... 37
2.2. Structure of the report ...... 37
3 T H E E V A L U A T I O N C ONTEXT ...... 38 3.1. BGRDP context...... 38
3.1.0. EU Programmes in BG in the evaluated 2007-2009 period ...... 38
3.1.1. National agriculture context ...... 39
3.2. Description of the evaluation process: Recapitulation of the ToR, purpose and scope of the evaluation ...... 43
3.2.0. Evaluation process ...... 43
3.2.1. Purpose and Scope ...... 45
3.3. Brief outline of previous evaluations related to the programme ...... 46
3.3.0. Ex-Ante evaluation of 2007-2013 NRDP ...... 46
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3.3.1. Strategic Environmental Assessment (SEA) of NRDP 2007-2013 ...... 49
3.3.2. On-going Evaluation Report 2008 ...... 51
3.3.3. On-going Evaluation Report 2009 ...... 55
4 M ETHODOLOGICAL A PPROACH ...... 57 4.1. Explanation of the evaluation design and the methods used ...... 57
4.2. Description of key terms of Programme Specific and Common Evaluation Questions...... 57
4.3. Evaluation and judgment Criteria ...... 59
4.4. Data sources of and techniques for data collection ...... 60
4.5. Techniques for replying to the Evaluation Questions and arriving at conclusions ...... 64
4.6. Problems or limitations of the methodological approach ...... 64
5 D ESCRIPTION OF P ROGRAMME , M EASURES AND B UDGET ...... 65 5.1. Programme implementation arrangements ...... 65
5.1.0. Actors involved with Programme management and implementation: ...... 66
5.1.1. Implementation procedures for the measures ...... 69
5.1.2. Procedures ensuring Publicity and Transparency ...... 70
5.2. Composition of the programme, description of priorities and measures ...... 71
5.3. Intervention logic of single measures...... 75
5.3.0. M111 Training, Information and Diffusion of Knowledge ...... 75
5.3.1. M112 Setting up of young farmers ...... 77
5.3.2. M121 Modernisation of agricultural holdings ...... 79
5.3.3. M122 Improving the Economic Value of Forests ...... 83
5.3.4. M123 Adding Value to Agricultural and Forestry Products ...... 84
5.3.5. M141 Semi-subsistence farming ...... 86
5.3.6. M142 Setting up of Producer Groups ...... 87
5.3.7. M143 Provision of farm advisory and extension services ...... 89
5.3.8. M211 Natural handicap payments to farmers in mountain areas and M212 Payments to farmers in areas with handicaps, other than mountain areas ...... 90
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5.3.9. M214 Agri-environmental payments ...... 91
5.3.10. M223 First afforestation of non-agricultural land ...... 93
5.3.11. M226 Restoring forestry potential and introducing prevention actions ...... 94
5.3.12. M321 Basic services for the economy and rural population ...... 96
5.3.13. M322 Village renewal and development ...... 99
5.3.14. M431-2. Sub-measure 2: Acquisition of Skills and Animation for Potential Local Action Groups (2007-2009) ...... 101
5.3.15. M511 Technical assistance ...... 101
5.3.16. M611 National Complements to Direct Payments ...... 102
5.3.17. Non started BGRDP measures ...... 103
5.4. Budget foreseen for the entire programming period ...... 105
5.5. Uptake and budget actually spent...... 105
6 M I D T E R M E VALUATION , I N C L U D I N G A N S W E R S T O E V A L U A T I O N Q UESTIONS ...... 109 6.1. Update of the current situation...... 109
6.1.0. Definition of the Rural Area ...... 109
6.1.1. Population and labor force dynamics ...... 109
6.1.2. Economy trends ...... 118
6.1.3. Trends in Agriculture ...... 123
6.1.4. Farm structure ...... 134
6.1.5. Consumption ...... 139
6.1.6. Regional aspects ...... 140
6.1.7. Environment ...... 152
6.1.8. Quality of Life and Rural infrastructure ...... 154
6.2. Re-assessing the intervention logic ...... 158
6.3. Axis 1 - developing a competitive and innovation-based agriculture, forestry and food processing industry ...... 160
6.3.0. Measure 112 Setting up of young farmers ...... 160
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6.3.1. M121 Modernisation of agricultural holdings ...... 173
6.3.2. Rejected Applications under M112 and M121 ...... 189
6.3.3. Measure 141 Semi-subsistence farming ...... 194
6.3.4. Measure 143 Provision of Advisory Services to farmers … in Bulgaria and Romania ...... 205
6.4. Axis 2: To protect natural resources and the environment of rural areas ...... 211
6.4.0. Measure 211 Natural handicap payments to farmers in mountain areas ...... 211
6.4.1. Measure 212 Payments to farmers in areas with handicaps, other than mountain areas ..... 230
6.4.2. M214 Agri-environmental payments ...... 245
6.4.3. M 223 First afforestation of non-agricultural land ...... 271
6.4.4. M226 Restoring forestry potential and introducing prevention actions ...... 274
6.5. Axis 3: Improving the quality of life and diversify job opportunities in rural areas ...... 277
6.5.0. M321 Basic services for the economy and rural population ...... 277
6.5.1. M322 Village renewal and development ...... 281
6.6. Axis 4: Measure 431-2 Sub-measure 2: Acquisition of Skills and Animation for Potential Local Action Groups (2007-2009) ...... 283
6.7. Axis 5: Measure 511 Technical Assistance ...... 288
6.8. Regional analysis of up-take ...... 291
6.9. Update of the Strategic Environmental Assessment (SEA) ...... 294
6.10. Evaluation of Administration ...... 306
6.10.0. Definition of authorities and related tasks ...... 307
6.10.1. Relations between Management and Control Structures ...... 309
6.10.2. Implementing Procedures ...... 312
6.10.3. Satisfaction of Beneficiaries ...... 318
6.10.4. Staff (number and qualification) and Training ...... 328
6.10.5. Cost Effectiveness and Efficiency ...... 332
6.10.6. Monitoring ...... 333
6.11. Answers to horizontal evaluation questions ...... 334
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7 C ONCLUSIONS AND R ECOMMENDATIONS ...... 344 7.1. Main conclusions ...... 344
7.1.0. Relevance ...... 344
7.1.1. Effectiveness ...... 344
7.1.2. Effects and efficiency ...... 345
7.1.3. Regional uptake ...... 353
7.1.4. Administration ...... 354
7.2. Main recommendations ...... 355
7.2.0. Programme level...... 355
7.2.1. Axis Level ...... 356
7.2.2. Measures Level ...... 358
7.2.3. Administration and Implementation Level ...... 360
7.2.4. Reallocation of funds between measures ...... 361
7.2.5. Action Plan to ensure successful implementation after the reallocation of funds ...... 367
LIST OF FIGURES
Figure 1: Overall structure for implementing the BGRDP ...... 65
Figure 2: Overall structure of the Managing Authority ...... 67
Figure 3: Overall structure of the Paying Agency ...... 68
Figure 4: Structure of the workforce by age in 2009 ...... 110
Figure 5: Employment coefficients of 15-64 by gender ...... 113
Figure 6: Unemployment coefficients by gender ...... 113
Figure 7:Employment coefficients by age ...... 113
Figure 8: Structure of the employed by educational attainment ...... 114
Figure 9:Persons 15-64 y.o., not in the workforce, distributed by gender and reasons for being economically inactive in 2009 (‘000) ...... 115
Figure 10: Unemployed persons by period of unemployment (‘000) ...... 117
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Elaboration of ongoing and mid-term evaluation of the RDP 2007-2010, Bulgaria
Figure 11: Indexes of the physical volume of GDP per employed and per man/hour (previous year = 100) . 119
Figure 12: Structure of the GVA per main economic sectors ...... 120
Figure 13: External trade balance (BGN million) ...... 120
Figure 14:Structure of the External trade ...... 121
Figure 15:Structure of the investments per main economic sector in the 2005-2009 period ...... 122
Figure 16: Structure of the investments per economic activity ...... 122
Figure 17: Changes in the labor productivity and the real work salary per economic sectors 2008/2007 .... 123
Figure 18: Use of BG territory ...... 128
Figure 19: Structure of the used agriculture territory ...... 130
Figure 20: Distribution of holdings by economical size – 2005 and 2007 ...... 135
Figure 21: Distribution of number of holdings by legal status 2003-2007 ...... 137
Figure 22: Distribution of UAA by legal status of the holding 2003-2007 ...... 137
Figure 23: Distribution of holdings by average size in ha and legal status 2003-2005-2007 ...... 137
Figure 24: Consumption of main foods on the average per household person...... 140
Figure 25: Population density per districts 2009 ...... 142
Figure 26: Birthrate per district 2009 (per 1 000 people) ...... 142
Figure 27: Death rate per district 2009 (per 1 000 people) ...... 142
Figure 28: Work salary on the average per household person per planning region ...... 144
Figure 29: Total income and expenses on the average per household person per planning region ...... 144
Figure 30: Changes in the number of active AP in 2010 compared to registered AP in 2009 per planning region and BG* ...... 145
Figure 31: Relative share of arable lands per districts ...... 145
Figure 32: Graphical representation of plants and animals per planning region ...... 151
Figure 33: Share of population having access to sewer system and sewage treatment stations ...... 152
Figure 34: Area and share of protected territories of country’s total area ...... 153
Figure 35: Use of water by the households, on the average per capita ...... 154
Figure 36: Map of water use by the households, on the average per capita ...... 155
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Elaboration of ongoing and mid-term evaluation of the RDP 2007-2010, Bulgaria
Figure 37: Relative share of households who have access to computer and internet at home ...... 157
Figure 38: Structure of the households who have access to internet at home per planning region ...... 157
Figure 39: Relative share of persons 16-74 y.o. who use internet at least 1 time weekly in 2009 ...... 157
Figure 40: Relative share of persons 16-74 y.o. who purchased goods via internet and have used the e- government services in the last 3 months ...... 157
Figure 41: Measure 112: Main production in percentage ...... 163
Figure 42: Measure 112: main purpose of the support in percentage ...... 167
Figure 43: Measure 121: Main purpose of the support in percentage ...... 183
Figure 44: Main purpose of the support in percentage ...... 197
Figure 45: EC standards that will be met as a part of the business plan ...... 202
Figure 46: To what extent are your investments dependent on the support ...... 203
Figure 47: What share would have been invested without the support ...... 203
Figure 48: The two key effects expected as a result of the support ...... 204
Figure 49: Your project was developed by… ...... 204
Figure 50: Average size of M211-supported arms ...... 216
Figure 51: Average paid support per hectare per district, M211 ...... 217
Figure 52: Support per farm per district, M211 ...... 217
Figure 53: Experience in agriculture and age of M211-beneficiaries ...... 218
Figure 54: M211-beneficiaries top productions ...... 219
Table 106: Managed land Figure 55: Share of owned land ...... 219
Figure 56: M211 farms as self-defined by their managers ...... 220
Figure 57: Share of income from agriculture ...... 220
Figure 58: The most important reasons for applying The most important reasons for applying ...... 221
Figure 59: Main spending line of the M211 payment ...... 222
Figure 60: EU standards that you still have to meet ...... 222
Figure 61: Would you apply under other RDP measures? ...... 223
Figure 62: Your 3 main sources of information for RDP support application? ...... 224
MIDTERM EVALUATION OF THE RURAL DEVELOPMENT PROGRAMME OF BULGARIA 10
Elaboration of ongoing and mid-term evaluation of the RDP 2007-2010, Bulgaria
Figure 63: Main reasons for NOT applying again ...... 229
Figure 64: Age of AE beneficiaries and years of experience in agriculture ...... 252
Table 130: Managed land [ha] and share of own land [%] Figure 65: Share of owned land ...... 253
Figure 66: AE farms as self-defined by their managers and share of income from agriculture ...... 253
Figure 67: Are you a member of the listed organizations Table 131: Membership in organizations ...... 254
Figure 68: EU standards that you still have to meet ...... 255
Figure 69: Main spending line of the AE payment ...... 256
Figure 70: Would you apply under other RDP measures? ...... 257
Figure 71: Your 3 main sources of information for RDP support application? ...... 259
Figure 72: Main reasons for NOT applying again ...... 263
Figure 73: If you do not implement M214 any longer, how do you think your environmental activities would change?...... 263
MIDTERM EVALUATION OF THE RURAL DEVELOPMENT PROGRAMME OF BULGARIA 11
Elaboration of ongoing and mid-term evaluation of the RDP 2007-2010, Bulgaria
LIST OF TABLES
Table 1: Summary of proposed reallocation funds among chosen BGRDP measures ...... 30
Table 2: Payments under the other EU Programmes in Bulgaria 2007-2009* ...... 38
Table 3: Dynamics in the pool of potential beneficiaries under BGRDP measures M111, M112, (M14), M121, M141, M142, M143, and M311 ...... 39
Table 4: Breakdown of BG farm holdings in 2007 in view of their economic size* ...... 40
Table 5: Major sources of public aid to BG Agriculture in MEUR ...... 41
Table 6: Evaluation question for administration ...... 58
Table 7: Description of evaluation criteria ...... 59
Table 8: Data structure ...... 60
Table 9: Results from the questionnaires ...... 62
Table 10: Strategy and Measures for Rural Development Axis 1 ...... 71
Table 11: Strategy and Measures for Rural Development Axis 2 ...... 72
Table 12: Strategy and Measures for Rural Development Axis 3 ...... 73
Table 13: Strategy and Measures for Rural Development Axis 4 ...... 73
Table 14: Structure of BGRDP: measures and budgets per RD Axes as programmed for the 2007-2013 period ...... 73
Table 15: Major beneficiary groups and respective BGRDP measures supporting them ...... 74
Table 16: Priorities when implementing ordinance for M121 ...... 79
Table 17: Summary of proposed distribution for the new M121 budget (reallocated budget for general competitiveness*) ...... 81
Table 18: Programmed targets, M211/M212 ...... 91
Table 19: Programmed targets, M214 ...... 92
Table 20: Programmed targets, M223 ...... 94
Table 21: Programmed targets, M226 ...... 95
Table 22: Preferred groups of beneficiaries, M321 ...... 96
Table 23: Programmed targets, M321 ...... 97
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Elaboration of ongoing and mid-term evaluation of the RDP 2007-2010, Bulgaria
Table 24: Distribution of the M321 types of supported actions according to the types of actions set in the obligatory CMEF indicator O.321 ...... 97
Table 25: Preferred groups of beneficiaries, M322 ...... 99
Table 26: Programmed targets, M322 ...... 100
Table 27: Distribution of the M322 types of revitalization actions according to the types of actions set in the obligatory CMEF indicator O.322 ...... 100
Table 28: Distribution of RD measures and budgets per RD Axes from CR 1698/2005 ...... 105
Table 29: Evolution in launching the BGRD measures per RD Axes ...... 105
Table 30: Actual uptake of budgets per RD Axes by end-2009 ...... 107
Table 31: Actual uptake of budgets per RD Axes by end-September 2010 ...... 107
Table 32: Recapitulation: Detailed evolution in launching and paying the BGRD measures April 2008- October 2010 ...... 108
Table 33: Population by age, Bulgaria, 2009 ...... 110
Table 34. Labor force, activity rate and employment rate in select years 2004-2009 ...... 111
Table 35 : Distribution of population by educational attainment and by employment status 2009 ...... 114
Table 36: Average Annual Wages and Salaries of the Employees under Labour Contract by Economic Activity Groups ...... 115
Table 37: Population in RURAL areas per sex and working groups, 2008 ...... 116
Table 38: Distribution of population per education degree and residence ...... 117
Table 39: Major macroeconomic parameters over the period 2002 – 2009 ...... 118
Table 40 . Main economic indicators for agriculture 2007-2009, MEUR ...... 123
Table 41 . Economic accounts in agriculture – plant and animal output per year in MEUR ...... 125
Table 42 . Economic accounts in agriculture – leading agriculture import/export products in MEUR ...... 126
Table 43: Arable land, used agricultural area and area of agricultural designation in the period 2004 – 2009 (ha) ...... 129
Table 44: Trends in the Plant Production/Processing Sector ...... 131
Table 45: Number of animals ...... 132
Table 46: Animal products in the period 2005 – 2009 ...... 133
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Table 47: Production of meat (tones of slaughter meat) ...... 133
Table 48: Balance of meat in 2008 (tones of slaughter meat) ...... 134
Table 49: Distribution of agricultural holdings and utilized agricultural areas thereby as per agricultural holdings’ status ...... 134
Table 50: Land tenure, number of agricultural holdings and areas by categories of utilized agricultural area in 2007 ...... 135
Table 51: Distribution of holdings >1ESU per economic size, per size classes and classes of managed area 136
Table 52: Structure of farms by type of specialization ...... 138
Table 53: Registered farmers and agriculture lands in the period 2007-2009...... 139
Table 54: Consumption trends 2007-2009 per household/year (Demand for agriculture products) ...... 139
Table 55 . Coefficients for natural and mechanic changes of the population per planning regions in 2009 ...... 140
Table 56 . Coefficients for economic activity, employment and unemployment per planning regions ...... 143
Table 57: Residence structure, gender distribution and age dependency ratio by planning regions in Bulgaria ...... 143
Table 58: Regional structure of the agricultural holdings ...... 144
Table 59: Land resources, sales and leased lands in 2008 and 2009 per planning region in ha ...... 147
Table 60: Land sales in 2008 and 2009 ...... 148
Table 61: Land renting in 2008 and 2009 ...... 148
Table 62: Plant output per planning regions in 2008 (BGN million) ...... 149
Table 63: Animal output per planning regions in 2008 (BGN million)...... 150
Table 64: Development in farm structure in Bulgaria, 2003-2007, 2009 estimate ...... 158
Table 65: Development of education levels among Bulgarian farms managers, 2003-2007, 2009 estimated ...... 159
Table 66: Types of production of M112 beneficiaries ...... 162
Table 67: Employment under measure 112 ...... 164
Table 68: Trends and expected economic performance in the supported M112 holdings ...... 165
Table 69: The M112 support will be used for investments in material assets...... 165
Table 70: Type of investment ...... 166
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Elaboration of ongoing and mid-term evaluation of the RDP 2007-2010, Bulgaria
Table 71: Purpose of the investments ...... 166
Table 72: Distribution between new product and new technology ...... 168
Table 73: Effect of the M112 support I...... 168
Table 74: Effect of the M112 support II...... 169
Table 75: Summary of the net effects from the investments (of 288 received interviews) ...... 170
Table 76: Agricultural activity ...... 177
Table 77: Employment ...... 179
Table 78: Trends and expected economic performance in the supported M121 holdings ...... 181
Table 79: Cumulative investments ...... 182
Table 80: Type of investments ...... 182
Table 81: Purpose of investments ...... 182
Table 82: Distribution of new product and new technology ...... 184
Table 83: Effect of M121 support I ...... 184
Table 84: Effect of the M121 support II...... 185
Table 85: Summary of the net effects from the investments (of 212received interviews) ...... 186
Table 86: Primary agricultural activity/ Agriculture activity mainly intended for support ...... 190
Table 87: Employment under measure 112 ...... 191
Table 88: Trends in the economic performance of the supported M112 holdings ...... 192
Table 89: Type of investment ...... 192
Table 90: Purpose of the investments ...... 193
Table 91: Purpose of the investments ...... 193
Table 92: Summary of the net effects from the investments (of 288 received interviews) ...... 194
Table 93: Development in number of small farms, Bulgaria 2003 – 2007, 2009 estimate ...... 198
Table 94: Status of Input and Output Indicators for measure 141 ...... 199
Table 95: SAPS farms and related output targets ...... 200
Table 96: Projections on the number of semisubsistence farms supported by M141 till end of programming period ...... 200
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Elaboration of ongoing and mid-term evaluation of the RDP 2007-2010, Bulgaria
Table 97: Semi-subsistence farm distributions according to their production types ...... 201
Table 98: NAAS consultations at regional level and their consideration of SFA-PA ...... 207
Table 99: Submitted and authorized applications for the period 2007 – 2009 and 2010 ...... 211
Table 100: Number of submitted and rejected applications per campaign/year ...... 212
Table 101: Number of beneficiaries with authorized payment of 0 BGN under m.211 ...... 212
Table 102: Targets related to measure 211 and their achievement ...... 213
Table 103 Requested and authorized support and penalties, m.211 ...... 213
Table 104: Simulation of budget spending based on requested support in applications 2007-2009 ...... 214
Table 105: Regional distribution of m211 support ...... 215
Table 106: Managed land Figure 55: Share of owned land ...... 219
Table 107: When you applied for measure 211 were you consulted by the listed organizations? ...... 223
Table 108: How do you assess the following elements of the application process under RDP? ...... 224
Table 109: Do you agree with the following statements regarding the implementation of the measure? ... 225
Table 110: To what extent do you think the measure contributes to the improvement or maintenance of: 225
Table 111: Total area of submitted applications per farm size ...... 227
Table 112: Application for M211 support ...... 228
Table 113: Submitted and authorized applications for the period 2007 – 2009 and 2010 ...... 230
Table 114: Number of submitted and rejected applications per campaign/year ...... 231
Table 115: Number of beneficiaries with authorized payment of 0 BGN under m.212 ...... 231
Table 116: Targets related to measure 212 and their achievement ...... 232
Table 117: Requested and authorized support and penalties, m.212 ...... 232
Table 118: Regional distribution of m212 support ...... 233
Table 119: Managed land ...... 235
Table 120: How do you assess the role of the listed institutions in the measure’s administration?...... 239
Table 121: How do you assess the following elements of the application process under RDP? ...... 240
Table 122: Do you agree with the following statements regarding the implementation of the measure? ... 240
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Table 123: To what extent do you think the measure contributes to the improvement or maintenance of: 241
Table 124: Submitted and authorized applications for the period 2008 – 2009 and 2010 ...... 246
Table 125: Land and animals in agri-environmental applications per scheme and campaign ...... 247
Table 126: Targets related to measure 214 and their achievement by 31 December 2009...... 248
Table 127: Regional distribution of area in application, supported and rejected in 2008 ...... 249
Table 128: Reasons for rejection of applications in 2008 ...... 250
Table 129: Distribution of beneficiaries and survey respondents per AE scheme ...... 251
Table 130: Managed land [ha] and share of own land [%] Figure 65: Share of owned land ...... 253
Figure 67: Are you a member of the listed organizations Table 131: Membership in organizations ...... 254
Table 132: Share of AE farms with lands in protected areas ...... 254
Table 133: Share of AE farms with lands in designated areas ...... 255
Table 134: The most important reason for applying ...... 256
Table 135: When you applied for measure 214 were you consulted by the listed organizations ...... 257
Table 136: Which factors influence your decision to apply under measure 214 [%] ...... 258
Table 137: How do you assess the role of these institutions in the administration/organization of m.214 .. 259
Table 138: How do you assess the following elements of the application process under RDP? ...... 260
Table 139: Do you agree with the following statements regarding the implementation of the measure? ... 261
Table 140: Do you agree with the following statements regarding the measure’s influence on your farm? 261
Table 141: Application for M214 support ...... 262
Table 142: Targets related to measure 214 and their achievement by 31 December 2009...... 265
Table 143: To what extent do you think the measure contributes to the improvement or maintenance of: 265
Table 144: Main outputs and results from M223 implementation and its projection to full beneficiary targets ...... 273
Table 145: Main outputs and results from M226 implementation and its projection to full beneficiary targets ...... 276
Table 146: Main outputs from M321 implementation ...... 279
Table 147: Main outputs from M322 implementation ...... 282
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Table 148: Distribution of Discussed LEADER projects ...... 285
Table 149: “Pisma odobreni reduced.xls” (28.05.10) ...... 291
Table 150: RDP actions contributing to mitigation and adaptation to climate change ...... 296
Table 151: Environmental indicators related to climate change adaptation ...... 297
Table 152: Actions contributing to renewable energies ...... 299
Table 153: Environmental indicators related to renewable energies ...... 299
Table 154: Actions contributing to water management ...... 301
Table 155: Environmental indicators related to water management ...... 302
Table 156: Actions contributing to biodiversity conservation ...... 303
Table 157: Environmental indicators related to biodiversity conservation ...... 304
Table 158: Overview of Implementation of RD Measures in BG ...... 310
Table 159: How do you assess the role of the following institutions in the administration / organization of the measure? ...... 318
Table 160: How do you assess the individual institutions ...... 319
Table 161: Distribution of expertise in the MA (Degrees from higher education) ...... 329
Table 162: Trainings undergone in the Managing Authority ...... 330
Table 163: Dead Weight of selected measures, axis 1 ...... 338
Table 164: Investments also without support, measure 121 in Bulgaria 2007-2009 RDP, measure 3.1 in Romania, Czech Republic, Slovenia and Slovakia, all SAPARD midterm evaluations ...... 339
Table 165Target for job creation / retention, ex ante evaluation, NRDP, pg 93-94, and realized 2007-2009 343
Table 166: Job creation, direct, measures under axis 1 ...... 343
Table 167: Effects related to the quantified targets for result indicators for axis 1 ...... 347
Table 168: Achievement of the quantified targets for result indicators for axis 2 ...... 349
Table 169: Effects related to EC common impact indicators ...... 351
Table 170: Provisional reallocation of funds among BG RDP measures to preserve as possible the Programme impacts ...... 362
Table 171: Summary of proposed reallocation of funds among select BGRDP measures ...... 367
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Table 172: Proposed timeframe of necessary actions to implement the proposed recommendations mainly concerning Axis I measures ...... 368
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Elaboration of ongoing and mid-term evaluation of the RDP 2007-2010, Bulgaria
1 Executive summary
1.1. Purpose of the report
This report is the final report of the Midterm Evaluation of the National Rural Development Programme in Bulgaria for the period 2007 – 2013, covering 2007 - 2009.
The report is prepared according to Article 86, Regulation CR 1698/2005 and in compliance with the Common Monitoring and Evaluation Framework (CMEF) including Guidance Note B – Evaluation Guidelines.
Article 86(6), Regulation CR 1698/2005, states: The mid-term and ex post evaluations shall examine the degree of utilization of resources, the effectiveness and efficiency of the programming of the EAFRD, its socioeconomic impact and its impact on the Community priorities. They shall cover the goals of the programme and aim to draw lessons concerning rural development policy. They shall identify the factors which contributed to the success or failure of the implementation of the programme, including as regards sustainability and identify best practice.
The Midterm Evaluation Report covers the implementation period from 01. 01. 2007 to 31. 12. 2009. However, the programme was launched in April 2008 and has been open during the period from April 2008 to the end of 2009 for a limited number of the measures. Therefore, the MTE report provides an assessment of the outputs, results and impacts of these measures as its primary objective, although the full programme and its corresponding intervention logic is assessed regarding past and future relevance.
1.2. Evaluation methodology
Evaluation questions The common evaluation questions related to measures and to the programme as such are defined by the European Commission and are included in the guidelines as well as in the ToR for this evaluation. It is possible for the national authorities to define national programme specific evaluation questions targeting issues of national interest, but this has not been the case in this evaluation, although the evaluators have formulated a few additional questions compared to the guidelines, in particular regarding the administration of the programme. Each evaluation question is answered in chapter 6 of this report, the measure specific questions in relation to the evaluation of each measure, and the horizontal evaluation questions in a separate section of the chapter.
Evaluation criteria The second import structural characteristic is the use of internationally recognized evaluation criteria. The criteria are relevance, effectiveness, effects, efficiency and sustainability. These criteria are used to structure the conclusions of the evaluation, in chapter 7 as well as in this executive summary.
Data collection Finally, the data collection carried out during the evaluation has been relatively detailed and comprehensive. First of all monitoring data from the SFA/PA and from the MA has been collected to the extent possible, but due to the rather weak character of the data, a questionnaire survey operation has been implemented among beneficiaries of all measures with
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Elaboration of ongoing and mid-term evaluation of the RDP 2007-2010, Bulgaria contracted projects by the end of 2009. The replies from beneficiaries have been impressive, both in terms of returned questionnaires and in terms of comments and proposals. The information collected through the surveys is the back bone of the data of the evaluation and represents a high degree of statistical solidity due to high respond rates. The surveys are supplemented with case studies, interviews with stakeholders and various types of statistical and technical desk research. Reports prepared during the previous year of the evaluators, including the Ongoing Evaluation reports 2008 and 2009, thematic studies of the dairy sector, of updates of the programme baselines and of the administration of the programme, as well as regarding possible reallocations of funds between the measures are part of the back ground information used in the evaluation.
In total the evaluators find that the implemented methodology is appropriate and provides a good basis for the conclusions and recommendations of the evaluation.
1.3. The NRDP objectives and its implementation context
NRDP objectives The overall objectives of the NRDP are summarized below:
To develop a competitive and innovation-based agriculture, forestry and food processing industry To protect natural resources and the environment of rural areas To improve the quality of life and diversify job opportunities in rural areas To build local capacity and to improve local governance
The NRDP has been programmed to implement 30 measures from the Regulation (CR) 1698/2005 distributed on four main axes in order to fulfill the objectives of the national rural development strategy. The total public support budget for the full programme period is 3,278,771,726 €. The budget is distributed on BGRDP Axes as follows:
RD AXIS Public Budgets 2007-2013, € Axis 1 1 214 075 316 Axis 2 777 394 110 Axis 3 905 291 684 Axis 4 76 988 306 M 511 123 181 289 M 611 181 841 021 TOTAL 3 278 771 726
The current distribution of measures and budgets is in favor of the agriculture sector, which is programmed to benefit from eighteen NRDP measures: Ten Axis 1 measures, four of the Axis 2 measures, one of the Axis 3 measures, M41 – LEADER strategies, and by the National Complementary Direct Payments under M611. They cumulatively reach EUR 1.94 billion of public support, i.e. 59.1% of total NRDP public budget for the entire 2007 - 2013 period. The forestry sector will receive cumulatively MEUR 188.1 for the entire programming period 2007 - 2013. The processors of agriculture and forestry products will receive a cumulative public support worth of MEUR 285.2. Microenterprises
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Elaboration of ongoing and mid-term evaluation of the RDP 2007-2010, Bulgaria outside agriculture and fishery will benefit from MEUR 166. The quality of life (cultural, social, mobility, public health needs) of the general rural population will benefit from MEUR 683 of public support. In total the NRDP has been programmed to support the restructuring and modernization of the agriculture sector of the country in a way also taking into consideration environmental and nature preservation issues and the development of rural Bulgaria in a wider sense.
NRDP implementation context The NRDP is implemented in a quite complex context, where a multitude of factors exert various and mostly negative effects on the implementation of the programme and on the degree of achieving its strategic objectives, which has been well known over a longer period of time, see the Ongoing Evaluation Report 2008 and 2009. Among these factors, some are internal Bulgarian factors, others are external.
Among the most important external factors we find that the international economic crisis still continuing in BG is reducing the potential beneficiaries’ willingness to invest, as well as the willingness of the banks to give and to extend credits for bridge capital and private co-financing for farmers.
Among the internal national factors we find that the political change, which took place in the second half of 2009 due to the results of the elections also caused administrative consequences both of the MA and SFA/PA in terms of loss of knowledge, experience, managerial and communication skills from changed key staff at management as well as on the operational level. The SAPARD legacy in the sense of mistrust of farmers and other potential beneficiaries to the authorities and complicated implementation procedures has also contributed to a negative environment for the implementation of the programme.
In 2010 the reductions of the alleviations on fuel excises as well as tax and social security payments granted to agriculture/tobacco producers did contribute to the difficult situation in the sector, in the same way as the unsuccessful land reform and the expiration of various transition periods as set in the Act of Accession of Bulgaria to the European Community.
Furthermore, the CAP I Direct Payments applied through the SAPS in BG is in favor of hectare intensive cultures due to the volume of subsidies and causes reorientation to mono-production, where land is available. As a consequence, the hectare extensive cultures are in a less favorable situation and the production of fruit and vegetables, but also of animal produce is consequently going down.
Also a number of programme related internal factors have contributed to the relatively low effectiveness of the implementation so far.
The programme was delayed in 14 months, before the very first measures were launched. The simultaneous launch of 22 measures also contributed to administrative problems in the management of the programme implementation in the SFA/ Paying Agency and in the Managing Authority. Thus the abilities for executing a proactive programme management were reduced and programmed synergy among measures was and is now difficult to achieve. The administrative problems were enhanced of the decisions not to introduce windows for collecting proposals at an early stage, thus accumulating too many project proposals creating backlog of projects to be processed. As a consequence of the rather difficult administrative situation, no genuine strategic management and monitoring of the implementation was accomplished, also due to inappropriate administrative arrangements between the MA and the SFA-PA, but not the least the establishment of a monitoring system not capable of providing the needed data for the programme management.
Inappropriate implementation procedures directly transferred from SAPARD were also contributing to the low effectiveness of processing the huge number of project applications, some from measures not implemented under
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SAPARD and where the staff did lack the experiences. Finally, important animal and land parcel registers and ortophoto mapping are not in place and hinder the implementation of important axis 2 measures
Recent developments (especially the second and third quarter of 2010), however, indicate that the rate of project processing and payments in the SFA-PA is accelerating. Some first steps to decentralization and simplification of Programme implementation are underway. This, however, cannot overcome the significant lag in the implementation of the programme due to the various reasons including the severe conditions for many subsectors due to the economic crisis, and there is now a real threat for non-utilizing the full NRDP budget for year 2009.
1.4. Conclusions and recommendations
The conclusions and recommendations, summarized below, are the products of a lengthy process of ongoing evaluation activities and related studies, carried out of the evaluators from June 2009 to November 2010.
Conclusions The main conclusions of the evaluation are structured in relation to the evaluation criteria used throughout the evaluation report. Detailed conclusions are to be found also in other sections of the report, for example under each section evaluation individual measures. Here are the main conclusions summarized.
Relevance The NRDP is a highly relevant programme for the development and modernization of the agricultural and rural sector in Bulgaria. The assessment of the challenges, needs and problems in the sector shows that the intervention logic used as the basis for the programme prepared in 2006, when the programme was designed, is still intact and valid. The agricultural sector and the rural dwellers are still faced with structural problems in production, low productivity and quality of the products and difficulties competing with imported products. The result is low income, poverty and lack of jobs. Furthermore problems with complying with all EU requirements are still observed in particularly for the small scale farmers, leading to negative environmental impacts from production. Consequently, in general the quality of rural life in Bulgaria still needs the support from the NRDP. The conclusion is therefore that the programme is very relevant and that the implementation of the NRDP should be enhanced as much as possible in order to meet the challenges of the sector, even though modifications in the budgets for individual measures might be relevant due to the structural development of the sector.
Effectiveness The effectiveness of the programme implementation is primarily measured in terms of the value and number of contracted projects/contracts/actions under the various measures. In total, the programme has in the period from 2007 to end of 2009 demonstrated an economic effectiveness of 52.4 % measured as the value of contracts and projects compared to the total programme budget for the period of 3 out of 7 years. 736 million €, including complementary national direct payments under measure 611, has been contracted out of a total budget of 3,278.8 million €. This mean that around half of the average expected up-take of funds in terms of contracts has been achieved.
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There are big variations among axes and measures. Axis 1 has an effectiveness rate of 62 %, axis 2 of only 4.6 %, axis 3 on 52.7 % and axis 4 of 118 %, referring only to the preparatory measure M431-2 supporting the establishment of functioning Local Action Groups. Some of the measures, in particularly measure 112 and 121 for the non-guaranteed budgets, have demonstrated big effectiveness, and for both these measures the budgets for the whole programme period are used now. In particularly the attractiveness of the support for setting up young farmers is important and very positive, contributing to the revitalization of the agricultural sector. Also the effectiveness of the modernization of agricultural holdings measure 121 is high. The need to improve and renew the technological base of the sector is outspoken, and in this light it is positive that the demand for support under the measure has been so big as is the case. On the other hand almost all approved projects under the measure are related to new machinery for the field crop sector, while only few projects have been approved for other sectors such as animal sectors, fruits and vegetables etc. This has led to a somehow unbalanced uptake of funds under the measure. Other measures have demonstrated low effectiveness, such as measure 141 on support to semi subsistence farmers and the sub-measures for guaranteed sectors under 121. All measures under axis 2 are demonstrating low effectiveness, except for the smaller measure 212, which has achieved an economic effectiveness of 19.5 % (7.6 million €) by the end of 2009. Under axis 3 both measures opened and with contacted projects in the period are doing well, in particularly measure 322, with an effectiveness of 48.7 % (81.2 million €) while measure 321 has an effectiveness of 28.7 % due to contracts valued 123.4 million € in public support. The consequence of the demonstrated low effectiveness overall is that the support needed for the sector in order to meet the challenges is not delivered, and the problems are remaining the same in the sector. Therefore an enhanced and intensified effort must be made in order to increase the effectiveness of the programme implementation during the remaining period of the programme. In average the yearly effectiveness must be raised with 72 %1 in order to ensure the needed effectiveness and the relevant utilization of public support to the rural areas and the agricultural sector. The needed administrative effort must be made to make this happen. The task at hand is also demonstrated of the number of contracts made during the period. For the 2008 - 2009 period the SFA-PA managed to assess and contract 4,835 proposals and to accomplish payments of 2,046 of them. These figures are very low compared to the almost 60,000 contracts programmed distributed on 41,000 (axis 1), 4000 (axis 2), 11,000 (axis 3) and 2,900 (axis 4) contracts programmed under the measures. The technical effectiveness is then 20 % measured as the number of approved applications in relation to the expected yearly average, and in average almost 14,000 applications must be approved yearly in the rest of the programme period compared to the 2,500 during the first two years of implementation. A big challenge is ahead. The conclusions are emphasized below: The implementation of the measures, except for M112, is lagging behind compared to the programmed outputs targets for the particular measures The implementation of NRDP is highly unbalanced and in favor of some measures, some agricultural sectors, some public infrastructure types of projects and some districts, while others are lagging behind There is a big risk that Axis 2 measures, as well as M141 Supporting Semi-Subsistence Farms Undergoing Restructuring and M142 Producer organizations will not utilize their programmed budgets, thus their programmed contribution to BG-RDP objectives and EU-level goals will be inadequate There is a big risk that a significant part of the 2009 budget will be de-committed in 2011, in the range from 80 MEUR to 120 MEUR
1 736 million € has been contracted in 2 years equal to 368 million € per year. 2.544 million € in public support are still in the pipeline (budget) equal to 636 million € per year.
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Effects and Efficiency The effects of the interventions under the programme are of course related to the types of measures and projects being implemented, and the scale of the effects is as well a function of the effectiveness of the implementation. Low uptake of funds leads to low effects. The two measures under axis 1 contributing to the effects provide contracted, but not yet all paid investment of 4.096 young farmers under measure 112 and 1,871 farmers under measure 121, of which the huge majority are cereal producers and producers of industrial crops. We are aware that contracted projects might be cancelled for various reasons, but still we use the contracted projects as basis for the calculation of the effects expecting the projects to be implemented as planned.
Economic effects Our estimates based on the questionnaire surveys among beneficiaries during the 2007-2009 period, compared with other statistical sources, tell us that the programme has created or retained around 7,000 jobs for the public support of 300 million € for measure 112, 121 and 141, if we anticipate that the applications under this last measure are approved. The unit cost is 43,000 € per job created and/or retained, and we get 22 jobs per 1 million € in support. If the indirect effects are included, we create another 7,250 jobs due to the axis 1 support under measures 112, 121 and 141, as well as 5,250 contemporary jobs indirectly from the multiplier effects of the support. The surveys also tell us that a total of 100 million € in additional turnover is being created among the beneficiaries due to the investments under the two measures 112 and 121. This turnover creates a total additional gross value added (GVA) of 62 million € and an additional net value added (NVA) of 28 million €. Compared to the set targets for the programme, these achievements are very positive. It is expected to generate 175 million € in additional GVA for the whole programme period, and 62 mill. € for the period from 07 - 09 represents 83 % of the target with contributions from measure 112 and 121 alone. Furthermore, the generation of net value added (NVA) is almost as positive. The measures 112 and 121 have contributed with additional 28 million € in NVA. This is equal to 72 % of the target for the period 07 – 09, out of the total target of 90 million € for the period 07 -13 for all measures contributing to the objective. In this sense the contribution from measure 112 and 121 is very positive. The labor productivity increases dramatically on the supported farms under measure 121 in the range of 20 % from 30,000 € GVA/FTE to 36,000 € GVA/FTE. This is a substantial increase, and is outmatching the set targets for the programme several times. The total contribution from all measures is expected to be an average increase in labor productivity of 500 € measured in GVA/FTE. The achievements from measure 121 so far is 6,000 € GVA/FTE. However, this increase will not be typical for the investments in the sector due to the character of these investments being almost exclusively machinery to the large scale cereals and industrial crops producers. The next wave of beneficiaries will be representing other sectors and smaller farmers, and hence the contribution to the productivity growth from these beneficiaries will be much lower and much more in line with the expected effects. Modernization of the sector through support to investments in new products and new technologies is an important objective for the programme. According to the survey results, almost 2,000 beneficiaries have invested in new products and or technologies, representing 1.021 young farmers supported under measure 112 and 876 farmers from measure 121. This achievement is equal to 85 % of the set target for the period 07 – 09 out of a total of 5,200 for the full programme period.
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Finally, with the public support approved and contracted for the period 2007 – 2009 of 582.14 million € (measure 611 not included), this public support contributes with a growth in the income of the economy of 808.5 million € or a net growth of 226.4 million €, due to the general multiplier effects of public investments. However, due to the delays in payments compared with contracting, the real impacts are much lower, but will materialize later, when the payments are made. The multiplier is therefore depending on the fact that the public support is paid out. If we instead use the factual paid out money to beneficiaries for the period, which is 125,7 million € (measure 611 again excluded), the contribution to the growth in the economy is reduced considerably to 175.6 million € and a net growth of 48.9 million €. This is a reduction in the contribution to income generation of 632.9 million € in gross income and 105.9 million € in net growth.
Thus, from a socio economic point of view it is very costly to have too big and unnecessary delays in the payments to the beneficiaries. We recognize that there always is a time lag between approval of projects and effected payments, in particularly for complex projects, but the calculations demonstrate that it is important to accelerate payments. This can be done, for example, through effective advance payments and a relevant number of installments during the project implementation phase. Regarding the dead weight of the public support, indicating how big a share of the investments, which also would have been made without public support, the conclusion is that the three measures (112, 121 and 141) under axis 1 carry a dead weight on 81.4 million € equal to 25 % of the total public expenditures to the three measures. This average is in the higher end compared with other countries. However, the figures differ from the one measure to the other. Measure 112 Young farmers, carry only 7 % deadweight, which is fine and is far beyond what could have been expected, while measure 141 carry 22.5 % equal to 1.3 million €. Measure 121 carries on the other hand 33.6 % deadweight. This measure is also the biggest measure in terms of public support and therefore this measure contributes to a big share of the 81 million €, primarily carried by the field crop farmers, while the dead weight among other types of beneficiaries under measure 121 – typical small scale farmers - is as low as 9 %. Steps should be considered to be taken to reduce dead weight particularly under measure 121.
In total the economic effects for the farmers having had access to the programme is very satisfactory, and the experience shows that a broader implementation of the programme also contributing to meeting of the needs of other sectors is relevant and should be pursued.
The environmental effects are more modest due to the low up-take of funds. However, the general conclusion is that the implemented actions on agricultural land contribute to the objectives of the programme in a somewhat satisfactory way. The target of improvement of biodiversity and habitats is achieved 31% in terms of committed areas. Soil quality target is achieved at 26% which the share of organic farming of this target is achieved at only 5%. The application area under organic farming however almost doubles each year since 2008. The situation with water quality indicator is quite characteristic of the entire implementation of m.214. If we consider data for 2008 campaign which was the only one paid by end of December 2009, then we see that this target would have an overachievement of almost 3 times the initial target. However, the PA data from the beginning of September 2010 shows that for the 2009 campaign there are no authorized areas under the two soil and water schemes and therefore the value is 0. The LFA measures are reaching mainly household and family farms thus contributing to the prevention of land abandonment and depopulation of rural areas and therefore are able to achieve the programme objectives. This is achieved through involvement of local institutions and it confirms the conclusion that the closer to the beneficiaries the institutions are the more useful and appreciated are by the beneficiaries. This needs to be considered well in the process of decentralization of the implementation of measures targeting small scale farmers and small projects/applications.
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At the same time, there is no environmental effect in the forest measures of Axis 2. There is a very low uptake of these measures and there is no information on the forest area to be supported by the 2010 contracted projects. Some environmental effects are also created of the measures under axis 1. 39 % of the beneficiaries under measure 121 indicate in the survey that the investments have improved nature preservation and preservation of the biodiversity, while 32 % claim that the investments have prevented the pollution of waters from agriculture activities.
Also the effects of interventions under axis 3 are expected to be positive contributing to improvement in the standards of living in rural areas, in particularly through new and renovated infrastructure. Measure 321 contributing to investments in basic services for the economy and the rural population is one of two measures with projects approved. The majority of projects are concentrated on environmental infrastructure. More than 50 % of the projects are targeting reconstruction or new sections of water provisions and treatment services leading to improved infrastructure and a better living environment for the rural population. On the other hand, the projects are expensive (1.67 million € in average per approved project totaling 253 million €), while project applications not yet processed total 450 million € in public support out of a total budget of 430 million €. Measure 322 supporting village renewal and development is demonstrating high effectiveness as indicated above. The majority of projects are concentrated on physical infrastructure (mainly streets, lightning and parks), also contributing to improved living conditions in rural areas. For M322 the situation is the same as for measure 321: The full budget of 166 million € of the measure is applied for with a total of 184 million € in applications, of which 108 million € are approved.
Regional Uptake Generally, the analysis of the regional up-take of funds under the programme so far shows, that districts which have prevailing forest cover on their territory have been neglected due to the later start of payments under the forestry measure, under M123 processing including wood, and micro entrepreneurship – M312, in favor of the districts, characterized of intensive agriculture based on field crops – grain, oleaginous, technical cultures and supported by M112 and M121. The top 5 districts measured in terms of up-take of payments from axis 1 measures (Russe, Dobrich, Pleven, Plovdiv and Stara Zagora) represent an uptake of 67 MEUR by the end of May 2010 or 38.5 % of all payments under the axis. However, the five districts only represent 25,500 farmers out of the total of 101,191 farmers registered in 2009 (exclusive subsistence farmers). Their over-performance is 53 % in average, with Dobrich as the top-performer with an up-take 2.5 times as big as expected based on the number of farmers in the district. On the contrary, the Bottom 5 districts (Gabrovo, Vidin, Kardjali, Smoljan and Pernik) represent 16,820 farmers (16 %), but has only been able to absorb 7 MEUR or 4 % of the payments. The five districts are underperforming with 75 % of the expected up-take in average. At the bottom we have Kardjali representing 9.4 % of farmers, but only absorbing 0.4 % equal to 4.3 % of the expected amount. Even though the district is dominated of tobacco growing, it is still a striking difference in up-take, which could call for further analyses, not only for Kardjali, but also for other under-performing districts. The evaluators assess that if the MA had chosen to decentralize and regionalize the measure budgets, the implementation of the BGRDP both the implementation rate and the integrity of the development might have been in a more progressed situation. This could have happened because then the regional authorities would also have been interested in absorbing not only infrastructure support, but also to help their farmers and entrepreneurs absorb the “private” aid available for support under the programme. Last but not least, the local administrations and communities would have had much more experience in sound local governance practices and in the LEADER approach.
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Administration The administrative set-up of the Bulgarian administration of the Rural Development Program is coherent with EU requirements. The Bulgarian administration has established the necessary institutional structure, but also the defined units within the SFA/Paying Agency comply with the standards stipulated in the EC regulations. It might even be postulated that the eagerness to comply with EU requirements is contributing to a lower effectiveness of the administration than could otherwise have been the case. The coordination and relation among the administrative authorities, above all MAF and SFA, are open for improvements, even though the relations between the administrative authorities have improved since the end of the summer of 2010. In this context it is important to conclude that the monitoring system is not working as well as it could. Data according to proper monitoring, see CMEF guidelines are not collected, and if they are collected, they are not always registered in the IT system, or they might be registered with errors and misunderstandings. Also the reporting of data from the IT system is difficult and causes problems for the MAF. The result is that the monitoring system must be improved in order for the MA to be de facto a managing authority ensuring the sound strategic management of the Programme. An enhanced regional implementation model transferring the functions of contracting and authorization of payments for the biggest part of the “non-area based” measures is expected to lead to a more transparent and effective set-up. The division of responsibilities between the central PA and the district and regional offices is ineffective. It is inconceivable that the farm visits according to Article 26 of Commission Regulation No. 1975/2006 are being done by experts of the central PA. It would be recommendable to delegate this function to the regional paying agencies (RPA) as the nearness to the beneficiary will improve the quality of the data and above all reduce administrative costs. The comparative analysis of the thematic study on the administration of the RDP carried out of the evaluators as a part of the ongoing evaluation activities and reported separately did conclude that the BG administration has room for improvements and that it is possible to organize the administration more effectively, than it is seen in Bulgaria. The biggest worry, however, seems to be the big fluctuation in staff, especially on management level. Besides the numerous changes on managing the RD Directorate of MAF, the Executive Director and the Deputy Directors of SFA have also been replaced on many occasions. To promote a strong administration, it is recommendable to keep the continuity of personal as to retain understanding, specific knowledge and managerial skills not so easy to acquire in Bulgaria. Finally, it is also worth referring that the satisfaction among the beneficiaries of the administration is very high. The satisfaction among the beneficiaries participating in the NRDP is generally high, for the administrative institutions and for the procedures. 75 % of the beneficiaries are very satisfied or satisfied with MAF, while only 16 % are either unsatisfied or very unsatisfied. For SFA/PA the similar figures are 73 % and 18 %, while the figures for the regional offices of SFA are 78.5 % and 14.5 %, which is as good as for the district offices of MAF with scores of 77 % and 16 % respectively. Even though the scores are very positive, there is still room for improvements also compared with similar survey results from other countries, where satisfaction scores often are as high as 90 % or more.
Regarding the various elements connected with the application process, the satisfaction is the highest for the information required in the application, where 80 % of the replies are positive. The satisfaction is the lowest for the duration of the procedure for project selection. Here 43 % are unsatisfied or very unsatisfied, while the transparency of the decision making process scores 31 % of negative replies, and First In First Served (FIFS) scores 27 % negative replies. The general conclusion is that the beneficiaries are very positive, but that there is room for further development of the procedures in order to increase the user satisfaction even further.
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Recommendations Based on the above conclusions, the following recommendations are made: They are presented on different levels and for different actors/stakeholders participating in NRDP implementation. It is indicated for each recommendation if action can be taken right away, or if further administrative procedures must be carried out. It is stressed that the recommendations are expressed of the evaluators, and that their further fate in the process is to the MAF to decide in dialogue with the SFA/PA and the EC.
Programme Level The general environment for implementing the programme should be improved, i.e. more information/orientation and consultation, easier access to bridge capital should be secured also for other sectors than animal farms supported in 2010. Immediate action is possible and recommended. Better coordination must be established with OP Human Resources (providing training to farmers wishing to convert to non-agriculture gainful activities) Immediate action is possible and recommended. Programme synergy must be improved; Measures M124 could be integrated in M121 like in Denmark. This will prevent the need to allocate limited administrative capacity. Change in the measure is needed. Strong interconnection must be established among M112, M141, M142 and the general competitiveness budgets of M121 (reorganization of the guarantee budgets). Change in the measure is needed. Investments in EU priorities (i.e. innovation, energy and water savings, use of ICT, quality foods, organic foods, tourism) must be reinforced via the measures design of M112, M121, M141, M142, M123, M124, M311, M312, M321, M322 . Where appropriate certain parts of the aid could be linked to the obligation to carry out appropriate investments in the said priorities. Change in the measure is needed. All of these should be actively promoted via M111, M114, M511 (National Rural Network). M511 could help the identification and the ‘technical advice” to carry out such investments to be later used by the trainers and consultants under M111 and M114/143. Immediate action is possible and recommended. Regional targeting of the funds per measure M112, M121, M141, M311, M312 must be introduced to help the social restructuring in the priority districts with the most difficult development prospects. Changes in measures are needed. The implementation of M126 and 341 is not necessary. They can be removed from the programme. Change in programme is needed. Reallocation of measure budgets is necessary – see the proposed reallocation of funds below, and in chapter 7. Change in programme is needed. The reallocation of budgets should follow strict conditions and prioritization. Overcoming of regional disparities should be a part of the conditions for reallocation of funds. Change in programme is needed.
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Table 1: Summary of proposed reallocation funds among chosen BGRDP measures
Reallocation in favor of measures, MEUR Justification
M112: Setting up of young farmers, The budget is used 31.12.2009, and there is still need for supporting Young Farmers selected after their contribution to Programmed budget 102.4 MEUR 67.5 programme objectives
2,700 new contracts proposed
M114: Use of advisory services by Build up of capacity in the NAAS in order to support the farmers is farmers and forest owners 15.3 urgently needed. Programmed budget 0 MEUR
M121: Modernisation of agricultural The budget for competitiveness is used. It is needed to increase holdings the budget and to prioritize M112, M141 and M142 beneficiaries 209.9 and priority subsectors: animal breeding (+poultry), fruits and Programmed budget (without EERP vegetables. funds) 469.9 MEUR, 50 % on guaranteed budgets, 50 % on competitiveness budget
M226: Restoring forestry potential Low demand so far: 1.1 MEUR per 01.12.2010, but the need is big and introducing prevention actions. 14.1 in order to prevent forest damages from fires and wind falls. Targeted information to potential beneficiaries is needed Programmed budget 29.5 MEUR
TOTAL: 306.8
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Table 1: Continued
Reallocation in disfavor of measures, MEUR Justification
M 111: Training, information and Reduction in the number of targeted beneficiaries under M141 from diffusion of knowledge, 15.3 21,000 to 5,000.15 MEUR applied for 31.12.2009, 7 MEUR contracted 01.12.2010 Programmed budget 42,17 MEUR
M 122: Improving economic value of Very low demand: 0.3 MEUR applied for 01. 12. 2010 forests 14.1 Programmed budget 24.1 MEUR
M 141: Supporting semi-subsistence Reduction in the number of targeted beneficiaries under M141 from farms undergoing restructuring 110.0 21,000 to 6,600 due to a decrease in the number of potential beneficiaries Programmed budget 144.6 MEUR
M 223: First afforestation of non- Low demand 0.6 MEUR 31.12.2009. Intensified information will agricultural land 20.4 contribute to increase the up-take of the reduced budget Programmed budget 40.4 MEUR
M 311: Diversification into non- 47.3 MEUR applied for 01.12.2010. A reduced budget will balance agricultural activities 50.0 the available resources for the 2011-2013 period Programmed budget 142.3 MEUR
M 511: Technical Assistance The TA is over budgeted and a reallocation to productive measures 70.0 is relevant under the present circumstances Programmed budget 123 MEUR
M 611: National Complements to Un-spend resources are reallocated Direct Payments, Programmed 27.0 budget 182 MEUR
TOTAL: 306.8
Axis Level Axis 1: Unmet needs should be met via the accelerated implementation of M111 and the launch of M114, M124 (if not integrated within M121), M125. Immediate action is possible and recommended
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The non-guaranteed budget of M121 should be increased to satisfy priority needs for financing. General competitiveness budgets should be guaranteed within M121 for M112, M141, M142, as well as for the animal and fruit and vegetables sectors. Change in the measure is needed. Accompany the provision of such aid with appropriate information, training, consultation actions preferably as close as possible to the farms. Immediate action is possible and recommended From all beneficiaries of development aid should be requested investments in EU priorities (i.e. obligatory 5% should be invested either in ICT, or energy savings or Alternative energy production, etc.). Changes in the measures are needed. Use the information, training, consultation actions to organize the smaller – economically weak holdings into producer organizations. Immediate action is possible and recommended Beneficiaries under M 114 should be obliged to create at least 1 PO for M142 especially in the animal sector. Immediate action is possible and recommended. Axis 2: Implementation of the measures should be intensified in order to increase up-take and generate the needed environmental benefits from the programme. Immediate action is possible and recommended. Establish (and re-establish) dedicated Axis 2 units in both the Paying Agency and the Managing Authority and empower them to taking and implementing decisions for overcoming the implementation hurdles of the measure. Immediate action is possible and recommended. This should also include: o Providing real-time access to the implementation data of measure 214 to the Axis 2 unit responsible staff; o Establish an official and permanent working group between the experts of the PA Axis 2 unit and the MA Axis 2 unit. Ensure that all land and farm animals’ registers function properly and contain information representing the actual situation on the farms. There have been numerous reports from farmers where their animals are not included in the farm animals register. The big number of 0 BGN subsidies in reality means that all these farmers have declared more land and animals than the officially registered in their names and despite the fact that they have documents for them. Immediate action is possible and recommended. This is a problem that needs to be addressed by MAF in close cooperation with the MA and the PA. Remove the requirement of official and notarized agreements of land use for all AE applicants. The sustainability, continuation and implementation of the 5 years AE commitment should be checked by on-the-spot controls by checking the proper implementation of the AE action itself and not by only checking land ownership documents. Immediate action is possible and recommended. Develop a targeted information campaign per AE scheme and for the entire m.214. Special information campaigns should be developed for m.211 and m.212 as well. There has to be targeted information campaign to extensive livestock farmers under m.212. Immediate action is possible and recommended o Develop and effective learning mechanism for the implementation of Axis 2 measures by publishing the main mistakes leading to rejection of applications or to penalties and reduction of payments. Train the staff and ensure the provision of up-to-date information to the municipal and regional offices of the Ministry of Agriculture and the Paying Agency as well as the consultants especially from NAAS and RAAS. The underestimation of their role in the implementation of all Axis 2 area-based measures should be prevented. On the contrary, coordinated training and information to these offices are key to the successful implementation of the AE measure. Immediate action is possible and recommended Provide positive signals to the Axis 2 and especially AE beneficiaries and potential applicants by processing in time the 2010 campaign applications – this means before the end of 2010. It should be unacceptable that the
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situation of the last two years is repeated and the new application campaign starts before the results of the previous are known. Immediate action is possible and recommended Involve municipalities (through the Association of Municipalities in Bulgaria) to solve the problem with long-term renting of municipal and state grasslands on one and the same plot of land which continues to be a recurring problem as indicated by the survey’s comments. Immediate action is possible and recommended Prioritize the AE training projects under m.111 and the AE consultancy organizations under m.114 and promote them to beneficiaries before and during the 2011 campaign. This delays is a particular problem for 2008 AE beneficiaries who have to submit the copies of AE training documents already. Immediate action is possible and recommended Recommendations regarding implementation arrangements and modifications of the ordinance accordingly: o Introduce the requirement that the applications are assessed based on the conditions/ordinance that is in force at the time of the submission of application. It is unacceptable that the rules of the game are being changed post-factum and that farmers are penalized or rejected on this basis. This means that the implementation ordinance with all its amendments and changes should be published in the State gazette not later than 1 month before the start of the application campaign on March 1st. This will allow also sufficient time for the municipal and district offices to get acquainted with the changes. o Provide a time period when the Axis 2 and AE applications can be amended and/or modified in the case of missing documents or difference of land and/or animals with LPIS and IACS. This will require a timely review of the AE applications, not as at the moment after the end of the calendar year. o Abandon the practice of withholding SAPS payments on the basis of an expected/assumed breach of AE requirements. This is extremely de-motivational for AE beneficiaries. Penalties should be paid on the basis of recorded breach, not an assumed one. Another simple way of not withholding SAPS payments is to simply process the AE payments on time – within the same calendar year! o The MAF and PA offices in districts and municipalities (especially the ones with highest number of current beneficiaries) should receive additional support (staff and/or premiums) during the application campaign. This will allow them to check carefully the submitted AE applications already during the submission and to correct obvious technical mistakes such as missing signatures and copies of needed documents. An additional motivation could be ensured by linking premiums to the number of submitted AE applications. Re-assess the output and result targets in view of the current implementation experience and the 2010 Agricultural Census to reflect better the situation and number of farms and managed farmland. Immediate action is possible and recommended Start the implementation of measure 213 Support to Natura 2000, but only after the problems with land eligibility under LPIS and IACS are addressed. Otherwise, the same problems and bad image will be transferred to the new measure and this will jeopardize the overall implementation of Axis 2 in this programming period as well as in the next one. Immediate action is possible and recommended Develop and start the implementation of the remaining AE schemes – riparian habitats, management of lowland mosaics, etc. under the same condition as for Natura 2000 measure – solve the land eligibility under LPIS and IACS issues. Immediate action is possible and recommended Develop and pilot test the measures related to forest area-based payments such as Forest-environment payments. Pilot testing is of key importance, which will prevent implementation failure of full-scale measure implementation. Two schemes are proposed to address the growing number of forests officially certified as sustainably managed forests and identified as High Conservation Value forests. Immediate action is possible and recommended.
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Open specific and targeted calls under m.111 to increase the awareness and knowledge of farmers and other land users’ related to adaptation to climate change, water saving techniques and technologies and biodiversity friendly practices, etc. Immediate action is possible and recommended. Axis 3: Priority should be shifted from types of infrastructure projects to meeting the needs of target groups of the population – tobacco/milk producers, the children, the young people, women, minorities, the elderly. Immediate action is possible and recommended Close cooperation with OP Human Resources must be established to secure human capacity in the beneficiaries under M311, M312, M313. Immediate action is possible and recommended EU priorities should be promoted via M511. This is a horizontal recommendation for all Axis 3 measures. Immediate action is possible and recommended. Change the ranking criteria in order to favor projects with new jobs. Immediate action is possible and recommended. Axis 4: Implementation of the Leader axis is urgently needed and must be accelerated in order to ensure the local involvement of the mobilized human resources in the regions. Immediate action is possible and recommended. It is expected that the number of projects financed under Strategies for Local Development will reach more than 2,000 until end-2015. It is recommended that the selected LAGs immediately establish close contacts with dedicated officers from the respective Regional Paying Agency. To avoid delays in the processing of the LAGs projects it is strongly recommended: (i) LAG should keep very well updated the designated contacts in the SFA- PA, since the time of the local call for proposal – in this way the respective officer will have possibility plan and allocated necessary time to the finally selected projects; (ii) to set deadlines for projects processing both in the LAG and in the RPA. Immediate action is possible and recommended.
Measures Level M111, M112, M121, M141 and M142: Measure design (content, eligibility criteria, selection criteria) should target particular agri sectors and particular administrative districts lagging behind in their modernization, restructuring of their agriculture sectors. Changes of measures are needed. M121: Maximum sum of support must be reduced to 100.000 – 150.000 € except for investments in green houses and cold stores. Change of measure is needed. M121: Implementation arrangements and procedures must be simplified. Change of measure is needed. M111, M114, M143: Must include components promoting investments in EU priorities. Change of measure is needed. M511 must be redesigned to ensure information (innovation, technology, good practices) and promotion benefits per major groups of beneficiaries. Immediate action is possible and recommended. If the recommended reallocation of funds to M112 and M121 is decided, then - through extrapolations from the current M112 and M141 implementation - it is expected that the number of M112 and M141 beneficiaries applying for investment support under M121 may reach 2,000 applicants (EUR 110,000 public subsidy on the average if M121 budget is increased by MEUR 227.4). If this will happen, then the newly transferred budget to M121 for general competitiveness should be reserved only to the M112, M141 and M142 beneficiaries and the fruit & vegetables sector and the tobacco producers, who want to start alternative agriculture producers. Then, through a modified ranking system the support should be channeled to priority sectors (fruit, vegetables, former
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tobacco producers, animal farms) and priority districts (with less received agriculture investment support until the time of project selection). Changes of measures and procedures are needed. More detailed recommendations on changing measure design or budget is prepared under each of the analysis in Chapter 6 of this report.
Programme Management Level Strengthen and preserve the capacity of the MA and SFA-PA. Introduce windows for collecting projects for the coming year, including the amount of support available for which the applicants will compete. Strictly adhere to the annual programme of calls for proposals. Immediate action is possible and recommended. The quality of the monitoring and evaluation information presented to the MC must be improved to allow for the making of sound management decisions within the principles of sound financial management of public funds. MC should receive information about effects and results (as in CMEF), and not only information about number of processed projects in the SFA-PA. Immediate action is possible and recommended. Re-implement the SAPARD practices for monitoring the regional implementation of the measures. Immediate action is possible and recommended. SFA-PA and MA monitoring system must be brought in line with the CMEF minimum standards in terms of data/content and in terms of processing. Real-time access to monitoring data must be ensured through an appropriate IT reporting system. Manual processing of thousands of excel entries is not feasible. Immediate action is possible and recommended MA capacity should be strengthened to carry out appropriate micro, mezzo and macro level analyses to ensure sound management of the measures and the programme in general. Time-schedule for such analyses should be established and followed by appointed MA officers. Fluctuations of staff make this intervention relevant and feasible. Financing should be by the M511. Immediate action is possible and recommended. Some implementation tasks, such as information, ranking, selection of projects) could be allocated to various organizations – i.e. the Forestry Agency. Changes of procedures are needed. Some sector/regionally targeted publicity and promotion tasks could be allocated to branch organizations and associations. Immediate action is possible and recommended.
Administration and Implementation Level Simplification of processing procedures of applications, see Danish model for measure 121. Changes of procedures are needed. Simplification of control procedures (especially before contracting). Changes of procedures are needed. Improving the quality of selection of projects for example through introduction of windows for selection of projects for all measures. The planned time-schedule should be posted at the MAF and SFA/PA web sites by the end of each year and should be observed by the SFA/PA. Immediate action is possible and recommended. Simplification of the selection of projects in accordance with defined criteria (adaptation of the BP with emphasis put on the payback period – 4 to 6 years). Immediate action is possible and recommended. Reduce the risk for dead weight through more focus on public goods, innovation and a medium long risk profile. Changes of measure fiches are needed.
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Allow for small construction projects less than EUR 25.000 (e.g. under M121, M123, M311, M312) to be carried out by the beneficiary him/herself. Change in implementing ordinances and of SFA-PA implementation procedures is needed for all the “private measures”. If necessary, coordination to change national public procurement law should be pursued via the Minister of the EU programmes in BG. Take steps to remove the requirements to the applicants for investment support to present three offers, and to be confirmed by suppliers during the evaluation of project in PA, as this poses a significant hurdle, when the unsuccessful supplier not selected, refuses cooperation; simple reference to market prices and the prices database in the SFA-PA is sufficient. Immediate action is possible and recommended. Take steps to decentralization of the administration for all relevant measures. Immediate action is possible and recommended. Automation/computerization of all administrative operations where appropriate, including the monitoring system. Immediate action is possible and recommended. Ensure timely feedback to beneficiaries on mistakes and small errors and flaws; provision of sufficient time for the applicant to improve his/her applications must be secured. Immediate action is possible and recommended Use external expertise (advisory council or board of experts, registered in an expert database) to consult to complex and difficult projects. Immediate action is possible and recommended. Publish advice and guidelines for the particular measure/type of project/beneficiary. Incorporate the appropriate technologies for meeting EU priorities in the Guidelines. Immediate action is possible and recommended. Prepare and use good and bad practices for the preparation of applications and for project implementation as a teaching tool to the target groups, for example published on the MAF website and/or used of advisors in their consultations with potential beneficiaries. Immediate action is possible and recommended Prepare descriptions of model-holdings and communicate to the general public, on the MAF web site and/or through advisors, the minimum economic size of a holding to be sufficient to generate a family income. Match each model-holding with an organic model-holding. Immediate action is possible and recommended. Data on regional NRDP implementation indicates that the project processing burden of the district offices is unequal: Heavier for some particular districts, while others do not seem to be much involved in the implementation of measures. Reallocation of staff could be relevant in order to tackle the bottlenecks in the offices, where the administrative problems and burdens are the biggest. Immediate action is possible and recommended.
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2 Introduction
2.1. Purpose of the report
This report presents the Midterm Evaluation of the National Rural Development Programme in Bulgaria 2007 – 2013, covering the period fro 2007 to 2009.
It is prepared according Art 86,CR1698/2005 and is in compliance with Guidance Note B – Evaluation Guidelines concerning the Common Monitoring and Evaluation Framework.
Article 86(6) from CR 1698/2005 states: The mid-term and ex post evaluations shall examine the degree of utilisation of resources, the effectiveness and efficiency of the programming of the EAFRD, its socioeconomic impact and its impact on the Community priorities. They shall cover the goals of the programme and aim to draw lessons concerning rural development policy. They shall identify the factors which contributed to the success or failure of the programmes’ implementation, including as regards sustainability, and identify best practice.
The Midterm Evaluation Report covers the implementation period from 2007 to 2009. The programme was launched and has been open in 2008 for a limited number of the measures. Therefore the MTE covers the outputs and results of these measures, as its primary objective.
2.2. Structure of the report
The report is to a large extent structured as demanded in the CMEF guidelines. The report contains an executive summary as chapter 1.
Chapter 3 is a description of the evaluation context. It contains a description of the evaluation purpose and the process, and finally it presents a summary of relevant previous evaluations of the programme.
Chapter 4 is a description of the methodology used in the evaluation, while chapter 5 is a presentation of the programme, its objectives, priorities, measures and budgets. Furthermore the chapter also contains an analysis of the intervention logic for the measures under the programme. Finally, the actual implementation progress of the programme until end of December 2009 is analyzed in terms of the value of contracted projects/actions/contracts.
Chapter 6 presents the evaluation of the individual measures, of the programme as such, including answers to the common horizontal evaluation questions, as well as of the regional uptake of the measures, and of the administrative and institutional set-up.
Finally, chapter 7 presents the main conclusions and recommendation.
The report also contains a number of annexes in a separate document.
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3 The Evaluation Context
3.1. BGRDP context
3.1.0. EU Programmes in BG in the evaluated 2007-2009 period There are seven programmes in Bulgaria cofinanced by the EU Structural Funds. Each has a separate Managing authority and intermediate bodies located in various institutions. The BGRDP has been programmed with demarcation lines preventing double financing by the SF Programmes, which could potentially finance the same activities/beneficiaries or types of investments in the rural areas. Regarding potential additionality or synergetic effects, however, it should be noted that: - OP Environment, OP Regional Development could add to the quality of life in relatively limited scope of rural areas (mainly in the OPRD agglomerations) - OP Competitiveness could create employment outside agriculture and processing industry across the rural areas - OP Human Resources could offer much needed training the rural inhabitants working in the processing enterprises or for general entrepreneurship outside agriculture and forestry, which is particularly necessary for the small agriculture(tobacco) producers who decide to leave any agriculture related activity altogether MAF has established good working contacts with the MA of the OP Human Resources and thus cooperation in a joint monitoring and coordination of the two Programmes is possible. In the evaluated period, the SF OPs programmes were in their initial stage of implementation.
Table 2: Payments under the other EU Programmes in Bulgaria 2007-2009*
PROGRAM FINANCED BY THE SF Paid EUR % of programmed budget 2007-2013 OP Transport 35 784 874,45 2,2% OP Environment 39 712 341,56 2,7% OP Regional Development 26 424 445,38 1,9% OP Competitiveness 3 956 894,00 0,4% OP Technical Assistance 2 337 920,98 4,8% OP Human Resources 33 857 194,13 3,3% OP Administrative Capacity 32 186 007,99 20,9% Source: http://eufunds.bg/bg/page/766
Hence and based on this general analysis as well as on the knowledge of the content of the programmes and the effort of the MAF to avoid overlapping, it can be concluded that no synergetic or conflicting effects have emerged among the BGRDP and the SF Ops in the evaluated period.
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3.1.1. National agriculture context The BGRDP is programmed in heavy favor of the agriculture sector in the country (MEUR 1880=59% of BGRDP budget of MEUR 3200 is dedicated to the agriculture sector). [See also subsection 5.2.]
More than MEUR 1300,0 will also be paid to the sector in the form of CAP I Direct Payments, aid for tobacco growing, and other alleviations on taxes and quasi-tax payments.
These funds were targeted at cumulatively approximately 110.000 farmers, who were either registered agriculture producers, or registered tobacco producers or registered in the IACS, or any combinations of any three.
Table 1 below shows the effect from lifting the alleviations, which the farmers had in respect of their tax and social security payments, and which took place in 2010.
Table 3: Dynamics in the pool of potential beneficiaries under BGRDP measures M111, M112, (M14), M121, M141, M142,
M143, and M311
-
-
N N N N N N
%
ange
by by
agri
Num
2009
AP by by AP
District District
Region 2009 P
Change Change Ch
Planning
Active AP
producers
2010/2009
Registered Registered Registered
15.10.2010 15.10.2010 15.10.2010
Delisted AP AP Delisted
redAP2009
Active AP by Activeby AP
2010/Registe Delisted Agri Delisted NC 4 V. Tarnovo 3178 30 2442 36 2 406 -772 -24,29% NC 7 Gabrovo 676 12 499 11 488 -188 -27,81% NC 17 Razgrad 3174 59 2000 92 1 908 -1 266 -39,89% NC 18 Russe 3034 79 2431 37 2 394 -640 -21,09% NC 19 Silistra 3185 56 2290 72 2 218 -967 -30,36% NE 3 Varna 2629 36 2228 36 2 192 -437 -16,62% NE 8 Dobrich 4331 23 3747 38 3 709 -622 -14,36% NE 25 Targovishte 2174 118 1652 123 1 529 -645 -29,67% NE 27 Shumen 3821 168 2870 123 2 747 -1 074 -28,11% NW 5 Vidin 1605 44 1128 33 1 095 -510 -31,78% NW 6 Vratsa 2476 20 1973 31 1 942 -534 -21,57% NW 11 Lovech 1213 10 906 8 898 -315 -25,97% NW 12 Montana 2172 36 1509 53 1 456 -716 -32,97% NW 15 Pleven 3743 42 2489 83 2 406 -1 337 -35,72% SC 9 Kardjali 9527 674 6371 6 371 -3 156 -33,13% SC 13 Pazardjik 4615 36 3589 72 3 517 -1 098 -23,79% SC 16 Plovdiv 10312 52 8995 74 8 921 -1 391 -13,49% SC 21 Smoljan 4438 268 2279 253 2 026 -2 412 -54,35% SC 26 Haskovo 6917 37 5709 64 5 645 -1 272 -18,39% SE 2 Burgas 6069 210 4559 4 559 -1 510 -24,88% SE 20 Sliven 4130 49 3107 67 3 040 -1 090 -26,39% SE 24 Stara Zagora 4081 26 3355 36 3 319 -762 -18,67% SE 28 Yambol 2872 15 2331 48 2 283 -589 -20,51% SW 1 Blagoevgrad 4216 35 3000 26 2 974 -1 242 -29,46% SW 10 Kjustendil 1185 20 934 8 926 -259 -21,86% SW 14 Pernik 573 1 506 5 501 -72 -12,57% SW 22 Sofia Capital 2252 28 1893 19 1 874 -378 -16,79% SW 23 Sofia 1593 19 1340 10 1 330 -263 -16,51% Total for Bulgaria 100191 2203 76132 1458 74674 -25517 -25,47%
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BGRDP measures M 112 and M 141 have probably added to the increase in the above numbers as the first measure supports new emerging farmers, and the second may have attracted farms operating in the shadow market. The rest of the BGRDP Axis I agriculture support measures target only Registered Agriculture Producers (as well as M311).
Axis II measures supports land managers registered in IACS (may also be registered Agriculture Producers.)
MAF data however, indicates that the number of producers of agriculture produce in BG is much bigger, 665,000 according to the table below, while the table above refers to 101,191 farmers in 2009, which is in accordance with the FADN from 2007 indicating that there are around 117,500 farmers registered in Bulgaria. The table below demonstrates that a significant part of the animals in the country are raised by very small units, which however, also generate significant part of the part-time employment in the country.
Table 4: Breakdown of BG farm holdings in 2007 in view of their economic size*
holdings UAA Animals SGM Workforce
ESU Number ha % % LSU(000) % MEUR % AWU(000) % (000) (000)
< 1 508.2 76.4 275.1 9.5 636.1 60.7 261.5 20.3 480.3 60.7
1-4 139.4 20.9 252.7 8.7 514.4 26.9 278.4 21.6 213.3 26.9
4- 40 14.7 2.2 408.0 14.0 175.8 4.9 172.0 13.3 39.0 4.9
40-100 1.6 0.2 523.1 18.0 37.1 1.9 127.8 9.9 14.7 1.9
>=100 1.6 0.2 1 445.5 49.8 264.7 5.6 451.5 35.0 44.3 5.6 total 665.5 100.0 2 904.5 100.0 1 628.1 100.0 1291.2 100.0 791.6 100.0
* This table was presented by the MA on the Round Table dedicated to the Semisubsistence farming in BG, See also MAF Agricultural sector report 2009.
The Tobacco Report 2009 from MAF states that in 2009 there was made subsidy payments to 26 626 tobacco producers situated in 112 municipalities (42% of all BG municipalities).
Tobacco producers are supported by BGRDP only if:
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- They start agriculture activity via a new registration as an agriculture producer (M112) - but for alternative production - Are registered agriculture producers and then they have access to support outside tobacco sector - Are registered agriculture producers and continue to increase their tobacco growing business under M141. In all cases, if the last tobacco producer wishes support under M121, he/she will have to convert to an alternative agriculture production – not tobacco.
Table 5: Major sources of public aid to BG Agriculture in MEUR
Source 2007 2008 2009 SAPARD measure 1.1. Modernisation of holdings 234 956 0902 NA NA BGRDP M121 Modernisation of holdings NA - 71 426 225 BGRDP M112 Young farmers NA - 18 486 082 BGRDP M211, M212, M214 (LFA and AE) NA - 56 024 491 CAP I Direct Payments* (BGRDP M611) NA 165 745 213 479 224 833* National support schemes in Agriculture** <40 <40 <40 National support schemes in Agriculture**- tax/fuel excise alleviation ? ? ? National support schemes in Tobacco production*** <55 <55 <55 *Campaign 2007 is paid in 2008, campaign 2008 is paid in 2009, and campaign 2009 was also paid in 2009. The MEUR 145 from M611 is part of these figures. ** These include only the national support schemes for direct support for agriculture – the prevailing part of them, however comes in the form of low-rate credits – both short term for operating expenses (e.g. for cattle feed), or longer-term for investment purposes (e.g. cow sheds, beehives, orchards, etc.). There are other incentives for the agriculture producers – i.e. tax/social insurance alleviations, fuel excise alleviation, but the evaluators do not have access to the respective figures. *** These are subsidies paid per kg of purchased quality tobacco. Tobacco producers also enjoyed tax/social insurance alleviations for the registered tobacco producer.
In the evaluated period 2007-2009, the payments received under CAP I Direct Payments far outnumbered the aid extended by the BGRDP measures + the cumulative investment aid provided under SAPARD to BG agriculture in the entire 2000-2006 period. CAP I Direct Payments in BG is implemented via the flat rate per/ha SAPS scheme. The relative intensity of the CAP I Direct Payments support is much higher to the general production expenses per hectare of field crops (grain, oleaginous, technical cultures), than to the general production expenses of fruits and vegetables. The EUR 121.6/ha flat rate payment equaled 20.5% of the expenses per ha for growing wheat and 1.6% for hectare expenses of tomatoes and 5.4% of the expenses of cherry hectare. Animal producers, who did not manage any lands in the period (or could not prove that they did), did not receive any support from the CAP I Direct Payments. These were associated with the drop in the areas, production volumes and output generated in BG fruit and vegetable subsectors and in the animal sector in general. The more the amounts and the intensity of the CAP I support, the higher the credibility of the farmer when applying for a bank loan, and the easier for such a farmer to receive the loan.
2 Source. SAPARD Annual Report 2008. MEUR 100.5 of these were allocated to the cereals sector, MEUR 15.9 to horticulture, MEUR 23.4 to vineyards, MEUR 15.7 to fruit. Dairy cows received MEUR 22.9 and pig farms – MEUR 23.8.
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Hence, the CAP I in Bulgaria also pulled the interest and the willingness of the banks to extend the loans to farmers demonstrating larger and secure influx of CAP I support, primarily from the field crops sector (also the main beneficiary of SAPARD M1.1. measure). The smaller holdings / the other sectors, which did not have such collateral could not receive so easily the bridge capital to invest in modernizing and boosting the competiveness of their holdings, and in the animal sector – neither they could invest in the meeting the Acquis requirements for milk hygiene as transposed in the national veterinary/food safety legislation. Many such smaller holdings officially stopped their operations, but it is not certain, if they did not enter the shadow market for agriculture goods, especially in the milk sector. The new political management of the Ministry of Agriculture and Food immediately took actions to alleviate this situation. 5 new national support schemes were opened for the producers of animal produce, and two more are under the notification process with the EC. The Ordinance for Direct Sales was also finally enforced, and in 2011 the farmers are allowed to sell their own products to final customers provided they keep their farms/sales places in accordance with the appropriate conditions for such activities. All these developments, however, took place in 2010 and their effects and impacts will be unfolding in the next 3-5 year period before the identified sector imbalances and market distortions are rectified. They cannot, consequently, be part of the current evaluation exercise.
MIDTERM EVALUATION OF THE RURAL DEVELOPMENT PROGRAMME OF BULGARIA 42 3.2. Description of the evaluation process: Recapitulation of the ToR, purpose and scope of the evaluation
3.2.0. Evaluation process
The Midterm evaluation of BGRDP is a part of the ongoing evaluation of the programme being a mandatory exercise for the Managing Authority stated in the EC regulation 1698/2005. The evaluation activities have included a number of studies and reports, which have been prepared in the period from the signing of the contracts in May 2009 until today. These reports are:
On-going evaluation report 2008 On-going evaluation report 2009 Milk Report – A study of the dairy sector in Bulgaria Administrative study – An assessment of the administrative procedures of the SFA/PA Context Report: A study of the impacts of reallocation of BG RDP funds between measures Re-assessment of the NRDP intervention logic and assessment of impacts of reallocation of BG RDP funds between measures Regular progress reports of the activities
From the very beginning of implementing the ongoing and mid-term evaluation contract the evaluators had difficulties in the timely receiving of reliable monitoring information organized according to the CMEF-Format (See OER 2008 and 2009). On the other hand, the information from the CMEF tables alone is not sufficient for the evaluation of the BGRDP according to the minimum quality standards for such exercises. The team decided to request from SFA-PA primary data for applications/implemented projects/payments at applicants’ beneficiaries’ level. The team received full support from the MA, who also experienced significant difficulties in receiving from SFA-PA CMEF-related data. After a lengthy process of communication (May-June 2009, but for LFA and AER the data was received in September 2010) among the evaluation team and the various officers in the various SFA-PA units involved with different tasks in the different project implementation stages according to the different implementation rules and procedures of BGRDP measures, the evaluators received numerous excel tables containing detailed lists of beneficiaries, the parameters of their projects and the performed payments. For some of the individual entries the evaluators found data gaps - or missing data- for a significant number of obligatory CMEF indicators. The findings on the quality of the presented data were documented in the Sixth (Quarterly) Progress Report of evaluation activities, covering the period June-September 2010. Other data received from the SFA-PA was unreliable or mixed and needed intensive additional processing before coming to meaningful findings and conclusions. The connections in the data between the numerous tables were the unique identification number of the beneficiary and the unique identification number of his/her application or contract. The reason for receiving so many tables lies in the fact that the applications/projectsdata is stored in various databases within IACS, each of which contains only the data items of interest for the particular administrative unit, i.e. “PA departments” at central level. This is because the units are engaged in the particular consecutive stage of lengthy implementing procedures, and therefore keep only the information
Elaboration of ongoing and mid-term evaluation of the RDP 2007-2010, Bulgaria details relevant for their immediate work. This finding can be expressed in a different manner: the Contracting Department can provide the details for all applications and contracts including detailed CMEF-monitoring related information; however, the department is not able to provide information for the actual payments, which are kept in the Payments department. Neither is it able to provide M211, M212 and M214 applications/payments details, because they are implemented yet by a third Direct Payments Department, which administers the implementation of LFA and AER together with the CAP I Direct Payments, and which keeps the information in another specific IACS layer associated with the LPIS and the Animal Registers. We herewith by no means claim that the monitoring system at SFA-PA is inadequate/unreliable for their control procedures: As a matter of fact the SFA-PA is 100% able to trace any application/investment/payment/check, etc. according to their internal rules of procedure, and in full adherence to EC Regulation stipulating the depth and breadth of controls to be carried out by the Paying Agencies. On the other hand the described arrangements put the SFA-PA in the position of not being able to provide reliable CMEF- monitoring data as a minimum prerequisite for sound financial management of BGRDP jointly by the MA and the Monitoring Committee (This statement is further confirmed by the deadweight and low multiplier effects identified for the implemented BG RDP measures.) In all cases, the evaluators decided to strengthen their analyses and evaluation of BGRDP implementation by conducting their own survey among BGRDP beneficiaries, but also among the rejected applicants for M112 and M121 support. The questionnaires were prepared and sent via mail in the second half of August 2010. Replies from respondents kept coming back via mail till the end of September 2010, when the evaluators decided to put the deadline for respondents which should be considered for the MTE report. More details on sending/receiving process and statistical validity are described in section 4.4. Sources of data, techniques for data collection of this report. The questionnaires for M112, M121, M141, M223 and M226 followed more or less the same design of questions organ- ized in four main sections: - Beneficiary profile (starting “0” condition of the beneficiary before the support) - Types of supported investments/activities - (Anticipated) Results from the support - Feedback on implementation arrangements and the administration involved with implementation of the measures
The questionnaire for the rejected M112 and M121 beneficiaries contained the same chapters adjusted for what would have had happened if the applications was supported, but they were preceded by a specific chapter with questions asking the reasons for the rejection of the application. Due to measure specificities the questionnaires for beneficiaries under LFA were organized in three sections: - Beneficiary profile (starting “0” condition of the beneficiary before the support) - Experience with and use of LFA support - Feedback on implementation arrangements and the administration involved with implementation of the measures The M214-AER was even more specific and was arranged in the following chapters: - Beneficiary profile (starting “0” condition of the beneficiary before the support) - Experience with and use of M214 support
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- Types and results of supported AER activities - Feedback on implementation arrangements and the administration involved with implementation of the measures
3.2.1. Purpose and Scope The MTE exercise is supposed to evaluate the unfolding effects and impacts in/from the supported beneficiaries of the implemented rural development measures till end-2009 (with paid applications/contracts for support). This scopes the MTE evaluation to the measures which had been open and provided support to beneficiaries till the end of 2009: M112, M121, M143, M211, M212, M214, M511 and M611. It should be noted that: - M 143 is the measure where the sole beneficiary is the NAAS, and that the implementation of the consultations/preparation of business plans under this measure actually “opens the gates” for the beneficiaries under M112, M141, M142 and M214 - M511 is the technical assistance measure which supports the Monitoring Committee and the MA in managing the Programme, and the MA and SFA-PA administration in implementing the BGRDP measures - M611 is entirely implemented through the CAP I Direct Payments procedures - The payments under M112 and the majority of M121 are actually the advance/fist payments to more complex and lengthy projects, which for the first measure will take at least 3 years and for the second – up to 2 years, (as is the rule in the BG implementing ordinance. Hence, it should be stressed out that the unfolding impacts from the support of just two investment measures (M112 and M121) are in their very initial stages of unfolding, and that, therefore, the entire MTE exercise should be perceived as highly dependent on the successful implementation of all the projects with initial payments. It should be stressed that the calculations of economic effects later in the report is based on the number and value of projects/contracts approved and not only on paid contracts. The evaluators were asked by the MA to evaluate also the measures where payments occurred in 2010, but also the “forest measures”. According to monitoring data by end-September 2010 presented to the meeting of the Monitoring Committee on 5th October 2010, payments in 2010 had been effected for the first time to beneficiaries under the measures: M 123, M 141, M 223, M 226, M 312, M 321, M 322, and M 431-2. However, upon evaluators’ request, the SFA-PA provided detailed application/project data3 for all payments performed till end-May 2010 for the following measures under Axis 1 and Axis 3: M112, M121, M141, M143, M321, M322, and M511. Latter on (in September 2010), different department of SFA-PA provided the information on implementing the Axis 2 M211, M212, M214 payments until end-2009. These two sets of detailed data has made possible and have been used for the MTE analysis in Chapter 6, including the Regional Uptake Study (see section Regional Uptake Study in this report). Because the SFA-PA files miss data for M123, M223, M226 and M312, the evaluators herewith conclude that the first payments under the four measures actually took place in the period June - September 2010.(For more details on BGRDP
3 In the excel file “Pisma odobreni_reduced.xls” containing 5644 entries for the all SFA-PA Axis 1 and Axis 3 payments performed till end-May 2010.
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Elaboration of ongoing and mid-term evaluation of the RDP 2007-2010, Bulgaria launch and actual implementation of measures see Table Recapitulation: Detailed evolution in launching and paying the BGRD measures April 2008 - October 2010, section: Uptake and budget actually spent) As a result, the scope for the MTE exercise should be covering the implementation of M112, M121, M143, M211, M212, M214, M511 and M611 where payments to beneficiaries were actually effected till the end-2009, and M141, M223, M226, M321, M322, M431-2, where payments were made in the January - May 2010 period.
3.3. Brief outline of previous evaluations related to the programme
This section brings the summaries of four evaluation reports prepared in relation to the NRDP 2007-2013 programme. It is the summaries of the ex ante evaluation and the Strategic Environmental Assessment prepared as an integral part of the preparation of the programme, and it is the two annual On-going Evaluation reports covering the ongoing evaluation activities for the years 2008 and 2009. All four reports are available and can be required from Ministry of Agriculture and Food.
3.3.0. Ex-Ante evaluation of 2007-2013 NRDP4 The Ex-ante Evaluation of the Rural Development Programme 2007 – 2013 was carried out in the period June 2006 - March 2007 by a team of Bulgarian and international experts from the Scanagri Denmark Consortium Partners. The methodology used follows the procedures set out in the Handbook on Common Monitoring and Evaluation Framework, July 2006, Guidance Document + Guidance Note from A to O. The final evaluation report was based on the December 2006 version of the RDP5. The evaluation team established good working relationships with the Managing Authority - RDD and other institutions involved in the Programme. The key findings and recommendations of the evaluators were as follows: The SWOT analysis singled out a number of needs which have to be addressed by the Programme. The relevance of the interventions seemed adequate, although some improvement could be made by including/strengthening specific interventions related to easier access to credit, introduction of innovation techniques (for Axis 1 and Axis 3); specific intervention to comply with the Water Framework Directive and Birds and Habitats Directive (for Axis 2). For Axis 4, a strong information campaign to local communities is indispensable to cope with the lack of experience in the implementation of this kind of intervention. The relations between the general objectives and the specific sub-objectives indicated that there was a useful synergy between the Axes: for example, the expected positive impact of the measures on the environmental situation. There was as well a good coherence with the Community Strategic Guidelines, even if stronger attention could be paid to the promotion of territorial balance and the entry of women in the labour market. The interventions concerning Leader initiatives had to be detailed as well. An analysis of the measures to be implemented and analysis of expected impacts was produced. The analysis confirmed the subsidiarity and proportionality principles, the coherence of the Rural Development Programme and the efficiency of the foreseen interventions.
4 See National Rural Development Programme 2007-2013. 5 The evaluators and RDD worked together on RDP preparation right from the start of the evaluators’ contract. The recommendations of the final evaluation report were used to finalize the March 2007 version of RDP in view of its official submission to the EC. Thus, the evaluators had the opportunity to contribute to and to comment on the March 2007 version of RDP as it was submitted to the EC via the SFC. Furthermore, the core Bulgarian experts from the team of evaluators were also subsequently involved in the consultations in the framework of WGs on RDP axes.
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Indications on the future set up of the implementing bodies and relevant procedures were produced. The Bulgarian Government did plan and carried out the strengthening and reorganization of the RDD (MA). State Fund Agriculture would act as a Paying Agency, benefiting from the experience of the SAPARD interventions and with a well structured network of local offices throughout the Bulgarian territory. The evaluator did provide a calculation/estimation of indicators (outputs, results and impacts) expected from the implementation of the RDP.
Main recommendations of the Ex-ante evaluation
Considering the extremely diversified structure of agriculture, forestry and food processing enterprises, an appropriate strategy for each measure should be detailed, both in terms of targets/beneficiaries and/or geographical location. Once the priority targets for each intervention were well defined, the relevant eligibility conditions and the ranking systems for assessing the project proposals/beneficiaries admitted for financing should be adjusted accordingly. No steps for regionalization of the BGRDP measures (e.g. setting quantified targets for outputs or budget quotas per district) was introduced to best meet geographic specificities. It is essential that Programme applicants and beneficiaries were provided with effective procedures for filing claims against decisions of the Managing Authority or the Paying Agency; in this vein it was recommended also that applicants and beneficiaries were provided a tribune for exchanging good and bad practices, experiences and warnings against unqualified consultants/ providers and suppliers of services and machinery; Yes, such system was introduced and it is effective. Another strategic issue concerns the necessity to focus the Programme resources on production sectors that were considered perspective in terms of added value, export, environmental aspects, etc. No such steps were undertaken. Specific recommendations were articulated per each measure. In general, it was recommended to specify priority criteria, especially for measures that had a wide pool of potential beneficiaries; No such steps were undertaken for M112. For M121 the ranking system is rather project-location based rather than beneficiary based. The same findings are valid for M321 and M322 where the focus is on project location and project readiness rather than on the needs of particular final beneficiary group. SAPARD experience should be kept in mind when considering the implementation procedures for the RDP, in order to avoid past problems. In particular: a) full transparency of the procedures had to be ensured: in terms of list of eligible costs, scoring system for selection of eligible projects and detailed motivations for the rejection of projects; b) achieving the RDP general and operational objectives should always be considered as a priority instead of concentrating only on achieving the targets associated with “utilization of the measure budgets”. The lack of “interest” for a particular support scheme within measures could be just a matter of insufficient information poorly targeted to potential beneficiaries, or to insufficient access of bridge capital; c) procedures should be simplified as much as possible to reduce the transaction costs for the applicants/beneficiaries; The SFA-PA transferred almost 100% the procedures for selecting and controlling the investment type of projects – not good over-centralized practices for BGRDP - a much bigger program than the SAPARD. Transparency is ensured 100%, but answers to queries of particular applicants/beneficiaries come delayed. Lack of CMEF based monitoring, however, limits the presentation of the spatial implementation of the support
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Elaboration of ongoing and mid-term evaluation of the RDP 2007-2010, Bulgaria and also across sub-sector. Potential positive results and intermediate benefits from the support are not conveyed properly, but they could raise the image of the BGRDP as compared to the SAPARD Programme. The appropriate set up of the MA and PA and their interactions was essential for successful achievement of RDP targets. Considering the extremely high number of applications foreseen to be processed, as a minimum, the majority of the administrative tasks should be carried out at decentralized-district level. Specific technical training to the relevant personnel could greatly help their implementation; MA and PA relationship is rapidly improving. A closer cooperation between MA and PA seemed indispensable in order to assure the necessary efficiency of the procedures utilized during the implementation phase; See previous. However, the M431-2 efficiency of joint implementation remains low. (May bring problems for the LEADER M41 and M431.1 implementation) It was suggested to put in place a specialized Management Information System in order to simplify and make more accurate the collection of monitoring data; Such system is not in place, as it should be based on CMEF-compatible monitoring system which is still in the establishment phase. A specific effort should be made in finding the adequate way to reach also potential beneficiaries belonging to minority groups. The information campaign should find the technical solutions in order to deal directly and appropriately with them, taking into consideration the regional concentrations of the minorities; Don’t know. The information campaigns are rather horizontally implemented without specific targeting of the vulnerable groups and the minorities. But it is also true that the later groups need intensive training and information before being able to participate in the program. An important issue the Programme should tackle was how to ensure an easier access for beneficiaries to credit for investments (bridge capital); In year 2010 the new government provided for national schemes helping the participation of the animal sector. The fruit and vegetables sector is not yet properly addressed. In implementing the measures, the support to the participation of women in the labour market should always to be taken into consideration. Additional ranking scores should be given to projects presented by women; Such additional ranking score is given in the employment generating private measures in M311 and M312. In view of the Bulgarian “hierarchy of needs” it seemed that particular measures should be launched as soon as possible – especially the ones that contribute to stronger project management capacities with potential targeted beneficiaries, or ones that benefit “collective interests” (Training, Consulting, Skills acquisition, Leader Approach); On the contrary, all measures for 2008-2009 were open simultaneously but the SFA-PA favored the actual consideration, contracting and payments to M112 and M121 mostly. The rest of the applicants had to wait for a significantly longer time to be considered and approved. Training activities should be focused also on the creation of an effective network of private consultants able to assist the beneficiaries in the preparation of the project applications. The administrative burden for the offices charged with the assessment of project proposals could be decreased if the documentation that they receive follows the rules;
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SFA-PA did training for more than 700 consulting firms in 2008. No more such targeted training or information actions were carried out despite the important changes which took place in the period 2009-2010 (e.g. the European Economic Recovery Plan). Some of the measures did need to be accomplished taking into consideration the mitigation measures proposed in the Strategic Environmental Assessment, thus avoiding undesired negative environmental impacts. The evaluator proposed a reduction in the number of measures to be implemented by the RDP, namely Measure 131, Measure 132, Measure 133 and Measure 216. This seemed appropriate taking into consideration that: - These measures’ added value in achieving the RDP general objectives would be weak as more pressing needs were existing which could be better dealt with other measures; - These measures’ concepts were relatively new for Bulgaria and there were no accumulated public interest and readiness to benefit from the measures; - These measures’ relatively small budgets would require intensive administrative effort to set up effective implementing arrangements for their implementation, monitoring and evaluation. Yes, the recommendation was put into practice
It was also recommended that the redistribution of these measure budgets should go to measures which will deal more efficiently with more urgent rural development needs. The same logic was applied in the proposal for redistributing budgets among other rural development measures so that a better balance within the Axes is achieved in terms of measure targets and impacts.
Don’t know.
3.3.1. Strategic Environmental Assessment (SEA) of NRDP 2007-20136
Approach and findings
The Strategic Environmental Assessment of the Rural Development Programme 2007–2013 was carried out in the period June 2006 - March 2007 by a team of Bulgarian and international experts (part of the wider team of evaluators) from the Scanagri Denmark Consortium Partners, who carried out the Ex-ante evaluation of the RDP.
The Environmental Assessment of the Bulgarian Rural Development Programme was prepared in accordance with Directive 2001/42/EC of the European Parliament and of the Council on the assessment of the effects of certain plans and programmes on the environment. Its content (summary) followed the indications given in the Directive 2001/42/EC and the detailed recommendations of its Annexes 1 and 2.
Directive 2001/42/EC was fully transposed in the Bulgarian legislation through the Environment Protection Act and the Ordinance on the Environmental Assessment Terms for Plans and Programmes.
With Decision No EO-5/2006 identifying the need to carry out an Environmental assessment the Minister of Environment and Water decided to commission such an assessment of the RDP. The requirements on the scope of the Environmental assessment scope were defined in the Decision.
6 See the NRDP 2007 – 2013 for the summary and the full report as annex
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Under the Environmental Assessment of the RDP a complete analysis of the major environmental components (Biodiversity, Flora, Fauna, Air, Soil, Water, Climate, Landscape and Cultural heritage) has been carried out. An analysis has been made of the situation which would emerge under three scenarios: present situation without the implementation of the Programme (0 alternative); implementation of measures without applying the proposed mitigation actions (I alternative) and implementation of the measures with application of the proposed mitigation actions (II alternative). An analysis of the environmental problems related to the implementation of the measures has been made and a final assessment matrix and actions envisaged to mitigate impacts have been prepared. The evaluators judged the 0 alternative as unacceptable and did not support the implementation of the I alternative as it would have negative impacts on the environment. The II alternative was recommended as most favourable in terms of environmental impact.
As far as the environmental situation was concerned in general terms most of Bulgaria’s pollution problems stemmed from the lack of treatment and inadequate dumping facilities for waste and sewage. Specifically, within agriculture, the main sources causing environmental degradation are: diffused pollution of ground and surface waters with nitrates and phosphates, point-source pollution of ground and surface waters by poorly stored animal manure, and by pesticides, abandonment of land and pasture, and soil erosion. These problems persist from the period before the application of the SAPARD Programme. Additionally, pollution with heavy metals in some areas worsens the environmental situation.
SEA consultations
MAF developed a timetable in coordination with the Ministry of Environment and Water (MoEW) for public consultations on the SEA on the RDP. For the purpose of public consultations the evaluators prepared a detailed questionnaire and a non-technical summary of the SEA. The process involved formal and informal consultations with the RDP stakeholders and the general public. The SEA Report was posted on the MAF website in November 2006. All stakeholders participating in the Working Groups for the preparations of the Programme were consulted - MAF circulated the questionnaire to the members of the Working Groups to corroborate and assess the significance of environmental impacts of RDP measures as anticipated by the SEA. The partners were given a month to respond to the questionnaire. The questionnaire findings were also posted on the MAF website. In December 2006 a public hearing was organized on both the RDP and the draft SEA report, which was attended by over 140 people (see also section 8.11 of the SEA report – Annex 7.2).
The Competent Authority (the MoEW) in its Opinion on Environmental assessment № 3-2/2007 approved the Rural Development Programme 2007 - 2013 and prescribed two types of measures – (1) for prevention, decrease and elimination of potential negative impacts from the Programme implementation and (2) measures for on-going monitoring (in addition to the monitoring arrangements as described in section 8.10 of the SEA report) and control during the Programme implementation. Each third year MAF through the Managing Authority (Rural Development Directorate) have to elaborate reports on monitoring and control, including on actions taken for prevention, decrease and elimination of potential negative impacts from the Programme.
The first group of measures proposed in Opinion № 3-2/2007 of MoEW will be taken into consideration within the definition of criteria for project selection and the second group of measures will be included in the general Programme monitoring.
The received recommendations from the Competent Authority (MoEW) are reflected in the final version of the Strategic Environmental Assessment Report. No changes in the aims or measures of the Rural Development Programme are necessary as a result of the environmental assessment.
In addition to the monitoring arrangements described in Opinion 3-2/2007 and chapter 12 of the Programme the Managing Authority did undertake a special effort to ensure that data was collected for all environment-related indicators – as specified in Annex 3 to the Programme and Opinion 3-2/2007. Thus, data for baseline indicators, esp. those currently
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Elaboration of ongoing and mid-term evaluation of the RDP 2007-2010, Bulgaria listed as “not available” would be collected in the regular surveys of the Agri-statistics Directorate of MAF and the National Statistics Institute, Ministry of Environment and Waters – Executive Agency on Environment.
The mid-term evaluation will also include an environmental impact assessment based on primary and secondary (monitoring-based) sources of information as well as a critical overview of monitoring arrangements. The primary data for the environmental impact analysis will be collected through surveys/questionnaires, as well as by on-the-spot checks of beneficiaries based on the analysis of the supported actions.
3.3.2. On-going Evaluation Report 20087
Objectives and faced challenges This ongoing evaluation report, covering the implementation of BG RDP in 2008, was prepared in compliance with Article 86(3) and Article 82(2)(d) of Regulation (ЕС) № 1698/2005. The report was prepared in the period from 1st June to 15th June 2009 and was revised during August and September based on comments from the MAF received on 12th August 2009. At the Monitoring Committee meeting held in May 2009, it was an important issue at the agenda that there was a widespread concern among members of the MC about the lower than expected implementation rate of the programme. The concern was double: first, the resources available under the programme were urgently needed in order to stimulate the growth and restructuring of the sectors; second, there was a concern for de-commitment of resources8 at the end of 2010, if the implementation rate continues to be relatively low. It was a primary objective of this first annual evaluation report to try to assess the factual implementation rate and to try to identify the causes to this implementation rate. Was the implementation rate relatively low by the end of 2008? Why did the BG RDP show a lower than expected implementation rate? What did influence the implementation rate? This objective was the key focus point for this first annual report. The ongoing evaluation activities were faced with a number of challenges. The challenges did influence the activities and the final product in a way which could call for improvement of the working procedures in the partnership between MAF, PA and the evaluator. Here it is sufficient to highlight three issues: 1) Late start of the assignment: The evaluation activities were initiated when the contract was signed and in force 1st June, 2009. 2) Inertia in establishing the procedures for cooperation between the partners: The MAF, the PA and the evaluator did lead to inadequate requests for information, late and partial responses and delivery of data too late to be utilized in the present report. 3) Structural problems regarding processing and distribution of collected monitoring data from the PA to the MAF in general, and to the MC.
7 See the full report available from MAF 8 Returning the RDP funds back to the EC budget.
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Conclusions
Summary of BG RDP implementation by end-2008 BG RDP launched 21 of its measures in year 2008 and received applications under 18 of them. There was a great interest in the support provided under M111, M112, M121, M 123, M321 and M322 where the applied-for-budgets were already requesting high proportion of the entire 2007-2013 measure budgets: 10% (M123), 15% (M111), 31% (M322), 42% (M321), 44% (M121), 48% (M112). M211 and M212 were also achieving satisfactorily their spending rates and their programmed area-based output targets. Other measures were lagging behind in attracting the interest of potential beneficiaries: M122, M141, M142, M214, M313. The implementation of M143 by NAAS showed a mixed progress – it could be assessed as unsuccessful as regards the set indicator for consultations under measure 141, and successful as regards the consultations under measure 112 and 214 to some extent. There were approved applications/signed contracts under eight of the measures (112,121,143, 211, 212, 214, 511, 611) and payments were made under five of them (112, 143, 211, 212, 611). In financial terms the available 2007 + 2008 RDP public budget of EUR 581.2 million that should be spent (paid out) by the end of year 2010 seemed well covered, as the aggregated budget of submitted applications + already contracted + payments quite certain for years 2009 and 20109 had a total of EUR 745 million.
Quality of measure implementation It was not possible to assess whether the RD measures were implemented in such a manner as to achieve their general input/output targets and measure specific targets. This was because: (i) The measures were still in their early stages of implementation with very few (if any) projects contracted for implementation (ii) If such analysis is made it has to be based on monitoring information from the proposed projects, not on contracted ones. However, there was no detailed monitoring information available to allow the assessment of proposed activities/investments and their spatial distribution (see end of Chapter 5 for details) However, it may be speculated that the implementation of particular measures may turn not to be the most efficient in meeting urgent socio-economic needs while contributing to the meeting of EU and national challenges /see the concerns in section 4.3.2./. Of course, such unfortunate scenarios will be possible only if there are no significant numbers of competing “quality” applications which will allow the best use of the established project selection criteria and project selection and implementation procedures.
Risks for decommitment of RDP funds The monitoring data does not indicate significant risks of decommitment due to poor interest in most of the RDP measures. However, provided the slow rate of contracting for measures where the pile of applications and applied-for-budgets are relatively big (M111, M112, M121, M123, M214, M321, M322), there is some risk of de-commitment. The risk of decommitment is quite likely to be amplified by two major groups of factors:
9 M211, M212, M214 are expected to at least the present level of annual payments as they are based on long-term commitments of the beneficiaries.
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- external factors, originating from the trends in the general socio-economic environment as affected by the international financial crisis and its implications in Bulgaria - internal factors, originating from the established administrative setup (capacity and procedures) entrusted with the efficient achievement of BG-RDP objectives and targets in dynamic socio-economic environment. The identified external factors increasing the risk of decommitment are associated with: - the financial/economic crisis which hit Bulgaria in the last quarter of 2008, and which increases both the unwillingness of the banking sector to provide bridge capital at acceptable interest rates, and the unwillingness of the potential private beneficiaries of RDP measures to undertake riskier investments eligible for support by the Programme; consequently decisions are made to cancel, postpone or reduce the size of investments, including the ones already applied for Programme support - the SAPARD legacy, where unexpected starts and stops in implementing measures and receiving payments adds extra caution to the willingness of entrepreneurs to apply and take advantage of the available rural development aid - the imbalanced mix of national and European policies for supporting general territorial and sectoral agriculture development; this puts some municipal authorities or farmers in unequal position regarding their access to bridge financing and overall ability to benefit from RDP support; this is so because farmers unable to demonstrate steady and big cash flows (i.e. from Direct Payments) are in general unable to attract bank credits for bridge financing of their RDP investment projects - general uncertainty in the development perspectives limit the entrepreneurial spirit and the overall interest in RDP aid. The identified internal factors increasing the risk of decommitment are associated with: - insufficient and unspecialized administrative capacity in terms of human power in the Paying Agency (the Intermediate Body implementing the Programme). Insufficient administrative capacity at the Managing Authority which directly implements several RDP measures while carrying out all the publicity actions, the monitoring and reporting of the RDP, the modifications of RDP prepared on the basis of close partnership with the MC and EC. The recruitment of new staff needs time before the new personnel becomes efficient in its expertise and daily operations - inefficient implementation procedures at the Paying Agency, which unlike the SAPARD Agency, must cope both with: (i) achieving much bigger RDP quantified targets while spending RDP budget 6 times bigger than the budget available under SAPARD, (ii) while processing each year hundreds of thousands of payment claims for Direct Payments and for support under the quasi-direct-payment RD measures (M211, M212, M214, which implementations demands additional on-the-spot checks); this means that much more documentation must be processed, more checks must be carried out and more payments must be paid, but the implementation procedures are still quite similar to the centralized procedures used under SAPARD - insufficient quality of the information and publicity campaign dedicated to RDP support schemes: it is claimed that the information provided (written guidelines, PR, advisory services etc) was of poor quality. If the information was better, for example targeting specific measure related needs of potential beneficiaries and of specific regions, it could hypothetically be expected that the implementation rate would have been higher due to better quality of the applications for support - high rate of default applications and projects: the more time the PA staff wastes on ineligible applications, and the greater the number of sanctioned/cancelled contracts the less efficient is the implementation of BG RDP and the risk of decommiting RD funds grows - lack of transparency of RDP implementation: there was no feedback to the candidates from the PA related to the particular stage in which the submitted projects proposals were; the candidates grew impatient with the lack of
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development of their proposals especially when the time periods for consideration, approval and contracting their projects were long passed and they could still receive no answers from PA staff; this was a public fact and may have contributed to the unwillingness of potential beneficiaries to submit applications for aid. While MA and PA may tackle the risks ensuing from the internal factors (i.e. take steps to improve the efficiency with which rural development aid was delivered), they had little control on the external factors originating from the general socio-economic environment. While the implications from the external factors could be alleviated through coordinated national policies, section “Recommendations” below summarizes emerging recommendations that were expected to tackle the implications of the internal factors increasing the risk for decommitment of RDP funds. It is indicated under each recommendation, if the recommendation was followed and how.
Recommendations
1. The establishment of management information system interface with the MA is of paramount importance for the effective and timely decision making at MA and the MC. The system should be able to feed from the PA Oracle database of RDP monitoring data the daily progress in implementing the RDP measures, taking into consideration not just data for the contracted projects, but also monitoring data for the applied for, the rejected and the cancelled projects. As a minimum it can be based on the CMEF tables, taking also in consideration the measure specific additional indicators. MIS should be able to give detailed summary of monitoring information to enforce the MA in making informed and timely decision-making. MIS is also indispensable for the conduct of the ongoing and mid-term evaluation activities in timely and satisfactory manner. Steps have been taken to improve the reporting system, but so far no adequate solution is in place. 2. Carry out review on the compliance and subsequent adoption of the BG RDP and the individual measures to the new challenges included in the Health Check of the CAP and the Economic Recovery Package, based on a wide discussion among the stakeholders in the permanent working groups (not only in Axis 2) and the Monitoring Committee Not implemented 3. Ensure that information requests to beneficiaries from PA and any public authorities is homogenous and without variation from one district and authority to another The evaluators are not informed that any steps are taking to meet the recommendation. 4. Ensure homogeneous replies to questions from potential beneficiaries across PA units and public authorities. The evaluators are not informed that any steps are taking to meet the recommendation. 5. Take steps to strengthen the administrative capacity and competence both at the MA and the PA Not implemented 6. Prepare for further future decentralization of the tasks of the Paying Agency in Bulgaria The process has been started. 7. Simplify the implementation procedures as much as possible to reduce administrative burden and allow the achievement of measure quantified targets; take steps to ensure the applicants are not wasting unnecessary time and resources – it will save also administrative time for re-checks and re-re-checks The process has been started, but not yet finalized. 8. Specialization of the staff as the key to success in efficient implementation of RD measures Not implemented 9. Ensure that the competences and the qualifications of the NAAS are in line with the requirements to meet the needs of farmers in order to fulfill cross compliance requirements (Good Agriculture and Environment Conditions and Statutory Management Requirements), when this is needed.
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10. Ensure optimization of the activity of the Transparency Commission Not implemented 11. Establishment of a database of experts and specialists in particular areas- agricultural equipment, permanent crops, technologies for processing factories in different sectors- meat, milk, tinned products, dried products, grain, wine, tourism, public infrastructure, etc.- who are to be asked for evaluation of particular projects, expert opinion or solving of difficult cases when there is the need to during the project selection process; Not implemented 12. Review and categorization of the problems which cause low application rate for specific RDP measures; preparation and fulfillment of steps for successful solving of the problems Not implemented 13. Use positive (good practices) and negative (black list) publicity to illustrate to the applicants the “do’s” and “don’ts” in taking advantage of RDP support Not implemented
3.3.3. On-going Evaluation Report 200910
This ongoing evaluation report 2009 covering the BG RDP was prepared in compliance with Article 86(3) and Article 82(2)(d) of Regulation (ЕС) № 1698/2005. This draft report was prepared in the period from 1st March to 9th April 2010. The objective of the report was to provide the MA, the MAF, the MC and the EC with an external and independent evaluation of the implementation of the BG RDP during 2009. The evaluation must report on the activities accomplished and the evaluation of the programme implementation regarding financial effectiveness and progress in achieving the programme objectives. The main conclusions and the related main recommendations are summarized below, while the full report presented the evaluation in details, including detailed recommendations presented under each of the thematic studies and other activities implemented during 2009, also including the recommendations formulated within the 2008 On- going evaluation report. These recommendations are still valid.
Conclusions
The evaluation team did chose to summarize the conclusions of the 2009 ongoing evaluation report in the four main points below:
1) The implementation of the BG RDP was far behind its budget and Bulgaria faced a big risk for de-commitments in 2011 due to low financial up-take. In total, the evaluation team estimated the value of de-commitment at risk to be around MEUR 250. (At the time of the report)
2) The implementation of the BG RDP was impeded by far too bureaucratic implementing procedures in the SFA-PA leading to low contracting, to waste of money in terms of lost investment revenues for the farmers, for the food industry and for the country and to lack of achieving the objectives of the programme, urgently needed to be met.
3) The implementation was hampered by an inappropriate organizational set-up between the MA and the SFA-PA, where information and decision processes were impeded leading to slow, poorly enlightened and sometimes wrong decisions
4) No adequate monitoring system was in place and no reliable data regarding progress of the programme implementation was available for the MA, the MAF, the MC and for the EC.
10 See the full report, available from MAF
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Recommendations
The conclusions did lead to three main recommendations, which were as well complex as radical on the one hand, but also required on the other hand in order solving the problems facing the BG RDP implementation:
1) The SFA-PA should change radically the contracting procedures by eliminating as many of the redundant administrative control steps as possible (at least five pair of eyes) either regionally (in the first place) or centrally. This should be done, even if it required re-accreditation of the implementation and payment authorisation procedures, although it was not expected that this would be the case. The recommendation was not implemented 2) Change the relationship between the MA and the SFA-PA, making the MA the de facto managing partner in the implementation and making the SFA-PA directly subordinated to the MA and the MAF in order to eliminate the hostile and unfruitful climate between the two institutions. If necessary, the contract delegating the implementation of BG-RDP measures from MA to SFA-PA should be modified accordingly to clarify duties, responsibilities, quality standards and penalty clauses in cases of mis-performance. Steps are taken to improve the relationship between the SFA/PA and the MA. 3) Open up and utilize the monitoring system and the data available for managing and decision making purposes in order for all partners to be able to manage the programme implementation in a strategic and enlightened way, as well as for better publicity purposes. This should be done, even if it required modifications in SFA-PA implementation procedures, the job descriptions of staff and relevant specialization of SFA-PA regional and central staff. Redesigning the monitoring sections of the application forms to meet as close as possible the CMEF format was also necessary for some measurers. Steps are taken to improve the reporting system and the access to the data base for the MA, but the system is not yet adequately developed.
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4 Methodological Approach
4.1. Explanation of the evaluation design and the methods used
The MTE is building upon primary and secondary information. The evaluator finds that this approach is able to answer the evaluation questions annexed to the ToR with high validity. Description of the methodology and the data collection methods can be structured as a set of criteria and questions that are analyzed and answered through the adopted data collection and analysis. Hence the evaluator will in this report present the evaluation criteria that should be investigated, the evaluation questions (both Common EQ and Programme specific EQ) that present a framework for analysis and the data collection activities evaluator used to answer the questions and criteria. There are already six modifications to the BGRDP, five of which have been officially notified to the EC, and four of which have been considered and agreed by the EC. The evaluation team wished to be as useful as possible; therefore we had to choose the BGRDP variant which is most “modern” and the same – more or less acceptable to the Commission. We chose to base our findings, conclusions and recommendations to the texts in the 5th BGRDP, because it also had new and agreed financial tables in view of the European Plan for Economic Recovery, as well as it had clarified the types of items to be supported by the respectively designated rural development measures. Where necessary we will point out the details at measure level, for which the EC has not yet granted consent.
4.2. Description of key terms of Programme Specific and Common Evaluation Questions
In order to present results on the evaluation criteria, a number of evaluation questions are used. These questions are in part defined from the Commission in the CMEF Guidelines, and in part evaluation questions developed and defined by evaluator in order to address issues in the national context. The answering of these evaluation questions allows for both cross-country comparisons on the achievements of the Programme as well as country specific knowledge on the impact of the Programme. On the assessment of the measures the EQ are primarily focused on the effects of the measure; however these can - when aggregated to the programme level- give indications on the evaluation criteria for the Programme. On the programme level the set of CEQ is to a major extent supplemented with additional and more thorough evaluation questions. This is especially the case in the evaluation of the administrative set-up. The evaluation questions are - as presented below - further distributed into sets of criteria and indicators on these criteria. The general idea is that the assessment of the individual evaluation question should be based on answering indicators and criteria.
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Table 6: Evaluation question for administration
Question Criteria Indicators To what extent has the The implementation arrangements implementation of the programme have contributed to the maximizing Statements from beneficiaries contributed to maximizing the of impacts intended impacts To what extent are the administrative The administrative costs are in Administrative costs in total and compared with other costs in compliance with programme compliance with the resources used countries and other programmes, if possible. budget and the uptake of funds under under the programme Administrative costs per measure and per support € the measures? To what extent is the administrative The administrative set-up is in Coherence between Bulgarian administrative practice set-up in compliance with the EU- compliance with the EU- and the requirements from the Commission? (Y/N) requirements? requirements Procedures and criteria are defined for project selection and used? (Y/N) The administrative practice To what extent is the administrative The employees have been trained in understanding (procedures, rules, criteria) is set-up transparent and appropriate? and using procedures and criteria concerning project transparent and appropriate selection+ (Y/N) Guidelines for project administration developed (Y/N) To what extent is the management Number of complaints The administration is done on a and administration of applications Adm. staff are working with relevant tasks competent level done at a technical competent level? Statements from beneficiaries The employees knows of their specific tasks and To what extent is the division of responsibility (Y/N) and their role in the entire responsibility among the involved The division of responsibility is clear administrative system (Y/N) authorities (MAF/MA, SFA/PA, MC) and unambiguous The cooperation among the administrative units is clear and unambiguous? well established and functioning? (Y/N, which, how often) To what extent is the information about the programme and the Information campaign accomplished (Y/N) and Information is sufficient measures sufficient to ensuring an assessed to be satisfactory of beneficiaries (Y//N) appropriate uptake? The data collection system is in place and is functioning (Y/N) To what extent is the monitoring Data related to output, results and impacts are being system supporting the data collection The data collection -and monitoring collected (Y/N, types of data) system both in terms of monitoring system is adequate and evaluation of the programme? Data from the monitoring system is presented for the MC (Y/N, how often, types of data) and is assessed being adequate by the MC (Y/N)
Furthermore, we have inserted below our understanding of three key terms from CMEF, as used in answering the respective evaluation questions.
CEQ-M112-1: “Enduring” setting-up of young farmers = sustainable farm holding operations starting at least in the fourth year of project implementation and continuing for at least 5 years afterwards (This is particularly appropriate for the
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CEQ-M112-2: “Structural adjustment of the holdings” = the obtaining and organization of material and immaterial assets boosting the ability of the supported holdings to become “enduring” (see definition for enduring above). CEQ-112-3: “ Human potential in the agricultural sector” = the abilities and skills of the employed to produce and perform competitively according to the ever-growing expectations towards agriculture of the EU citizens as reflected in the CAP, and the respective requirements for the particular activities as set in the relevant Acquis.
4.3. Evaluation and judgment Criteria
The evaluation is based on the evaluation criteria presented in the CMEF guidelines. These criteria create an approach for the data collection and analysis and determine the structure of the draft report.
Table 7: Description of evaluation criteria
Evaluation criteria Definition
The assessment includes two aspects: An assessment of the relevance of the objectives of the Relevance and project in relation to the needs and problems of the beneficiary (internal relevance) and an coherence assessment of the project in relation to the objectives of the measure and the Programme.
Effectiveness An assessment of the fulfillment of the project objectives. Are the expected outputs produced or purchased in accordance with the project application?
An assessment of the quantitative and qualitative results and impacts of the project outputs.
As a supplement four specific evaluation criteria can be included in the assessment. These are defined as follows: Effects Deadweight effect; a project activity would have been implemented also without the support.
Additionality; a project activity will be accomplished only because of the support. Leverage effect; support to a project is gearing the investment through attraction of other financial sources hereby allowing for an increased multiplier effect. Displacement effect; a project activity creates a new job, which is positive, but at the same time it erodes (displaces) an existing job in another location, which is negative. Cost-effectiveness An assessment of the output produced in relation to the cost of the output.
Efficiency and utility An assessment of the value and utility of the results and the impacts compared to the
11 I.e. orchards, berries, nurseries for decorative plants, etc. 12 Including achieved economies of scale.
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investments.
An assessment of the anchoring of the project output, results and impacts of the beneficiary. Will Sustainability the output, result and impact last also in a longer time perspective or will they be eroded due to different reasons?
Source: Guidelines CMEF
Finally, the team chose – in line with the CMEF guidelines - to evaluate the implementation of the measures according to the degree they meet the identified socio-economic and environmental needs for public support. A five-point scale of judgment criteria was set up to measure the degree to which measures satisfy the confirmed needs: 0. Do not know = the available information does not allow for a judgment 1. To no extent = Unmet needs (not a single EUR has been spent for a particular need, i.e. for supporting M141 beneficiary) 2. To a less extent = Very insufficient degree of meeting needs (the spent EUR are meeting less than 5% of the identified needs for support) 3. To some extent = Insufficient degree of meeting needs (the spent EUR are meeting less than 20% of the identified needs for support) 4. To a high extent = Sufficient degree of meeting needs (20-49% of identified needs are met by the effected payments) 5. To an adequate extent = Adequate degree of meeting the needs (at least 50% of the needs are met by the effected payments)
4.4. Data sources of and techniques for data collection
The MTE has been comprised with various data collection activities. As the answering of the evaluation criteria and questions cannot be affirmed on quantitative monitoring indicators the evaluation criteria and questions will be answered through a portfolio of data sources. These are comprised by primary and secondary data sources, which are of both qualitative and quantitative nature.
Table 8: Data structure
Primary Secondary
Qualitative Interviews with administrative staffs in various Programming documents (Programme, ex-ante ministries evaluation etc.)
Interviews with beneficiaries (case studies) Various reports and documents on agricultural and rural development in Bulgaria
Documents made available for the Monitoring Committee meetings
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Quantitative Questionnaires for final beneficiaries and for Monitoring tables rejected applicants Statistical surveys
Annual progress reports
Using this approach, the evaluator can answer the evaluation questions with a high validity and reliability even though the development in the individual indicators is not always identified. The secondary data is used in order to establish a solid foundation for the primary data collection activities. During the mid-term evaluation of the Programme the following data collection activities for gathering primary data have been carried out. A survey of questionnaires to beneficiaries under each of the measures under implementation was initiated in order to accumulate information on the perception of results and impacts from the supported projects. The questionnaires were developed in close cooperation with the MAF.
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Table 9: Results from the questionnaires
Measure Number of beneficiaries Number of selected beneficiaries Number of Reply Statistical (31.12.2009) for the survey replies rate validity
112 4059 610 288 47,21% 4.2
121 1761 537 212 39,48% 5.2
123 25 0 0 0 0
141 464 464 226 48,71% 4.7
142 1 0 0 0 0
211 72995 754 212 28,12% 5.7
212 30205 754 194 25,73% 6.0
214 2728 572 204 35,66% 5.5
223 20 20 12 60,00% 18.0
226 17 17 10 58,82% 20.0
312 29 0 0 0 0
321 68 0 0 0 0
322 88 0 0 0 0
431-2 102 102 56 54,90% 9.0
Rejected 359 90 25,07% 9.0
Total 112562 4189 1504 35,90% 2.0
The rate of return of 36 pct. of the total beneficiary population is a satisfactory result. However, it should also be noticed that the statistical validity (uncertainty) of the results is more important than the reply rate. For cross cutting questions covering all measures, such as the administrative questions, we have a statistical uncertainty of 2.0 pct, which is very good, and very satisfactory. The statistical uncertainty is around +/- 5 pct for the major measures and very satisfactory; for a few measures we have a lower validity due to the low number in the gross population. The quantitative data collection was supplemented with qualitative data collection primarily through case studies of selected projects and visits to beneficiaries on the spot. The case studies and the associated interviews were conducted with key representatives from the projects. For gaining information on the administrative set-up a number of interviews were carried out with staffs of the SFA/PA. Based on the available and collected data the evaluator concludes that viable and valid conclusions can be derived.
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Table 10: Interview Persons
Interview person Position Organisation/institution Mr. Michael Tachev Managing director Old Liben Dairy farm and factory National Association of Small and Ms. Eleonora Negulova Chairwoman Medium Business Mr. Todor Nicolov Chairman Vanto Trade Auto AD Mr. Krassimir Kiriakov President VOCA Consult Mr. Emil Darev Senior consultant VOCA Consult Mrs. Sijka Bandakova Director Regional directorate of MAF -Plovdiv National Association of milk Mrs. Diljana Slavova Executive Director processors Mr. Atanas Kiskinov Executive Director National milk board MAF- Agrarian Development Mrs. Violeta Krasteva State expert Directorate Head of Department Veterinary MAF- Agrarian Development Mrs. D-r Zlatka Vazelova and Hygienic Control in the Directorate Livestock Farms Department Mr. Lubomir Merachev Managing Director Filipopolis Dairy factory Mr. Nistor Kamenov Director Regional directorate of MAF Montana 11 visits and interviews with milk producers 215 questionnaires fill in milk producers from Montana, Vidin, Plovdiv regions
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4.5. Techniques for replying to the Evaluation Questions and arriving at conclusions
The team followed a uniform approach for answering the Evaluation Questions: 1. Where possible (information was sufficient) the entire pool of needs for support was identified. Prioritization among needs for support was attempted where information was sufficient. (also used for judging programme and measure relevance) 2. The current design of the measure was reviewed together with the programmed budgets and positive impacts on the identified pool of needs (also used for judging measure relevance) 3. The regional uptake of the measure at district level was also reviewed. Analysis at municipal level was also made where possible. (judging for the horizontal evaluation questions associated with regional coherence/disparities) 4. Analysis on BGRDP, Axes’ and individual measure’s progress in implementation was made in view of realized payments (judging on measures effectiveness and efficiency of implementation) 5. The potentially achieved synergy among measures was reviewed 6. Programmed and unintended links among measures, CAP I and other support schemes/programmes benefiting the same target groups of beneficiaries were analyzed (implementation additionality)
4.6. Problems or limitations of the methodological approach
A number of problems have made it a challenge to prepare the Midterm Evaluation in Bulgaria. The main challenges faced are the following: Insufficient quality and quality of CMEF-data. For 2009 year: Insufficient quality and quantity of macro-data for the agriculture from the Agristatistics directorate and forestry sector from the Executive Agency on Forestry. For 2009 year: No [or late for evaluators’ purposes] information from the NSI including the regional statistics necessary for the regional uptake study. The respondents to the questionnaires were selective in their answering – and some of the answers to particular income-related questions are not always reliable. These are duly indicated in the respective texts. These challenges have primarily been solved through our own data collection via surveys to beneficiaries under all measures with contracted projects/actions. The results of these surveys are very good and form a solid basis for the evaluation compensating to a large extent on lack of other data sources.
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5 Description of Programme, Measures and Budget
5.1. Programme implementation arrangements
Bulgaria has set up the legal, statutory and administrative framework in accordance with the provisions of Article 74 of Council Regulation no. 1698/2005, in order to protect the financial interests of the European Community. The institutional administration, control and implementation system for the Bulgarian Rural Development Program comprises the following:
The Managing Authority, represented by the Rural Development Directorate within the Ministry of Agriculture and Food (www.mzh.government.bg); The accredited Paying Agency is represented by the State Fund Agriculture of Bulgaria (www.dfz.bg); Certification organs were Grant Thornton OOD-Bulgaria by end 2007 and Deloitte OOD in the period 2008-2011.
Considering that in Bulgaria, for the administration of Community funds just one paying agency is active, there has been no Coordinating Body established respectively the liaison between the paying agency and the European Commission is the Managing Authority. The accreditation of the Paying Agency falls within the responsibility of the Competent Authority, set up within the Ministry of Agriculture and Food. The development of the Bulgarian system for the implementation of EAFRD is based on the institutional structure and the legal framework created to implement the SAPARD program. This can be best illustrated as follows: Figure 1: Overall structure for implementing the BGRDP
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5.1.0. Actors involved with Programme management and implementation:
Monitoring Committee of the BGRDP
A Programme Monitoring Committee was established by an Order of Minister of MAF in accordance with Article 77 of Council Regulation (EC) No 1698/2005. The Programme Monitoring Committee (PMC) oversees the effectiveness and the quality of programme implementation with regard to programme objectives and therefore shall review and take Programme management decisions on the basis of the provided monitoring and evaluation information in accordance with Article 78 of Council Regulation (EC) No 1698/2005. The Committee involves all key partners in rural development: Economic and social partners; Competent regional, local and other public authorities; The European Commission, at its own initiative, may participate in the Committee in an advisory capacity; Other appropriate bodies representing civil society, non-governmental organisations (including environmental organisations and those responsible for promoting equality). It is anticipated that the Consultative Partnership Working Group (as referred to in Chapter 14) will form the basis of the PMC. The Monitoring Committee is aided in its work by permanent working groups – one for each Axis of the BGRDP. The working groups discuss the implementation of the particular measures and help the Ma formulate draft decisions to be discussed during the sittings of the Monitoring Committee (held usually in the spring and the autumn of each calendar year).
Managing Authority: Ministry of Agriculture and Forestry The functions of the Managing Authority are performed by the Rural Development Directorate of the Ministry of Agriculture and Forestry. The Directorate has three departments.
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Figure 2: Overall structure of the Managing Authority
Department 1 is mostly involved with the monitoring and coordination of the BGRDP process among various stakeholders, the Monitoring Committee and the EC services. This department is also managing the implementation of the M511 Technical Assistance, including the Programme Publicity via a multiannual Communication Plan. Currently the Department is also overseeing the functioning of the National Rural Development Network until an external administrative Unit is selected via competition to fulfill these obligations. Department 2 wraps up the implementation of SAPARD Programme and PHARE projects implemented by the MAF during the preaccession period. This small department, however, is also responsible for the implementation of M431-2 [Preparation for the LEADER Approach], but also for the coordination and organization of the MC sittings. Department 3 is responsible for the formulation of the respective national policies within the framework of the CAPII Rural Development, and to manage the implementation of respective BGRDP measure in close cooperation with the Paying Agency. In this very difficult first post accession period the Department is also the main “consultative” partner to both the Paying Agency but also to applicants from the various beneficiary groups targeted per the particular BGRDP measures – its officers were very heavily involved with popularizing the possibilities for support under the respective BGRDP measures, but also in answering to complaints from applicants. The Directorate is indirectly aided also by other units within the MAF, and especially the MAF District and Municipal offices. The latter are heavily involved with the implementation of M611, M211, M212 and parts of M214 because these BGRDP measures are implemented together with the CAP I Direct Payments, and the services are helping the CAPI to identify their lands in the IACS and fill in their application forms.
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Paying Agency: State Fund Agriculture
The accredited paying agency, by the means of Article 74, Paragraph (2) of Council Regulation no. 1698/2005 and in accordance with Article 6 of Council Regulation no. 1290/2005 for the implementation of the measures financed from the European Agricultural Fund for the Bulgarian Rural Development Plan 2007-13 is the State Fund Agriculture (SFA). SFA was established by means of the Farmers Support Act in 1998. Its Managing Council was appointed to become the Managing Authority for the SAPARD Program (2000-06). In April 2007, SFA was accredited as the paying agency in accordance to Council Regulation no. 1290/2005. As the only paying agency of Bulgaria, it is accredited for the implementation of the Common Agricultural Policy (CAP – I & II pillar) as well as the Common Fisheries Policy (CFP) of the European Union. SFA performs its activities in compliance with the applicable European legislation, the Farmers Support Act, the decisions, rules, programs and instructions elaborated by the Management Board of the Fund. The organization structure of SFA is presented in the following scheme:
Figure 3: Overall structure of the Paying Agency
The SFA-PA has a structure consisting of: A central office in Sofia (SFA-PA); 28 district offices involved in the implementation and support schemes and measures (DISSM);
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11 regional paying agencies (RPA); 11 regional technical inspectorates (RTI). The total number of the workforce in SFA-PA is more than 1500 people. They are involved with the implementation of all CAP First and Second Pillar support interventions, all national support schemes in agriculture sector, but also with the ahtorisation and payments under the Fishery Programme.
National Agriculture Advisory Service and its Regional Agriculture Advisroy Services (RAAS)
The National Agriculture and Advisory Service (NAAS) was established 1999 and is set-up as an advisory body, providing services to the farmers. It assists farmers filling out the applications for certain RD measures and thereby assists the District Offices of SFA. For its activities NAAS is remunerated as the only beneficiary by funds of M143 (consulting service). In the evaluation period NAAS and RAAS could be considered the gateway for smaller farmers to participate with projects and applications for support under M112, M141, M142, M214, but also under M121, M123 and M311 as well for any of the beneficiaries under the first group of measures. NAAS had 17 Regional Agriculture Service and 27 District Offices, and more than 120 experts. Each regional office could also attract an additional three experts whenever the interest for particular RAAS service was very high in a particular moment of time. There are discussions to limit the number of NAAS experts by at least 1/3/ in the current reduction of administration in BG institutions. The evaluators see emerging difficulties from such a developments especially in view of the recommended reallocation of funds among measures and the ensuing need for additional consultation in a very compacted time (See Chapter 7). It is recommended to launch a second wave of M112 young farmers (provisional number 2700); but also there will be need for consultations for creation of Producer Organizations (M142), strengthened implementation of M214, advise on appropriate standards and requirements per agriculture activity, appropriate technologies to meet also the EU priorities via BGRDP investment projects under M121, M123 and M311. At the same time M114 is going through the notification process of the 5th BGRDP notification. Even if this measure is launched as early as February 2011 there will be very short time for other consultants to organize and consult so massive numbers of applicants which applications have to be prepared in quality terms and approved in a very short time. Hence, the evaluators see both the need to preserve and expand the administrative capacity of the NAAS, but also to negotiate with the EC the implementation of the M143 original scope of actions as in 2007-2009. For these purposes an increase in M143 budget will be necessary.
5.1.1. Implementation procedures for the measures The investment measures under Axis I and Axis III were implemented based on the heavily centralised and inefficient SAPARD model, despite the warnings and recommendations in the BGRDP Ex-Ante Evaluation. The same approach was used also for the non-investment Axis I measures M112 and M141 even though the amounts of support under them are low and can easily be controlled on a local, decentralized level. M 111, M143 and M511 were implemented entirely at the SFA-PA central level in Sofia. Axis II measures and M611 were implemented largely via the CAP I Direct Payments mechanism. Same approach will probably be used for the Natura 2000 measures M213 and M224 whenever they are launched in 2011. The Axis II forestry measures, however, followed the centralized implementation model for the Axis I measures. Only the preparatory M431-2 was implemented of all Axis 4 measures in the evaluated period. The controls on the consulting teams preparing the local communities for the LEADER Approach were exercised both by the MA and the
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SFA-PA. This led to a great delay in the payments and thus in the implementation of the preparatory projects. As a result general discontent with LEADER Approach emerged both with the local administrations but also with the local partnerships even before the Actual LEADER measures started to be implemented. More details on these issues are presented in the Evaluation Chapter 6 of this report.
5.1.2. Procedures ensuring Publicity and Transparency Publicity The Managing Authority organized and carried out a very massive information campaign in 2008 via its multi-annual Communication Plan. Impressive numbers of articles and messages reached the general public via all possible media channels. Significant number of seminars was also organized not only for the stakeholder groups, but also as a training instrument for various offices and organizations involved with the implementation of particular BGRDP measures. As a result the general awareness of the BGRDP possibilities for support is excellent. Despite this, the evaluators surveys in the country (but also via the questionnaires sent to the beneficiaries – see Chapter 4), indicated that not always the target groups are knowledgeable of all the measures and possibilities for support by them. For example during the field visits for the “Milk Survey” the evaluators found out that the agriculture producers knew about the support by M112 and M121 but not so much about the possibilities for support under M141 and even less – for the benefits from creating/joining a Producer Organization under M142. Other beneficiaries were not sure whether their estate was near or inside the spatial coverage of particular measures and the respective regimes (i.e. in lands of High Nature Value, or in Nitrate Vulnerable Zones). Arguably, the ones who did not know this didn’t also know the obligations/limitations on their practices arising from the particular regimes. This indicates that the learning curve of the potential beneficiaries of the measures has not yet reached its peak, especially whenever technicalities and/or smaller producers are being focused during the analysis. The greatest deficit, however, in the Publicity campaigns comes from the fact that they failed to convey a very important message on the CAP goals and objectives which should be achieved in partnership by the Managing Authority, the Paying Agency and the supported beneficiaries. Said in another way, the publicity campaigns failed to explain WHY the aid reached the BGRDP beneficiaries and what public goods are expected from the extended support to the particular types of project; and what other win-win solutions could be created with appropriate additional investments in EU priorities.
Transparency Regarding the transparency of the BGRDP implementation, the evaluators note that the SFA-PA and the MA make everything possible to publish implementation progress on the respective websites of both institutions. SFA is additionally keeping and update list of all beneficiaries of EU aid under both CAP I and CAPII instruments. Formally, there is sufficient information ensuring sufficient information for Programme implementation. This however, does not contribute neither for the strategic management of the BGRDP, nor to the favorable image of BGRDP among the general public. The reason for this is very simple. In the absence of automated monitoring system according to the CMEF format as a minimum, neither the SFA-PA nor MA can keep and updated and comprehensive account not only on: - Number of projects submitted, approved and amounts paid, (as is the current practice via regularly published excel files),
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- But also their regional distribution, - And the favorable results and even intermediate impacts anticipated or even achieved by the supported projects. Not only this will improve the basis for quality decision-making of the Monitoring Committee (where again only excel files are presented), but also the general image of the Programme when the general public realizes its significant impacts on BG economy, and even environment but to a significantly less extent. Further details are presented in the analyses in Chapter 6 on monitoring system, and on M511 implementation in the evaluated period.
5.2. Composition of the programme, description of priorities and measures
BGRDP has been programmed to benefit from 3013 RD measures from the CR1698/2005 in progressing towards achievement of its rural development strategy:
Table 10: Strategy and Measures for Rural Development Axis 1
Overall To develop a competitive and innovation-based agriculture, forestry and food processing industry objective of Axis 1 Sub- 1. To restructure and modernize physical 2. To support adjustment of 3. To promote knowledge objectives potential and promote innovation farming structures and and improve human support co-operation potential Operational – To improve the economic performance of the – To facilitate the move into – To ensure an appropriate objectives agricultural holdings and the food processing the market for semi- level of technical and industry through better use of production factors, subsistence farms; economic knowledge. introduction of new technologies and innovation, – To facilitate the and environmentally friendly farming practices; establishment of young – To take advantage of market opportunities farmers and structural through widespread innovative approaches in adjustments of their holdings; developing new products, processes and – To encourage the setting- technologies; up of producer groups. – To meet EU standards; – To improve the infrastructure, necessary for – To support land increasing the competitiveness of agriculture and consolidation forestry; – To broaden the economic value of private forests and to increase diversification of forest production. Measures for - M121. Modernisation of agricultural holdings; - M112. Setting up of young - M111. Training, achievement - M122. Improving the economic value of the farmers; information and diffusion of of sub- forest; - M125. Infrastructure knowledge; objectives - M123. Adding value to agricultural and forestry related to the development - M143. Provision of farm products; and adaptation of agriculture advisory and extension and forestry services in Bulgaria and - M124. Cooperation for development of new Romania (2007-2009) products, processes and technologies in the - M141. Supporting Semi-
13 This is the number of measures as presented in the BGRDP. In evaluators’’ minds the real number of measures is 31 because they consider M431-2 as a separate measure specifically provided only to BG and RO in their accession treaties, and hence a measure which has been allocated separate budgets and deserves separate considerations.
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agriculture and food sector and in the forestry Subsistence Farms - M114. Use of farm sector; Undergoing Restructuring ; advisory services (2010- - M125. Infrastructure related to the development - M142. Setting up producer 2013) and adaptation of agriculture and forestry; groups; - M126. Restoring agricultural production potential damaged by natural disasters and introducing preventive actions;
Table 11: Strategy and Measures for Rural Development Axis 2
Overall objective of To protect natural resources and the environment of rural areas Axis 2 Sub- 1. Increase sustainable management of agricultural land 2. To promote sustainable objectives Conservation of Development of Improvement of Develop forest and forest land biodiversity and Organic water and soil sustainable management HNV farmland farming quality land management practices Operational – To introduce – To increase – To conserve – To introduce – To enhance the protection agricultural methods the number of soil and water anti-erosion and sustainable management of objectives compatible with the organic farmers resources practices and forests; preservation of – To increase including in those farming activities; – To extend and improve biodiversity; the area managed areas at risk of – To introduce forest resources; – To promote the under organic high nutrient suitable crop – To restore forestry potential multifunctional character production losses (e.g. Nitrate rotation and in forests, damaged by natural of agriculture; systems Vulnerable Zones) prevent further disasters and fire and to introduce – To prevent future or other forms of development of preventive actions; land abandonment and agricultural monoculture – To help forest owners to keep the agricultural pollution. agriculture; address specific disadvantages, activities in marginal and – To preserve resulting from the implementation HNV farmlands; and restore field of Council directives on the – To preserve boundaries and conservation of natural habitats, traditional orchards wind belts thus wild fauna and flora; – To maintain the reducing the risk – To help deliver the EU goals genetic variety and of wind erosion. for use of renewable energy natural heritage by sources traditional local breeds and plant varieties – To help farmers to address the restrictions, resulting from the Community legislation on conservation of natural habitats, wild flora and fauna Measures for – M211. Natural handicap payments for farmers in mountain areas – M223. First afforestation of non-agricultural land achievement – M212. Payments for farmers in areas with handicaps other than mountain of sub- areas – M224. Natura 2000 (forests) objectives – M213. Natura 2000 payments (agricultural land) – M226. Restoring forestry – M214. Agri-environmental payments potential and introducing prevention actions
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Table 12: Strategy and Measures for Rural Development Axis 3
Overall objective of To improve the quality of life and diversify job opportunities in rural areas Axis 3 Sub- 1. To improve the quality of life in rural areas 2. To promote diversification of job opportunities in rural objectives areas
Operational To improve access to and quality of basic To develop income generating activities outside the objectives services and infrastructure in rural areas; agricultural sector for farm households and the wider rural population.
Measures for - M321. Basic Services for the Economy and - M311. Diversification into Non-Agricultural Activities; achievement Rural Population; - M312. Support for the Creation and Development of of sub- - M322. Village Renewal and Development; Micro-Enterprises objectives - M313. Encouragement of Tourism Activities;
Table 13: Strategy and Measures for Rural Development Axis 4
Overall objective To build local capacity and to improve local governance of Axis 4 Sub-objectives 1. To build local capacity for implementation of 2. To support implementation of local development the LEADER approach strategies Operational – To support establishment of Local action – Implementation of local development strategies to objectives groups and preparation of local development achieve the objectives of one or more of the three other strategies; axes – To increase capacity of local action groups – To promote cooperation Measures for - M431. Running Costs, Acquisition of Skills and - M41. Implementation of the Local Development achievement of Animation Strategies; sub-objectives - M421. Inter-Territorial and Trans-National Cooperation
The distribution of the number of programmed measures per RD Axis and the corresponding budget of the Axis are presented in the next table. Table 14: Structure of BGRDP: measures and budgets per RD Axes as programmed for the 2007-2013 period
RD AXIS Number of measures 2007-13 Public Budgets 2007-2013 Axis 1 12 1 214 075 316 Axis 2 7 777 394 110 Axis 3 6 905 291 684 Axis 4 3(414) 76 988 306 M 511 1 123 181 289 M 611 1 181 841 021 TOTAL 30 (31) 3 278 771 726
14 This is the number of measures as presented in the BGRDP. In evaluators’’ minds the real number of measures is 31 because they consider M431-2 as a separate measure specifically provided only to BG and RO in their accession treaties, and hence a measure which has been allocated separate budgets and deserves separate considerations.
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The distribution of the programmed support interventions per types of beneficiaries is the following:
Table 15: Major beneficiary groups and respective BGRDP measures supporting them
Groups of final beneficiaries15 Measures supporting the beneficiary Cumulative budget 2007-13 for group provided the respective eligibility supporting the beneficiary conditions are met groups – MEUR M111, M112, M114, M121, M124, M125, Agriculture producers and M126, M141, M142, M143, M211, M212, 1 938 877 365 associations thereof (18) M213, M214, M311, M 41, M511, M611 Forest owners and associations M111, M114, M122, M124, M223, M224, 188 110 068 thereof (9) M226, M41, M511 Processors of raw materials from M123, M124, M41, M511 282 517 085 agriculture and woods (4) Micro-entrepreneurs outside M312, M41, M511 165 936 913 agriculture, fishery and forestry (3) Rural Population (via support for M313, M321, M322, M341, M41, M431, 682 800 083 municipal authorities and NGOs) (8) M421, M511 Monitoring Committee and the M511 20 530 215 Implementing administration (1) TOTAL 3 278 771 728
The current distribution of measures and budgets is in favor of the agriculture sector, which is programmed to benefit from eighteen BG RDP measures: ten Axis 1 measures, four of the Axis 2 measures, one of the Axis 3 measures, M41 – LEADER strategies, and by the NCDPs under M611. (Intangible benefits should be also coming from the M511 support to the National Rural Network.) They cumulatively reach EUR 1.94 billion of public support, i.e. 59.1% of total BGRDP public budget for the entire 2007-2013 period. The forestry sector will receive cumulatively MEUR 188.1 for the entire programming period 2007-2013. The processors of agriculture and forestry products will receive a cumulative public support worth of MEUR 285.2. Microenterprises outside agriculture and fishery will benefit from MEUR 166. The quality of life (cultural, social, mobility, public health needs) of the general rural population will benefit from MEUR 683 of public support. The conclusion from this section is the BGRDP has been programmed to aid primarily the restructuring and moderzniastion of the agriculture sector of the country.
15 Final beneficiary = the groups which enjoy the results and impacts from the interventions, not necessarily the beneficiaries who win and implement the projects. E.g., the final beneficiary of the training is the farmer, not the training institution. The same logic is for M511 where the publicity actions benefit the target groups of measure beneficiaries, the transparency actions based on sound on- time monitoring and evaluation benefit the population in general, and the support for the National Rural Development Network is supposed to act as a major impetus for introducing innovative good practices in BG production and processing but also in better governance as well. For the integrity of the analysis therefore the budgets of M111 (MEUR 42.2), M114 (MEUR 36.1), M124 (MEUR 24.1), M41 (MEUR 53.9) and of M511 (MEUR 123.2) is distributed equally among all of the groups of final beneficiaries which are programmed to benefit from these measures.
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5.3. Intervention logic of single measures
This section of the report provides a description and assessment of the intervention logic for each of the measures under evaluation.
5.3.0. M111 Training, Information and Diffusion of Knowledge
Objectives To improve human potential in the agricultural and forestry sectors through diffusion of knowledge and development of new skills. The operational objective is to ensure adequate levels of technical and economic knowledge and skills in management and business, new technologies, product quality and safety, sustainable management of natural resources including requirements for cross compliance, renewable energy sources and organic production.
Rationale Bulgaria's accession to the EU requires farmers to adapt to the introduction of a range of Community standards and requirements relevant to their business activities. Through professional training activities opportunities for earning additional income and acquiring new skills will be extended to people occupied in agriculture and forestry. In conditions of increasing specialization in agriculture and forestry it is important that farmers and foresters have good economic and technical qualifications in the sphere of use of new technologies, renewable energy sources and organic agriculture.
Target groups of beneficiaries The target groups are public or private vocational education and training institutions, registered under the Law on Vocational Education and Training and universities, registered under the Law on Higher Education. Eligible beneficiaries under this measure are agricultural producers - natural persons or sole traders. The participation of adults occupied in agriculture and forestry in the training courses and information actions is free of charge.
Preferred groups of beneficiaries The organizations responsible for training courses will enroll trainees giving priority in the following order: Beneficiaries with approved projects under the Measure 112 Setting up of Young Farmers; Beneficiaries with approved projects under the Measure 141 Supporting Semi-Subsistence Farms Undergoing Restructuring.
Approved beneficiaries under the Measure 214 Agri-environment payments will be enrolled with priority for the specific information actions related to this measure. The selection for training institutions will be done according to the following evaluation criteria: relevance and quality of the curriculum, professional experience of the proposed trainers, adequacy of the training facilities and equipment, financial aspects of the offer.
Programmed budget: EUR 42.170.344 Programmed targets: Number of participants in training 20 000; Number of training days received 170 000 Programmed linkage to other measures
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The support for vocational training under the Measure is related to agriculture and forestry and it is only for agricultural producers, forest owners as well as for those employed in their holdings. All other types of vocational training will be supported under OP Human Resources (ESF) including for those employed in the food processing sector, and training needed to promote economic diversification in rural areas in sectors other than agriculture/forestry, independent of whether the person trained is involved in the agricultural/forestry sector or not. Support for vocational training of those employed in the fisheries sector will be carried out under OP Fisheries (European Fisheries Fund).Beneficiaries under this measure could be the beneficiaries under measures M 112, M 141 and M 214 and all other applicants meeting the conditions. When an applicant does not meet the requirements for occupational skills and competence, he could be approved for support under the measures providing that he takes a commitment to meet these requirements (for example to undertake and complete a training course consisting of 150 training hours under the measure 111 Training, information and diffusion of knowledge), within a 36 month period starting from the moment of the individual decision to grant aid.
Linkage to other relevant support schemes: Potentially all of the M111 beneficiaries which are registered agriculture producers will have access to the respective national support schemes for the particular type of agriculture production – for animal or plant production, or even for national investment support. Of course, they also having access to M211, M212, M214, M611, provided they have lands that meet the eligibility conditions and the respective minimum standards and requirements for their agri-activities
Conclusions The survey of the beneficiaries showed that between 79 % of beneficiaries under M112, and 73 % under M141, 40 % under M121 have no specific agricultural education or training. The measure is highly relevant. The delay with which the measure is implemented, entail failure to meet the commitments for beneficiaries under M112, M141 and M214 with signed contracts with the SFA. Having in mind the changes in the number of potential beneficiaries under Measure 141 and M 214, the evaluators consider that the targets for M111 are difficult to achieve for the remaining period until the end of the program. The most recent developments, however, indicate that there are 50 approved contracts by the SFA-PA, which are planned to train/inform 15 779 trainees. The role of M111 is to gain momentum for the building of awareness and increasing the knowledge of farmers and other land users in terms of adaptation to climate change, water saving techniques and technologies, biodiversity friendly practices, etc. It is recommended that the MA opens specific and targeted calls for this type of information and training.
Recommendations To ensure innovation and meeting EU priorities it is recommended as a minimum that the training programmes for M112, M141, M214 include useful information modules dedicated to: - modern innovative technologies useful for meeting EU priorities (e.g. waste management, saving water and energy, using alternative energy, profiting from biodiversity or from social services, producing and marketing of organic produce, etc.); this should help the beneficiaries also to latter take advantage of M121, M142, M311 (and maybe M214) - good EU practices and financial benefits from organizing into a Producer Organization; this is indispensable for the smaller holdings participating in the said measures to help them take advantage from production economies of scale possible to achieve under M142. Note: Best multiplier effects will be achieved, if the innovative technologies are created in Bulgaria, as this will provide direct link among the R&D institutions and the production sector. Not the least, in this way Bulgaria will have the better chances to meet its objectives for R&D spending and Innovation in the Strategy 2020.
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5.3.1. M112 Setting up of young farmers
Objectives: To facilitate setting up by young farmers in the process of modernization and compliance with the Community requirements for safety at work, environmental protection, hygiene and animal welfare in the agricultural holdings of young farmers. Rationale: One of the major problems in the agricultural sector is the unfavorable age structure of the farmers. The overall low educational level of those employed in agriculture is another problem. The exodus of young people from agriculture is a serious problem that requires special measures for retaining the young labour force. The typically higher education level of young farmers will improve the adaptability of the sector to the foreseeable changes, as well as increase capacity to search for new business opportunities within agriculture, better quality production techniques and improved competitiveness. Target groups of beneficiaries Registered agriculture producers between 18-40 years of age by the time of application, who had started agriculture activities not earlier than 14 months before the submission of the application. It is obligatory that the beneficiary is at least 2 ESU by the time of application and his holding will grow with at least 3 ESU by the time for second check before final payment. However, to achieve the maximum EUR 12500 support from the second tranche, the beneficiary holding must have increased its size with at least 5 ESU, as according to the measure rules – each 1ESU will bring EUR 2500 towards the final installment of support. The young farmers have 36 months to adjust their holdings to achieve compliance with the Community requirements for safety at work, environmental protection, hygiene and animal welfare in the agricultural holdings, and to the statutory management requirements as transposed in the national legislation, and if necessary - to obtain the appropriate training necessary for their farming occupation, including via a free training course under M111. Tobacco is the only produce banned from support under the measure. Preferred groups of beneficiaries: None specified. “1st come, 1st served principle” is used.
Programmed budget: EUR 102 413 694 Programmed targets: 4 096 supported young farmers Programmed linkage to other measures: Very similar to the ones for M141 beneficiaries: free consultation/preparation of application under M143; free training under M111; possibility to receive investment support under M121 for further farm modernization and M311 for diversification of economic activities outside agriculture. The investment support can be received immediately after the startup of the 5-year M112 period for project implementation. There is not specific link made for other relevant measures like M211, M212, M214, M611, where M112 can also have access to support provided the holding meets the eligibility conditions. Linkage to other relevant support schemes: Potentially all of the M112 beneficiaries will have access to the respective national support schemes for the particular type of agriculture production – for animal or plant production, or even for national investment support. Of course, M112 are also having access to M211, M212, M214, M611, provided they have lands that meet the eligibility conditions and the respective minimum standards and requirements for their agri-activities. Conclusion This measure will ultimately contribute to faster restructuring of the labor force/human potential involved in agriculture activities, and therefore - the structure of the holdings; will contribute to the increased production of currently deficit agriculture raw materials of higher quality produced locally. It will also contribute to the decrease in depopulation of the rural areas, as relatively young families will be given chances for agriculture gainful activities supported via a large number of support measures and schemes, and non-farming activities supported by M311.
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Recommendations for necessary changes in measure design (and implementation rules) All of the recommendation here are applicable only if the suggested increase in budget for M112 takes place, so that a new wave of M112 is possible. 1. Territorial prioritization: measure should be implemented on the entire country. Priority should be given in the districts where the number of registered and active agriculture producers is high, but the implementation of M112 has been minimal. This prioritization should be part of the ranking system in the next point. 2. Ranking system: the first come – first serve principle for approving project proposals should be replaced by a system of ranking criteria to choose the most economically viable-enduring holdings (including next participation in M121, and/or in M142 or even M311) and proposals best meeting the national needs in terms of: -production subsector (proposals from holdings with main production of hectare-intensive field crops should be disfavored), -created job places, innovation (including future participation in M214), -the expected effects for the local economy (will there be multiplier effects, including eventual participation in M121, M311?) The decision to extend the aid should be made “up to 5 months after accepting the proposal” as a replacement to the current rule: “not later than 18 months from the date of establishment”. This is because even now there are 12-24 months delays in approval after the submission date, and the requirement that the holding should be “established up to 14 months prior the submission of proposal” is a rule from the CR1698/2005 and will therefore remain intact. IMPORTANT: There seem to be at least two very significant hurdles in the realization of the proposed implementation of the measure: A. The current implementation rules envisage that the interim check by SFA-PA on achievement of holdings objectives as laid in their business plans are made after the 3rd year of BP implementation (as a condition for the final payment). For young farmers contracted in 2012 this will be very late – outside the programming period till end- 2013. Therefore young farmers should be given the opportunity to request SFA-PA interim check after they have achieved the objectives set in their BP, even if this achievement took place in the first year after the initial payment. In no case should young farmers be selected which interim check is envisaged beyond November 2013. This calls for a modification in the Implementing Ordinance, where a new project eligibility rule should be introduced. (The same logic holds true also for the M141 applicants/beneficiaries, which also have to demonstrate the achievement of particular interim objectives) B. M143 no longer will be supporting the applications of the Young Farmers, and M114 is still not launched and tested in the reality. It is not certain, if there is sufficient and experienced consultation capacity under M114 to offer so intensive consulting (>2500 beneficiaries under M112 alone) within a very compact 2011 period. Therefore the evaluators see the need to extend the full range of NAAS operations (as in 2007-2009 period) till the end of 2012. In this period it is expected that the M114 will have sufficient time be tested, accepted and running efficiently to meet significant consultation and orientation needs.
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5.3.2. M121 Modernisation of agricultural holdings Objectives:
To improve the overall performance and competitiveness of the agricultural holdings through modernization of the factors of production, and the introduction of new processes and technologies, targeting production of quality agricultural products; To improve the protection of the environment; To promote the respect of Community standards and improvement of conditions on the agricultural holdings, especially related to occupational health and safety, hygiene and animal welfare. Rationale: Achieving compliance with the requirements, related to veterinary, phyto-sanitary, animal welfare, environment protection, hygiene and occupational health and safety, requires huge investments that will be very difficult to implement without support for the Bulgarian agricultural producers. Modernization of farms is also crucial to improve their economic performance through better use of production factors including: the introduction of new technologies and processes for improving product quality; on farm diversification, including into non-food sectors and production of energy crops; and the transition from conventional to organic farming.
Target groups of beneficiaries: Agriculture producers and agriculture producer groups (including beneficiaries under M112, M141 and M142) Preferred groups of beneficiaries: The measures texts state that support with priority shall be given to young farmers (18-40 y.o.), who might also be beneficiary under the M112; to applicants in rural areas; to applicants who had not yet received EU support for similar investment (in BG case it is possible only under the SAPARD and PHARE programmes in the 2000-2006 period). According to the measure, further ranking points should be given to holdings’ investments associated with the Nitrate Directive, the milk production, the animal breeding other than raising dairy animals, the conversion to organic production. For the latter group – minimum budget quotas have been also reserved within the entire M121 budget.[It makes an impression that the investments in alternative energy are not given priority via the ranking system; still they have a separate 5% quota as a reserved budget from M121 budget as well.] Such investments are also benefitting from higher rate of support by the measure (+10%). The implementing ordinance for M121, however, sets somewhat different priorities to beneficiaries and investments: Table 16: Priorities when implementing ordinance for M121
Criteria Points Maximum Points 1. Applicant is an young farmer (18-40), including beneficiaries from M112 35 35 2. Area- 2A Applicant is in a rural area 35 50 based 2B Applicant is in a rural area belonging to the scope of Rhodoppi, North Western 15 and Standja Sakar National Investment Programmes 3. Applicant has not been supported for the same investment by the Community 15 15 Total points 100
This ranking system (used by the SFA-PA to rank the M121 for priority financing) does not seem to pay sufficient attention to the priorities as set in the measure texts – e.g. it offers no incentive for the said priority types investments, and it is via this „prioritization” that the Community Priorities are not neglected by the beneficiaries and BGRDP in general.
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Furthermore, together with the continuous “no window” process for collecting M121 applications it may have contributed to the situation where more than 96% of the approved/paid M121 projects are projects by grain producers for purchasing agriculture machinery. This is why the ranking system should be modified to provide for better links with other measures, and for better targeting of the support to the most urgent agriculture and subsistence needs.
Programmed budget: MEUR 465.8 (net of the provisional budgets for M124, M125 and M126 temporarily joined to M121 budget until measures are opened). 55% of the budget is reserved for meeting standards in priority national sub-sectors (milk/other animals) or priority types of investments (associated with environmental preservation – adjusting to the Nitrate Directive, and horizontal RD priorities: alternative energy, organic production.) Programmed targets: 5390 holdings supported. Of them 2500 should be farms in the animal breeding sector. Of them 2000 should be investing in meeting the requirements of the Nitrate Directive 91/676/EEC. Programmed linkage to other measures: according to the implementation rules the measure provides direct link only to M112 beneficiaries via the established ranking criterion. There is not specific link made for other relevant measures like M211, M212, M214, M611, where M121 beneficiaries can also have access to support provided the holding meets the eligibility conditions. Linkage to other relevant support schemes: Unlike M112 and M141 beneficiaries, the beneficiaries under M121 have access to the relevant national support schemes including the CAP I Direct Payments. This is because the beneficiaries are the well-established entities with history of successful support provision in the past. In general they are also better meeting to a greater extent the obligatory standards and requirements for their produce. Conclusion: The current measure design “guarantees” rather than promotes via the ranking system the achievement of the national objectives and the EU priorities. The guarantees, however, are obviously incapable alone to (i) secure the financing of the projects which best meet national and EU objectives while (ii) producing relatively more public goods per invested euro, or (iii) modernize in equal proportion the agriculture sub-sectors, and (iv) spin faster the economic multiplier of the local economy. The design is also inappropriate in view of the national context for implementing the M121 measure: - SAPS channels most of the Direct Payments (as well as the M211, M212, M611 payments) to agriculture subsectors which are hectare-intensive, but where the intensity of CAP I support per produced unit is the higher (filed crops: grain, oleaginous, etc.); in the opposite case – animal holdings without managed lands were supported by relatively insignificant national schemes most of which were credit-based rather than subsidy-based - Because of the increasing Direct Payments per hectare but also in absolute amounts (the more hectares are managed) the holdings operating primarily in the field crops sector also have easier access to the bridge capital necessary for M121 investments. This heavily skewed the M121 support to the bigger holdings receiving in reality more subsidy per production unit; and in disfavor of the more priority animal and fruit and vegetables sectors, where Acquis requirements remain to be met, and where the sub-sectors competitiveness is obviously much lower especially in view of the trade balance with the respective agriculture commodities. (See also the findings from the Questionnaires in Chapter 6 of this report).
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The current maximum of support further contributed to the distortion of measure effects as it allowed the concentration of significant general competitiveness16 budgets in relatively few holdings and administrative districts (see also the M121 implementation analysis in Chapter 6 of this report).
Recommendations for necessary changes in measure design (and implementation rules) All of the recommendation here are applicable only if the suggested increase in non-guaranteed budgets for general competitiveness of M121 takes place, so that financing of mainly proposals from M112, M141, M142 beneficiaries is possible, but also so that a budget is reserved for holdings from fruit and vegetables, animal and poultry sectors. Recommendations on Measure Design It is necessary to reallocate/increase the general competitiveness budget of this measure and to guarantee budgets in it for the beneficiaries under M112, M141, M142 (who have already expressed wish to be supported by M121 in their Business Plans, but also for the new wave of such beneficiaries provided the recommended reallocations takes place). It is also necessary to extend additional competiveness support to priority agriculture subsectors: animal breeding (+poultry), fruits and vegetables. Tobacco producers should also be supported in their on-farm agriculture conversion or off-farm conversion to alternative gainful activities outside agriculture (meaning that particular budgets should also be reserved within the budget of M311 for the listed groups of M121 beneficiaries.). We herewith propose the breakdown of guaranteed budget per particular target group of beneficiaries:
Table 17: Summary of proposed distribution for the new M121 budget (reallocated budget for general competitiveness*)
Target beneficiary group Supported Reserved budget for Average size of the subsidy beneficiaries** them - EUR per project***
For M 112 – beneficiaries 1700 85 000 000,0 50 000,0
For M 141 – beneficiaries 800 40 000 000,0 50 000,0
For M 142 – beneficiaries 20 1 600 000,0 80 000,0
For M 214 – beneficiaries 85 6 800 000,0 80 000,0
For animal farms 200 16 000 000,0 80 000,0
For fruit and vegetables farms 280 22 400 000,0 80 000,0
For tobacco producers converting to other production 100 5 000 000,0 50 000,0
For greenhouses 45 33 000 000,0 733 333,3
Total 3230 209 800 000,0 64 953,6
* This table presents strictly only the targets and reserved budgets for the newly reallocated general competitiveness budget. The old division of the reserved budgets in the measure should be preserved for applicants until end-2012. The applicants for general competitiveness projects (tractors, irrigations system, automated milking parlor, etc.), should also be encouraged to participate in the
16 Budgets not linked to achieving specific Acquis requirements or EU priorities.
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Elaboration of ongoing and mid-term evaluation of the RDP 2007-2010, Bulgaria old reserved budgets – for organic production, for alternative energy, for meeting Nitrate Directive, etc. In this way general competitiveness projects will also leverage investments in EU priorities. The entire integration process will be greatly facilitated if the outputs from the suggested M511 activities in the Action Plan are produced, promoted and implemented as fast as possible via the suggested media and measures. ** The supported beneficiaries should be distributed mainly in the districts where support to agriculture has been more limited both under SAPARD and BGRDP 2007-2009. *** It is generally expected that the general competitiveness projects will be twice as big (at 50% cofinancing), but there should be no problem to apply with even bigger projects which will just receive lower rate of cofinancing (up to a maximum of support up to EUR 100.000 with exception for the greenhouses projects).
In the general competitiveness budget there should be no restriction on the types of supported activities/investment provided they meet the general eligibility conditions from the EU Regulations.
There should be introduced a much lower limit of the investment support extended to the investment projects – up to a EUR 100.000, with the exception of the greenhouses where the limit may be preserved at EUR 1.5 million. In all cases this maximum limits should be reduced if the average size of the supported projects is higher than the expected average size in the table – in all cases it is strongly recommended to try to achieve as much as possible the proposed quantified targets for the supported beneficiaries numbers.
Improvement in the project ranking system is necessary. Proposals best meeting the national needs in terms of: -production subsector (proposals from holdings with main production of hectare-intensive field crops should be disfavored), -created job places, innovation investments (including future participation in M214), -the expected effects for the local economy (will there be multiplier effects, including after eventual participation in M123, M311?) - the geographic location of the project – is it in a district where SAPARD and BGRDP could not meet satisfactorily the needs for investments support in agriculture? - the deadweight effects/the economic viability of the applicants holdings (not investments!),. priority should be given to proposals according to which the applicant should be able to pay back his/her investment within a 3-6 years period.
It is recommended to lift all limitations and reservation on the budgets no later than March 2013 except for the maximum amount for support. In this way there will be no danger of decommitment of M121 funds because there will be sufficient time for other non-targeted beneficiaries to apply and win general competitiveness projects in the period March 2013-December 2013. Then according to the n+2 rule they will have sufficient time to implement the projects and thus all non-absorbed budgets will be utilized, and not decommitted to the EU budget. This recommendation should be valid for private measures where ranking systems and reserved budgets target the aid to particular beneficiary groups and or projects of specific priority.
Recommendations on the design of the implementing ordinance
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1. The production capacity (productivity) of the supported machinery for land cultivation should be corresponding to the size of lands managed by the applicant, but also taking into consideration the capacity of the machinery supported under SAPARD or M121 in the period 2007-2009. The assessment of the correspondence should be based on transparent methodology which takes into consideration the specificities per sub-sector and soil qualities, as well as the location of the supported production – is it in an LFA of shorter vegetation period? 2. Only one offer should be demanded from the applicants irrespective of the size of the investments. It should be possible to check the price eligibility of the offer against the existing database of existing reference market prices in the SFAS-PA. The condition for thee offers (and the associated checks by SFA-PA on their validity) cause delays in the selection procedure of the proposals. 3. The check of price eligibility could be reinforced by checking the market prices for such investment items elsewhere in the Common Market. However, it should also be considered that the traders of machinery on BG market could be exclusive representatives of particular trademark and hence provide training but also hold the exclusive rights for post-purchase guarantee upkeep. The later is one of the major criteria which convince the BGRDP beneficiaries to purchase the particular item. On the other hand, quasi-monopolistic practices on BG market for agriculture machinery via exclusive representation seem highly inappropriate within the Common Market. 4. The present model for determining the economic viability of the supported projects should be replaced by simple assessment on the payback period of the supported investments. Support should be given to proposals which have 3-6 years of payback period. This change is particularly important for the animal holdings where the investment intensity is higher but the profitability is lower due to the intense internal and external competition on the Common Market for marketing of animal products (e.g. milk, beef etc.) 5. The assessment of holdings viability could be greatly facilitated by an external body of experts in the particular sub-sectors who can provide informed opinion on the viability prospects of the applicants in the particular activity and district. These should be matched also by specialist in particular activities – i.e. appropriate technologies for alternative energy, for waste management, for economization of water and energy use, etc. The work of such panels could be financed by the Technical Assistance. In all cases they should be provided a sufficiently detailed summery of the proposals at least 2-3 weeks before the deadline for selecting the ones for support. Thus they will have time to acquaint themselves with the proposals, compare their merits and provide the best possible opinion. Such an approach will be particularly facilitating if the proposed decentralization in implementing the measures takes place. (Such expert approach is also recommended for the rest of investment measures of BGRDP: 123, 311, 312 and in some cases – also for the non-investment measure М112.)
6. Of course the final decision to select and finance a particular proposal will remain with the Paying Agency.
7. If the proposed reallocation and targeting of beneficiary groups is accepted, then there will be also a need to change the application form, the monitoring form next to it and the associated practices within the SFAS-PA. Beneficiaries should also be prepared for the forthcoming changes at least three months before their enforcement via the publication in the State Gazette.
5.3.3. M122 Improving the Economic Value of Forests Objectives: Improve fellings for seedling regeneration as well as continue lightenings for establishing high productive forests; Improve the timber quality as well as timber quantity by appropriate silvicultural treatments (thinnings and pruning);
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Support the modernisation of specific equipment needed for silvicultural activities as well as for producing and harvesting non timber products. Rationale: There is an urgent need to support forest improvement. In addition non state forest owners (private forest owners as well as municipalities) tend not to have enough financial resources to finance the silvicultural measures which are prescribed in their forest management plans, also they do not have the necessary harvesting equipment. For these reasons, there is no economic interest to do these activities. Therefore there is a low willingness to improve the economic value of forests by the non state forest owners. The actions are in line with the National Strategy for Sustainable Development of the Forestry Sector 2006 -2015 and have to respect the Forest Act (1997) and related secondary legislation. Target groups of beneficiaries: Private forest owners (natural persons or legal entities) and their associations; Municipalities and their associations. Preferred groups of beneficiaries: None specified. “1st come, 1st served principle” is used. Programmed budget 2007-2013: EUR 24 097 340 Programmed targets: 10 100 forest holdings receiving investment support; Area pruned 1 000 ha; Area supported, (divided into coppice forests and plantations) (ha) 4 000 ha; Programmed linkage to other measures: Linkage to other relevant support schemes: All actions to be supported under this measure are based on Sustainable Forest Management Plans (SFMP). Detailed rules for the creation of SFMP are given in Ordinance No 6 about forest surveys in the Republic of Bulgaria . Conclusions The measure is relevant, but the interest from potential beneficiaries in the measure is low. There are only a few applications submitted by fourth year of the programming period. It is unlikely during the current economic crisis that any of the target beneficiary groups private, religious organizations or municipalities will express interest in the long-term investments supported by the measure. To avoid decommitment, the evaluators consider a part of its budget should provisionally be transferred to the M226 where are supported forests in need of restoration (See proposed reallocation in Chapter 7). In case the MA does not wish to transfer Axis 1 funds to Axis 2 activities, then there is an alternative to transfer the funds to M121 – for the creation of fast-growing tree cultures for biomass energy source. In this scenario there will be both socio-economic (new jobs, more income, less abandoned lands) and environmental benefits (the biomass will replace carbon based fuels as there will be above ground CO2 rotation: CO2 sink into woods, burning: release of CO2 in the atmosphere, again CO2 sink into biomass, etc.). This will also require a change in the current reallocation proposal.
5.3.4. M123 Adding Value to Agricultural and Forestry Products Objectives: Improvement of the overall performance, economic productivity and competitiveness of enterprises in the food processing and forest industry through: – better use of production factors; introduction of new products, processes and technologies, – improving quality and safety of foods and their traceability, – Achievement of compliance with Community standards.
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– Improvement of environmental protection.
Rationale: The growth of micro, small and medium sized enterprises and the modernization of their assets will improve the competitiveness of the food-processing sector. Priority shall also be given to investments intended to create and promote new products and to diversify product range. The accession of the Republic of Bulgaria to the EU also requires enterprises processing food and forestry products to achieve full compliance with EU standards related to animal welfare, phyto- and veterinary requirements, food and fodder safety, environmental protection, hygiene and occupational health and safety. Achieving this compliance will require substantial investments, which would be realized with difficulty without financial support especially in the milk and meat sectors, to which transitional periods for compliance with EU standards have been granted to certain enterprises. Target groups of beneficiaries: Eligible beneficiaries under this measure shall be: Natural persons or legal entities registered under the Commercial Law or Law on Co-operations being micro, small and medium sized enterprises within the meaning of Commission Recommendation 2003/361/EC, including producer markets17. Enterprises, which are not micro, small and medium but whose number of staff is less than 750 employees or annual turnover is less than EUR 200 million. Preferred groups of beneficiaries: For all projects with a satisfactory business plan, the selection of projects will be done through giving priority to projects which concern: – investments directly targeting environmental protection; – investments for compliance with Community standards till the end of 2009 for enterprises in the milk and meat sectors, which have been granted a transitional period and/or newly introduced Community standards for micro- enterprises, – investments for promoting the integration between primary agricultural producers and enterprises in the food processing industry, and between forest holders and enterprises processing forestry products; – investments for production of bio-energy and for improvement of energy efficiency; – investments for support of micro and small enterprises and enterprises located in rural areas. Programmed budget 2007-2013: EUR 243 176 17418 Programmed targets: 620 supported enterprises Programmed linkage to other measures: According to the implementation rules the measure provides direct link only to M142 beneficiaries via the established ranking criterion. There is not specific link made for other relevant measures like M112 or M121, where M121 beneficiaries can also have access to support provided the holding meets the eligibility conditions. Linkage to other relevant support schemes: All beneficiaries could apply for relevant schemes of CAP I. The Paying Agency shall be responsible for cross-checks aiming at avoiding double-financing between the RDP and these support schemes. The Paying Agency has to put in place a special procedure for the cross-checks. Every investment project under the RDP, which may fall under the scope of these 1st Pillar support schemes, will be checked for possible double financing before its approval. Full complementarity and demarcation between the current measure and measures financed
17 These are producer markets established under the Law for the Commodity Exchanges and Market Places. According to this Law a producers market is the place and the infrastructure for wholesale trade, where registered producers sell to traders their agricultural products. 18 BGRDP, fifth notification, Indicative Breakdown by Rural Development Measure, page 230, EEPR included.
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Elaboration of ongoing and mid-term evaluation of the RDP 2007-2010, Bulgaria by the 1st Pillar support schemes in the sectors listed in Annex I to Regulation 1974/2006 is ensured. If the beneficiaries – processors are also registered agriculture producers they all potentially will have access to the respective national support schemes for the particular type of agriculture production – for animal or plant production, or even for national investment support or CAP I . Conclusions The measure is evaluated as relevant and necessary and demonstrates more than sufficient interest from the beneficiaries in its support. There seems to be no need for modifications in the measure texts. However, there seems to be a need to change the project assessment procedure in line with the recommendations made for M121 above. The same is true for the need to bring the application form and the monitoring form in line with the monitoring requirements demanded by the CMEF.
5.3.5. M141 Semi-subsistence farming Objectives: To facilitate the move into the market for semi-subsistence farms undergoing restructuring Rationale: The measure supports the development of farm holdings which currently have low economic size, producing mainly for their own consumption and marketing a small share of their output, but which have the potential to develop into viable commercial farm businesses. To overcome the considerable challenges facing these semi-subsistence farmers, specific short term support, alongside the standard range of rural development measures, is required to encourage this transformation process from semi- subsistence farms to commercial viable enterprises. Target groups of beneficiaries: Semi-subsistence farms between 1-4 ESU who market a small share of their output to supplement household income and use the rest for domestic consumption, but at the same time possess economic potential for future development. Preferred groups of beneficiaries: no ranking system is created in implementing this measure Programmed budget 2007-13: EUR 144.584.038 Programmed targets: 21,000 semi-subsistence farmers. 80% of them should enter the market. After the third year of their support the beneficiaries mush have increased the holding by 1.5 ESU, and y the fifth – by 3 ESU. In the same period the holdings must meet the obligatory Community standards related to veterinary and phyto-sanitary requirements, animal welfare, environmental protection, hygiene and occupational health and safety Programmed linkage to other measures: M141 beneficiaries cannot apply under M112. Advisory support for the application including the elaboration of a business plan is provided by M 143. Training and information can be received under M111 (7000 trainees); eco-training under M111 is obligatory for the farmers who lack appropriate education in environmental preservation. Supported holdings are also free to participate in investment measures: M121 and M311. Linkage to other relevant support schemes: Only registered agri-producers can be supported under this measure. In theory this should give the holdings also access to the National support schemes in the plant production and animal breeding sectors. For the majority of the supported holdings, this, however, will be possible only after the 3rd year of support when the obligatory Community standards are achieved (i.e. milk hygiene standards). Conclusion
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The measure is very relevant and important in fighting rural poverty, but also in transforming the holdings into market orientated farms meeting necessary standards. Thus, limiting the gray agriculture sector of operation of unregistered holdings will also occur, and the normal market mechanisms will function more reliably. Meeting the obligatory Community standards and gaining access to national support schemes, will, of course, be easiest for the agriculture operations where meeting the standards requires the least efforts and investments. In general, the semi-subsistence farms do not have easy access to investment support, and even credits for participating under M121 and M311 are not easy to receive especially in the current aftermath of economic and financial crises. Still there are identified necessary changes in the measure design and the implementation rules of the measure. Recommendations on measure design To change the definition for a semi-subsistent holding eligible for support under M141 – To increase the scope of the measure to include wider range of holdings between 1-8 ESU. This will also increase the number of potential beneficiaries under M121 as well as to allow the holdings to become economically viable and market orientated in shorter time period. – To remove the condition for a minimum area eligible for support under SAPS and/or the LFA, as long as many of the animal farms manage no lands, and other manage lands less than 1ha or less than 0.5 ha for perennials and/or vineyards, or 0.5 ha when the lands are in a mountainous area – To remove the requirement neither of the agriculture cultures to exceed 85% of the total economic size of the holding – To stop requesting documents for ownership and/or land lease/rent contract for the set minimum size of managed area for a period of 5 years – Eligible for support should be physical persons but also sole proprietors of semi subsistent holding – The eligibility that the applicant should be below 60 years of age should be removed To change the definition for a semi-subsistent holding eligible for support under M141: Economically viable is this holding which by the end of the support period has increased its economic size by at least 3 economic units in comparison to its size at the application date The obligatory interim objectives to achieve compliance with the Community standards in the area veterinary, phytosanitary, animal welfare, environmental protection, hygiene, health and safety at should be achieved by the fifth year of the support period, in case the applicant is not supported by the M121.
5.3.6. M142 Setting up of Producer Groups Objectives: To encourage the setting up of producer groups in the agricultural sector in order to increase the production and supply of high quality products meeting EU standards and adapted to market requirements, and to support the access of small and medium holdings to the market. Rationale: An adjustment of farm structures and improvement of cooperation among farmers is needed to increase the competitiveness of both the agricultural and food processing industry. It is expected that the setting up of producer groups in the agricultural sector will contribute to an increase in the production and supply of high quality products which meet EU standards and are better adapted to market requirements. Joint marketing of output should facilitate the access of small and medium-sized holdings to the market. Target groups of beneficiaries: Agricultural producer groups; officially recognized not later than the end of 2013
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Preferred groups of beneficiaries: no ranking system is created in implementing this measure “1st come, 1st served principle” is used. Programmed budget 2007-2013: EUR 12 048 670 Programmed targets: 150 supported producer groups; Turnover of supported producer groups (MEUR307 Programmed linkage to other measures: According to the implementation rules of the measure provides direct link to M121 beneficiaries via the established ranking criterion. Linkage to other relevant support schemes: Producer groups for fruits and vegetables and for hops will not be eligible for support under this Measure. They are eligible for CAP I. The member of producer groups are also registered agriculture producers and they all potentially will have access to the respective national support schemes for the particular type of agriculture production – for animal or plant production, or even for national investment support or CAP I Conclusion There is only one submitted project on the measure. Approval of that was delayed more than 2 years. The measure is indispensable, especially for small farms in dairy, livestock and beneficiaries of the M141 and 112. Missing of bridge financing, prior organizational and administrative work prior to registration, recognition and application of the producer group is weak point in the implementation of the measure. The measure supports producer organizations which have already been established whereas the most serious problems, both organizational and financial, producers face before and during the establishment of an organization is lack of preliminary funding for the establishment and registration of a Producer Organization (PO); In almost all Member States, PO were established with the financing and support of donor programs or projects. The negative financial flows, which will follow for the PO participants, is prohibitive for the setting up of the system, even though the OP feasibility might be good. Advance payment for the setting up of PG and PO is needed in order to make the idea work. The payments may originate from the SFA National Schemes after coordination with the Commission, or even from the Bulgarian Development Bank. In addition to that, or as an alternative - the POs could also be relieved from payments of profit tax for 3 years period. Consultants’ potential in the areas of legal requirement, of financial management and tax-system should be mobilized to support the establishment of POs. Recommendations on measure design The present composition of the measure texts are more appropriate for a measure name: “Support for recognized producer organizations”. The name of the measure according to Art 35 from CR 1698/2005 contains “Producer Groups”. In its essence the BGRDP measure is not a measure for the creation of “Producer groups” because it sets as beneficiaries “agriculture producer organizations, which have been officially recognized by the end of 2013”, i.e. these are organizations which have already been created and after they apply and are recognized by the PA – they can receive also financial aid. [But the process for establishment/registering/recognition is not actually supported, as it should] The scope of the parties which can become members to a supported PO should be increased to include not only the agriculture producers registered under Ordinance 3 by MAF, but also the beneficiaries registered in IACS. Not only physical persons and sole proprietors, but also juridical persons registered by the Commercial Law should be allowed to become members to the supported PO. The maximum participation of the state in the juridical persons should be up to 25%. It is written in the measure that the implementation procedure will be reviewed up to 2 years from the start of measure implementation. The calls for proposals did not incite interest in the target groups of potential beneficiaries, which calls for the next package of proposals
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– update of the present Ordinance 27 / 5 August 2008 for recognition of POs and revoking or updating and streamline all the Ordinances related to the recognition of POs as listed in Articles 12 and 26 and namely: Ordinances 21/2001, 23/2001, 24/2001. All this brings confusion with the agriculture producers potential beneficiaries of a supported PO – advance financing for the organisational setup and structuring of the POs supported by the BGRDP – or advance financing under the national schemes for organizational activities and juridical registration of the PO even before their recognition by the SFA-PA, or the extension of state for the creation of the PO altogether – M143 should continue its full scope of activities until end-2012 as it is necessary that the NAAS has the possibility to consult/aid the creation of POs. NAAS could create at least one PO in each of the administrative districts where its regional offices are located – The conditions for operations of the recognized POs should be made easier: profit tax payments should be alleviated or at least reduced during the first three years from registration
5.3.7. M143 Provision of farm advisory and extension services Objectives: To assist farmers to access the support possibilities under the 2nd Pillar of CAP to facilitate the effective utilization of financial aid directed to their farms; and to help them to adhere to GAEC, agricultural production hygiene and quality standards, veterinary and phyto-sanitary requirements, environmental protection and animal welfare standards. Rationale: To increase competitiveness and innovation in the agricultural sector there is a clear need to improve the agricultural knowledge and management skills of farmers. It is expected that the provision of improved and high quality farm extension services will contribute to an increase in human potential and help ensure an appropriate level of technical and economic knowledge and skills in the agricultural sector. Target groups of beneficiaries: National Agriculture Advisory Service (NAAS). Final beneficiaries [until end-200919] are the applicants under M112, M141, M142, and M214. In 2010-2013 period only the applicants under M141 will remain as final beneficiaries. Preferred groups of beneficiaries: NA Programmed budget 2007-13: EUR 6.024.335 Programmed targets: 21000 (as in BGRDP texts for the fifth notification) Programmed linkage to other measures: provision of consultations and preparation of the application documents for applicants under M112, M141, M142, and M214. If the applicants so wished, the NAAS also prepared their applications for M121 and M311. Linkage to other relevant support schemes: Not clear at this moment. (Potential link to Direct Payment Claims for M211 and M212 applicants) Conclusion The implementation of this measure in its original scope of actions is very necessary for the successful realization of the proposed reallocation of funds among measures (see Chapter 7).
19 The measure was initially programmed to operate until end-2009. With the fifth modification of the BGRDP its period for implementation has been extended till the end of the programming period.
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Recommendations Regional quantified targets for consultations of applicants under M112, M141 and M142 could be agreed to ensure that present regional uptake imbalances are alleviated.
5.3.8. M211 Natural handicap payments to farmers in mountain areas and M212 Payments to farmers in areas with handicaps, other than mountain areas Objectives: M211- To maintain the agricultural activities in the mountain areas and to prevent land abandonment and soil erosion; M211- To conserve and improve the existing biodiversity within mountainous areas; M211- To contribute to the rational use, conservation and sustainable development of land and other natural resources in mountainous areas; M212- To promote the rational use, conservation of biodiversity and sustainable development of the land and other natural resources in other less favoured areas; M212- To maintain agricultural activities and to prevent land abandonment and soil erosion; M212- To help maintain the attractiveness of the countryside M211 + M212- To reduce the depopulation of these areas;
Rationale: M211 The support for the activities related to agricultural land use in the mountainous less favoured areas and observance of good farming and environmental conditions in these areas is needed to prevent abandonment of farming land, to increase the attractiveness of the countryside, and to help prevent the depopulation of mountainous areas. The factors, which have unfavourable impacts on the income of farmers in the less favoured areas, may be classified as technical, technological, natural, organizational, and economic. The impact of natural factors only is taken into account in determining the criteria for the designation of the mountainous less favoured areas. These natural factors include: the altitude above sea level, the slope and a combination of these two factors. M212 Bulgaria has a relatively small territory but due to its geographical location, landscape diversity and soil structure has a big diversity of natural conditions. As a result many micro-regions are defined with a combination of different natural factors influencing the agricultural production. However one of the factors that has direct impact on the agricultural activities is the soil fertility. In Bulgaria productivity of the land is measured by its category. Land category varies from 1 to 10 where category 1 refers to agricultural lands with highest productivity. Areas with low productivity have limited potential for cultivation of different crops, additional production costs and as a whole lower economic performance in agriculture. They are predominantly used for extensive livestock farming. In order to prevent abandonment of such types of land payments are required to compensate the farmers working under less favourable conditions due to the natural handicaps they face, as compared to farmers in more favoured areas. Target groups of beneficiaries: Farmers – natural persons or legal entities Preferred groups of beneficiaries: NA
Programmed budget: EUR 233.218.233 + EUR 38.869.706
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Table 18: Programmed targets, M211/M212
Indicators M211 M212 Targets for Outputs Number of supported holdings in areas with handicaps, other than 60.000 10.000 mountain areas Agricultural land area supported (ha) 328.000 110.000
Programmed linkage to other measures: Not Specified Linkage to other relevant support schemes: (evaluators’ understanding is that the measures are contributing to farmers’ income derived from all area-based payments under SAPS, i.e. CAP I Direct Payments) Conclusions The measures should add to the annual income of 70.000 small and medium holdings (payments up to 100 ha per beneficiary holding). The support should contribute to the abandoning of the lands and emigrating from the territory of part of the 70.000 family holdings. Measures implementation also brings environmental benefits as they additionally contribute to GAEC adherence by the supported holdings in the LFAs of Bulgaria.
5.3.9. M214 Agri-environmental payments Objectives: Increase the environmental awareness and knowledge of farmers; Promote the use of environmental planning (multi-annual nutrient management planning and crop rotation; Support the development of organic farming as an environmentally-friendly method with economic potential; Preserve genetic variety of endangered local breeds and traditional crop varieties; Maintain biodiversity by encouraging the conservation of high nature value farmland, including support for traditional mountain pastoralism in designated areas; Maintain and restore traditional agricultural landscapes and landscape features with cultural, scenic or environmental value; Conserve soil and water resources, including in areas affected by severe erosion and at risk of high nutrient losses (e.g. Nitrate Vulnerable Zones); Encourage farmers on a voluntary basis to manage agricultural lands in Natura 2000 sites prior to measure 213. Additionally each of the agri-environmental packages has its own environmental objectives.
Rationale: Natural resources, traditional landscapes and biodiversity are parts of the national heritage. Support is provided to preserve, restore and maintain these valuable assets. Target groups of beneficiaries: Farmers – natural persons or legal entities registered in IACS and willing to commit for 5 years to apply the selected agri-environmental activity.
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Preferred groups of beneficiaries: Some of the agri-environmental packages can (a) only be implemented in certain pre-defined areas or regions or farm animals: Farmers whose managed land is defined as High Nature Value; Farmers breeding endangered local breeds Pastoral farmers in National parks “Central Balkan” and “Pirin” (b) others are being prioritized: Arable farmers within Nitrate Vulnerable Zones Farmers within municipalities with moderate to severe erosion problems
Programmed budget: EUR 310.957.701 (Clean M214 budget net of NATURA 2000 M213 and 224 provisionally stored with M214 budget) Table 19: Programmed targets, M214
Number of farm holdings and receiving support 40 000
Total area under agri-environmental support (ha) 160 000
Total number of contracts 50 000
Physical area under agri-environmental support (ha) 160 000
Number of actions related to genetic resources: 1 000
Programmed linkage to other measures: Assistance in agri-environment packages selection and application development support is provided by NAAS via measure 143 till the end of 2009. M214 beneficiaries are stated as priority target group for measure 111. Agri-environmental training should happen within the first 2 years of their agri- environmental commitment (for 2008 beneficiaries it was extended to 3 years). Although, it is not specified in the measure texts: (1) The budget of M121 Modernisation of Agriculture Holdings contains 5% reserve for holdings producing organic production. Hence, the respective beneficiaries under this M214 measure have access to investment support for modernizing/increasing the competitiveness of their holdings. The support should cover all possible types of tangible and intangible assets including the purchasing of machinery and equipment. (2) Support under M214 is also likely to reinforce the intensity of support per holding hectare in the LFAs supported by M211 and M212; hence the measure will also reinforce the achievement of their measure objectives. Linkage to other relevant support schemes: All CAP I and national support schemes which offer support in the respective areas, based on SAPS or offer investment support for the appropriate types of tangible and intangible assets. Conclusions
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The implementation of this measure is strongly dependent on the existence and referencing to various registers containing reliable information for lands, their coverage with agriculture cultures, and/or animals’ registers. Other factors contributing to its successful implementation are the existence of sufficient expertise with the certifying bodies for organic production and the ever growing demand from processors (vertical integration of organic food chains) and general public for organic products. The wider range of public goods produced during the operations of the M214-beneficiaires (preservation of biodiversity, preservation of the soils, waters, air, etc.) also need wider and deeper recognition by the people, but also by the implementing administration. Appropriate targeted PR campaign including partially financed by the M511 may boost the general awareness but may also strengthen the vertical integration of the production/processing to add more value on the M214-produce produced and marketed locally. Research and development projects co-funded in the future under M124 may further strengthen the said vertical integration. Recommendations It is recommended to re-design and simplify the Soil and Water and HNVF4 packages to address better the realities on the farms.
5.3.10. M223 First afforestation of non-agricultural land
Objectives: Enhance the forest cover in order to contribute to climate change mitigation and to support natural biodiversity. Diminish soil erosion and avoid land marginalization. Improve the water balance in the supported afforested and neighbouring areas. Rationale: In Bulgaria 34 % of the total territory is covered by forests, primarily located in mountainous areas. The main agricultural regions of Bulgaria are lowlands in the north – the Danube Plain and in the south – around the river Maritsa. The forest cover there is lower than 10%. A lot of former agricultural land which is situated in mountains and semi-mountains regions is unused, which results in environmental and socio-economic problems. In lowlands, due to the low forest cover a high fragmentation of forests and other wooded land can be observed. For preserving biodiversity so called natural “bridges” need to be established between forest areas. On the other hand, the extension of forest resources will contribute to climate change mitigation and enhances carbon sequestration. The abandoned agricultural areas have a high potential for this purpose, due to the relatively suitable sites for rapid growth of young forest trees. In the mountain areas a high level of soil degradation and regressive succession can be observed, particularly on abandoned land. So these areas lose soil by wind and water erosion. Also their possibilities to fight natural hazards such as flooding, to protect soil and to improve water quality are much lower. Increasing the forest cover using native tree species will also improve the water balance in the surrounding territories, which is an important problem in South European countries. Target groups of beneficiaries: Private owners of non-agriculture lands, or their associations, municipalities owning non-agriculture lands or their associations, state entities managing state owned lands from the state forest fund. Preferred groups of beneficiaries: Eligible projects will be ranked according to the priority selection criteria listed below:
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- location in municipality with low forest cover (from less than 30 to less than 60% with lower percentages prioritized); - location in a municipality classified with high or medium risk of soil erosion. Programmed budget: EUR 40.424.494 Table 20: Programmed targets, M223
Type of indicator Indicator Target 2007-13
Output Number of beneficiaries receiving afforestation aid 2 000
Number of hectares of afforested land 10 000
Programmed linkage to other measures: Not specified. Linkage to other relevant support schemes: It contributes to the planned afforestation activities by the state entities managing state forest fund, or the municipal afforestation activities some of which financed under SAPARD. Conclusions The proposed measure is linked to the National Strategy for Sustainable Development of Forests 2006 -2015 as a strategic aim under point 3; to the actions envisaged in the Strategic Plan for Development of the Forest Sector 2007- 2011 as well as to the Community Forestry Strategy (paragraphs D1a and C 2). Apart from the environmental benefits (including the support to biodiversity), the conversion of the non-agriculture lands into forests will offer numerous opportunities for the local population including: forest products (not the least as source for alternative energy), as well as amenities for the development of specific types of tourism in the rural areas. These of course will be likely to develop and fully unfold for the next generation of rural inhabitants living in the particular areas. Like in M214 above, it may be useful to target a specific promotion campaign under M511 for the public benefits for the local population and economy arising in the long term from the implementation of M223 projects. Further links may be pursued with the local development strategies financed under M41.
5.3.11. M226 Restoring forestry potential and introducing prevention actions Objectives: Restoring forests damaged by forest fires, and other natural disasters; Improvement of prevention actions against forest fires. Rationale: The main natural hazards faced by Bulgaria’s forests are forest fires, floods, wind draw as well as insect infestations. In recent years, Bulgaria has experienced some important natural disasters, some of them causing serious damage to forests. During the last 5 years more than 500 000 hectares of forests were destroyed by fires. Most of them up to now have not been restored (about 80%). These areas are a high potential for further disaster by insects (e.g. bark beetles) and they have encouraged floods as well as soil erosion. Unfortunately private forest owners and municipalities do not have
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Elaboration of ongoing and mid-term evaluation of the RDP 2007-2010, Bulgaria enough money to restore these areas. As a result of the low economic productivity of these forests and low income levels in rural areas there is a lack of willingness to invest in restoring the damaged forests. Without support for these areas, they will become abandoned lands in the future. Another important disaster in Bulgarian forests is wind draw. It has been estimated that in the last two years more than 120 000 m³ (250 000 ha of forest) have been damaged. Only 50% of these areas have been restored, mainly in state forests. As a result, large areas of damaged forest have not been re-established, similar to the fire damaged areas, especially in small-scale and municipal forests. These serious and current threats to Bulgaria forests result in the loss of potential for carbon sequestration and forest production. Without public support the forest areas concerned risk to be damaged further and the damaged areas will not be re- established. Target groups of beneficiaries: Private owners of forests, or their associations, municipalities owning forests or their associations, state entities managing state forest fund. Preferred groups of beneficiaries: NA. “1st come, 1st served” principle is used Programmed budget: EUR 29.540.976
Table 21: Programmed targets, M226
Type of Indicator Target 2007-13 indicator Output Restoration actions: Number of actions supported 2 000
Supported area of damaged forests (ha) 170 000 Prevention actions: Number of equipped anti-fire depots 100
Number of established/improved landing places for helicopters 10 Number of fire monitoring points constructed/improved 100 Total volume of investment (in MEUR) 29
Programmed linkage to other measures: Linkage to other relevant support schemes: The implementation of the measure is in strong linkage with national/sub- national forest programmes or equivalent instruments, as well as with the Community Forestry Strategy. Conclusion The implementation of the measure is in strong linkage of proposed actions with national/sub-national forest programmes or equivalent instruments and with the Community Forestry Strategy. Bulgaria adopted a National Strategy for Sustainable Development of Forests 2006 -2015, and Strategic Plan for Development of the Forest Sector effective from January 2007. The protection of forests against fire is addressed in both documents. Most of the proposed actions will be implemented in areas with high or medium risk of forest fires (see Annex 5 Attachment 1 to Measure 226). The conformity of the proposed measures with protection plans will be ensured by the forest management plans. The restoration of the forests and the public goods produced by them may need targeted PR
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5.3.12. M321 Basic services for the economy and rural population Objectives: To enhance business attractiveness and labour force mobility in rural areas by improvement of road infrastructure; To improve living conditions in rural areas by improving access to quality water and sewage infrastructure; To improve access for the rural population to cultural, recreational and sports services; To improve access to social services for the rural population and especially for children and vulnerable groups; To improve access to ICT-related services. Rationale: The competitiveness of Bulgaria's rural areas is constrained by inadequate quality and access to basic infrastructure and services for the economy and rural population. The analysis shows that service provision levels in rural Bulgaria are considerably lower than in urban areas, and far below EU average standards. The physical accessibility of rural areas has deteriorated due to the poor quality of municipal roads, which are important for connecting settlements within municipalities. This has been caused by the inadequate level of investment in road maintenance and renovation works since 1989. The poor quality of the roads increases journey times and the territorial weaknesses of the rural areas, and reduces their economic and social attractiveness. Improved access is a key condition for economic growth and diversification in rural areas e.g. for developing rural tourism potential. Reconstruction of the exiting water supply network and extension of the sewage system is important for the preservation of the environment and improving the level of services provided to the rural population. The underdeveloped social services, limited opportunities for cultural and recreational activities affect living standard in rural areas and results in population drain. This measure aims at improving both the business environment and general living conditions for the rural population. The measure will target support of projects identified as a priority in the Municipal Development Plans 2007 – 2013. It is expected to boost local economies and to help slow the exodus of young and entrepreneurial people from rural areas. Interventions under this measure are vital for the economic, social and cultural integration in rural areas. Target groups of beneficiaries: Municipalities, non-profit making legal entities, “chitalishte” community centres Preferred groups of beneficiaries: Table 22: Preferred groups of beneficiaries, M321
CRITERIA POINTS Projects to be implemented in municipalities with population not exceeding 10 000 inhabitants (as of 10 end 2005 Projects implemented on the territory of settlements with population above 500 and not exceeding 5000 30 inhabitants (as of end 2005) Projects for rehabilitation of water supply and sewage system 10 Projects proposed by applicants who are non-profit-making legal entities and “chitalishte” community 10
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Programmed budget: EUR 369.5 (less the provisionally stored budget of MEUR 61.4 million for the M341 planned to be launched later date in 2010)
Table 23: Programmed targets, M321
Type of Indicator Indicator Target 2007-2013 Output Number of supported actions 1 510 Total volume of investments (in '000 EUR) 427 417 Result Population in rural areas benefiting from improved services 320 000 Increase in internet penetration in rural areas 300 000
Programmed linkage to other measures: Not specified. Linkage to other relevant support schemes: Not specified. Conclusions and recommendations on measure design, scope of interventions, relevance and coherence: Table 24: Distribution of the M321 types of supported actions according to the types of actions set in the obligatory CMEF indicator O.321
O.321 Basic Actions supported by M321 from BGRDP Ranking Services … points in Types of actions M321 ICT initiative (e.g. a) Establishment or improvement of centres for ICT-based services (such as health - infrastructure) advice, business support, municipal services, etc.), including mobile ICT centres; Mobility b) Reconstruction and rehabilitation of existing municipal roads and bridges. 10 Construction of new roads will be supported in exceptional cases, where the applicant could prove important social and economic benefits; Culture and social c) Establishment of new or improvement of existing culture services centres (such as - infrastructure cultural centres, theatres, libraries), including creation of mobile units; d) Establishment or improvement of centres for recreation, leisure time and sports (including sports centres, youth centres, etc.); e) Establishment or improvement of centres for social services –care for elderly 10 and people with disabilities (such as Day Care Centres)
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Environmental f) Construction/reconstruction/rehabilitation of the water supply system and 10 infrastructure related facilities; (sewage, g) Construction/reconstruction/rehabilitation of the sewage system and related wastewater facilities; treatment) / Energy h) Construction or rehabilitation and equipping of installations for the production of - electric power and/or heat for municipality owned buildings and/or if buildings are used for provision of different services for the community, from renewable energy sources; setting-up public distribution networks for bio-fuels or heat/power from biomass or other renewables. In the case of cogeneration (combined heat and power generation) the capacity of the installation should be based on the useful heat demand of the municipality owned buildings (Directive 2004/8/EC); i) Investments for improvement of energy efficiency in municipal and other buildings used for provision of community services Training j) NA NA Childcare k) Establishment or improvement of centres for social services – child care 10 (nurseries, kindergartens), including specialised transport; Other l) (Public health*: ) Construction or rehabilitation of small infrastructure for waste - management – only carcass collection facilities;
* According to the evaluators understanding the supported actions will contribute for better protection of the public health.
Conclusion The ranking system gives too much weight to infrastructure projects with ready designs which are also to be situated in smaller settlements (500-5000). It is not sure that this approach: - Targets best the needs of the various social groups (children, women, the elderly, etc.) - The needs for business development - The results from the interventions (population benefiting from the improved services.) The ranking system does not sufficiently promote the EU priorities, which are a strong impetus for the modernization of the economies through knowledge based society and use of modern technologies for environmental preservation. Recommendations The whole budget of the measure has already been applied for and there is little room for recommendations in the present programming period without jeopardizing the equality principle for all applicants under the measure. Therefore the following recommendations are provided for the next programming period: - Measure manager within MA should acquaint him/herself with the latest elaboration of the Quality of Life concept as presented in the working paper Capturing impacts of Leader and of measures to improve Quality of Life in rural areas by the Evaluation Expert Network in July 2010 - Possible projects and activities targeting the needs of particular social sub-groups and the agriculture and non-agriculture business in the rural areas should be identified
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- and then the programming of the measure should be realized in such a way that its design targets with priority the needs of that social sub-group and/or type of business which are considered the most priority by the local population - Then the budget of the measure should be regionalized (i.e. % budget quotas should be allocated per district and hence the competition for support will be less fierce and the local authorities should not be forced to apply with whatever projects they have ready at hand regardless if these are the projects that best meet the needs of the local communities) - The identification of the most urgent needs to be met by the measure in the municipalities could be greatly facilitated by the (newly) established LAGs, as such prioritization should have already be done in their local development strategies. This set of recommendations/guidance are applicable for all Quality of Life measures (M313, M322) including also the indispensable LEADER Approach (M41).
5.3.13. M322 Village renewal and development Objectives: To improve the attractiveness of the living environment in settlements in the rural areas Rationale: Rural areas may be successful and sustainable provided their citizens live and work in them and have opportunities to interact, travel and build their homes there. They will be attractive for tourists if the overall rural environment is safe, sustainable and of high environmental quality. The green areas, streets and squares in rural areas have a strong impact on the quality of life of their citizens. These spaces offer an opportunity for physical exercise, social contacts, relaxation and calm. Well-maintained green areas and parks may become the most preferred and typical features of rural areas. Rural areas have to become attractive living places, otherwise, regardless of the environmental considerations, the citizens of rural areas will continue moving into the cities. This measure targets physical renewal of the settlements in rural areas and improvement of opportunities for recreation and the attractiveness of villages – creating/recovery of publicly accessible green areas, landscaping of gardens, construction or renovation of squares, street lighting, and pedestrian zones. Target groups of beneficiaries: Municipalities, non-profit making legal entities, “chitalishte” community centres; Civil partnerships of natural persons or legal entities, established for the renovation of the facades of private buildings and surrounding areas; Local religious branches, which may apply for renovation and refurbishment of buildings of religious importance , all of which are operating in and whose projects will be implemented in 178 rural municipalities, which are not included in urban agglomeration areas where similar actions are supported by the OP Regional Development co- funded by the EU Regional Development Fund. Table 25: Preferred groups of beneficiaries, M322
CRITERIA POINTS Projects implemented on the territory of settlements with population above 500 and not exceeding 5000 40 inhabitants (as of end 2005) Projects to be implemented in municipalities with population not exceeding 10 000 inhabitants (as of 10 end 2005 Projects proposed by applicants who are non-profit-making legal entities, “chitalishte” community 10 centres and local religious branches, which are registered in the eligible municipalities, where the activities will be implemented Projects proposed by applicants who have never previously received EU support for implementation of 30
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Programmed budget: EUR 166.756.670 Table 26: Programmed targets, M322
Type of indicator Indicator Target 2007-2013 Output Number of villages where actions took place 800 Total volume of investments (in MEUR) 208.446 Result Population in rural areas benefiting from improved services 500 000
Programmed linkage to other measures: Not specified. Linkage to other relevant support schemes: Not specified.
Table 27: Distribution of the M322 types of revitalization actions according to the types of actions set in the obligatory CMEF indicator O.322
O.322 Village Actions supported by M321 from BGRDP Ranking renewal … points in Type of M321 revitalization Physical a) Reconstruction and construction of street network, street footpath, squares, - lightning in the village b) Refurbishment of facades of private buildings, outdoor facilities, including leveling and landscaping of outdoor facilities(if integrated in a village renewal plan) Social c) Rehabilitation of public green areas - parks and gardens, children playgrounds and related facilities d) Reconstruction and refurbishment of municipal buildings of local historic and cultural importance and the improvement of the surrounding areas and outdoor facilities, including landscaping e) Reconstruction and refurbishment of buildings of local religious importance and the improvement of the surrounding areas and outdoor facilities, including landscaping f) (Preparation of village renewal plans20, if the plan includes some of the investment activities mentioned above)
20 Preparation of general settlement spatial plans according to the provisions of the national Spatial Planning Law is not eligible for support under this measure.
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Economic NA (i.e. business incubators, R&D sites, technology transfer centers, NA business centers, etc.)
Conclusion and Recommendations See the ones for M321 (M41) above.
5.3.14. M431-2. Sub-measure 2: Acquisition of Skills and Animation for Potential Local Action Groups (2007-2009) Objectives: To support establishment of Local action groups and preparation of local development strategies Rationale: Article 63(c) of Council Regulation (EC) 1698/2005 and Annex VІІІ of the Act of Accession of Bulgaria and Romania (as amended by Council Decision 2006/664/EC). Article 37a and Point 5.3.4.3 of Annex II of Commission Regulation (EC) N°1974/2006 (as amended by Commission Regulation (EC) No 434/2007). The implementation of the Leader Axis in Bulgaria will require the establishment of increased local capacity for preparing and implementing development strategies. It is necessary to expand and develop the local knowledge and skills for formulating and implementing local development strategies, as well as to prepare local experts to be involved with monitoring and evaluating locally supported projects. Target groups of beneficiaries: Municipalities, non-profit making legal entities, or legal entities registered under the Commercial Law and the Cooperatives Act, which are registered and operating on the territory on which the potential LAG will be established and acting on behalf of potential future LAGs. Preferred groups of beneficiaries: NA Programmed budget: EUR 7.2 million Programmed targets: Number of supported potential LAGs under measure 431(2) = 60 Programmed linkage to other measures: All LEADER Approach measures M41, M421, M431, as well as all BGRDP measures, all CR 1698/2005 measures, but also other actions outside BGRDP scope which financing is necessary for the implementation of the local development strategies. The implementation of the projects financed by this measure is supposed to prepare the LAGs for implementing all of the above in pursuit of implementing their local development strategies. Linkage to other relevant support schemes: Not specified. Conclusion and Recommendations Measure is implemented till beginning 2011. Measure was necessary to ensure minimum knowledge and understanding the challenges for the implementation of the LEADER Approach.
5.3.15. M511 Technical assistance Objectives: To provide the resources required for effective management and implementation of the RDP.
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Rationale: Measure support will be used in accordance with Article 66 of Council Regulation (EC) No 1698/2005 for actions related to the preparation, management, monitoring, evaluation, information and control activities of programme assistance only. Target groups of (final) beneficiaries: Monitoring Committee (including Working Groups), Managing Authority, SFA- Paying Agency, National Rural Network (including LEADER LAGs), stakeholders/potential beneficiaries under Preferred groups of beneficiaries: NA Programmed budget: EUR 123.181.289 (including MEUR 18.477.193 for publicity and MEUR 7.0 for the operations of the National Rural Development Network) Programmed targets: Not specified Programmed linkage to other measures: Not specified (In evaluators’ understanding M511 should ensure as a minimum the preparation, the publicity, the monitoring, evaluation and reporting of all BGRDP measures, including the provision/promotion of innovation/best practices via the National Rural Network ) Linkage to other relevant support schemes: Not specified (However, aiding the establishment of management/monitoring information system at MA, M511 will also help the establishment of overall EU-funds information system at the level of the National Strategic Reference Framework) Conclusion and Recommendations The relevance of the measure in meeting the needs for strong administrative capacity have risen after the layoffs in both the MA and SFA-PA in the second half of 2009 and the associated loss of much needed administrative capacity.
5.3.16. M611 National Complements to Direct Payments Objectives: Not specified in measure texts. (Evaluators’ understanding: to contribute to reducing the gap among the average level of Direct Payments in the “old MS” and the newly accepted ones, where the contribution from EAGGF to country’s Direct Payments is 25%, 30%, 35% of the average EU level of Direct Payments in the respective year) Rationale: Not specified in measure texts. Target groups of beneficiaries: Not specified in measure texts. (Evaluators’ understanding: holders of agriculture lands eligible for CAP I Direct Payments.) Preferred groups of beneficiaries: NA Programmed budget: EUR 181.841.021 Programmed targets: Not specified in measure texts. Programmed linkage to other measures: Not specified in measure texts. (Evaluators’ understanding: the measure is strongly linked with CAP I Direct Payments, but also with M211, M212, M214 – area based payments from BGRDP. All of these are payable upon the same hectare of managed lands provided the respective eligibility conditions are respected.) Linkage to other relevant support schemes: Not specified in measure texts. (Evaluators’ understanding: Findings and conclusions Complementary national direct payments (CNDP) shall be financed both by the national budget, and by a transfer from EAFRD for the period 2007-2009 (year 2007 - 25%, year 2008 - 20% and year 2009 - 15% of the respective annual allocation originating from the EAGGF Guarantee Section as referred to in Article 34(2)of the Act of Accession of Bulgaria
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Elaboration of ongoing and mid-term evaluation of the RDP 2007-2010, Bulgaria and Romania21). This is the easiest for implementation BGRDP measure. The M611 payments constitute the most significant part of BGRDP payments effected until end-2009. Because of the SAPS arrangements in BG, the payments will be proportionate to the area under management in the respective year. This puts inequality in the intensity for support for the different cultures, while also depraving from support the animal holdings which do not manage lands eligible for CAP I Direct Payments. As a result more and more producers will re-orientate towards the production of cultures where the intensity of support per hectare is the greatest (currently in the arable crops sub-sectors: grain, technical cultures- rapeseed, etc.) The support under the measure together with the CAP I payments add to the creditworthiness of the particular agriculture producer and opens possibilities for him/her to offer collateral to bank credits, including credits for the bridge capital necessary to participate in the BGRDP investment support measures. However, the banks are not willing to extend credits to holdings not likely to receive at least BGN 5000 (appr. EUR 2500) as direct payments in the particular year. For campaign 2009 this puts 21 ha as the minimum land-size necessary for a holding to able to receive bank credit based on Direct Payments collateral. In conclusion, M611 is also strongly linked to implementing the M121, but also may have positive effects on the creditworthiness of the holdings participating in M112 and M141, provided they manage at least 21 ha of agriculture lands.
5.3.17. Non started BGRDP measures This evaluation does not cover the evaluation of the BG RDP measures: - M111, M122, M123, M142, M311, M312, M313, M41, M431 which were launched by the MA in the 2008- May 2010 period, but did not effect any payments to selected beneficiaries in the said period, and - M114, M124, M125, M126, M213, M224 M341, M421, which are not yet launched, or their launching was programmed for 2011. However, for the purposes of consistency in the evaluation approach, the evaluators do find it worthwhile to comment on the negative effects of not paying or launching particular measures in the said period. This is particularly important especially in view of lost potential synergetic effects from providing simultaneous support to related closely associated needs for supports of connected target beneficiary groups. It is previously in this report demonstrated that: The needs to upgrade the human potential in agriculture and forestry were not met in the evaluated period. The needs for supports in the forestry and in the food-and-wood-processing had been put aside for the 3rd year of programme implementation. This did not only discriminated the economic subsectors, but also brought losses in the vertical integration of the processing chains and in the innovation and modernization of the processing chains. This is because it is the processing enterprises which are closer to the final client of the commodities and it the processing enterprises together with the wholesalers who act as the drivers bringing positive changes and innovations in the food- web. Furthermore, not implementing M124 also reinforces the integration/innovation processes, cumulating losses both to economic performance and economic competitiveness in the general food chains The needs for support the diversification of the rural economy were also neglected and first payments were effected in the last quarter of 2010. Thus M311, M312 and even M313 failed to provide a safety belt for the farmers who wished to cease agriculture activities and/or reorient themselves to non-agriculture activities. Thus, now, when the milk/animal
21 And detailed in Commission Decision 2007/383/EC of 1.6.2007, amending Commission Decision 2006/636/EC fixing the annual breakdown by Member State of EAFRD support for the period 2007-13.
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5.4. Budget foreseen for the entire programming period The distribution of the measures and their budgets per RD Axes is the following: Table 28: Distribution of RD measures and budgets per RD Axes from CR 1698/2005
AXIS Number of measures Public Budgets 2007-2013 % of total BGRDP budget Axis 1 12 1 214 075 316 37,0% Axis 2 7 777 394 110 23,7% Axis 3 6 905 291 684 27,6% Axis 4 4 76 988 306 2,3% M 511 1 123 181 289 3,8% M 611 1 181 841 021 5,5% TOTAL 31 3 278 771 726 100.0%
5.5. Uptake and budget actually spent
Table 29: Evolution in launching the BGRD measures per RD Axes
RD Public Budgets 2007-2013 Number of Open Implemented22 Implemented by AXIS measures 2007-13 measures* measures: 2008-09 10.2010** Axis 1 1 214 075 316 12 8 3 7 Axis 2 777 394 110 7 5 5 5 Axis 3 905 291 684 6 5 2 4 Axis 4 76 988 306 4 1 1 1 M 511 123 181 289 1 1 1 1 M 611 181 841 021 1 1 1 1 TOTAL 3 278 771 726 31 21 13 19
* By end-2009 still not launched are the measures: M114, M124, M125, M126 (Axis I), M213 and M224 (N2000 form Axis 2), M341 (Axis 3), the entire LEADER package horizontally available for all MS (M41, M421, and M431-1). ** In year 2010 there were approved applications for support (and contracts signed) for additional 6 measures: M111, M123, M141, M142, M311, M312. Even though they are technically outside the scope of the strict evaluation activities23, upon the request of the Managing Authority, the evaluation team agreed to look and assess their implementation specificities.
Eight of the Axis 1 measures were launched in 2008 – the earliest possible period after the negotiations with the EC on BGRDP contents was finished in February 2008. Four of the Axis 1 measures were programmed to start at a later stage: M124, 125, 126 in year 2009, and M114 in year 2010. By middle of October 2010 none of them are being launched, and the MA considers giving up the implementation of M126 altogether.
22 Having at the least signed contracts with eligible beneficiaries. 23 Assessing results and impacts of realized/finished activities as supported by the measures.
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Five of the Axis 2 measures are launched and implemented since 2008. The remaining two: M213 and M224 (NATURA 2000 in agriculture and forestry, respectively), are dependent upon the finalization of the NATURA 2000 management plans to be produced by the Ministry of Environment. It was planned that the latter 2 measures shall be launched in year 2009. There are indications that their actual implementation will start in 2011.
Five of the Axis 3 measures were launched in 2008-early 2009. MA considers giving up the implementation of M341 Skills acquisition and animation with a view to preparing and implementing a local development strategy altogether as the needs which the measure is supposed to address, are successfully met by the implementation of M431.2 Running costs, acquisition of skills and animation – potential LAGs (preparation of LEADER LAGs).
Axis 4 measures were supposed to be launched in Bulgaria consecutively: M431.2 prepares the establishment of LAGs on eligible territories in the period 2007-2009. Then from 2009, M41 support to implementing the LAGs local development strategies was to be provided to select LAGs, which meet minimum quality standards in their development strategies and administrative capacity. First contracts under M431.2-potential LAGs were launched in the middle of 2009. The selection of first LAGs and the launch of their M41 strategies is presently foreseen not earlier than the end of 2010. There will be a selection of other LAGs in 2011, and the implementation of their local development strategies will be launched not earlier than the second half of 2011. In 2011 will also start the implementation of M421 Inter-territorial and trans-national cooperation for those LAGs which have already launched the implementation of their local development strategies financed by M41 Implementation of the local development strategies and M431.1 Running costs, acquisition of skills and animation – selected LAGs.
The remaining two BGRDP measures M511 and M611 were launched as programmed. There is unused budget under M611 which the MA plans to reallocate to the budget of M121, where is the greatest share of unmet requests for support of all BGRDP measures.
However, as was established in the OER 2009, not all of the open measures were actually implemented until the end- 2009. Applications were considered/approved (and contracts signed where appropriate) under 13 measures: - 3 of the Axis 1 measures (M112, 121, 143) - 5 of the Axis 2 measures (M211, M212, M214, M223, M226) - 2 of the Axis 3 measures (M321 and M322) - M 431.2 - M 511 - M 611
Already at this stage the non-guaranteed budget of M121 was entirely applied for and there were sufficient number of approved applications sufficient for its full uptake. The same holds true for the budget of M112 – by end-2009 there were submitted more than sufficient applicants to exhaust the entire 2007-2013 budget of M112 available for payments of the first installments of EUR 12500 each. The payments for the remaining open measures, however, were in a much more unfavorable position, which is best indicated at Axis level.
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Table 30: Actual uptake of budgets per RD Axes by end-2009
RD AXIS Implemented measures Paid measures Public Budgets 2007-2013 Paid budgets 2007-09 2008-09 2008-09 % of total 2007-13 Axis 1 3 3 1 214 075 316 8% Axis 2 5 3 777 394 110 4% Axis 3 2 0 905 291 684 0% Axis 4 1 0 76 988 306 0% M 511 1 1 123 181 289 3% M 611 1 1 181 841 021 82% TOTAL 13 8 3 278 771 726 7.5%
Actual payments by end-2009 had been made just to beneficiaries under 8 measures: - 3 of the Axis 1 measures (M112, 121, 143) - 3 of the Axis 2 measures (M211, M212, M214) - M 511 - M 611 Speeding up of the BGRDP implementation was recorded in the period January – September 2010. Six additional measures started contracting compared to the 2008-2009 situation, and 8 additional measures started for the first time payments to approved/contracted beneficiaries. The increase in payments was even more dramatic – from 7.5% of the budget for the entire period (till end 2009) to 17.0% of the same figure (till September 2010). Table 31: Actual uptake of budgets per RD Axes by end-September 2010
RD AXIS Implemented measures Paid measures Public Budgets 2007-2013 Paid budgets % of total 2007-13 Axis 1 7 5 1 214 075 316 18.0% Axis 2 5 5 777 394 110 8.0% Axis 3 4 3 905 291 684 14.0% Axis 4 1 1 76 988 306 0.3% M 511 1 1 123 181 289 6.0% M 611 1 1 181 841 021 82.0%* TOTAL 19** 16*** 3 278 771 726 17.0%
* Some MEUR 27 million have not been spent together with the CAP I Direct payments. It is planned to reallocate these funds to productive investments under M121. ** M122 is the only measure of the eight Axis 1 measures open in 2008 which has not yet contracts by end September 2010. However, the interest towards the support is very low – only 2 (two!) applications for support have been submitted for the entire 2008- 2010 period. Applicants for M313 support from the six Axis 3 measures open in 2008 also wait for their first contracts. *** By end-September 2010, waiting for first measure support payments are beneficiaries with contracts under M111, M142, M311. Some of them have submitted their applications for support in year 2008.
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Table 32: Recapitulation: Detailed evolution in launching and paying the BGRD measures April 2008- October 2010
OPEN MEASURES PAID MEASURES
M111, M112, M121, M122, M123, M112, M143 M141, M142, M143 … M211, M212, M214, M223, M226 M211, M212 Measures open for the first time in M311, M313, M321, M322 … Measures paid in 2008 2008 M431-2 … M511 M511 M611 M611
Measures open for the first time in M121 Measures first time paid in M312 2009 M214 2009*
M141 Measures open for the first time Jan- Measures first time paid Jan M41, M 431-1 M321, M322 Sept 2010 – May 2010* M431-2
M123 Measures first time paid M223, M226 June – September 2010** None M312 M111, M142 Measures open but not yet M41, M431-1 paid for the first time***
M114, M124, M125, M126 Programmed measures not yet M213, M224 None open for the first time**** M341 M421
* Payments have been delayed by one year ** Payments have been delayed by more than 1 year *** Payments to applications are not paid, now for more than 1.5 years **** Launching the measures has been delayed by at least with 1 year according to the initial plan as also set in the fifth notification for BGRDP modifications.
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6 Midterm Evaluation, including Answers to Evaluation Questions
6.1. Update of the current situation
6.1.0. Definition of the Rural Area The Republic of Bulgaria is situated in the South East part of Europe and it has a total territory of 111,000 km2. Bulgaria is divided into 6 planning regions (NUTS 2), 28 administrative regions (NUTS 3) and 264 municipalities (LAU 1). The national definition of rural areas defines rural areas as municipalities (LAU1), in which population density is up to 150 inhabitants per km2 and no settlement has a population over 30,000 people. According to this definition, 80% of the territory in Bulgaria is classified as rural, where 41% of the population is living. The population density in the rural areas is half of the national average (35.2 vs. 67.8 inhabitants per km2, respectively). The definition of rural areas scopes the territories for implementation of BGRDP measures in Axis 3 – Quality of Life and Axis 4 – LEADER Approach. It is also the main basis for demarcation of EAFRD implementation with the implementation of OP Regional Development (financed by the European fund for regional development - ERDF). Closer look into the coverage of the designated rural areas reveals that this definition is unfair to some municipal territories where the way of living is primarily based on agriculture, forestry and fishery except for the central town, which offers some advanced public services and jobs outside the primary sectors (i.e. the municipality of Gorna Oryahovitsa). Other municipalities, on the other hand, even though designated as rural do not have their local economies/employment depending so much on the primary sectors but on mining (i.e. Chelopech, Pirdop), host metal processing plants (i.e. Kuklen) or are bordering large towns (i.e. Maritsa and Rhodoppi municipalities surrounding the town of Plovdiv).
6.1.1. Population and labor force dynamics The population of the country at the end of 2008 is 7.607 million people and at the end of 2009 it is 7.564 million people. Due to the negative natural population increase and negative net international migration, the population decreased by almost 43 thousand persons or by 0.6% in comparison with the previous year. Women continue to predominate in the total number of the population (51.6%). The population in the rural areas has declined by over 1 million people in the period 1972 – 2004 and after that up to the year 2008 by over 180,000. The major contributor to the population decline in rural areas is the negative natural growth and migration from rural to urban areas and outside the country. Regarding the age structure, the process of population ageing continues all over the country. The relative share of the population under 15 years of age in 2009 is significantly low (13.6%), whereas that of the population over 65 years is constantly increasing and is now 17.5%.
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Table 33: Population by age, Bulgaria, 2009
Total for Bulgaria Total Men Women 7563710 3659311 3904399 Population Below Working Age <15 1026200 527133 499067 in % from total 13,57 14,41 12,78 Population at Working Age >15<65 5211619 2593083 2618536 in % from total 68,90 70,86 67,07 Population Above Working Age >65 1325891 539095 786796 in % from total 17,53 14,73 20,15 Source: NSI, Population 2009
Figure 4: Structure of the workforce by age in 2009
Source: NSI
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Table 34. Labor force, activity rate and employment rate in select years 2004-2009
2004 2007 2009 Category Total Male Female Total Male Female Total Male Female N’000 % N’000 % N’000 % N’000 % N’000 % N’000 % N’000 % N’000 % N’000 % Labor force above 15 y.o. and 3322,0 49,7 1772,2 55,3 1549,8 44,6 3492,8 52,6 1852,2 58,2 1640,6 47,5 3491,6 53,0 1862,4 59,0 1629,2 47,5 activity rate Employed above 15 y.o. and 2922,2 43,7 1550,7 48,4 1371,5 39,5 3252,6 49,0 1731,5 54,9 1521,1 44,4 3253,6 49,4 1732,3 54,9 1521,3 44,4 employment rate Unemployed above 15 y.o. 399,8 12,0 221,6 12,5 178,2 11,5 240,2 6,9 120,7 6,5 119,5 7,3 238,0 6,8 130,1 7,0 107,9 6,6 and unemployment rate Labor force 15-64 y.o. and 3275,8 61,7 1741,3 66,4 1534,5 57,2 3447,9 66,3 1820,3 70,6 1627,6 62,1 3441,5 67,2 1828,0 72,0 1613,5 62,5 activity rate Employed 15-64 y.o. and 2876,4 54,2 1520,0 58,0 1356,5 50,6 3208,8 61,7 1700,5 66,0 1508,2 57,6 3204,8 62,6 1698,7 66,9 1506,1 58,3 employment rate Unemployed 15-64 y.o. and 399,4 12,2 221,3 12,7 178,0 11,6 239,1 6,9 119,8 6,6 119,3 7,3 236,7 6,9 129,3 7,1 107,4 6,7 unemployment rate Source: NSI
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The table demonstrates that both the labor force and the activity rate for the population above 15 years of age generally increased in the period 2004-2009. The employment rates also increased for both men and women in the last year before the economic crisis, which made its first negative impacts in Bulgaria in the last quarter of year 2009. In 2009 the tendency of increase of the economic activity rate of the population observed in the period 2003 - 2008 was disrupted. The economic activity rate in the age group 15 - 64 years (67.2%) is by 0.6 percentage points lower in 2009 than in 2008. The male activity rate continues to be significantly higher than the female, respectively 72.0% for the men and 62.5% for the women. In 2009 a decrease of the employment in the country was observed. The number of employed persons aged 15 - 64 years decreased in comparison with the previous year 2008, by 3.1%. The employment rate for the same age group was decreasing by 0.9 percentage points, and reached 62.6%. However, in comparison with 2003/2004 the employment rate was higher by 10.1 percentage points. For the first time since 2003, in year 2009 was registered an increase of the number of unemployed persons, respectively in the unemployment rate: in 2009 the number of unemployed persons was 238.0 thousand or by 19.2% more than in the previous year 2008.
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Figure 5: Employment coefficients of 15-64 by Figure 6: Unemployment coefficients by gender Figure 7:Employment coefficients by age gender % % 16 90 % 80 80 14 Общо 2008 70 70 Мъже 2009 60 12 60 Жени 50 50 10 40 40 8 30 30 20 20 6 10 10 4 0 0 2003 2004 2005 2006 2007 2008 2009 15 - 24 25 - 34 35 - 44 45 - 54 55 - 64 65 и повече 2003 2004 2005 2006 2007 2008 2009 Мъже Жени Общо
Source of graphs: NSI.
The high unemployment rate of young people is an additional problem that leads to the out migration of the young labour force from rural areas to urban centres and abroad.
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The employment status was strongly influenced by the educational attainment of the population. According to the NSI more than half of unemployed (54.6 %) were with low education, whereas the shares of unemployed with secondary and tertiary education were 35.7 % and 7.9 % respectively.
Table 35 : Distribution of population by educational attainment and by employment status 2009
Primary and lower Total Secondary education Tertiary education education Number Number % Number % Number % By labour Employed 2 929 552 427 684 14,6 1 645 442 56,2 822 286 28,1 status Unemployed 604 843 330 488 54,6 215 782 35,7 48 075 7,9 Inactive 760 635 281 093 37,0 367 040 48,3 101 105 13,3 Source: NSI
The educational level of the workforce is rising and it is changing the structure of the educational attainment of the employed.
Figure 8: Structure of the employed by educational attainment
2003 2009 14.3% 18.2% 27.6% 25.8%
58.0% 56.0% Висше Средно Основно и по-ниско
Source of graphs: NSI.
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Figure 9:Persons 15-64 y.o., not in the workforce, distributed by gender and reasons for being economically inactive in 2009 (‘000)
Хиляди 1800 Обезкуражени Legend from top-down: 1600 Discouraged (do not believe will find work) 1400 Посещават учебно 1200 заведение In education process 1000 Недобро здравословно Not physically fit for employment 800 състояние Personal reasons or family obligations 600 Лични причини или 400 семейни задължения Others 200 Други 0 Общо Мъже Жени
Source of graph: NSI. Regarding the professional specialization in Bulgaria, each second person of the population with secondary education has a technical qualification or profession acquired and 27.6% have completed general secondary education, without qualification. Amongst the rest, more considerable are shares of population educated in the field of humanities and business sciences - 7.5% and agricultural sciences - 5.9%. The educational and qualification structure of population is relatively diverse. High shares of people with tertiary education in the field of social, business and law sciences is registered - 26.6%, as well as in techniques - 22.8%, teachers and education sciences - 17.2% and specialists in the field of health and social services - 13.9%. In 2009 the average annual wages and salaries as a total for the country reach EUR 3,627 (BGN 7,094 and the nominal increase is by 1.8 times in comparison with 2005). In the different sectors in economy the average wages are different as well as their changes. The highest increase of the average wages and salaries in 2009 is registered in the economic activity groupings “Administrative and support service activities” - 2.2 times, “Real estate activities” 2.1 times, “Construction”, “Public administration” and “Electricity, gas, steam and air conditioning supply” - 2.0 times. The agricultural sector is one of the lowest paid, and the annual salary is 30% lower than the average in the country (see table below).
Table 36: Average Annual Wages and Salaries of the Employees under Labour Contract by Economic Activity Groups
in EUR Economic activity groups 2003 2006 2007 2008 2009 Total 1 677,0 2 210,8 2 641,8 3342,8 3627,1 Agriculture, hunting, forestry and fishing 1 239,4 1 557,4 1 855,5 2413,8 2743,1 Mining and quarrying 2 764,6 3 618,9 4 352,1 5191,1 5704,5 Manufacturing 1 500,6 1 965,4 2 350,4 * * Electricity, gas and water supply 3 137,8 3 974,8 4 567,4 * * Construction 1 425,5 1 828,9 2 172,5 2828,0 3341,3
Trade, repair of motor vehicles and personal and 2741,5 2851,5 household goods 1 233,7 1 760,9 2 139,8
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in EUR Economic activity groups 2003 2006 2007 2008 2009 Hotels and restaurants 996,0 1 364,1 1 641,2 2026,2 2318,7 Transport, storage and communication 2 100,4 2 717,0 3 266,1 3734,5 4056,1 Financial intermediation 3 838,8 5 026,5 5 853,3 7455,7 7902,5 Real estate, renting and business activities 1 526,2 2 383,6 3 070,3 * * Public administration; compulsory social security 2 649,5 3 255,9 3 905,8 4668,1 4893,1 Education 1 823,8 2 323,3 2 656,7 3559,6 4020,3 Health and social work 1 823,8 2 396,4 2 824,9 * *
Other community, social and personal service * * activities 1 188,2 1 702,6 2 127,5 Source: NSI 2003-2007 *NSI data for 20008 and 2009 is further differentiated in the 2010 Book of facts, and is no longer comparable with the previous estimates.
The labor price per hour in year 2007 is also the lowest and in the agriculture (excluding hotels and restaurants where salaries are lower but incomes per employee higher-tips), and it is 1.11 EUR per hour (the average is 1.69 EUR/hour). The yearly comparison of the agricultural sector shows an increasing trend of salaries in last few years. According to the statistical data the following conclusions could be made: the agricultural sector is on the last place by salaries in Bulgaria, and the wages are increasing between 6% (2003/2004) and 11% (2006/2007), but at a much slower pace compared to other sectors. This explains why the rural areas still have problems in retaining the young population. The age structure of the rural population is less favorable than the overall one at country level due to the comparatively low share of population at working age (see table below).
Table 37: Population in RURAL areas per sex and working groups, 2008
Total Under working age At working age Above working age Total Мales Females Total Males Females Total Males Females Total Males Females 3062536 1500337 1562199 454465 233216 221249 1808658 965923 842735 799413 301198 498215 In % of the total 14,84 15,54 14,16 59,06 64,38 53,95 26,10 20,08 31,89 Source: NSI, own calculation
The share of the population above working age was 27 % in rural areas (in 2004) and in 2008 it is 26.1 %. This is a relatively low decrease when compared to the decrease in total population. In 2004, the share of women in the rural population was 51 % and it remains the same in 2008. In 2004, in the group of working age population the share of females was 46 %. In 2008 this percentage was 46.6 %. The employment and unemployment in rural areas follow the same tendency as in the country in general. Moreover the declining trend of the number of employed in agriculture at the benefit of the employed in industry and service sectors was observed in the past years. A significant problem in rural municipalities is the high level of long-term unemployment, which is still explained by the lack of employment opportunities in rural areas and the deteriorating employability of the labour force.
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Figure 10: Unemployed persons by period of unemployment (‘000)
Хиляди 500 По-малко от една 450 година 400 Една година и 350 повече 300 250 200 150 100 50 0 2003 2004 2005 2006 2007 2008 2009
Source of graph: NSI.
The long-term unemployment coefficient is 3.0% - respectively 2.9% for men and 3.1% for women. Another major reason of the higher unemployment in rural areas is the related educational status of the population. Place of residence influence strongly the level of education as it can be seen from table below.
Table 38: Distribution of population per education degree and residence
Primary and lower Secondary Total Tertiary education education education Number Number % Number % Number % Urban 3 172 067 530 952 16.7 1 720 576 54.2 893 236 28.2 By residence Rural 1 122 962 508 314 45.3 507 688 45.2 78 229 7.0 Source: NSI Just 7.0% of rural population has completed tertiary education, 45.2% of people are with secondary and 45.3% has lower than secondary education. In comparison the share of urban population with tertiary education is over 4 times higher (28.2%) and persons with education lower than secondary is 16.7%.
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6.1.2. Economy trends
Table 39: Major macroeconomic parameters over the period 2002 – 2009
Parameters 2002 2004 2006 2007 2008 2009 Gross value added – MEUR 15062,1 17323,1 22202,3 25858,6 29518,4 30096,7 GVA - Change in physical volume na24 na na 106.38 106.29 97.30 Contribution of agriculture, forestry, fishery to the GVA- 1783,9 1858,5 1707,2 1547,7 2040,1 1693,9 MEUR (%) 11,8% 10,7% 7,7% 6,0% 6,9% 5,6% Change in physical volume na na na 72.7 129.63 96.47 Gross Domestic Product (GDP) – current prices in MEUR 16969,3 20361,7 26476,2 30772,1 35430,0 35042,4 Growth of GDP (compared to the preceding year) na na na 106.2 106.0 95.0 Foreign Trade – Exports- FOB – MEUR 6062,8 7984,9 12011,9 13511,9 15203,8 11699,3 Contribution of agriculture, forestry, fishery to exports - 12,6% 10,70% 8,80% 8.87% 12.68% 17.19% (%)25 Foreign Trade – Imports- CIF– MEUR 8411,2 11619,5 18479,3 21861,3 25093,5 16875,7 Contribution of agriculture, forestry, fishery to imports - (%) 6,0% 5,60% 4,85% 5,94% 7,10% 10,25% Inflation rates: - average during the period 5,8% 6,1% 7,3% 8,40% 7,8% 0,6% Unemployment rates – average annual level ** 17,71% 12,67% 9,61% 7,75% 6,31% 7,59%* Registered unemployed – total number ** 665998 469 223 356 054 286980 233719 280980 Annual average salary of employed people – in EUR 1580,4 1794,1 2210,8 2641.8 3342,8 3627,1 - in agriculture, forestry and hunting – in EUR 1179,6 1327,3 1560,0 1855.5*** 2413,8*** 2743,1*** - in fishing – in EUR 702,5 906,0 1201,0 *** *** *** Source: NSI, unless stated otherwise * In the last quarter of 2009 the unemployment rate was 7,9% and in the second quarter of year 2010 – already 8.92% unemployment rate according to the Employment Agency. ** Source of data is the Annual Report 2009 of the Employment Agency *** No separate data is available; the 2008 and 2009 figures are cumulative for both sectors: agriculture&forestry and fishing
24 Na=not applicable 25 Data for contribution of agriculture, forestry and fishery to the international trade comes from the MAF Annual reports.
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Figure 11: Indexes of the physical volume of GDP per employed and per man/hour (previous year = 100)
Source of graph: NSI.
The produced Gross Value Added (GVA) of the economic activities in the country in 2009 amounted to EUR 30,097 million at current prices, decreasing by 2,7% in real terms compared to the Gross Value Added (GVA) created in 2008 attributable to various sectors as follows: - To the industrial sector: – 8.1%, whereas industry created 30.3% of the Gross Value Added (GVA) in economy; - To the services sector: – 1.7%, whereas its share in the total Gross Value Added (GVA) is 63.6%; - To the agricultural sector: – 3.3%, whereas its share in the Gross Value Added (GVA) is 6.1%. According to the preliminary data from NSI, the agricultural sector has formed GVA amounted to EUR 600 million for the first half of 2010. The index of GVA volume in the sector is 100.6% compared to the same period of 2009. The relative share of agriculture sector in the total GVA and GDP is respectively 4.5% and 3.9%.
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Figure 12: Structure of the GVA per main economic sectors
% 70
60
Индустрия 50 Селско и горско стопанство
40 Услуги
30
20
10
0 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009
Source of graph: NSI.
The balance of the foreign trade (exports FOB – imports CIF) was negative in all of the months in 2009, reaching 4.96 billion euro cumulative.
Figure 13: External trade balance (BGN million)
Млн. левове 0 -200 -400
-600 -800 -1000 -1200 -1400 2008 -1600 2009 -1800 -2000 I II III IV V VI VII VIII IX X XI XII
Source of graph: NSI.
BG agriculture has a positive but not very significant net contribution to the net balance in the external trade. It seems that there is a potential for improving this contribution by increasing the production of animal output and of fruit and vegetables.
Thus there will also be quality raw materials for the processing enterprises other than the ones in the milling, baking, pastry industries.
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Figure 14:Structure of the External trade
Source of graphs: NSI. Legend from top-down for both exports (left) and imports (right) from international trade in 2009 Food and live animals Alcoholic and non-alcoholic beverages and tobacco Non processed raw materials non-edible (excluding fuels) Mineral fuels , oils and other similar products Fats, oils and waxes of plant and animal origin Chemicals and chemical products Items, classified by the type of the material Machinery, equipment and transportation vehicles Various readymade products, etc. Goods and deals not listed elsewhere
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Figure 15:Structure of the investments per main economic sector in the 2005-2009 period
% 70
60
50
40
30
20
10
0 2005 2006 2007 2008 2009 Индустрия Услуги Аграрен сектор
Source of graph: NSI. Legend: Left to right: Industry, Services, Agriculture
The largest share of the investments in 2009 was made by the economic activities “Mining and quarrying, processing and other industry, water supply and restoration” – 29.7% of total. Next in investment share were “Trade, auto repair, transport, storage and postal services, hotels and restaurants” – at 22.1%. Third were “Real estate services” at 10.4%. Agriculture, forestry, hunting and fishery had much lower investment activity and reduced share of investment compared to the previous 2008 (app 2.5%). Figure 16: Structure of the investments per economic activity
Селско, ловно, горско и рибно стопанство
Добивна, преработваща и друга промишленост; доставяне на води; канализационни услуги, управление на отпадъци и възстановяване
Строителство
Търговия; ремонт на автомобили и мотоциклети; транспорт, складиране и пощи; хотелиерство и ресторантьорство
Създаване и разпространение на информация и творчески продукти; далекосъобщения
Финансови и застрахователни дейности
Операции с недвижими имоти
Професионални дейности и научни изследвания; административни и спомагателни дейности
Държавно управление; образование; хуманно здравеопазване и социална дейност 2009 Други услуги 2008
0 5 10 15 20 25 30 35 %
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Source of graph: NSI. In 2009 the structure of the investments changed as the share of the investments in buildings rose by 8.8% points to 52.6% in comparison to 2008; the investments in machinery and equipment also increased by 1.5% to reach 40.3% of all investment groups. In 2009 the labor productivity dropped for all economic sectors. This was due to the unfolding economic crisis in the last quarter of 2009 when the consumption/demand and business orders for goods dropped and the use of the production factors in the business entities dropped accordingly.
Figure 17: Changes in the labor productivity and the real work salary per economic sectors 2008/2007
% 12 10.5 10 9.2 8 5.5 6 4 3.0
2 0.5 -1.0 0 -2 -4 Производителност на труда -3.9 -6 Реална работна заплата -8 -6.8 Аграрен сектор Индустрия Услуги Общо национална икономика
Source of graph: NSI.
6.1.3. Trends in Agriculture
Table 40 . Main economic indicators for agriculture 2007-2009, MEUR
Changes Changes 2007 2008 2009 2008/2007 2009/2008 Value of the crop and animal 1 production (in producer prices), 2911,7 1,35 3923,0 0,82 3199,4 including: Crop production 1613,1 1,53 2472,4 0,80 1971,1
Animal production 1298,6 1,10 1450,6 0 85 1228,2
2 Agricultural services 225,3 1,26 283,3 0,98 276,9
3 Secondary activities 277,2 1,25 346,0 1,20 415,1 Gross value in sector “Agriculture” (in 4 3414,3 1,33 4552,3 0,85 3891,3 producer prices) (4=1.1+1.2+2+3)
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Changes Changes 2007 2008 2009 2008/2007 2009/2008 Gross output in sector “Agriculture” 5 3314,9 1,4 4494,0 0,8 3803,0 (at basic prices) 6 Intermediate consumption 2087,7 1,25 2608,3 0,89 2330,3
7 Gross value added (at basic prices) 1227,2 1,54 1885,7 0,78 1472,8
8 Operating surplus / Mixed income 1201,5 1,60 1947,1 0,80 1592,9
9 Entrepreneurial income 1079,5 1,60 1771,1 0,80 1372,5 Source: MAF
In 2009 the share of agricultural sub-sectors in the structure of the gross output is as follows: - Plant production – 51.1 % (MEUR1971); - Livestock production – 30.7 % (MEUR 1228,2); - Agricultural Services - 7.3 % (MEUR 276,9); - Secondary (non-agricultural) activities - 10.9 % (415,1)..
The biggest share from the gross output in 2009 have the following subsectors of crop production: - Cereals – MEUR 698,2 (18% of the gross output in agricultural sector); - Industrial crops – MEUR 479,0 (12.3% of the gross output in agricultural sector); - Vegetables – MEUR 215,4 (5,5% of gross output in agricultural sector).
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Table 41 . Economic accounts in agriculture – plant and animal output per year in MEUR
2007 2008 2009 2007 2008 2009 Cereals 446, 1025,4 675,6 28,5% 41,2% 33,6% Animals 636,9 51,1% 673,6 49,0% 611,6 54,1% Wheat (325,2) 20,8% (661,5) 26,6% (388,1) 19,3% 9, % 8,3% 8,6% Cattle (118,3) (114,8) (97,0) Barley (57,5) 3,7% (111,6) 4,5% (101,5) 5,0% 13,0% 12,4% 14,3% Maize for grain (40,4) 2,6% (210,5) 8,5% (155,9 7,7% Pigs (162,0) (170,7) (162,1)
Technical cultures 314,7 20,1% 588,2 23,6% 5 1,2 26,4% Sheep and goats 12,7% 11,1% 12,5% (157,9) (152,7) (141,3) Oilbearing seeds (174,6) 11,2% (431,3) 17,3% (343,1) 17,0% 14,2% 15,2% 16,7% Poultry (177,6) (209,6) (189,2) Rapeseeds (20,9) 1,3% (70,0) 2,8% (68,4) 3,4% 48,9% 51,0% 46,0% Sunflower (146,6) 9,4% (350,4) 14,1% (265,1) 13,2% Animal products 609,6 701,6 519,9
Tobacco (98,5) 6,3% (127,0) 5,1% (147,7) 7,3% Milk 39,1% 40,3% 34,7% (487,6) (554,9) (392,3) Forage 90,9 5,8% 87,0 3 5% 292,4 14,5% Eggs 8,8% 8,4% 9,7% Vegetables 436,4 27,9% 540,6 21,7% 242,9 12,1% (109,8) (115,1) (109,2) Fresh vegetables (394,1) 25,2% (430,6) 17,3% (225,8) 11,2% Animal output 1246,5 100,0% 1375,2 100,0% 1131,5 100,0% Tomatoes (82,6) 5,3% (97,3) 3,9% (32,5) 1,6% Other fresh vegetables (311,5) 19,9% (333,3) 13,4% (193,3) 9,6% Flowers and nurseries (42, ) 2,7% (110,0) 4,4% (17,1) 0,8% Potatoes 51,3 3,3% 79,5 3,2% 104,0 5,2% Fruits 215,6 13,8% 162,4 6,5% 158,4 7,9% Fresh fruits (91,9) 5,9% (63,1) 2,5% (66,8) 3,3% Other fresh fruits26 (48,2) 3,1% (43,0) 1,7% (48,5) 2,4% Grape-total (123,7) 7,9% (9 ,3) 4,0% (91,6) 4,6 Other grape (99,3) 6,3% (93,3) 3,7% (85,8) 4,3% Plant output* 1565,8 100,0% 2489,4 100,0% 2012,5 100,0%
* The figures are the totals as in the NSI publication for agriculture output. The figures do not add to the total as only select important products are included.
26 I.e. other than apples which has been omitted as a sub-item to fresh fruits here in this table. MIDTERM EVALUATION OF THE RURAL DEVELOPMENT PROGRAMME OF BULGARIA 125
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Table 42 . Economic accounts in agriculture – leading agriculture import/export products in MEUR Products-exports Quantity, Value, Share of Products-imports Quantity, Value, Share of exports, imports, tons EUR* tons EUR* % %
Sunflower seeds 911415 208098185,6 10,3 Pig meat 86152,8 149759961,4 8,7
Wheat (incl. mixed with rye) 1517746,1 184432515,5 9,2 Sugar, in solid state 226820,2 100169932,5 5,8
Raw/unprocessed tobacco 44631,6 180983630,7 9,0 Raw/unprocessed tobacco 24348,7 84599563,3 4,9
Bread, biscuits, pastry 53169,6 111028478,3 5,5 Poultry meat (tariff № 0105) 67717,2 64902308,1 3,8 Poultry meat (tariff № 0105) 86630253,7 Cigars, cigarillos, cigarettes from tobacco or 29019,2 4,3 56745634,8 tobacco substitute 7230,9 3,3 Maize for grain 572002,6 72837434,4 3,6 Coffee and coffee substitutes (containing 55727755,9 Rapeseeds 240738 69159069,2 3,4 coffee) 26024,4 3,2
Cigarettes from tobacco 66854682,8 8184,8 3,3 Tomatoes fresh or cooled 80021,8 55026026,3 3,2 Sunflower, saffron, cotton oil, not modified 55031799,8 Foodstuff not listed elsewhere 18767,5 53276638,9 3,1 chemically 88208 2,7 Ethanol <80 % vol, rakijas, liqueurs and other 46460045,8 Cheeses and curds 20451 3 50910964,9 2,5 spirit beverages 11080 2,7
Wines, including with added alcohol, grape Chocolate and other foodstuffs containing 49717926,8 45727482,6 must (different form tariff № 2009) 54230,4 2,5 cocoa 14847,3 2,7
Barley 416055,7 44984020,0 2,2 Bread, biscuits, pastry inclusing ones containing cocoa, other dough preparations, 38178998,5 Sugar, in solid state 42329919,2 20372,1 2,2 81740,4 2,1 starch, farina, similar
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Fruit and other edible plant parts p ocessed or Soya oilcakes and other solid residual canned with/without sugar or sweeteners or 35993069,5 19930, 5 38010533,9 1,9 (including in the form of granules), resulting 112750,7 2,1 alcohol, not listed elsewhere from oil extraction Milk and cream, concentrated or with added Preparations used for animal feeding 33519724,6 35673745,1 15117,9 1,7 sugar or other sweeteners 29861,3 2,1
Fruit and other edible plant parts processed or canned with/without sugar or sweeteners or 28843 33678429,5 2,0 alcohol, not listed elsewhere
Preparations used for animal feeding 35053,4 32802752,9 1,9
Source: MAF, Annual Report 2010. * The original tables in the Agrarian Report have USD values. Too convert them into EUR the exchange rate USD/EUR = 0.719 was used (see also: http://www.oanda.com/currency/average )
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The total territory of Bulgaria is 11.1 million ha. Figure 18: Use of BG territory27
Source of graph: NSI.
Legend top-down (in km2): Total Agriculture areas Forestry areas Settlements and other urbanized territories Water courses and bodies Territories for quarrying and mining Territories for infrastructure (including transport infrastructure)
In 2007, 73% of the total agricultural land was private, 22 % was municipal and 5% was state owned. There is a significant fragmentation of land ownership in Bulgaria, which was created by the land restitution. The average size of the agricultural plots is 0.6 ha. The size of the plots varies by region, depending on the natural conditions and the crop structure - from 0.3 ha in Smoljan NUTS 3 region to 3.0 ha in Dobrich region28. The fragmentation of land ownership is a significant barrier to long-term investments in agriculture, land improvements and efficient use of agricultural machinery and there is a clear need for land consolidation actions. In 2009 the arable area was 3,122516 million ha (62.1 % of UAA), and about 70 % of it was concentrated in three NUTS 2 regions - North-East, North-Central and South-Central region. Fallow land was 0.4 million ha or 13.4% of the arable land. Permanent pasture and meadows accounted for 1.719028 million ha (33.8% of the UAA) and permanent crops 0.164 536 million ha (4.0% of the UAA). In the last five years a tendency of decrease of Utilized Agricultural Area (UAA) is observed. Generally, a certain extent of reduction of the relative share of the used agricultural area compared to the total area of the country is observed. In 2009 the biggest share among the cereals is areas under wheat and it represents 40.2% of the arable land in the country. In 2009 also it is observed an increase of areas under wheat with 12.5%, compared to 2008. Wheat occupies 66.8% of cereals and 24.9% of UAA in the country (see table below). In 2009 the area under barley increased by 18.7%,
27 Source of graph: NSI Statistical Book of facts, 2010 28 Source: MAF, Land Ownership Directorate
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PLANTED CROPS 2006 2007 2008 2009 Wheat 979 925 1 120 510 1 114 427 1 254 151 Barley 192 539 193 840 223 004 264 689 Rye and triticale 17 285 12 030 15 296 17 034 Oats 20 707 25 412 40 230 28 894 Maize 386 772 408 880 348 402 303 881 Rice 5 082 6 454 5 042 6 521 Other cereals 6 779 5 224 8 175 3 288 Sugar beat 101 994 Industrial textile crops 811 501 199 102 Sunflower 785 064 686 692 723 962 687 209 Tobacco 27 932 31 144 26 742 27 865 Industrial oil-bearing crops 22 012 59 389 102 899 115 013 Other industrial crops 35 325 39 954 48 824 60 629 Potatoes 23 825 21 890 21 648 14 068 Beans, peas, broad beans 4 379 5 401 5 868 3 803 Lentils, chick peas and other leguminous 2 237 1 291 3 857 5 754 Vegetables 39 899 41 088 30 001 28 715 Nurseries 3 810 3 621 3 314 2 806 Arable fodder crops, Other annual fodder crops 4 885 6 108 7 352 6 349 Lawn of leguminous crops 91 162 92 213 99 362 94 226 Lawn of cereal crops 2 492 3 353 2 468 1 183 Fallow land 436 508 291 751 229 471 196 336 CULTIVATED LAND: 3 089 531 3 057 740 3 060 543 3 122 516 Family gardens 40 388 25 790 25 763 21 411 Orchards 71 084 75 035 69 893 71 995 Vineyards – pure crops 100 564 103 949 100 873 84 438 Mixed perennials 10 182 9 541 12 759 8 103 Permanent grasslands and lawns-orchards 1 876 392 1 842 141 1 828 865 1 719 028 Greenhouses, shelters and high sheds 1 912 2 024 2 129 2 094 UTILISED AGRICULTURAL AREA: 5 190 053 5 116 220 5 100 825 5 029 585 Source: NSI, MAF
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Figure 19: Structure of the used agriculture territory
Source of graph: NSI.
Legend top-down (in %): Wheat Potatoes Vineyards (not mixed with other cultures) Barley Fresh vegetables Permanent grasslands Maize for grain Fallow lands Others Sunflower Orchards
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Table 44: Trends in the Plant Production/Processing Sector
Economic activity Indicator Measurement unit 2006 2007 2008 2009 Planting Harvested areas of fruit Ha 25 978 28 361 21 978 24 269 Harvested areas of vegetables Ha 699 639 544 360 532 012 466 506 Harvested areas of cereals Ha 1 609 089 1 772 350 1 718 016 1 850 377 Harvest Produce Fruit Tonnes 116 010 104 559 90 746 106 173 Produce Vegetables Tonnes 1 182 865 803 533 874 354 734 951 Produce cereals Tonnes 5 524 880 3 197 570 6 973 139 6 194 985 Output/Sales Total Agriculture Plant Output At farm-gate prices, MEUR - 1 613 2 472 1971 Agriculture Output – Fruit At farm-gate prices, MEUR - 212 160 192 Agriculture Output – Vegetables At farm-gate prices, MEUR - 453 531 211 Agriculture Output – Potatoes At farm-gate prices, MEUR - 74 78 108 Agriculture Output – Cereals At farm-gate prices, MEUR - 485 1050 700 Trade Net exports – fruit and vegetables MEUR - - 50 080 946 - 79 055 858 - 95 449 145 Net exports- cereals MEUR - 80 083 182 425 671 518 379 933 121 Processing Processing Fruits GVA-MEUR - 9.2 20.4 37.6 Processing Vegetables GVA-MEUR - 23.4 26.5 48.9 Processing Cereals GVA-MEUR - 83.8 129.0 116.5 Source: MAF
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The total production of cereals declined by around 11.0% in 2009 compared to 2008 mainly as a result of lower yields. Production increases in rice and rye production. In 2009 the vegetable production is on 47.5 thousand ha. The share of area under greenhouses is 2.0%. The total amount of vegetable production is 735 thousand tons. The greatest share is for potatoes - 232 thousand tons, tomatoes – 104 thousand tons and watermelons - 89 thousand tons. In 2009 vegetable production is 15.9 % less than this in 2008. The most significant increase in 2009 is in the eggplant production (135.6%) and melons production (59.2%) compared to 2008. The growth is due to the increase in harvested areas and in average yield. In 2009 fruit production was 106,173 thousand tons, which is 17% increase compared to 2008. The main reason for the increase is increase in harvested area. The biggest share is for which are over 33% of the total fruit production. Also according to the data from table above the conclusions on vineyards and orchards are as follows:
- vineyards in 2009 occupy 84,438ha which is a decrease of 16.3% compared to 2008. The vineyards share in the UAA in the country is 1,7%. - orchards occupy 1.4% of UAA in the country. The reduction of areas under orchards 2009 compared to 2008 is 2.0%. The decrease of the mixed orchards compared to 2008 is 36.5%. In 2009, the most important sub-sectors of livestock for the gross output in agricultural sector are: - Milk production - 818.0 million BGN (10.7% of the gross output in agricultural sector); - Poultry - 399.4 million BGN (5.2% of the gross output in agricultural sector); - Pig - 360.22 million BGN (4.7% of the gross output in agricultural sector). The pig production is the only sub-sector of animal breeding which has grown in the last two years.
Compared to the previous year in 2009 there is a decline in the number of all kind of animals. The reduction of cattle is - 4,5%, buffaloes -9.9%, sheep -5.1%, goats -16.1%, and pigs -6.9%. The most insignificant decline is in poultry sector - 0.8%.
Table 45: Number of animals
Animals 2005 2006 2007 01.11. 08 01.11. 09 01.11. 10 Cattle, total 621 797 628 271 602 056 564 904 539 555 540 000 Buffaloes, total 8 198 8 247 8 968 9 222 8 311 8 400 Sheep, total 1 602 255 1 635 410 1526392 1 474 845 1 400 252 1 400 000 Goats, total 608426 549076 495484 429 834 360 822 361 000 Pigs, total 942992 1012655 888609 783 649 729 798 730 000 Poultry, total 19514929 20156227 18697687 17 549 000 17 400 000 17 500 000 Horses, donkeys, etc. - - - 175 091* 170 459* 170 000 Rabbits - - - 303 233* 117 955* 300 000 Bee families 663367 671674 718822 652 586** 624 965** 630 000
Source:MAF, Agristatistics”, NVMS **data is by May 1st .
In 2009 the total of 1 231 760tons of milk was produced in the country of which: cow milk – 87%, goat milk – 5.2%, sheep milk – 7.1%, buffalo milk – 0.6%. Compared to the previous period, reduction was observed in the production of all kinds of milk and it is 6.5% less than in 2008.
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The total meat produced in the country was 243 624 tons that is 9.1% more compared to 2008. In 2009 white meat production marked an increase and its share of the total meat production came up to 53.4%. For the same period the production of red meat in the country was 1.1% less than in the year before, and its share in the total meat production is over 46.6%.
Table 46: Animal products in the period 2005 – 2009
Production 2005 2006 2007 2008 2009
1. Milk – total (tons) Including: 1 508 069 1 515 673 1 327 461 1 316 071 1 231 760 Cow milk 1 286 909 1 298 709 1 148 328 1 143 190 1 073 401 Buffalo milk 6 989 7 132 7 052 7 173 7 022 Sheep milk 105 057 107 535 84 907 88 243 87 247 Goat milk 109 114 102 297 87 174 77 465 64 090 Meat – total in slaughter house weight 227 420 231 886,7 235 747,6 223 280 243 624 2. (tons) Red meat 128 988 124 473,7 119 358,6 114 718 113 461 White meat 98 432 107 413,0 116 389,0 108 562 130 163 3. Eggs (thousand) 1 543 103 1 594 544 1 579 270 1 507 909 1 429 221 4. Bee honey (tons) 11 200 11 199 6 139 11 377 9 529 Source: MAF, Annual report, 2008
Table 47: Production of meat (tones of slaughter meat)
Meat type 2004 2005 2006 2007 2008 2009 Pig 78 320 74 533 77 696 76 303 73 757 73 659 Cattle 30 887 30 025 23 004 21 778 19 929 21 921 Caprine and Ovine 20 467 24 428 23 773 21 278 20 862 17 393 Poultry 77 835 98 432 107 413 116 389 108 562 130152 Source:MAF, “Agristatistics” various bulletins
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Table 48: Balance of meat in 2008 (tones of slaughter meat)
Type of meat Produced in BG Net exports Domestic % of net exports in consumption domestic consumption Cattle 19929 -17915 37844 47,34% Pig 73757 -92015 165772 55,51% Caprine and Ovine 20862 5610 15253 n.a. Other 170 -8413 8583 98.0% Total red meat 114718 -112733 227451 49,56% Poultry 108562 -48317 156 869* 30,80% TOTAL MEAT 223269 -161050 384320 41,91% Source: Won calculations based on MAF, “Agristatistics” data, where all customs tariffs have been included and then calculated in slaughter house tones via the respective EC coefficients. * Including rabbit meat
6.1.4. Farm structure The structural adjustment in Bulgarian agriculture after 1989 and the lack of government support resulted in different forms of land abandonment – ended or intermittent farming operations. According to MAF data, in 2004 the agricultural land, which was not in agricultural use for more than three years was 450,000 ha, and the figure tends to increase. Over the last years a tendency of decrease in the number of agricultural holdings in Bulgaria continued. Comparing the data from farm structure survey in 2005 with the data in the 2003 data a substantial reduction in agricultural holdings by 20% is observed, nearly 9% withdrew from agriculture, 2% temporarily stopped operations and another 9% reduced their size below the threshold for the agricultural holdings. Statistical survey on farm structure and labor force in agriculture was conducted in 2007 and data are published in Agricultural Report 2009. In 2010, Bulgaria will conduct the first census of agriculture fully compatible with European criteria and indicators, which is a part of the mandatory update of the data by Eurostat rules. The results of agricultural census in 2007 about structures in agricultural sector show that the numbers of holdings in Bulgaria kept decreasing. Over the period 2005 – 2007 the process of reduction of the number of holdings (all types) and increasing the average size of farms continued. Table 49: Distribution of agricultural holdings and utilized agricultural areas thereby as per agricultural holdings’ status
Agricultural holdings, number Area, hectares Average area per holding-ha Legal status 2005 2007 2005 2007 2005 2007 Bulgaria 520529 481920 2729 390.1 3050 745.0 5,2 6,3 Individuals 515300 476956 914739.5 1033 468.2 1,8 2,2 Sole holders 2158 1828 354597.0 408786.2 164,3 223,6 Cooperatives 1525 1156 890870.0 726305.5 584,2 628,3 Companies 1312 1763 522559.2 781884.5 398,3 443,5 Associations, 234 217 46624.5 100300.7 199,3 462,2 etc. Source: AGRARIAN REPORT 2009, Ministry of Agriculture and Food, Directorate for Agricultural Statistics
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Table 50: Land tenure, number of agricultural holdings and areas by categories of utilized agricultural area in 2007
Utilized agricultural area (UAA) Agricultural holdings, Area, hectares Average area per categories number holding-ha Utilized agricultural area 481920 3050 744.96 6,3 Arable land 334674 2663 641.18 8,0 Cereals 179980 1 700 313.24 9,4 Dried pulses 36602 10280.54 0,3 Industrial crops 51492 746315.53 14,5 Oilseed production crops 22988 690566.45 30,0 Forage crops 100688 98994.79 1,0 Potatoes 128539 17826.19 0,1 Strawberries, fresh vegetables and 88037 23801.52 flowers 0,3 Seeds and seedlings 2200 458.37 0,2 Fallow land 29955 65651.00 2,2 Kitchen gardens 371758 17753.31 0,0 Permanent grassland 133909 279582.23 2,1 Permanent crops 137178 89768.24 0,7 Fruit plantations 54315 36630.92 0,7 Vineyards, total 98265 51537.64 6,3 Source: AGRARIAN REPORT 2009, Ministry of Agriculture and Food, Directorate for Agricultural Statistics
According to the economic size of holdings in Bulgaria (figure below), the largest group is the group of small farms i.e. farms having size up to 4 economic units (more than 96% of total number of farm). Further analysis of this group shows that 77.9 % of the total number of holdings are in size up to 1 economic size unit followed by farms having economic size 1 – 4 economic size units (considered below as semi-subsistence farms). As seen from the figure practically no changes have appeared over the period of 2005 - 2007. Figure 20: Distribution of holdings by economical size – 2005 and 2007
2005 2007
Source: MAF, own calculation
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The share of holdings smaller than 1 ESU remains significant – around 70%. These were primarily subsistence farms. These farms cultivated a very small share of UAA, but they are a significant share of the livestock. The existence of a significant share of small holdings is explained by: a significant share of these holdings is operated as an additional income generating activity for retired people and people employed in other sectors of the economy and also part of the holdings are operated by people forced into agriculture by the lack of other employment opportunities.
Table 51: Distribution of holdings >1ESU per economic size, per size classes and classes of managed area
Distribution of holdings per 5 classes of economic size Distribution of holdings per 5 classes of managed land
Total producers 117.800 117.800 Total producers
Class 1-8 ËSÜ 106.500 93.600 Class <5 ha
Class 8-16 ËSÜ 4.800 14.500 Class 5-20 ha
Class 16-40 ËSÜ 3.200 3.500 Class 20-50 ha
Class 40-100 ËSÜ 1.700 2.000 Class 50-100 ha
Class >100 ËSÜ 1.700 4.200 Class > 100 ha
Average ESU per holding ESU 7.9 24.3 ha Average HA per holding
Source: Eurostat
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Figure 21: Distribution of number of holdings by Figure 22: Distribution of UAA by legal status of Figure 23: Distribution of holdings by average legal status 2003-2007 the holding 2003-2007 size in ha and legal status 2003-2005-2007
100,20000% 100% 700 90% 100,00000% 80% 600 99,80000% 70% Civil association and 500 60% 99,60000% others Natural persons Companies 50% 99,40000% 400 Sole traders Co-operatives 40% Co-operatives 99,20000% 30% Sole traders 300 Companies 20% 99,00000% Natural persons Civil association and 10% 200 others 98,80000% 0%
2003 2005 2007 100 98,60000% Natural persons Sole traders
98,40000% Co-operatives Companies 0 2003 2005 2007 2003 2005 2007 Civil association and others
Source of graphs: own calculations
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Over the period 2003 – 2007, the total number of holdings declined by 26.4 percent as the average size of farms increased by more than 42 percent. The most substantial is the decline in number of co-operatives (41.4%) followed by the civil associations and others (39.7%). Over the period also a substantial re-distribution of land among the different legal type is observed as the area cultivated by coops declined by nearly 38% as the land used by all other type of farms increased as the most substantial increase is observed land used by companies. As a result of these changes the average size of all type of farms increased. In spite of predomination of number of small scale farmers, the large scale producers cultivated in this period (2005) more than 60% of arable land, also they produce the main part of the agricultural commodities. The number of farms in animal stock production in 2009 is around 290 thousand which is 12.6% less compared to 2008. The reduction in animal breeding farms is mainly from holdings breeding 1 to 9 females. It is consequence from the consolidation and concentration of livestock production started in the beginning of 2008. According to the statistical data over 51% from total number of cows are breed in holdings with more than 10 cows, 61% from buffaloes are raised in farms with over 20 buffaloes and 5% of sheep are in farms with more than 50 sheep. There are changes also in pig and poultry breeding. In pig production 78% of pigs are bred in farms with over 50 sows. In poultry production there is increase by 17.7% in the category of farms growing from 100 to 9999 hens and pullets. In 2009 the number of the beef farms decreased and the number of cattle also. The farms breeding sheep decreased and the number of sheep dropped down by more than 12%. A decrease is also observed in the goat-breeding farms. The enlargement continues also in the pig-breeding where the total number of pigs has decreased by 18%. This process is quite obvious in poultry-farming where the decrease of the farms precedes substantially the decrease in the number of birds. Consolidation of farms, their technical restructuring and concentration of the animal stock breeding sector were processes characterizing the activities during the later years. Modernization and restructuring of animal breeding was expressed in reduction of the number of small-scale farms and increase of the number of animals per farm, which allowed for traceability of used raw materials, respectively of the products, from the farm to the retail market. As seen from the table below substantial development of farms toward the specialization is observed. The share of specialized farms have increased during the period 2003 – 2007 by 14% as at the end of the period more than 50% of farms are specialised either in crop production or in livestock production. Substantial reduction in the share of non- specialised livestock farm is also observed. Substantial increase in mixed crop and livestock farms is also observed particularly over the period 2003 – 2005, but generally nearly all of them are small farms (with economic size less than 4 economic size units).
Table 52: Structure of farms by type of specialization
Type of farm 2003 2005 2007
Specialised crop farms 18% 21% 27% Specialised livestock farms 26% 32% 31% Not specialized crop farms 10% 8% 10% Not specialized livestock farms 36% 22% 15% Mixed crop and livestock farms 9% 16% 17% Not calcified farms 0% 0% 0% Source: own survey
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Table 53: Registered farmers and agriculture lands in the period 2007-2009
2007 2008 2009 Registered agriculture producers29 - number 80527 91443 100195 Agriculture producers* registered in the LPIS30 - number 79053 88526 87890 Difference between the two groups - number 1474 2917 12305** Registered lands in LPIS – hectares 3384375 3600000 3545253 Average lands per AP registered in LPIS – hectares 42,81 40,67 40,34 * This number does not include the tobacco producers which had no access to CAP I Direct Payments in the evaluated period as tobacco was not subject to CAPI support. However, if the same tobacco producer was also growing some other culture he/she would receive Direct Payments for it in the respective year, provided he/she met the minimum eligibility conditions. ** In year 2009 the animal breeding sector received for the first time roughly MEUR 31,2 subsidy for all animals registered in the IACS. This and BGRDP measure 112 (young farmers) may explain to some extent the rise in the number of registered agriculture producers who have no lands eligible for CAP I Direct Payment (registered in LPIS).
6.1.5. Consumption
The production trends (increasing cereals and technical cultures, decreasing animal produce, fruit and vegetables) are contrary to the growing consumption/demand of BG households who seek more and more for fresh meat, fresh milk, fresh fruit and vegetables, and eggs and less bread and canned products.
Table 54: Consumption trends 2007-2009 per household/year (Demand for agriculture products)
Measure unit 2007 2008 2009 Bread Kg. 248,894 241,076 229,171 Pastry & noodles Kg. 33,007 33,253 33,741 Fresh Meat Kg. 52,092 55,871 63,168 Processed meat and sausages Kg. 30,259 30,668 28,753 Milk and Dairy Products Kg. 127,003 129,036 137,246 Fresh milk Lt. 39,874 39,507 45,890 Yoghurt Kg. 52,925 53,248 53,348 White cheese (brined) Kg. 24,436 24,836 25,297 Other type of cheese Kg. 0,448 0,509 0,531 Yellow cheese (kashkaval) Kg. 7,446 7,172 8,126 Other dairy products Kg. 1,873 3,764 4,054 Fresh fruit Kg. 65,591 71,259 80,176 Canned fruit Kg. 7,196 9,077 8,918 Fresh and cooled vegetables Kg. 99,769 110,590 109,861 Canned vegetables Kg. 6,544 6,732 5,707
29 According to MAF Ordinance 3/1999. See also Table 3 in subsection 3.1.1. National Agriculture Context of this report. 30 Land Parcel Identification System. This is the backbone for IACS system for CAP I Direct Payments.
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Measure unit 2007 2008 2009 Potatoes Kg. 47,477 50,239 51,790 Eggs number 198,376 204,596 218,071 *Source: Own calculations based on “NSI-Average Prices 1992-2009.zip” from www.nsi.bg
NSI data shows that the detected trends in consumption were present in the entire 1999-2009 period in which the consumption of meat fruit and vegetables are rising to and the consumption of bread and fresh milk are decreasing.
Figure 24: Consumption of main foods on the average per household person
25.5 Алкохолни напитки - л 19.6 2009 52.2 Безалкохолни напитки - л 24.5 1999 27.9 Kартофи - кг 26.9 68.4 Зеленчуци - кг 58.6 44.3 Плодове - кг 42.2 Kисело мляко - кг 26.8 22.2 Прясно мляко - л 19.9 31.4 Mесни произведения - кг 14.3 12.0 Mесо - кг 30.7 23.3 105.9 Хляб - кг 140.6
0 20 40 60 80 100 120 140 160
Source of graph: NSI
6.1.6. Regional aspects
The demographic situation in most of the planning regions is not favorable for a balanced territorial development in favor of sustainable development in the meaning of the Cohesion Policy. Practically all of the planning regions are experiencing negative demographic developments which will put great difficulties in overcoming the regional disparities in the short to medium term. This is also valid for the South western region where the problems are disguised due to the country capital which continues to draw young and qualified population from the rest territory of Bulgaria.
Table 55 . Coefficients for natural and mechanic changes of the population per planning regions in 2009 Population by 31.12 Birthrate Death rate Natural growth Mechanical Planning regions growth number ‰ BG 7563710 10.7 14.2 -3.5 -2.1 Northwestern 902537 9.1 18.3 -9.2 -5.7 North Central 914939 9.1 15.2 -6.1 -4.1 Northeastern 988935 11.6 13.4 -1.8 -0.7 Southeastern 1116560 11.7 14.2 -2.5 -2.0 South western 2112519 11.2 13.2 -2.0 0.8 South Central 1528220 10.5 13.3 -2.8 -3.6
Source: NSI
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Particularly negative are the developments in the Northwestern and the North Central Planning Regions of the country, where all of the indicators are almost 2 times worse than the country average.
The South Central Region on the other hand will be hit in 2011 both by the stop of national tobacco subsidies and the expiration of the transition period for achieving milk hygiene standards.
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Figure 25: Population density per districts 2009 Figure 26: Birthrate per district 2009 (per 1 000 Figure 27: Death rate per district 2009 (per 1 000 people) people)
Source of graphs: NSI
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Table 56 . Coefficients for economic activity, employment and unemployment per planning regions (in %) Coefficient for economic activity Employment rate Unemployment rate Planning regions (15 - 64 y.o.) (15 - 64 y.o.) 2003 2008 2009 2003 2008 2009 2003 2008 2009 Total 60.9 67.8 67.2 52.5 64.0 62.6 13.7 5.6 6.8 Northwestern 55.8 63.8 62.6 47.8 59.3 57.5 14.0 7.1 8.0 North Central 58.8 64.2 63.3 49.7 58.6 57.9 15.2 8.5 8.4 Northeastern 62.4 67.9 66.2 49.7 62.0 59.2 20.1 8.6 10.4 Southeastern 61.3 66.2 65.6 52.1 62.3 61.2 14.7 5.8 6.6 South western 65.0 73.1 73.4 57.6 71.0 70.4 11.2 2.9 4.1 South Central 58.4 65.8 65.3 51.9 62.4 60.5 11.0 5.1 7.3
Table 57: Residence structure, gender distribution and age dependency ratio by planning regions in Bulgaria
2004 2007 2009 Age Age Age Residence Sex depende Residence Sex depende Residence Sex depende structure ncy structure ncy structure ncy Statisti Ratio Ratio Ratio Ratio Ratio Ratio cal Wom Wom Wom region en en en s % per 1 % % per 1 % % per 1 % 000 000 000 men men men Urban Rural Urban Rural Urban Rural residen residen Total Total residen residen Total Total residen residen Total Total ce ce ce ce ce ce Total 70,0 30,0 1060 44,9 70,7 29,3 1065 44,3 71,4 28,6 1067 45,1 North- 61,1 38,9 1048 54,0 61,6 38,4 1058 52,2 62,3 37,7 1062 52,7 West North 63,9 36,1 1059 44,8 64,9 35,1 1066 44,5 65,5 34,5 1068 45,3 Central North- 69,9 30,1 1048 43,0 70,3 29,7 1053 43,1 70,9 29,1 1055 44,1 East South- 68,4 31,6 1049 46,7 68,8 31,2 1054 46,2 70,1 29,9 1056 46,9 East South- 81,4 18,6 1081 41,2 82,0 18,0 1082 40,6 82,3 17,7 1083 41,8 West South 65,1 34,9 1056 44,6 66,0 34,0 1062 44,3 66,5 33,5 1064 44,8 Central Source: NSI, Residence structure, sex ratio and age dependency ratio
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Figure 28: Work salary on the average per household Figure 29: Total income and expenses on the average person per planning region per household person per planning region
Левове Левове 3000 5000 2008 2009 Общ доход Общ разход 4297 2450 4500 2500 2305 3875 4000 3693 3695 3557 3507 3335 3381 3353 1928 1942 3500 3202 3216 2000 1873 3170 1816 1739 1754 2937 3016 1621 1592 1611 1580 1640 3000 1467 1500 2500
2000
1000 1500
1000 500 500
0 0 Общо Северозападен Северен Североизточен Югозападен Южен Югоизточен Общо Северозападен Северен Североизточен Югозападен Южен Югоизточен централен централен централен централен Source of graphs: NSI
From the regional point of view the changes in number of holdings as well as average size of holdings follow the changes at national level but by different degree (see table below). Thus the most substantial are the changes in South-Central region (the number of farms declined by 37 %) while the number of farms in North-East region declined by less than 19 %. Table 58: Regional structure of the agricultural holdings
Planning regions Total number of agricultural holdings 2005/2003 2007/2003 2005 2007 % % Bulgaria 534,613 493,133 -8 % -28% Northwest planning region 96,714 90,334 -7 % -19% North Central Region 72,467 63,782 -12 % -29% Northeastern region 64,417 56,293 -13 % -28% Southeastern Region 78,052 66,939 -14 % -37% South Western 85,506 82,216 -4 % -29% South Central Region 137,457 133,569 -3 % -23% Source: MAF, own calculations
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Figure 30: Changes in the number of active AP in 2010 compared to registered AP in 2009 per planning region and BG*
* Based on Table 3: Dynamics in the pool of potential beneficiaries under BGRDP measures M111, M112, (M14), M121, M141, M142, M143, and M311 in this repor
Figure 31: Relative share of arable lands per districts
Source of graphs: NSI
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According to System for agro-market information (SAPI) survey ("Status and trends in the land market in 2009") the financial and economic crisis affected the agriculture sector. In regard to the land market main changes are in reducing its activity for the first time since 2004 onwards. In 2009 main characteristic of the land market are: - Land owners offer land actively as they do not seek the highest price. They sell land in order to ensure money to survive; - Higher requirements concerning size of the parcels and quality of the terrain; - The competition between buyers is decreasing. In 2009 the number of deals conducted is 110,276 for 104,344.6 ha of agricultural land. The deals are less compared to 2008 by 9.3% and the sold agricultural land is 19% less.
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Table 59: Land resources, sales and leased lands in 2008 and 2009 per planning region in ha
Planning region Total area* Forestry area* Agriculture area* 2008 2009 Total* Arable* Sold lands % Leased lands % Sold lands % Leased lands % ** ** ** ** North Western 1907030,8 419752,4 1328206,0 1089879,5 16432 1,5% 40709 3,7% 17074 1,6% 47549 4,4% North Central 1497397,0 356663,3 1019034,5 852240,8 36090 4,2% 139222 16,3% 27659 3,2% 103377 12,1% North Eastern 1448739,7 329327,3 986714,0 855003,7 35556 4,2% 95931 11,2% 26635 3,1% 83433 9,8% South Eastern 1979873,2 673299,5 1131173,7 914492,2 16200 1,8% 24701 2,7% 16169 1,8% 48502 5,3% South Central 2236505,4 976125,8 1041488,2 738375,9 25600 3,5% 18064 2,4% 16749 2,3% 25338 3,4% South Western 2030644,1 960585,5 869865,3 526935,8 7532 1,4% 9327 1,8% 3092 0,6% 10216 1,9% BG-Total 11100190,2 3715753,8 6376481,7 4976927,9 137401 2,8% 327954 6,6% 107378 2,2% 318417 6,4% * Source: NSI, електронна публикация „Районите, областите и общините в Република България 2008” NB!: Used data is from source: Агенция по геодезия, картография и кадастър към Министерството на регионалното развитие и благоустройството, 1. Баланс на територията на Република България към 31.12.2000 г. по вид територия, статистически зони, статистически райони, области и общини 1, 2. This information is outdated as is illustrated by various MAF publications (including because of the joining of abandoned lands to the forestry fund, see Agrarian Report 2010). However, it remains the only available official data at regional data, which the team could find. Anyhow, the land resources data is sufficiently good for illustrating the proportion of land resources sold or leased per planning region in 2008 and 2009. ** Indicates the percentage of sold or leased lands towards the total arable lands in the planning region. See also the next two tables below where the data comes from.
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The table indicates that most active land transactions and leasing is present in the planning region which have most of the arable lands, but also where the ownership of the lands plots is favorable for mechanized production of plant cultures. The CAP I Direct Payments add to these developments, channeling best support to the production of cereals, technical cultures, etc., and thus increasing the demand for land (and the deals) in the Planning regions best suited for such production. Table 60: Land sales in 2008 and 2009
2008 2009 Planning regions Sales, Sold lands, Average price Sales, Sold lands, Average price num ha BGN/ha num ha BGN/ha Northwest planning 16456 16432 3150 14018 17074 2680 region North Central Region 37856 36090 4910 32332 27659 2790 Northeastern region 25485 35556 10920 23665 26635 5740 Southeastern Region 15609 16200 6790 17365 16169 3310 South Central Region 26723 25600 8680 22657 16749 5780 South Western 12044 7532 123640 5171 3092 101760 Bulgaria 134173 137401 18460 115208 107378 6900 Source: MAF, Agrarian report 2010
Table 61: Land renting in 2008 and 2009
2008 2009 Planning regions Land leases, Leased lands, Land leases, Leased lands, Average price num ha num ha BGN/ha Northwest planning 19484 40709 19401 47549 50-200 region North Central Region 65685 139222 55239 103377 250 Northeastern region 50492 95931 41920 83433 400 Southeastern Region 5839 24701 14386 48502 100-400 South Central Region 8760 18064 14164 25338 <1000 South Western 4250 9327 6282 10216 50-800 Bulgaria 154510 327954 151392 318417 - Source: MAF, Agrarian report 2010
It can be seen that the particular planning regions have different size of arable areas. Further to that they specialize in particular agriculture outputs. Leading in plant output are the North Central, North Eastern and South Eastern Planning regions. However, the production of potatoes is concentrated primarily in the South Western and South Central Planning regions. Tobacco on the other hand is produced primarily in the South Central Region, and in the North Central region but to a much smaller extent. Hence, the stop of national support for tobacco production in 2010 will have the greatest effects in the SC region and in the NC region to a less extent.
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Table 62: Plant output per planning regions in 2008 (BGN million)
Output BG NW Region NC Region NE Region SE Region SW Region SC Region Cereals 2 005.5* 375.3 473.2 511.8 429.7 55.4 160.1 Wheat (1 293.8) 212.2 295.0 347.5 330.8 38.0 70.3 Barley (218.2) 42.5 56.3 43.7 61.5 4.7 9.5 Maize for grain (411.8) 115.2 112.7 109.7 21.3 9.3 43.6 Technical cultures 1 150.4) 191.2 274.9 237.7 210.2 23.5 212.9 Oilbearing seeds (843.5) 178.8 205.7 210.4 192.0 11.3 45.3 Rapeseeds (136.9) 21.7 34.4 40.4 34.2 0.9 5.3 Sunflower (685.3) 157.0 156.7 166.2 155.1 10.4 39.9 Tobacco (248.3) 7.4 49.1 15.7 13.1 11.6 151.4 Forage cultures 170.2 36.5 35.0 28.5 18.7 21.9 29.6 Vegetables 1 057.3 117.7 206.1 97.8 143.4 200.6 291.7 Fresh vegetables (842.1) 115.5 60.5 89.0 112.1 200.4 264.6 Potatoes 155.5 7.0 1.5 7.2 5.4 85.8 48.6 Fruits 317.7 55.3 71.9 40.6 94.3 7.5 48.1 Fresh fruits (123.5) 17.5 58.7 23.2 8.9 2.6 12.6 Grape total (194.2) 37.8 13.2 17.4 85.4 4.9 35.5 Plant output 4 868.9 783.4 1 065.7 926.9 905.6 394.8 792.5 Source: http://www.nsi.bg/otrasal.php?otr=1&a1=102&a2=106#cont
* The figures are the totals as in the NSI publication for agriculture output. The sub-figures do not add to the total as only select important products are included.
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Animal output is produced in a more balanced manner through all planning regions, with the exception of the South Western region, where the production is less than 50% of the average for the remaining region. The presence of the country capital obviously offers better employment possibilities for the population in the settlements in the region. Table 63: Animal output per planning regions in 2008 (BGN million)
Output BG NW Region NC Region NE Region SE Region SW Region SC Region Animals 1 317.5* 194.7 245.8 211.3 319.8 83.6 262.3 Cattle 224.5 47.0 35.5 29.6 39.4 14.6 58.4 Pigs 333.9 32.4 95.3 63.9 82.3 17.9 42.1 Sheep and goats 298.6 29.0 45.3 49.3 65.2 25.4 84.4 Poultry 409.9 67.9 62.5 56.2 127.3 23.6 72.4 Other animals 47.4 17.7 6.9 11.8 5.2 1.5 4.3 Animal products 1 372.2 304.9 184.3 257.9 206.9 137.2 281.0 Milk 1 085.2 223.0 139.8 188.3 169.1 121.0 244.0 Eggs 225.1 65.7 33.2 50.7 31.8 13.6 30.1 Other 61.9 16.2 11.3 18.9 6.0 2.6 6.9 Animal output 2 689.7 499.6 430.1 469.2 526.7 220.8 543.3 Source: http://www.nsi.bg/otrasal.php?otr=1&a1=102&a2=106#cont * The figures are the totals as in the NSI publication for agriculture output. The sub-figures do not add to the total as only select important products are included.
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Figure 32: Graphical representation of plants and animals per planning region
Source of graphs: NSI Per column righ-left: wheat, barley, grain for maize, sunflower, tomatoes, cucumbers, pepper, potatoes, (water)melons, cattle, pigs, sheep, goats Color: NW Region NE Region SW Region NC Region SE Region SC Region
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The agricultural sector plays a decreasing role for GDP, export potential and for employment opportunities in Bulgaria. The numbers of employees are decreasing in the sector. Surveys show that the area mostly affected by land abandonment is located in mountainous regions, which suffered from the collapse in animal breeding, regions with other natural deprivations or poor quality of soil.
6.1.7. Environment In 2009 there are 69 sewage water treatment stations active in BG. Six new were put into operation in 2008. Figure 33: Share of population having access to sewer system and sewage treatment stations
% 100
80 66.5 69.6
60 43.8 40.3 40.7 41.1 42.0 36.7 38.1 38.6 39.9 40
20
0 2000 2001 2002 2003 2004 2005 2006 2007 2008 СПСОВ Обществена канализация
Source of graphs: NSI
In year 2008, there are 192 towns (some of which in rural areas), who have no sewage water treatment stations. 48 of them have population above 10000 people. Biodiversity Bulgaria is among the European countries with richer biodiversity, including a number of rare and endemic species. The Bulgarian flora comprises between 3 550 and 3 750 higher plant species.
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Figure 34: Area and share of protected territories of country’s total area
Source of graphs: NSI
Bulgarians traditionally grow local varieties in their gardens, which is a prerequisite for preserving the significant diversity of old, primitive varieties (folks’ selection), local populations and their forms. Preserving the quality of the environment is a main purpose of sustainable consumption and production. Last years in Bulgaria there has been a trend of decreasing the damaging emissions. For example according to the NSI data the sulphur oxides emissions in 2008 have decreased by 14% in comparison with 2007. The emissions of the other major pollutants also decrease. The comparison between the emissions and GDP shows a sustainable tendency of decreasing pollution per unit of GDP. In 2008 the sulphur oxides emissions per USD 1000 of GDP decrease over 2 times in comparison with 2004 - from 0.039 to 0.015 tons (NSI data). For the period 1990 - 2008 the environment expenditure is between 0.9 and 2.5% of GDP, as its highest level is registered in 2008. In rural areas main environmental issues are: - Valuable semi-natural habitats are destroyed due to the used drainage systems, plowing, construction and use of fertilizers, pesticides - Pollution of the soil and underground water - Degradation of soil structure in arable land - High risk of forest damage from natural disasters - Many of the land managers do not respect the high natural value of land and sustainable land use
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6.1.8. Quality of Life and Rural infrastructure
The road transport network is generally well developed in Bulgaria. The railway and water transport systems are much more limited in terms of coverage. All country is covered by the country’s national electricity supply system. In the whole of the country, the infrastructure and the services provided by the ICT sector are relatively good. The network of rural postal services is being extensively developed. The capacity of the network to service international traffic, however, is insufficient. During the later years the water supply system is expanded and it covers about 98.9% of the country’s population. All towns and 96 % of the villages are supplied by water. The quality of water supplied is “good for drinking” according to the Bulgarian State Standard. The provided water is estimated at 99lt./per capita/per day. The population in the towns uses more water 103 lt./per capita/per day than the population of in the villages 87lt./per capita/per day.
Figure 35: Use of water by the households, on the average per capita
Л/ден 120
92 97 100 99 95 90 95 94 99 100
80
60
40
20
0 2000 2001 2002 2003 2004 2005 2006 2007 2008
Source of graphs: NSI
The regional data indicate that most water is used in Sofia – capital 141lt./per capita/per day, and least in Targovishte district 60lt./per capita/per day.
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Figure 36: Map of water use by the households, on the average per capita
Видин Силистра
РусеРусе РусеРусе РазградРазград Добрич Монтана Плевен Враца Шумен Търговище Търговище Варна Ловеч Габрово
Перник София Сливен
Бургас Кюстендил Стара Загора Бургас Ямбол Пловдив Пазарджик
Благоевград Благоевград Хасково Смолян Кърджали л/чов./ден. l/day/per capita 121 to 142 101 to 120 81 to 100 60 to 80
Source of graphs: NSI
In year 2008, 4.6% of the population (situated mainly in the rural areas) experienced non-regular provision of drinking water. This occurred due to seasonal fluctuations in the availability of drinking water in the respective reservoirs. In year 2008, almost 70% of the population was connected to the public water-sewers system. In the towns the share pf connected population is 95%, but in the villages it is barely 9%. There are 1,172 settlements in Bulgaria, where waste is collectively collected. By NSI data in 2008 3,369 thousand tons of municipal waste were collected through organized waste collection systems, of which 3.359 thousand tons are land filled. During the years 2007 -- 2009 the building of regional landfills for municipal waste continued, and at the same time outdated landfills were closed down, as they did not respond to the ecological requirements, and new contemporary facilities for municipal waste disposal were constructed. The organized waste collection systems were implemented in new settlements led to an increase of the population served by municipal waste collection systems from 78.6% in 2000 to 93% in 2007/2009. As a whole for the period 2000 - 2008 a tendency of reduction of the municipal waste generated per capita is observed. While in 2000 the municipal waste per capita amounted to 518 kg, in 2008 the annual volume decreases to 467 kg per capita. As regards the social infrastructure, the system of education is well developed, with nurseries, kindergartens and schools in almost every rural settlement that has the minimum required number of children. But the quality of education is lower
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The SW Region (capital) has the greatest share of households with access to internet in 2009. This is due to the greater number and competition of internet providers, good optic infrastructure and growing demand for such ICT services. Figure 37: Relative share of households who have Figure 38: Structure of the households who have access to computer and internet at home access to internet at home per planning region
% 35 31.7 10.8% Компютър Интернет 29.6 16.8% 30 28.6 10.1% 25.3 25 23.3 21.3 19.0 20 11.7% 17.0
15 37.3% 13.3% 10
5 Северозападен Северен централен Североизточен Югоизточен Югозападен Южен централен 0 2006 2007 2008 2009
Source of graphs: NSI
Most active in using internet is the age group 16-24 y.o.; the share of persons from this group who spend time in internet has risen by 41.7% for a five year period to reach 75.1% in year 2009.
Figure 39: Relative share of persons 16-74 y.o. who Figure 40: Relative share of persons 16-74 y.o. who use internet at least 1 time weekly in 2009 purchased goods via internet and have used the e- government services in the last 3 months
13.9% 3.1% % 32.0% 75.1% 12 Електронна търговия Електронно правителство 9.8 10 8.4 8 46.8% 6.2 6
60.1% 4 3.3 16 - 24 25 - 34 35 - 44 45 - 54 55 - 64 65 - 74 1.7 1.7 2
0 2007 2008 2009
Source of graphs: NSI
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6.2. Re-assessing the intervention logic Based on the brief up-date of the current situation described in the previous section we can here re-assess the overall intervention logic of the programme.
It is recalled that the overall objectives of the NRDP are:
To develop a competitive and innovation-based agriculture, forestry and food processing industry To protect natural resources and the environment of rural areas To improve the quality of life and diversify job opportunities in rural areas To build local capacity and to improve local governance
The description of development trends, challenges, needs and problems in the sector shows that the intervention logic used as the basis for the programme, when the programme was designed in 2006, is still intact and valid. The agricultural sector and the rural dwellers are still faced with structural problems in production, low productivity and quality of the products and difficulties competing with imported products. Support to modernization of the sector is urgently needed. The contribution to GVA is going down and did fell again from 2008 to 2009 with more than 3 %. The result is low income, poverty and lack of jobs. The number of farms is going down over the years and is reduced with 25 % over the last years, but at the same time the average farm size is increased with 42 % measured in hectares. The development of the farm structure is illuminated in the table below. Table 64: Development in farm structure in Bulgaria, 2003-2007, 2009 estimate ESU* 2003 2007 Change 03-07 2009 (estimate)
Number, % Number, % Number, % Number, % 000 000 000 000
X<1 508.2 76.4 375.6 76.2 -132.6 -26.0 310.0 76.2
1≤ x <4 139.4 20.9 95.8 19.4 -43.6 -31.3 73.9 18.2
4≤ x <40 14.7 2.2 18.4 3.7 +3.7 +25.2 20.3 5.0
40≤ x <100 1.6 0.2 1.7 0.3 +0.1 +6.3 1.8 0.4 x>100 1.6 0.2 1.6 0.3 +0 0 1.6 0.4
Total 665.5 100 493.1 100 -172.4 -25.9 406.9 100
Source: MAF, Agrostatistics Directorate: Structure of agricultural holdings in Bulgaria 2007, 2009, MAF: National Rural Development Programme 2007-2013, December 2009, Eurostat and own calculations
Note *: ESU = Economic Size Units, a common statistical indicator used of EU to measure the income of a farm. 1 ESU = 1,200 € of annual income.
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The total number of farms in Bulgaria is reduced from 2003 to 2007 with 25 % from 665,500 farms in 2003 to 493,133 farms in 2007. If this trend is prolonged to 2009, the number of farms in 2009 is down to a little more than 400.000. The far largest number of farms leaving business is small farms below 1 ESU, where 200,000 holdings have left production, while 65,000 farms in the group between 1 and 4 ESU have left the group. Of these, 5.600 farms have climbed to the next level of ESU between 4 and 40 ESU, which is increased from 14,700 in 2003 to 20,300 farms in 2009. This is the level of farms with the largest growth. The group between 40 and 100 ESU has also increased and is estimated to include 1,800 farms, increasing with 6.3 % from 2003 to 2007, prolonged to 2009. The group with larger farms above 100 ESU is rather stable with around 1,600 farms, but due to the fact that the total number of farms is going down, the relative share increases from 0.2 % in 2003 to 0.4 % of the total number of farms in 2009. The relative importance of the larger farms is therefore doubled from 2003 to 2009. In total we have in 2009 an estimated 23.700 farms larger than 4 ESU, which is almost 6 % of the total number of farms. In 2003 these groups of farms only did represent 2.6 %. In general this development is positive in the sense that larger farms are expected to be more competitive than the small scale farms smaller than 4 ESU, typically semi subsistence farms. On the other hand, the structural development also points to the fact that farmers are leaving business in large numbers, as well are agricultural jobs. With 265,000 farms out of business from 2003 to 2009 the sector has lost at least 300,000 jobs.
As a consequence, the rural population is reducing over the years, and the age structure is changing with more elderly people and fewer younger people in rural areas. Also long term unemployment is an increasing problem in rural areas, and there is a big need for education and for jobs to the rural population in general, and to the younger people in particularly. According to the NRDP, the agricultural sector suffers under an inappropriate education structure, where the majority of farmers only have practical agricultural training and no formal education as such. The NRDP refers to the fact that only 3 % of the farm managers in 2003 did have a secondary or a higher education related to agricultural production, see the table below.
Table 65: Development of education levels among Bulgarian farms managers, 2003-2007, 2009 estimated
2003 2005 2007 2009 estimated Farmer’s education Number % number % number % number % Farmers, total 665,500 100 534,613 100 493133 100 406,850 100 Farmers with practical education 645,535 97 506,285 94.7 468,875 95 386,508 95 Farmers with secondary education 13,310 2 22,861 4.3 19,694 4 16,274 4 Farmers with higher education 6,655 1 5,467 1 4,564 1 4,069 1 Source: MAF, Agrostatistics Directorate: Structure of agricultural holdings in Bulgaria 2007, 2009, MAF: National Rural Development Programme 2007-2013, December 2009, Eurostat and own calculations
The evaluation team has up-dated the information from the NRDP and prepared a prognosis of the education structure as of 2009. The trend in the figures is that we see more educated farm managers in 2005 and 2007, than we did in 2003, where only 3 % of the farm managers had a secondary and higher education, while it was 5% in 2005 and in 2007. This is a positive development which is appreciated. However, we do not see any particular further positive development from 2005 to 2007. The relative distribution between the three levels of education is constant indicating the need for an
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Furthermore problems with complying with all EU requirements are still observed in particularly for the small scale farmers, leading to negative environmental impacts from production.
In general the rural infrastructure is relatively well developed, but there is a continuing need for improving the infrastructure in order to make the living conditions a good as possible. This count for the technical infrastructure such as water supply and waste water treatment, roads etc, as well as social infra structure. Consequently, in general the quality of rural life in Bulgaria still needs the support from the NRDP. The conclusion is therefore that the programme is very relevant and that the implementation of the NRDP should be enhanced as much as possible in order to meet the challenges of the sector, including modernization and education/training as well as generation of new job possibilities, even though modifications in the budgets for individual measures might be relevant due to the structural development of the sector.
6.3. Axis 1 - developing a competitive and innovation-based agriculture, forestry and food processing industry
In the following sections we present the answers to the obligatory Common Evaluation Questions at measure and Pro- gramme level, starting with axis 1 measures.
6.3.0. Measure 112 Setting up of young farmers
Objectives and Rationale The measure supports the restructuring of the unfavorable age structure in BG agriculture. It offers up to EUR 25,000 to new farmers starting for the first time agriculture activities up to 14 months prior to the submission of applications for support. The payments are to be received in two tranches – The first is EUR 12,500 paid immediately after the approval (contracting) of the beneficiary, while the second of up to EUR 12500 is paid after the 3rd year of project implementation, provided the beneficiary has fulfilled his objectives set in the business plan. It is obligatory that the beneficiary has at least 2 ESU by the time of application and that his holding will grow with at least 3 ESU by the time for second check before final payment. However, to achieve the maximum EUR 12,500 in support from the second tranche, the beneficiary holding must have increased its size with at least 5 ESU, as according to the measure rules – each 1 ESU will bring EUR 2,500 of the final installment of support. The young farmers have 36 months to adjust their holdings to the statutory management requirements as transposed in the national legislation, and if necessary - to obtain the appropriate training for their farming occupation, including via a free training course under M111. Tobacco is the only produce banned from support under the measure. There are no ranking criteria; first-come-first-serve-principle has been used instead. The young farmers are allowed to work only in part-time job-positions outside the farm – up to 4-hours working day employment. The measure is programmed to support 4,096 beneficiary holdings, and the total amount of full realized young farmers’ investments is programmed at MEUR 208. General data on Implementation
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By end-September 2010 payments to the remaining contracted holdings have been made and the total amount available for disbursement of the first EUR 12,500 payment tranches has been almost exhausted (payment have made to 4038 contracts out of 4096 programmed). Only beneficiary failures and respective terminations of contracts can bring budgets for new opening of the measure. This, however, will be known by mid-2011 at the earliest. According to SFA-PA information from applications, the median increase of the ESU in the contracted holdings is calculated at ESU 5.37. By end 2009, the measure has paid the first tranche of payments to 1,480 holdings. In July 2010 the evaluators received the contacts of M112 beneficiaries, so that the questionnaires could be sent to them. The excel file contained the names and addresses of 4059 beneficiaries: 27 of them were firms, 2371 of the beneficiaries were men (58.4%), and 1661 were women (40%). The regional uptake of M112 support was quite unbalanced (see Annex 4: REGIONAL DISTRIBUTION OF BGRDP PAYMENTS PER DISTRICT PER MEASURE). In the period 2008-2009 most M112 payments (MEUR18.5) were paid to beneficiaries from just two of the 6 planning regions of South Bulgaria: the South Eastern (MEUR 4.2 =22%) and South Central (MEUR3.7=20%) Planning Regions. Least support reached the South West Planning Region (MEUR 1.7=9%). The imbalances at district level are even more substantial: Just five districts: Stara Zagora (MEUR 1.5=8%), Plovdiv (MEUR 1.5=8%), Sliven (MEUR 1.3=7%), Haskovo (MEUR 1.3=7%), Pleven (MEUR 1.2=6.5%), received almost 36.5% of all M112 payments effected in 2008-2009 period. The same districts also attracted the majority of M112 payments (MEUR 30.8) in 2010 as well: Stara Zagora (MEUR 2.6=8%), Plovdiv (MEUR 3.7=12%), Sliven (MEUR 1.3=4%), Haskovo (MEUR 1.8=6%), Pleven (MEUR 1.2=4%), collectively attracted almost 29% of all M112 payments effected in 2008-2009 period. These figures correspond to 540 = 36.5%*1480 beneficiaries receiving payments in 2008-2009 period, and to 773 = 29%*2664 beneficiaries paid in 2010. If we compare the cumulative 2008-2010 effects of supporting 1313 young farmers within the pool of 20,331 active registered agriculture producers in the five districts (see Table: Dynamics in the pool of potential beneficiaries under BGRDP measures) then the implementation of M112 has contributed to the process of strengthening of 6.5% of the human potential of agriculture producers in the five districts. In the other negative extreme are the districts Sofia Capital, Kardjali, Pernik, Gabrovo, Sofia District, which in 2008-2009 collectively received payments almost equal to EUR 862.000 (4.7% of total MEUR18.5 total payments.). In 2010 their collective payments reached MEUR 1,85 (6% of total MEUR 30.8 payments). These payments are likely to collectively impact just 1.9% of the total 10564 active registered agriculture producers in the districts Sofia Capital, Kardjali, Pernik, Gabrovo, Sofia District. The evaluators note that the least beneficial impacts compared to potential needs for restructuring support is identified in Kardjali, where by October 2010 there are only 43 supported active registered agriculture producers supported by M112 out of 6371 active producers’ total (0.67%). At the same time Kardjali is the district experiencing the most drastic decline (-33%) in the number (minus 3100) of active registered agriculture producers by October 2010 compared to their number in 2009. Only the district of Smoljan has worse situation where the number of active registered agriculture producers dropped by 54% from more than 4,000 to just over 2,000 producers. As a conclusion we can state that the territorial implementation of M112 does not meet in balanced manner the needs for restructuring the human potential across the different BG districts. This in the medium term is likely to reinforce the intensification of regional disparities for potential for growth (some districts will enjoy younger and better educated entrepreneurs in agriculture than others). The situation is particularly worrying for these districts, where the number of active registered agriculture producers is also drastically declining, as this means that they will be suffering from emigration of active workforce. A second wave of additionally implemented M112 projects seems justified, provided the measure is implemented with regional conditioning including an appropriate ranking system.
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Data from the questionnaires Beneficiary Profile 288 filled in interviews were received from respondent beneficiaries. The data from the interviews indicates that the most common beneficiary has less than 1 year experience (58%) or between 2-5 years (30%) of experience in agriculture. 79% of 285 respondents did not have appropriate education degree in agriculture activities. 53% intend to acquire it via training under M111, and 34% - by other means of training. 4-8% of the respondents did not know whether their holdings are within or bordering a protected area. 6-13% of the beneficiaries did not know whether their holding is within or bordering lands of High Nature Value, Nitrate Vulnerable Zones or Less Favored Areas. The business background and managerial abilities of the beneficiaries also seem to be in great need of improvement, especially in view of their inconsistent answers to the questions associated with their economic performance (e.g.: profitability, productivity, etc.) – this may be an indication that they do not understand the basics of business management and marketing. Main agriculture occupation When asked what are the main types of holdings produce (up to three types), their replies are distributed as follows: Table 66: Types of production of M112 beneficiaries
1st produce 2nd second produce 3rd produce TOTAL Respondents, N 257 65 18 (1) Field Crops: Grain, technical cultures, etc. 73 1 0 … … … … (4) Essential oil cultures 3 5 0 (5) Horticulture 76 24 0 (6) Greenhouses 8 4 4 … … … … (8) Perennials – orchards or berry plantations 47 17 5 (15) other (in most cases are beehives) 21 0 0 Source: Data from own survey, 2010
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Figure 41: Measure 112: Main production in percentage
Measure 112: Main Production (%) 9%
1% 0% 1% 2% 0% 29% 3%
18%
0% 1%
3%
3%
30% (1) field crops – grain, technical etc. (2) energy crops (3) tobacco (4) oil crops (5) horticulture/field and vegetable production (6) greenhouses (7) vineyards for wine (8) permanent crops –fruit trees and/or bush fruits (9) dairy cows / buffalo (10) cattle-breeding and fattening (11) sheep/goats. please, underline for: (а) for milk (b) for meat (12) pigs (13) poultry (14) mixed/plant growing +livestock-breeding from the above mentioned productions / (15) other
The data indicates strong orientation of the beneficiaries to the plant production sector, and even when the holding is of the mixed production the produce is still in the plant production agriculture sub-sector. Only 20 of the respondents indicated animal production as primary business, and only 9 of them are raising milk cows or buffaloes (<4% of all respondents). The majority of respondents did not raise any animals at all or as their primary activity (250 of 288). The ones that did, had mixes of various animals and poultry – situation quite diverging from the specialist animal farm holdings. From support will
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Elaboration of ongoing and mid-term evaluation of the RDP 2007-2010, Bulgaria benefit slightly less than 340 LSU, the majority of which are bovine (157 LSU) or sheep/goats (141 LSU) animals. All of fifty eight respondents (20 new additional to the 38 original will start raising animals), claim they will increase the number of livestock raised in their farms after the final payment. Interestingly enough, 3 of the respondents claim that they will use M112 support to invest in the production of tobacco as the primary produce of their holding, and one claims that he/she will support tobacco production as the holding’s second production of importance.
Employment 116 of 173 respondents did not employ any full time worker by the time of applications; this indicates that even the holder did not have full time occupation at the time of application. The employment data is explained by the fact that the majority of the beneficiaries are involved with plant production. Also, the investments in sub-sector perennials do take time before providing steady full time employment as measured in AWU. However, the beneficiaries expect to open up to two job places (AWU) after the final payment: Table 67: Employment under measure 112
Respondents, N Employment expectations Number of created/closed jobs 179 Increase of job places 355 113 - Of which women 200 73 - Of which people < 25 years 89 24 Decrease in job places 2 0 - Of which women 0 0 - Of which people < 25 years 0 Source: Data from own survey, 2010
67.5% of the respondents are quite certain that the job places (AWU) are sustainable and will be preserved in the three year period after the final payment of M112. On the other hand, almost 18% of respondents do not know if they will be able to maintain the newly created employment. Land coverage and ownership According to the data a total of close to 2700 ha, and the average size is 6.5ha per holding. This explains the large proportion of holdings preferring to deal with horticulture and perennials, where the produce intensity per ha is greater (cumulative 50% of all respondents) and where the achievement of the minimum 2 ESU condition for application for support is easier. The holdings will increase their lands by 2 ha on the average per holding (the median answer for this question) to reach a collective increase of 1,270 ha in the managed lands. The evaluators will use the bold underlined figures in extrapolating the net increase in managed lands by young farmers by the end of this M112-subsection. It should be noted that an increase in managed lands by the young farmer does not equal net increase in the managed lands in BG; this is because the young farmer may have been gradually taking over the management of the holding from the older generation of his/her family.
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The majority (68%) of the 273 respondents state that they do not own the managed lands but have rented/leased it. Twenty percent of the respondents, however, own all of their managed lands. This situation is not changing significantly as a result from the support, Economic performance The profitability of the farms was not sufficient for the upkeep and development of both the holding and the family of the young farmer (presumably with children). The starting parameters and the supported increase in the turnover, gross value added and NVA in the supported holdings is stated to be:
Table 68: Trends and expected economic performance in the supported M112 holdings
Indicator for Starting position at application level – Cumulative After the final payment – economic 2007 2008 2009 Cumulative performance N EUR N EUR N EUR N EUR Average per respondent – EUR Sales 97 1.005.399 118 1.470.684 191 2.190.722 115 1.379.987 12.000 GVA 90 607.192 103 520.280 100 1.069.398 83 701.708 8.454 NVA 87 472 302 102 222.021 156 736.004 92 471.047 5.120
The figures, however, correspond very well to the increase in the economic size of the holdings as stated to the SFA- PA in applicant’s business plans: 5.37 ESU on the average per applicant young famer. The farmers expect an increase in their market sales. 146 (63%) reply their sales will increase by EUR 7.500 per farm, but the median answer is EUR 5.000.
Investments Table 69: The M112 support will be used for investments in material assets.
Number of respondents N Cumulative investments in EUR Average per respondent – in EUR 221 Full investment value = 3.656.652 16.546 224 Investment via M112 = 2.247.740 10.035
The extrapolation of this data indicates that the beneficiaries are generally investing more than the minimum threshold for investments as set in the implementing ordinance (EUR 3.500). On the other hand, it seems hardly possible that the M112 will achieve the target of MEUR 208 worth of total young farmers’ investments, as the current data indicate that: - the M112 support initiates 60% farmers’ top-up to the investments supported by the measure, but more importantly, - the beneficiaries use only 40.1% of the EUR 25000 aid to invest in material assets in the holding. This means via extrapolation that less than MEUR 42 from M112 budget will be invested in assets, and that the total volume of young farmers’ investments will reach up to MEUR 67 (indicator O(112-1) from CMEF). This is some 30% of the target MEUR 208 set for supporting the Bulgarian young farmers in the programming period 2007-2013, and either the
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Table 70: Type of investment
Type of investment N Number of answers %
Land improvement 279 118 42,29 Machinery and equipment 279 125 44,80 Buildings, i.e. cow-sheds 279 17 6,09 Infrastructure, i.e. manure storage installations 279 1 0,35 Purchasing of lands 279 8 2,86 Purchasing of animals 279 10 3,50
Table 71: Purpose of the investments
Purpose of investment N Amount in EUR
Meeting Nitrate Directive requirements 55 256 991 Meeting milk hygiene requirements 44 35 754 Meeting animal welfare requirements 55 235 887 Production of alternative energy from RES / or production of energy cultures 37 6 140 Processing/preparations for final customer 52 49 226 ICT/ e-business 0 - Acquiring patents, ISO, R&D 0 - Production of quality foods (including of certified origin) 41 1 487 Savings in water use 47 19 106 Savings in energy use 41 13 754
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Figure 42: Measure 112: main purpose of the support in percentage
Measure 112: Main purpose of the support (%)
11%
0%1% 1% 26% 3% 0% 2%
1% 1% 1% 24%
25% 1% 3% (1) field crops – grain, technical etc. (2) energy crops (3) tobacco (4) oil crops (5) horticulture/field and vegetable production (6) greenhouses (7) vineyards for wine (8) permanent crops –fruit trees and/or bush fruits (9) dairy cows / buffalo (10) cattle-breeding and fattening (11) sheep/goats. please, underline for: (а) for milk (b) for meat (12) pigs (13) poultry (14) mixed/plant growing +livestock-breeding from the above mentioned productions / (15) other
87% of 278 respondents state that their investments depended very strongly to the support by the measure – they would not have invested any funds in the holding without the support from the measure, and only 4% of the beneficiaries would have invested between 76-99 % of the investment amount. Only 0.3% of the beneficiaries did not depend at all on M112
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Elaboration of ongoing and mid-term evaluation of the RDP 2007-2010, Bulgaria in investing in their holdings. The major part of beneficiaries’ co-financing originated from personal savings (62%), and the next in importance were the bank credits (42%); approximately 30% of the private co-invested funds originated from friends and relatives. The invested goods and services were almost 100% of Bulgarian origin.
Results from the investments More than 50% of the respondents will not introduce innovation in their agriculture activities. This is supported also from the previous tables presenting the types of investments and their purpose. The ones who will introduce innovation are split almost equally between introducing a new product or new process/technology.
Table 72: Distribution between new product and new technology
N=262 % (1) New product 62 23,7 (2) New product new technology 64 24,4 (3) Neither 136 51,9
Bio-production Almost 30% of 277 respondents claim they will start certification procedure for organic production after the final payment. (It is not clear why all of the beneficiaries who intend to start bioproduction do not consider it an innovation.). The main positive effects from M112 support as perceived by the beneficiaries are mixed (N=284): - 61% claim there will be an increase in the income, while - 23% believe this will continue the existence of the farm
Small rate of the respondents, however, expect increased production efficiency: only 7% expect higher income per 1 AWU and only 12% - higher productivity per hectare. This may consistent with the fact that less than 45% of the respondents invest in new machinery (see table above), and that only 16% the beneficiaries will get rid of old machinery older than 13.6 years on the average.
Apart from that the beneficiaries do expect benefits from M112 support in meeting the obligatory standards, and preservation of the environment, Table 73: Effect of the M112 support I
N Significant Limited No Worse Don’t know improvement improvement improvement
Num % Num % Num % Num % Num %
(1) Working conditions? 264 188 71,2 61 23,10 6 2,27 1 0,3 8 3,03
(2) Animal welfare? 124 43 34,67 13 10,48 15 12,09 0 0 53 20,07
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(3) Environmental impacts: preventing 202 81 40,09 42 20,79 19 9,4 1 0,49 59 29,2 the pollution of waters from agriculture activities? (4) Environmental impacts: nature 204 82 40,19 58 28,43 16 7,84 2 0,98 46 22,54 preservation and preservation of the biodiversity? (5) Climate changes because of 197 46 23,35 45 22,84 28 14,21 1 0,5 77 39,08 agriculture?
(6) Manure storage and spreading? 182 68 37,36 48 26,37 25 13,73 0 0 41 22,52
(7) Quality and storage capacity for 191 63 32,98 51 26,7 28 14,65 0 0 49 25,65 fruit and vegetables?
… but also in the economic performance of the holdings: Table 74: Effect of the M112 support II
N Significant Limited Not much None Don’t know improvement improvement
Num % Num % Num % Num % Num %
(1) Increase in profitability 243 149 61,31 56 23,04 18 7,4 1 0,4 19 7,8
(2) Increase in productivity 247 155 62,75 58 23,48 17 6,9 2 0,8 15 6,07 (more effective use of production factors) (3) Support for new 223 65 29,14 41 18,38 50 22,42 33 14,79 34 15,24 technologies and innovations (4) Better access to market and 247 95 38,46 65 26,31 50 20,24 16 6,47 21 8,5 bigger market share (5) Increase in the quality of the 247 161 65,18 50 20,24 25 10,12 2 0,8 9 3,64 products (6) Increase in the sustainability 249 167 49,1 49 19,67 20 8,03 0 0 13 5,22 of holdings operations
The support from M112 did open possibilities to 54% of M112 beneficiaries (N=261) to participate in the national support schemes managed by SFA-PA. This positive effect however is much smaller in view of improved access to private/bank financing: only 25% expect such positive effects.
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Table 75: Summary of the net effects from the investments (of 288 received interviews)
Indicator N Net increase because of the Extrapolation to Extrapolation to Meas. M112 support N=1480* N=4096** unit Generated employment 179 355 2 935 8.123 AWU Area of managed lands 220 1.270 8.544 23.634 HA Raised livestock 58 527 13.448 32.217 LSU Production potential 233 1.370 8.695 24.066 SGM Sales 191 101.230*** 784.400 2.170.880 EUR Investments supported 221 2.247.740 15.052.738 41.659.470 EUR by M112 Full investment value 224 3.656.652 24.160.022 66.863.104 EUR * Actual number of beneficiaries receiving the first tranche of payments till end-2009. ** Programmed target number of beneficiaries to be completely paid till end of the programming period. The figures in this column indicate the share of production factors and employment, etc., which is used, generated, etc. by the holdings of the new young farmers by end-2013. *** This figure was derived on the basis of the data above in Table 36 Trends and expected economic performance in the supported M112 holdings, where the average sales per answer is almost 12000, and the average answer per beneficiary in 2009 is 11470. The difference 530 is multiplied by 191, 1480 and 4096 to arrive to the figures in the respective columns of the table.
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Answers to EQs CEQ-112-1. To what extent has the aid facilitated the enduring setting-up of young farmers of either sex? Answer: At this time there is a little evidence that the measure has supported enduring holdings of young farmers. This is because: 1. Only the initial 50% payments of the support have been effected to holdings 5-year plans as stipulated in the implementation arrangements. It is not clear what part of the beneficiaries will survive the interim 3-year period and the 8 year period for full holding establishment 2. The rate of support (EUR 12500 at first payment and EUR 25000 total) is insufficient to establish a viable holding in most of the agriculture sectors, which will both become compliant to all standards in the 3-year interim period before the second payment of aid, and prove economically viable. At this time it seems that the holdings from the plant production sector have better chances to become enduring, not in the least – because of the present SAPS for CAP I Direct payments introduced in BG. This hypothesis is confirmed by the survey carried out among M112 beneficiaries, where the vast majority of respondents are in the plant production sector. 3. Large proportion of the young farmers need education (>50%) and orientation (- practically all), including tailor- made business consultation on the farm, as well as orientation to what exactly area holdings is operating in (i.e. N2000, NHV, etc.) and what are the associated environmental risks and obligations. The implementation of BG RDP could not provide satisfactorily this important human capacity building services not only in the period till end-2009, but also in the period until end-September 2010. This is because the M111 and M114 have not been producing benefits to young farmers in the said periods. 4. The study of the milk sector indicated there are unfair market practices towards the dairy farms other than 1st groups (not meeting the hygiene requirements). The purchasers of the raw milk push the prices down and do not always issue slips for the purchased milk – thus pushing the sales to the grey market (the shadow economy). 5. The achievement of endurance depends on the ability to invest in necessary assets and services; BG banks are unwilling to extend development credits to enterprises without economic history; young farmers on the other hand have fewer possibilities to offer real estate as collateral to bank credits; hence, their prospects for development are much harder than the ones for the established agri-holdings receiving sufficient Direct Payments under the SAPS. Provided the current economic environment in BG agriculture and food industry, and the current state support system to agriculture, at this time as somewhat enduring can be considered only 36% of the holdings of current young farmers operating in the arable crops sector (grain, technical cultures, etc.). Hence, the extent to which the measure has facilitated the enduring setting-up of young farmers for both sexes (58.4%male/40% female) is evaluated as 2. to a less extent compared to identified structural adjustment needs in BG Agriculture.
CEQ-112-2. To what extent has the aid facilitated the structural adjustment of the holdings after the initial establishment of young farmers? Answer: Based also on the previous answer, the extent to which the measure has facilitated the structural adjustment of the holdings is evaluated as 1: To no extent, at all. 31 for the holdings in the animal sector and 2. to a less extent for the
31 In animal sector it is most expensive to meet the most numerous and expensive obligatory standards and requirements for operations on the Single Market. Hence, here the flat rate investment support under M112 contributes the least to the attainment of
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CEQ-112-3. To what extent has the aid contributed to improving the human potential in the agricultural sector? Answer: By end-2009 the measure has paid the first installments to 1480 new farmers (young farmers are agriculture entrepreneurs who start for the first time agriculture activities). In 2007 the number of big holdings was estimated to be 21.000, and the number of semi-subsistent farms: 95.800. At the same time the number of the registered agriculture producers is changing by a quarter from approximately 100.000 in year 2009 to less than 75.000 by 15. October 2010 (see Table 1 Dynamics in the pool of potential beneficiaries under BGRDP measures M111, M112, (M14), M121, M141, M142, M143, M311).
If in the 2008-2009 M112 has started to help the establishment of 1480 new holdings of young farmers, then the measure M112 has contributed 2. to a less extent in improving the human potential in agriculture sector (1.5% of total registered agriculture producers in 2009). However, in 2010 the entire budget of the measure has been fully contracted and payments under the first tranches have been effected. This indicates that by the end- 2013 year the measure will have 3: to some extent helped the improving of the human potential in BG Agriculture when:
it will have helped the establishment of 5.5% of the registered holdings, provided the current 75000 registered producers remain the same in number by 2013 these 4096 holdings will be managed by relatively young and active entrepreneurs, but most importantly – by entrepreneurs who have comparative knowledge and to the EU – general level
CEQ-112-4. To what extent has the aid contributed to improving the competitiveness of the agricultural sector?
Answer: By end-2009 the measure has offered first tranche of monetary support to 36% of programmed beneficiaries, i.e. - to insufficient number of holdings operating primarily in the plant production sector. Hence the contribution to the competitiveness of BG agriculture is evaluated as 1: To no extent, at all. This is further reinforced by the fact that the entire economic potential of the holdings will be achieved not earlier than the third year of their functioning, but their full economic performance will be available not earlier than the sixth year of their operation, when they have not only met the obligatory requirements and relevant standards but also have sufficient business history and place in the economic networks adding value to agriculture products and/or the respective processing chains on the Common Market.
“endurance”. It can be argued that the condition to meet them even at a latter stage acts as effective market entrance barriers to new players in the animal production sector – a failure of a “free market” where entrance and exit are not hard to realize. The banking sector is incapable of bringing down the barrier, and the state schemes still need adjustment to help the economically vulnerable farms of the young farmers.
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Conclusions and recommendations
The chapter on the re-assessing the intervention logic above established that the M112 is highly relevant for the restructuring needs of BG agriculture in terms of economic viability of the farms and the upgrade of the involved human potential. The design of the measure (lack of ranking criteria for selecting the most relevant beneficiaries/regions/sectors), together with the cumbersome implementation arrangements are hurting the efficiency and thus the effectiveness of measure implementation.
Hence the favorable effects in the supported holdings and their impacts on the general competitiveness of BG agriculture are insufficient, but even more importantly - drastically lagging behind compared to the potentially attainable parameters. Another concern is the sustainability of the results/impacts of the implemented measure. The economic environment in BG agriculture in 2009 tended to favor these plant production sub-sectors which can achieve maximum rate of support from the SAPS Direct Payments. This put greater difficulties to these holdings in the animal sector which have not sufficient agri-lands under their management. Another detriment to sustainability was the failure of the BGRDP actual implementation to provide much needed education, training and information services, as well as tailor-made consultations to bolster the human potential of the supported managers of newly created agriculture holdings.
6.3.1. M121 Modernisation of agricultural holdings
Objectives and Rationale
To improve the overall performance and competitiveness of the agricultural holdings through modernization of the factors of production, and the introduction of new processes and technologies, targeting production of quality agricultural products; To improve the protection of the environment; To promote the respect of Community standards and improvement of conditions on the agricultural holdings, especially related to occupational health and safety, hygiene and animal welfare.
The measure supports the modernization and the meeting of Acquis requirements in Bulgarian priority agriculture sub- sectors. There are guaranteed budgets to ensure appropriate targeting of priority needs in BG subsectors as well as EU priorities. (See also the relevant M121 texts in sub-section 5.3. above ). There are ranking criteria, but they were not effectively used in the selection among the incoming applications in the period 2008-August 2009. More or less the first- come-first-serve-principle to contract the applicants seems to have been used instead.
The net budget of the measure is MEUR 477. The measure offers up to EUR 1.500.000 per farm holder for the entire programming period. The measure is programmed to support 5390 beneficiary holdings, and then the average amount of support available per beneficiary under the budget till end-2013 is calculated at EUR88.500. 3,700 of the supported beneficiaries should be introducing new products or techniques.
General data on Implementation
By August 2009 the entire non-guarantee budget of the M121 (referred unofficially to as the “agriculture machinery” budget) had been applied for and exhausted (MEUR 201= MUR 447*45%).
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Data from SFA-PA on 1,761 beneficiaries (covering the period 2008- end-May 2010) indicated that 117 of the contracts are with physical persons - women (6.6%) , 498 are with physical persons – men (28.3%), and 1146 are contracts with firms (65.1%). Some 260 of the contracts with firms are actually contracts with some form of cooperatives, and some 350 are sole proprietors (ET-firms of physical persons, personally liable 100% to the respective firm assets). By end-September 2010 payments to 1,364 beneficiaries had been effected for the total amount of EUR 164.729.432. This calculates at EUR 120,700 average support paid per beneficiary (136.4% higher than the programmed average of EUR 88,500 ). However, almost 88% of the number of payments is paid as first-advance payments to big, complex and expensive projects, which means that the average subsidy paid per supported project will be even higher. This means that the target of supported 5,390 farmers is unachievable unless lower limits of the maximum support per holding are enforced. By end-2009 the measure had paid to 537 beneficiaries32 the amount of MEUR 71.427.370. This calculates at EUR 133.000 support paid on the average (150% of the programmed EUR88.500 average subsidy per beneficiary). Again, the majority of the number of payments are just first/advance payments to bigger investment projects. The excel file “pisma odobreni reduced.xls” originating from the SFA-PA contains detailed information of all payments carried out till end-May 2010. Regarding M121 it contains entries for 1011 payments under M121 which cumulative payments of MEUR 124.2 (52.8+71.4, respectively for the periods: Jan-May 2010 and 2008-2009). The information therein indicates that 325 payments (32% of all) had used approximately MEUR 81.0 of all the payments (65% of all paid amount). Almost all of them were first/advance payments on big/complex projects which are likely to absorbed at least as much funds until their successful implementation within the 24-month period stipulated in the implementing ordinance. All this indicates that the majority of M121 non-guarantee support is absorbed by a few hundred expensive projects of obviously financially strong entities capable of securing the necessary bridge capital for such investments. The file also indicates that just five M112 beneficiaries (2 female, 3 male), have also received payments for M121. Their collective paid amount is almost EUR 270.000 (EUR 54.000 on the average). It should be noted however, that all of these payments are the advance payments of bigger and more complex projects. These last findings indicate quite a weak synergy between the support under M112 and M121. It also indicates that the ranking system of M121 does not sufficiently guarantee investment support to M112 beneficiaries (i.e. the 4,096 beneficiaries cannot any longer have access to support for general competitiveness [non-guarantee M121 budgets], but just to the reserved budgets). The regional uptake of M112 support was quite unbalanced (see Annex 6. REGIONAL DISTRIBUTION OF BGRDP PAYMENTS PER DISTRICT PER MEASURE (in EUR). In the period 2008-2009 most M121 payments (MEUR 71.4) were paid to beneficiaries from North Western Region (MEUR 20.4 =28.5%). In comparison, the South Central the North Western Planning Regions managed to absorb collectively MEUR 7.2 (10%). The figure for SW Region is especially low as it barely reaches 1.1% of all payments made. The imbalances at district level are even more significant: Pleven (MEUR 8.9) and Dobrich (MEUR 7.2) alone managed to attract already 22.5% of all the M121 payments in 2008-09 period. [Each of the district outperformed by almost 3/4 times the third most active district Silistra, which managed to attract MEUR 4.8 in that period] In Jan-May 2010 the two districts
32 To preserve the integrity of evaluation, these are the beneficiaries where the positive impacts from the support will be unfolding first, and these are the projects which should be in the scope of measure evaluation. Despite this, the evaluators will extrapolate the findings, conclusions and recommendations for the entire number of 1761 beneficiaries paid till end-September 2010.
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Elaboration of ongoing and mid-term evaluation of the RDP 2007-2010, Bulgaria also attracted significant amount of M121 payments: Pleven attracted MEUR 3.4 and Dobritch – MEUR 8.9. This collectively accounted to 23.3% of all MEUR 52.8 paid in the first 5 months of 2010. The number of payments paid in the two districts is: 85 in Pleven and 143 in Dobrich for the entire period 2008-May 2010. The number of beneficiaries however is even smaller as 4 of the payments in Dobrich reached actually two beneficiaries, and in Pleven two payments had been done to one beneficiary. This data can be transformed in the following average amounts of subsidies paid in Pleven and Dobrich: - Pleven: MEUR 12.3/84 beneficiaries = EUR 146.000 (165% of the programmed average of EUR 88.500 for 5390 beneficiaries) - Dobrich: MEUR 16.1/141 beneficiaries = EUR 114.000 (129% of the programmed average of EUR 88.500) Collectively, the two districts are attracting 22.9% of all payments ever paid under M121 in the period 2008-May 2010. The outreach of the support is, however, unsatisfactory. In Pleven the aid is reaching just 3.5% of the 2406 active registered agriculture producers by 15 October 2010. In Dobrich the situation is similar: 3.9% of the 3709 active registered agriculture producers received payment. It should be noted that the two districts are among the BG districts which have higher than average areas of arable lands: Pleven 325000 ha (6.5%) and Dobrich 345000 ha (6.9%) of total 4,980,000 BG arable lands. In comparison, the SAPARD M1.1. Farm Modernisation measure supported 65 beneficiaries in Pleven with the total amount MEUR 8.9, and in Dobrich 128 SAPARD beneficiaries with total MEUR 15.5. Even if the two sets of SAPARD and M121 beneficiaries are completely different, the amount of M121 payments seems concentrated in two few beneficiaries compared to the active registered agriculture producers in October 2010 – 6115 in the two districts collectively. It should be noted that at least 377 (6.1%) of these 6115 producers are new farmers - beneficiaries under M112 Young Farmers, and should have access to investment support for further development, sustainability and endurance of their holding – meaning access to the general non-guarantee budget, financing the holdings general competitiveness. In the other extreme are five districts which received none or very insignificant support from the M121 payments in 2008- 2009: Kjustendil (EUR 0), Pernik (EUR 0), Kardjali (EUR 35.730), Blagoevgrad (EUR 51.710), Gabrovo (EUR 261.195). In Jan-May 2010 their M121 payments were: Kjustendil (EUR 0), Pernik (EUR 172.500), Kardjali (EUR 36.530), Blagoevgrad (EUR 39.400), and Gabrovo (EUR 710.090). Collectively their full support is EUR 1.307.000 (2008-May 2010), equal to just 4.6% of MEUR 28.4 paid collectively to Pleven and Dobrich in 2008-May 2010 period, and to just 1% of any M121 payments in the said period (MEUR 124.2).
The aid reached just 13 of 11.260 registered active agriculture producers (0.11%!) and will have insignificant positive benefits on 418.900 ha of arable lands (8.4% of total 4.980.000 BG arable lands).
The evaluators note that the least beneficial impacts compared to potential needs of restructuring support is identified in Kardjali, where by October 2010 there are supported only 3 active registered agriculture producers out of 6371 total. At the same time Kardjali is the district experiencing the most drastic decline (-33%) in the number (minus 3100) of active registered agriculture producers by October 2010 compared to their number in 2009. [Only the district of Smoljan has worse situation where the number of active registered agriculture producers dropped by 54% from more than 4000 to just over 2000 producers].
Kardjali was also one of the districts which participated the least under SPAPRD M1.1. Modernization of Agriculture holdings, and where the termination of state support for tobacco production and the restructuring of the milk farms to meet
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Elaboration of ongoing and mid-term evaluation of the RDP 2007-2010, Bulgaria the hygiene requirements, will cause the fastest and the largest economic turmoil in district’s agriculture and general economy. As a conclusion – the territorial implementation of M121 does not meet in balanced manner the needs for supporting the competitiveness of agriculture holdings across the different BG districts. This in the medium term is likely to reinforce the intensification of regional disparities for potential for growth (some districts will enjoy greater proportion of modern assets and the associated greater productivity per ha and per AWU, - and consequently, higher profitability per production factor). The situation is particularly worrying for these districts where the number of active registered agriculture producers is also drastically declining, as this means that they will be suffering from diminished agriculture output ,incomes, higher poverty levels and possible emigration of active workforce unless it is aided to convert to alternative gainful economic activity. 1. It seems justified to increase the non-guaranteed budget of M121 but to limit it / or at least strongly prioritize it to the districts lagging behind in their participation in M121, especially for the ones which also had weaker participation in SAPARD M1.1. 2. To reinforce the sustainability in implementing M112 and M141, It seems justified that the larger part of this non- reserved budget is allocated with priority to the M112 beneficiaries and the M141 beneficiaries. Separate guaranteed budget under M121 for general competitiveness is also necessary for the Producers Organizations supported by M142 (which should also be consulted under M114 + M143). Fruit and vegetables sector and former tobacco producers for conversion to other agricultural activities are also in need of a targeted investment support. 3. To ensure that the new non-reserved aid is reaching greater number of holdings, it seems justified to limit the upper limit of M121 support only to the family holdings, or the small and medium sized holdings, or alternatively: limit the upper maximum of aid available per beneficiary for the entire 2007-2013 period. These maximums, however, should take into consideration the fact that the businesses in the different agriculture subsectors require different intensity of investment, and that the final result from the BGRDP support should be an enduring and sustainable holding operating in accordance with all relevant Acquis standards and requirements as set in CR73/2009 and in CR 1698/2005.
Data from the questionnaires Beneficiary Profile 212 filled in interviews were received from respondents-beneficiaries. The data from the interviews indicates that 68% of the respondents had between 11-20 and more years of experience in agriculture (However, 3% had less than 1 year experience at the time of application). 1-8% of the respondents did not know whether their holdings are within or bordering a protected area. 3.5-8% of the beneficiaries did not know whether their holding is within or bordering lands of High Nature Value, Nitrate Vulnerable Zones or Less Favored Areas. 88 respondents – physical persons – responded to the question if they had formal professional education in the agriculture sector. 39% of them stated they didn’t have such degree. Average economic size of the respondents was 108.5 – 109 ESU (N=159).
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Main agriculture activity When asked what are the main types of holdings produce (up to three types), their replies are distributed as follows: Table 76: Agricultural activity
1st produce* 2nd second produce 3rd produce TOTAL Respondents, N 209 117 54 (1) Field Crops: Grain, technical cultures, etc. 195 1 1 (2) Energy cultures 1 51 0 (3) Tobacco 0 5 0 (4) Essential oil cultures 0 37 22 (5) Horticulture 3 2 4 (6) Greenhouses 0 1 0 (7) Vineyards for wine 1 7 3 (8) Perennials – orchards or berry plantations 5 3 10 (9) Milk cows and buffaloes 1 6 10 (10) Cattle for meat 0 1 0 (11) Sheep/goats 0 2 4 (12) Pigs 1 0 0 (13) Poultry 1 0 0 (14) Mixed animal + plant from the above 1 1 0 (15) Other (in most cases are beehives) 21 0 0 * Indicates the primary produce by the holding (the one which brings most profits).
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Measure 121: Main Production (%)
0%0%0% 3% 0%0%0% 0% 2% 1%0%
94%
(1) field crops – grain, technical etc. (2) energy crops (3) tobacco (4) oil crops (5) horticulture/field and vegetable production (6) greenhouses (7) vineyards for wine (8) permanent crops –fruit trees and/or bush fruits (9) dairy cows / buffalo (10) cattle-breeding and fattening (11) sheep/goats. please, underline for: (а) for milk (b) for meat (12) pigs (13) poultry (14) mixed/plant growing +livestock-breeding from the above mentioned productions / (15) other
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The data indicates strong orientation of the beneficiaries to the plant production sector, especially in the arable crops subsector. The answers of the respondents do not indicate holdings conversion to any different product as a result of the support: the majority (91.4% of the respondents will continue to grow field cultures). Only 3 of the respondents indicated animal production as primary business, and only 1 of them are raising milk cows or buffaloes. However, there are 19 farms which add value by raising animals as the secondary or tertiary in importance agriculture activity. From support will benefit slightly less than 3376 LSU, the majority of which are bovine (1846 LSU) or sheep/goats (almost 800 LSU). Unlike the situation with M112 there will be no net increase in the LSU as a result from the M121 support.
Employment 197 respondents claimed that they provided FTE employment to 3017 employees (15.5 on the average). 537 of them were family members. 193 were young people <25 years of age. 675 were women. The holdings provide part time employment as well - cumulative for 687 workers. 86 (44% of the respondents did not hire part time workers). However, the beneficiaries expect to open up to two job p. laces (AWU) after the final payment: Table 77: Employment
Respondents, N Employment expectations Number of created/closed jobs 105 Increase of job places 206 35 - Of which women 55 46 - Of which people < 25 years 43 54 Decrease in job places 119 18 - Of which women 24 11 - Of which people < 25 years 6 Net changes in the employment of Increase of job places 87 159 respondents - Of which women 31 - Of which people < 25 years 37
159 respondents answered there will be changes in the number of their employees. More than 30% of them declared they were planning o reduce the number of their workforce. The net increase in the employment in the 159 holdings will be 87 – quite weaker than the employment rate ensured by M112. 87% of the respondents are quite certain that the employment will be preserved in the three year period after the final payment of M112. On the other hand, almost 18% of respondents do not know if they will be able to maintain the newly created employment. Land coverage and ownership According to the data from 203 respondents, a total of 222.060 ha managed by the farmers are actually supported via the M121 support (1.100 ha on the average). The majority of the respondents are renting the lands from their owners: 77(38.9% of all respondents) do not own any lands, and 54% - own up to 25% of their managed lands.
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184 respondents claim they will be changing the area of their managed lands after the final payment of M121 support: 152 will increase it by 16.176 ha (106 ha on the average), but 31 claim they will be decreasing their managed lands by 1319 ha (41 ha on the average). The net change in managed lands of the 184 respondents after the final payment is therefore expected to be positive at 14.900 ha.
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Economic performance
Table 78: Trends and expected economic performance in the supported M121 holdings
Indicator for Starting position at application level – Cumulative After the final payment – Cumulative & economic 2005 2006 2007 2008 2009 average per respondent performance N EUR N EUR N EUR N EUR N EUR N EUR Average per respondent EUR Sales 153 64.550.000 158 93.400.000 170 95.300.000 174 132.900.000 176 131.800.000 107 85.900.000 803.000 GVA 142 31.600.000 146 39.800.000 157 48.600.000 162 76.900.000 165 76.400.000 102 56.900.000 558.000 NVA 143 13.100.000 145 23.600.000 157 24.800.000 162 40.400.000 162 33.600.000 101 32.900.000 326.000
The data indicates that the majority of the respondents are big for the Bulgarian standards and are capable of mobilizing significant financial resources when necessary.
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Investments The M121 support will be used for investments in material assets. Table 79: Cumulative investments
Number of respondents N Cumulative investments in EUR Average per respondent – in EUR 199 Full investment value = 51.029.997 256.400 182 Investment via M121 = 34.795.969 191.200
The extrapolation of this data indicates that the beneficiaries are generally investing 34% more in the projects than the 50% obligatory co-financing rate (65.000/191.200). The evaluators are not able to say if and what part of this is due to non-refundable VAT tax payments. The majority of 201 respondents (96%) will use the support for investments in machinery and equipment (for land cultivation, biogas installations etc.). The majority of the remaining respondents (43%) prefer to invest in land improvement (plantations of perennials, irrigation, fencing, etc.).
Table 80: Type of investments
Type of investment N Number of answers %
Land improvement 201 5 2.5 Machinery and equipment 201 193 96.0 Buildings, i.e. cow-sheds 201 2 1.0 Infrastructure, i.e. manure storage installations 201 1 0.5
Table 81: Purpose of investments
Purpose of investment N Amount in EUR
Meeting Nitrate Directive requirements 39 3 957 622,6 Meeting milk hygiene requirements 0 - Meeting animal welfare requirements 25 368 832,2 Production of alternative energy from RES / or production of energy cultures 23 239 017,2 Processing/preparations for final customer 38 5 751 880,8 ICT/ e-business 22 1 158,6 Acquiring patents, ISO, R&D 21 4 039,2 Production of quality foods (including of certified origin) 41 1 487,3 Savings in water use 21 37 002,2 Savings in energy use 39 3 816 400,2
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Figure 43: Measure 121: Main purpose of the support in percentage
Measure 121: Main purpose of the support (%)
1% 1% 1%0%0% 4% 0%0% 0%0% 1%
92%
(1) field crops – grain, technical etc. (2) energy crops (3) tobacco (4) oil crops (5) horticulture/field and vegetable production (6) greenhouses (7) vineyards for wine (8) permanent crops –fruit trees and/or bush fruits (9) dairy cows / buffalo (10) cattle-breeding and fattening (11) sheep/goats. please, underline for: (а) for milk (b) for meat (12) pigs (13) poultry (14) mixed/plant growing +livestock-breeding from the above mentioned productions / (15) other
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Part of 203 respondents stated that their investments depended somewhat strongly to the support by the measure – 16.75% would not have invested any funds in the holding without the support from the measure, 44% could realize at least 50% of the investment themselves.
In the opposite extreme were 3.45% of the beneficiaries would have invested between 76-99 % of the investment amount, and 3.9% of the beneficiaries did not depend at all on M121 in investing in their holdings. The major part of beneficiaries’ co-financing originated from bank credits (146 respondents) and from personal savings (83 respondents). Only 17% of the invested goods and services were of Bulgarian origin.
Results from the investments 89 (56% of 161 respondents) respondents claim that additional produce worth EUR 85.000 will have better access to BG and international markets. 85% of 193 respondents will replace agriculture machinery aged 15.2 years on the average. More than 44% of the respondents will not introduce innovation in their agriculture activities.
Table 82: Distribution of new product and new technology
N=188 % (1) New product 17 9.04 (2) New product new technology 88 46.8 (3) Neither 83 44.2
Bio-production Almost 20% of 172 respondents claim they will start certification procedure for organic production after the final payment.
The main positive effects from M121 support as perceived by the beneficiaries are as follows: - “to a large degree”: 85.19% claim there will be an increase in the income (N=161 of 189), - “to a large degree”: 88.02% - better use of production factors (N=169 of 192), - “to a large degree”: 74.30% - increase of product quality (N=133 of 179), - “to a large degree”: 74.55% - increase in the sustainability of holding’s operations (N=123 of 165), The introduction of new products and technologies (39.7%) and the better access to market / bigger market share (35.3%) and not so strong effects expected via the support.
Table 83: Effect of M121 support I
N Significant Limited Not much None Don’t know improvement improvement
Num % Num % Num % Num % Num %
(1) Increase in profitability 189 161 85.19 23 12.17 4 2.12 0 0.00 1 0.53
(2) Increase in productivity 192 169 88.02 20 10.42 1 0.52 0 0.00 2 1.04 (more effective use of
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production factors)
(3) Support for new 151 60 39.74 40 26.49 18 11.92 17 11.26 16 10.60 technologies and innovations (4) Better access to market and 150 53 35.33 36 24.00 32 21.33 12 8.00 17 11.33 bigger market share (5) Increase in the quality of the 179 133 74.30 33 18.44 6 3.35 3 1.68 4 2.23 products (6) Increase in the sustainability 165 123 74.55 31 18.79 7 4.24 0 0.00 4 2.42 of holdings operations
Apart from economic benefits, the beneficiaries do expect the M121 support to help them in meeting the obligatory standards, and preservation of the environment:
Table 84: Effect of the M121 support II
N Significant Limited No Worse Don’t know improvement improvement improvement
Num % Num % Num % Num % Num %
(1) Working conditions? 200 184 92.00 13 6.50 0 0.00 0 0.00 3 1.50
(2) Animal welfare? 71 22 30.99 4 5.63 8 11.27 0 0.00 37 52.11
(3) Environmental impacts: 120 38 31.67 28 23.33 16 13.33 3 2.50 35 29.17 preventing the pollution of waters from agriculture activities? (4) Environmental impacts: nature 133 52 39.10 38 28.57 10 7.52 4 3.01 29 21.80 preservation and preservation of the biodiversity? (5) Climate changes because of 128 33 25.78 37 28.91 15 11.72 5 3.91 38 29.69 agriculture?
(6) Manure storage and spreading? 113 48 42.48 27 23.89 10 8.85 2 1.77 26 23.01
(7) Quality and storage capacity for 74 6 8.11 7 9.46 12 16.22 5 6.76 43 58.11 fruit and vegetables?
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The support from M121 did open possibilities to 60% of beneficiaries (N=205) to participate in the national support schemes managed by SFA-PA. This positive effect, unlike for M121 beneficiaries is well matched also to a better access to bank credits: 70% (N=195) state that the support has in very big extent (33.3%) or to some extent (37%) improved their access to bank and private financing.
Table 85: Summary of the net effects from the investments (of 212received interviews)
Indicator N Net increase because of Extrapolation to Extrapolation to Meas. the M121 support N=537* N=5390** unit Generated employment 159 87 294 2 949 AWU Area of managed lands 184 14 900 43 485 436 473 HA Raised livestock Na na**** na na LSU Production potential 132***** 1 446 5 883 59 045 SGM Sales 176 131 800 000 28 965 835 290 737 150 EUR Investments supported 182 34 795 969 102 667 227 1 030 496 005 EUR by M121 Full investment value 199 51 029 997 137 704 062 1 382 169 265 EUR * Actual number of beneficiaries receiving the (first) payments till end-2009. ** Programmed target number of beneficiaries to be completely paid till end of the programming period. The figures in this column indicate the share of production factors and employment, etc., which is used, generated, etc. by the holdings of the supported farmers by end-2013. The evaluators are aware of the bias here caused by first paying to big projects of big holdings under M121, which are also prevailing the selected sample of beneficiaries for questionnaires. The real results will be much smaller, not the least because the prevailing part of the present M121 will continue to utilize M121 funds (88% are receiving just first payments under M121 for apparently larger projects; these additional funds, however, will be impacting the same lands, employment, sales as stated in the texts above.). At this moment this bias cannot be cleaned/smoothened. *** This figure was derived on the basis of the data above in Table YYY Trends and expected economic performance in the supported M121 holdings ****The cumulative net value from answers does not indicate an increase in the number of supported LSU because of the M121 project. *****107 will increase their economic size; 25 think they will decrease their economic size. The increase presented in the table is the net among the two.
Answers to EQs CEQ-121-1. To what extent have supported investments contributed to a better use of production factors on agricultural holdings? In particular, to what extent have supported investments facilitated the introduction of new technologies and innovation? Answer: Data from questionnaires reveal that the support contributed 4: to a high extent to a better use of the production factors on agricultural holdings. The support however, does 2. to a less extent contribution to the introduction of new technologies and innovation? These effects, however, will benefit mainly the field crops sector, and a limited number of beneficiaries. CEQ-121-2. To what extent have supported investments enhanced market access and market share of agricultural holdings? Answers: The information from the questionnaires reveals that the measure has enhanced 3: to some extent the market access and market share of the agricultural holdings. Again from these effects, however, will benefit mainly the field crops sector, and a limited number of beneficiaries.
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CEQ-121-3. To what extent have supported investments contributed to an enduring and sustainable activity of agricultural holdings? 0: do not know. The measure has supported investments of already enduring and sustainable agricultural holdings of much greater than the average sales and profitability. There may be more deadweight effects than added value from the extended M121 support. CEQ-121-4. To what extent have supported investments contributed to improving the competitiveness of the agricultural sector? 1: to no extent, at all. Support was extended to holdings which were already operating for 11-20 years on the market, generating sufficient sales/profits to cover their own investment expenses. The deadweight effects are quite big. On the other hand, or very little aid for general competitiveness was provided to limited number holdings mostly from the grain sector. The rest of the BG agriculture sectors which are also generating significant output in the economy and much greater employment as well, could not participate in the M121 – non-guarantee budgets. There are various and numerous reasons for that, but among the core reasons is the present SAPS system for Direct Payments introduced in Bulgaria.
Conclusions and recommendations Relevance The measure is very relevant to the needs of Bulgarian agriculture. Neither SAPARD, nor M121 have satisfactorily met the needs for modernization in the BG agriculture sectors outside the field crops sector. Its design however must be improved to increase its reach to the smaller and medium size (family) businesses, the present BGRDP beneficiaries (M112, M141, M142) and the priority agriculture sectors. All these need investment support including support for achieving general competitiveness by purchasing necessary agriculture machinery. Against the investment support they should additionally achieve full compliance to all relevant Acquis requirements. A specific form of contract among the MAF and the individual farmers could be devised, whereby all necessary steps for achieving compliance and related expenses. Such arrangements are already existing for the beneficiaries under M112 and M141. The redesign of the measures is not sufficient to improve its relevance. Steps must also be taken to ensure access to bridge capital and to quality training and consultation tailor-made to farmers needs. The EU-aspect of the M121 will be greatly increased with accompanying tailor made Promotion Campaign explaining the EU Strategic Priorities and Acquis (standards and requirements) all in the context of the CAP expectations that farmers should deliver Public Goods. Such need was already identified with the M112 and M121 beneficiaries where between 3-9% of the respondents did not know if they were managing lands in protected areas or other areas under specific regime (NATURA, LFA etc.). Naturally it cannot be expected from them to know and observe the then the specific requirements/technologies which must be observed in such areas. All this calls for a strong link in implementing the measures M121, M141, M142, M112 (especially information actions for raising the innovation awareness on energy efficiency, other EU-level priorities), M114 (especially on-farm tailor made consultation ) but also – the National Support Schemes, as the numerous smaller farmers have very hard access to bank credits for development. (The MAF has already initiated several new support measures in this respect, which are appreciated very high by the evaluators.).
Effectiveness The measure is not effective, neither spatially-territorially, nor sectorally, because of the high deadweight effects from providing support to already established farms with easy access to private funds for development.
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Effects There are quite high positive effects in the supported enterprises, but they are contributing little to the improving the general situation in the other sectors.
Efficiency Assessed as very low for the above reasons: Also, very low because of the extremely long period in which a project must be carried out. Separate steps must be taken by both the SFA-PA and the MA in improving the delays in the support reaching the selected applicants.
Sustainability It adds little to the sustainable agriculture in BG especially in view of the number of active agriculture producers. In some districts the measure does not add to no sustainability at all.
Recommendations The general review of the implementation of the measure brought up the following suggestions for improvement of the implementation of the measure It seems justified to increase the non-guarantee budget of M121 but to limit it / or at least strongly prioritize it to the districts lagging behind in their participation in M121, especially for the ones which also had weaker participation in SAPARD M1.1. To reinforce the sustainability in implementing M112 and M141, It seems justified that the larger part of this non- reserved budget is allocated with priority to the M112 beneficiaries and the M141 beneficiaries. Separate guaranteed budget under M121 for general competitiveness is also necessary for the Producers Organizations supported by M142 (and M114 + M143) fruit and vegetables sector and former tobacco producers who apply to convert to alternative agricultural activities, but also M214 beneficiaries who operate other than organic farming (for which there already is a reserved M121 budget); To ensure that the new non-reserved aid is reaching greater number of holdings, it seems justified to limit the upper limit of M121 support only to the family holdings, or the small and medium sized holdings, or alternatively: limit the upper maximum of aid available per beneficiary for the entire 2007-2013 period. These maximums, however, should take into consideration the fact that the businesses in the different agriculture subsectors require different intensity of investment, and that the final result from the BGRDP support should be an enduring and sustainable holding operating in accordance with all relevant Acquis standards and requirements as set in CR73/2009 and in CR 1698/2005. To target the support to at least 2% of the active agriculture producers in the various districts of the country (these can also be beneficiaries under M112, M141, M142)
The analysis on the questionnaires gives justification for on additional recommendation: 1. To limit the M121 general competitiveness’ budget from going to grain sector. This limitation should of course not be applied to the beneficiaries with mixed production, as well as the beneficiaries under M112, M141, M142.
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6.3.2. Rejected Applications under M112 and M121 Rationale In this subsection the evaluators try to compare the effects from M112 and M121 support against the parameters in non- supported farm holdings – one that have been rejected for support under either of the measures. 90 filled in interviews were received from respondent beneficiaries out of total 359 questionnaires sent. In the received filled in questionnaires there is a strong bias of the replies towards that sub-population of rejected applicants which thought they were discriminated against, and who are determined to fight for their rights to receive the BGRDP M112 and/or M121 support. Data from the questionnaires Reasons for rejection Only 2% of the non-successful M112 and M121 applicants claim they were not informed for the reasons for their rejection by the SFA-PA. The period for informing the beneficiaries was too long 6-16 months (2 – 5 times the period for notification as set in the implementing ordinance). The very long period for informing the candidates causes financial losses to them and brings down the trust in BGRDP, MA, SFA-PA. The primary reasons for rejection of the applicants were: dissonance in the stated areas (12%), insufficient budgets (9.3%), mistakes in related documents (9%), mistakes in the BP and the financial parameters of the projects (3.5%). However, the majority of the respondents point out “Other reasons” as the primary cause for rejection (58%). The high percentage in the last item can be explained partially explained by the answers to the questions if the respondents believed that the application was assessed appropriately/honestly in the District and Central SFA_PA administration. 35% of the respondents claim that their applications were not considered honestly in the SFA-PA. 29% on the other hand do not have opinion, which may be an indicator for their lack of knowledge on project selection procedures and the relevant project management cycle. Fourty six (54% of the respondents) claim they have filed claims against the rejection of their applications, even though the percentage of respondents who thought that their applications were not considered honestly is 35%. Half of the respondents claim they knew their rights as applicants and were aware where to file the objection to their rejection. The rejection to support their agriculture businesses will have negative effects on their prospects for development: 53% claim they will have to cut down production scale, and 16% claimed that failure to receive BGRDP aid will bring bankruptcy to their holdings. Only 4.6% of the respondents will not experience negative consequences from the rejection of their applications. Beneficiary Profile The data from the interviews indicates that the majority of the applicants were of the semi-subsistent type: collectively they reached almost 250 ESU, which calculat4s at 3.73 ESU per respondent holding (N=67). The most common respondent has less than 1 year experience (45%) or between 2-5 years (27%) of experience in agriculture. This indicates that the majority of the respondents are applicants under M112, and that they are relatively new to the National/EU support schemes, as they failed to prepare selectable applications, and/or prepared them late when the budget of the measures was already applied for.
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Significant part of the holdings lands were located in LFA – mountainous and LFA – other, as 21.4% of the applicants claimed that the holding was entirely located in one of the two LFA categories. On the other hand, 9.7%, 9.8% and 7.3% claimed they did not know whether their holding is respectively in lands of HNV, NVZ and LFA-other. If an extrapolation to all potential applicants for support under M112 and M121 should be made, this is an indication that significant part of the new entrants (M112) in the agriculture business – with experience up to 2 years, may need additional orientation in the location of the lands of their holding and the additional rules they must adhere to and the additional benefits they could receive from BGRDP measures.
Main agriculture occupation When asked what are the main types of holdings produce (up to three types), their replies are distributed as follows: Table 86: Primary agricultural activity/ Agriculture activity mainly intended for support
1st produce* 2nd second produce 3rd produce At Intended for At Intended for At Intended for application support application support application support TOTAL Respondents, N 87** 87 51** 48 24** na*** (1) Field Crops: Grain, na technical cultures, etc. 45 29 0 0 0 (2) Energy cultures 0 1 3 4 0 na (3) Tobacco 1 0 3 0 0 na (4) Essential oil cultures 0 1 3 1 1 na (5) Horticulture 5 5 6 6 1 na (6) Greenhouses 0 2 1 1 2 na (7) Vineyards for wine 3 3 2 1 0 na (8) Perennials – orchards or na berry plantations 9 19 10 8 2 (9) Milk cows and buffaloes 11 14 7 6 2 na (10) Cattle for meat 1 2 7 7 3 na (11) Sheep/goats 5 5 4 3 0 na (12) Pigs 1 2 1 7 0 na (13) Poultry 1 0 0 0 0 na (14) Mixed animal + plant from na the above 0 0 4 6 9 (15) Other 5 4 0 5 4 na Source: Own survey. * Indicates the primary produce by the holding (the one which brings most profits). ** By the time of application *** The respondents were asked to point out up to 2 productions intended for support by the BGRDP.
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The data indicates strong orientation of the beneficiaries to the plant production sector, and even when the holding is of the mixed production the produce is still in the plant production agriculture sub-sector (mainly of perennials). Still, significant 22% of the respondents indicated animal production as primary business, and very substantial 42% claim that they raise animals as secondary of tertiary activity. This actually indicates that the applicant holdings are of the mixed production type and that almost 50% of them raise some kind of animal or poultry. The total number of holdings raising milk cows as primary of additional agriculture activity is 20 (23% of the respondents). If there is a sufficient statistical validity in this ratio: 50% of all rejected holdings raise animals, then the extrapolation to all rejected holdings shows that a very significant number of animal holdings were not granted access to the support under M112 and M121. The evaluators do not know at this time if they applied for M141 support on a later date, preferred to return to the shadow economy, or ceased agriculture activities altogether. 34 holdings (of total 89 respondents) answered to the question if they intended to increase or decrease their animal stocks. None of them intended to decrease the number of their animals, and the total number of increased animal numbers reached 1273 LSUs. Almost half of this increase is due to the intended increase in the bovine animals: 28 holdings would collectively increase by 484 LSUs from cows (21 respondents), 65 LSUs from calves, 10 LSUs from buffaloes, 11 LSUs from breeding heifers and 30 from calves for meat production = 600 LSUs. The data also indicates that some 10-15% of the respondents planned to carry out an on-farm diversification or orientation to an alternative primary production. Most significant was the intended increase in the holdings raising cattle- by 110% increase compared to the initial breakdown of the primary productions. 35.6% on the other hand wanted to convert from producing arable crops as their primary product to an alternative production, but their applications as well as all other applications considered in this sub-section ultimately failed. This may be a further proof to the fact that the field crops are currently being favored by the assessment carried out by the SFA-PA project assessment procedures.
Employment The rejected applicants expected to open up to 3.3 places (AWU) after the final payment: Table 87: Employment under measure 112
Respondents, N Employment expectations Number of created/closed jobs 77 Increase of job places 253 37 - Of which women 106 43 - Of which people < 25 years 76 0 Decrease in job places 0 0 - Of which women 0 0 - Of which people < 25 years 0 Source: Data from own survey, 2010 Significant part of the job places was intended for women and young people.
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Land coverage and ownership 74 respondents replied they managed lands to a total of almost 696 ha (9.4 ha per holding on the average). The greater part of them (39%) did not own any of the lands. 23% on the other hand owned all of the lands they applied with. 78 responded they intended with the aid of the BGRDP to increase the managed lands by 28 ha on the average, to a total of 1866 ha.
Economic performance The sales and profitability of the rejected holdings was low. This is demonstrated by the information in the table below, where the trends in the holdings Sales, GVA and NVA are presented. The turnover and NVA in the supported holdings is stated to be: Table 88: Trends in the economic performance of the supported M112 holdings
Indicator for economic Trends in sales and NVA – Cumulative and per respondents performance 2007 2008 2009 N EUR- EUR - Per N EUR- EUR - Per N EUR- EUR - Per total R total R total R Sales 12 30.012 2.501 30 170.666 5.689 36 226.973 6.305 NVA 10 31.879 3.188 26 75.190 2.892 31 119.872 3.867
The data further supports the finding that the respondents managed small sized holdings with economic performance similar to the ones of the semi-subsistent farms.
Investments 70 respondents stated they were investing EUR 1.466.635 on the total (EUR 20.952 per respondent) The majority of 83 respondents (45.8%) will use the support for investments in machinery and equipment (for land cultivation, biogas installations etc.). The majority of the remaining respondents (35%) prefer to invest in land improvement (plantations of perennials, irrigation, fencing, etc.). 15.7%, however, intended to invest in buildings which may be cowsheds, etc. outside the living areas of the settlements. Table 89: Type of investment
Type of investment N Number of answers %
Land improvement 83 29 35.0 Machinery and equipment 83 38 45.8 Buildings, i.e. cow-sheds 83 13 15.7 Infrastructure, i.e. manure storage installations 83 3 3.6
The distribution of the aid per primary purpose of investment indicates that a significant part of the total intended investments was targeting the compliance with the requirements of the Acquis as transposed in BG legislation (almost 26% of the total EUR 1.466.635 intended investments supported by the BGRDP):
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Table 90: Purpose of the investments
Purpose of investment N Amount in EUR
Meeting Nitrate Directive requirements 13 245.256 Meeting milk hygiene requirements 12 101.479 Meeting animal welfare requirements 21 36.076 Production of alternative energy from RES / or production of energy cultures 2 3.835
Major part of it was designated for meeting the requirements set by the Nitrate Directive. Large part of these investments, however, will not be realized now without the support of BGRDP, as long as only 7% of 86 respondents claimed they were not significantly depending on the aid, and only 14.8% stated they could realize more than half of the intended investments without the help of the program. This leads to the conclusion that the deadweight effects in rejected projects would have been quite smaller than the ones detected with the M121 beneficiaries.
Results from the investments One third of the respondents will not introduce innovation in their agriculture activities. The ones who will introduce innovation are split almost equally between introducing a new product or new process/technology.
Table 91: Purpose of the investments
N=85 % (1) New product 26 31 (2) New process/new technology 33 39 (3) Neither 26 31
Bio-production Almost 58% of the 84 respondents claim they will start certification procedure for organic production after the final payment.
Access to external financing The aid from BGRDP would have improved access to private financing (i.e. banks) for almost 72% the respondents; only 7% think that the aid would not help much or not help at all in these aspects, and remaining 22% have no opinion on this matter.
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Table 92: Summary of the net effects from the investments (of 288 received interviews)
Indicator N Net increase because of the Extrapolation to Extrapolation to Meas. support N=4096* N=5390** unit Generated 77 253 13 458 17 710 AWU employment Area of managed 78 1866 97 989 128 945 HA lands Raised livestock 34 1273*** 153 359 201 808 LSU Full investment 70 1.466.635 85 819 099 112 930 895 EUR value * Programmed number of beneficiaries under M112 ** Programmed number of beneficiaries under M121 *** 600 LSU of the 1273 LSU total increase were intended in the cattle raising sector.
Conclusion The current measure design of M112 and M121 apparently disfavors the selection of animal farms. This is probably due to the current selection based on NVP in the BP for M121 which serves as the major selection criteria, and the Table for calculating the SGM to be used when calculating the economic size of applicants under M112, M121 and M141. Thus potential raw material for the meat processing industry for quality meat products are lost, but also there may loss of jobs and less demand in the market for forages in the medium term. It is necessary to adjust the project selection criteria and procedures under M121 to account for the longer term payback period of investment in the animal sector. Recalculations for the SGM calculating table may also be necessary, as it now 3 years old (it was first established in MAF in the beginning of 2008, but it relied on animal farm economic parameters identified in 2007).
6.3.3. Measure 141 Semi-subsistence farming
Objectives and Rationale The measure support falls within Axis 1 Competitive and innovation-based agriculture under objective Supporting the adjustment of farming structures and cooperation. The measure supports the restructuring of farms that have low economic size, produce mainly for their own consumption and market a small share of their output. The measure aims to support the farms which have the potential and are willing to become viable commercial businesses. General Implementation The measure opened on September 1st, 2008. By 31 December 2009 there were 747 applications submitted for a total of 5.602.500 Euro but none was contracted and paid by then. In 2010 alone, there are 906 applications submitted (data presented at the Monitoring Committee November 5th, 2010). This is a significant increase compared to the applications submitted in the two preceding years. In terms of processing and contracting project applications, by 16 of November 2010, there are 712 approved applications and 182 rejected applications and 63 withdrawn applications.
The main problems related to the uptake of the measure by semi-subsistence farmers were presented by the National Agriculture Advisory Service at the Round table for semi-subsistence farmers in October 2010:
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Divergence in the lands pointed in the IACS and the lands indicated in the Register of Agriculture Producers under Ordinance 3.
No timely reflection of the animal movements in the System for identification of animals…. by the Veterinary Service and divergence in this data and the data in the IACS
M141 applicants are insecure whether they will be able to use the same municipal agriculture lands in the next 5- year period, because the 1-year contract practice for using municipal lands is very common
It is hard to find sufficient agriculture lands so that the increase in economic size during the next 5 years is ensured
Lack of finances (own or credits) in the animal holders so that they can invest to achieve compliance with the EU standards related to raising animals
Significant difficulties in increasing the size of the existing agriculture buildings and in the creation of new cow sheds outside the settlements
Problems with land ownership – too many co owners of small parcels of cultivated lands
Changes in the taxation and social security payments forced part of the agriculture producers (also having another job place) to give up application for M141 support, because the amount of social security payments increased. The same effects were derived from the introduction of profit tax for the agriculture producers
Holders of semisubsistence farms were not allowed to apply for support because they were above 60 years of age
Small animals holdings failed to be registered – the veterinary authority refuses to register it if it is in the settlement; also whenever the holders cannot prove the legal grounds for using the cowshed (very often this type of constructions are not legalized – therefore they are non-existent legally)
The update of the holdings data in the register under Ordinance 3 for agriculture producers is not always possible in the various municipalities.
Applicants do not have access to support because they fail to meet the condition of growing at least two agriculture cultures, or one culture and animals, and/or because they fail to meet the condition that neither of the cultures exceeds 85% of the total economic size of the holding.
Non eligibility of the semisubsistence holdings wishing to apply, only because they fail to meet the condition of managing lands of more than 1 ha, or 0,5 ha for perennial plantations, or 0,5 ha when the lands are located in a mountainous area.
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Data from the survey regarding beneficiaries
Measure 141: Main produktion (%) 1%0% 1% 0%0% 2% 0%
9%
2%
45%
14%
23% 0% 2% 1%
(1) field crops – grain, technical etc. (2) energy crops (3) tobacco (4) oil crops (5) horticulture/field and vegetable production (6) greenhouses (7) vineyards for wine (8) permanent crops –fruit trees and/or bush fruits (9) dairy cows / buffalo (10) cattle-breeding and fattening (11) sheep/goats. please, underline for: (а) for milk (b) for meat (12) pigs (13) poultry (14) mixed/plant growing +livestock-breeding from the above mentioned productions / (15) other
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Figure 44: Main purpose of the support in percentage
Measure 141: Main purpose of the support (%) 10%
0% 2% 0% 1%
33%
19%
0% 1%
4% 3%
2%
25%
(1) field crops – grain, technical etc. (2) energy crops (3) tobacco (4) oil crops (5) horticulture/field and vegetable production (6) greenhouses (7) vineyards for wine (8) permanent crops –fruit trees and/or bush fruits (9) dairy cows / buffalo (10) cattle-breeding and fattening (11) sheep/goats. please, underline for: (а) for milk (b) for meat (12) pigs (13) poultry (14) mixed/plant growing +livestock-breeding from the above mentioned productions / (15) other
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Answers to the Evaluation Questions (EQ)
Relevance and coherence The evaluators consider the support to the development of semi-subsistence farmers highly relevant to the Bulgarian agriculture sector given their high albeit decreasing number. The development in the number of semi subsistence farms between 1 and 4 ESU is indicated in the table below, where the 2003 and 2005 figures are from the NRDP, while the 2007 figures are from EC and the 2009 figures are estimated. Table 93: Development in number of small farms, Bulgaria 2003 – 2007, 2009 estimate
2003 2005 2007 2009
1≤ x <4 ESU total 139,400 117,700 95,800 73,900
SAPS farms, numbers 41,573 34,500 27,300 20,700
SAPS farms, % of total 29.8 29.3 28.5 28.0
Source: MAF, Agristatistics Directorate: Structure of agricultural holdings in Bulgaria 2007, 2009, MAF: National Rural Development Programme 2007-2013, December 2009, Eurostat and own calculations
Restructuring these small scale, semi-subsistence farms is a long process which needs considerate guidance and support. It will require significant investments as well as consultancy and technical support not only for the development of the applications and the business plan but also throughout the entire process. If successful, this inevitably will lead to further reduction in their number which may result in unbalanced labour and land abandonment in more marginal regions and high demand for land and labour in more productive regions. Therefore, a much stronger connection to the other measures in the RDP and other national development (training, environment, social) programmes is required. The measure provides annual flat rate grant payment for a period of 5 years to semi-subsistence farmers who produce primarily for their own consumption and market a small share of their output. The scope of the support is explained as a temporary support to the income of such farms that should be helping them to overcome the difficulties and costs related to restructuring. Following EC requirements the support is provided on the condition of developing a business plan. The Bulgarian business plan requires obligatory mid-term targets (end of 3rd year) related to (a) compliance with Community standards on veterinary and phyto-sanitary requirements, animal welfare, environmental protection, hygiene and occupational health and safety as well as (b) increase in the economic size of the farm by a minimum of 1.5 ESU. Additionally, at least one out of six voluntary mid-term targets should be met. The measure refers to potential investment support from measures 121, 122, 123 and 311 when thus indicated in the business plan. The development of the business plan can be supported by measure 143. All in all, there is a high degree of incoherence between the scope which presents the measure as an income support and the obligatory mid-term and final targets which require significant investments in land, animals, buildings, machinery, equipment, etc. In our view, the measure support (1500 euro per year for 5 years) should be aimed to cover mainly basic on-farm investments enabling the implementation of the business plan and the transaction costs of farmers to get all documentations regarding their farm premises and land as well as farmers’ time for training and education and efforts for cooperation with other farmers. The actual restructuring investment and thus the obligatory mid-term targets as set in the
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Bulgarian business plan requirements for measure 141 seem to be realistic only when supported by some of the investment measures (121, 122, 123, 311 or 312).
Effectiveness The effectiveness of the measure is assessed through the number of approved projects and allocated funds and achievement of the operational objectives (checked against output indicators) and the achievements of the specific objectives (checked against the result indicators). Based on the output indicator of 21,000 semi-subsistence farms to be supported and the allocated total budget of 144.6 million Euro, the measure effectiveness by 31 December 2009 is zero. There is a very low number of projects submitted – 747 (3,5% of the targeted output) for the period 1 September 2008 to 31 December 2009 but even they are not processed and contracted. By mid of November 2010, there is an improvement both in terms of submitted projects (doubling their overall number) and in contracted projects but still the overall effectiveness remains very low. Additionally, there is a rejection and withdrawn rate of almost 26% which reduces the effectiveness further.
Table 94: Status of Input and Output Indicators for measure 141
Type of Indicator Target Status Status indicator 2007-2013 20.01.2010 16.11.2010 Input Total Public Support (Euro) 144.584.038 Submitted 5.602.500 Submitted 12 457 500,00 € Contracted 0 Contracted 5 340 000,00 € Rejected 0 Awaiting 5.602.500 Rejected 1 365 000,00 € withdrawn 472 500,00 €
Awaiting 5 280 000,00 € Output Number of semi- 21 000 Submitted 747 Submitted 1661 subsistence farms Contracted 0 Contracted 712 supported Rejected 0 Rejected 182 Awaiting 747 Withdrawn 63 Awaiting 704 Source: MAF RDP, and PA Agency reports
At the same time, we should also consider the relevance and reliability of the output indicator itself – 21 000 supported semi-subsistence farms. The development in this category of farms is very dynamic even without the planned support by the RDP 2007-2013 as observed by the downward trends 2003-2007. It will not be exaggerated to state that it was outdated already by 2007 when the total number of SAPS eligible farms was reduced to 27 300. Given the fact that one of the main characteristics of the semi-subsistence farms is the production for own consumption it is unlikely that the support under the measure would have motivated 77% of them to restructure in order to become commercial. It is more realistic to retain the share of the initial targeted support of 61% (based on 2005) or even 51% (based on 2003 data) and recalculate the target output indicator which cannot be kept static in such a dynamic environment. The 2007 relevant output indicators count to 16.617 or 13.790 supported farms. ‘ Since there is no real intervention supporting semi-subsistence farms by end of 2009 we assume continuation of the downwards tendency thus reaching 20 700 farms. Recalculating the output target means 10.456 or 12.600 semi-
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Table 95: SAPS farms and related output targets
Year 2003 2005 2007 2009* 2011* 2013* SAPS farms, numbers 41573 34500 27300 20700 13700 6700 Planned target output, numbers 21000 21000 21000 21000 21000 21000 Target output, share 0,51 0,61 0,77 1,01 1,53 3,13 Adjusted output, 2003% 13790 10456 6920 3384 Adjusted output, 2005 % 16617 12600 8339 4078 Source: BG RDP for 2003, 2005 and 2007; *Own calculations for 2009, 2011 and 2013
It is encouraging that by 30 September 2010 all 2008 and 2009 applications were processed and further 906 applications were submitted in 2010 alone. Yet, this is not expected to lead to a significant deceleration of the tendency and we assume further reduction to 13.700 SAPS eligible semi-subsistence farms in 2011. The resulting adjusted output indicator is close to 7.000 supported farms. This relates to the estimations stated by the representatives of the NAAS33 that they can prepare approximately a total of 6600 successful applications by the end of 2013.
Table 96: Projections on the number of semisubsistence farms supported by M141 till end of programming period
2010 2011 2012 2013 TOTAL M141 beneficiaries receiving 1.650 3.300 4.950 6.600 16500* payments - number Corresponding sum of payments 2.475.000 4.950.000 7.425.000 9.900.000 24.750.000** - EUR * Projected total number of payments **Projected budget to be absorbed till end of programming period
The effects on the budget allocations will have to be reassessed as well considering that support is committed for a 5 years period but can be applied for only till 31 December 2013 (irrespective of the n+2 rule). Clearly, parts of the commitments signed in and after 2011 will have to be transferred to the next programming period. Therefore, it is highly recommended that the Managing Authority and the Paying Agency make every effort to mobilize applications and contracting in 2011 to make best use of the budget in this programming period and reduce the commitments on the next programming period.
33 NAAS contributions at Roundtable discussions “Semi-subsistence farms in Bulgaria – status, support and future potential” on 22 October 2010 stating that they can prepare approximately a total of 6500 successful applications by the end of 2013 if they maintain their current capacity and are allowed to hire additional consultants especially in the regions/offices with high number of potential candidates.
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Effects The majority of support so far goes to the crop production farms reaching 83% of all supported farms while less than 7% of the farms are within the livestock breeding sector. The measure has no specific sector targeting however one would expect a comparable distribution of support among the existing farms from the different sectors. Comparing the data for semi-subsistence (1-4ESU) farms distribution in 2007 and the profiles of the approved semi-subsistence farms we observe a strong bias towards crop production sectors. Horticulture and orchards (incl. vineyards) come second and third approved groups but represent four- and five-fold increase in their 2007 shares (6,1% to 26,8% and 4,8% to 20,9% respectively). If we consider the production which will utilize the support their shares increase even more to 28,4% and 28,7% respectively. Share of arable production farms as a main income generating production during application is also above its 2007 share (40,5% compared to 25,4%) . However, it evens up in the utilization of support where the sector represents 25,7% of the farms. The livestock breeding sector is significantly underrepresented both as main income generating sector at the time of the approval and as productions utilizing the support – 34,4% in 2007 down to 9,2% and further reduced to 6,9% of all farms. This clearly reveals that the measure is not able to attract livestock breeding semi-subsistence farms which represent approximately one third of all semi-subsistence farms in the country. Even when it does attract such farms livestock breeding is not their main focus of spending the support. Another group of farms significantly underrepresented in the supported farms is the mixed crop and livestock breeding farms – 18,6% in 2007 down to 2,6% from the approved farms and only 0,6% as a main focus of the support. The underrepresentation of small scale livestock breeding and small scale mixed crop and livestock breeding farms is particularly worrying from an environmental perspective since these are the types of farms which normally produce positive environmental benefits and related public goods such as mosaic landscapes, habitats for important flora and fauna species, etc.
Table 97: Semi-subsistence farm distributions according to their production types
2007 share of all Main income Main production Focus farms (1 – 4 ESU) generating production of support (% of all farms) (% of all farms) Arable 25,4 40,5 25,7 Horticulture 6,1 26,8 28,4 Orchards 4,8 20,9 28,7 Mixed crop production 10,8 n.a. n.a. Total crop production 47,1 88,2 82,8 Cattle/sheep/goats 23,3 7,2 6,0 Pigs/poultry 1,6 2,0 0,9 Mixed livestock 9,5 n.a. n.a. Total livestock production 34,3 9,2 6,9 Mixed crop & livestock 18,6 2,6 0,6 Others n.a. 0 9,7 Source: MAF Agriculture Report 2009 and Own survey results
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Measure specific EQ To what extent has the support promoted enduring structural adjustment of semi-subsistence farms? Support has not reached the semi-subsistence farms in Bulgaria by the end of 2009. Therefore, it has not contributed yet to the structural change dynamics that these farms are facing. Restructuring is happening alongside the available large but unspent budget under measure 141. This is a problem for both the farms that are de facto exiting the farming operations overall and the farms which are struggling to adapt to the new requirements posed by the EC standards and the competitive markets. On the other hand, the expectations for support (as expressed by the application submitted for support) are highest in the crop production sector of arable production, horticulture and orchards. It can be assumed that the measure will have most positive influence on the market adjustments of the semi-subsistence farms in these sectors (see table xxx Semi- subsistence farms distribution according to their production types above). It is very unlikely that the measure will have a positive influence on the small scale livestock breeding farms. This is probably due to the need of much higher investments necessary to meet the EC hygiene and veterinary standards than is the support provided by the measure. At the same time, the Bulgarian business plan requires that all supported farms meet at the end of the 3rd year of support all EC standards on veterinary and phyto-sanitary requirements, animal welfare, environmental protection, hygiene and occupational health and safety.
Figure 45: EC standards that will be met as a part of the business plan
Source: Own questionnaire
While the evaluators understand that semi-subsistence farms should meet all EC requirements it is considered an unnecessary strictness to make it an obligatory mid-term requirement in the business plan. In practice, for most farms in the livestock breeding sector this implies that they should only apply under measure 141 if they have secured investments to meet the Community standards from elsewhere. This contradicts the concept of the measure to support the structural adjustments of farms. The situation of small scale livestock farmers is further aggravated by the fact that no other measure in the RDP provides adequate support for their adaptation to the EC requirements as well as that Pillar I SAPS payments favor arable farms.
Deadweight The planned investments are to a very large extent dependent on the support expected by the measure. Among the respondents 70% state that their investment is to a large extent dependent on the support, further 20% are to some extent dependent on it. Only 2% state their investments are not dependent on the support while 4% indicated a ‘don’t know’ answer.
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Figure 46: To what extent are your investments dependent on the support
Source: Own questionnaire
Twenty pct. of respondents would have not invested at all if support was not available. Further 54 pct. of respondents would have done up to 50% of the investment. Only 12 pct. would have done more than 50% of the investments. The entire investment would have been done by only 2% of the respondents.
Figure 47: What share would have been invested without the support
To what extent has the support facilitated the move into the market for semisubsistence farms? The number of farms entering the market is selected as a result indicator for the support provided by the measure. It is set at 16.800 farms which accounts for 80% of the initial output target. Considering the recalculation of the output target at 7.000 farms done above, the recalculation of the result indicator keeping the rationale behind it, shows a reduction of the result indicator to 5.600. The three key effects expected as a result of the support are related to income increase which has highest importance by any means, followed by keeping the farm and market realization of farm production. Clearly the expectations for income increase are also closely related to the marketing of farm production as this is the way to earn income for the majority of supported farms.
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Figure 48: The two key effects expected as a result of the support
Source: Own questionnaire
Efficiency The efficiency of the semi-subsistence farms support is measured by the time, costs and efforts of both the farmers and the administration. A specific characteristic of this measure is that project applications and related business plans can be developed by the National Agriculture Advisory Service which are free to the farmers and are paid for by measure 143. The advisory support offered by the NAAS was used by 91% of the respondents while only 2% developed their own business plans. Consultancy companies and other organizations supported 7% of the respondents. From this perspective the support provided by NAAS was very efficient and proves to be key to the successful implementation of the measure in the remaining period. Figure 49: Your project was developed by…
Source: Own questionnaire
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Considering the (recalculated) target number of farms, the efficiency of support was not so high. Large amount of money were available but remained unspent. Some submitted projects had to wait for more than a year to get processed and contracted by the Paying Agency. At the same all related institutions – Managing Authority, Paying Agency and NAAS alike state a low interest in the measure. During the implementation period (1 Sept.2008 – 31 Dec.2009) measure 141 lost a couple of ‘competitions’ to measure 112 ‘Young farmers’. The first one is related to the attention and interest of the farmers in the overlapping size of 3 to 4 ESU who also have the biggest potential for becoming commercially viable. Clearly 7.500 Euro compared to 25.000 Euro over a 5 year period is not so economically attractive. The second loss is related to the attention and interest of the public authorities – MA, PA and NAAS. While all 5.433 projects in measure 112 were processed by end of 2009, none of the 747 applications under 141 recorded any processing by the PA. At the same time, NAAS reports 4383 developed project application under measure 112 by end 2009, and only 75834 project applications under measure 141. Conclusion The evaluators participated in the Round Table dedicated on the problems and prospects of Semisubsistence farming in BG (organized jointly with the MAF in October 2010). They are convinced of the great socio-economic and environmental benefits which the semisubsistence farmers bring because of their existence and are on the opinion that this measure should be activated as much as possible in very short time. Evaluators agree with the necessity to lift the limitations which prohibited the participation of such farmers under the measure as set in the 5th notification for BGRDP modifications sent to the EC. However, the evaluators reiterate here their opinion that holders of bigger farms 6-8 ESU (depending on the subsector) should be allowed for support as they continue to be economically fragile and face the same difficulties in their prospects for developments as the currently smaller farmers (1-4 ESU). On the other hand, it is the semisubsistence farmers are the primary producers of fruit, vegetables and some of the animal products (e.g. excluding pig meat, eggs, etc.). On the other hand, because there are already 3 years lost for supporting the semisubsistence farmers under M141 there is a need to transfer their budget to other Axis I measures which will bring more or less the same socio-economic benefits as the ones intended under the measure.
6.3.4. Measure 143 Provision of Advisory Services to farmers … in Bulgaria and Romania
Objectives: To assist farmers to access the support possibilities under the 2nd Pillar of CAP to facilitate the effective utilization of financial aid directed to their farms; and to help them to adhere to GAEC, agricultural production hygiene and quality standards, veterinary and phyto-sanitary requirements, environmental protection and animal welfare standards. Rationale: To increase competitiveness and innovation in the agricultural sector there is a clear need to improve the agricultural knowledge and management skills of farmers. It is expected that the provision of improved and high quality
34 NAAS reported figure of 758 supported project applications by end 2009 differs from the PA reported submitted applications of 747 for measure 141. This can be due to some farmers deciding not to apply after the application documents and business plan were developed; effort for which NAAS would not be reimbursed by measure 143.
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Elaboration of ongoing and mid-term evaluation of the RDP 2007-2010, Bulgaria farm extension services will contribute to an increase in human potential and help ensure an appropriate level of technical and economic knowledge and skills in the agricultural sector. Target groups of beneficiaries: National Agriculture Advisory Service (NAAS). Final beneficiaries [until end-200935] are the applicants under M112, M141, M142, M214. In 2010-2013 period only the applicants under M141 will remain as final beneficiaries. Preferred groups of beneficiaries: NA Programmed budget 2007-13: EUR 6.024.335 General data on implementation
The measure lacks a reliable system for timely monitoring the contribution of NAAS towards the achievement of the quantified targets in the M112, M141, M142, M214. This is because NAAS contribution is recognized only after the consulted applicants are approved (and contracted) by the SFA-PA; then the payment claim of NAAS is considered and payments are effected for these consultations which led to the successful participation of the consulted holder in the respective measure.
Therefore, all of the data on M143 implementation presented here is reflecting past contribution of NAAS (especially in view of the delays with which some of the applications are considered by the SFA-PA).
According to SFA-PA data the NAAS has been paid until end -2009 almost MEUR 0.7 to four submitted payment claims altogether. At the same time in the 2008-2009 NAAS had already prepared the applications of almost 4400 young farmers, forming the significant part of the approved and paid 4038 farmers in 2009 and 2010; more than 1900 applications for M214 and almost 700 applications for M141.(see also the next table 93 with data by NAAS)
By November 2010, the payments are already MEUR 2.37 on payments declared in 9 payment claims, but the total amount of 10 standing payment claims for consultations is MEUR 13.16 – more than twice the M143 budget programmed in 2007.
This indicates that if SFA-PA recognizes a fraction of the standing NAAS payment claims, then the entire budget of the M143 is already spent and will need additional increase if the proposed recommendations and reallocations of BGRDP funds take effect.
The interest towards NAAS services was not uniform per district and per particular measure during the 2007-2009 period. This is illustrated in the next table, where also the success rate per distract NAAS service can be identified by the ratio “prepared by NAAS/ rejected by SFA-PA”.
In all cases the success ratio is not attributable only to the quality of work of the NAAS officers, but also depends on the quality of information and the frankness of the applicants looking for consultation, and in many cases – on the contradicting data from LPIS.
35 The measure was initially programmed to operate until end-2009. With the fifth modification of the BGRDP its period for implementation has been extended till the end of the programming period.
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Table 98: NAAS consultations at regional level and their consideration of SFA-PA
District Number District Name Submitted claims to SFA-PA in the evaluated 2008-2009 Cumulatively processed in SFA-PA 2008-2009* Cumulatively processed by SFA-PA Approved for payment by SFA-PA 08-09 Rejected by SFA-PA 112 214 141 121 112 214 141 112 214 141 112 214 141 1 Благоевград 105 51 1 0 10 5 0 8 0 0 18 5 0 2 Бургас 135 154 69 0 37 47 0 8 22 0 45 69 0 3 Варна 103 39 9 0 15 8 0 12 18 0 27 26 0 4 В. Търново 213 109 22 0 54 50 0 11 2 0 65 52 0 5 Видин 169 28 87 0 21 2 0 9 1 0 30 3 0 6 Враца 117 30 10 0 33 0 0 16 0 0 49 0 0 7 Габрово 65 127 11 1 16 96 0 2 4 0 18 100 0 8 Добрич 237 8 10 2 50 0 0 21 4 0 71 4 0 9 Кърджали 67 83 24 0 5 38 0 2 0 0 7 38 0 10 Кюстендил 200 11 21 0 75 4 0 5 1 0 80 5 0 11 Ловеч 93 16 13 0 24 0 0 14 2 0 38 2 0 12 Монтана 221 9 10 0 33 0 0 20 0 0 53 0 0 13 Пазарджик 195 103 16 0 30 78 0 10 5 0 40 83 0 14 Перник 64 24 3 1 12 2 0 7 0 0 19 2 0 15 Плевен 201 220 56 0 52 46 0 20 9 1 72 55 1 16 Пловдив 284 113 55 0 39 17 0 19 5 0 58 22 0 17 Разград 72 24 10 0 18 13 0 3 1 0 21 14 0 18 Русе 264 58 42 0 57 24 0 7 6 0 64 30 0 19 Силистра 100 54 35 0 27 14 0 10 7 0 37 21 0 20 Сливен 226 95 20 1 70 48 0 14 7 0 84 55 0 21 Смолян 74 69 35 0 15 34 0 4 6 0 19 40 0 22 София 89 30 4 0 15 2 0 10 1 0 25 3 0
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23 Ст. Загора 364 60 17 0 59 18 0 18 12 0 77 30 0 24 Търговище 148 286 25 0 17 59 0 4 24 1 21 83 1 25 Хасково 268 29 11 0 37 7 0 28 4 0 65 11 0 26 Шумен 177 51 11 0 45 6 0 9 16 0 54 22 0 27 Ямбол 118 24 22 4 52 12 0 11 1 0 63 13 0 Total Payment Requests 4369 1905 649 9 918 630 0 302 158 2 1220 788 2 * Indicates what part of the provided consultations had been in fact considered at the SFA-PA in the period 2008-2009; hence also indicates the SFA-PA delay in the consideration of the consulted applications.
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CMEF does not provide for evaluation of this measure. There are no obligatory CEQs formulated, as this measure is specific to the BGRDP (and the Romanian RDP). Therefore, evaluation of the measure is based simply on identifying the degree to which NAAS managed to aid the application process for M112, M141, M142, M214 and M121, M123 and M311 applicants for aid and the degree to which it ensured synergies at farm level achieved from farmers benefiting from various applicable BGRDP measures.
Based on the factual state of art of BGRDP implementation by end-2009, the evaluation is the following for the particular target measures: M112, 4. to a high extent M141, 1: to no extent, at all. M142: 1: to no extent, at all. M214: 1: to no extent, at all. Contribution to synergy effects at farm level: 1: to no extent, at all.
It is true of course that in the 2007-2009 period the BGRDP was implemented in quite imbalanced manner: largely “demand driven” management of the Programme, not balanced by a strategic sequence in opening and closing windows per particular measure to achieve the maximum synergy of measures.
Hence, NAAS was in the position to react to demand for consultations mostly by the M112 applicants, and hence the above mostly unsatisfactory assessments.
Conclusions
The measure did not manage to contribute significantly to the competitiveness and innovation of the agricultural sector. This is particularly true for the M141 and M214 measures, but most unfortunately for M142 where a lot of efforts still remain to be done to alleviate the situation with high fragmentation of production structures.
In view of lot of unmet consultation needs, and the reallocation of funds to be implemented in a very tight timeframe, there is a strong need that the M143 is implemented in the old rules and conditions as in the 2007-2009 period.
If the proposed reallocations in Chapter 7 take place, additional M111 funds need to be reallocated to this M143 measure according to the set quantified targets for consultations per measures and districts (see recommendations below).
It is necessary that NAAS makes every effort also to prepare a BP for the consulted under M112, M141, M142, M214, so that they can also participate in the newly reserved M121 (but also M311) guaranteed budgets (see also Chapter 7, Timeframe for implementing the reallocations)
Recommendations
Negotiate the Use of old M143 scope till end 2012. Allocate regional quantified targets for consultations under M112, M141, M142, M214 (but also for M121, M123, M311 for the previous beneficiaries). Targets should be consistent with the efforts to balance the territorial use of the support under the agriculture supporting measures (See also Annex 12 to this report). Strengthen the administrative capacities of the offices to be able to carry out the allocated consultations. For this purpose take into consideration the finalized quantified targets per beneficiary subgroups of M121 (but also the reserved budget of MEUR 6.0 for the same beneficiaries in the M311).
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Table 17: Summary of proposed distribution for the new M121 budget (reallocated budget for general competitiveness*)
Target beneficiary group Supported Reserved budget for Average size of the subsidy beneficiaries** them - EUR per project*** For M 112 – beneficiaries 1700 85 000 000,0 50 000,0 For M 141 - beneficiaries 800 40 000 000,0 50 000,0 For M 142 - beneficiaries 20 1 600 000,0 80 000,0 For M 214 – beneficiaries 85 6 800 000,0 80 000,0 For animal farms 200 16 000 000,0 80 000,0 For fruit and vegetables farms 280 22 400 000,0 80 000,0 For tobacco producers converting to other production 100 5 000 000,0 50 000,0 For greenhouses 45 33 000 000,0 733 333,3 Total 3230 209 800 000,0 64 953,6
Ensure consultations on the kitchen table are possible in the isolated villages (i.e. budget for fuel is ensured). Use the materials recommended for M511 above, during the consultations.
NAAS must produce at least one PO in each of the BG districts by June 30th 2012. Part of the budget transferred from M111 to M114 could be allocated to this M143 measure. NAAS capacity must be strengthened to produce the expected consultations till the remainder of BG RDP implementation period (till end 2015).
Note: Due to a very tight timeframe, the realization of the consultation projects should take place till the end of 2011 and less to the first half of 2012 (See suggested timeframe in Chapter 7). This means that the necessary NAAS staff and the relevant NAAS budgets should negotiated as soon as possible within the National budget for the next year.
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6.4. Axis 2: To protect natural resources and the environment of rural areas
6.4.0. Measure 211 Natural handicap payments to farmers in mountain areas
Short description of measure The support to farmers in mountainous areas is a compensatory payment to overcome the natural handicaps for agricultural production related to the high altitude such as poorer agro-climatic conditions and impossibility for full utilization of the agricultural land. The measure aims to maintain the agricultural activities in mountainous areas thus preventing land abandonment and depopulation. It also aims to contribute to the conservation and improvement of existing biodiversity within mountainous areas via rational use, conservation and sustainable development of land and other natural resources.
General implementation status The measure was launched already in 2007 with the direct payments campaign starting on March 1 till May 15, 2007 following their rules and regulations. There were 22 649 submitted applications in 2007 of which only 3 were not approved. The paid subsidy amounts to 12.376.678.90 Euro. The number of submitted applications increased in 2008 by 7% compared to 2007. Despite this overall increase, the amount of paid subsidy was decreased by 7%. The number of rejected applications increased up to 72 but there was still a net increase of 1380 approved applications. In 2009, there was 9% increase in the number of submitted applications compared to the previous 2008 campaign, and 16% increase compared to the first campaign in 2007. The number of rejected projects increased again to 112. The paid subsidy (paid in 2010) increased by 47% compared to 2007 subsidy, and by 58% compared to the 2008 paid subsidy. Table 99: Submitted and authorized applications for the period 2007 – 2009 and 2010
Submitted Authorized/Approved Applications Total Authorized Public Subsidy Applications (no.) (Euro) (no.) By 15.01.2010 By 30.09.2010 By 15.01.2009 By 30.09.2010
2007 Campaign 22 649 22646 22646 12 376 678,90 12 376 678,90
2008 Campaign 24 151 24026 24079 11 504 828,34 11 519 301,35
2009 Campaign 26 246 0 26134 0 18 203 739,53
2010 Campaign 29 097 n.a. 0 n.a. 0
Total 23 881 507,24 42 099 719,78
Source: Data presented at MC meeting on 5 October 2010, subsidy presented in BGN, converted to Euro 1BGN=1.95583 Euro
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Table 100: Number of submitted and rejected applications per campaign/year
Campaign 2007 2008 2009 2010 Number of submitted applications 22 646 24 151 26 246 29 097 % compared to previous campaign/year - 7 9 11 % compared to 2007 campaign/year 7 16 28 Number of rejected applications 3 72 112 n.a. Source: Data presented at MC meeting on 5 October 2010 and own calculations
The discrepancy between the increasing number of approved beneficiaries per year and the floating amount of paid subsidy is explained by the high number of beneficiaries with authorized payments of 0 BGN. In 2007, an average of 11% of all beneficiaries had authorized payment of 0 BGN. Their share more than doubled (26,6%) in 2008, then went back down to 12,7% in 2009. The data reveals that the 0 BGN payment is more a problem for farms with areas between 50 and 100 ha, then for larger farms (more than 100ha). This problem is less present in the smallest farm group as it covers 12,6% of them in 2009. However, having in mind that they represent by far the largest group (95% of all supported farm), the biggest reduction in the amount of potentially paid subsidy comes from them.
Table 101: Number of beneficiaries with authorized payment of 0 BGN under m.211
2007 2008 2009 Farm size No. Of which 0 % No. Of which 0 BGN % No. Of which 0 % BGN payment BGN payment payment Up to 50 ha 21617 2269 10,5 22891 6033 26,4 25066 3155 12,6 50-100 ha 519 112 21,6 676 227 33,6 679 115 16,9 Above 100 ha 481 103 21,4 558 157 28,1 507 77 15,2 -мах payment 255 248 255 Total 22617 2484 11,0 24125 6417 26,6 26252 3347 12,7 Source: Data provided by PA Direct Payments Dept in June 2010
Rate of achievement of targets as set in the measure texts The achievement of targets is measured towards the paid beneficiaries by 31 December 2009. It is however also compared to support paid by end of September 2010 as it refers to 2009 campaign albeit being paid in 2010. In terms of the input indicator of the total public subsidy there is an achievement of 10% by 31 December 2010. The output indicator for number of supported farms in mountain areas is achieved at 40% and the output indicator for supported agricultural land in the mountain regions is reported at 94%. However, the last two indicators report also farms and land with authorized support of 0 BGN. It is not sure if we can consider these farms and areas as supported even if they have authorized payments of 0 BGN. The output indicator for supported farms reduces to 30% and the indicator for supported land reduces to 68%. The data for the paid 2009 campaign show a similar result: 18% of the overall 7-year budget is spent on reported 44% of the target farms, and 92% of the target agricultural land. When these are corrected with the 0 BGN authorized payments, the targets are achieved at 38% and 79% respectively.
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It is very important to underline that despite the relative underachievement of the targeted output for number of supported farms, 95% of all supported farms are within the most targeted group of up to 50 ha. From this perspective the measure was extremely successful to attract and motivate participation of small scale farmers from the mountainous areas.
Table 102: Targets related to measure 211 and their achievement
Type of Indicator Target Status Status indicator 2007-2013 31.12.2010 30.09.2010 Input Total public support (Euro) 233.218.233 Paid 23.881.507,24 Paid 42.099.719,78 (10%) (18%) Output Number of supported farms in mountain 60 000 24.026 (40%) 26.134 (44%) areas 17.708 (30%) 22.905 (38%) Supported agricultural land in the 328 000 309.585 (94%) 301.365 (92%) mountain regions (ha) 221.409 (68%) 258.376 (79%)
It is also important to stress that the low spending of the measure’s budget is mainly due to the high level of penalties posed to farmers in each of the three years of reported implementation. The data shows that there is an average level of penalties of 36,75% of the entire authorized support. The share was highest in 2008 when as high as 62,51% of the authorized support was foregone in penalties. In the ‘more normal years’ the share of penalties is still more than a quarter of the authorized support. When we calculate the total amount of penalties (2007-2009) as a share of the total public support (2007-2013) we see that they come to 6,60% of it.
Table 103 Requested and authorized support and penalties, m.211
Campaign/year Requested Penalties Reductions Authorized Share in authorized support in support support of (%) application Penalties Reductions
2007 15.667.916,82 3.270.958 20.280 12.376.678,90 26,43 0,16 2008 18.735.642,11 7.196.732 25.284 11.513.626,29 62,51 0,22 2009 22.966.377,97 4.927.749 41.932 17.996.696,90 27,38 0,23 Total 57.369.936,9 15.395.439 87.496 41.887.002,09 36,75 0,21 (2007-2009) share of 24,60 6,60 0,04 17,96 total budget
(2007-2008) share of 14,75 4,49 0,02 10,24 total budgets
Based on these observations the evaluators made a simulation of the foregone commitment and spending of support. The amounts of the requested support in applications for the period 2007-2009 are used as a baseline and are then extrapolated to the end of the programming period. The assumption that all applied for UAA in mountainous regions is eligible for support was made.
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The results are self-explicatory: the recorded interest in measure as expressed by the amount of requested support would have resulted in 81% of budget spending by the end of 2013, and by a total of 111% by the end of the 2015 (n+2 rule applied). The conclusion that the land eligibility and the resulting level of penalties are the biggest problem to the measure’s implementation holds true very strongly. Table 104: Simulation of budget spending based on requested support in applications 2007-2009
Year Support per year (Euro) Compared to previous year (%) 2007 15.667.916,82 2008 18.735.642,11 120% 2009 22.966.377,97 123% 2010 28.707.972,46 126 2011 34.449.566,96 120 2012 34.449.566,96 100 2013 34.449.566,96 100 Total 2007-2013 189.426.610,2 81% from total public budget 2014 34.449.566,96 100 2015 34.449.566,96 100 Total 2007-2015 258.325.744,1 111% from total public budget
Regional uptake of the measure
The regional uptake of the measure will best be assessed if we have data of available UAA and SAPS eligible area in the designated mountainous areas per district. Due to the lack of such information, the second best option considered is to observe the implementation data and its development during the three years for which data is available. There are four districts with more than 2000 beneficiaries (Blagoevgrad, Kurdjali, Smoljan and Sofia district) and other four (Kjustendil, Pazardjik, Plovdiv and Sliven) with more than 1000 beneficiaries. The top five districts in terms of total subsidy paid are the top four in terms of beneficiaries and Pernik. Pernik provides a very interesting comparison as it has less than 1000 beneficiaries but receives a total subsidy of 3.878.657 Euro for the three years. This is just a bit less than the subsidy received in Smoljan (3.923.350) with 5001 beneficiaries. There are mixed trends in the development of supported land per district. There are districts with comparatively stable development both with small areas included (Vratsa, Montana, Targovishte, Shumen) and with large areas included (Kjustendil, Pernik, Sliven). There are also districts with a clear upward trend in supported land such as Blagoevgrad, Pazardjik, Plovdiv, Sofia district, Sofia capital and Stara Zagora. A more worrying is the trend in districts with areas in flagship mountains such as Stara planina (Veliko Tarnovo and Lovech), Rhodoppi mountains (Kardjali, Smoljan and Haskovo) and Standja (Burgas) where we have a well defined decrease of land from one year to the next. The evaluation team made a simulation to see what the total maximum area of land submitted in applications per district was for the period 2007-2009. We selected the year with the highest area submitted (figures in blue in the table below)
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Measure 211 2007 2008 2009 Total Subsidy District No. Area (ha) No. Area (ha) No. Area (ha) Authorized 2007-2009 Благоевград 2085 16199,1 2513 30885,03 3376 29669,78 4.721.849 Бургас 409 5485,71 381 3585,26 375 3038,61 567.235 Варна 48 2681,37 23 1801,2 42 2439,49 185.492 В.Търново 282 6772,06 278 5365,88 296 4645,99 735.129 Видин 82 562,82 145 3900 137 1202,25 143.508 Враца 179 2123,42 186 2377,45 190 1988,64 344.160 Габрово 249 3940,34 282 4954,53 287 4525,1 626.894 Добрич 1 2 0 0 0 0 0 Кърджали 4246 18952,76 4170 18136,56 4290 16174,78 3.141.508 Кюстендил 986 11059,26 1014 11654,01 1158 12767,71 1.840.235 Ловеч 707 12601,15 638 9708,5 663 9083,73 1.320.153 Монтана 419 3675,64 471 4144,04 478 3297,91 663.312 Пазарджик 1410 13735,49 1514 15309,1 1696 15185,66 2.448.993 Перник 744 33187,3 835 36461,89 871 34433,63 3.878.657 Плевен 3 14,21 5 306,95 5 313,17 17.139 Пловдив 941 13402,92 1012 23905,36 1228 28318,73 2.985.496 Разград 3 15,7 1 12,53 2 17,1 1.973 Русе 4 62,95 4 532,2 3 20,68 1.271 Силистра 1 54,18 1 54,22 1 58,65 13.002 Сливен 1091 18038,86 1202 19162,61 1383 18094,15 2.896.106 Смолян 5148 24716,98 5344 20593,87 5001 16334,18 3.923.350 София област 1783 36937,7 2144 46575,77 2482 46447,31 6.024.836 София столица 462 21421,97 484 22660,98 521 23070,41 1.978.203 Стара Загора 405 16702,75 470 17061,77 560 19442 2.029.229 Търговище 542 4174,99 634 5165,25 774 5173,93 847.457 Хасково 213 3054,44 192 2043,47 224 1902,52 325.750 Шумен 171 2802,51 182 3220,83 209 3711,79 490.300 Ямбол 2 22,45 1 6,54 2 7,2 2.748 Total 22616 272401,03 24126 309585,8 26254 301365,1 42.153.985
The analysis of the regional uptake is complemented with a review of the average size of supported holdings per district, the average support per hectare per district as well as the average support per far per district. The largest supported holdings (including the ones with 0 BGN authorized support) are in Varna district. Pleven and Silistra also show up at the same level but there are too few farms (less than 5) to be representative.
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The next three districts with largest supported farm holdings are Pernik, Sofia capital and Stara Zagora. The districts with smallest size (less than 10 ha) of supported farms are Smoljan, Kardjali, Montana, Pazardjik, Targovishte and Burgas and Blagoevgrad.
Figure 50: Average size of M211-supported arms
There is a very big variability between years within one district and between districts between years. We attribute this to the penalties which farmers had to pay and the resulting 0 BGN support or reduced level of support. Districts with the least level of support per hectare Varna, Pernik, Pleven and Sofia district. Districts with the highest level of support per hectare are Kardjali, Smoljan, Yambol and Silistra. Silistra however has very few supported farms so its results are more an exception that a rule in the district. Overall we observe a notable increase in the level of support per hectare in 2009 compared to 2008. This is due to the exceptionally high level of penalties posed to farmers in 2008. In most districts the increase of support per hectare in 2009 compared to 2007 is due to the increase of the payment for areas up to 50 ha in 2009 from 90 euro/ha to 110 euro/ha.
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Figure 51: Average paid support per hectare per district, M211
Measure 211’s average support per farm is highest in the districts of Varna, Pernik, Pleven, Silistra, Stara Zagora and Sofia capital. These are the districts with largest farms and despite the fact that they do not receive payment for the areas above 100 ha they still receive highest support per farm holding. The districts with the lowest level of support per farm are Kardjali and Smoljan which are also the districts with the largest number of small farms.
Figure 52: Support per farm per district, M211
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Data from the questionnaires The evaluators complement the observations of the official data regarding measure 211 implementation with the survey results in order to understand better the variability in the overall very low uptake so far. Beneficiary Profile A large share (60%) of the surveyed beneficiaries has more than 20 years experience in agriculture. Further 23% have more than 11 up to 20 years. Only 5% have less than 5 years of experience and other 10% have up to 10 years experience. This relates closely to the age structure of the surveyed beneficiaries where 64% are above 50 years old. A quarter of the respondents are between 41 and 50 years old. Only 10% are younger than 40 years.
Figure 53: Experience in agriculture and age of M211-beneficiaries
The main production sectors of the surveyed beneficiaries are related to animal husbandry mainly dairy cattle and sheep and goats. The average (median) number of the dairy cows is 2 per farm with a minimum of 1 and a maximum of 43. The average (median) size of sheep flocks is 10 sheep, with a minimum of 1 and a maximum of 242. Mixed crop production and animal husbandry are the third type of production (first and second combined). This measure seems to be the only one or among the very few measures that are actually supporting small scale extensive livestock farms. Arable crops as a main and only production are also well represented. This is followed by tobacco growing as a main and almost only production. Horticulture and orchards are represented both as a first and second production of importance.
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Figure 54: M211-beneficiaries top productions
The average (median) size of surveyed holdings is 3,85ha with a minimum size as low as 0,03 ha and a maximum size of 300 ha. Therefore, all groups of the differentiated support are represented in the survey. Looking at the share of owned land we observe that this measure supports more land owners – 38% of all respondents own all of their managed land. Further 17% own more than 50% of their land. There are also 17% landless land managers and we assume that these are mostly livestock farmers who use municipal land for grazing.
Table 106: Managed land Figure 55: Share of owned land
Size Area (ha)
Total of all respondents 3.161,385
Min size 0,03
Max size 300,00
Median size 3,85
Source: Own survey N…./16
The respondents were given the opportunity to self-define their farms. Overall 85% of them defined their farms as household farm, of which 38% producing for their own needs and 47% selling part of their produce. When we relate these definitions to the concepts of subsistence and semi-subsistence farms then we see m211 is supporting 38% subsistence farmers and 47% semi-subsistence farmers. If this percentage of self-defined semi- subsistence farms is related to the total number of supported holdings in the group up to 50 ha (0,47 * 25066 (2009)) then
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Elaboration of ongoing and mid-term evaluation of the RDP 2007-2010, Bulgaria we see the unlocked potential of measure 141 of 11.781 potential beneficiaries (assuming they meet the eligibility conditions, including age limitations and 1 – 4 ESU). The third important self-defined farm type with 10% of all farms is family farm producing for the market and also consuming part of their produce. Fully commercial family farms represent only 3% of the surveyed beneficiaries. Big agro companies diversifying or specializing in environmental production cover 1% each. Concluding we can state that the measure is reaching mainly household and family farms thus contributing to the prevention of land abandonment and depopulation of rural areas and therefore is able to achieve its objectives.
Figure 56: M211 farms as self-defined by their managers
There are only 21% of respondents that receive their entire income from agriculture. Other 12% of respondents have more than 50% income from agriculture. A very large share (41%) of respondents has less than 30% of their income from agriculture which is explained by the large share (40%) of people above 60 years old and the 38% household farms producing for their own consumption.
Figure 57: Share of income from agriculture
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The measure’s support is important for the respondents in terms of covering farm production costs which otherwise they cannot afford and if no support was available then there would be potentially land abandonment. The second important reason for applying is that the payments are improving the business of the respondents and are therefore important for them. This is also confirmed by the increasing number of small farms (up to 50 ha) in 2009 compared to 2007. Preserving the environment is appearing as second, third and forth rated reason for applying.
Figure 58: The most important reasons for applying The most important reasons for applying
Full statement
Improve The payments improve my business business and I need them
Cover costs I need the payments to cover my farming costs which I cannot afford otherwise
Pays for what The measure pays me for I do something I would do anyway
Environment Nature conservation and environment are important to me and so I participate
The main spending of the support is on farm operation costs, followed by investments in machines and equipment and personal costs. This relates strongly to the scope of the proving the support – compensatory payment for poorer production conditions as well as the need to prevent depopulation in rural areas. The results of the second rated line of spending the support – namely the investments in machines and equipment and to some extent the investments in buildings and facilities again raise the issue of complementarities with measure 141 Support to semi-subsistence farmers. Ideally, these two measures should have been implemented closely together so that m211 support is used for operational costs of production and measure 141 is used for the small investments needed on the farms.
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Figure 59: Main spending line of the M211 payment
The majority of respondents have to meet EU requirements for livestock breeding – 38% of all state the veterinary EU standards, and 30% state that they have to meet the milk hygiene requirements. Considering that most of the respondents are from the livestock breeding sector, the result is as expected.
Figure 60: EU standards that you still have to meet
When asked if they consider applying under other measures of the RDP, 63% of the respondents replied ‘No’ and 12% of them stated they have not heard of some of the other measures. There are 15% of the respondents who are definitely interested in other measures and other 10% are considering the possibilities for applying.
The biggest interest is in measure 121 which is probably the most famous measure in the entire RDP. It is followed by measure 141, measure 313 and measure 214. It is also very encouraging that although there are a few younger (than 40 years) surveyed beneficiaries they show an interest in measure 112.
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Figure 61: Would you apply under other RDP measures?
The most important institution body that played a key role during the implementation under measure 211 is the MAF municipal offices. They are assessed as very useful by 45% of the respondents and as useful by other 41%. They are followed by MAF district offices and NAAS/RAAS. The fourth rated institution as useful and very useful are the regional offices of the PA. This confirms that conclusion that the closer to the beneficiaries the institutions are, the more useful and appreciated they are by the beneficiaries. This needs to be considered well in the process of decentralization of the implementation of measures targeting small scale farmers and small projects/applications. The organizations receiving highest rates for not being useful are NGOs, which in reality have no role in the implementation of the measure and thus this result is very logical. NAAS/RAAS were also assessed as not useful by some 5% of the respondents. As in the case of the NGOs, NAAS/RAAS have no official role in the implementation of the measure.
Table 107: When you applied for measure 211 were you consulted by the listed organizations?
Organization No Yes, very Yes, useful Yes, but were useful not useful NAAS and its regional offices 56 18 21 5 MoA - Municipal offices for agriculture 11 45 41 3 MoA - District offices for agriculture 56 22 20 3 Ministry of Agriculture – Agri-environment Dept. 89 4 8 0 Ministry of Agriculture – other Dept’s 86 4 9 1 SFA – Regional PA 71 11 18 1 SFA – Central PA Sofia 66 1 4 1 Environmental NGOs 91 1 1 6 Other NGOs 90 3 1 6 Others 0 0 0 0
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The primary source of information for the m211 application for the surveyed beneficiaries is the municipal offices of MAF and MAF itself, followed by the regional offices of the SFA-PA. The leading secondary sources of information are again the MAF municipal offices and Television. Television is also an important tertiary source of information.
Figure 62: Your 3 main sources of information for RDP support application?
The respondents assess as satisfactory the available information, the level of details required in the application and the required supporting documentation.
Unsatisfactory to almost a quarter (23%) of the surveyed beneficiaries are the length of the selection/approval procedure and the transparency of decision making in SFA/PA. Further 10% find the transparency in SFA-PA as very unsatisfactory thus reaching a total of a third of all respondents.
Table 108: How do you assess the following elements of the application process under RDP?
[%] Very Satisfactory Unsatisfactory Very Don’t satisfactory unsatisfactory know Amount and adequateness of information available 7 59 13 3 18
Detail of information required in application 5 59 16 3 17 Requirements of the documents to be provided 6 59 15 4 17 Length of the project selection procedures 3 31 23 7 36 Transparency of the decision making process in the 5 37 23 10 26 SFA/Paying Agency
Ironically, 80% of the respondents state that they identify their land parcels in IACS easily and 83% state that they implement GEAC easily. At the same time these are the two main reasons for the penalties and reduction in payments imposed to farmers.
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Table 109: Do you agree with the following statements regarding the implementation of the measure?
[%] Strongly agree Agree Cannot judge Disagree Strongly disagree I find enough information when I apply 14 45 14 10 3 I fill in the application and collect 15 50 11 18 2 supporting documentation easily I identify my parcels in IACS easily 21 59 16 7 1 I implement the GAEC easily 16 67 20 1 1 I know who controls what during on-the- 14 53 20 9 4 spot checks
Answers to the Evaluation Questions (EQ)
The evaluation questions are answered on the basis of the factual implementation data as well as the responses of the surveyed supported beneficiaries.
Table 110: To what extent do you think the measure contributes to the improvement or maintenance of:
Total Very A lot A little Very little Was number of much harmful replies Continued farming activity in mountainous 182 40 38 16 4 1 areas Preventing land abandonment in 181 43 38 12 7 0 mountainous areas Preventing depopulation of mountainous 165 28 32 28 13 0 areas Landscape maintenance 132 17 39 30 13 1 Biodiversity conservation 147 21 37 32 9 1 Sustainable land and other natural resource 133 29 49 20 1 2 management Improving the environment 139 32 46 18 1 2 Improving the environmental knowledge of 129 21 37 28 12 2 farmers Source: Own survey
EQ: To what extent have compensatory allowances contributed to ensuring continued agricultural land use in mountain areas? A total of 78% of the respondents state that the measure contributed very much (40%) and a lot (38%) to the continued farming activity in mountainous areas. Additionally, 81% state that it contributed very much (43%) to preventing land abandonment and a lot (38%).
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Answer: Data from the survey shows that for actual beneficiaries the measure contributes 4: to a high extent. Given that the measure is probably the only one that practically supports farms in mountainous areas, including small and very small livestock farms, the measure contributes 4: to a high extent to continued land and grasslands use.
EQ: To what extent have compensatory allowances contributed to the maintenance of a viable rural community in mountain areas? Overall, more than half of the respondents think that the measure contributed to preventing depopulation of mountainous areas. However, there are also 28% who think it contributed a little and other 13% who find it very little.
Answer: According to the surveyed beneficiaries the measure contributes 2: to a less extent. Viable rural communities require a lot of other support outside the agriculture sector; however, the support to farmers working in mountainous areas is a crucial element in it. At the same time, area-based payments are also only one element of the overall support that mountainous farmers need (investment support, education and training of new faming requirements are also important elements), therefore the measure contributes 2: to a less extent.
EQ: To what extent has the scheme contributed to maintaining or promoting sustainable farming systems? Almost half (49%) of the respondents stated that the measure contributed a lot to sustainable land and other natural resource management. Other 29% think that it contributed very much to it. The improvement of farmers’ environmental knowledge however is considered as very high by 21% and as high by 37% of the respondents. At the same time there are 28% who find it a little and 12% find it very little.
Answer: Data from the survey shows that for actual beneficiaries the measure contributes 4: to a high extent. At the same time GAEC are among the main reasons for penalizing farmers which is not always clearly explained to them, the measure contributes 3: to some extent.
EQ: To what extent has the scheme contributed to maintaining the countryside and improving the environment? The improvement of the environment as a whole is considered as very high by 32% and as high by 46% of the surveyed beneficiaries. At the same time, when the biodiversity conservation and landscape management are concerned, 32% and 30% respectively find it a little contribution, other 9% and 13% respectively find it very little.
Answer: Data from the survey shows that for actual beneficiaries the measure contributes 4: to a high extent. Given that the measure is probably the only one that practically supports small-scale mountainous farming systems, the measure contributes 4: to a high extent.
Conclusions and recommendations This section is structured according to the evaluation criteria of relevance, effectiveness, effects, efficiency and sustainability.
Relevance The targeting of the measure’s support focused almost exclusively on small scale farmers and there are clear indications that this was successful. At the same time, there were probably big gaps in data during the process of measure’s first design. Two gaps that prove to be very important are related to (1) how much of the available UAA is eligible for SAPS support, and (2) in what size of farm holdings it was distributed
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There was a reported total UAA in mountainous areas of 885.982 ha. Data from early 2010 shows that the total SAPS eligible area in mountainous areas is 387.928,40 ha. This is only 44% of the available UAA in mountainous areas. More than half of the available UAA is in reality not eligible for SAPS and therefore, for measure 211 support. This explains to large extent the large share of 0 BGN payments. The issue of SAPS eligibility –ineligibility and its relation to measure 211’s eligibility–ineligibility needs to be addressed by the Managing Authority and the Ministry of Agriculture. If one of the main objectives of measure 211 is to prevent land abandonment, it seems very incoherent to NOT support farmers who want to manage abandoned or semi-abandoned land in mountainous areas. The second information gap is related to the distribution of land (eligible UAA) in farms. The implementation data for measure 211 shows that 95% of supported farms (up to 50ha) actually manage around 40% of the land. Almost half of the land is managed by 2% of the farms (larger than 100 ha). At the same time, there is a very thought provoking trend of decreasing the land managed in big farms (above 100ha) to increasing the land managed by small farms (up to 50 ha). There seem to be two possible explanations for such trend. The evaluators are not in a position to prove either of them but think that both worth consideration. The first explanation assumes that the support provided by the measure motivates small scale farmers who have previously given their land in cooperatives to start managing it individually. If this is true then the measure actually contributes to the objectives of reducing the depopulation of mountainous areas. The second explanation is a more negative one. It assumes that there is purposeful division of large farm holdings to smaller units in order to benefit from the higher support.
Table 111: Total area of submitted applications per farm size
Farm size 2007 2008 2009 Total % Average Total area % Average Total area % Average area (ha) size (ha) size (ha) size (ha) (ha) (ha) up to 50 ha 108.726 40 5,03 128.525,3 41 5,61 136.939 45 5,46 50 - 100 ha 36.226,48 13 69,8 47.708,04 15 70 47.723,1 16 70 above 100 ha 127.448,5 47 265,52 133.959,7 43 239,64 116.702,3 39 230 272.401 100 310.193 100 301.364,4 100 Source: Data provided by PA Direct Payments Dept in June 2010 and own calculations
Effectiveness The measure has been extremely effective in mobilizing small scale farmers to apply for support. It was less effective in actually supporting them given the high share of penalized farmers to the extent 0 BGN became a typical ‘authorized support’. The MA needs to address the issue of land eligibility and the reasons behind the high rate of penalties and to develop and implement mitigation actions already before the 2011 application campaign. At the same time, the number of supported farms is under 50% of the output target while the output target for the supported area is almost reached. The evaluators recommend that the output targets for both the supported farms and areas are reviewed in terms of the implementation so far, and the new statistical data which becomes available with the 2010 agricultural Census.
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Effects The effects are assessed through the qualitative and quantitative achievement of result and impact targets. The result targets of m.211 are related to avoiding marginalization and land abandonment as well as contributing to soil quality. The targets are set as percentage but it is not clear from what set – whether UAA in mountains areas or of the country as a whole or something else. Therefore, an exact assessment is not possible. At the same time, when marginalization and land abandonment are considered, it has to be reminded that there is a large number of beneficiaries with 0 BGN authorized support. In our view, many of these applicants are actually managing such marginalized and semi-abandoned plots. If this is the case, then the overall effects of the measure are significantly reduced, because it further penalizes farmers with lands that are most in need of support.
Efficiency In reality, the outputs (as low as they are in comparison to the target) are achieved without a dedicated information campaign to potential beneficiaries and without specific training of the staff in MAF municipal offices.
Sustainability The sustainability of m211 is ensured via continued management of the agricultural land in the mountainous region and therefore there is a requirement for a minimum 5 years of continued management. A particular concern from this perspective is the age structure of the supported and surveyed beneficiaries where 15% are older than 70 years and other 25% are older than 60 years. However, the review below focuses on more administrative aspects of sustainability. A positive aspect (especially when compared to m.214) is that only 3% of the respondents have decided to withdraw participation and only 6% are decided not to apply again after the end of the current 5 years period. Almost a third of the respondents (28%) have not decided yet if they would renew their participation which 66% confirm their continued willingness. There are some 19% who state that they have no information on the status of their application. This share is very high having in mind that almost all 2009 applications were processed by June 2010 and the survey was carried out in August- September 2010.
Table 112: Application for M211 support
Have you applied for measure Have you decided to withdraw Would you apply again when your 211 WITHOUT being approved? participation from m.211? current agreement ends?
No 70% No 97% No 6%
Yes 11% Yes 3% Yes 66%
Do not know, still 19% Have not 28% have no decided yet information
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When the reasons for withholding from future participation are discussed, we see that the two main reasons are the insufficient level of payment and the too big delay in annual payments. The payment levels are currently being re-calculated and negotiated with the EC DG Agri, therefore this issue is being addressed. The delay in the annual payments remains to be addressed although the payments were within the officially set deadline of 30 June, the year following the application.
Figure 63: Main reasons for NOT applying again
Recommendations The recommendations are based on the review of the targets achievements, the results of the survey as well as on the undergoing recalculations of the compensatory payments: 1. Analyze in details the reasons for the high share of penalized farmers, especially the reasons leading to 0 BGN authorized support and implement corrective actions for 2011 application campaign and onwards. This analysis requires collaborative efforts of the PA-Direct payments department, the MA and the LPIS responsible directorate in the Ministry of Agriculture. (see also common recommendations for area-based Axis 2 measures) 2. Provide feedback to the penalized farmers for the reasons for penalties, giving them the opportunity to correct their activities for the 2011 application campaign. 3. Make the staff in the MoA municipal offices an active and motivated partner for the implementation of the area- based RD measures (including premiums to current staff). This should also include feedback on penalized farmers from their municipality which would provide an effective learning mechanism for local administration and farmers alike.
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4. There are districts with very high number of small m211 applicants which creates more pressure on their staff during the application campaigns, therefore, the municipal and district offices of the MAF and the PA should receive additional support (additional staff and/or premiums to current staff) under measure 511. 5. Carry out well targeted information campaign to potential beneficiaries from the mountainous areas for each of the remaining three years – 2011, 2012, 2013. 6. Re-assess the output targets in view of the current implementation experience and the 2010 Agricultural Census to reflect better the situation and number of mountain farms and managed farmland.
6.4.1. Measure 212 Payments to farmers in areas with handicaps, other than mountain areas Short description of measure The measure aims to support agricultural production in areas with natural handicaps, other than mountain areas. In Bulgaria, these are the areas with poor land productivity as measured by their soil fertility category. The rational for intervention states that due to their low crop productivity these areas are predominantly used for extensive livestock farming. The objectives of the measure are therefore aiming to promote the rational use of land and other natural resources and conservation of biodiversity as well as to prevent land abandonment, maintain the attractiveness of the countryside and reduce depopulation of these areas. Priority is given to farms with managed land up to 50 ha which receive the highest support of 50 euro/ha. The second priority group is farms with land up to 100 ha which receive 20 euro/ha for the areas above 50 ha. Farms with land of more than 100 ha do not receive support for the areas above 100 ha. General implementation status The implementation of the measure began in 2007 with the direct payments campaign. Already in the first year it attracted 9 412 applicants which thus almost reaching its target number of supported farm holdings of 10 000. The implementation data shows that the interest in the measure’s support continues to increase with a stable pace of 7% each year. Overall in 2010 campaign there are 19,2% more applicants than in 2007. The number of rejected applicants also increases each year, however it remains negligible to the overall number. Table 113: Submitted and authorized applications for the period 2007 – 2009 and 2010
Submitted Authorized/Approved Applications Total Authorized Public Subsidy Applications (no.) (Euro) (no.) By 15.01.2010 By 30.09.2010 By 15.01.2009 By 30.09.2010
2007 Campaign 9 412 9 411 9 411 3 761 033,71 3 761 033,715
2008 Campaign 10 017 9 977 9 989 3 801 379,19 3 806 666,183
2009 Campaign 10 835 0 10 793 4 582 738,362
2010 Campaign 11 651 n.a. 0
Total 7 562 412,91 12 150 438,26
Source: Data presented at MC meeting on 5 October 2010, subsidy presented in BGN, converted to Euro 1BGN=1.95583 Euro
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Table 114: Number of submitted and rejected applications per campaign/year
Campaign 2007 2008 2009 2010 Number of submitted applications 9.412 10.017 10.835 11.651 % compared to previous campaign/year 6,0 7,5 7,0 % compared to 2007 campaign/year 6,0 13,1 19,2 Number of rejected applications 1 28 42 n.a. Source: Data presented at MC meeting on 5 October 2010 and own calculations
The largest group of applicants and beneficiaries (93%) is comprised of farms with managed land up to 50ha. The other two groups are almost equally represented by 3% and 4%. This representation is quite stable in the three years of the implementation of the measure. As with the other area-based payment measures 211 and 214, a very large group of the reported beneficiaries actually did not receive any support because their authorized payments were “0 BGN” and there is another large group of beneficiaries with reduced payments due to penalties. The worst year from this perspective is 2008, when an average of 26,8% of all supported beneficiaries got authorization of 0 BGN. The highest percentage is indeed in the first priority group with up to 50 ha of managed land of which 27,2% were penalized. The least penalized were farms with more than 100 ha managed land. This is most probably due to the fact that these large farms manage much less grasslands which were the most penalized land use group in 2008. When we compare these results with 2007 and 2009 results, we see that the situation with land eligibility in LPIS is quite dynamic.
Table 115: Number of beneficiaries with authorized payment of 0 BGN under m.212
2007 2008 2009 Of which Of which Of which 0 Farm size 0 BGN 0 BGN BGN No. payment % No. payment % No. payment % Up to 50 ha 8691 1903 21,9 9201 2505 27,2 10056 1868 18,6 50-100 ha 311 45 14,5 361 91 25,2 346 22 6,4 Above 100 ha 393 55 14,0 429 80 18,6 416 48 11,5 мах payment 248 257 293 Total 9395 2003 21,3 9991 2676 26,8 10818 1938 17,9 Source: Data provided by PA Direct Payments Dept in June 2010
Rate of achievement of targets as set in the measure texts The total public support available for this measure is 38.869.706 Euro and by 31 December 2009 19% of it was paid to beneficiaries. When the 2009 campaign payments are considered, the budget utilization goes up to 31%. The data reveals that the 2013 output targets are already being achieved at 99.77% of the number of supported farms and 183% of the supported agricultural land. In practice, this means that the size of the supported farms is on average double the size of the initially targeted farms. However, it should be considered that this reported number of beneficiaries’ farms and agricultural land include the farms and lands with 0 BGN authorized support. The actual supported share will be lower but even this reduction will not compromise the achievement of the targets. Moreover, there is a clear indication (including 2010 campaign applications) that there will be a significant overachievement of the land target and the supported farms target.
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Table 116: Targets related to measure 212 and their achievement
Type of Target Status Status Indicator indicator 2007-2013 31.12.2010 30.09.2010 Paid 7.562.412,91 Paid 12.150.438,26 Input Total public support (Euro) 38.869.706 (19%) (31%) Number of supported farms in areas with handicaps other than mountain areas 10.000 9.977 (99.77%) 10.793 (107.93%) Output Supported agricultural land in the other 110.000 201.336 (183%) 200.172 (181%) LFA regions (ha)
The table below shows that the penalties imposed to farmers for the period 2007 – 2009 represent as high as 8% of the measure’s total budget. Overall, the total amount of the penalties of a bit more than 3 million Euro is close to the 2007 paid support of 3,7 million euro. This is a clear indication that the implementation of the IACS rules and GEAC requirements are a serious barrier to the area-based support.
Table 117: Requested and authorized support and penalties, m.212
Share in authorized Requested Authorized support of (%) Campaign/year support in Penalties Reductions support application Penalties Reductions
2007 4.545.204,394 778.865,43 5.305,25 3.761.033,72 20,71 0,14
2008 5.272.768,988 1.465.602,90 5.786,92 3.801.379,20 38,55 0,15
2009 5.361.996,585 796.376,22 7.348,34 4.558.272,02 17,47 0,16
Total 15.179.969,97 3.040.844,5 18.440,51 12.120.684,93 25,09 0,15
(2007-2009) share of total budget 39 8 0,05 31
(2007-2008) share of total budgets 25 6 0,03 19
Regional uptake of the measure Across all districts, there is a stable upwards trend in the number of beneficiaries. The district with the highest number of beneficiaries is Kardjali, followed by Haskovo, Targovishte and Blagoevgrad. There are only three districts – Burgas, Haskovo and Yambol, which utilize more than 1 million euro of measure 212 support. While in Haskovo there are almost 2000 supported farm holdings, in Burgas the supported agricultural holdings are less than 900. In Yambol, however, these holdings are less than 350 which means that these holdings are actually very big (on average 74 ha) and are still attracted by the support offered.
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Table 118: Regional distribution of m212 support
Measure 212 2007 2008 2009 Applicants Area Applicants Area Applicants Area Total authorized District (No.) (ha) (No.) (ha) (No.) (ha) support (Euro) Благоевград 638 3.009,32 749 7.318,07 990 8.962,04 686.982,9 Бургас 807 25.580,67 810 27.065,38 896 26.445,49 1.535.717,1 Варна 43 1.604,11 34 1.049,87 46 1.011,08 59.720,7 В.Търново 34 433,01 20 202,51 34 462,26 34.193,9 Видин 124 1.140,46 59 908,54 72 1.365,95 83.554,8 Враца 142 6.505,7 153 5.875,75 172 6.417,75 390.181,7 Габрово 84 4.901,8 90 3.466,92 95 3.763,24 161.264,9 Добрич 1 53,64 2 68,89 0 0 3.041,8 Кърджали 2.142 7.828,96 2.250 8.711,16 2334 8.396,74 879.917,1 Кюстендил 302 2.719,65 428 4.320,37 473 4.299,83 288.548,5 Ловеч 154 5.840,99 181 9.526,28 183 8.604,68 335.622,0 Монтана 221 1.929,25 244 2.511,61 256 2.634,88 194.424,6 Пазарджик 454 5.974,96 401 6.132,78 410 5.488,1 300.486,5 Перник 1 0,65 28 476,24 30 389,88 31.971,9 Плевен 0 0 0 0 0 0 0,0 Пловдив 620 16.684,98 564 18.192,43 622 19.645,28 962.217,6 Разград 1 0,78 0 0 0 0 0,0 Русе 3 548,95 5 939,64 2 826,42 13.383,8 Силистра 0 0 0 0 0 0 0,0 Сливен 262 2.599,82 257 2.884,74 289 3.240,41 264.919,2 Смолян 3 6,01 2 3,34 3 5,54 666,5 София област 165 5.448,84 198 6.196,49 243 6.703,56 443.136,4 София столица 165 5.952,21 169 6.554,98 170 5.238,73 328.999,1 Стара Загора 22 16.828,23 180 14.485,77 189 15.858,7 517.181,5 Търговище 764 6.249,06 950 7.899,93 1.063 8.331,32 691.271,2 Хасково 1.786 36.098,04 1.864 40.355,63 1.934 39.177,77 2.572.755,5 Шумен 1 76,63 3 83,76 7 147,94 10.467,1 Ямбол 257 20.530,86 350 26.105,29 305 22.754,97 1.319.464,4 Total 9.196 178.547,58 9.991 201.336,37 10.818 200.172,56 12.110.090,8
Data from the questionnaires The evaluators complement the observations of the official data regarding measure 212 implementation with the survey results in order to understand better the variability in the overall very low uptake so far. Beneficiary Profile A bit more than half (55%) of m.212 respondents are between 41 and 60 years old, and there are other 32% older than 61 years. The share of young farmers (less than 40 years old) is 12%.
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Nearly half (46%) have more than 20 years experience in agriculture. The newcomers (less than 5 years experience) are 14%. Overall, this is a very unbalanced distribution of the people engaged in farming with a clear dominance by older and more experienced farmers which is good in terms of experience but not so good in terms of new entrants and overall future sustainability of agriculture in these areas.
The survey carried out with measure 212 beneficiaries provides an insight of their production systems and types of production. The results show that the majority of the surveyed beneficiaries grow arable crops as a primary production. The second important production both as primary and secondary is vineyards for wine production, followed by orchards and tobacco. Dairy cattle as a primary production are rated in 6th position. Sheep and goats and mixed crop and livestock production are only in 7th and 8th position. These results are questioning the rationale and the relevance of the support: Extensive livestock farming receives minor support while arable farming and vineyards are overtaking the majority of it.
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The total area managed by the surveyed beneficiaries is 13.167,97 ha. The average (median) size per farm is 7,19 ha which is almost double than the average (median) size of the surveyed beneficiaries of measure 211. The minimum size of surveyed farms is 0,1 ha and the maximum size is 2500 ha. The farmers that own their entire managed land are 38% and other 13% own more than 50% of their managed land. Landless farmers represent 21% of the respondent and further 28% own less than 50% of their managed land.
Table 119: Managed land
Size Area (ha)
Total of all respondents 13167,97
Min size 0,1
Max size 2500
Median size 7,19
Source: Own survey N…./12
Additionally, respondents were asked to self-define their farm type. Almost half of them (45%) defined their farms as household farm, selling part of their produce. Other 23% self-defined their farms as household farm, producing for their own needs. Additionally, 18% self-defined their farms as family farms producing for the market and consuming part of their produce.
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Considering the self-definition of the farms types above, it is surprising that 36% of the respondents receive their entire income from agriculture. At the same time, another third of the surveyed beneficiaries receive less than 30% of their income from agriculture.
The largest group of surveyed m212 beneficiaries is farmers between 51 and 60 years old. A little less than a quarter of the farmers are older than 61 years and 10% are older than 70 years. At the same time farmers between 21 and 30 years are only 2%. Other 10% are between 31 and 40 years old and another quarter are between 41 and 50 years.
Almost half (46%) have more than 20 years of experience in agriculture, while 31% have less than 10 years of experience in agriculture.
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The most important reason for applying under the measure support is defined as the need to cover their farm production costs which otherwise they cannot afford. The second rated reason is the need to improve their farming business. Environmental motivation comes as third and fourth options.
Full statement
Improve The payments improve my business business and I need them
Cover costs I need the payments to cover my farming costs which I cannot afford otherwise
Pays for what I The measure pays me for do something I would do anyway
In line with the main two reasons for the application for support – the Environment Nature conservation and actual spending of it is for farm operation costs and for investments in environment are important to me and so I participate machines and equipment. A significant third spending line is covering personal costs of the respondents.
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The EU standards that the surveyed respondents still have to meet are Nitrate Directive, indicated by 35% of them, and the Veterinary standards for livestock husbandry, indicated by 33%. Milk hygiene and phyto-sanitary requirements have to be met by 18% and 14% respectively.
More than half of the respondents (58%) are not planning to apply under other RDP measures. Other 13% are not aware about more than three of the listed measures. Not surprisingly the most known measures are Axis 1 measures while Axis 3 measures are much less known. Less known is also measure 214 from Axis 2.
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In the overall process of the measure’s administration, the most satisfactory is the role of MAF’s municipal offices assessed as very satisfactory by 27% of the respondents and as satisfactory by 46%. MAF and SFA-PA central and regional offices also are assessed as satisfactory by 52%, 50% and 48% of the respondents respectively. Table 120: How do you assess the role of the listed institutions in the measure’s administration?
Very Very Don’t [%] satisfactory Satisfactory Unsatisfactory unsatisfactory know MAF 17 52 15 3 14 MOEW 5 32 27 5 30 NVMS 4 34 20 8 34 SFA-PA Sofia 16 50 12 5 17 SFA – Regional PA 17 48 14 7 15 NAAS/RAAS 9 35 14 11 31 District offices of agriculture (municipalities) 27 46 15 4 9 Private consultants 6 12 6 7 70
The measure is implemented in areas designated as less-favoured due to natural handicaps other than mountain areas in a total of 569 settlements (LAU2). It is therefore essential that the administration in these settlements is well informed and knowledgeable to inform and support farmers for available support. The three primary sources of information for the surveyed beneficiaries are MAF municipal offices, the regional offices of SFA-PA and MAF. When secondary and tertiary sources are considered, the municipal offices of MAF become the top leader for providing information on the measure. Important external to the institutions sources of information are Television and General periodicals. Internet is only important as a tertiary source of information about RDP support application.
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The elements of the application process that are assessed as most satisfactory are the amount and adequateness of available information and the detail of information required in the application. The level of detail of the information in application is assessed by other 55% of the respondents as satisfactory, while the availability of information is assessed by 18% of the respondents as unsatisfactory. The highest scores for unsatisfactory elements are for the length of the selection procedure and the transparency of decision making process in the SFA-PA. Table 121: How do you assess the following elements of the application process under RDP?
Very Very [%] Satisfactory Unsatisfactory Don’t know satisfactory unsatisfactory
Amount and adequateness of information available 13 48 18 5 15 Detail of information required in application 13 55 14 1 17 Requirements of the documents to be provided 11 56 14 3 16 Length of the project selection procedures 2 34 20 9 34 Transparency of the decision making process in the SFA/Paying Agency 6 34 18 13 29
The implementation of the measure is assessed through five main statements. The strongest agreement (by a quarter of the respondents) is related to the easiness of identifying land parcels in IACS. Additionally 49% of the respondents agree to this statement. There is also an agreement (56%) and strong agreement (18%) that the GEAC requirements are implemented easily. However, as with the other two area-based measures 211 and 214, these are the main reasons for penalties and reduction of subsidies to farmers. Table 122: Do you agree with the following statements regarding the implementation of the measure?
Strongly Strongly agree Agree Cannot judge Disagree [%] disagree I find enough information when I apply 10 46 14 17 3 I fill in the application and collect supporting documentation easily 14 50 11 14 7 I identify my parcels in IACS easily 24 49 18 11 6 I implement the GAEC easily 18 56 17 6 1 I know who controls what during on-the- spot checks 18 52 17 10 3
Answers to the Evaluation Questions (EQ) The evaluation questions are answered on the basis of the factual implementation data as well as the responses of the surveyed supported beneficiaries who were asked to assess the overall contribution of the measure and their own contribution to some of the targeted environmental aspects.
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Table 123: To what extent do you think the measure contributes to the improvement or maintenance of:
Total Was number of Very much A lot A little Very little harmful replies Continued farming activity in less-favoured 135 34 27 30 7 1 areas other than mountainous areas Preventing land abandonment in less- 142 43 31 20 6 1 favoured areas other than mountains Preventing depopulation of less-favoured 125 32 26 27 14 1 areas other than mountainous areas Landscape maintenance 98 14 40 34 11 1 Biodiversity conservation 112 16 33 37 13 1
Sustainable land and other natural resource 115 30 43 16 9 3 management Improving the environment 116 32 38 23 6 1
Improving the environmental knowledge of 107 22 36 31 8 2 farmers
EQ: To what extent have compensatory allowances helped in ensuring continued agricultural land use in areas with handicaps, other than mountain areas? A total of 74% of the respondents stated that the measure contributed very much (43%) and a lot (31%) to the prevention of land abandonment in less-favoured areas other than mountainous areas. The measure’s contribution to continued farming activity in these areas is assessed as very high by 34% but there are other 30% that think it contributed only a little to this objective.
Answer: Data from the survey shows that for actual beneficiaries the measure contributes 4: to a high extent. Given that the measure actually did not manage to reach it preferred target group of extensive livestock farming. it contributes 3: to some extent.
EQ: To what extent have compensatory allowances contributed to the maintenance of a viable rural community in areas with handicaps, other than mountain areas? Around one third (32%) of the respondents think that the measure contributed very much to preventing depopulation of the LFAs other than mountainous. However, there 27% who think that it contributed only a little and other 14% that it contributed very little to depopulation prevention.
Answer: According to the surveyed beneficiaries the measure contributes 2: to a small extent. Viable rural communities require a lot of other support outside the agriculture sector, and we see that the profile of beneficiaries shows a very small share of younger farmers (less than 40 years old) thus the measure contributes 2: to a small extent.
EQ: To what extent has the scheme contributed to maintaining or promoting sustainable farming systems? The measure’s contribution to sustainable land and other natural resource management is assessed as very high by 30% of the respondents and as high by other 43%. In terms of contribution to improving the environmental knowledge of farmers, 36% of the respondent’s assess it as ‘a lot’ while other 31% assess it as ‘a little’.
Answer: According to the surveyed beneficiaries the measure contributes 4: to a high extent. However, the support did not reach the extensive livestock farmers and thus it contributes 2: to a small extent.
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EQ: To what extent has the scheme contributed to maintaining the countryside and improving the environment? A total of 70% of the respondents think that the measure contributed very much (32%) and a lot (38%) to improving the environment. When assessing the measure’s contribution to specific environmental components such as biodiversity conservation and landscape management 50% and 45% of the respondents respectively find it as little and very little.
Respondents were also asked about their specific on-farm contribution to environment. The majority of them (59%) expected to contribute to erosion control. Other 30% expected to contribute to biodiversity conservation and improvement. Protection of water resources was addressed by 5% of the respondents.
Answer: Data from the survey shows that for actual beneficiaries the measure contributes 4: to a high extent. At the same time, the extensive livestock farming systems which are very important for biodiversity conservation remain outside the support, the measure contributes 3: to some extent.
Conclusions and recommendations This section is structured according to the evaluation criteria of relevance, effectiveness, effects, efficiency and sustainability.
Relevance There are 449.002 ha of UAA in the regions identified as less-favoured areas other than mountains areas. During the RDP development in 2006-2007, approximately 25% of these areas are targeted for support. In 2009, the implementation data shows that close to 45% of the UAA is submitted for support under the measure which means that the offered support is attractive to the beneficiaries. The rationale for support states “Areas with low productivity have limited potential for cultivation of different crops, additional production costs and as a whole lower economic performance in agriculture. They are predominantly used for extensive livestock farming.” The survey carried out with measure 212 beneficiaries provides an insight of their production systems and types of production. The results show that the majority of the surveyed beneficiaries grow arable crops and vineyards while livestock farming is only 6th, 7th and 8th positions. These results are questioning the rationale and the relevance of the
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Effectiveness The measure was extremely effective in attracting the interest of farmers. Already in the first year of support, the area of support land was overachieved and the number of supported farms was reached at 94%. At the same time, it was ineffective in terms of supporting extensive livestock systems and the associated with them biodiversity, thus is not able to achieve the objective for biodiversity conservation and rational use of natural resources.
Effects The effects are assessed through the qualitative and quantitative achievement of result and impact targets. The result targets of m.212 (as with m211) are related to avoiding marginalization and land abandonment as well as contributing to soil quality. The targets are set as percentage but it is not clear from what set – whether UAA in mountains areas or of the country as a whole or something else. Therefore, an exact assessment is not possible. At the same time, when marginalization and land abandonment are considered, it has to be reminded that there is a large number of beneficiaries with 0 BGN authorized support. In our view, many of these applicants are actually managing such marginalized and semi-abandoned plots. If this is the case, then the overall effects of the measure are significantly reduced, because it further penalizes farmers with lands that are most in need of support.
Efficiency In reality, the outputs are achieved without a dedicated information campaign to potential beneficiaries and without specific training of the staff in MAF municipal offices and from this perspective this particular measure was extremely efficient.
Sustainability The age structure distribution of current beneficiaries is the biggest challenge for these areas and for the sustainability of land use for farming. At the same time, this is a problem which goes well beyond the scope of area-based payments and support. The sustainability of m212 is ensured via continued management of the agricultural land in these less-favoured areas and therefore there is a requirement for a minimum 5 years commitment. There are only 6% of the respondents that have decided to withdraw participation (probably mostly recipients of 0 BGN authorized support). There are only 5% of respondents who are decided not to apply again after the end of the current 5 years period.
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Almost a third of the respondents (30%) have not decided yet if they would renew their participation and 65% confirm their continued willingness. There are 9% of respondents who state that they have no information on the status of their application which is much lower as compared to m211. Additionally, there are 8% who state that they applied and were not approved which we assume is again due to the 0 BGN authorized support as the survey is carried among approved beneficiaries only.
Have you applied for measure Have you decided to withdraw Would you apply again when your 212 WITHOUT being approved? participation from m.212? current agreement ends?
No 83% No 94% No 5%
Yes 8% Yes 6% Yes 65%
Do not know, still 9% Have not decided 30% have no information yet
Respondents that have decided NOT to participate again or are undecided yet were also asked to rate the top three reasons for this. The majority indicate the insufficient level of payment and the big delay in the annual payments. These top 2 reasons are uniform among the three area-based payment schemes.
Recommendations The recommendations are based on the review of the targets achievements, the results of the survey as well as on the undergoing recalculations of the compensatory payments and from this perspective they are similar to the recommendations under measure 211.
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There is one specific recommendation to measure 212 related to its preferred targeted group of extensive livestock farming:
1. Carry out targeted information campaign to the low-intensity livestock farmers who were the original target group of the measure and encourage them to apply for this area-based support.
The issues and problems to extensive livestock farmers are going beyond the scope of this measure and are mostly related to meeting EU hygiene and veterinary and sanitary standards and thus a much needed investment support. However, they are having an important role of maintaining extensive grazing in such less-favoured areas and therefore, contributing to biodiversity conservation for which they should be paid. Municipalities (both mayors and municipal councils) who are responsible for the distribution of common pastures for grazing should also be informed and involved.
6.4.2. M214 Agri-environmental payments Objectives and Rationale: The main objective of the Agri-environment (AE) measure is to support environmentally friendly farming practices. The measure provides payments to farmers willing to commit contractually for 5 years to preserve, restore and/or maintain natural resources (mainly soil and water), traditional landscapes, biodiversity and habitats and/or endangered local breeds of farm animals. Additionally, the measure aims to increase the environmental awareness and knowledge of farmers and to promote the use of environmental planning in farm management practices. The measure was launched in 2008 with the direct payments campaign starting on March 1 till May 15, 2008 following their rules and regulations. The Agri-environmental measure implementation ordinance No.12/3.04.2008 was only published officially on April 22, 2008 giving less than a month to the applicants to submit their documents. It was amended already on August 8, 2008 and the amendments effected the submitted applications. It was repealed by Ordinance No.11/6.04.2009 which was amended on 9.03.2010.
General implementation status By the end of December 2009 there were two application campaigns (for years 2008 and 2009) for which 2908 application were submitted in total. Only 2008 campaign approved beneficiaries (1021) were paid by this date. The number of rejected applications in 2008 is 441 or 30% of all submitted applications. The period for effecting payments for the 2009 campaign was 1 December 2009 - 30 June 2010 according to the implementation rules. However, applicants should be informed on the status (approval/rejection) of their applications shortly after the end of the application campaign. No applications were processed (and applicant informed) or paid by end of 2009. In fact, 2009 information and payments was provided for the majority of applicants after 30 June 2010. By 30 September 2010, there were 999 paid applications, 400 rejected and further 47 still awaiting results of checks. This means that the share of rejected applications continues to be very high at around 30%. Overall, there are five major implementation problems of measure 214 (common to all AE schemes): 1. Low number of applicants. For the three years and respective campaigns there is insignificant increase in the number of applicants. At the same time, there are participants that decided to withdraw applications.
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2. Too slow processing of m.214 applications 2008 campaign was processed during the application period of 2009 campaign which created timing/planning problems to farmers. However, the situation with the 2009 campaign applications was much worse. 2009 applications were only processed after the end of 2010 campaign (with a few exceptions of first year organic applicants) and payments for 2009 were authorized in September 2010. 3. High share of rejected applications. The share of rejected applications maintains a high level of 30% for the two processed campaigns (by end September 2010). This indicates that either there is no effective learning mechanism for both administration and applicants or that the eligibility/implementation set up is inappropriate or both. Since the evaluators do not have information on the reasons for rejection of 2009 applicants we cannot compare them with the 2008 rejection reasons. 4. Extremely high level of penalties to the extent that there are a huge number of approved applications with authorized subsidy of 0 BGN. This leads to a low utilization of the measure’s budget but even more to de-motivation of the few participating farmers and to an overall negative image for the measure. 5. There is no real contract for the AE commitment. If the submitted AE application which is an annex to the SAPS payment application is approved, then it is considered as a contract. The evaluators believe that this is a rather vague formulation of a contract especially in terms of the 5 years commitment, where it appears as a declaration in points 4 and 5 among other 13 common declaration points. In this way, there is no contractual obligation of the beneficiary to maintain participation (although if he/she does not, there is a strict penalty) but also there are no contractual obligations of the Paying Agency to process and inform, and then pay beneficiaries in a given time period (thus in the case of huge delays there is no penalty to the PA).
There is another problem related to the implementation of the measure which is not directly related to the application process and beneficiaries but which has a serious influence on the assessment and evaluation of the implementation and achievement of objectives and targets:
6. Deficiency of comparable and thus reliable information on the actual AE areas and beneficiaries (new, continuing from previous years, changed) in the different years from the PA The evaluators received three main sets of data from the PA – in June, August and September 2010. The figures in all of them differ which made very difficult the analysis of the implementation. As a result, some of the details that we wanted to analyze could not happen due to lack of comparability of the data. It is not the task of the evaluators to say which one is correct. Therefore, we indicate under each table the source from which data is used. In most cases, we are referring to the trend rather than the specific figures although we understand the deficiencies in this approach as well.
Table 124: Submitted and authorized applications for the period 2008 – 2009 and 2010
Submitted Authorized/Approved Applications Total Authorized Public Subsidy Applications (no.) (Euro) (no.) By 30.12.2009* By 30.09.2010** By 30.12.2009* By 30.09.2010**
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2008 Campaign 1462 1021 1021 2.481.612,21 2.481.612,21
2009 Campaign 1446 0 999 0 3.038.918,67
2010 Campaign 1781 n.a. 0 n.a. 0
Total 4689 1021 2020 2.481.612,21 5.520.530,88
Source: * file: “Financial+table+for+_axis_1,2,3_-_Annual_review_meeting_-_20.01.2010.xls” **Data presented at MC meeting on 5 October 2010, subsidy presented in BGN, converted to Euro 1BGN=1.95583Euro Implementation data is best analyzed when all AE schemes are reviewed individually and across years. The following observations are being made: The total area for which applications are submitted in 2008 and 2009 remains more or less stable at 56.780 ha and 55.673 ha respectively. At the same time, there is high variability between the application areas per scheme in the two years. HNV in Important Bird Areas scheme and Crop Rotation schemes mark the highest increase of 4 and 8 times but have no or almost no success in approval. There is also an increase in the land under the Organic Farming and Pastoralism schemes of 21% and 16% respectively. On the other side are the HNV in Under-grazed Grasslands and Soil Erosion schemes which mark a decrease of 15% and 24% respectively. Traditional Orchards are the scheme with the most stable area in submitted applications. The areas authorized for payments vary enormously between the years and schemes. There seems to be no or very limited continuation of commitments from the previous years. If one sentence is to be used explaining the authorization observations, it will be “The implementation is very chaotic”. Table 125: Land and animals in agri-environmental applications per scheme and campaign
Campaign 2008 2009 2010 Scheme Submitted Authorized % Submitted Authorized* % Submitted OF1 Organic farming (ha) 6369 3573 56 8108 2945 36 15697 OF2 Organic apiculture (no.) no data 17244 - 20637 12657 61 23647 HNV1 HNV under grazed (ha) 33927 32066 95 28642 20193 71 29671 HNV2 HNV overgrazed (ha) 887 872 98 977 588 60 749 HNV4 HNV in IBAs (ha) 193 49 25 784 0 0 207 LF3 Traditional Orchards 60 26 43 68 62 91 79 (ha) SW1 Crop rotations (ha) 100 0 0 875 0 0 397 SW2 Soil erosion control (ha) 4381 2877 66 3325 0 0 2650 LB1 Rare breeds (no.) no data 9236 - 26906 18694 69 35430 LB2 Pastoralism (ha) 10862 1272 12 12894 3279 25 16718 TOTALS Land (ha) 56780 40735 72 55673 27067 49 66168 Rare breeds (no.) no data 9236 - 26906 18694 69 35430 Bee-hives (no.) no data 17244 - 20637 12657 61 23647 Source: Data provided by MA in early September 2010, file: “aep_table[1]_danni po kampanii_Sep2010” . * By 30 September 2010, there were additional 45 applications authorized and 47 were still waiting for decision.
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Rate of achievement of targets as set in the measure texts The output targets consider the number of supported holdings as well as the total number of contracts, physical area and total area under agri-environmental commitments as well as the number of actions related to genetic resources. There are two important observations in the targeted output indicators. The first one is related to the expectation that 25% of the farm holdings will renew their agri-environmental commitments within the current programming period. The second one is related to the average farm size of potential beneficiaries of 4 ha. There are big discrepancies between the shares of paid support, supported farms and land. On the one hand, a quarter of the targeted area is already being committed but not all of it is actually supported. On the other hand, the support paid and committed is approximately 10 times less. There are also serious differences between the various AE schemes as well as between the years as discussed above. The share of paid support by end of 2009 represents 0,57% of the measure’s allocated budget. When the figure is adjusted to the 5-years commitment – the share increases to 2.85% but even this is insignificant compared to the available budget. The number of contracts (in reality authorized applications) represents 2,04% and land under agri- environmental commitments represents 25,46% of the targeted for the entire period. Another important aspect to consider is the number of applications and area which are reported as authorized but are paid 0 BGN. The number of farms receiving 0 BGN support in 2008 campaign is 412 or 40% of all supported farms. This reduces the number of farm holdings receiving real support to 609 or 1,52% of the farms targeted for support. The physical area receiving actual support is 21 780 ha or 13,61% of the targeted. In either case (applicant, committed or only really supported farms), the average AE farm size is between 35 -40 ha/farm and is much larger than the initially planned 4 ha/farm. Therefore, the output indicators for farms receiving support and number of contracts should be revised to reflect this reality. The results and impact of the agri-environmental payments are measured by the areas under successful land management. Therefore, the leading concern for the measure’s implementation should be how to increase the area of land implementing the AE activities and receiving real support. Table 126: Targets related to measure 214 and their achievement by 31 December 2009.
Type Indicator Target Achieved by 31.12.2009 2007-2013 Unit % Input Total public support (Euro) 435.340.701 2.481.612,21 0,57 (2,85)
Output Farm holdings receiving support (no.) 40 000 609 1,52
Total area under AE support (ha) 160 000 40 735* 25,46 Total number of contracts (no.) 50 000 1021 2,04 Physical area under AE support (ha) 160 000 21 780** 13,61 Actions re. genetic resources (no.) 1 000 271 27,10 Source: RDP text, PA monitoring data and own calculations *Areas under all authorized applications ** Areas under authorized application receiving more than 1 BGN of agri-environmental payment. Regional uptake of the measure The regional uptake of measure 214 shows that there are districts in which the interest outperforms significantly others. The number one leader is Blagoevgrad with 7506ha in submitted applications. There are six districts with more than 4000ha - Burgas, Pleven, Plovdiv, Razgrad, Haskovo and Targovishte. Two districts (Vidin and Kjustendil) have less than 20 ha and Vratsa has 28 ha.
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There is a large number of districts (9) in which there are less than 5 % rejected areas. However, there are two districts with 100% rejected areas. Additionally, there are 3 more districts with more than 70% rejected areas, including Vidin and Kjustendil which anyway have very low area in submitted applications. The districts with the highest share of actually supported areas are Vratsa, Ruse and Lovech. Additionally, Razgrad, Plovdiv, Burgas, Varna and Veliko Tarnovo have more than 50% of areas actually supported. It should be noted however, that this analysis does not consider the penalties where the amount paid is more than 0 BGN since the evaluators do not have this information. The areas that are authorized for support (therefore obliged to implement AE commitments) but their payment is 0 BGN due to penalties represent 44% of all areas in submitted applications. Four districts are particularly concerned by this – Montana, Haskovo, Sliven and Pleven with more than 70% of all areas. Overall for the country, the problem of the 0 BGN support represents the biggest problem both in terms of area (not actually supported) and budget (not actually spent) and even more the motivation of beneficiaries to continue their AE engagements. This issue was frequently raised in the comment sections of the survey carried out (See box below).
Table 127: Regional distribution of area in application, supported and rejected in 2008
District Area in applications Share of areas (%) (ha) Authorized Authorized Rejected Paid > 1 BGN Paid = 0 BGN Благоевград 7.506 34 18 49 Бургас 4.630 51 35 14 Варна 102 53 25 22 В.Търново 3.509 52 45 3 Видин 11 5 7 88 Враца 28 100 0 0 Габрово 1.535 49 38 13 Добрич 163 0 0 100 Кърджали 156 41 59 0 Кюстендил 14 15 15 70 Ловеч 2.200 73 4 23 Монтана 409 0 96 4 Пазарджик 2.430 38 47 15 Перник 108 0 0 100 Плевен 4.468 12 79 8 Пловдив 4.228 57 2 41 Разград 4.699 64 35 0 Русе 2.144 95 0 5 Силистра 145 2 0 98 Сливен 2.093 8 85 7 Смолян 414 43 57 1 София област 1.797 37 62 1 София столица 3.540 29 61 10 Стара Загора 1.307 49 27 24
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Търговище 4.000 6 65 29 Хасково 4.466 8 91 1 Шумен 182 6 22 72 Ямбол 504 43 44 13 ОБЩО 56.790 38 44 18 Source: Data provided by PA-Direct Payments Unit in June 2010
As it was discussed above, there is a high level of rejection of AE applications in both years for which applications were processed. The information available is only for 2008. It reveals that one of the biggest issues is the eligibility under IACS cross-checks relevant for 39% of the rejected applicants.
However, the reasons defined as “Incorrect AE application” and the rejections due to various articles which require copies of various documents (obviously not presented by the applicants) account for a total of 57% of all rejections. This indicates a serious problem in the implementation arrangements of the measure related to:
The big delays in processing the AE applications in practice do not provide time for beneficiaries to submit missing documents or to correct obvious-technical mistakes since the usual 10 days period for correction is long gone.
- There was no quality check of the AE applications to verify that all needed documents were also submitted and that the application was correctly filled in. Given that the rejection rate for the 2009 application is also 30% it seems that this was not corrected in the second year of m214 applications and becomes a repeated systemic mistake which needs to be addressed adequately.
Table 128: Reasons for rejection of applications in 2008
AE scheme Not Incorrect Art.40 Art.45 Art.45 Other art. Other Total eligible AE (1) (2) after IACS application checks OF1 Organic farming 21 30 - - 3 [Para.4]: 10 7 71 OF2 Organic apiculture - 10 1 - - [Para.4]: 2 6 19 HNV1 HNV undergrazed 15 17 - 1 - - 1 34 HNV2 HNV overgrazed 1 1 - - - - - 2 HNV4 HNV in IBAs - - 4 - - - 1 5 LF3 Traditional orchards 9 5 - - 4 [Art.30(3)]: 1 22 3 SW1 Crop rotations - - - - 1 - - 1 SW2 Soil erosion control 124 6 1 - 3 - 1 135 LB1 Rare breeds 16 21 - 4 4 [Art.34(2)]: - 148 39 [Art.14(2)]: 64 LB2 Pastoralism 7 10 - 40 - - - 57 Total 193 100 6 45 15 118 17 494 % 39 20 1 9 3 24 3 100
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Data from the questionnaires The evaluators complement the observations of the official data regarding measure 214 implementation with the survey results in order to understand better the variability in the overall very low uptake so far. Beneficiary Profile The surveyed beneficiaries were selected from the set of beneficiaries with authorized payments in 2008. The survey was carried out in August-September 2010 therefore the responses logically represent their situation in 2010 rather than in 2008. Thus, we are able to observe how their activities, expectations and motivations have developed in the last three years (2008, 2009 and 2010). This explains also why the distribution of beneficiaries between the AE schemes is closer to the distribution of submitted applications in 2010 than to the authorized ones in 2008. Beneficiaries of the “HNV in under-grazed grasslands” scheme continue to attract highest interest. We also observe a significantly increased interest in the “Organic farming” scheme which is represented by the respondents group as well. The development in the applications for these two leading scheme is quite interesting. While ‘HNV in under-grazed grasslands” maintains a stable number from the first year, the “Organic farming” scheme almost doubles its numbers each following year. Additionally, 17% of the AE respondents state that they implement other nature conservation measures which are not supported by the AE measure.
Table 129: Distribution of beneficiaries and survey respondents per AE scheme
AE scheme Respondents Share of authorized Share of submitted Number Share (%) beneficiaries (2008) applications (2010) OF1 Organic farming 66 23 7 27 OF2 Organic apiculture 41 14 11 7 HNV1 HNV undergrazed 64 22 48 33 HNV2 HNV overgrazed 18 6 3 2 HNV4 HNV in IBAs 8 3 0 0 LF3 Traditional orchards 7 2 2 2 SW1 Crop rotations 12 4 0 0 SW2 Soil erosion control 8 3 6 3 LB1 Rare breeds 32 11 20 17 LB2 Pastoralism 36 12 4 9 Total 292 100 100 100 Source: MA data and own survey
The surveyed AE beneficiaries show a balanced representation of all productive age groups. Over half of them are between 40 and 60 years old. Young farmers (21 – 40 years old) represent a quarter of all surveyed AE beneficiaries. Farmers in official retirement age (over 60 years) are also almost a quarter, with farmers over 70 years old reaching 4% of beneficiaries. Interestingly, almost half of the farmers are younger than 50 years, and the other half are older than 50 years. Over 40% of all beneficiaries have more than 20 years of experience in agriculture. Over a third of the beneficiaries have between 6 and 20 years experience in agriculture, and other 18% have between 2 and 5 years. Newcomers in agriculture represent only 1% of all surveyed beneficiaries.
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Figure 64: Age of AE beneficiaries and years of experience in agriculture
Source: Own survey
There is also a big variability in terms of land managed by the surveyed AE beneficiaries, with a minimum size of 0,52 ha and a maximum size as high as 3.259,14 ha. However, the majority of respondent manage farms of approximately 28,50 ha. This is 7 times higher than the average target size used during the programming of the RDP. This indicates that a review and adjustment of the output indicator “number of supported farms” should be feasible given that the leading results of agri-environmental measure are based on areas under successful management. The importance of the successful and long-term (at least 5 years) management land is assessed also from the perspective of land ownership. We see that a worryingly large share (42%) of surveyed beneficiaries actually own no land at all. Additionally, 20% of respondents own less than a quarter of their managed land and 15% own between 26 and 50% of their managed land. At the same time, there are 17% of the surveyed beneficiaries who own the entire land they manage. Considering that 28% of the respondents are in HNV1 and HNV2 schemes and other 12% under LB2 Pastoralism scheme, we see that 40% of all respondents manage land which is either municipal or state grasslands. This raises a critical question on the common land use arrangements between the responsible authorities (whether municipal councils or national part directorates) and farmers. The practice of issuing agreements for one year only de-motivates farmers to participate (the least) and makes them unable to comply with the 5 years AE commitment. In reality, this is a problem for all area-based payment measures requiring 5 years commitment. However, it is particularly problematic for m214 which requires implementation of AE commitment on the same plot of land which is not the case in m.211 and m.212.
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Table 130: Managed land [ha] and share of own land [%] Figure 65: Share of owned land
Total area of all respondents 27.781,44
Min size 0,52
Max size 3.259,14
Median size 28,50
Source: Own survey N…./47
The majority of respondents (54%) identify their farms as household and family farms producing for the market and also consuming part of the produce. The fully commercial farms represent 28% of all respondents of which 12% are specialized in environmental produce and 9% are diversifying their activities with environmental production. The household farms, producing for their own needs represent 10% of the respondents. Agriculture is the only source of income for 45% of the AE respondents and provides more than 50% of the income for other 16%. This diversity of (self-defined) farm types reveals that the measure is de facto appealing to the entire range of active farmers and farm managers. The fact that household and family farms are so well represented means that the barriers to participation (reflected in the overall low number of beneficiaries and high share of rejected and 0 BGN payments) are not related to the size or management type of the farm. On the other hand, this diversity of farm types and indeed management types means that there cannot be “one size-fits all” solution to measure 214 information and promotion activities which will need to be intensified significantly in the remaining period. Figure 66: AE farms as self-defined by their managers and share of income from agriculture
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Close to one third of all respondent farmers are members of some organizations - farmers’ and sector associations are the top leaders followed by producer organizations. Membership in conservation organizations and agriculture trade unions is very limited – 2% each. The majority of farmers however are not members of any organization. This is important aspect when the potential for speeding up the up-take and implementation of the agri-environmental measure is decided. There is an assumed responsibility to the environmental NGOs that they should be the ones encouraging uptake and the low level of participation is considered as something that they should be worried about. We will discuss this issue again in more details when the implementation and institutional results are presented.
Figure 67: Are you a member of the listed organizations Table 131: Membership in organizations
Membership is as follows: Share of YES replies Sector associations 20 % Producer organizations 13 % Farmers associations 30 % Agriculture trade unions 2 % Associations for local/regional development 12% Environmental NGOs 2 % Other organizations 22 %
Source: Own survey
The majority of AE respondents state that their farm lands are not within boundaries of protected areas (over 79% across all categories). Further 10% of the respondents state that they do not know if their lands are within or outside protected areas. The share of “don’t know” replies increases when Natura 2000 areas are concerned. This is important to consider in the development of the promotion and information campaign of the future launch of measure 216 Natura 2000 support.
Table 132: Share of AE farms with lands in protected areas
[%] Yes No, No Don’t know (all parcels or some but is at the parcels) border with PA Reserve 2 0 88 11 National park 9 3 81 7 Nature park 6 4 83 7 Nature landmark 1 2 87 9 Managed reserve 1 9 82 7 Protected zone 15 3 71 11 Natura 2000 zone Bird Directive 13 3 71 13 Habitat Directive 12 3 69 16
Understandably, 41% of the AE respondent farms have lands within HNV farmlands. Mountainous areas comprise 55% of the farms and other LFA areas host 32% of the respondent farms. The farms with lands in Nitrate Vulnerable Zones are only 18% of all. The share of “don’t know” replies is as high as 21% for NVZ and other LFA farms. This provides
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[%] Yes No, No Don’t know (all parcels or some but is at the parcels) border HNV farmlands 41 2 44 13 Nitrate Vulnerable Zone 18 0 61 21 Mountainous LFA areas 55 0 36 8 Other LFA areas 32 2 45 21
The respondents that still have to meet the requirements of the Nitrate Directive represent 16% of all, however, this result should be analyzed together with the above finding that 21% of all farmers actually do not know if their land is within a Nitrate Vulnerable Zone. The veterinary requirements for animal husbandry represent the biggest share with 40% of farmers still having to invest to meet them. The milk hygiene requirements are indicated by 20% of the respondents. Further 24% indicate the Phyto- sanitary standards. All this requires additional on-farm investments which potentially can be supported by measure 121 reserved and non-reserved budgets.
Figure 68: EU standards that you still have to meet
The importance of the AE payments for improving beneficiaries business’ is the most important reason both in terms of number of replies and as prioritization as top 2 rates. The other three reasons are comparatively equal. We therefore can conclude that the AE activities are treated as business opportunities by farmers and not as a side activity of their main business.
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Table 134: The most important reason for applying
Full statement
Improve The AE payments improve business my business and I need them
Cover I need the AE payments to
env.costs cover the environmental
costs which I cannot afford otherwise
Pays for AE measure pays me for what I do something I would do anyway
Environment Nature conservation and environment are important to me and so I participate
The respondents state that they plan to spend the AE payments (“when we receive them!!”[citation]) mainly for the farms’ operation costs. This is also in line with the reasoning for the AE payment calculations which covers income foregone and increased costs of production. The second spending line of the AE payments is for investments in machines and equipment, followed by investments in buildings and facilities. The two investments options receive high scoring compared to all potential spending lines.
Figure 69: Main spending line of the AE payment
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The respondents were also asked if they are considering applying under other RDP measures. The majority (60%) state they are not planning to apply. A quarter of respondent are definitely interested in other measures, and 11% consider it now.
The biggest interest is in measure 121, followed by measure 211. If their stated interests coincide with their gaps in meeting the EU standards in veterinary and milk hygiene requirements as well as the Nitrate directive requirements then their investment plans can be met by measure 121 which still have unspent reserved budgets for these EU standards.
Figure 70: Would you apply under other RDP measures?
Support by governmental institutions is most used and considered most useful as well as highest share of not useful. However, it is very important to underline that beneficiaries rely predominantly on the responsible official institutions and therefore if the MA wants to improve the uptake and implementation of the measure, it has to strengthen significantly their capacity and knowledge to support beneficiaries. It is not enough to expect that NGOs both environmental and other can do this job UNLESS they are officially given the task to do it.
Table 135: When you applied for measure 214 were you consulted by the listed organizations
Organization No Yes, very Yes, useful Yes, but were useful not useful NAAS and its regional offices 14 33 38 16 MoA - Municipal offices for agriculture 21 27 36 16 MoA - District offices for agriculture 40 26 25 10 Ministry of Agriculture – Agri-environment Dept. 67 8 22 4 Ministry of Agriculture – other Dept’s 83 2 11 5 SFA – Regional PA 45 17 29 8 SFA – Central PA Sofia 35 1 7 4 Environmental NGOs 80 5 8 8 Other NGOs 79 9 3 9 Others 71 11 14 4
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The factor which provoked most respondents as influential on their motivation for participation is the level of agri- environmental payments. It is also rated as important to extremely important by 95% of them. The other two key factors influencing participation are preserving endangered farm crop and animal species and reducing soil and water pollution on my farm. The least important factors are the offered free agri-environmental advice and the recommendations by other people or colleagues. It is interesting that recommendations from colleagues are also rated as important by 35% of the respondents. We conclude that recommendation by others is only important when considered together with the level of agri- environmental payments and one or more of the environmental factors.
Table 136: Which factors influence your decision to apply under measure 214 [%]
Total No. Extremely Very Important Not very Not important Respondents important important important at all
Increase the diversity of wild flora and 95 27 14 29 16 14 fauna Preserve endangered farm crop and 102 33 18 29 11 9 animal species Improve landscape appearance 87 22 20 38 13 8 Reduce soil and water pollution on my 103 38 26 25 4 7 farm Reduce erosion on my farm 85 26 24 31 7 13 Level of agri-environmental payments 130 36 24 35 2 2 I know people who recommended it to 105 12 17 35 12 23 me The free agri-environmental advice 92 15 14 23 20 28
The role of institutions is assessed by the surveyed AE beneficiaries. Most satisfactory is considered the role of NAAS and its regional offices. This is followed by the municipal offices of agriculture and the regional offices of the PA. The closer the contact with the beneficiaries is the higher is the appreciation of their role. The role of the Ministry of Agriculture is assessed as satisfactory by 42% of the respondents and very satisfactory by 14%. SFA – PA headquarters are assessed as satisfactory by 40% of the beneficiaries and very satisfactory also by 14%. These two institutions also attract the highest dissatisfaction of beneficiaries: SFA- PA Headquarters gets a total of 38% (unsatisfactory 23% and very unsatisfactory 15%). The Ministry of Agriculture role is not satisfactory to 34% of the respondents (unsatisfactory 21% and very unsatisfactory 13%). The result is very informative on the appreciation of the AE beneficiaries of these two institutions roles and responsibilities. The role of the Ministry of Environment is also assessed as unsatisfactory by 23% of the respondents, which equals the ‘unsatisfactory’ score of the SFA-PA Headquarters. The other very important institution for the implementation of the AE measure is the veterinary service – NVMS. Their role is considered as satisfactory by a third of the respondents. They are also among the three most unsatisfactory performing institutions with 11%. Another third of the beneficiaries indicate ‘don’t know’ reply since they do not interact with it.
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The majority of the respondents (61%) indicated ‘don’t know’ reply on the role of private consultants. This is explained by the fact that the measure’ implementation is supported free-of-charge to the farmers by the NAAS-RAAS and hence less role for private consultants. Table 137: How do you assess the role of these institutions in the administration/organization of m.214
[%] Very Satisfactory Unsatisfactory Very Don’t know satisfactory unsatisfactory MAF 14 42 21 13 10 MOEW 9 28 23 10 31 NVMS 12 32 16 11 29 SFA-PA Sofia 14 40 23 15 9 SFA – Regional PA 21 48 15 8 7 NAAS/RAAS 28 38 13 8 13 District offices of agriculture (municipalities) 24 47 16 9 4 Private consultants 11 12 8 8 61 Source: Own survey
The top 3 first sources of information for the surveyed AE beneficiaries are the SFA/PA regional offices, MAF municipal offices and MAF itself. The top 3 second sources of information are MAF municipal offices, Television and NAAS/RAAS. The top 3 third sources of information are Internet, Television and MAF municipal offices and NAAS/RAAS. This coincides with the results of the assessment of the role of each institution above. This is also very informative on the design of the needed information and promotion campaign for the AE measure in the coming years. There is a key role for the MAF municipal offices and SFA/PA regional offices, both of which were significantly underestimated till now.
Figure 71: Your 3 main sources of information for RDP support application?
Source: Own survey
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Three elements of the application process are assessed as satisfactory and very satisfactory: detail of information required in application (75%), amount and adequateness of information available (71%) and requirements of the documents to be provided (68%). In the analysis of the results we shall consider that the replies are given by authorized/approved beneficiaries. The non-approved applicants due to not providing copies of documents or incorrectly filled in AE applications had no opportunity to comment on it. Therefore, in the overall assessment of these elements we shall consider it as well. The unsatisfactory and very unsatisfactory elements of the application process are the length of the selection procedure (55%) and the transparency of the decision-making process in the SFA-PA (56%). The length of selection/approval element is also very strongly commented in other evaluation questions as main reasons for NOT applying again after the 5-years commitment period.
Table 138: How do you assess the following elements of the application process under RDP?
[%] Very Satisfactory Unsatisfactory Very Don’t satisfactory unsatisfactory know Amount and adequateness of information available 10 61 18 8 4
Detail of information required in application 10 65 12 6 6
Requirements of the documents to be provided 12 56 16 9 7
Length of the project selection procedures 3 24 36 19 18
Transparency of the decision making process in the 6 27 31 25 10 SFA/Paying Agency The “first in, first served” selection criteria 10 20 25 23 23
Source: Own survey
The delay of the AE payments is considered as impeding to the farms’ normal activities by a total of 81% of the respondents. This is clearly the biggest problem to AE beneficiaries. The next statement that receives strong agreement is the easiness of implementation of the AE activities – 19% strongly support it, and 54% support it. Land parcels identification in IACS is assessed as easy and very easy by a total of 64% of the respondents. However, this is the statement which gets the highest score for strong disagreement by 11% of the respondents. Over a quarter of the AE respondents disagree with the statement for availability of enough information and easy filling-in of application and providing supporting documentation. Again, having in mind that the survey covered only approved beneficiaries, this share of disagreeing respondents is actually high.
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Table 139: Do you agree with the following statements regarding the implementation of the measure?
[%] Strongly agree Agree Cannot judge Disagree Strongly disagree I find enough information when I apply 12 46 9 26 6 I fill in the application and collect 10 45 12 26 8 supporting documentation easily I identify my parcels in IACS easily 12 52 9 17 11 I implement the AE activities easily 19 54 12 13 2 The delay of the AE payments impedes my 49 32 7 7 5 normal activity I know who controls what during on-the- 16 45 18 14 6 spot checks
The most positive effect (81%) from the measure on the beneficiaries’ farms is that they manage it now in a more environmentally friendly way than before. This is supported by the disagreement and strong disagreement of 79% of the respondents that the measure interfered with their normal farming activities. Another very positive statement is that 78% of the surveyed AE beneficiaries are glad that they joined the AE measure. This is even more positive when we consider the overall chaotic status of its implementation. Three quarters of all surveyed AE beneficiaries strongly agree (22%) or agree (53%) that the measure has hidden costs which they did not expect. Thus, there is less agreement (57%) that the payment covers their agri-environmental costs and 43% disagree with this statement.
Table 140: Do you agree with the following statements regarding the measure’s influence on your farm?
[%] Strongly Agree Disagree Strongly agree disagree There are hidden costs which I did not expect 22 53 20 5 The payment covers my agri-environmental costs 18 39 29 14 It interfered with my normal farm activities 5 16 59 20 It made easier my land management 17 47 30 7 I manage my farm in a more environmentally friendly way 26 55 16 2 The AEP income is a serious part of my total income 26 40 21 13 My AE activities contribute to other businesses in the region 15 42 35 8 I am glad that I joined the measure 29 49 14 8
Sustainability of agri-environmental activities is ensured via continued environmentally-friendly management of the land, hence, the requirement of the minimum 5-years duration of the AE commitment. The implementation of the AE measure in Bulgaria, however, indicates that this duration is halted already at the start of the AE commitment. One prominent example of this is the 2 877 ha of the SW package authorized as a part of the 2008 campaign, and then 0 ha authorized as a part of the 2009 campaign. The perspective of the beneficiaries as a response to five questions is presented below. Almost a quarter (22%) of the surveyed AE beneficiaries replies that they have applied under the measure without being approved. Further 9% state that they do not know because they still have no information.
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These replies are quite indicative of the transparency of the entire process having in mind that the Questionnaires are sent only to authorized/approved beneficiaries in 2008. Normally, we expected that we would get close to 100% “no” reply to this question since there are only 2 years from the start of the measure. When these beneficiaries are approved in 2008, they should know it and they should normally assume they are approved each following year [unless they do not implement the AE activities]. On the contrary, we have beneficiaries who say they were not approved although they are reported as such or who do not know their status. We assume that the respondents who say they were not approved were in reality beneficiaries of the authorized payment of 0 BGN. It is then understandable that 11% of the surveyed AE beneficiaries have actually decided to withdraw their participation in the scheme already in the second year of its implementation. When asked if they would apply again after the end of the current commitment period, only 60% reply firmly Yes. A quarter is still undecided and 15% are stating they would not apply again.
Table 141: Application for M214 support
Have you applied for measure Have you decided to withdraw Would you apply again when your 214 WITHOUT being approved? participation from m.214? current agreement ends?
No 69% No 89% No 15%
Yes 22% Yes 11% Yes 60%
Do not know, still 9% Have not decided 25% have no information yet
The two main reasons which would make current AE beneficiaries to refrain from future application are the ‘too big delays in annual payments’ and the ‘insufficient level of payment’. Both issues are something that can and should be addressed by the relevant responsible institutions – the Paying Agency and the Managing Authority.
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Figure 72: Main reasons for NOT applying again
A positive indication regarding the sustainability of the AE support is that it supports farmers believing in the environmentally-friendly way of farming. This is indicated by the fact that 43% of the respondents state that their environmental activities would not change if they do not implement m.214 any longer. Further 18% state that there will be moderate decrease. For one third of the respondents there will be significant decrease. Interestingly, 10% of the surveyed AE beneficiaries indicate that there will be an increase. This relates probably to the beneficiaries who also stated that they implement nature conservation activities which are not supported by the measure.
Figure 73: If you do not implement M214 any longer, how do you think your environmental activities would change?
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Box 1. Good practices for supporting management of HNV grasslands
Project „Conservation of globally important biodiversity in high nature value semi-natural grasslands through support for the traditional local economy”, implemented by the Bulgarian Society for the Protection of Birds (BSPB), funded by GEF/UNDP
The project: The objective of the project is to ensure long-term conservation of the high nature value grasslands in Bulgaria and to mainstream grasslands biodiversity concerns into Bulgaria’s agricultural policy in order to reverse negative changes caused by unsustainable grazing, abandonment, and land conversion. The scheme: In 2010, it launched a pilot grant scheme to support farmers from three pilot regions in Bulgaria – IBAs „Ponor”, „Besapari hills” and „Western Balkan” which will be implemented for 2 years. The pilot scheme aims to encourage farmers to adopt more biodiversity friendly land management practices in selected high nature value practices (HNV). The measures that are implemented are taken from the EAFRD menu and comprise: Agri-environmental payments, Compensatory payments for Natura 2000, Non-productive investments and Investments in holdings. The preparation: There were two years of preparation before the scheme was launched. Period for which the project team was able to meet personally and establish regular contacts with most of the farmers in the regions. This experience was extremely valuable to shape the investment measures in a way that is most beneficial and relevant to the needs of the small farmers. The information: There was a sequence of presentations in the villages of the grant scheme before and during launch. Additionally, information was spread by local and regional media, radio, newspapers. All this was followed by individual, personal meetings with the interested farmers to explain each of the measures, the relevance to the specific farm, etc. The advice: There is a special mobile team of consultants that provides advice and support to the interested farmers not only to the project pilot grant scheme, but also to apply under the Bulgarian RDP. They are working with the farmers from the identification of the support needs, to document development and submission of the application, all the way during the project implementation and final reporting. This includes also land identification in LPIS. The beneficiaries: There were a total of 47 applications only for the first year. One was rejected and two others withdrew due to personal reasons. Many of the beneficiaries have applied under more than one measure. All others are supported. The NRDP measures and support: There are only 4 beneficiaries who applied under m.214. The support provided by the mobile team to these people is key to their continued participation in m.214. There was an interest for manure storage investments under m.121 but the farmers still withhold from applying due to mistrust in the RDP. The key reasons for success according to the project team: The mobile teams and especially the personal contact at farm and house level are very important to motivate farmers to participate. It is also very responsible and demanding to the consultants as farmers rely on their advice. The other important success factor is the availability of the grant scheme which in practice support farmers in a very short time after the application is submitted as opposed to the long-waiting process under the RDP.
Source: BSPB project team, November 2010
Answers to the Evaluation Questions (EQ) The answers to the EQs are based on the factual data on areas under AE commitments as a share of the target result indicators and replies by the surveyed beneficiaries. The selected target result indicators are related to the improvement
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Table 142: Targets related to measure 214 and their achievement by 31 December 2009.
Type Indicator Target Achieved by 31.12.2009 2007-2013 Unit % Result Areas under successful land management contributing to: a) improvement of biodiversity (ha) 110 000 32 285 31 b) improvement of water quality (ha) 1 000 2 877* 288* c) improvement of soil quality (ha), of 160 000 40 735 26 which organic farming (ha) 70 000 3573 5 Source: RDP text, PA monitoring data and own calculations * This is very misleading given that the authorized area for 2009 campaign (done in late summer 2010) is 0ha.
Table 143: To what extent do you think the measure contributes to the improvement or maintenance of:
[%] Very much A lot A little Very little Was harmful Environmentally friendly farming practices 27 49 17 5 2 Habitats and biodiversity 22 46 24 6 2 Water quality 30 38 24 7 2 Soil quality 31 43 21 3 3 Mitigating climate change 16 26 36 20 2 Traditional landscape 21 37 31 9 2 The environment 31 38 22 8 1 Environmental knowledge of farmers 26 47 21 6 0
EQ: To what extent have agri-environmental measures contributed to maintaining or promoting sustainable farming systems? Almost a third of the respondents state that m.214 contributed very much to the improvement or maintenance of the environmentally-friendly practices. Other 49% state that it contributed a lot, which means that 76% of the surveyed beneficiaries assess positively the measure’s contribution. It should be noted however, that 2% find that it was actually harmful to the environmentally-friendly practices. Answer: Data from the survey shows that for actual beneficiaries the measure contributes 4: to a high extent. However, when we consider the overall low uptake of the measure, we see that the measure contributes 2: to a small extent. It
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EQ: To what extent have agri-environmental measures contributed to maintaining or improving habitats and biodiversity? The AE measure’s contribution to the improvement and maintenance of habitats and biodiversity was assessed as very high by 22% of the respondents. Further 46% of respondents think it contributed a lot. Almost a quarter of all respondents assess its contribution as little and 6% as very little. Again 2% of surveyed beneficiaries think it was actually harmful. Answer: Data from the survey shows that for actual beneficiaries the measure contributes 4: to a high extent. Given that the current uptake is mostly of grasslands land use types, the measure contributes 3: to some extent due to the low overall uptake.
EQ: To what extent have agri-environmental measures contributed to maintaining or improving water quality? Interestingly (if compared to the factual implementation data) the measures’ contribution is assessed as very high by a third of all respondent and additionally 38% think it contributed a lot. Almost a quarter of all respondents assess its contribution as little and 7% as very little. Again 2% of surveyed beneficiaries think it was actually harmful. Answer: Data from the survey shows that for actual beneficiaries the measure contributes 4: to a high extent. However, the implementation data shows that here are almost no approved areas under SW packages, and the areas approved in 2008, were not approved in 2009. Therefore, the measure contributes 1: to no extent at all.
EQ: To what extent have agri-environmental measures contributed to maintaining or improving soil quality? Measure’s contribution to soil quality receives highest appreciation with 31% stating it as very high and other 43% stating it ‘a lot’. The share of respondents that think it contributed a little goes down to 21% and only 3% assess it as very little. However, the share of respondents that think it was actually harmful is highest at 3%. Answer: Data from the survey shows that for actual beneficiaries the measure contributes 4: to a high extent. Based on the uptake of the AE schemes, the measure contributes 2: to a small extent.
EQ: To what extent have agri-environmental measures contributed to mitigating climate change? The mitigation of climate change is the only environmental objective that was not explicitly mentioned by m.214. Therefore, it is understandable that it gets the lowest appreciation of all. Very high contribution is indicated by only 16% of respondents, and high contribution by 26%. Little and very little contribution is indicated by 36% and 20% respectively. Again 2% find it actually harmful. Answer: Data from the survey shows that for actual beneficiaries the measure contributes 2: to a small extent. Given that most of the land under AE commitment is extensively used grasslands, the measure contributes 2: to a small extent.
EQ: To what extent have agri-environmental measures contributed to maintaining and improving landscapes and its features? Maintaining traditional landscape feature is targeted by one of the implemented AE schemes. Its contribution is assessed as very high by 21% of the respondents and as high by 37%. Little and very little contribution is indicated by 31% and 9% respectively. Again 2% find it actually harmful.
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Answer: Data from the survey shows that for actual beneficiaries the measure contributes 3: to some extent. Based on the uptake of the TL scheme, the measure contributes 1: to no extent, at all.
EQ: To what extent have agri-environmental measures contributed to improving the environment? The overall contribution of the AE measure to the environment is assessed as very high by a third of the respondents and as high by other 38%. A third of the respondents find it as contributing a little (22%) and very little (8%). Actually harmful is considered by 1%. Answer: Data from the survey shows that for actual beneficiaries the measure contributes 4: to a high extent. However, when we consider the overall low uptake of the measure, we see that the measure contributes 2: to a small extent.
EQ: To what extent have agri-environmental measures contributed to the environmental knowledge of farmers? This question was specifically added by the evaluators because this was one of the AE measure’s objectives. This is the only aspect, which did not receive ‘was harmful’ score. It was assessed as very high contribution by 26% of the respondents and as high by almost half of them (47%). Little and very little contribution is indicated by 21% and 6% respectively. Answer: Data from the survey shows that for actual beneficiaries the measure contributes 4: to a high extent. However, it should be considered that m.111 that should be providing the obligatory AE training has not started yet, the contribution is 3: to some extent.
Conclusions and recommendations This section is structured according to the evaluation criteria of relevance, effectiveness, effects, efficiency and sustainability. Relevance:
The selected AE schemes are highly relevant to the actual environmental situation in the country addressing the main identified problems. At the same time, there are AE schemes and combination of activities which did not attract any applicant for the three years of implementation such as (codes) AP 16, 19, 21 and 22 from HNV4 scheme, and AP 31, 32, 36-43 from SW scheme.
These packages should be revised and simplified if necessary to address better the farming practices on the ground. BSPB has already submitted proposals for the re-design of the HNV4 scheme based on their experience from a project pilot testing these agri-environmental practices. [Box with BSPB Grasslands project experience]
There are also AE schemes and packages which can be grouped in due to very similar activities in order to simplify the overall implementation of the measure.
At the same time, there are still AE schemes which are not developed and implemented such as restoration of riparian habitats and lowland mosaic landscapes, etc. The need for their implementation has not disappeared. It is recommended that they are implemented at a pilot scale in areas with pre-conditions that would stimulate uptake.
Effectiveness The measure is having variable effectiveness in achieving the objectives of the different AE scheme – with HNV1 and 2, and LB1 and 2 being more effective, while SW 1 and 2, TL and HNV4 being less effective.
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Effects There are assumed positive effects in the supported farms. However, these are very difficult to estimate because AE payments are being significantly delayed each year. The activities that were provoked by the expected AE payments (additionality) are being delivered in reality without the support (either because application has been rejected or the authorized support is 0 BGN).
Efficiency The efficiency is extremely low. The delay in the processing of applications is significant. SFA-PA and the MA/MoA should address the problems with the IACS registers so that the automatic IACS cross-checks are done in a normal time-frame. Additionally, the practice of penalizing farmers for conditions that are changed AFTER the application period should be stopped.
Sustainability At the moment the measure’s support contributes little to the sustainability of the Bulgarian agriculture. It still creates more expectations and sometimes disillusions than positive practical outputs.
Recommendations The general review of the implementation of the measure brought up the following suggestions for improvement of the implementation of the measure:
1. Establish (and re-establish) dedicated Axis 2 units in both the Paying Agency and the Managing Authority and empower them to taking and implementing decisions for overcoming the implementation hurdles of the measure. There has to be a faster and more productive way of solving implementation issues than sending official letters between these two key institutions for the implementation of the measure. This should also include: 1.1. Providing real-time access to the implementation data of measure 214 to the Axis 2 unit responsible staff; 1.2. Establish an official and permanent working group between the experts of the PA Axis 2 unit and the MA Axis 2 unit.
2. Ensure that all land and farm animals’ registers function properly and contain information representing the actual situation on the farms. The delays of the current processing of AE applications indicate a serious problem in the functioning of these systems. There have been numerous reports from farmers where their animals are not included in the farm animals register. The big number of 0 BGN subsidies in reality means that all these farmers have declared more land and animals than the officially registered in their names and despite the fact that they have documents for them. This is a problem that needs to be addressed by MAF in close cooperation with the MA and the PA.
3. Develop a targeted information campaign per AE scheme as well as for the entire measure. The implementation data so far shows that the AE beneficiaries represent the entire spectrum of farmers and farm structures. Therefore, the campaign has to be well-targeted addressing the specific characteristics of each scheme and thus potential beneficiaries. [The current m214 video clip published on the web-site is ill-suited to the reality of the AE aims and activities] Use every other opportunity to promote the AE measure such as timely approval of 2010 beneficiaries, increased level of AE payments (when approved), approved training and consultancy companies, etc. 3.1. Develop and effective learning mechanism for the implementation of m214 by publishing the main mistakes leading to rejection of applications or to penalties and reduction of AE payments.
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3.2. Update the already developed AE application manual and make it available on the MA, PA and NAAS websites. Peculiarly, it is now only available under www.europa.bg.
4. Train the staff and ensure the provision of up-to-date information to the municipal and regional offices of the Ministry of Agriculture and the Paying Agency as well as the consultants from NAAS and RAAS. The underestimation of their role in the implementation of all Axis 2 area-based measures should be prevented. On the contrary, coordinated training and information to these offices are key to the successful implementation of the AE measure.
5. Provide positive signals to the AE beneficiaries and potential applicants by processing in time the 2010 campaign applications – this means before the end of 2010. It should be unacceptable that the situation of the last two years is repeated and the new application campaign starts before the results of the previous are known. If indeed, all 2010 AE applications are processed by the end of 2010, this message should be actively sent to farmers.
6. Analyze the 2009 and 2010 campaigns’ main reasons for rejections as well as the main reasons leading to big penalties and feedback this information to both improve/simplify (where possible) the application process and advise applicants to correct them in the 2011 campaign.
7. Involve municipalities (including through the Association of municipalities in Bulgaria) to solve the problem with long-term renting of municipal and state grasslands on one and the same plot of land which continues to be a recurring problem as indicated by the survey’s comments.
8. Prioritize the AE training projects under m.111 and the AE consultancy organizations under m.114 and promote them to beneficiaries before and during the 2011 campaign. This delays is a particular problem for 2008 AE beneficiaries who have to submit the copies of AE training documents already.
9. The last three years, NAAS was the only RDP paid consultant that provided free AE consultancy to beneficiaries. The overall successfulness of this set up is still not clear as there is no data on the success of the 2009 applications. However, this is a period in which NAAS and RAAS gained significant experience and knowledge and it will be a waste of public money if this experience is not efficiently used in the remaining three years. We strongly recommend to the MA to explore ways to extend the free support provided by NAAS to AE applicants.
10. Introduce AE contracts which strengthen the commitment from both the beneficiary and the Paying Agency with all related rights and obligations as opposed to the current AE application only.
11. Recommendations regarding specific AE schemes:
11.1. Increase the geographical scope of the Pastoralism scheme which demonstrated high interest from the farmers as a pilot measure in the National parks Pirin and Central Balkan. It can be introduced to other regions (including national and nature parks) with high share of pastures, especially where land abandonment is still a serious issue.
11.2. Develop and implement at pilot level the AE schemes (waterfowl habitats, riparian habitats, lowland mosaics) which are not opened yet including via delegation of implementation to other organizations such as NGOs or protected areas management bodies.
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A doable way of making it happen in the remaining period is to open a call for the pilot testing of these schemes under the m.511, while the actual payments are still done by the Paying Agency.
11.3. Redesign and simplify the HNV4 and SW packages.
11.4. The possibility for introducing support to organic livestock breeding should be developed and used.
11.5. Study in more details the traditional orchards in the country in order to target better the support to the regions with larger areas and importance. The implementation data shows that there is a stable interest in the scheme - despite the small areas (usually less than 1 ha) farmers are willing to apply regularly.
12. Recommendations regarding implementation arrangements and modifications of the ordinance accordingly:
12.1. Introduce the requirement that the applications are assessed based on the conditions/ordinance that is in force at the time of the submission of application. It is unacceptable that the rules of the game are being changed post-factum and that farmers are penalized or rejected on this basis. This means that the implementation ordinance with all its amendments and changes should be published in the State gazette not later than 1 month before the start of the application campaign on March 1st. This will allow also sufficient time for the municipal and district offices to get acquainted with the changes.
12.2. Provide a time period when the AE applications can be amended and/or modified in the case of missing documents or difference of land and/or animals with LPIS and IACS. This will require a timely review of the AE applications, not as at the moment after the end of the calendar year.
12.3. Abandon the practice of withholding SAPS payments on the basis of an expected/assumed breach of AE requirements. This is extremely de-motivational for AE beneficiaries. Penalties should be paid on the basis of recorded breach, not an assumed one. Another simple way of not withholding SAPS payments is to simply process the AE payments on time – within the same calendar year!
12.4. The MAF and PA offices in districts and municipalities (especially the ones with highest number of current beneficiaries) should receive additional support (staff and/or premiums) during the application campaign. This will allow them to check carefully the submitted AE applications already during the submission and to correct obvious technical mistakes such as missing signatures and copies of needed documents. An additional motivation could be ensured by linking premiums to the number of submitted AE applications.
13. Make full use of the available measures and budgets to support an improved uptake of m214, greater recognition of its objectives and enabling conditions for the participating farmers by:
13.1. Use the m.511 to carry out more detailed studies related to production and marketing solutions in typical extensive farming systems and organic systems. Model farm projects can be developed to guide AE newcomers.
13.2. Promote the products of the extensive farming and organic systems to the final consumers including under m.111. There is an increased demand and recognition at least by urban consumers for quality organic
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and nature supporting food products. Producer associations and networks of producers can apply for support to implementing marketing and information campaigns (e.g. for organic vegetables or cheeses produced in mountain pastoral systems). The target group can be consumers, high end consumer, schools (if it is food service products), export trader etc.
13.3. Set up special task forces or teams-on-wheels to communicate and attract new farmers to the different AE schemes. There should be at least one task-force (team-on-wheels) per AE scheme. This could be done again under m.111. The task force should travel around in the country and inform ‘at the kitchen table’ the farmer about the potentials in concerting into agri-environmental actions.
13.4. Investment support for developing direct marketing from the farms should be made available under m.123 specifically for smaller and medium size AE farmers with an associate information campaign to them.
6.4.3. M 223 First afforestation of non-agricultural land Rationale The measure provides support to owners of non-agriculture lands to convert them into forests. This is expected to have mainly beneficial environmental effects upon soil degradation caused by wind and water erosion but also to contribute to mitigation of climate change and support natural biodiversity. Benefits to the water balance in the supported territories are also expected. The total 7-year budget of the measure is EUR 40.424.494. It is programmed to cover 10.000 ha of non-agriculture lands and support up to 2000 beneficiaries. General data on implementation Data from SFA-PA till mid-June 201036 indicate that there were submitted cumulatively 49 proposals from 49 identifiable beneficiaries37. 20 of them already had their contracts signed with the SFA-PA by the end of 2009. Each of the 20 beneficiaries was sent a questionnaire, and 12 questionnaires were received back filled in. (Data from the Qs and from the mentioned excel file is discussed below in the next subsection.) Data by September 30th 2010 presented to the 6th sitting of the Monitoring Committee indicates that the number of submitted applications was still 49 of cumulative budget requesting MEUR 4.3 (10.6%) support from the measure. There were no payments under the measure till the end of the evaluated period (end- 2009). First payments were effected after June 2010. Data by September 30th 2010 presented to the 6th sitting of the Monitoring Committee indicates that first/advance payments on 8 projects had been paid to the total of EUR 173.706 (EUR 21.713/beneficiary on the average). This constitutes 0.4% of the programmed beneficiaries and 0.4% of the programmed budget for the 7-year period. Data from SFA-PA file and Received Questionnaires The data from SFA-PA shows that the projects of 34 beneficiaries were contracted and 39 applicants38 total seemed eligible for support out of 49 submitted by end-May 2010 (the rest 10 had been rejected). The Majority - 20 of the applicants/beneficiaries are municipalities. One is a physical person, whose experience may be used as an example of good and bad practices for M511 information and PR campaign and for NRN promotion as well.
36 Excel file: 223-monitoringovi.xls 37 Each having an individual UIN in the IACs of SFA-PA. 38 Some were still in the process of examination
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The majority of 39 eligible applicants/beneficiaries are concentrated in Vtratza (5 projects), Blagoevgrad (3 projects), Pleven (3 projects) and Yambol (3 projects). Seven districts on the other hand: 10.Kjustendil, 12.Montana, 16.Plovdiv, 18.Ruse, 20.Sliven, 21.Smoljan, 24.Stara Zagora on the other hand had no applied for support until mid-June 2010. The majority of the beneficiaries were applying for support to plant broadleaves on their lands (29 of total 39 eligible applicants). Unfortunately, SFA-PA did not: - provide data on the land coverage of the applied projects, - provide cleaned information on the financial parameters of the proposals/contracts. Therefore, the analysis will continue based on extrapolations from the received filled in 12 Questionnaires.
The respondents cumulatively own 66320 ha of non-agriculture lands (5527 ha per beneficiary on the average). The majority of it is in the forest fund 65477 ha (5456 ha/beneficiary). The extrapolation to 39 beneficiaries indicates: ownership of 215.553 ha of non-agriculture lands, the vast majority of which are in the Forestry fund. In general, the applied parcels are not in the protected areas; 2 respondents however, claim that the parcels are in the N2000 – Birds Directive and four have applied with parcels partly in N2000-Habitats. One of the respondents has all of his parcels in forests with high conservation value, and 2 respondents – in mountainous areas. The respondents claim that the cumulative full investment value of the projects (VAT-free) is equal to EUR 394.553 (EUR 32.879,4 / beneficiary on the average). The extrapolation to 39 beneficiaries is EUR 1.282.296,3.
The costs which will be supported by the measures are EUR 307.112 (77.8% of full investment costs; )
Only one of the projects is expected to generate 12 jobs – all of which for women. It is moderately certain (51-75% probability) that the jobs will be retained in the future.
The increase in the standing wood for annual harvesting will be by 24818 m3.
According to the respondents the environmental benefits from the projects will be primarily in preventing erosion and desertification (10 respondents), climate change mitigation (6 respondents), increase in biodiversity (5 respondents). This contribution of the measure will be very significant (30%) or somewhat significant (52%) according to the respondents.
The general opinion of the respondents is that the projects will not contribute (significantly) neither to increase in the raw materials available for the wood processing industry, nor to higher yields of forest products (fruit, mushrooms, etc,.), nor tourism development.
The summary of environmental/socio-economic benefits and their (not so reliable) projections to the measure targets is presented in the table below.
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Table 144: Main outputs and results from M223 implementation and its projection to full beneficiary targets
Parameter Respondents Extrapolation to Extrapolation to Measurement N= 12 N=39* N=2000** unit Input – project costs 0,39 1,27 65,00 MEUR Input – M223 support 0,31 1,01 51,67 MEUR Area - broadleaves 114,30 371,48 19050,00 Ha Area – coniferous 46,10 149,83 7683,33 Ha Area – mixed 2,20 7,15 366,67 Ha Area – fast growing 10,00 32,50 1666,67 Ha cultures Wood for harvesting 24.818,00 80.658,50 4.136.333,33 M3 Generated new 12,00 39,00 2000,00 Number employment * Eligible candidates /beneficiaries ** Programmed target beneficiaries
It should be pointed out that the applications under M226 are slightly bigger in their parameters than the average programmed in BGRDP texts, where it is expected that the MEUR 40.4 public budget of M223 will be sufficient to plant 10000 ha of non-agriculture lands:
Programmed targets, M223
Type of indicator Indicator Target 2007-13
Output Number of beneficiaries receiving afforestation aid 2 000
Number of hectares of afforested land 10 000
The extrapolation above, however indicates that MEUR 51.67 (128% of M223 budget) will be sufficient to plant 28767 ha of non-agriculture lands (287.7% of programmed target). This may be due to the fact that the majority of the plantations are of broadleaves or because of majority of projects not being in the mountainous regions.
In all cases the number of contracted projects and their parameters is just a fraction of what is programmed under the measure, hence, the above extrapolations cannot be very reliable.
However, because there were no payments effected to the applicants/beneficiaries under the measures within the evaluated period (and not even by the end-of May2010), the answer to each of the following Common Evaluation Questions is 1. To no extent at all
CEQ-223-1.To what extent has the measure contributed to create significantly forestry areas?
CEQ-223-2.To what extent has the measure contributed to creating sustainable managed forestry areas which contribute to maintaining the ecological functions of forests and the prevention of natural hazards and fires?
CEQ-223-3.To what extent has the measure contributed to maintaining the countryside and improving the environment?
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Evaluators are aware that the attention of a significant part of the potential beneficiaries (municipalities) was dedicated first to applying and implementing “more urgent” infrastructure projects under M321 and M322. Now, when their budget is applied for it seems possible that the municipalities will reorientate themselves to the M223 projects which have much longer period of return of initial efforts. In all cases, however, the public goods created by the newly planted forests are in no way inferior to the contribution of infrastructure to the local quality of life. Hence, the conclusions on measure (i) relevance and sustainability and (ii) effectiveness and efficiency are quite diverging in evaluators mind.
The Conclusions on measure effectiveness, efficiency are corresponding to the answers to the common evaluation questions.
However, the relevance of the measure and the sustainability of the supported projects seem solid, hence all recommendations here are to increase the PR activities for attracting additional proposals from the municipalities and the private owners of non-agriculture lands, including religious organisations. Forests not only have beneficial environmental effects but also offer source of raw materials for an array of diverse value-adding chains, as well as offering amenities for eco-friendly tourism and the associated increased demand for local foods, goods and services.
Data from interviews also suggests that it will be recommendable to include more actively the structure of the Executive Agency on Forests to participate in the promotion, preparation and selection of proposals under this measure, provided it has the necessary administrative capacity for this type of exercise.
6.4.4. M226 Restoring forestry potential and introducing prevention actions Rationale: The measure helps the restoration of forests who suffered from natural disasters and calamities, and helps forest owners and their associations to invest in prevention installations, equipment and other assets. The 7-year budget is EUR 29.540.976. It is programmed to support Programmed targets, M226
Type of Indicator Target 2007-13 indicator Output Restoration actions: Number of actions supported 2 000
Supported area of damaged forests (ha) 170 000 Prevention actions: Number of equipped anti-fire depots 100
Number of established/improved landing places for helicopters 10 Number of fire monitoring points constructed/improved 100 Total volume of investment (in MEUR) 29
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General data on implementation Data from SFA-PA till mid-June 201039 indicate that there were submitted cumulatively 38 proposals from 36 identifiable beneficiaries40. 17 of them already had their contracts signed with the SFA-PA by the end of 2009. Each of the 17 beneficiaries was sent a questionnaire, and 10 questionnaires were received back filled in. (Data from the Qs and from the mentioned excel file is discussed below in the next subsection.) Data by September 30th 2010 presented to the 6th sitting of the Monitoring Committee indicates that the number of submitted applications was already 46 of cumulative budget requesting MEUR 2.6 support from the measure (8.8% of programmed budget). There were no payments under the measure till the end of the evaluated period (end- 2009). First payments were effected after June 2010. Data by September 30th 2010 presented to the 6th sitting of the Monitoring Committee indicates that first/advance payments on 2 projects had been paid to the total of EUR 16.000 – a tiny fraction of the programmed budgets and targets.
Data from SFA-PA and Received Questionnaires The data from SFA-PA shows that the projects of 24 beneficiaries were contracted and 24 applicants41 total seemed eligible for support out of 38 submitted by end-May 2010 (the rest 14 had been rejected). The majority of the applicants/beneficiaries are state forestry holdings – there only 2 municipalities. The majority of 24 eligible applicants/beneficiaries are concentrated in just 3 districts: 24.Stara Zagora (5 projects), 11. Lovech (4 projects), 9. Kardjali (3 projects). Sixteen districts on the other hand not applied for support until mid-June 2010. Unfortunately, SFA-PA did not: - provide data on the land coverage of the applied projects, - provide cleaned information on the financial parameters of the proposals/contracts. Therefore, the analysis will continue based on extrapolations from the received filled in 12 Questionnaires.
The respondents cumulatively own 195.000 ha of non-agriculture lands (19500 ha per beneficiary on the average). The majority of it is in the forest fund 169200 ha (16920 ha/beneficiary). In general, significant part of the beneficiaries applied with parcels in the protected areas; 1 respondent has all parcels in protected area, 3 respondents claim that all parcels are in the N2000 – Birds Directive (+1 who has parts of the parcels in the N2000BD) and 3 have applied with parcels all in N2000-Habitats (+2 who has parts of the parcels in the N2000- Habitats). This accounts that in fact all respondents had at least part of their lands in an area under special regime for activities. Furthermore, 1 of the respondents had all of his parcels in forests of high conservation value, and 3 more – in mountainous areas.
39 Excel file: 226-monitoringovi.xls 40 Each having an individual UIN in the IACs of SFA-PA. 41 Some were still in the process of examination
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One of the respondents has all of his parcels in forests with high conservation value, and 2 respondents – in mountainous areas. NB!: one of the respondents (10%), did not know whether the parcels were in lands of HNV, and one – in Nitrate Vulnerable Zone. The respondents claim that the cumulative full investment value of the projects (VAT-free) is equal to EUR 418913,2 (EUR 41.891 / beneficiary on the average). The extrapolation to 24 beneficiaries is EUR 1.005.392. Cumulative activities comprise: restoration of forest fires will be carried out on 222.4 ha total (6 respondents), and prevention against forest fires will be achieved on 12000 ha (2 respondents). The projects will support the resilience of forests against disease on 43.6ha and the risk of forest fires will be reduced on 12.133 ha total. The opinion of the respondents is that the measure contributes to the achievement of the specific objectives as it indeed: - restores the forests of from forest fires (N= 9; 2-to a very big degree; 3- to a big degree; 3- to a less degree) - restores the forests from other disasters (N= 6; 1; 2; 2) - prevents forest fires (N= 6; 1; 2; 2) However, its contribution towards (i) sustainable forest management, (ii) improving the general environment , (iii) improving the eco-knowledge of forest holders is not so significant. According to the respondents the environmental benefits from the projects will be primarily in increasing biodiversity (5 respondents), preventing erosion and desertification (4 respondents). This contribution of the measure will be very significant (30%) or somewhat significant (52%) according to the respondents. There will no generation of jobs as a result from the activities. The general opinion of the respondents is that the projects will not contribute (significantly) neither to increase in the raw materials available for the wood processing industry, nor to higher yields of forest products (fruit, mushrooms, etc,.), nor tourism development. The summary of environmental/socio-economic benefits and their (not so reliable) projections to the measure targets is presented in the table below. Table 145: Main outputs and results from M226 implementation and its projection to full beneficiary targets
Parameter Respondents Extrapolation to Extrapolation to Measurement N=2000** unit N= 10 N=24*
Input – project costs 0,42 1,0 84,00 MEUR
Area – restoration - fire 222,40 533,8 44.800,00 Ha
Area – fire prevention 12000,00 28.800,0 2.400.000,00 Ha
* Eligible candidates /beneficiaries ** Programmed target beneficiaries
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In all cases the number of contracted projects and their parameters is just a fraction of what is programmed under the measure; hence, the above extrapolations cannot be very reliable.
However, because there were no payments effected to the applicants/beneficiaries under the measures within the evaluated period (and not even by the end-of May2010), the answer to each of the following Common Evaluation Questions is 1. To no extent at all
CEQ-226-1.To what extent have the supported actions contributed to restore forestry potential in damaged forests?
CEQ-226-2.To what extent have the preventive actions introduced contributed to the maintenance of forests?
CEQ-226-3.To what extent have the supported actions contributed to increase the sustainable management of forestry land?
CEQ-226-4.To what extent have the supported actions contributed to improving the environment?
Like for the previous measure M223, Evaluators are aware that the attention of a significant part of the potential beneficiaries (municipalities) was dedicated first to applying and implementing “more urgent” infrastructure projects under M321 and M322.
The Conclusions on measure effectiveness, efficiency are corresponding to the answers to the common evaluation questions – not satisfactory.
However, the relevance of the measure and the sustainability of the supported projects seems solid, hence all recommendations here are to increase the PR activities for attracting additional proposals from the municipalities and the private owners of forest lands, including religious organizations and NGOs.
Data from interviews also suggests that it will be recommendable to include more actively the structure of the Executive Agency on Forests to participate in the promotion, preparation and selection of proposals under this measure, provided it has the necessary administrative capacity for this type of exercise.
In view of low uptake of M122 funds it seems recommendable to transfer budgets from that Axis I Competitiveness measure (of economic returns to be produced in the longer period, may be in the next generation) to this Axis 2 measure where at least there are preserved/prevented greater public benefits in preservation the health of the forest areas and thus substantiating the public benefits produce by the forests.
6.5. Axis 3: Improving the quality of life and diversify job opportunities in rural areas
6.5.0. M321 Basic services for the economy and rural population
Objectives and Rationale: Objectives: To enhance business attractiveness and labour force mobility in rural areas by improvement of road infrastructure; To improve living conditions in rural areas by improving access to quality water and sewage infrastructure;
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To improve access for the rural population to cultural, recreational and sports services; To improve access to social services for the rural population and especially for children and vulnerable groups; To improve access to ICT-related services.
Rationale: Municipalities, non-profit making legal entities, “chitalishte” community centres are supported in their investments to improve the technical infrastructure and social services of the Bulgarian villages thus increasing the attractiveness of the rural towns/villages for the local population (decrease emigration) and attract / support the development of the rural business. For demarcation purposes (OP Regional Development), the measure is implemented in 178 of the 231 rural municipalities of Bulgaria – the ones which are outside the agglomeration target areas for OP Regional Development. Most preferable are projects carried out in the smaller villages (500-5000), and projects which have feasibility studies and detailed planning papers to start immediate construction after selecting the construction firm in accordance with the law for public procurement – they bring together 50% of the total ranking points available in the selection process. The budget of the measure is MEUR 369.483.008 less the provisionally stored budget of approximately MEUR 64 million for the M341 programmed to be launched at a later date in 2010. The measure is programmed to support at least 1510 individual actions and improve the services for a minimum of 320.000 rural inhabitants. (and improve the ICT access for 300.000 inhabitants.) The targets can be expressed in: - 1510 supported actions , - realized at least in 64 settlements each having population of 5000 people or in 640 settlements each having population of 500 people
The measure generated extreme interest in the rural municipalities as it was the only source of public money after SAPARD, allowing significant investment for improvement and development of the public infrastructure and the associated social services: up to MEUR 3.0 for municipality42 and up to MEUR 0.5 for the projects of non-profit legal entities and “chitalishte” community centres for the entire 2007-2013 period. Then, considering the above targets, the budget of the measure will be sufficient for: + 123 rural municipalities (investing in at least 64 settlements with population of 5000 people, or in 640 settlements with population of 500 people), or + 730 non-profit legal entities and “chitalishte” community centres ( investing in same as above settlements)
Note: an applicant is free to apply with one project for as many same actions in different settlements, for as many actions they are ready, up to the maximum subsidy available for support per beneficiary for the 2007-2013 period.
42 In most cases this amount is times higher than the cumulative annual budgets which the rural municipalities have at their disposal for their functioning and providing the local administrative services.
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General data on implementation In August 2009 SFA-PA stopped the acceptance of proposals for support from rural municipalities . The submitted proposals were 461 and the cumulative amount of the subsidy for which they applied was MEUR 871.4 (2.36 times the total available budget for the measure). The number of proposals was approximately 2.6 proposals per any of the rural municipality on the average. After the selection of the beneficiaries, the first contracts for support were signed and by end-September there already were 134 contracts signed with beneficiaries and 111 payments effected to 111 beneficiary projects sometimes containing several actions (i.e. improving the water provision in several villages of the municipality.) The total amount of the cumulated advanced payments by end-September 2010 was MEUR 89.3 (24.2% of the MEUR 369.5 budget). This is equal to approximately EUR 805000 paid per project and indicates that the beneficiaries have applied with big/expensive projects of more than MEUR 1.7 (as the payments are 50% advance payments) . The Measure pays up to 50% of the project subsidy as an advance payment. This infers that the total amount of the projects which received their advanced payments will already utilize more than half of the entire M321 budget available for contracting in the 2007-2013 period (MEUR369.5 less the M341 budget). Further analysis however, requires detailed information on the parameters and the geographic location of the paid projects. Such information is available only in the file “Pisma odobreni reduced.xls” (28.05.10) provided by the SFA-PA to the evaluators in June 2010. The data inside the file covers all the payments by the SFA-PA to BGRDP beneficiaries by the end of May-2010. It contains information for 182 payments effected to 105 municipality beneficiaries under M321 or M322 to the total amount of EUR 78.368.977. The M321 data refers to 52 payments to 52 projects of 41 individual municipalities from 17 of the administrative districts. Sofia district is the leading district with 6 big projects whose payments were worth MEUR 7.3 (18.2% of all M321 payments). The total amount of payments is equal to MEUR 41.618.253 (which means that in the period June September the PA has effected 59 more payments worth MEUR 47.7) The 52 payments/projects are distributed for the following types of projects: Table 146: Main outputs from M321 implementation
Type of investment Number of projects Number of benefiting settlements
Environmental Water provision and Waste 42* 56 infrastructure (sewage, Water Treatment wastewater treatment) / Energy -Incl., new (25) (36)
Culture and social Chitalishte culture centers 3 5 infrastructure Sport facilities 7 7
* Probably all of these projects also include improvement of the road above the water provision/sewage system.
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Conclusions The prevailing majority of projects is concentrated in the CMEF classification Environmental infrastructure. More than 50% of them have reconstruction or entirely new sections, which indicates that the water provision and treatment services are in fact improving. This may be because the beneficiaries already had technical plans and wanted to be sure to win the public support under the measure. On the other hand, the projects are expensive, and if the remaining 59 projects paid after May 2010 are of the same type, it seems that the programmed outputs for the rest types of eligible activities supported by the measure will not be met: e.g. -culture and sport facilities, ICT centres, municipal roads, etc. Neither will be met the target for population benefiting from the improved services. Finally, improved water provision and treatment alone is not sufficient to prevent from emigrating the families of young people as they will seek good education for their children, nor to attract and aid the development of rural businesses in the age of knowledge-based economy . If the total number of supported projects is indeed 120 (see the considerations for the advance payments), then it seems that more than 50% of the entire budget of the measure is contracted, and all recommendations for changing the measure design, scope of supported actions, maximum rate of support per beneficiary are useless as they cannot be enforced due to already allocated budget. The evaluators will therefore refrain from making recommendations even though there is a great room to improve the implementing conditions to better reflect the horizontal EU priorities with ICT, knowledge based economy, energy and water savings, use of alternative energy and fuels, business support infrastructure, training facilities, etc. Such prioritization is recommended for the next programming period where the regionalisation of the implementation of the measure (but also all Axis 3 measures) is strongly recommended.
Recommendations It seems only reasonable to recommend keeping the M341 for this measure, as long as M341 needs for implementation are already met by M431-2.
Answers to EQs: CEQ-321-1.To what extent have the services provided contributed to improve the quality of life in rural areas? The available information indicates that the majority of payments are to projects classified as environmental infrastructure. The business and social needs of the local people seem to be poorly met. Furthermore, such big infrastructure projects demand long periods for procurement and implementation especially whenever they have new components or reconstruction works in several settlements. It is likely that such projects will be finished not earlier than the end of 2011, more realistically by the middle of 2012. Taking in mind the above the answer to the question is: 1: To no extent, at all. CEQ-321-2.To what extent have the services provided increased the attractiveness of the areas affected? Distinguish between the different sectors concerned (such as commerce, health services, transport, IT …). Based on the justification of the previous answer the answer to this questions is also 1: To no extent, at all.
CEQ-321-3.To what extent have the services contributed to reversing economic and social decline and depopulation of the countryside?
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Same answer, because the contribution of the water system alone to retain the active population from emigrating is low. Decreasing number of active people mean also decreasing demand for local goods and services. Hence, the effects on upgrading the attractiveness of the local territory for the business are even less. (Unless the business is consuming large quantities of water in the production process – mining and flotation). The answer is again: 1: To no extent, at all.
6.5.1. M322 Village renewal and development
Objectives and Rationale Objectives: To improve the attractiveness of the living environment in settlements in the rural areas Rationale: Rural areas may be successful and sustainable provided their citizens live and work in them and have opportunities to interact, travel and build their homes there. They will be attractive for tourists if the overall rural environment is safe, sustainable and of high environmental quality. The green areas, streets and squares in rural areas have a strong impact on the quality of life of their citizens. These spaces offer an opportunity for physical exercise, social contacts, relaxation and calm. Well-maintained green areas and parks may become the most preferred and typical features of rural areas. Rural areas have to become attractive living places, otherwise, regardless of the environmental considerations, the citizens of rural areas will continue moving into the cities. This measure targets physical renewal of the settlements in rural areas and improvement of opportunities for recreation and the attractiveness of villages – creating/recovery of publicly accessible green areas, landscaping of gardens, construction or renovation of squares, street lighting, and pedestrian zones.
Target groups of beneficiaries: Municipalities, non-profit making legal entities, “chitalishte” community centres; Civil partnerships of natural persons or legal entities, established for the renovation of the facades of private buildings and surrounding areas; Local religious branches, which may apply for renovation and refurbishment of buildings of religious importance , all of which are operating in and whose projects will be implemented in 178 rural municipalities, which are not included in urban agglomeration areas where similar actions are supported by the OP Regional Development co- funded by the EU Regional Development Fund. Again most preferable are the projects from small settlements (500-5000 people) which have never received EU aid for such activities before, and also having ready technical designs for the investments. The budget of the measure is programmed to be EUR 166.756.670, and it is programmed to benefit at least 800 villages and the project benefits should reach 500.000 people.
General data on implementation In August 2009 SFA-PA stopped the acceptance of proposals for support from rural municipalities under this measure. The submitted proposals were 245 and the cumulative amount of the subsidy for which they applied was MEUR 187.7 (1.13 times the total available budget for the measure). The number of proposals was approximately 1.4 proposals per any of the rural municipality on the average. After the selection of the beneficiaries, the first contracts for support were signed and by end-September there already were 175 contracts signed with beneficiaries and 139 payments effected to 139 beneficiary projects .The total amount of the cumulated advanced payments by end-September 2010 was MEUR 39.9 (23.2% of the MEUR 166.8 budget). This is equal to approximately EUR 287000 paid per project and indicates that the beneficiaries have applied with big/expensive projects.
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The Measure pays up to 20% of the project subsidy as an advance payment. This infers that the total amount of the projects which received their advanced payments will already utilize the entire M322 budget available for contracting in the 2007-2013 period. Further analysis however, require detailed information on the parameters and the geographic location of the paid projects. Such information is available only in the file “Pisma odobreni reduced.xls” (28.05.10) provided by the SFA-PA to the evaluators in June 2010. The data inside the file covers all the payments by the SFA-PA to BGRDP beneficiaries by the end of May-2010. It contains information for 182 payments effected to 105 municipality beneficiaries under M321 or M322 to the total amount of EUR 78.368.977. The M322 data refers to 130 payments to 130 projects of 79 individual municipalities from 25 of the administrative districts. Blagoevgrad is the leading district with 15 projects whose payments were worth MEUR 5.6% (15.3% of all M321 payments). The total amount of payments is equal to MEUR 36.750.724 (which means that in the period June- September the PA has effected just 9 more payments under this measure worth MEUR 3.15.) The 130 payments/projects are distributed for the following types of projects:
Table 147: Main outputs from M322 implementation
CMEF Category Type of investment Number of projects Number of benefiting settlements Rehabilitation, reconstruction of 70* 82 streets and bridges Lightning 4 12 Physical infrastructure (-Incl.Energy Efficient) (1) (3) Town centers 24 32 Parks and green areas 24 34 Chitalishte culture centers 3 4 Social infrastructure Religious centers, Culture 5 5 centers, Museum
* Some of these projects also include improvement of center area, and some the nearby parks
Conclusions The prevailing majority of projects is concentrated in the CMEF classification Physical infrastructure. No support was extended for business infrastructure, but this is because the measure is not programmed to support such activities. (And there is no danger in violating the demarcation with OP Regional Development.) The projects have benefitted 78 of the 178 municipal centers eligible for support. Some benefits from improved physical infrastructure (mainly streets, lightning and parks) have reached additionally 91 villages. Here for M322 is in force the same consideration that the entire budget of the measure is contracted, and all recommendations for changing the measure design, scope of supported actions, maximum rate of support per beneficiary are useless as they cannot be enforced due to already allocated budget. The evaluators will therefore refrain from making recommendations even though there is a great room to improve the implementing conditions to better reflect the horizontal EU priorities with ICT, knowledge based economy, energy and water savings, use of alternative energy and fuels, business support infrastructure, training facilities, etc.
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Answers to EQs: CEQ-322-1.To what extent has the measure contributed to improve the quality of life in rural areas? The measure is starting to improve the surrounding/ the environment in the municipal centers. This alone is not sufficient to increase the quality of life of the entire population of the municipality, as there are important needs of particular social groups that are not met by the measure (pupils, young people, business, the elderly). The measure is supporting mainly the attractiveness for visitors to the municipal centers. This together with the fact that the supported projects are not yet finished in the evaluated period justify the assessment : 1: To no extent, at all43.
CEQ-322-2.To what extent has the measure improved the attractiveness of rural areas? Based on the fact that only half of the BG municipalities seem to be able to benefit from the M322 support, and also on the same justification as on the previous question the answer is : 1: To no extent, at all.
CEQ-322-3.Distinguish between the different sectors concerned The support has been extended mostly for repair of streets and municipal town centers and parks. This does not bring any benefits to commerce, health services, transport, IT, and quite little to environment. Based on the previous answers, the answer is the same. 1: To no extent, at all.
CEQ-322-4.To what extent have the measure contributed to reversing economic and social decline and depopulation of the countryside? The types of investments do not bring benefits for reversing the economic and social decline and depopulation of the countryside. The answer is the same: 1: To no extent, at all.
6.6. Axis 4: Measure 431-2 Sub-measure 2: Acquisition of Skills and Animation for Potential Local Action Groups (2007-2009)
Objectives: To support establishment of Local action groups and preparation of local development strategies Rationale: The implementation of the Leader Axis in Bulgaria will require the establishment of increased local capacity for preparing and implementing development strategies. It is necessary to expand and develop the local knowledge and skills for formulating and implementing local development strategies, as well as to prepare local experts to be involved with monitoring and evaluating locally supported projects. Target groups of beneficiaries: Municipalities, non-profit making legal entities, or legal entities registered under the Commercial Law and the Cooperatives Act, which are registered and operating on the territory on which the potential LAG will be established and acting on behalf of potential future LAGs. The measure is expected to prepare at least 60 potential LAGs of which at least 50 should latter be supported by M41. Implementation of the Local Development Strategies and in M431. Sub-measure 1: Running the Local Action Group, Acquiring Skills and Animating the Territory for Selected Local Action Groups.
43 The answers are quite negative because the realization of the projects ia beond the evaluetd period. The situation will be very diffenret in the next evalution exercise.
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General data on implementation The implementation of this measure (as well as M511) suffered most from the changes of staff in the Managing Authority which took place in the second half of 2009. The selection of the proposals from the second call had to be finalized in late 2009 with the participation of completely new staff (from former PHARE department outside the RD Directorate). At the same time the requests for clarifications, minor changes and payment claims kept accumulating in the Managing Authority – which is directly involved with the implementation of this preparatory LEADER measure. In the beginning of 2010, however, the new staff started to gradually improve the communication with the beneficiaries and this has been noted by the beneficiary teams. This, however, does not apply for the payment claims as according to the implementation procedures the SFA-PA is supposed to double check all payment documentation before authorizing and effecting the requested payments. By end 2009 there signed/approved 103 projects for the preparation of Local Action Groups for the implementation of the LEADER Approach in Bulgaria. The total amount of the approved projects was for MEUR 8.6. They covered 158 rural municipalities out of 231 total and more than 2.2 million of the rural population. The distribution of the rural municipalities per potential LEADER territory was as the following: there 67 rural municipalities with claiming a separate LEADER territory. 25 potential LEADER territories comprised 2 rural municipalities, 8 territories contained 3 municipalities and three territories covered 4 rural municipalities each. However, there were at least 4 potential LEADER territories which terminated their M431.2 Leader preparatory contracts due to great delays in the processing of the payment claims submitted by the partnerships acting on behalf of the future LAGs and managing the preparatory projects locally. [This does not mean that they will not apply (have not applied in 2010) under M41. Implementation of the Local Development Strategies and in M431. Sub-measure 1: Running the Local Action Group, Acquiring Skills and Animating the Territory for Selected Local Action Groups.] In the second half of year 2010 there were already submitted for selection 57 applications from potential LEADER territories for participation in M41. Implementation of the Local Development Strategies and in M431. Sub-measure 1: Running the Local Action Group, Acquiring Skills and Animating the Territory for Selected Local Action Groups. There were no payments effected under this measure in 2009. By end-September 2010 SFA-PA had recognized as eligible 64 payment claims for a total of MEUR 2.1. Payments were effected to 20 of these for a total of EUR 512.305 (5.9% of the approved total MEUR 8.6 projects price). Data from questionnaires Questionnaires44 were sent to all of the 103 contract holders. Replies came from 59, but filled in questionnaires were received from 58 respondents (one claimed they had to postpone the implementation of the project due to administrative difficulties with the partner.). Follows brief description of the findings from the questionnaires. 39 of the respondents claim that they have attracted LEADER experts from EU countries to share and teach hands-on experience on LEADER implementation. Most popular were experts45 from Italy (16), Greece (10), Spain (4) and Hungary(4), Germany (3). Arguably it can be expected that if the respective territories manage to win a M41 support for implementing their strategy, they will form a partnerships for an implementation of a joint M421 Inter-Territorial and Trans-National Cooperation LAG project in the period 2011-2014.
44 The questionnaires were sent in end-August, and the replies kept coming back till the end of September-early October. 45 Some potential LAGs however have attracted experts from 2 and even 3 countries.
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The beneficiaries claim they have trained more than 67400 people during the implementation of the projects. This, however, is more likely to due to technical mistakes/ or misunderstanding on the question from the respondents (Marisa claims to have trained more than 30.000 people, Ihtiman more than 10.000, Razlog – more than 4700 – which is apparently impossible with the limited project budgets.). The evaluators believe that each of the consulting teams have informed significant part of the local population (e.g. via the local TV cable network), but that training as stipulated in the was provided to not more than 100-200 people per potential territory on the average. The extrapolation of this figure to 100 potential territories is 10000-20000 trained people – well above the programmed target of Number of participants that successfully ended a training activity = 5000. The respondents were asked if they had discussed concrete/real projects that should be supported by the Local Development Strategy. The 28 answers from the 28 respondents (out of 58 questionnaires) and their extrapolation to 50 programmed LAGs and to 100 M431-2 projects (in case every single M431-2 project produces a LAG) is: Table 148: Distribution of Discussed LEADER projects
N = 28 N = 50* N = 100
Projects - Budget - EUR Projects – Budget - Projects - Budget - number number EUR number EUR
Axis I projects 468 18.219.276 836 32 .534.421 1671 65.068.843
Axis II projects 119 4.365.700 213 7.795.893 425 15.591.786
Axis III projects 737 34.914.597 1316 62.347.495 2632 124.694.989
Non-BGRDP 81 2.009.320 145 3.588.071 289 7.176.143 projects
Total 1405 59.508.893 2509 106.265.880 5 018 212.531.761
* This is the number of LAGs programmed to be supported by M41 and M431.1 in the 2011-2013 period. It should be noted that extrapolation to 50 LAGS for both the number of projects and the respective amount for support are consistent with the ones programmed in M41. Implementation of the Local Development Strategies. Then an attempt to see the actual readiness of the potential territories for LEADER Approach was made. The evaluator chose to following approach to make this attempt: - See if specific projects were discussed during the preparation of the Local Development Strategies, their tentative costs in euros and whether these will be appropriate for Axis I/AxisII/AxisIII support from BGRDP or are outside the measures available in BGRDP (see the analysis above). - Also it was asked if the LAGs managing organs were identified, whether LAGs rules of operations and procedures were set, whether the requirements and conditions for hiring the Manager of the LAG and his/her experts were finalized, whether the pool of external experts were identified to help with the selection and control on the implemented projects as supported by the local development strategy - In a second series of questions the evaluator tried to understand whether the discussed projects/actions for support were targeting the needs of particular social group (i.e. children, pupils, young families, women, etc.), the EU priorities (i.e. ICT based business or healthcare, etc.), and whether they were expected to bring benefits to
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the population living in particular settlements of the potential territory (see also the Questionnaire in Annex 12 to this Report) The findings were that some 28 of the 58 respondents were ready or almost ready to implement the LEADER strategies. These findings are of course very subjective and based on a very limited scope of information coming just from questionnaires. Their reliability of the conclusion is further undermined by the fact that 21 of the respondents were contracted from the second call of proposals late in 2009, and as such were still in the beginning and middle of implementing their projects – hence their inability to provide positive answers to the said series of questions. CMEF does not contain any obligatory CEQs for evaluating this measure, as it is specific to the BGRDP (but also a similar measure is available to Romania). Hence, the evaluation on the measure is based on the coverage and the quality of preparing the rural areas of Bulgaria for the implementation of the LEADER Approach, through analyzing: The spatial scope of implementation The readiness of local communities to start the implementation of what kinds of development projects The readiness of Local Action Groups to implement grass roots developments based on sound governance, and bearing simultaneously the seven key LEADER Approach characteristics. The evaluation according to the set criteria then is: - Spatial coverage: 6. Above targets - Community Readiness: 2. To a less extent 46 - LAGs readiness: 2. To a less extent47 This measure is in the final stages of its implementation - there will be no more calls for proposals for support under this measure. Hence, there is no use to make recommendations for the measure, but still important lesions and warning can be drawn for the implementation of M41 and M431.1 in the remaining programming period till 2013. Most of these are based on the feedback in free from received from the respondents by answering questions 9 in the questionnaires: “9. Please, point out in free form all the difficulties you encountered at any level during the implementation of the project, and/or your suggestions how to improve its implementation” Adriano: Late reaction to payment claims and financial difficulties leads to giving up the implementation of some project activities Barite, Chepelare: Late reaction to requests for minor changes (change of the technical assistant) forces the consulting units to work extra Belovo-Velingrad: The lack of advance payments brings hardships in implementing the planned activities. Late reactions to requests for minor changes and to payment claims. Sent letters to MA got lost on the way. The situation with the reaction to our request was improved after the employment of coordinators in late 2009-2010.
46 It is clear that local community readiness will be achieved only after acquiring hands-on experience with tackling local projects to be financed by the local development strategy, when difficult choices will have to be made in selecting and rejecting particular projects or initiatives. 47 It is clear that LAGs readiness will be achieved only after acquiring the first hands-on experience with selecting, controlling monitoring local projects in cooperation with both the MA and the Paying Agency.
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Beloslav-Avren: It is extremely difficult without advance payments and late reactions to payment claims. To implement the project I had to get a credit for which I had to put as a collateral my personal assets….The relationship between the SFA- PA and Ma is quite complex. MAF is not flexible, not effective in its wortk, a big number of letters got lost, and the reply to them was important for the implementation of the project. There is a need for a faster and more flexible mechanism among SFA and MAF: these two institutions are not working. Bobov Dol: the difficulties are mainly of administrative character, associated mainly with the specific requirements for the recognition and payment of the costs, also, the mechanisms and forms for their reporting could be improved. There were no forms for some of the obligatory documents. Too long periods for approval of changes, for consideration and approval of requests, claims and reports. The reference price limits to repay expenses contradict the Annex Budget to the Contract. The principle “silent agreement” should be enforced. Bojchinovci- Yakimovo: Lack of advance payments. Procurement for services under the Law for procurement was difficult. The delay in payments (still not received) makes it difficult with reporting to the municipal council and the mayors (apparently the local authorities have prefinanced the project activities.) Bratzigovo and Kritchim: Lack of municipal ability to prefinance some activites led to their removal from the project. Emerging mistrust in the municipal council emerging from the great delays in requested repayments to the MA. The local community is highly individualistic orientated- there is a difficulty to achieve collective thinking. It was hard to make the local people believe that the BGRDP measures are open/accessible- the general perception is that only “specific” people can be successful with tier projects. Byala and Dolni Chiflik: The requirements/procedures for payment claims and project reporting are unrealistic. Too many efforts are dedicated to meeting the appropriate form for reporting rather than realizing the reported activities correctly. We are unable to make flexible decisions to meet the dynamic in the local community. From one side the local specificities are important must be taken into consideration, on the other Ordinance 14 demands too restricting rules on the project activities. It is impossible to foresee during the application stage the needs to react to local community dynamics during the implementation of project activities. Despite this we managed… The greatest problem of all is the extremely heavy bureaucracy and the extremely delayed approval of project costs. The municipalities are undergoing a heavy financial crisis and it is very shortsighted to make the implementation of LEADER so difficult… the instrument which could ”move” (meaning “animate”) at least a little bit the situation in the small villages…A possible solution could be to have the monitoring and approval of payment claims on the regional level. Byala (Russe region): Ma does not meet the periods for consideration of the report, the requests for the replacement in the consulting teams, etc.; the preparation and signing of Annexes usually takes longer than the project itself… the repayment of costs is too long which sometimes leads to giving up project activities like exchange of experience with foreign LAG or purchasing of equipment for the office which makes it impossible the further effective functioning/work of the team… Devin: the major difficulty is the distrust with the EU programmes… The low level of information, the enormous number of demanded documents, the slow procedures in selecting the projects prevent the majority of the people to apply under the BGRDP measures. During the discussion sometimes the talks are going in inappropriate direction: political accusations and personal conflicts take over. In such environment it is difficult to present correctly the information planned for the meeting. Regarding project administration – the delay in approving and repaying the expenses is very long and this makes it difficult to carry out the planned project activities. …
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Based on the above it seems that the implementation of the local Development Strategies under M41 will be even harder not in the least because the number of involved parties is getting even bigger: MA, SFA-PA, The LAG and the respective beneficiary. This justifies the following recommendations: Implementation of the Leader axis is urgently needed and must be accelerated in order to ensure the local involvement of the mobilized human resources in the regions. It is expected that the number of projects financed under Strategies for Local Development will reach more than 2,000 until end-2015. It is recommended that the selected LAGs immediately establish close contacts with dedicated officers from the respective Regional Paying Agency. To avoid delays in the processing of the LAGs projects it is strongly recommended: (i) LAG should keep very well updated the designated contacts in the SFA- PA, since the time of the local call for proposal – in this way the respective officer will have possibility plan and allocated necessary time to the finally selected projects; (ii) to set deadlines for projects processing both in the LAG and in the RPA. The direct participation of the MA in the control of projects seems unnecessary and makes expensive the implementation of the Axis. Evaluators are on the opinion that MA should withdraw from direct participation in the M41 implementation and only retain monitoring functions via an established electronic system connecting all of the selected LAGs with both the MA and the SFA-PA. This system should be able to help the MA exercise its monitoring and ongoing obligations while the SFA-PA will be regularly updated for the next needs for checking and financing projects contributing to the objectives of the local development strategy.
6.7. Axis 5: Measure 511 Technical Assistance
Objectives: To provide the resources required for effective management and implementation of the RDP. Rationale: Measure support will be used in accordance with Article 66 of Council Regulation (EC) No 1698/2005 for actions related to the preparation, management, monitoring, evaluation, information and control activities of programme assistance only. Target groups of (final) beneficiaries: Monitoring Committee (including Working Groups), Managing Authority, SFA- Paying Agency, National Rural Network (including LEADER LAGs), stakeholders/potential beneficiaries under the private measure and the potential beneficiaries under the LEADER Approach. Preferred groups of beneficiaries: NA Programmed budget: EUR 123.181.289 (including MEUR 18.477.193 for publicity and MEUR 7.0 for the operations of the National Rural Development Network) General data on implementation
By end 2009 the SFA-PA had effected payments to 24 payment claims totaling MEUR 1.1 (0.9% of the available budget of the measure in the period 2007-2013).
By November 2010 the situation is much improved as payments were effected to 66 payment claims totaling almost MEUR 2.9 (2.3% of the available budget). 41 of the contracts under this measure were already completed.
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CMEF does not provide for CEQs for the evaluation of this measure. Being a horizontal measure it is evaluated by Horisontal evaluation questions:
HCEQ 16. To what extent has the technical support increased the capacities of the managing authorities and other partners involved for implementing, managing, controlling and evaluating rural development programmes?
Answer: 1: To no extent, at all.
HCEQ 17. To what extent has the European Network for Rural Development contributed to establish good rural development practice?
Answer: 1: To no extent, at all.
Conclusions
Due to low absorption by the end of the fourth year of the programming period, significant part of M511 budget can be reallocated to Axis I measures to ensure sufficient budgets for M112 and M121 activities in the 2011-2013 period. M511 has ensured very strong publicity for the implementation of the BGRDP. Due to lack of automatic CMEF-based monitoring and reporting system its contribution to the transparency of BGRDP implementation is somewhat restricted. The contribution of M511 towards increased capacities of the MA and Partners needs focused efforts as this can contribute to the faster and more quality implementation of the BGRDP. M511 is yet to contribute to the activities of the National Rural Development Network. The measure can also be very useful in the orientation of the stakeholder groups in the EU priorities and the respective technologies that can be used to contribute to their achievement. Technical Assistance is also necessary for the potential applicants of these agriculture subsectors which are yet largely unreformed and need orientation in the obligatory standards and requirements as transposed in the Bulgarian legislation.
Recommendations It is recommended to use as much as possible to use the measure for the successful realization of the proposed reallocation of funds among BGRDP measures. Via separate projects it could be financed the following major sets of coordinated activities for outputs to be used by the training institutions under M111, the consulting organizations under M114 and the NAAS under M143: (i) Identify appropriate technologies (best practices) per agriculture subsector to meet EU priorities (e.g. water and energy saving, waste management for bio-degradable and non-bio-degradable waste, limitation of GHG emissions, use of alternative energy (incl. alternative fuels), technologies suitable for eco-farming and for soil preservation and restoration, etc.). Repeat the same exercise for the forestry sector and for the processing sector as well. Promote the use of the technologies via the Stakeholders associations (M111), Training institutions (M111), Consultants (M114), NAAS (M143 and M114), National Rural Network (M511), LEADER LAGs (M41), district and municipal offices of MAF, district offices of SFA-PA. Stress benefits for the beneficiaries as well as the public benefits created from the introduction of the investments. (ii) Identify appropriate investments and technologies to meet the minimum set of standards and requirements for holdings per particular agriculture sub-sector. Calculate respective costs within respective market price brackets. Repeat the same for the forestry sector and for the processing sector as well. Promote the use of the technologies via the Stakeholders
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Other than that the measure can still be used for the creation and use of external experts panels recommended for the selection of projects under M121, M123 (but also feasible for M311 and M312).
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6.8. Regional analysis of up-take
Bulgaria has 6 planning regions containing 4-5 administrative district s each. The districts vary in their land cover (agriculture/forests) and main agriculture subsectors (field crops, tobacco, animal production). All regional uptake analysis is based on an excel file with the payments carried out by the SFA-PA till the end May 2010. The regional uptake analysis can consider just the regional distribution of the 8 measures: M112, M121, M141, M321, M322, M211, M212, M214. This is because: - M 143 and M511 are supposed to be implemented centrally in Sofia; - There is no information on the regional implementation of M611, as it is implemented together with the CAP I Direct Payments. The evaluators therefore presume that the majority of the M611 will be absorbed in the districts with the bigger territories, where the agriculture lands are also prevailing compared to the forestry areas; Based on all this, the total amount of funds which will be analyzed regionally is MEUR 308 577 461,9 (See the subtotal in the third column of Annex 4: REGIONAL DISTRIBUTION OF BGRDP PAYMENTS PER DISTRICT PER MEASURE IN TOTAL PERIOD AND IN 2008-2009 PERIOD (in EUR) The cumulative data in the file is presented here: Table 149: “Pisma odobreni reduced.xls” (28.05.10)
Measure Total Payments Total Sum 2010* payments 2010* sum 2008-09 payments 2008-09 sum N EUR N EUR N EUR m 112 3 943 49 221 558 2 464 30 797 638 1 479 18 486 082 m 121 1 011 124 206 187 476 52 779 962 535 71 426 225 m 141 463 693 211 463 694 087 - - m 321 53 41 954 935 53 42 007 920 - - m 322 129 36 315 196 129 36 361 058 - - m 143 7 1 993 456 2 1 214 981 5 780 993 m 511 38 1 849 134 14 735 076 24 1 116 392 SUBTOTAL 5 644 256 233 678 3 601 164 590 723 2 043 91 809 692 m 211** 23 263 42 100 816 - - 23 263** 42 153 985 m 212** 8 869 12 094 816 - - 8 869** 12 110 091 m 214** 433 1 758 195 - - 433** 1 760 415 SUB-TOTAL 38 209 312 187 505**** 3 601 164 590 723 34 608 ** 147 834 183 M 611** - 145 491 234 TOTAL - 457 911 286 * In the period Jan-May 2010. ** The information for M211-214 was received later in a different set of files. *** These figures indicate the maximum number of beneficiaries which have been paid irrespective in which particular year. This approach is more compliant with the CMEF-rules where setting the measure targets for Axis 2 and monitoring and reporting them should be done on the basis of beneficiaries and not on cumulating number of payments. **** The BGRDP funds absorbed
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The data on regional uptake of funds indicates that North Western and South Central Planning Regions have taken the best advantage of BGRDP support (MEUR 118.2, 38.3% out of the MEUR 308.6 considered in this regional uptake section of the report). The origin of the acquired support is, however, quite diverse: In Axis I, NW seems to benefit mostly from the investment support under M121, while the SC region is taking advantage mostly from the M112+M211+M212+M214 support. Both regions are also receiving quite the substantial shares from the support paid under Axis 3 infrastructure measures M321+322 [they received MEUR 35.8 , 45.8% of all the MEUR 78.3 payments under Axis 3]. The SW region on the other hand is very unique in attracting the majority of LFA payments (37.3%) and the Axis 3 infrastructure payments (39.5%). The least figure is particularly intriguing as Sofia district includes municipalities neighboring the Sofia capital. Arguably these municipalities are already benefiting from short distance to the biggest city of Bulgaria (having access to the biggest market demand for workforce and foods in the country.). At district level, however, the situation becomes very imbalanced and very patchy regarding the prospects for further economic development of the districts. There are districts which have attracted very significant shares of BGRDP Payments till May2010: Among the leading ones are Dobrich (MEUR 20.2), Plovdiv (MEUR 18.0), Sofia-District (MEUR 18.2), Pleven (MEUR 17.5), Blagoevgrad (MEUR 17.4 ). The reasons for their success in absorbing RD aid is diverse: - Some have large areas of fertile arable lands suitable for fields crops (grain, oleaginous, technical cultures); they benefit mostly from the support of M112, M121 (Dobrich, Pleven districts) - Others have large portions of their agriculture areas positioned in the LFAs of Bulgaria (Sofia District, Blagoevgrad). They benefit mostly from M211. This absorption however, is also strongly reinforced with strong participation under Axis 3 “infrastructure” measures M321 and M322 - It is only Plovdiv which has a relatively balanced mix of attracted funds under the available opportunities of payments. On the other opposite are the districts of Gabrovo (MEUR 3.0), Pernik (MEUR 5.4.) and Kjustendil (MEUR 6.3.). The reasons are of geographic nature: while Gabrovo is one of the BG districts with smallest territory, it also has relatively small part of its territory having arable lands. Both Pernik and Kjustendil on the other hand, are border districts situated very close to the capital. This arguably explains the low interest of the local population in engaging with agriculture activities. Support for alternative activities outside agriculture was not available under M312 in the considered period. These explanations however are less valid for Vidin (MEUR 6.4; MEUR 3.3 coming from M321 and M322), and not valid at all for Kardjali (MEUR 6.3, most coming from M211 payments- MEUR 3.14) and Smoljan (MEUR 11.7, most of it coming from M211, M321 and M322).
Conclusions Generally, the districts which have prevailing forest cover on their territory have been neglected (later start of payments under the forestry measure, under M123 processing including wood, and microentrepreneurship – M312) in favor of the districts which rely more on “intensive agriculture” (field crops – grain, oleaginous, technical cultures: by M112 and M121.) The current implementation of BGRDP does not allow the achievement of any planned synergy at district level, which synergies should be planned in the municipal and district development plans. All groups of private and public individuals are put in the situation to compete for resources whenever the SFA-PA decides to open the respective measure or pay the respective payment under M211, M212, M214.
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The district participation in the various measures is therefore quite chaotic, and as a result some districts seem to have modernized/restricted significant part of their agriculture sectors, while others are lagging behind in this aspect, but rely in on the infrastructure projects under M321 and M322 instead. While this strategy for “construction-based” development may be working in the short to medium term, in the longer term the second groups of districts would have lost significant parts of their young and active population (and their purchasing power as well). The evaluators note that if the MA had chosen to decentralize and regionalize the measure budgets, the implementation of the BGRDP both the implementation rate and the integrity of the development would be in a more advanced situation.[Provided the general decentralization of government allowed this.] this would have happened because then the regional authorities would have been also interested in absorbing not only infrastructure aid, but also help their farmers and entrepreneurs absorb the “private” aid available for support under the Programme. Last but not least, the local administrations and communities would have had much more experience in sound local governance practices and most importantly – in the LEADER Approach. Similar recommendations for decentralization and regionalization in implementing the programme had been put also in the EX-Ante Evaluation of the BGRDP. Recommendations 1. In the end of the 4th year of the programming period it is too late to initiate any regionalization in implementing any BGRDP measures. However, regional monitoring and reporting on the implementation of the separate measures will be useful for the district and local authorities (at least on district level, preferably - on municipal level) to better manage their territories as set in the Regional Development Act and in a significant number of Environmental Laws. 2. Decentralize the implementation and regionalize the budgets of the measures of Rural Development Programme in the next programming period. 3. Compensate the increasing disparities in potential for development by channeling with priority the remaining budget of the measures towards the districts with lowest absorption of funds compared to their needs (i.e. number of active registered famers, arable areas, areas with potential and traditions in horticulture, arable areas suitable for organic farming, areas suitable to afforestation, areas needing restoration or protection against disasters, etc.) 4. Match all initiatives with appropriate promotion (M511), training (M111), consultation (M114 and M143). Seek the cooperation of the district and local administration in realizing the activities.
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6.9. Update of the Strategic Environmental Assessment (SEA)
The Strategic Environmental Assessment is a statutory requirement for any programme or large scale projects especially when implemented at national or regional level. The specific conditions and guidance for the SEAs of the RDPs are defined in the EAFRD Regulation. The SEA of the Bulgarian RDP was carried out by a team of independent experts in the period 2006 – 2007 prior to implementation of the RDP. Three years later, the main environmental issues and priorities remain valid and still need to be addressed pro-actively.
At the same time, there were a number of changes in the European policy documents and national implementation of the key EU environmental goals as identified in the Bulgarian RDP.
In the course of the CAP Health Check undertaken in 2008, Member States agreed48 that a number of new challenges should be included in the EAFRD as funding priorities. These included mitigation of, and adaptation to, climate change, renewable energies, water management and biodiversity as well as dairy sector restructuring. An underlining bottom-line for all these new challenges is the need to improve the environmental awareness and knowledge of farmers and land users. Alongside this decision, and in response to the economic downturn, the EU agreed the European Economic Recovery Programme49, according to which unspent EU funding was diverted towards rural development, including the new challenges. It is within this framework that Bulgaria reinforced the already planned actions related to the new challenges.
Meanwhile, in Bulgaria, 101 Natura 2000 sites designation orders were published specifying the main restrictions and obligations of agricultural and forest land users within them. The four river basin management plans are also published and outline common and additional measures that farmers and forest users could do in order to contribute to the achievement of the sustainable water management goals.
The update of the SEA is carried out against the four new environmental challenges by reviewing the developments in the EU policy documents, their reflection in the Bulgarian RDP, including the selected environmental indicators. Based on the results of the review a set of recommendations for improving the environmental performance of the measures under the RDP is provided, where relevant.
1. Climate change mitigation and adaptation
Adaptation, along with mitigation, is an essential part of addressing the challenges and opportunities associated with climate change. Mitigation refers to the efforts to limit the man-made causes of climate change. Adaptation involves taking action so that we can be more resilient to our current climate, less susceptible to the impacts of future climate change and in a position to take advantage of opportunities.
Developments in EU policy
In April 2009, the European Commission published a White Paper on adapting to climate change50, with an accompanying paper on the challenge for agriculture and rural areas51. The White Paper recognised that most adaptation measures would be taken at national, regional or local level, but said that such measures could be strengthened by an integrated and coordinated approach at EU level. The Commission foresaw a two-stage approach: Phase 1, from 2009 to 2012, would lay the ground work for preparing a comprehensive EU adaptation strategy; Phase 2, from 2013 onwards, would see that strategy implemented. The date of 2013 is of particular significance for the Common Agricultural Policy (CAP); the EU’s current Financial Perspective runs from 2007 to 2013; and a Budget Review is now underway which will address the post-2013 future of the CAP.
48 Annex II, Reg. No 74/2009 of 19 January 2009 amending EAFRD Reg. No1698/2005 49 COM(2008)859 50 COM(2009)147 “Adapting to Climate Change: Towards a European framework for action” 51 SEC(2009)417 “Adapting to climate change: the challenge for agriculture and rural areas” MIDTERM EVALUATION OF THE RURAL DEVELOPMENT PROGRAMME OF BULGARIA 294
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The White Paper identifies the integration of adaptation into EU policies as one of the components in Phase 1 of the adaptation framework proposed. It proposes the following actions to be taken in the period to 2013 by the EU and Member States: ensuring that measures for adaptation and water management are embedded in national rural development strategies and programmes for 2007–2013; consideration of how adaptation can be integrated into the three strands of rural development and how to give adequate support for sustainable production, including how the CAP can contribute to the efficient use of water in agriculture; examination of the capacity of the Farm Advisory System to reinforce training, knowledge and adoption of new technologies that facilitate adaptation; updating of the forestry strategy, and launch of debate on options for an EU approach on forest protection and forest information systems.
The Commission paper on the challenges for agriculture and rural areas of adaptation to climate change provides the following overview of the impacts of climate change on agricultural production: rising atmospheric CO2 concentration, higher temperatures, changes in annual and seasonal precipitation patterns and in the frequency of extreme events, affecting the volume, quality and stability of food production and the natural environment; climatic variations affecting the availability of water resources, the incidence of pests and diseases, and the quality of soils, leading to significant changes in the conditions for agriculture and livestock production; in extreme cases, the degradation of agricultural ecosystems, causing desertification and a total loss of the productive capacity of the land affected.
The EU does not have specific competence in forestry policy, though it has adopted both an EU Forestry Strategy (with common principles for sustainable forest management) and an EU Forest Action Plan (working towards a monitoring system and enhanced protection for EU forests) and a Green Paper on forest protection and information, which was published in March 2010.
The Forestry Green Paper52 sets out the characteristics of EU forestry and woodland and the challenges faced by forests in a changing climate and raises a series of questions in order to initiate a public debate. It is noted that forests provide a number of socio-economic and environmental functions and that climate change is likely to have a significant gradual impact on forestry, particularly through pests and species change. Climate change will also increase forestry’s vulnerability to shocks such as storms and fires.
Developments in Bulgarian policies and programmes
The current Bulgarian policies and programmes on climate change are mostly focused on the implementation of the commitments under the Kyoto protocol and the related emission reductions and trading mechanisms. A lot less attention is given to actions to climate change adaptation especially in the agriculture and forestry sectors. This is also confirmed by a recent report of the World Bank53 (WB).
The WB report underlines that the country’s capacity to manage climate change will depend on its demonstrated ability to address a broader category of problems related to the environment and national resource base. This is also stated as one of the weaknesses of the countries which independently of climate change faced substantial challenges to deal with environmental problems.
52 COM(2010)66, 01.03.2010 53 WB, 2009, Adapting to climate change in Europe and Central Asia MIDTERM EVALUATION OF THE RURAL DEVELOPMENT PROGRAMME OF BULGARIA 295
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The report recognizes that the different types of farms have varying advantages and disadvantages in adapting to the challenges posed by climate change. It identifies several elements of a functioning agricultural system that will determine the ability to adapt to climate change: timely climate information and weather forecasts, and the skills needed for their interpretation; locally relevant agricultural research in techniques and crop varieties; training in new technologies and knowledge‐based farming practices; private enterprises, as well as public or cooperative organizations for inputs, including seeds and machinery, and affordable finance for such inputs; infrastructure for water storage and irrigation; physical infrastructure and logistical support for storing, transporting, and distributing farm outputs; strong linkages with local, national, and international markets for agricultural goods.
Developments reflected in the BG RDP
The Bulgarian RDP covers sufficiently large number of measures and action which can contribute to adapting to climate change if properly implemented and directed. However, the analysis of the implementation of these specific actions shows that they need urgent speed up of implementation.
Table 150: RDP actions contributing to mitigation and adaptation to climate change
Possible actions (Annex II, Reg.74/2009) Actions in BG RDP Actions under EERP Status*
Improve efficiency of nitrogen fertiliser use m.121 m.121 Under (e.g. reduced use, equipment, precision m.214 OF1 10% increase in implementation agriculture), subsidy Improvement of manure storage
Improvement of energy efficiency (e.g. use of m.121 m.121 Under construction materials which reduce heat loss) 10% increase in implementation subsidy
Soil management practices (e.g. tillage methods, m.214 OF1, SW1, SW2 no Under catch crops, diversified crop rotations) implementation
Land use change (e.g. conversion of arable land m.214 SW1 No Under to pastures, permanent set-aside) implementation
Extensification of livestock (e.g. reduction of m.214 HNV1, HNV2, HNV4, LB1, No Under stocking density) and grassland management LB2 implementation
Afforestation, establishment of agro-forestry m.223 No Under systems implementation
Flood prevention and management measures No No n.a. (e.g. projects related to coastal and interior flood protection)
Training and use of farm advisory services in Potentially m.111 No Under relation to climate change implementation
Prevention actions against forest fires and m.226 No Under climate-related natural disasters implementation * Assessment of the implementation is done in sections 6.3-6.5 of the MTE.
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Review of existing RDP environmental indicators related to climate change
In this part we review the indicators that are indirectly related to climate change adaptation while the renewable energies indicators are presented below. Information on the baseline indicators is collected and reported by both the Executive Environmental Agency and the bodies of the Ministry of Agriculture. They still need specific operational agreements between these institutions which should reflect the time and format requested by the CMEF guidelines.
Table 151: Environmental indicators related to climate change adaptation
Type of Indicator Description Measurement Source Comment
Baseline Needs operational Executive Environmental agreement for reporting 22. Soil: Areas at risk of Classes of T/ha/year Agency according to CMEF soil erosion definitions
Needs operational agreement for reporting UAA under organic MAF 23. Soil: Organic farming according to CMEF farming definitions
Result Needs better Agriculture and forest Supported UAA under identification of the areas contributing to soil PA and MA successful management actions and measures quality contributing to it.
Impact Needs better Improvement in soils identification of the PA and MA (erosion, contamination) Area in ha actions and measures (national) contributing to it.
2. Renewable energies
Renewable sources of energy – wind power, solar power, hydro-electric power, tidal power, geothermal energy and biomass – are considered essential alternatives to fossil fuels. Their use reduces the greenhouse gas emissions, diversifies the energy supply and reduces the dependence on unreliable and volatile fossil fuel markets. The growth of renewable energy sources is also expected to stimulate employment in Europe as well as the creation of new technologies.
Developments in EU policy
The EU's Renewable Energy Directive (2009/28/EC) sets an overall binding target of 20% for the share of EU energy needs to be sourced from renewables such as biomass, hydro, wind and solar power by 2020. As part of this total effort, at least 10% of each Member State's transport fuel use must come from renewable sources (including biofuels). The Renewable Energy Directive (2009/28) and the Fuel Quality Directive (2009/30) include criteria for sustainable biofuel production and procedures for verifying that these criteria are met.
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Developments in Bulgarian policies and programmes
Bulgaria’s mandatory national target under Directive 2009/28/EC for 2020 is a share of 16 % of renewable energy sources in the gross final consumption of energy, including a 10 % in the transport sector. The forecast document concerning the production of renewable energy that Bulgaria submitted in December 2009 reports a technical potential of 4 500 ktoe of energy from renewable sources. The highest potential is with hydropower (~31%) and biomass (~36%). Biomass is the most widely used energy resource in Bulgaria – predominantly in the form of firewood combined with coal. Biomass waste from agriculture is not used to a great extent and is usually destroyed on the spot.
According to the Climate policy tracker54 (2010), Bulgaria passed an ambitious RES legislation in 2008 and attracted a lot of potential investors applying for support (PV: 1.6 GWp). Unfortunately, the strategy for reaching the EU RES targets has not been well structured. This has resulted in a (temporary) suspension of the policy until the implications for the public budget are sorted out. Additionally, the national network operator has continued to control (and thus to limit) grid access of renewable electricity projects.
The Bulgarian Renewable Energy Action Plan (June 2010) sees a significant potential in the use of biofuels in the agricultural sector as over 82 % of its energy consumption in 2005 was based on liquid fuels. The use of biofuels in agriculture is expected to facilitate its sustainable growth. However, there is still no national legislation related to the sustainability criteria for both biofuels and bioliquids.
Furthermore, the action plan specifies that there is still no organized information collection of data and thus data availability on biomass and biofuels production and consumption in the country.
The National Renewable Energy Action Plan refers to the RDP and its measures for supporting renewable energy production such as the construction or rehabilitation of installations for electricity and/or heat generation from renewable sources in municipal and public service buildings; construction of distribution networks for biofuels or electricity/heat produced from biomass or other renewable sources; investments to improve the energy efficiency of municipal or public service buildings; etc.
It also refers to the efforts to improve forest management in order to increase future growth and sustainable reproduction by certification of state-owned and municipal forests.
Developments in the BG RDP
The Bulgarian RDP provides an ample of opportunities to support the production of energy crops and the related production of biofuel and biogass. They are not yet fully utilized mostly due to market factors external to the programme. At the same time, there is an overwhelming interest in projects related to solar energy (photovoltaic). It is advisable that the MA introduces ranking criteria which will allow a more balanced support to the different types of renewable energies supported by the RDP.
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Table 152: Actions contributing to renewable energies
Possible actions (Annex II, Reg.74/2009) Actions in BG RDP Actions under EERP Status*
Biogas production using organic waste (on farm m.121 m.121 Under implementation and local production) 10% increase in subsidy
Perennial energy crops (short rotation coppice m.121 m.121 Under implementation and herbaceous grasses) 10% increase in subsidy
Processing of agricultural/forest biomass for m.121 m.121 Under implementation renewable energy 10% increase in subsidy
Installations/infrastructure for renewable energy m.123 & m.311 & m.123 & m.311 & m.312 Under implementation using biomass and other renewable energy m.312 10% increase in subsidy sources (solar and wind power, geothermal)
Information and dissemination of knowledge Potentially m.111 no Under implementation related to renewable energies as of 2010 * Assessment of the implementation is done in sections 6.3-6.5 of the MTE.
Review of existing RDP environmental indicators related to renewable energies
The information related to renewable energies is extremely scarce as also recognized by the National Renewable Energies Action Plan. This significant lack of data should be urgently addressed by the MA by actively contributing or initiating reporting of data by the responsible governmental bodies. Otherwise, the public support given to renewable energies may be compromised.
Table 153: Environmental indicators related to renewable energies
Type of Indicator Description Measurement Source Comment
Needs operational 24. Production of MAF, kToe from agriculture agreement for reporting renewable energy from and forestry Ministry of Economy, according to CMEF agriculture and forestry Energy and Tourism definitions
Needs operational 25. UAA devoted to UAA devoted to energy MAF, State Forestry agreement for reporting Baseline renewable energy and biomass crops Agency according to CMEF definitions
Needs operational 26. GHG emissions from Agricultural emissions of agreement for reporting MAF, MOEW agriculture GHG according to CMEF definitions
Agriculture and forest Needs better areas contributing to Supported UAA under identification of the Result PA and MA climate change successful management actions and measures (renewable energies) contributing to it.
Needs operational Contribution to Increase in production of PA and MA, agreement for reporting Impact combating climate renewable energy from Ministry of Economy, according to CMEF change agriculture and forestry Energy and Tourism definitions
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3. Water Management
The protection of water resources and ensuring sustainable water management is one of the cornerstones of environmental protection in Europe.
Developments in EU policy
The Water Framework Directive (WFD) is the key legislation regarding water management in Europe. Its environmental objectives require Member States to prevent deterioration of the status of all bodies of surface water and groundwater and to achieve good status as a rule by 2015. In 2009, management plans were produced for each river basin district which cover the period 2009-2015. They shall be revised in 2015 and then every six years thereafter. Additionally, from 2010, Member States must ensure that water pricing policies provide adequate incentives for users to use water resources efficiently and that the various economic sectors, including agriculture contribute to the recovery of the costs of water services, including those relating to the environment and resources. Agriculture has been identified as the major sustainable water management issue in the WFD implementation at European level.
In 2007, the European Commission addressed the issues of flood risks (Dir.2007/60/EC) and water scarcity and droughts in Europe (COM (2007) 414 final).
The Floods Directive aims to reduce and manage the risks that floods pose to human health, the environment, cultural heritage and economic activity including agriculture. The Directive requires Member States to carry out a preliminary assessment by 2011 to identify the river basins and associated coastal areas at risk of flooding. For such zones they would need to draw up flood risk maps by 2013 and establish flood risk management plans focused on prevention, protection and preparedness by 2015. The Directive applies to inland waters as well as all coastal waters across the whole territory of the EU.
The Communication on water scarcity and droughts identifies 7 main policy options to address the issue including putting the right price on water, considering additional water supply infrastructure, fostering water efficient technologies and practices, fostering the emergence of a water-saving culture in Europe as well as improve knowledge and data collection.
Developments in Bulgarian policies and programmes
The Bulgarian territory in divided into four river basin districts – Danube, Black Sea, East Aegean Sea and West Aegean Sea districts. All four River Basin Management Plans (RBMPs) were approved by an Order of the Minister of Environment in March 2010.
The RBMPs are the main instruments for water management in the river basins. They include detailed programmes of measures specifying actions that need to be undertaken to contribute to the good water status by 2015. The national programmes of measures have to be made operational by December 2012 which is still within the current programming period.
The RBMPs measures related to agriculture, forests and rural development comprise erosion control and reduction of unused water leakage, implementation of good farming practices aiming to reduce nitrate pollution, implementation of production standards for environmental management, implementation of reforestation projects in riparian habitats, re-flooding of wetlands with specific conservation needs, reconnecting old river-beds and meanders, etc. There are also measures aimed at information and training for farmers and other sector producers in the good practices aiming environmental conservation and management.
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Almost all RBMPs consider funding for the training and information about the Good Farming Practices from the RDP. However, none of them considers funding from Axis 2 measures: whether the planned but still not developed m.214 Management of riparian habitats or Management of Waterfowl habitats packages or m.213 designed to support the implementation of WFD (and Natura 2000) or m.216 supporting non-productive investments for environmental management.
Developments in the BG RDP
The Bulgarian RDP covers sufficiently large number of measures and action which can contribute to efficient water management if properly implemented and directed. However, the analysis of the implementation of these specific actions shows that they need urgent speed up of implementation.
Table 154: Actions contributing to water management
Possible actions (Annex II, Reg.74/2009) Actions in BG RDP Actions under EERP Status*
Water saving technologies (e.g. efficient irrigation m.121 m.121 Under implementation systems) 10% increase in subsidy Water storage (including water overflow areas) Water saving production techniques (e.g. adapted cropping patterns)
Wetland restoration no no n.a.
Conversion of agricultural land into forest/ m.223 no Under implementation agro-forestry systems
Installations for waste water treatment on farms m.121 m.121 & m.123 Under implementation and in processing and marketing 10% increase in subsidy
Development of semi-natural water bodies no no n.a. Creation of natural banks Meandering rivers
Soil management practices (e.g. catch crops, m.214: OF1, SW1, SW2 no Under implementation organic farming, conversion of arable land into permanent pasture)
Information and dissemination of knowledge Potentially m.111 no Under implementation related to water management as of 2010 * Assessment of the implementation is done in sections 6.3-6.5 of the MTE.
Review of existing RDP environmental indicators related to water management
Information on the baseline and impact indicators is collected and reported by the Executive Environmental Agency. They still need specific operational agreements between the EEA and the MA/MAF which should reflect the time and format requested by the CMEF guidelines. The result indicator needs to be revised in order to represented all actions and measures contributing to it.
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Table 155: Environmental indicators related to water management
Type of Indicator Description Measurement Source Comment
Executive Needs operational agreement for 20. Water quality: Gross Nitrogen balance in Environmental reporting according to CMEF Nutrient Balances kg/ha Agency definitions Baseline 21. Water quality: Concentrations in Executive Needs operational agreement for Pollution by nitrates and surface and Environmental reporting according to CMEF pesticides underground waters Agency definitions
Agriculture and forest Needs better identification of the Supported UAA under Result areas contributing to PA and MA actions and measures successful management water quality contributing to it.
Impact Improvement in water Changes in Gross Executive Needs operational agreement for quality Nutrient Balance (kg/ha) Environmental reporting according to CMEF Agency definitions
4. Biodiversity
Biodiversity is the variety of ecosystems, species and genes. Together with climate change, the loss of biodiversity is the most critical global environmental threat and gives rise to substantial economic and welfare losses.
Developments in EU policy
In 2001, the EU set itself the target to halt biodiversity loss in the EU by 2010. Already in 2008, the European Commission recognized that despite the efforts, there are clear indications that the EU will not achieve its target (COM (2008) 864). Several factors that prevented the EU from achieving its 2010 target have been identified and need to be addressed in the biodiversity policy for the period beyond 2010: 1. Implementation gaps in establishment of the Natura 2000 network, which is not set to be complete on land until 2010 and at sea until 2012. 2. Major policy gaps that remain to be addressed such as the policies on soils and invasive species as well as the policies addressing ecosystem services. It is recognized that key ecosystem services are provided outside protected areas. 3. Significant knowledge and data gaps at all levels – Member State, EU and global. Data gathering, analysis and validation have not followed a comprehensive approach due to the complexity of biodiversity, which cannot be reduced to a single variable but requires development of a set of inter- related indicators. 4. Integration of biodiversity concerns into other policies must be improved. In terms of integration with the CAP a strengthening of rural development policy with a view to developing ecosystem services by preserving and enhancing farming and forestry with a high nature value is essential. 5. Funding needs for biodiversity in the EU must be properly assessed, also taking into account the welfare benefits that ecosystems deliver. 6. The issue of equity should be considered within the EU and at the global level.
The post-2010 EU biodiversity vision and target was adopted by the Environment Council in March 2010 and aims to halt the loss of biodiversity and degradation of ecosystem services in Europe and to restore them to the greatest extent possible. The Council also recognized the need to improve the integration of biodiversity and habitat considerations into other policies and sectors thereby strengthening ecological coherence in Europe.
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Developments in Bulgarian policies and programmes
Natura 2000 sites in Bulgaria cover a total of 33,8% of the country’s territory. There are 114 Special Protected Areas (SPA) under the Bird Directive which cover 20,4% of the territory. The 228 proposed Sites of Community Interest (pSCI) cover 29,5% of the territory.
The first designation orders of SPAs were issued in November 2007. By November 2010, there are 101 SPA designation orders which specify the key restrictions and obligations that land users, including of agriculture and forest lands within the Natura 2000 site have to comply with. The designation orders for SCI are planned for 2011.
Developments in the BG RDP
The Bulgarian RDP addressed the key actions contributing to biodiversity conservation on agriculture land already in its initial version. It considered the implementation of m.213 once the SPA designation orders were published. The text of m.213 was submitted to the EC with the 5th notification procedure of the RDP.
In terms of the implementation of m.214, there are still four packages that are not developed and thus not implemented: HNV3 Maintenance of Waterfowl Habitats, HNV5 Restoration of Riparian Habitats, LF1 Lowland mosaic landscapes, and LF2 Creation, Restoration and Maintenance of Field Boundaries. The reasoning for postponing their implementation was the lack of sufficient capacity to develop the packages as well as the need to gain some experience in the implementation of the other AE packages.
The importance of the non-started packages has not been reduced for this period and therefore, it is recommended to develop and implement them.
In terms of biodiversity conservation in forests and forest areas, the RDP has no measures contributing to it. This is despite the fact that a very large share of the Bulgarian biodiversity is located within forest areas (both within and outside protected areas). It is strongly recommended that forest biodiversity is supported by the RDP. This will require development and implementation of either m.224 Natura 2000 in forests or m.225 Forest-environment payments. More discussion on the issue forests and environment is presented in the special section below.
Table 156: Actions contributing to biodiversity conservation
Possible actions (Annex II, Reg.74/2009) Actions in BG RDP Actions under EERP Status*
No application of fertilizer and pesticides on m. 214: no Under implementation high nature value agricultural land HNV1, HNV2, HNV4 Extensive forms of livestock management LB1, LB2, Integrated and organic production OF1, OF2
Perennial field and riparian boundary strips and m.214: Riparian habitats no Not yet developed biobeds package
Setting up of management plans for Natura no no Funding under OP Env. 2000
Construction/management of biotopes/habitats m.213 on Natura 2000 land no Developed, but not yet within and outside Natura 2000 sites implemented
Land use change (extensive grassland m.214 no Under implementation management, conversion of arable land to HNV1, HNV2, HNV4 permanent pasture, long-term set-aside) LB1, LB2
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Management of high nature value perennials m.214: LF3 no Under implementation
Setting up and preservation of meadow no no orchards
Conservation of genetic diversity m.214: LB1, LB2 no Under implementation
Information and dissemination of knowledge m.111 no Under implementation as related to biodiversity of 2010 * Assessment of the implementation is done in sections 6.3 – 6.5 of the MTE.
Review of existing RDP environmental indicators related to biodiversity
The baseline indicators for Farmland Bird Index and High Nature Value farmlands and forests are of primary monitoring importance, since they are directly linked with the relevant impact indicators. Therefore, their correct development and calculation are of key importance to the overall evaluation of RDP impact.
BSPB owns the methodology for the calculation of the Farmland Bird Index, which has been approved by the EC and therefore, it is contracted under m.511 for this activity.
In 2007 the Agri- environment Department of MAF along with the Sustainable Land Management Project of MoEW made the first steps for the identification of potential agricultural land with high nature value. These are namely the lands object to support under the m.214, HNV1 and HNV2.
The indicator for land with high nature value, as has been calculated up until now, needs to be developed further due to the following reasons:
At present it does not cover forests with high nature value but only agricultural land. The fiche for this indicator clearly stipulates that agricultural land and forests with high nature value are to be taken into consideration.
The data available at present is only quantitative- area in ha. Moreover it refers to potential lands with high nature value. The guidebook of the EC requires the development of a set of sub- indicators which are to add information about the qualitative status- for example intensity of land use, intensity of input production resources etc.
The result indicator needs to be revised in order to represented all actions and measures contributing to it.
Table 157: Environmental indicators related to biodiversity conservation
Type of Indicator Description Measurement Source Comment
Trends of index of 17. Population of Contract under m.511 signed in population of farmland BSPB farmland birds autumn 2010 birds
Needs further development based 18. High Nature Value Baseline UAA of High Nature on EC guidance documents to farmland and forest MAF Value Farmland areas reflect quality of HNV as well as to areas assess forests of high nature value
19. Tree species % of coniferous, State Forest Needs operational agreement for composition broadleaved and mixed Agency reporting according to CMEF
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definitions
Result Agriculture and forest Supported UAA under PA and MA Needs better identification of the areas contributing to successful management actions and measures contributing biodiversity and HNV to it.
Trends of index of 4. Reversing biodiversity Contract under m.511 signed in population of farmland BSPB decline autumn 2010 birds
Impact Needs further development based 5. Maintenance of HNV on EC guidance documents to farmland and forest Supported UAA PA and MA reflect quality of HNV as well as to lands assess forests of high nature value
5. Forest and environment in the RDP
The role of forests in delivering ecosystem services such as soil protection, freshwater supplies, biodiversity conservation as well as climate regulation need to be secured and enhanced.
The EAFRD (2007-2013) is the main instrument for financing of forest measures and includes provisions for co- financing for afforestation, payments for Natura 2000 areas, prevention and restoration and other forest environmental measures as well as a wide range of investments in forest management and wood processing.
The Bulgarian RDP provides the opportunity to support afforestation and forest risk management but does not support essential aspects related to biodiversity conservation or freshwater supply. It is strongly recommended that the MA develops and implements at a pilot level measure 225 Forest-environment payments as well as measure 224 Natura 2000 in forests.
This is needed to gain experience for a full scale implementation of these two measures in the next programming period. The MA should not be afraid to get engaged in new measures in Axis 2. On the contrary, it should proactively strive to develop a partnership for implementation of these forest measures together with the Paying Agency and the State Forestry Agency.
Furthermore, there are a number of ongoing initiatives to identify and map High Conservation Value Forests as well as certification of sustainably managed forests by the Forest Stewardship Council (FSC). These are the two types of actions which can immediately be introduced as pilot schemes under m.225.
This is also an additional way to increase the utilization of the public support under Axis 2 which is under serious threat of de-commitment.
Conclusions and Recommendations Overall, the Bulgarian RDP provides sufficient opportunities to contribute to the new challenges faced by the European agriculture. The only exception is related to the support of forest ecosystem services and it is strongly recommended to address this gap by pilot implementation of m.225 Forest environment payments already in the current programming period.
Another important gap is related to the postponed agri-environmental packages especially the ones related to riparian habitats and lowland mosaics both of which are very important to water quality and adaption to climate change.
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For all other environmental actions and measures, it is critically important to strengthen their implementation in the remaining period till 2013.
The role of m.111 is gaining momentum for the building awareness and increasing the knowledge of farmers and other land users in terms of adaptation to climate change, water saving techniques and technologies, biodiversity friendly practices, etc. It is recommended that the MA opens specific and targeted calls for this type of information and training.
The environmental baseline indicators need additional effort by the Managing Authority. Some (Farmland Bird Index, Water Quality, Soil Quality) need operational agreements with the respective institutions that already collect the information but do not report it in an appropriate CMEF format. Others need to be additionally developed to reflect their quality aspect (HNV farmland indicator) or developed entirely (HNV forests). The indicators related to renewable energies need to have streamlined data collection and reporting by the responsible institutions.
The environmental result indicators need to be revised to reflect all actions and measures contributing to them.
6.10. Evaluation of Administration
This chapter covers the evaluation of the administration of the National Rural Development Program of Bulgaria, whose implementation was launched in March 2008. The data used for the evaluation of the administration of the Bulgarian Rural Development Program (BG-RDP) was collected through a range of methods:
On the one hand, there was a thematic study on the administration of the BG-RDP prepared over the last winter and delivered in spring 2010. This study analyzed the structure, procedures, and effectiveness of the BG-RDP, but also made comparisons to the administrative structure and procedures of other EU member states (AT and DK). It included a range of recommendations based on the findings as well as the best- practice models of other member states. Since the deliverance of this thematic study on administration, there have been some changes within the administration. This evaluation tries to honor these changes as progress has been made.
In addition, a range of reports and documents were reviewed including operational manuals (i.e. written instructions, procedures), agreements with external authorities and delegated bodies, annual Audit reports, financial reports, reports on the Monitoring Committee Meetings, etc.
Furthermore, numerous interviews with members of the administrative structures and other stakeholders were conducted. Amongst others, there were interviews made with Directors of the Paying Agency and Managing Authority as well as delegated bodies. Especially these interviews showed some of the progress made throughout the evaluation period, which are not yet completely documented.
Finally, the evaluation of the administrative structure and procedures tries to respect the results of the questionnaire survey, which was made with more than 1.400 beneficiaries.
The evaluation of the administrative set-up is based on administrative questions, which the evaluator has used to structure the evaluation. The following section presents the major findings and conclusions from the assessment of the administrative set-up and includes recommendations based on the findings.
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1. Evaluation Question: To what extent is the administrative set-up in compliance with the requirements of the European Union?
6.10.0. Definition of authorities and related tasks
In accordance with the provisions of Article 74 of Council Regulation no. 1698/2005 on support for rural development by the European Agricultural Fund for Rural Development (EAFRD), Bulgaria has set up the legal, statutory and administrative framework in order to protect the financial interests of the European Community. The institutional administration, control and implementation system for the Bulgarian Rural Development Program comprises the following:
The Managing Authority, represented by the Rural Development Directorate within the Ministry of Agriculture and Food (www.mzh.government.bg); The accredited Paying Agency is represented by the State Fund Agriculture of Bulgaria (www.dfz.bg); Certification organs were Grant Thornton OOD-Bulgaria by end 2007 and Deloitte OOD in the period 2008-2011.
Considering that in Bulgaria, for the administration of Community funds just one paying agency is active, there has been no Coordinating Body established respectively the liaison between the paying agency and the European Commission is the Managing Authority.
The accreditation of the paying agency falls within the responsibility of the Competent Authority, set up within the Ministry of Agriculture and Food.
The development of the Bulgarian system for the implementation of EAFRD is based on the institutional structure and the legal framework created to implement the SAPARD program. This can be best illustrated as follows:
Managing Authority
The Bulgarian Managing Authority, in accordance with Article 74 of Council Regulation no. 1698/2005 for the National Rural Development Program (NRDP) is the Rural Development Directorate with the Ministry of Agriculture and Food (MAF).
Besides the task of Managing Authority, the Rural Development Directorate is also responsible for the implementation of LEADER (M 41, M 431.1 and M 431.2) as well as for the Technical Assistance Measure (M 511).
In accordance with Article 75 of Council Regulation no. 1698/2005, the Managing Authority is responsible with the efficient, effective and adequate management and implementation of the Bulgarian Rural Development Program. By virtue of Article 75, Paragraph (2) of above Regulation, the Managing Authority has made use of its function to delegate a part of its specific functions to SFA, continuing to bear the entire responsibility for the efficient and adequate management and implementation of the delegated tasks. Within the implementation of the Bulgarian Rural Development Program the Managing Authority has delegated to the Paying Agency the following tasks:
The implementation of all measures of the Bulgarian Rural Development Program (financial application, evaluation, contracting, technical control, authorization, accounting and execution of payments) with the exception of the measures M 41 (including the National Rural Development Network as well as the selection of Local Action Groups remains in competence of MAF), M 431.1 and M 431.2 (all steps of
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administration up to authorization of payments is implemented by MAF) as well as M 511 (Technical assistance operations – projects implemented by MAF). The recording, collecting and storing of the statistical information on the financial and physical implementation of the Bulgarian Rural Development Program in an IT system, in a form proper for monitoring and evaluation. The observance of the obligations in regard to information and publicity according to Article 76, Paragraph (2) of Council Regulation no. 1698/2005.
Paying Agency and its delegated bodies
The accredited paying agency, by the means of Article 74, Paragraph (2) of Council Regulation no. 1698/2005 and in accordance with Article 6 of Council Regulation no. 1290/2005 for the implementation of the measures financed from the European Agricultural Fund for the Bulgarian Rural Development Plan 2007-13 is the State Fund Agriculture (SFA).
SFA was established by means of the Farmers Support Act in 1998. Its Managing Council was appointed to become the Managing Authority for the SAPARD Program (2000-06). In April 2007, SFA was accredited as the paying agency in accordance to Council Regulation no. 1290/2005. As the only paying agency of Bulgaria, it is accredited for the implementation of the Common Agricultural Policy (CAP – I & II pillar) as well as the Common Fisheries Policy (CFP) of the European Union. SFA performs its activities in compliance with the applicable European legislation, the Farmers Support Act, the decisions, rules, programs and instructions elaborated by the Management Board of the Fund.
The paying agency State Fund Agriculture has a structure formed by:
A central office in Sofia (SFA-PA); 28 district offices involved in the implementation and support schemes and measures (DISSM); 11 regional paying agencies (RPA); 11 regional technical inspectorates (RTI).
Certifying Body
In accordance with Article 5 of Commission Regulation no. 885/2006, the Certification Body carries out the controls both during and after the end of each financial year and is in charge with certifying the truthfulness, compliance and accuracy of the accounts of the accredited paying agency.
The Bulgarian National Audit Office functions as the Certification body and performs its examination in compliance with the International Audit Standards and the Guidelines issued by the European Commission.
Other important players
National Agriculture and Advisory Service
The National Agriculture and Advisory Service (NAAS) was established 1999 and is set-up as an advisory body, providing services to the farmers. It assists farmers filling out the applications for certain RD measures and thereby assists the District Offices of SFA. NAAS has 17 Regional Agriculture Service and 27 District Offices. For its activities NAAS is remunerated as the only beneficiary by funds of M 143 (consulting service).
District and Municipal Services of the Ministry of Agriculture and Food
The Ministry of Agriculture and Food (MAF) has 28 district and 234 municipal offices which support farmers filling out their applications for specific measures of axis II of the BG-RDP, which go align with the direct payments of CAP-I.
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Conclusions/Recommendations to 1. Evaluation Question
The administrative set-up of the Bulgarian administration of the Rural Development Program is coherent with EU requirements. The Bulgarian administration has established the necessary institutional structure, but also the defined units within the paying agency comply with the standards stipulated in the EC regulations.
2. Evaluation Question: To what extent is the division of responsibilities among the involved authorities (MAF & PA) clear and unambiguous?
3. Evaluation Question: To what extent is the administrative set-up transparent and appropriate?
6.10.1. Relations between Management and Control Structures
In accordance with Council Regulation no. 1698/2005 and having regard to the conditions and necessities specific to the Bulgarian rural area, the Managing Authority decided to use following implementation:
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Table 158: Overview of Implementation of RD Measures in BG
Submitting the Verifying the Technical financing eligibility or control application, selection Concluding the Submitting Authorization Accounting Execution of Internal setting up criteria / Risk On-the- Measure contract the payment of of payments payment Audit administrative administrative analysis spot respectively dossier payments dossier controls controls endorsement 111 PA PA PA PA PA PA PA PA PA PA 112 DISSM DISSM & PA PA RPA PA RTI PA PA PA PA 121 DISSM DISSM & PA PA RPA PA RTI PA PA PA PA 122 DISSM DISSM & PA PA RPA PA RTI PA PA PA PA 123 DISSM DISSM & PA PA RPA PA RTI PA PA PA PA 141 DISSM DISSM & PA PA RPA PA RTI PA PA PA PA 142 DISSM DISSM & PA PA RPA PA RTI PA PA PA PA 143 PA PA PA PA PA PA PA PA PA PA 211 DISSM PA - - PA RTI PA PA PA PA 212 DISSM PA - - PA RTI PA PA PA PA 214 DISSM PA - - PA RTI PA PA PA PA 223 DISSM DISSM & PA PA RPA PA RTI PA PA PA PA 226 DISSM DISSM & PA PA RPA PA RTI PA PA PA PA 311 DISSM DISSM & PA PA RPA PA RTI PA PA PA PA
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312 DISSM DISSM & PA PA RPA PA RTI PA PA PA PA 313 DISSM DISSM & PA PA RPA PA RTI PA PA PA PA 321 DISSM DISSM & PA PA RPA PA RTI PA PA PA PA 322 DISSM DISSM & PA PA RPA PA RTI PA PA PA PA 41 LAG LAG LAG RPA PA RTI PA PA PA PA 431.1 MAF MAF MAF MAF PA PA/RTI MAF PA PA PA 431.2 MAF MAF MAF MAF MAF MAF MAF PA PA PA 511 MAF MAF MAF MAF - - PA PA PA MAF 611 DISSM DISSM & PA PA PA PA PA PA PA PA PA PA = State Fund Agriculture (central PA); MAF = Ministry of Agriculture and Food; DISSM = District departments Implementation and Support Schemes; RPA = Regional Paying Agencies; RTI = Regional Technical Inspectorate; LAG = Local Action Group
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To summarize the above table there are 5 different systems established, expressing the relations of the administrative set- up, implementing the NRDP of Bulgaria:
1. RDP measures of axis I & III (excl. M 111 & M 143) as well as M 223, M 226 & M 611 2. RDP measures M 111 & M 143 3. RDP measures M 211, M 212 & M 214 4. RDP measure M 511 5. RDP measures under the LEADER axis
The bulk of the implementation of the NRDP – both expressed in amount of measures, number of claims and total expenditure - lies in the competence of SFA-PA. SFA is using its 28 district offices for the beneficiaries to submit their applications, the 11 regional paying agencies for submission of the payment dossiers and the 11 regional technical inspectorate offices to facilitate field inspections in the rural regions.
Whereas most measures of axis I & III are implemented in the authorization and contracting directorate of SFA, the implementation of the “area-based” measures of the Agri-environmental program and Less Favored Areas M 211, M 212 & M 214 is managed in the directorate responsible for the direct payments (SAPS). As the payment relevant unit for direct payments and measures 211, 212 & 214 is the area, the applications as well as the administrative set-up go align to comply with the Integrated Administration and Controls System (IACS).
For the implementation of the LEADER axis, the Managing Authority within MAF is responsible for the selection of the Local Action Groups (LAGs) based on their submitted Local Development Strategy and for their official recognition. The LAGs are responsible for the selection of local projects according to their strategy. They are obliged to verify the administrative dossier before submitting the payment claim of the beneficiary.
Conclusions/Recommendations to 2. & 3. Evaluation Questions
The coordination and relation among the administrative authorities, above all MAF and SFA are adequate to a satisfactory degree. The division of responsibilities is clear and unambiguous. The relations between the administrative authorities have improved since the beginning of the accession of Bulgaria to the EU.
An enhanced regional implementation model transferring the function of “authorization of payments” for the biggest part of the “non-area based” RD measures would lead to a more transparent and effective set-up.
Whereas it is conceivable that MAF has kept the competence of the LEADER administration from the beginning on, especially with the establishment of the Local Action Groups (LAGs), it is recommended to delegate the competence of LEADER administration within the next 2-3 years to SFA. This would not only be more positive for the beneficiaries, the use of existing structures of SFA would minimize administrative costs of RD implementation.
4. Evaluation Question: To what extent has the implementation of the program contributed to maximizing the intended impacts?
6.10.2. Implementing Procedures
As already more specifically emphasized in the thematic study on the administration of the NRDP, the administration of the “area-based” axis II measures (M 211, M 212 & M 214) make up the bulk of the applications, which is 92% (690.000 applications) of the total expected RD applications/contracts in the programming period 2007-13. Since these “area
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Some 7% of the total applications/contracts in the RD period 2007-13 fall under the axis I & III measures as well as the forestry measures of axis II. Whereas the bulk of these “non-area-based” RD measures are implemented in a similar line, there are specific administrative steps chosen for the RD measures M 111, M 143 and M 511. Based on the limited number of beneficiaries, this evaluation will scrutinize the RD measures with higher uptake.
Around 1% of the total applications/contracts fall under the LEADER contracts of axis IV, which are managed by the Ministry of Agriculture and Food.
Area based RD Measures
The application procedure takes place mainly on pre-printed applications in the time March to 15 May each application year. Since the applications are pre-printed, chances for bias are limited. The enrolment process takes place at the 28 District Offices for Implementation and Support Schemes (DISSM). These DISSM check applications for obvious errors and completeness, the files are sent to the central PA, to the Directorate for Direct Payments. At SFA-PA, the files are selected using risk analysis for field inspections. The field inspections (minimum 5%) according to Article 27 of Commission Regulation no. 1975/2006 are implemented by the Regional Technical Inspectorate (RTI), the results send back to SFA-PA. Next to the sample of claims have been checked on the spot, 100% of applications undergo administrative checks at Directorate for Direct Payments, SFA-PA. These administrative checks also include cross-checks with other registers. SFA-PA is responsible for the authorization, accounting and executing of payments. With the executed payments, the beneficiaries receive a notification on their payment.
Based on an audit by the European Commission there have been deficiencies found in the LPIS-GIS under the IACS system as well as flaws in field inspection of the area based RD measures. Based on these short-comings, the European Commission has clawed back 20.2 Mil. €.
Rural Development Measures of axis I & III (except M 111 and M 143)
The rural development measures under axis I & III are implemented by the paying agency, partially using their decentralized structure. Based on an interview with Deputy Director Simeonov beginning of July, the status on processed applications / claims with date 30 June 2010 is as follows:
Total number of applications 11.079 Of which processed applications 8.718 Of which not yet processed 2.361
Number of processed applications 8.718 Of which approved and contracted 6.863 Of which already paid 5.856 Of which have been rejected 1.458 Of which have been pulled back 397
According to the last amendments made July 2010 in regulations for procedures for support under the RDP, the evaluator tries to summarize the lengthy described procedures:
The application process takes place at the District Offices for Implementation of support schemes (DISSM). After conducting the necessary checks, the project dossiers proceed to SFA-PA. Within five months from the closing date for the reception of an application for support, the PA conducts administrative controls according to Article 26 of Commission Regulation no. 1975/2006. After administrative checks, selection and contracting high ranking projects, the contracted project dossiers are sent to the Directorate for Rural Development at SFA-PA.
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The beneficiary can apply for and “advance payment” at the Regional Office of the Paying Agency (RPA) and then start with his investment respectively activities. Similar procedure when beneficiary has finished the investment respectively activity and is ready for his final payment. Below describe the procedures of the involved bodies:
General Tasks of Regional Paying Agencies (RPA): 1. Accept requests for payment; 2. Carry out primary processing of accepted applications; 3. Send the processed requests in the central department of the SFA.
Procedures for payments in RPA: 1. Approval of the payment request not later than one month after the expiry of the contract, the beneficiary should fill an application for payment.
2. Check for completeness of the Documents. The inspection shall be conducted in the presence of the beneficiary or his authorized person. Each file must contain only original documents or certified copies. If the documents are complete and eligible the expert: gives a unique identification number of the application gives receipt to the beneficiary apply the checklists to the beneficiary’s dossier submits two checklists to the chief expert for verification.
3. Verification with the criteria for financing the expert completes signs and stamps on checklists and worksheets for payments submits the package to the chief expert for verification chief expert check and certify by signature that verification is done conducting procedure for checking the presence of double funding
4. Introduction of administrative data for the field visits done by the expert in the checklist, sign and stamp it chief expert checks again and signs verification
5. Preparation of compliance report Expert from the RPA checks and summarizes the results from the administrative checks. The report has to be signed by the Chief Expert and Head of RPA. The report should be registered in the relevant register. All checks should be recorded in the table for documentation movement and should be put as a first page of the dossier. All pages of the dossier should be sequentially numbered by the expert and must include the identification number of the application at the top of the page.
6. Copy and backup file Experts from RPA make copy of the dossier. The project is registered in the archive.
7. Send the dossier in the central office of the Paying Agency The full dossier with the original checklists and worksheet for payments and the report of compliance should be sent to SFA-PA, Department for Authorization of payments at Directorate Implementation of Rural Development Measures through registered post with back receipt. Protocol for delivery and acceptance is signed.
Worksheet for payments should be sent also in electronic format.
Within three weeks (15 working days) of the submission the request for payment should be processed.
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Procedures for payments in Authorization of payments at Department Implementation of Rural Development Measures at SFA-PA:
1. Registration of the dossier Expert stamp and sign two copies of the Protocol for delivery - one for RPA, and the other protocols’ register.
2. Verification of compliance with criteria for financing Chief of the Department randomly allocated projects between the chief experts and experts. Expert examines the documents according to the criteria for funding, completes, signs and stamps check list. The expert submits a package together with the checklist to the chief expert for verification. Chief expert complete and sign the section for further inspection checklist. In the event that the payment request complies with the eligibility criteria, the expert proceeded to the next stage. The expert checks for the presence of double funding.
3. Field visits according to Article 26 of Commission Regulation no. 1975/2006 This check covers all payment requests involving investments that have passed the previous stages. Field visit is carried out once in case of a single payment and before any of the interim payments. The expert from the Department check checklist for this. Chief expert completes section checklist for further inspection.
Head of the department randomly chooses two experts/main experts to carry out visits. The visit must be completed within 5 working days from the date of the travel order. Experts/main experts prepare report for results and signed checklist. The results of the examination shall apply to the project and take into account in the authorization of the payment request. If the results are positive, the payment request enters the list of applications for risk analysis to determine the sample of projects which will be checked by the Regional Technical Inspectorates.
4. Authorization of the payment request No. 1 Expert calculates the payment, taking into account the documents accompanying the request for payment, completes WP- template and prepares Authorization worksheet, table for ineligible expenditure and table of costs. Each table is printed out, signed and be stamped by the expert. Chief expert makes post-control.
5. Risk analysis for a sample selection for field visits
6. Field visits according to Article 27 of Commission Regulation 1975/2006 The responsible expert completes administrative data in control sheet. Chief expert check entered data and completed the section for further inspection of the checklist.
Also Application for field visits should be prepared and approved by the head of the department. Copy of all documents should be sent to the Technical Inspectorates. Visits should be made within 20 working days.
7. Authorization of the payment request No. 2 Expert and chief expert check requests for eligibility of assets and unit price for the asset. All checks are recorded in the table for documents’ movement. All pages of the dossier should be numbered by the expert and must include the identification number of the application at the top of the page. The heads of the PA (Executive Director and Deputy Executive Director) carry out specific checks, sign the relevant checklists and fill the table for ad-hoc checks.
8. Preparation of Authorization Letter The expert shall prepare a letter for authorization of the payment request and sign it. Chief expert checks and signs the Letter. An expert prepares protocols for delivery and acceptance for the authorization of payments to the Financial Department, Accounting Department and Department Payment. Letters and protocols are approved by the Head of the Department and Deputy Director of PA. Documents are sent to the Executive Director for decision and signature.
9. Notification letter for approval / rejection to beneficiaries
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Prepared by expert regarding data from Departments: Accounting and Finance. It should be signed by the Chief Director. All projects are processed in order of registration.
The procedure of processing should not exceed three months.
After that the bank is informed for the payments
10. Archiving of dossiers
11. Ex-post control It takes place after the investment and the final payment. The selection of beneficiaries, subject to further control is performed by the Department through risk analysis.
Tasks of Regional Technical Inspectorates (RTI) 1. Organize and carry out field checks of the applicants; 2. Keep written records and prepare reports on all checks; 3. Send documentation from the control and reports on central level of the PA.
LEADER implementation
For the implementation of the LEADER approach, the M 431.2 beneficiaries (who have contracted qualified expert teams to animate the potential LAG territory and potential LAG strategy and rules of procedure) file payment claims with the MA within MAF. The MA carries out administrative checks and then files the payment claims at the RD Directorate of SFA-PA. After the necessary checks, the RD Directorate of SFA-PA proceeds with the authorization of payments process.
Administrative procedures, investment-related measures (111, 121, 123), axis 1, Denmark The administrative process of the 121 and 123 measures is on the one hand very simple, and on the other supported of an integrated IT system guiding the processing of the applications through the various controls and check to be carried out of the experts responsible for the measures. A basic principle is that similar measures (such as 121 and 123) are clustered in the processing of applications in order to build up competence and take advantage of economies of scale among the experts involved in the processing of the particular measures.
Applications can be submitted within a window of a certain length, typically one month. Applications are accepted and registered In the IT system as they arrive to the Directorate. This completeness check is typically carried out of a non- academic secretary, see step 1 in the flow chart below.
When the window is closed, all applications are grouped in clusters of similarity of the experts involved in the processing of the measures, again in order to take advantage of economies of scale in the processing of similar applications. After the clustering and the instructions to the experts, including guidelines for processing, each cluster of applications is distributed to the relevant expert.
Expert 1 carries out the eligibility check supported of the IT system as step 2, where the application is registered. In the process he/she also checks the objectives, the budgets, the investments, the applied for support and any other issues of relevance for the approval of the application, depending on the character of the application. The expert also ranks the projects within his cluster in accordance to the selection criteria for the measure related to the objectives of the measure, the axis and the program as such. The processing of the application cannot continue in the IT system to expert 2, see below, if any of the defined procedures to be followed of expert 1 are not correctly implemented.
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Expert 2 carries out the verification of the eligibility checks as step 3. This is done in order to respect the four eyes principle. Again this is supported of the integrated IT system, where no release of the application to approval can take place without a verification procedure carried out of expert 2.
It is possible for the expert 1 to use a so-called Innovation Committee of experts from research, business and organizations, for a hearing procedure, if a cluster of applications are considered of high complexity, and where an independent hearing can support the decision process. It is as such a hearing and the outcome of the hearing might not be followed of the Directorate.
After the verification of expert 2, the application is passed on to the head of unit for approval and signature. The beneficiary can then be notified by e-mail or mail and the project be initiated. The time span from the application is received in the Directorate to decision is made is between 4 and 12 weeks. 4 weeks for simpler projects and 12 weeks if the Innovation Committee is involved.
In this way the application passes through four steps and four pairs of hands basically within the same office. Specific issues such as demand for additional information or rejections due to non-compliance to the administrative check etc are not covered here. Only the straight forward approval process of a typical application is illustrated below.
The resources used for implementing the Danish measures 111, 121 and 123 in an integrated support scheme during the period 2007 – 2009 is 10,622.7 man-hours. A total of 770 project applications have been approved and a small number of project applications rejected. If only the approved contracts (770 in total from 2007 to 2009) are used as basis for the calculation, we have used in Denmark in average 13.8 man-hours per project contracted following the procedures covered by the four steps procedures described above.
Conclusions/Recommendations to 3. & 4. Evaluation Question
To combine the implementing procedures of the “area based” measures of the NRDP (M 211, M 212 & M 214) with those of the direct payments (SAPS) is considered an appropriate and transparent set-up of the administration, which is comparable to set-ups in other member states. As the administration has chosen to use one application for area based RD measures and SAPS and is implementing those measure under the IACS system for administrative controls, it can be considered beneficial to reduce bureaucracy for both, the farmers as well as for the implementing administration. Furthermore, combining these two subsidy schemes can have positive implications on the uptake of the area based RD measures.
The procedures for the “non-area-based” RD measures of axis I & III as well as forestry measures of axis II are complicated; involve too many checks by different bodies of the administration. It seems that every application/dossier has to be signed by numerous employees at different level without knowledge of what is being signed for.
The division of responsibilities between the central PA and the district and regional offices is ineffective. It is inconceivable that the farm visits according to Article 26 of Commission Regulation No. 1975/2006 are being done by experts of the central PA. It would be wise to delegate this function to the regional paying agencies (RPA) as the nearness to the beneficiary would improve the quality of the data and above all reduce administrative costs.
Based on an interview held at SFA in July 2010 there is still not yet an official manual on machinery standards (costs) approved by the Government. This would be essential to facilitate administration of investment schemes based on machinery. In addition, the involvement of the “official agency responsible for construction” is a key to
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First efforts can be honored in terms of promoting training of staff of regional offices in the central PA. As a medium-term objective, SFA should try to delegate the function of “authorization of payments” to the regional offices of the paying agency (RPA). This would simplify administration and make the whole set-up more effective.
5. Evaluation Question: To what extent is the information about the program and the measures sufficient to ensure an appropriate uptake?
6.10.3. Satisfaction of Beneficiaries The satisfaction articulated by the beneficiaries with the administration of the NRDP program was collected in our survey and is expressed in the following tables.
How do you evaluate the role of the following institutions in the administration/organization of the measure?
Table 159: How do you assess the role of the following institutions in the administration / organization of the measure?
Very Not Very Do not satisfactory Satisfactory satisfactory unsatisfactory know
Ministry of Agriculture and Food (MAF) 13,78 17,63 14,68 11,73 5,69
Ministry of Environment and Water 4,51 10,72 15,06 12,50 20,26 National Veterinary Service 5,13 9,72 11,25 11,54 20,74
State Fund Agriculture - Paying Agency (SAF-PA) – central office 14,55 15,67 14,59 16,15 5,54 Regional offices SAF-PA 18,44 14,74 12,49 11,73 4,49 National Agricultural Advisory Service 19,89 11,02 11,25 14,04 8,50 District/municipality offices of MAF 17,93 15,79 14,39 14,23 3,87 Private consultants 5,78 4,71 6,29 8,08 30,91 Total 100,00 100,00 100,00 100,00 100,00 Source: Own questionnaire
The role of the National Agriculture Advisory Service (NAAS) is assessed as “very satisfactory” from 19,9% of the respondents. It is the highest positive rate compared to the other institution involved in the process of administration/organization of the all measures of RDP. Next are Regional offices of SFA/PA (18,4% of the respondents rated their role as “very satisfactory”) and Agriculture District Directorates/Agriculture Municipal Services (17,9% of the respondents mark “very satisfactory” as an assessment of their work). On the third place are SFA/Paying Agency–central
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More than 70% from the respondents “do not know” how to assess the role of the Ministry of Environment and Water (20,3%), National Veterinary Service (20,7%) and Private consultants (31%) which means that beneficiaries did not use the services of these three institutions.
Table 160: How do you assess the individual institutions
Very satis- Satis- Not satis- Very unsatis- Do not factory factory factory factory know Total Ministry of Agriculture and Food (MAF) 28,01 47,30 11,38 4,51 8,80 100,00 Ministry of Environment and Water 10,69 33,53 13,62 5,60 36,55 100,00 National Veterinary Service 12,75 31,92 10,67 5,42 39,24 100,00 State Fund Agriculture - Paying Agency (SAF-PA) – central office 30,26 43,04 11,57 6,35 8,77 100,00 Regional offices SAF-PA 38,18 40,29 9,86 4,59 7,08 100,00 National Agricultural Advisory Service 41,57 30,40 8,97 5,55 13,53 100,00 District/municipality offices of MAF 35,93 41,76 11,01 5,39 5,90 100,00 Private consultants 14,65 15,76 6,08 3,87 59,63 100,00 Source: Own questionnaire
The table shows that 75 % of the beneficiaires are very satisfied or satisfied with MAF, while on 16 % are either not satisfied or very unsatisfied. For SFA/PA the similar figures are 73 % and 18 %, while the figures for the regional offices of SFA are 78.5 % and 14.5 %, which is as good as for the district offices of MAF with scores of 77 % and 16 % respectively. Even though the scores are very positive, there is still room for improvements also compared with similar survey results from other countries, where satisfaction scores often are as high as 90 % or more.
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Source: Own questionnaire
How do you evaluate the following questions, connected with the application form for support under RDP?
The common assessment of all questions regarding the application processis satisfactory. It is the rate scored from more than half of the respondents. The distribution of this rate among the questions is as follows: 62,5% of the beneficiaries assessed the “Elements of the information, required in the application” as satisfactory, 58% of them put this mark for “Volume and relevance of the available information” and 57% assessed “Requirements about the documents that are to be presented” also as satisfactory. This assessment is much lower for the other three questions, respectively: “Transparency of the decision- making project at SFA/ Paying Agency” (for 39,2% from the respondents), “Duration of the procedure for project selection” (for 36,5%), and 33,2% rated “Procedure for project selection on the basis of the “first in, first served“ principle” as satisfactory. The negative rates for these three statements are higher and the total lack of satisfaction (“Not satisfactory” and “Very unsatisfactory”) is for transparency 30,7%, for duration 43,3% and for the selection procedure – 27,2%. The main conclusion is that the management/governance of the measures is not satisfactory for the beneficiaries.
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Very Very satis- Satis- Not satis- unsatis- Do not factory factory factory factory know Total Volume and relevance of the available information 18,70 57,99 11,66 4,39 7,27 100 Elements of the information, required in the application 18,10 62,46 9,26 2,36 7,83 100 Requirements about the documents that are to be presented 19,37 57,12 11,96 4,56 7,00 100
Duration of the procedure for project selection 7,04 36,47 27,14 16,14 13,21 100
Transparency of the decision- making processt at SFA/ Paying Agency 17,42 39,17 18,12 12,57 12,72 100 Procedure for project selection on the basis of the “first in, first served“ principle” 15,12 33,15 14,00 13,19 24,54 100 Source: Own questionnaire
The satisfaction is the highest for elements of the information required in the application, where 80 % of the replies are positive.
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The satisfaction is the lowest for the duration of the procedure for project selection. Here 43 % are not satisfied or very unsatisfied, while the transparency of the decision making process scores 31 % of negative replies.FIFS scores 27 % negative replies.
Among the all questions the highest rate – “Very satisfactory” have “Volume and relevance of the available information” and “Requirements about the documents that are to be presented” which are indicated by 20,5% and 19,8% of the respondents.
While “Duration of the procedure for project selection”, “Procedure for project selection on the basis of the “first in, first served principle” and “Transparency of the decision- making project at SFA/ Paying Agency” received the negative rate of “Very unsatisfactory” compared to the others respectively from 30,3%, 24,4% and 24,2%.
Very satis- Satis- Not satis- Very unsatis- Do not factory factory factory factory know Volume and relevance of the available information 20,53 21,33 13,24 8,62 10,53 Elements of the information, required in the application 17,87 20,66 9,46 4,16 10,20
Requirements about the documents that are to be presented 19,78 19,55 12,64 8,32 9,43
Duration of the procedure for project selection 7,40 12,84 29,49 30,31 18,31
Transparency of the decision- making project at SFA/ Paying Agency 18,79 14,15 20,21 24,22 18,09
Procedure for project selection on the basis of the “first in, first served“ principle” 15,63 11,47 14,96 24,37 33,44 Total 100 100 100 100 100 Source: Own questionnaire
Which are your three main sources of information in terms of applying for support under RDP?
The three main sources that respondents have used in order to get information about RDP are as follows: first of all Agriculture and Forests District Services (for 16,2% of the respondents), Regional offices of SFA/PA – 14,8% from respondents and NAAS – 12,9%. The second main group of sources are: TV (11,8%), Internet (10,5%) and MAF (10,2%). The specialized agricultural editions are the less used sources – only from 3,6% of the beneficiaries.
It is necessary for efforts to be aimed at direct contact with Agriculture and Forests District Services, SFA and NAAS.
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ranged on the Source of information 1st place 2nd place 3rd place Total in % Ministry of Agriculture and Food 369 11 10 390 10,24 SFA/ Paying Agency- central level 180 154 40 374 9,82 Regional offices of SFA/PA 359 146 57 562 14,75 Agriculture and Forests District Services (municipalities) 270 258 88 616 16,17 NAAS 163 223 104 490 12,86 Private consultants 30 89 44 163 4,28 Specialized agricultural editions 21 62 53 136 3,57 Press 51 116 62 229 6,01 TV 18 197 234 449 11,79 Internet 11 54 335 400 10,50 Total - - - 3809 100,00 Source: Own questionnaire
Compared analysis of the sources presents that MAF (25,1%) and Regional offices of SFA/PA (24,4%) are put on the first place from the most of the respondents. On the second place are rated Agriculture and Forests District Services (municipalities) – 19,7% and NAAS – 17% as used sources of information. While on the third the most used sources are Internet for 32,6% of the respondents and TV – 22,8%.
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ranged on the Source of information 1st place 2nd place 3rd place MAF 25,07 0,84 0,97 SAF-PA Central 12,23 11,76 3,89 Regional offices SAF-PA 24,39 11,15 5,55 District/municipality offices of MAF 18,34 19,69 8,57 NAAS 11,07 17,02 10,13 Private consultants 2,04 6,79 4,28 Agricultural newspapers/magazines 1,43 4,73 5,16 Press 3,46 8,85 6,04 TV 1,22 15,04 22,78 Internet 0,75 4,12 32,62 Total in % 100 100 100 Source: Own questionnaire
How do you evaluate the quality of the information seminars/ presentation materials of MAF in terms of:
The majority of beneficiaries have given positive evaluation (“Very satisfactory” and “Satisfactory”) to the quality of information seminars and materials, respectively for these under Axis I – 65,5%, Axis II – 58% and Axis III – 55,9%. The percentage of beneficiaries who could not evaluate (“Do not know”) the seminars under all axes is high – from 30% for Axis I, 35% for Axis II and 36,8% for Axis III.
Very satis- Satis- Not satis- Very unsatis- factory factory factory factory Do not know Total in % Measure under Axis I 22,14 43,40 3,70 0,72 30,03 100 Measure under Axis II 15,56 42,48 5,33 1,29 35,34 100 Measure under Axis III 15,70 40,18 5,70 1,67 36,75 100 Source: Own questionnaire
Among the measures the most satisfactory are information seminars and presentation materials for Axis I while the information seminars and presentation materials for Axis III compared to those for the two other axes are rated as very unsatisfactory from 44,2% of the respondents.
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Very satis- Not satis- Very unsatis- factory Satisfactory factory factory Do not know Measure under Axis I 43,31 36,15 26,59 20,93 31,01 Measure under Axis II 28,50 33,13 35,84 34,88 34,16 Measure under Axis III 28,19 30,72 37,57 44,19 34,83 Total in % 100 100 100 100 100 Source: Own questionnaire
Source: Own questionnaire
How do you evaluate the eligibility criteria and the criteria for the selection of projects that are to be supported under RDP? 1. To have more spot checks
2. They are sometimes not applicable for beekeepers
3. They are high for small farmers and it is almost impossible to apply for modernization for them
4. Criteria are generally good / to shorten the duration of procedures and quantity of documents required
5. To change the age restriction
6. Many of the criteria are redundant or should be proved more than once
7. In general the criteria are good, but it is necessary to have better access and transparency of the criteria
8. The time and order of the project submission should not be criteria
9. There are too many requirements that cause delay in the projects’ implementation
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10. The main criteria should be oriented towards young people in order to receive appropriate education and trainings, parallel to financing their farm and also towards environmentally friendly projects that improve the quality of agricultural products.
Do you think that the administration managing the support is appropriate As a whole, the respondents evaluate the administration managing the support as very appropriate.
Very Very appropri- Appropri- Inappropri- inappropri- Do not Total in ate ate ate ate know % Defining the legal framework - MAF 15,41 56,08 6,91 2,94 18,67 100 Implementing aid - SAF-PA 20,47 57,33 5,10 2,51 14,59 100 Source: Own questionnaire
MAF as authority defining the legal framework I appropriate for 56,1% and inappropriate only for 6,9%. Still it is the level of the respondents who do could not give an assessment is high – 18,7%. The administration which implement the aid – SAF/PA – is assessed again as apropriate. And the assessment very appropriate here it is a little bit higher than for MAF, respectively 20,5% compared to 15,4%.
For both of the administration very few respondents think that they inappropriate and very inappropriate.
Source: Own questionnaire
Do you have any additional comments or recommendations in terms of the way in which the measure was developed or is administrated?
1. The deadlines must be kept
2. Very large number of documents required and very long period between submission of application and obtaining of aid
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3. To reduce the number of required documents and verifications done from different level of administration
4. More transparency
Conclusions/Recommendations to 5. Evaluation Question
The satisfaction of the beneficiaries with the administration is highly articulated. This counts institutions participating in the implementation, in particularly the regional offices of the SFA.
The information of the program is also assessed to be very useful. On the other hand, the selection procedures and the transparency regarding these procedures are the most criticized of the various issues related to application procedures.
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6. Evaluation Question: To what extent is the management and administration of applications done at a technical competent level?
6.10.4. Staff (number and qualification) and Training
According to the Council of Ministers Decision 100 (16 May 2008), SFA counts a staff totaling 1.535 employees. More than half of SFA-employees (800) are working in the central headquarters in Sofia, 246 officers are employed on level of the district offices and 473 officers are employed on level of the regional offices. 348 of 473 employees are involved in the technical inspectorate.
Within the headquarters it is difficult to allocate the employees just to rural development as SFA also implements instruments of the 1. Pillar of the CAP (i.e. SAPS) or the CFP. Though, within the headquarters, 150 officers are employed in the rural development directorate of which 80 are involved with contracting and 70 officers with authorization of payments. Within the directorate involving direct payments, 40 officers are also involved with the implementation of the area based axis II measures (LFA and agri-environmental measures).
Since Bulgaria’s accession to the European Union in 2007 high quantities of personal within the MAF as well as SFA-PA have been dismissed of their duties. This fluctuation of staff has taken place especially on top and middle management levels. Since the beginning of this MTE project, there have been 4 different Directors responsible for Rural Development within MAF. Furthermore, within the first three years of accession, the paying agency has been managed by 4 (Drumev, Tadarakov, Kantchev and Yahova) different Executive Directors. In addition, a high number of Deputy Directors within the paying agency have been replaced in the same period. These fluctuations in personal lead to a loss of expertise and above all, in a loss of know how. Changes in management influence the effectiveness of administration by slowing down the decision making process.
An assessment of the qualifications of the staff within the central PA shows that there is a lack of agricultural expertise. Especially within the staff of the “Regional Technical Inspectorate” (RTI) there are limited employees with practical or theoretical knowledge of agriculture. It has been proven as a successful attribute with the technical inspectorate staff if the employees have farming background.
Conclusions/Recommendations to 6. Evaluation Question- SFA-PA
In comparison to most other paying agencies within the EU, the Bulgarian administrative set-up, which is, the central paying agency and decentralized offices are top-notch in terms of quantity of personal. This leaves open the question if the staff of the Bulgarian administration lack the qualification or if the administration is more complex compared to other member states?!
The comparative analysis of the thematic study on the administration of the RDP had already concluded that the BG administration has more than twice as many employees working in the central and decentralized offices of the paying agency as for instance in Austria. This fact is difficult to conceive, imagining that the Austrian administration has more application/claims to tackle, more beneficiaries to deal with and above all, higher annual payments in number and volume.
But also the ratio between the staff on central level to the number of employees in the decentralized offices stresses in BG that administration is focused on a centralized system. The total number of employees working in the Austrian administration on central and decentralized level are lower than the total number of staff at SFA-PA.
In the year 2010 there have been numerous trainings organized to have experts from the regional offices to work on
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Most employees of the Regional Technical Inspectorate have little, if not any agricultural background. It would be recommendable to take stronger focus for future selections to get more practical knowledge within the staff of the technical inspectorate.
The biggest worry seems to be the enormous fluctuation in staff, especially on management level. Besides the numerous changes on managing the RD Directorate of MAF, the Executive Director and the Deputy Directors of SFA have also been replaced on many occasions. To promote a strong administration, it is recommendable to keep the continuity of personal.
Similar findings were gathered regarding the administrative capacity of the Managing Authority. In August the 2010 MA submitted information about the number of staff, their qualification and experience with rural Development Programmes.
According to the Statutes of MAF, the Rural Development Directorate has 50 staff number, and there were 8 vacant places by the time of receiving the information in 2010. The information for the acting 42 experts55 indicated that:
- 22 experts were hired after 1 January 2008; this indicates that they did not have hands-on experience neither with the Programming of the BGRDP including the Ex-Ante and the preparation for CMEF compatible monitoring process (via a special Technical Assistance preparatory project in 2007.)
- Of the remaining 20, most have SAPARD experience in publicity, monitoring and reporting, but
- Only 4 remain from the very early SAPARD period where programming was joined with intensive EU training, and when programmed measures were translated into implementing ordinance in close cooperation with the SAPARD Agency.
Regarding the qualifications of the present staff the evaluators found out that the following distribution of expertise (mostly magistrate degrees, but also a few doctoral degrees):
Table 161: Distribution of expertise in the MA (Degrees from higher education)
Specialty Number of experts Ecology and Preservation of the Environment 3 Agriculture related (including agri-pharmacy) 1 Forestry related 1 Chemistry related 4 Hydro meliorations 356 Construction engineering (civil or public) 1 Tourism 1 Economics related: (9) - Agrarian economics 2 - Labor 2 - Industry 2 - Commerce 1 - Management of Economic Information and Data 1 - Macroeconomics 1 Law 6
55 But at least three are acting as secretaries and a chauffer. 56 But one of these left the MA shortly after the submission of the information.
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Management (4) - Business administration 3 - International economic relations 1 Accounting and Control 2 Journalism 1 Politology and International Relations and Eurointegration 4
The distribution of the qualification shows some relative imbalance in the expertise dedicated to the agriculture and forestry sectors.
It is also not certain whether the available qualifications are also distributed to the management of the most appropriate measure(s): i.e. it appears that agrarian specialist is managing the M123 processing measure, a hydromelioration expert is managing the M111 Training and Information measure, and magistrates in chemistry are managing the Axis 2 M214 Agro ecology measure.
Regarding the related and appropriate trainings57 which the experts joined after their employment as managers of rural development measures, their distribution is the following:
Table 162: Trainings undergone in the Managing Authority
Thematic training Number of trained experts58 Elaboration of strategies and formulation of policies 2
“Technical assistance for increasing the administrative capacity in the sphere of 2 EU policies”
“Preparation of the officers from the Bulgarian state administration for effective work with the EU institutions” (negotiation in the decision-making process in the 3 EU)
“Strategic planning and formulation of policies in the state administration” 1
“Basic course for project composition” 1
Specialization in European administrative practices 3
“European policies for equal opportunities” 1
Essence and major elements of the EU Structural Funds, the strategic 2 programming documents and operational programmes
Effective protection of the EU Community financial interests 159
Structural Funds of the EU 1
57 In fact a lot of experts also carried out other trainings – e.g. language skills trainings, or compuer skills, but they are not considered as ones adding to the experts experise in policy making, public administration and management of Rural Development Programmes. 58 The number actually trained experts is not 17, but 10 as significant part of same experts joined two or more trainings. 59 This person actually left shortly after the submission of the information.
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The above findings lead to the following conclusions and recommendations on the administrative capacity of the Managing Authority of the BGRDP
The above findings lead to the following conclusions and recommendations on the administrative capacity of the Managing Authority of the BGRDP
Conclusions/Recommendations to 6. Evaluation Question- Managing Authority
The administrative capacity of the Managing Authority seems to be severely decimated after the political change which took place in 2009. Very limited SAPARD expertise remains in the MA, but also very significant part of the present staff did not participate in the programming of BGRDP and the preparation for its monitoring.
There seems to be a deficit of expertise related to the formulation and implementation of policies in:
- Agriculture Sector and Sub-sectors
- Sustainable development of rural economies for balanced territorial development
- Quality of life based on inclusion, participation and improved local governance
The administrative capacity in the forestry sector also seems in need of strengthening as one person cannot be efficient in the policy formulation/implementation, measures monitoring and management, complaint management, publicity and information campaigns.
The thematic training of the experts seems scarce especially in view of the lost SAPARD knowledge and experience, but also in view of the ever growing expectations from the Common Agriculture Policy which should be working across the Community in synergy with the Related EU Policies in the knowledge based economy of the Single Market.
This deficit is demonstrated even in the work of Monitoring Committee, where draft decisions for modifications to the measures and their implementing rules are presented, without proper preliminary analysis what will be the effects on the network of socio-economic interrelations in the rural areas, and their impact on achieving Programme targets in an efficient manner.
These give grounds for the next set of recommendation aiming at strengthening the administrative capacity of the MA. It seems feasible to strengthen the administrative capacity of the Directorate via employment of particular specialists and targeted training for the relatively newly hired staff.
- Hire additional experts with qualifications in agriculture, forestry and processing industry; allocate to them particular analysis, monitoring and publicity tasks, but not all of them to every one of the experts; start specialization of the staff based both on expertise and personal skills
- Hire additional experts for Quality of Life (Axis 3 and 4) : with expertise in Urban planning
- Hire additional experts for Quality of Life (Axis 3 and 4) : with expertise in Local governance
- Hire additional expert(s) to serve as liaison between the Research and Development organizations as this will facilitate the implementation of M124 but also the implementation of the recommendations in the rest of the text to promote appropriate technologies also contributing to the achievement of the EU priorities
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- For the relatively new staff: carry out training in:
+ public administration and policy making in the context of the EU Community traditions and Acquis
+ Common Agriculture Policy: objectives, instruments, interactions among objectives, shifting taxpayers expectations and ensuing expected changes in the behavior of the stakeholder groups (including growing expectations for the provision of particular public goods), Strategic Guidelines for Rural Development60 presenting the expected contribution of the Community Rural Development Programmes towards the achievement of Supranational Community Strategies (Goteborg, Lisbon)
+ programme strategic management for Rural Development Programmes (EAFRD), based on strategic partnership with socio-economic partners and stakeholders groups
+ monitoring and evaluation of Rural Development Programmes, especially in view of the elaboration of key concepts like Quality of Life, which were not present during the BGRDP programming
In all cases, building a successful manager of BGRDP measures and Axis is a challenging and very expensive exercise. The experts performing such obligations should be fairly evaluated for their contribution in achieving programme objectives, but also protected from firing with every new political change in the Ministry.
The same holds true for the contributing experts in SFA-PA.
7. Evaluation Question: To what extent are the administrative costs in compliance with the programs budget and the uptake of the funds under the measures?
6.10.5. Cost Effectiveness and Efficiency
The administration of the RDP is costly, and it must be costly due to the detailed requirements to the administrative procedures described and evaluated above. However, the cost should in some way be in balance with the financial outlet of the program.
We know that the administration respectively paying agency in every member state is evaluated by the ratio between input costs and executed payments. From the experiences in Austria and Denmark the ratio between input costs and effectuated payments lies between 0,04 in Austrian and 0.1 in Denmark– that means for every 1 € paid to beneficiaries the total input costs account for 0,04 to 0.1 €. Since the evaluator does not have data on the budget of the administration in BG (SFA amongst others), it was not possible to calculate this ratio.
Conclusions/Recommendations to 7. Evaluation Question
The evaluator has no information on the budget situation of the paying agency and its delegated bodies and therefore was not able to calculate the ratio between payments made and input costs.
Based on the experience in other member states, the administrative costs could be minimized by continuing to delegate functions (i.e. authorization of payments) to the regional offices. As in the previous chapter (6.8.4)
60 COUNCIL DECISION of 20 February 2006 on Community strategic guidelines for rural development (programming period 2007 to 2013) (2006/144/EC)
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8. Evaluation Question: To what extent is the monitoring system supporting the data collection system both in terms of monitoring and evaluation of the program?
6.10.6. Monitoring
The monitoring of the RDP should be carried out in accordance with the provisions of Articles 80 and 81 of Council Regulation (EC) no. 1698/2005 as well as the Common Monitoring and Evaluation Framework (CMEF).
The Directorate for Rural Development, the Managing Authority for NRDP, within the Ministry of Agriculture and Food (MAF), is the authority responsible for managing and implementing the RDP in an efficient, effective and accurate way in accordance to Article 75 of Council Regulation (EC) no. 1698/2005. This Directorate has in its structure a Department, which performs specific tasks related to the elaboration of an adequate monitoring and evaluation system, namely the Implementation, Coordination and Monitoring Department. The issue of monitoring and the inappropriate use oif CMEF indicators has been touched upon several places during the report and will not be elaborated further here.
Conclusions/Recommendations to 8. Evaluation Question
The evaluator has concluded that the PA is not sufficiently supporting the monitoring data. Neither the monitoring database is adequately filled, nor do the job descriptions include responsibilities for monitoring duties.
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6.11. Answers to horizontal evaluation questions In this section, the common evaluation questions are answered based on the findings from the previous sections and chapters. Not all evaluation questions are adequately answered in this draft report, but the answers will be developed further.
HCEQ 1. To what extent has the programme contributed to the realization of Community priorities in relation to the renewed Lisbon strategy for growth and jobs with respect to: - the creation of employment opportunities? AXIS 1measures as well as M211 and M212 and M611via the Direct Payments under CAP I have contributed to the preservation of jobs in the agriculture holdings. M112 has created more than 8000 new jobs, but their sustainability depends on the endurance of the supported holdings, which endurance has been rated as 2. to a less extent The major Axis 3 measures adding to employment outside agriculture had not been started in the evaluation period and did not create job places. The prevailing majority of the submitted applications under M312 for the creation of solar parks, however, cannot create even close the programmed targets for newly created employment. The general evaluation to this answer is: 2. to a less extent (and not in the programmed Axis 3)
- ameliorating the conditions for growth? At programme level: 2. to a less extent (mainly because of the M112 and to some extent form M121) At individual measure level: M 111, M122, M123, M141, M142, M311, M312, M313, M511: 1: To no extent, at all. M 112, M 121, M321, M322: 2. to a less extent M143: 4: To a high extent The general evaluation to this answer is: 2. to a less extent (but the lack of synergy among measures and the uncertain endurance of the M112 beneficiaries undermines this)
HCEQ 2. To what extent has the programme contributed to promoting sustainable development in rural areas? In particular, to what extent has the programme contributed to the three priority areas for protecting and enhancing natural resources and landscapes in rural areas: - biodiversity and the preservation and development of high nature value farming and forestry systems and traditional agricultural landscapes? 2. to a less extent - water? 2. to a less extent - climate change? 1. to no extent, at all mainly due to extremely low implementation of the forests measures 223 and 226
HCEQ 3. To what extent has the programme integrated environmental objectives and contributed to the realisation of Community priorities in relation to - the Göteborg commitment to reverse biodiversity decline? 1. to no extent, at all
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- the objectives laid down in Directive 2000/60/EC establishing a framework for Community action in the field of water policy? 1. to no extent at all due to non-start of AE scheme on riparian habitats and minimal uptake of the SW schemes - the Kyoto protocol targets for climate change mitigation? 1. to no extent, at all mainly due to extremely low implementation of the forests measures 223 and 226
HCEQ 4. To what extent has the programme contributed to achieving economic and social cohesion policy objectives with respect to: - reducing the disparities among EU citizens? Insufficient number of the programmed measures are implemented in imbalanced manner on the territory of the country. The rate of achieving the programmed targets is far below the identified needs. There is no synergy in the implementation of the measures, important measure improving the quality of the human potential and supporting innovation are not implemented. The general evaluation to this answer is: 1: To no extent, at all. - reducing territorial imbalances? The implementation of M112 and M121 in the absence of M311 and M312 actually increase the territorial imbalances regarding the development prospects of the farms, entrepreneurs and the general districts economy (see the findings for Kardjali and Smoljan) The general evaluation to this answer is: 1: To no extent, at all.
HCEQ 5. To what extent has the programme successfully targeted the particularity of the agricultural activities in the programming area with respect to: - the social structure of the programming area? BGRDP was not implementing important RD measures which substitute/replace/outweigh the negative effects from one another (i.e. M141 and M142 helping the smaller holdings to increase their access to markets, M311 and M12 – to provide safe exit from agriculture to the holders who need to close agriculture activities because of impossibility to meet standards and requirements) There is a dissonance in implementing the M121 and M112 (and M141&142 -which implementation had been delayed and sufficiently promoted via M111, M143, M511). The greater part of the payments in Axis 1 reached already established and competitive holdings in the field crops sector, rather than smaller semi-subsistence (M141) or emerging holdings (M112) in the rest of agriculture subsectors (including the priority milk, fruit and vegetables sub-sectors, and the needy for quick restructuring milk and tobacco holdings). This had rather adverse effects on the social structure of the programming area with concentration of the wealth and production factors in fewer hands rather than the opposite. The general evaluation to this answer is: 1: To no extent, at all.
- structural and natural conditions of the programming area? The majority of BGRDP payments were concentrated in few districts in the hands of few already established holdings operating in few of the numerous agriculture sectors of Bulgaria.
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Measures M311, M312, M313 were not in practice supporting applicants wishing to develop and take advantage of the rest natural conditions in the programming area. The general evaluation to this answer is: 1: To no extent, at all.
HCEQ 6. To what extent has the programme successfully targeted the particular situation of the programme area e.g. depopulation or pressure from urban centres? Axis 3 measures improving the quality of life were not implemented/no payments were effected in the evaluated period. The general evaluation to this answer is: 1: To no extent, at all.
HCEQ 7. To what extent has the programme contributed to restructuring and modernisation of the agricultural sector? The Programme contributed to a large extent in the modernization of the field crops sector (M121), and to a less extent other sub-sectors from the plant production sector (M112 and M141). Animal sector was the least supported. The general evaluation to this answer is: 1: To no extent, at all.
HCEQ 8. To what extent has the programme contributed to further develop high quality and value added products? The questionnaires do not prove programme contribution in this aspect. The general evaluation to this answer is: 1: To no extent, at all.
HCEQ 9. To what extent has the programme contributed to promoting a strong and dynamic European agrifood sector? The Programme did not support most of the agriculture subsectors. The programme did not support the processing capacities via M123. The general evaluation to this answer is: 1: To no extent, at all.
HCEQ 10. To what extent has the programme contributed to promoting innovation in the European agrifood sector? The questionnaires do claim programme contribution in this aspect. However, the investments associated with management and marketing based on ICT, introduction of ISO systems, in energy and water savings, in introduction of new products, in production of quality and organic foods are not very common and the invested amounts – not significant. The general evaluation to this answer is: 1: To no extent, at all.
HCEQ 11. To what extent has the programme strengthened arrangements for partnerships between the regional, national and European level? The general evaluation to this answer is: 0: Do not know.
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HCEQ 12. To what extent has the programme contributed to the promotion of equality between women and men? The general evaluation to this answer is: 0: Do not know.
HCEQ 13. To what extent has the programme ensured complementarity and coherence between the programme measures and actions financed by the Cohesion Fund, the European Social Fund, the European Fisheries Fund and the EAFRD? The Operational Programmes cofinanced by the listed EU funds were not active in selecting/contracting, but especially in paying on contracts in the evaluated 2007-2009 period. The general evaluation to this answer is: 0: Do not know.
HCEQ 14. To what extent has the programme maximized synergies between the axes? There is no synergetic effects from implementing the measures in Axis 1 – targeting the improvement of the general socio- economic situation in the rural areas. Axis 2 and Axis 3 were hardly implemented in the said period. The general evaluation to this answer is: 1: To no extent, at all.
HCEQ 15. Тo what extent has the programme contributed to an integrated approach to rural development? Same as above answer to HCEQ 14. The general evaluation to this answer is: 1: To no extent, at all.
HCEQ 16. To what extent has the technical support increased the capacities of the managing authorities and other partners involved for implementing, managing, controlling and evaluating rural development programmes? In the evaluated period the major focus of the general evaluation to this answer is: 1: To no extent, at all.
HCEQ 17. To what extent has the European Network for Rural Development contributed to establish good rural development practice? 1: To no extent, at all.
HCEQ 18. To what extent has the programme design been successful in avoiding deadweight and/or displacement? The deadweight of the NRDP investments presents, how big a share of the total investments the beneficiaries would have invested also without the programme support. If the beneficiaries will not invest anything without the programme support, the investments do not carry any deadweight, and is 100 pct additional. Opposite: The beneficiaries will invest the full investment also without the support, and in these cases the deadweight is 50 pct of the investment equal to the support.
In most situations the investments are composite investments, where the character of the investments (quality, quantity and timing) will be dependent on the availability of support. This composite character of the investments, which also might include components related to EU standards, makes it in practical terms difficult to achieve no deadweight at all in the investments. As a rule, between 10 % and 20 % is good and acceptable, while higher dead weight rates should cause some concern. The reason is as follows:
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If a government wishes to invest 100 million € on health care in order to increase the capacity and the quality of the sector we will expect that most of the money actually will be used for the purpose and the dead weight will be close to zero. On the other hand, if the same government wishes to invest 100 million € in agriculture in order to increase capacity and quality, and the farmers would have made 25 % of the investment also without support, these 25 % of the government support will displace private capital, and the farmers can use these resources for order purposes, for ex sample new private cars or vacations to the Black Sea. As a consequence the government gets only for 75 million € increased capacity and quality in agriculture, but for 25 million € of new cars and vacations. That was not the idea with the intervention and the use of the tax payers money, and therefore, dead weight is not acceptable from a political point of view.
The dead weight of the three measures 112, 121 and 141 is presented in the table below.
Table 163: Dead Weight of selected measures, axis 1
Measure Total public support, M€ Dead Weight, Million € Dead Weight, % 112 102.4 7.23 7.1 121 217.1 72.9 33.6 141 5.6 1.26 22.5 Total 325.1 81.4 25.0 Source: Own calculations based on Surveys, 2010
The result is that the three measures carry a dead weight on 81.4 million € equal to 25 % of the total public expenditures to the three measures. This average is in the upper end, and is probably not acceptable. However, the figures differ from the one measure to the other. Measure 112 Young farmers, carry only 7 % deadweight, which is fine, and is lower than what is experienced in other EU countries, where support to young farmers typically is considered to carry much dead weight. In Bulgaria we see that the support to young farmers is needed in order to make them interested and willing to invest in farming activities.
For measure 141 the dead weight is 22.5 % equal to modest 1.3 million €. The amount measured in € is not big, but the percentage is. The dead weight signals that a quarter of the farmers would have tried to develop their farms in to commercial farming also without the support, and that is understandable. In order to improve the income and the living conditions, many semi subsistence farmers will do their best to develop their farming, and therefore some dead weight must be accepted.
Measure 121 carries on the other hand the largest share: 33.6 % deadweight. This measure is also to biggest measure in terms of public support and therefore this measure contributes to a big share of the 81 million €.
The best way to assess the dead weight of a programme is to compare the calculations with similar programmes in other countries. We have compared the results from this MTE with similar surveys in four new member states.
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Table 164: Investments also without support, measure 121 in Bulgaria 2007-2009 RDP, measure 3.1 in Romania, Czech Republic, Slovenia and Slovakia, all SAPARD midterm evaluations Bulgaria, 2007-2009 Romania, Czech Slovenia, Slovakia, Total public support to Measure Pct. Republic, Pct. Pct. investments, mill. € Deadweight Pct. Mill € Pct
121 217.1 72.9 33.6 13.6 15.0 23.9 15.0 (3.1 under SAPARD) Source: Own calculations based on questionnaires
The deadweight is calculated on the basis of the co-financing rate, which is 50 pct for the measure. As mentioned, we have asked the beneficiaries how big a share of the investment they would have invested also without the programme support. The answers are extrapolated from the survey results to the total number of beneficiaries (approved contracts) under the measure by the end of 2009.
As it is indicated in the table the investment support to measure 121 carry a relative big deadweight. 33.6 % of the public support to the sector equal to 72.9 million € would have been invested also without the support and the investment would then have been financed with private money. This share is double as big as the average of the four countries compared with here. From a general programme support perspective this is not acceptable, and the dead weight should be reduced through all relevant means.
In order to do that it is necessary to know the types of farmers under measure 121 (sector, large or small) carrying the largest share of the deadweight. Our survey provides us with data about the sector belonging of the beneficiaries. The majority (95%) of the beneficiaries are producers of grain and other field crops, while only 5 % are producers of other products. We have looked into the dead weight of these other producers, and the results show us that the dead weight us non-field crop producers is much lower than for the population (grain producers) as a whole.
The dead weight for non-field crop producers under measure 121 is only 9.3 %, and therefore less than one third of the beneficiaries in total for the measure. This figure is comparable with the level for the four countries we compare with here.
The conclusion is that support to investments in machinery and equipment for production of large scale crops like cereals, soya etc carry a higher dead weight, than investments of a more complex character, also contributing to the fulfilling of EU standards, which is the case for investments in dairy farms, animal breeding and similar productions. Therefore, the recommendation must be to target the public support to sectors, where the EU standards end the Acquis related investments are needed, instead of supporting expansion of the machinery park for the large scale producers of cash crops.
The experience from an old member state, Denmark, shows the same picture. Investment support in a broad sense to the agricultural sector did carry an unacceptable high dead weight in the 2000-2006 programme period (more than 40 %), and thus the measure was redesigned for the 2007-2013 programme period. The new design is focusing on innovation and new technologies as well as the contribution of these new technologies to public goods in terms of environmental benefits from production, reduced emissions, reduced use of pesticides, better working environment for the work force etc. The current midterm evaluation in Denmark has demonstrated the success of this transformation of the support. Now the dead
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Consequently, the general conclusion to this answer is: 1: To no extent, at all.
HCEQ 19. To what extent has the programme design been successful in encouraging multiplier effects? The evaluation question has two dimensions. On the one hand the multiplier effects must be estimated, and on the other hand the programe design must be assessed regarding its contribution to the multiplier effects.
The calculation of the multiplier effects
One approach to assess the socio-economic impacts of the NRDP is to use the Keynesian multiplier as a tool in order to calculate the overall effects on income and job creation in the economy.
The Keynesian multiplier operates in the following way: If the Government through public spending, as is the case with the public support under the NRDP, pumps money into the economy, this additional money for example to a farmer to invest in modernization of the agricultural holding, will represent a purchasing power of the farmer. This income will be invested in various goods in the economy (machines, construction materials, labor etc.), and thus the suppliers of these goods and labor force will have an additional income, which also is spent on other goods and services, again creating an income for the suppliers of these goods and services.
Depending on how much of this additional income to the suppliers and to the labor force, each of them will spend or save, the effects throughout the economy will vary. This willingness to use the income on spending on consumption or investments or on savings is called the marginal propensity to consume (MPC) or invest, and is the share of the additional income, which is used on consumption/investments. The higher the share used on consumption is, the higher is the multiplier effects in the economy.
Two other factors must be considered as well. The first is the marginal income tax rate. If a supplier or a worker receives an additional 100 € in income, a part of this will go to income tax. Thus, the money available to consumption and/or savings will be reduced with this marginal income tax rate. The bigger this is, the smaller is the multiplier effect on the economy.
Finally, a part of the goods purchased of the suppliers and workers will go to imported goods. The bigger this share of the consumption is, the smaller is the multiplier effects in the national economy. This share of the income used on imports is called the marginal propensity to import (MPM).
Therefore, to use the multiplier in the assessments of the socio-economic impacts for income and job creation we will need to have reliable estimates for the marginal propensity to consume, the marginal income tax rate and the marginal propensity to import in the Bulgarian economy.
The Bulgarian economy is favored with a low income tax. A flat rate of 40 % of the income is paid in total of all taxes. This counts also for additional income and there is no progression in the income tax rate. Therefore, the marginal income tax rate as well is 0 %. We will use this tax rate in the multiplier.
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The marginal propensity to consume is more difficult to estimate, but it can be done in this way: It is the experience from analyses of this factor in various economies that the MPC is low, if you have a high income, and it is higher if you have a small income. This is of course logical: If one citizen in the city, for example, has a high income, he/she might find it difficult to find a way to spend the whole amount of the additional income, and a relatively big share of the additional income will be saved or used to reduce debts, which has the same effect on the multiplier. On the contrary, the poorer worker or farmer in rural areas might find it convenient or even necessary to spend the full amount on consumption. Here the MPC is high. The majority of the support granted through the NRDP targets the rural areas, and it is therefore reasonable to estimate a relatively high MPC, also even higher than what might be used as a national average of the national economic institutions. The beneficiaries of the NRDP support vary of course regarding income and social status. Therefore we cannot expect that all additional income is spent on consumption, although it probably is a relatively big share. Here we will decide that the MPC is 0.8 as an average for beneficiaries under the programme. This means that 80 % out of an additional net income after tax (40 % of the gross additional income) is used for consumption, while 20 % are saved.
Finally, a share of the consumption goes to imported goods and services. We know from other countries that the share of imported goods in the consumption is lower in rural areas than in urban areas. This will lead to a low MPM, but on the other hand we also know that some of the measures under the programme provide support to technology investments, often with a relatively high share of import components. It is for example the experience that investments under measure 123 Processing carry a higher share of imports than investments under the measures Modernization of agricultural holdings and Diversifications of economic activities. In Bulgaria the share of the investment under measure 121 for imported goods is very high: It is more than 80 % (In Romania the average import rate under SAPARD was 72 %), but on the other hand we expect that the MPM for rural families and workers in general is much lower and even zero. Based on these observations we decide to use a MPM of 0,2. This means that 20 % of the net income used on consumption is spend on imported goods.
Thus, we have the following input to the calculations:
Marginal income tax rate = 0.4 Marginal Propensity to Consume = 0.8 Marginal Propensity to Import = 0.2 Total public support 2007 – 2009 (approved and contracted) = 582.14 million €, exclusively complementary direct payments under measure 611
Effects on income generation
Using the traditional formula for calculating the multiplier we find that the multiplier in this situation with the defined preconditions is 1,39. With the public support approved and contracted for the period 2007 – 2009 of 582.14 million €, the public support contributes with a growth in income of the economy of 808.5 million € or a net growth of 226.4 million €.
However, due to the delays in payments, the real impacts are much lower. It is clear that the multiplier is depending on the fact that the public support is paid out. Otherwise the investment will not represent a demand and a derived consumption. If we instead use the factual paid out money to beneficiaries for the period, which is 125.7 million € (measure 611 not included), the contribution to the growth in the economy is reduced considerably to 175.6 million € and a net growth of 48.9 million €. This is a reduction in the contribution to income generation of 632.9 million € similar to a reduction in the net growth of 105.9 million €.
Thus, from a socio economic point of view it is very costly to have too big delays in the payments to the beneficiaries. We recognize that there always is a time lag between approval of projects and effected payments, in particularly for complex
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Beside the effects of the multiplier, we will also see effects of the investments made, for example in terms of increased factor productivity, better quality of products, better management skills etc. These benefits will be dealt with at a later stage.
Effects on job creation
Another issue is the creation of jobs through the investments and the public support under the programme. How many jobs can be expected of the increase in income generated of the public support? We do not have an average figure from any socio economic institution indicating the costs per job created in Bulgaria. However, from other countries we have data for the costs of jobs created and maintained in RDPs. Comparable figures are available from Romania, where the SAPARD programme did create 10.800 new jobs with a total public support of 133 million €. The unit price per job created in Romania was around 12.500 € per job or around 80 jobs per 1 million € in public support. The indirect job generating effects of the multiplier is not included here.
Using this figure as reference, we could expect more than 46,000 jobs created in Bulgaria with 582.14 million € in public support as well as another 50,000 jobs created indirectly due to the multiplier effects.
The SAPARD midterm evaluation update in Bulgaria did not provide information about job creation effects. However, the ex ante evaluation of the NRDP in Bulgaria provides another estimate of the expected costs per new job created in measures under axis 1, as well as under other axes. It is expected that the NRDP for the full programme period will create 3,129 new jobs for a total public support of 1,214.01 million € under axis 1. This is equal to a unit price of 388,000 € per new job. If we include the expected number of jobs retained (maintained), which is another 11,000 jobs, the unit cost is getting down to 86,000 € per job created and/or maintained. This figure is far away (almost 7 times bigger) from the realized effects of SAPARD in Romania.
Our estimates based on the questionnaire surveys in Bulgaria for the 2007-2009 period tells us that we have created or maintained around 6,660 jobs for the public support of 300 million € for measure 112, 121 and 141. The unit cost is 43,000 € per job created and/or maintained, and we get 22 jobs per 1 million € in support. If the indirect effects are included, we create another 7,250 jobs due to the axis 1 support under measures 112, 121 and 141. The effectiveness in terms of job creation of the support in Bulgaria compared to the SAPARD support in Romania is only a quarter, but the price is almost half of the expectations in the ex ante evaluation of the NRDP.
Our conclusion is that the ex ante evaluation underestimated the job creation effects of public investments and the cost per job as well. On the other hand we find that the realized job creation effect so far under the programme has been disappointing compared to the experiences from Romania.
The reason is, according to our assessment, that the majority of the projects implemented so far , for example under measure 121, has been technology intensive projects contributing to a higher total factor productivity at the farms and therefore to less job creation. The achievements in terms of higher factor productivity are good in the light of the objectives of the programme regarding increased competitiveness, and this is appreciated, but these achievements cannot stand alone. Job creation is also an objective of the programme and an intensified effort to implement projects with better job creating potential is needed.
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Table 165Target for job creation / retention, ex ante evaluation, NRDP, pg 93-94, and realized 2007-2009
Retained Created Realized 2007-2009 Axis Number % Number % Number % 1 10 994 38% 3 129 18% 6 660 ? 2 13 054 46% 300 2% ? ? 3 4 375 16% 13 800 77% ? ? 4 0 0% 520 3% ? ? Total 28 423 100% 17 749 100% ? 100 Source: BG NRDP 2009; Own survey 2010
Table 166: Job creation, direct, measures under axis 1 SAPARD Romania BG Ex ante evaluation BG Realized 2007 - 2009
Public support, million € 133.0 1,214.0 286.3
Number of jobs created 10,800 14,125 6,660 and maintained
Unit cost per job 12,315 85,947 42,992
Source: SAPARD Midterm evaluation update, 2006; BG NRDP 2009; Own survey 2010
Beside the jobs created through the direct investments, the income generated through the multiplier effects also contribute to job creation. If we use the experienced unit price per job = 43,000 € and we relate this figure to the increased income in the economy due to the multiplier effect, being 226.4 million €, we generate additional 5,250 jobs due to this indirect effect.
In total we generate 6,660 jobs through the investments on farms, and another 5,250 jobs indirectly in the economy due to the multiplier effects.
The contribution of the programme design to the multiplier effects As indicated above, the calculated multiplier effects are based on a general investment Keynesian multiplier, not depending in any way on the programme deisgn. The effects are caused of the sum of the public spendings independently of the programme design. From the previous sections in the report it is clear that the implementation of the individual measures has taken place without strategic considerations on the potential interactions between the various measures. Therefore, it is the conclusion that the programme design in general and its implementation in particular has not contributed to optimizing the multiplier and synergy effects of the implementation. For the evaluated period the general conclusion to this answer is: 1: To no extent, at all.
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7 Conclusions and Recommendations
7.1. Main conclusions
The main conclusions of the evaluation are structured in relation to the evaluation criteria used throughout the evaluation report. Detailed conclusions are to be found also in other sections of the report, for example under each section evaluation individual measures. Here are the main conclusions summarized.
7.1.0. Relevance The NRDP is a highly relevant programme for the development and modernization of the agricultural and rural sector in Bulgaria. The assessment of the challenges, needs and problems in the sector shows that the intervention logic used as the basis for the programme prepared in 2006, when the programme was designed, is still intact and valid.
The agricultural sector and the rural dwellers are still faced with structural problems in production, low productivity and quality of the products and difficulties competing with imported products. The result is low income, poverty and lack of jobs. Furthermore problems with complying with all EU requirements is still observed in particularly for the small scale farmers, leading to negative environmental impacts from production. Consequently, in general the quality of rural life in Bulgaria still need the support from the NRDP.
The conclusion is therefore that the programme is very relevant and that the implementation of the NRDP should be enhanced in order to meet the challenges of the sector, even though minor modifications in the budgets might be relevant due to the structural development in the sector.
7.1.1. Effectiveness The effectiveness of the programme implementation is primarily measured in terms of the value and number of contracted projects/contracts/actions under the various measures.
In total, the programme has in the period from 2007 to end of 2009 demonstrated an economic effectiveness of 52.2 % measured as the value of contracts and projects compared to the total programme budget for the period of 3 out of 7 years. 736 million € has been contracted out of a total budget of 3,278.8 million €. This mean that only around half of the average expected up-take of funds in terms of contracts has been achieved.
There are big variations among axes and measures. Axis 1 has an effectiveness rate of 62 %, axis 2 of only 4.6 %, axis 3 on 52.7 % and axis 4 of 118 %. Some of the measures, in particularly measure 112 and 121 for the non-guaranteed budgets, have demonstrated big effectiveness, and for both these measures the budgets for the whole programme period are used now. On the other hand other measures have demonstrated low effectiveness, such as measure 141 on support to semi subsistence farmers and the sub-measures for guaranteed sectors under 121.
All measures under axis 2 are demonstrating low effectiveness, while the measures under axis 3 are doing well, in particularly measure 322.
The consequence of the demonstrated low effectiveness overall is that the support needed for the sector in order to meet the challenges is not invested, and the problems are remaining in the sector. Therefore an enhanced and intensified effort
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Elaboration of ongoing and mid-term evaluation of the RDP 2007-2010, Bulgaria must be made in order to increase the effectiveness of the programme implementation during the remaining period of the programme. In average the yearly effectiveness must be raised with 72 %61 in order to ensure the needed effectiveness and the relevant utilization of public support to the rural areas and the agricultural sector. The needed administrative effort must be made to make this happen.
The task at hand is also demonstrated from the number of contract made during the period. For the entire 2008-2009 period the SFA-PA managed to assess and contract 4,835 proposals and to effect payments on 2,046 of them. These figures are very low compared to the almost 60,000 contracts programmed distributed on 41,000 + 4000 + 11,000 + 2900 contracts programmed under the measures of Axis 1, Axis 2, Axis 3 and Axis 4 respectively. The technical effectiveness is then 20 % measured as the number of approved applications in relation to the expected yearly average, and in average almost 14,000 applications must be approved yearly in the rest of the programme period compared to the 2,500 during the first two years of implementation.
The conclusions are emphasized in the dots below: The implementation of the measures except for M112 is severely lagging behind compared to the programmed outputs targets for the particular measures The implementation of BG-RDP is highly unbalanced: M112 and M121 has been prioritized by the SFA-PA without preceding proper analysis for best achievement of Programme objectives to meet urgent socio-economic needs There is a certainty that Axis 2 measures, as well as M141 Supporting Semi-Subsistence Farms Undergoing Restructuring and M142 Producer organizations will not utilize their programmed budgets, thus their programmed contribution to BG-RDP objectives and EU-level goals will be inadequate There is a big risk that a significant part of the 2009 budget will be de-committed in 2011
7.1.2. Effects and efficiency
The effects of the interventions under the programme are of course related to the types of measures and projects being implemented, and the scale of the effects is as well a function of the effectiveness of the implementation. Low uptake of funds leads to low effects. The two measures under axis 1 contributing to the effects provide contracted, but not yet all paid investment of 4.096 young farmers under measure 112 and 1,871 farmers under measure 121, of which the huge majority are cereal producers and producers of industrial crops. We are aware that contracted projects might be cancelled for various reasons, but still we use the contracted projects as basis for the calculation of the effects expecting the projects to be implemented as planned.
Economic effects Our estimates based on the questionnaire surveys among beneficiaries during the 2007-2009 period, compared with other statistical sources, tell us that the programme has created or retained around 7,000 jobs for the public support of 300
61 736 million € has been contracted in 2 years equal to 368 mio. € per year. 2.544 million € in public support are still in the pipeline (budget) equal to 636 million € per year.
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Elaboration of ongoing and mid-term evaluation of the RDP 2007-2010, Bulgaria million € for measure 112, 121 and 141, if we anticipate that the applications under this last measure are approved. The unit cost is 43,000 € per job created and/or retained, and we get 22 jobs per 1 million € in support. If the indirect effects are included, we create another 7,250 jobs due to the axis 1 support under measures 112, 121 and 141, as well as 5,250 contemporary jobs indirectly from the multiplier effects of the support. The surveys also tell us that a total of 100 million € in additional turnover is being created among the beneficiaries due to the investments under the two measures 112 and 121. This turnover creates a total additional gross value added (GVA) of 62 million € and an additional net value added (NVA) of 28 million €. Compared to the set targets for the programme, these achievements are very positive. It is expected to generate 175 million € in additional GVA for the whole programme period, and 62 mill. € for the period from 07 - 09 represents 83 % of the target with contributions from measure 112 and 121 alone. Furthermore, the generation of net value added (NVA) is almost as positive. The measures 112 and 121 have contributed with additional 28 million € in NVA. This is equal to 72 % of the target for the period 07 – 09, out of the total target of 90 million € for the period 07 -13 for all measures contributing to the objective. In this sense the contribution from measure 112 and 121 is very positive. The labor productivity increases dramatically on the supported farms under measure 121 in the range of 20 % from 30,000 € GVA/FTE to 36,000 € GVA/FTE. This is a substantial increase, and is outmatching the set targets for the programme several times. The total contribution from all measures is expected to be an average increase in labor productivity of 500 € measured in GVA/FTE. The achievements from measure 121 so far is 6,000 € GVA/FTE. However, this increase will not be typical for the investments in the sector due to the character of these investments being almost exclusively machinery to the large scale cereals and industrial crops producers. The next wave of beneficiaries will be representing other sectors and smaller farmers, and hence the contribution to the productivity growth from these beneficiaries will be much lower and much more in line with the expected effects. Modernization of the sector through support to investments in new products and new technologies is an important objective for the programme. According to the survey results, almost 2,000 beneficiaries have invested in new products and or technologies, representing 1.021 young farmers supported under measure 112 and 876 farmers from measure 121. This achievement is equal to 85 % of the set target for the period 07 – 09 out of a total of 5,200 for the full programme period. Finally, with the public support approved and contracted for the period 2007 – 2009 of 582.14 million € (measure 611 not included), this public support contributes with a growth in the income of the economy of 808.5 million € or a net growth of 226.4 million €, due to the general multiplier effects of public investments. However, due to the delays in payments compared with contracting, the real impacts are much lower, but will materialize later, when the payments are made. The multiplier is therefore depending on the fact that the public support is paid out. If we instead use the factual paid out money to beneficiaries for the period, which is 125,7 million € (measure 611 again excluded), the contribution to the growth in the economy is reduced considerably to 175.6 million € and a net growth of 48.9 million €. This is a reduction in the contribution to income generation of 632.9 million € in gross income and 105.9 million € in net growth.
Thus, from a socio economic point of view it is very costly to have too big and unnecessary delays in the payments to the beneficiaries. We recognize that there always is a time lag between approval of projects and effected payments, in particularly for complex projects, but the calculations demonstrate that it is important to accelerate payments. This can be done, for example, through effective advance payments and a relevant number of installments during the project implementation phase. Regarding the dead weight of the public support, indicating how big a share of the investments, which also would have been made without public support, the conclusion is that the three measures (112, 121 and 141) under axis 1 carry a dead weight on 81.4 million € equal to 25 % of the total public expenditures to the three measures. This average is in the higher
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Elaboration of ongoing and mid-term evaluation of the RDP 2007-2010, Bulgaria end compared with other countries. However, the figures differ from the one measure to the other. Measure 112 Young farmers, carry only 7 % deadweight, which is fine and is far beyond what could have been expected, while measure 141 carry 22.5 % equal to 1.3 million €. Measure 121 carries on the other hand 33.6 % deadweight. This measure is also the biggest measure in terms of public support and therefore this measure contributes to a big share of the 81 million €, primarily carried by the field crop farmers, while the dead weight among other types of beneficiaries under measure 121 – typical small scale farmers - is as low as 9 %. Steps should be considered to be taken to reduce dead weight particularly under measure 121.
In total the economic effects for the farmers having had access to the programme is very satisfactory, and the experience shows that a broader implementation of the programme also contributing to meeting of the needs of other sectors is relevant and should be pursued. Table 167: Effects related to the quantified targets for result indicators for axis 1
Target Achievement Axis Indicator Measurement 2007- as of Remarks 2013 31.12.2009
Number of Number of 91 projects were submitted participants that participants, who but, no contracts were successfully ended have obtained 18,000 0 signed as of 31.12.2009. a training activity certificate, degree 50 projects are approved in related to or diploma 2010 agriculture and/or forestry I Increase in gross increase in gross 62 Effects from measure 112 Axis 1 value added in value added (in 175 (83 % of and 121 only Improving the supported MEUR) target for 07- competitiveness farms/enterprises 09 period) of the agricultural and Number of 1,897 forestry sector holdings/enterprises Effects from measure 112 Number of (85 % of introducing new 5,200 (1,021 farms) and 121 (876 holdings/enterprises target for 07- products or farms) only 09 period) techniques
952 projects were Number of farms submitted, but no Number of farms converted from contracted under the 17,000 0 entering the market semi-subsistence measure as of 31.12.2009 into market actors 712 projects approved in 2010 Source: MAF, NSP, APR 2009 and own calculations based on surveys to beneficiaries 2010
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The environmental effects are more modest due to the low up-take of funds. However, the general conclusion is that the implemented actions on agricultural land contribute to the objectives of the programme in a somewhat satisfactory way. The target of improvement of biodiversity and habitats is achieved 31% in terms of committed areas. Soil quality target is achieved at 26% which the share of organic farming of this target is achieved at only 5%. The application area under organic farming however almost doubles each year since 2008. The situation with water quality indicator is quite characteristic of the entire implementation of m.214. If we consider data for 2008 campaign which was the only one paid by end of December 2009, then we see that this target would have an overachievement of almost 3 times the initial target. However, the PA data from the beginning of September 2010 shows that for the 2009 campaign there are no authorized areas under the two soil and water schemes and therefore the value is 0. The LFA measures are reaching mainly household and family farms thus contributing to the prevention of land abandonment and depopulation of rural areas and therefore are able to achieve the programme objectives. This is achieved through involvement of local institutions and it confirms the conclusion that the closer to the beneficiaries the institutions are the more useful and appreciated are by the beneficiaries. This needs to be considered well in the process of decentralization of the implementation of measures targeting small scale farmers and small projects/applications. At the same time, there is no environmental effect in the forest measures of Axis 2. There is a very low uptake of these measures and there is no information on the forest area to be supported by the 2010 contracted projects. Some environmental effects are also created of the measures under axis 1. 39 % of the beneficiaries under measure 121 indicate in the survey that the investments have improved nature preservation and preservation of the biodiversity, while 32 % claim that the investments have prevented the pollution of waters from agriculture activities. The rate of achievement of result indicators related to environment is concluded below. The achievement is measured towards the data for two campaigns - 2007 (m.211, m.212) and 2008 (m.211, m.212 and m.214). The 2009 campaign applications were not processed by 31.12.2009 for any of the measures. Two important aspects need to be considered before the figures are presented:
1. The area presented comprises areas submitted in applications. It does not represent actually supported areas. Hence, there might be big differences in the actually supported areas due to the high share of penalties, including payments of 0 BGN to farmers. 2. The results are only for support to agricultural land. None of the forest measures’ applications is even contracted by the end of 2009.
The RDP contribution to biodiversity and high nature value farmlands is achieved at 47% compared to the target set. This contribution is ensured by all three area-based payments measures 211, 212 and 214. The 211 and 212 contributions is calculated on the basis of supported areas in settlements with Montagu’s Harrier habitats (see map 1 in Annex 11) as listed in the Annexes of the Implementation ordinance of m.214.
The improvement of water quality target is achieved at 64%, mainly due to m.211 and m.212 supported areas in settlements defined as Nitrate Vulnerable Zones(see map 2 in Annex 11). However, it should be noted that the majority of these areas are comprised of grasslands in mountainous areas. Therefore, the overall contribution to actual improvement in the water quality is questionable due to the lack of uptake of the Soil and Water packages of m.214 on arable lands.
The contribution to mitigating climate change is calculated on the basis of all permanent grasslands supported by m.211, m.212 and m.214. Permanent grasslands have a higher ability to store organic carbon than new tree plantations (Davis and Condron, 2002) but their contribution was ignored in the initial target setting of the RDP measures. On the contrary, it
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Elaboration of ongoing and mid-term evaluation of the RDP 2007-2010, Bulgaria was only assumed that the forested areas will make such a contribution. However, by the end of 2009 there are no forest areas supported and hence the reporting against this initial target is 0.
The improvement of soil quality target is reported as achieved by 146% due to m.211 and m.212 areas within settlements with identified water erosion problems (see map 3 in Annex 11) as listed in the Annexes of the Implementation ordinance of m.214. However, as with water quality target, the actual contribution to soil quality is questionable due to the lack of uptake of the Soil and Water packages of m.214 on arable lands. It is more appropriate to consider this area as avoided risk of deteriorating existing soil quality.
The result target for avoiding the marginalization and abandonment of land is achieved at 56%, which is represented by all supported land by m.211, m.212 and m.214.
The national indicator for supporting organic production is achieved at 5% only. In the 2009 campaign there were 8108 ha submitted in applications for organic production, however by September 2010, only 2945 ha are authorized for support. In reality, it means a reduction in this indicator, again due to really high level (64%) of rejected or penalized farmers.
Table 168: Achievement of the quantified targets for result indicators for axis 2
Axis Indicator Measurement Target Achieved as of Remarks 31.12.2009 2007-2013
Area (ha) under successful land management Total number of ha under successful land management contributing to:
а) biodiversity and high Including LFAs in nature value ha settlements with 286 000 135 095 (47%) farming/forestry; Montagu’s Harrier habitats b) improvement of water Including LFAs in ha quality; 174 000 111 748 (64%) NVZ settlements Axis 2 All supported Improving the c) mitigating climate change ha permanent environment 178 000 217 965 (122%) grasslands by m.211, and the 212&214. countryside d) improvement of soil Including LFAs in ha quality 223 000 325 265 (146%) water erosion settlements e) avoidance of All supported land by marginalisation and land ha m.211, 212& 214 618 000 345 139 (56%) abandonment
Development of organic UAA for organic production (national 70 000 production, ha 3 573 (5%) indicator)
Source: MAF-NSP, PA data and own calculations
Also the effects of interventions under axis 3 are expected to be positive contributing to improvement in the standards of living in rural areas, in particularly through new and renovated infrastructure. Measure 321 contributing to investments
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Elaboration of ongoing and mid-term evaluation of the RDP 2007-2010, Bulgaria in basic services for the economy and the rural population is one of two measures with projects approved. The majority of projects are concentrated on environmental infrastructure. More than 50 % of the projects are targeting reconstruction or new sections of water provisions and treatment services leading to improved infrastructure and a better living environment for the rural population. On the other hand, the projects are expensive (1.67 million € in average per approved project totaling 253 million €), while project applications not yet processed total 450 million € in public support out of a total budget of 430 million €. Measure 322 supporting village renewal and development is demonstrating high effectiveness as indicated above. The majority of projects are concentrated on physical infrastructure (mainly streets, lightning and parks), also contributing to improved living conditions in rural areas. For M322 the situation is the same as for measure 321: The full budget of 166 million € of the measure is applied for with a total of 184 million € in applications, of which 108 million € are approved.
Effects summarized in relation to the common impact indicators The impacts of the interventions described above are summarized in the table below regarding the common impact indicators, for which the RDP has defined targets. We have for each of the indicators provided information about the achieved impacts and indicated how big a share of the target, which is met by the end of 2009. Comments are further more provided in the right column.
It is clear from the table below as well as from the previous table above that even though axis 1 measures have demonstrated a relatively low economic effectiveness, the performance is good on the various indicators. Where axis 1 did have an economic effectiveness of 62 %, the performance measured in relation to the impacts as a share of the set targets is higher. For GVA, NVA, for jobs and for productivity the effectiveness is between 75 % and 90 %. This means that even though only 62 % of the sources are contracted (for only two measures), the impacts in terms of for example GVA is 83 % for measures 112 and 121 alone. This is an over-performance per € contracted of 25 % compared to the set target.
The environmental impacts of the RDP are measured by a set of four main impact indicators and one national indicator. Overall, there is a significant lack of current environmental information – the most recent data for Bulgaria is for 2008 which does not reflect in any way the effects from RDP implementation. Therefore, the assessment of the impact indicators is based on expert opinion.
The Environmental Indicators report for 2008 of the Executive Environmental Agency, presents data for the Farmlands Bird Index for 2008 at 98.28%. There are 135 095 ha of supported areas in settlements with Montagu’s Harrier habitats. At the same time, the uptake of the HNV4 package of m.214 related to Important Bird Areas is very low and in 2009, there are no areas authorized for support. Based on this data, we can state that the contribution to reversing the biodiversity decline indicator is at a very insufficient degree for meeting the needs identified by the RDP.
The target related to High Nature Value farmlands is achieved at 17% at a total of 69 174 ha. This is a modest contribution compared to the target of 400 000 ha. It should be noted, that it also includes estimates based on survey results of HNV farmlands supported by m.211 and m.212.
The RDP contribution to water quality is assessed as very limited since the biggest pressure come from land use types other than permanent grasslands. Unfortunately, these other land use types are less covered by the area-based measures. The most intensive regions of the country are almost not present in these schemes. Furthermore, the uptake of the Soil and Water packages is very low. At the same time, there is a gradual trend of increased use of chemical fertilizers in the country.
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There is a positive contribution of the supported permanent grasslands to organic carbon storage. There is no RDP supported contribution from forested areas as there were no projects contracted by the end of 2009.
The contribution to the indicator for reduced CO2 emissions from farm machinery is also not measured. However, we believe that there is a very limited net positive impact if at all due to the following reasons:
- New machinery are purchased and all of them are meeting the new, much stricter emissions regulations which is a positive impact; - However, the majority of this machinery is of very large power (often larger than the actual farm needs) and there are big numbers of such new machines (so as to absorb m.121 entire non-reserved budgets. - At the same time, there is no obligation or direct connection between the purchase of new machinery with taking old machinery out of use. Thus, the overall balance is doubtful.
The national impact indicator related to soils improvement covers an area of 325 265 ha.
Table 169: Effects related to EC common impact indicators
Indicator Measurement Target Progress Remarks Economic growth, Net additional value 206 000 000 N/V including for: added (in MPPS) agricultural sector Net additional value 43,612,000 Effects from measure added (in PPS) 140 800 000 (28 million €) 112 and 121 only (90.4 million €) 72.3 % of target for 07-09 period forestry sector Net additional value 9 400 000 0 added (in MPPS) non-primary sector Net additional value 55 800 000 0 added (in MPPS) Employment Net additional FTE Retained FTE jobs: creation, including jobs created 28,000 N/A for: Created FTE jobs: 18,000 agricultural sector Net additional FTE Retained FTE jobs: Retained and created Effects from measure jobs created 17,248; FTE jobs – 7,250 112 and 121 only Created FTE jobs: (88.9 % of target for Additional 5,250 jobs 1,790 07-09 period) created through the multiplier effects forestry sector Net additional FTE Retained FTE jobs: Retained FTE jobs – jobs created 1,030; 0 Created FTE jobs: Created FTE jobs – 0 300 non-primary sector Net additional FTE Retained FTE jobs: jobs created 9,722; Retained FTE jobs 0 Created FTE jobs: Created FTE jobs – 0 15,910 Labour Change in Gross EUR 342 N/A
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Gross nutrient balance shall be Improvement in Changes in gross improved due to Very limited or no No exact data water quality nutrient balance reduced chemical RDP contribution emissions from farming activities. Positive contribution from supported 1. Carbon permanent sequestration shall grasslands be augmented – Contribution to Increase in 252 000 t CO shall No RDP supported combating climate production of 2 be sequestrated. contribution from change renewable energy No exact data forest areas
2. Production of CO 2 Very limited or no net from farm machinery positive impact will decrease. Soil quality shall be Improvement in improved due to soils (erosion, Area in ha reduced erosion and 2009: 325,265 ha contamination) pollution with (national) chemicals. Source: MAF, NSP, APR 2009 and own calculations
7.1.3. Regional uptake Generally, the analysis of the regional up-take of funds under the programme so far shows, that districts which have prevailing forest cover on their territory have been neglected due to the later start of payments under the forestry measure, under M123 processing including wood, and micro entrepreneurship – M312, in favor of the districts, characterized of intensive agriculture based on field crops – grain, oleaginous, technical cultures and supported by M112 and M121. The top 5 districts measured in terms of up-take of payments from axis 1 measures (Russe, Dobrich, Pleven, Plovdiv and Stara Zagora) represent an uptake of 67 MEUR by the end of May 2010 or 38.5 % of all payments under the axis. However, the five districts only represent 25,500 farmers out of the total of 101,191 farmers registered in 2009 (exclusive subsistence farmers). Their over-performance is 53 % in average, with Dobrich as the top-performer with an up-take 2.5 times as big as expected based on the number of farmers in the district. On the contrary, the Bottom 5 districts (Gabrovo, Vidin, Kardjali, Smoljan and Pernik) represent 16,820 farmers (16 %), but has only been able to absorb 7 MEUR or 4 % of the payments. The five districts are underperforming with 75 % of the expected up-take in average. At the bottom we have Kardjali representing 9.4 % of farmers, but only absorbing 0.4 % equal to 4.3 % of the expected amount. It is striking differences, which could call for further analyses.The evaluators assess that if the MA had chosen to decentralize and regionalize the measure budgets, the implementation of the BGRDP both the implementation rate and the integrity of the development might have been in a more progressed situation. This could have happened because then the regional authorities would also have been interested in absorbing not only infrastructure support, but also to help their farmers and entrepreneurs absorb the “private” aid available for support under the programme.
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Last but not least, the local administrations and communities would have had much more experience in sound local governance practices and in the LEADER approach.
7.1.4. Administration The administrative set-up of the Bulgarian administration of the Rural Development Program is coherent with EU requirements. The Bulgarian administration has established the necessary institutional structure, but also the defined units within the SFA/Paying Agency comply with the standards stipulated in the EC regulations. It might even be postulated that the eagerness to comply with EU requirements is contributing to a lower effectiveness of the administration than could otherwise have been the case. The coordination and relation among the administrative authorities, above all MAF and SFA, are open for improvements, even though the relations between the administrative authorities have improved since the beginning of the accession of Bulgaria to the EU. In this context it is important to conclude that the monitoring system is not working as well as it could. Data according to proper monitoring, see CMEF guidelines, are not collected, and if they are collected, they are not always registered in the IT system, or they might be registered with errors and misunderstandings. Also the reporting of data from the IT system is difficult and causes problems for the MAF. The result is that the monitoring system must be improved in order for the MA to be de facto a managing authority ensuring the sound strategic management of the Programme. An enhanced regional implementation model transferring the function of “authorization of payments” for the biggest part of the “non-area based” measures is expected to lead to a more transparent and effective set-up. The division of responsibilities between the central PA and the district and regional offices is ineffective. It is inconceivable that the farm visits according to Article 26 of Commission Regulation No. 1975/2006 are being done by experts of the central PA. It would be recommendable to delegate this function to the regional paying agencies (RPA) as the nearness to the beneficiary will improve the quality of the data and above all reduce administrative costs. The comparative analysis of the thematic study on the administration of the RDP carried out of the evaluators as a part of the ongoing evaluation activities and reported separately did conclude that the BG administration has room for improvements and that it is possible to organize the administration more effectively, than it is seen in Bulgaria. The biggest worry, however, seems to be the big fluctuation in staff, especially on management level. Besides the numerous changes on managing the RD Directorate of MAF, the Executive Director and the Deputy Directors of SFA have also been replaced on many occasions. To promote a strong administration, it is recommendable to keep the continuity of personal as to retain understanding, specific knowledge and managerial skills not so easy to acquire in Bulgaria. The satisfaction among the beneficiaries participating in the NRDP is generally high, for the administrative institutions and for the procedures. 75 % of the beneficiaries are very satisfied or satisfied with MAF, while only 16 % are either unsatisfied or very unsatisfied. For SFA/PA the similar figures are 73 % and 18 %, while the figures for the regional offices of SFA are 78.5 % and 14.5 %, which is as good as for the district offices of MAF with scores of 77 % and 16 % respectively. Even though the scores are very positive, there is still room for improvements also compared with similar survey results from other countries, where satisfaction scores often are as high as 90 % or more.
Regarding the various elements connected with the application process, the satisfaction is the highest for the information required in the application, where 80 % of the replies are positive. The satisfaction is the lowest for the duration of the procedure for project selection. Here 43 % are unsatisfied or very unsatisfied, while the transparency of the decision making process scores 31 % of negative replies, and First In First Served (FIFS) scores 27 % negative replies. The
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7.2. Main recommendations
Based on the above conclusions, the following recommendations are made: They are presented on different levels and for different actors/stakeholders in NRDP implementation. It is indicated for each recommendation if action can be taken right away, or if further administrative procedures must be carried out. It is stressed that the recommendations are expressed of the evaluators, and that their further fate in the process is to the MAF to decide in dialogue with the SFA/PA and the EC.
7.2.0. Programme level The general environment for implementing the programme should be improved, i.e. more information/orientation and consultation, easier access to bridge capital should be secured also for other sectors than animal farms supported in 2010. Immediate action is possible and recommended. Better coordination must be established with OP Human Resources (providing training to farmers wishing to convert to non-agriculture gainful activities) Immediate action is possible and recommended. Programme synergy must be improved; Measures M124 could be integrated in M121 like in Denmark. This will prevent the need to allocate limited administrative capacity. Change in the measure is needed. Strong interconnection must be established among M112, M141, M142 and the general competitiveness budgets of M121 (reorganization of the guarantee budgets). Change in the measure is needed. Investments in EU priorities (i.e. innovation, energy and water savings, use of ICT, quality foods, organic foods, tourism) must be reinforced via the measures design of M112, M121, M141, M142, M123, M124, M311, M312, M321, M322 . Where appropriate certain parts of the aid could be linked to the obligation to carry out appropriate investments in the said priorities. Change in the measure is needed. All of these should be actively promoted via M111, M114, M511 (National Rural Network). M511 could help the identification and the ‘technical advice” to carry out such investments to be later used by the trainers and consultants under M111 and M114/143. Immediate action is possible and recommended. Regional targeting of the funds per measure M112, M121, M141, M311, M312 must be introduced to help the social restructuring in the priority districts with the most difficult development prospects. Changes in measures are needed. The implementation of M126 and 341 is not necessary. They can be removed from the programme. Change in programme is needed. Reallocation of measure budgets is necessary – see the proposed reallocation of funds below, and in chapter 7. Change in programme is needed. The reallocation of budgets should follow strict conditions and prioritization. Overcoming of regional disparities should be a part of the conditions for reallocation of funds. Change in programme is needed.
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7.2.1. Axis Level
Axis 1: Unmet needs should be met via the accelerated implementation of M111 and the launch of M114, M124 (if not integrated within M121), M125. Immediate action is possible and recommended The non-guaranteed budget of M121 should be increased to satisfy priority needs for financing. General competitiveness budgets should be guaranteed within M121 for M112, M141, M142, as well as for the animal and fruit and vegetables sectors. Change in the measure is needed. Accompany the provision of such aid with appropriate information, training, consultation actions preferably as close as possible to the farms. Immediate action is possible and recommended From all beneficiaries of development aid should be requested investments in EU priorities (i.e. obligatory 5% should be invested either in ICT, or energy savings or Alternative energy production, etc.). Changes in the measures are needed. Use the information, training, consultation actions to organize the smaller – economically weak holdings into producer organizations. Immediate action is possible and recommended Beneficiaries under M 114 should be obliged to create at least 1 PO for M142 especially in the animal sector. Immediate action is possible and recommended.
Axis 2: Implementation of the measures should be intensified in order to increase up-take and generate the needed environmental benefits from the programme. Immediate action is possible and recommended. Establish (and re-establish) dedicated Axis 2 units in both the Paying Agency and the Managing Authority and empower them to taking and implementing decisions for overcoming the implementation hurdles of the measure. Immediate action is possible and recommended. This should also include: o Providing real-time access to the implementation data of measure 214 to the Axis 2 unit responsible staff; o Establish an official and permanent working group between the experts of the PA Axis 2 unit and the MA Axis 2 unit. Ensure that all land and farm animals’ registers function properly and contain information representing the actual situation on the farms. There have been numerous reports from farmers where their animals are not included in the farm animals register. The big number of 0 BGN subsidies in reality means that all these farmers have declared more land and animals than the officially registered in their names and despite the fact that they have documents for them. Immediate action is possible and recommended. This is a problem that needs to be addressed by MAF in close cooperation with the MA and the PA. Remove the requirement of official and notarized agreements of land use for all AE applicants. The sustainability, continuation and implementation of the 5 years AE commitment should be checked by on-the-spot controls by checking the proper implementation of the AE action itself and not by only checking land ownership documents. Immediate action is possible and recommended.
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Develop a targeted information campaign per AE scheme and for the entire m.214. Special information campaigns should be developed for m.211 and m.212 as well. There has to be targeted information campaign to extensive livestock farmers under m.212. Immediate action is possible and recommended o Develop and effective learning mechanism for the implementation of Axis 2 measures by publishing the main mistakes leading to rejection of applications or to penalties and reduction of payments. Train the staff and ensure the provision of up-to-date information to the municipal and regional offices of the Ministry of Agriculture and the Paying Agency as well as the consultants especially from NAAS and RAAS. The underestimation of their role in the implementation of all Axis 2 area-based measures should be prevented. On the contrary, coordinated training and information to these offices are key to the successful implementation of the AE measure. Immediate action is possible and recommended Provide positive signals to the Axis 2 and especially AE beneficiaries and potential applicants by processing in time the 2010 campaign applications – this means before the end of 2010. It should be unacceptable that the situation of the last two years is repeated and the new application campaign starts before the results of the previous are known. Immediate action is possible and recommended Involve municipalities (including through the Association of municipalities in Bulgaria) to solve the problem with long-term renting of municipal and state grasslands on one and the same plot of land which continues to be a recurring problem as indicated by the survey’s comments. Immediate action is possible and recommended Prioritize the AE training projects under m.111 and the AE consultancy organizations under m.114 and promote them to beneficiaries before and during the 2011 campaign. This delays is a particular problem for 2008 AE beneficiaries who have to submit the copies of AE training documents already. Immediate action is possible and recommended Recommendations regarding implementation arrangements and modifications of the ordinance accordingly: o Introduce the requirement that the applications are assessed based on the conditions/ordinance that is in force at the time of the submission of application. It is unacceptable that the rules of the game are being changed post-factum and that farmers are penalized or rejected on this basis. This means that the implementation ordinance with all its amendments and changes should be published in the State gazette not later than 1 month before the start of the application campaign on March 1st. This will allow also sufficient time for the municipal and district offices to get acquainted with the changes. o Provide a time period when the Axis 2 and AE applications can be amended and/or modified in the case of missing documents or difference of land and/or animals with LPIS and IACS. This will require a timely review of the AE applications, not as at the moment after the end of the calendar year. o Abandon the practice of withholding SAPS payments on the basis of an expected/assumed breach of AE requirements. This is extremely de-motivational for AE beneficiaries. Penalties should be paid on the basis of recorded breach, not an assumed one. Another simple way of not withholding SAPS payments is to simply process the AE payments on time – within the same calendar year! o The MAF and PA offices in districts and municipalities (especially the ones with highest number of current beneficiaries) should receive additional support (staff and/or premiums) during the application campaign. This will allow them to check carefully the submitted AE applications already during the submission and to correct obvious technical mistakes such as missing signatures and copies of needed documents. An additional motivation could be ensured by linking premiums to the number of submitted AE applications. Re-assess the output and result targets in view of the current implementation experience and the 2010 Agricultural Census to reflect better the situation and number of farms and managed farmland. Immediate action is possible and recommended
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Start the implementation of measure 213 Support to Natura 2000, but only after the problems with land eligibility under LPIS and IACS are addressed. Otherwise, the same problems and bad image will be transferred to the new measure and this will jeopardize the overall implementation of Axis 2 in this programming period as well as in the next one. Immediate action is possible and recommended Develop and start the implementation of the remaining AE schemes – riparian habitats, management of lowland mosaics, etc. under the same condition as for Natura 2000 measure – solve the land eligibility under LPIS and IACS issues. Immediate action is possible and recommended Develop and pilot test the measures related to forest area-based payments such as Forest-environment payments. Pilot testing is of key importance, which will prevent implementation failure of full-scale measure implementation. Two schemes are proposed to address the growing number of forests officially certified as sustainably managed forests and identified as High Conservation Value forests. Immediate action is possible and recommended. Open specific and targeted calls under M111 to increase the awareness and knowledge of farmers and other land users’ related to adaptation to climate change, water saving techniques and technologies and biodiversity friendly practices, etc. Immediate action is possible and recommended. Axis 3: Priority should be shifted from types of infrastructure projects to meeting the needs of target groups of the population – tobacco/milk producers, the children, the young people, women, minorities, the elderly. Immediate action is possible and recommended Close cooperation with OP Human Resources must be established to secure human capacity in the beneficiaries under M311, M312, M313. Immediate action is possible and recommended EU priorities should be promoted via M511. This is a horizontal recommendation for all Axis 3 measures. Immediate action is possible and recommended. Change the ranking criteria in order to favor projects with new jobs. Immediate action is possible and recommended. Axis 4: Implementation of the Leader axis is urgently needed and must be accelerated in order to ensure the local involvement of the mobilized human resources in the regions. Immediate action is possible and recommended. It is expected that the number of projects financed under Strategies for Local Development will reach more than 2,000 until end-2015. It is recommended that the selected LAGs immediately establish close contacts with dedicated officers from the respective Regional Paying Agency. To avoid delays in the processing of the LAGs projects it is strongly recommended: (i) LAG should keep very well updated the designated contacts in the SFA- PA, since the time of the local call for proposal – in this way the respective officer will have possibility plan and allocated necessary time to the finally selected projects; (ii) to set deadlines for projects processing both in the LAG and in the RPA. Immediate action is possible and recommended.
7.2.2. Measures Level M111, M112,M121, M141 and M142: Measure design (content, eligibility criteria, selection criteria) should target particular agri sectors and particular administrative districts lagging behind in their modernization, restructuring of their agriculture sectors. Changes of measures are needed.
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M121: Maximum sum of support must be reduced. Change of measure is needed. M121: Implementation arrangements and procedures must be simplified. Change of measure is needed. M111, M114, M143: Must include components promoting investments in EU priorities. Change of measure is needed. M511 must be redesigned to ensure information (innovation, technology, good practices) and promotion benefits per major groups of beneficiaries. Immediate action is possible and recommended. If the recommended reallocation of funds to M112 and M121 is decided, then - through extrapolations from the current M112 and M141 implementation - it is expected that the number of M112 and M141 beneficiaries applying for investment support under M121 may reach 2,000 applicants (EUR 90,000 public subsidy on the average if M121 budget is increased by MEUR 227.4). If this will happen, then the newly transferred budget to M121 for general competitiveness should be reserved only to the M112, M141 and M142 beneficiaries and the fruit & vegetables sector and the tobacco producers, who want to start alternative agriculture producers. Then, through a modified ranking system the support should be channeled to priority sectors (fruit, vegetables, former tobacco producers, animal farms) and priority districts (with less received agriculture investment support until the time of project selection). Changes of measures and procedures are needed.
More detailed recommendations on changing measure design or budget is prepared under each of the analysis in Chapter 6 of this report as well as in section 7.2.4 below.
Programme Management Level Strengthen and preserve the capacity of the MA and SFA-PA.
Introduce windows for collecting projects for the coming year, including the amount of support available for which the applicants will compete. Strictly adhere to the annual programme of calls for proposals. Immediate action is possible and recommended. The quality of the monitoring and evaluation information presented to the MC must be improved to allow for the making of sound management decisions within the principles of sound financial management of public funds. MC should receive information about effects and results (as in CMEF), and not only information about number of processed projects in the SFA-PA. Immediate action is possible and recommended. Re-implement the SAPARD practices for monitoring the regional implementation of the measures. Immediate action is possible and recommended. SFA-PA and MA monitoring system must be brought in line with the CMEF minimum standards in terms of data/content and in terms of processing. Real-time access to monitoring data must be ensured through an appropriate IT reporting system. Manual processing of thousands of excel entries is not feasible. Immediate action is possible and recommended MA capacity should be strengthened to carry out appropriate micro, mezzo and macro level analyses to ensure sound management of the measures and the programme in general. Time-schedule for such analyses should be established and followed by appointed MA officers. Fluctuations of staff make this intervention relevant and feasible. Financing should be by the M511. Immediate action is possible and recommended.
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Some implementation tasks, such as information, ranking, selection of projects) could be allocated to various organizations – i.e. the Forestry Agency. Changes of procedures are needed. Some sector/regionally targeted publicity and promotion tasks could be allocated to branch organizations and associations. Immediate action is possible and recommended.
7.2.3. Administration and Implementation Level Simplification of processing procedures of applications, see Danish model for measure 121. Changes of procedures are needed. Simplification of control procedures (especially before contracting). Changes of procedures are needed. Improving the quality of selection of projects for example through introduction of windows for selection of projects for all measures. The planned time-schedule should be posted at the MAF and SFA/PA web sites by the end of each year and should be observed by the SFA/PA. Immediate action is possible and recommended. Simplification of the selection of projects in accordance with defined criteria (adaptation of the BP with emphasis put on the payback period – 4 to 6 years). Immediate action is possible and recommended. Reduce the risk for dead weight through more focus on public goods, innovation and a medium long risk profile. Changes of measure fiches are needed. Allow for small construction projects less than EUR 25.000 (e.g. under M121, M123, M311, M312) to be carried out by the beneficiary him/herself. Change in implementing ordinances and of SFA-PA implementation procedures is needed for all the “private measures”. If necessary, coordination to change national public procurement law should be pursued via the Minister of the EU programmes in BG. Take steps to remove the requirements to the applicants for investment support to present three offers, and to be confirmed by suppliers during the evaluation of project in PA, as this poses a significant hurdle, when the unsuccessful supplier not selected, refuses cooperation; simple reference to market prices and the prices database in the SFA-PA is sufficient. Immediate action is possible and recommended. Take steps to decentralization of the administration for all relevant measures. Immediate action is possible and recommended. Automation/computerization of all administrative operations where appropriate, including the monitoring system. Immediate action is possible and recommended. Ensure timely feedback to beneficiaries on mistakes and small errors and flaws; provision of sufficient time for the applicant to improve his/her applications must be secured. Immediate action is possible and recommended Use external expertise (advisory council or board of experts, registered in an expert database) to consult to complex and difficult projects. Immediate action is possible and recommended. Publish advice and guidelines for the particular measure/type of project/beneficiary. Incorporate the appropriate technologies for meeting EU priorities in the Guidelines. Immediate action is possible and recommended. Prepare and use good and bad practices for the preparation of applications and for project implementation as a teaching tool to the target groups, for example published on the MAF website and/or used of advisors in their consultations with potential beneficiaries. Immediate action is possible and recommended
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Prepare descriptions of model-holdings and communicate to the general public, on the MAF web site and/or through advisors, the minimum economic size of a holding to be sufficient to generate a family income. Match each model-holding with an organic model-holding. Immediate action is possible and recommended. Data on regional NRDP implementation indicates that the project processing burden of the district offices is unequal: Heavier for some particular districts, while others do not seem to be much involved in the implementation of measures. Reallocation of staff could be relevant in order to tackle the bottlenecks in the offices, where the administrative problems and burdens are the biggest. Immediate action is possible and recommended.
7.2.4. Reallocation of funds between measures Below in the table 121, we have summarized our justification for a comprehensive proposal for reallocation of funds between measures taking all axes and all measures into consideration. This proposal has been presented for the MA previously as one of the reports produced as a part of the on-going evaluation activities, and this MTE has not changed the rationale and the justification for the recommendation. It is therefore repeated here. It must be taken into consideration that if the proposed reallocation of budgets is accepted then relevant changes in the budgets and the targets and measures design of many measures should be introduced, including: M111, M112, M114, M121, M141, M142, M 143, M311, M312, etc.
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Table 170: Provisional reallocation of funds among BG RDP measures to preserve as possible the Programme impacts
Public Remaining p. Subtract Add Conditions and Justifications Measure Budget budget from to N 2007-2013 Code MEUR63 MEUR MEUR MEUR62
The measure is in the red zone in the sense that lack of up-take is causing risk for recommitment. The measure currently holds the budget for M114.
Its MEUR 42.2 budget is distributed over 20,000 trainees and 170,000 hours. This calculates at 8.5 hours per trainee worth of EUR 2,110 for each trainee. These are sufficient for a quality consultation under M114 (or M143), which is expected to be effective in increasing the farmers capacities through tailor-made consultations, 1 111 42.2 42.2 -15.3 - preparation of business plans and marketing-orientation for beneficiaries under M141, M112, M142 and M214, including active PR on benefits for participating under M142. At least 25% of the budget should be transferred to M114 where the actions will be more beneficial to the farmer/forest owner. If deemed appropriately, part of the budget may be reallocated to M143, if NAAS undertakes the creation of 27 Producer Organizations in each of the BG districts. If M111 experiences the same difficulties as M3.1 under SAPARD, then more resources could be reallocated towards the budgets of M114 and M143.
The measure is very beneficial both to the age-transformation of the agri-sector, and to the production of various agri-produce outside arable crops. Also, it is much more effective in creating jobs, even compared to M312. 2 112 102.4 0 - +67.5 Therefore the measure should have the budget increased for a second wave of applicants in 2011-2012. It could be considered that potential beneficiaries should enter a PO.
3 114 36.1 36.1 - +15.3 Measure budget should be increased from M111. The measure is the most efficient way of improving the human-management capacity in the agri and forestry sector, because it actually offers management and
62 According to the BGRDP financial tables in the fifth modification (pp 229-232). All budgets provisionally held by other measures are distributed as programmed, except for M126 and M341 for which implementation there seems to be no need. 63 Calculated on the basis of applications submitted by end-August 2010, and on 2009 payments for M211, M212 and M214. MIDTERM EVALUATION OF THE RURAL DEVELOPMENT PROGRAMME OF BULGARIA 362
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Public Remaining p. Subtract Add Conditions and Justifications Measure Budget budget from to N 2007-2013 Code MEUR63 MEUR MEUR MEUR62
marketing support. It is possible and it could be considered to demand from each consultant under this M114 measure to produce at least one Producer Organization by 30 June 2011. This will speed up the uptake of M142, but will also contribute significantly to a very acute problem with BG situation of immense farm structure fragmentation in particular subsectors.
It may be demanded from M141 and M112 beneficiaries to obligatorily enter a PO under M142. Thus all M141, M142 and M112 will all be aligned to speed up the age transformation of the agri-sector, while also greatly improving the managerial capacities of smaller/newer farmers.
To prevent discrimination, the same condition is put below for M143.
BG production of all plant and animal produce is below the national consumption, except for grain and some technical cultures. Measure budget should be increased by MEUR 209.8, but no more support should be offered to the specialist holdings in grain, technical and oleaginous cultures. These are the only sub-sectors with positive trade balance, which also managed to uptake more than 90% of the M121 non-guaranteed 4 121 465.8 256.2 (55%64) - +209.9 budgets, as far as the evaluation team is informed in spite of fragile monitoring data.
The measure budget currently holds the budgets for M124 and M125, M126. The evaluators are on the position that M124 and M125 are very important measures and that they are needed and should be implemented. Hence, the budget for M 121 should be decreased with their budgets.
The measure is in the red zone. It is unlikely during the current economic crisis that any of the target 5 122 24.1 24.1 -14.1 - beneficiary groups will express interest in the long-term investments supported by the measures neither private, religious organizations nor municipalities. Part of its budget should provisionally be transferred to the M226. Alternatively if the MA does not wish o increase the Axis 2 budgets then the funds could be reallocated
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Public Remaining p. Subtract Add Conditions and Justifications Measure Budget budget from to N 2007-2013 Code MEUR63 MEUR MEUR MEUR62
to the M121 for planting fast growing species for alternative energy purposes.
6 123 243.2 150.4 - - NA. No need for reallocations but for speeding up the implementation of the measure.
Measure must start as soon as possible. It is the only instrument which facilitates effectively innovation in the BGRDP implementation, and creates possibilities to integrate BG traditions in the processing chains. Not in the 7 124 24.1 24.1 - - last it offers market for the BG R&D institutions (i.e. increases the R&D effects on the socio-economic environment). (This means that current M121 public budget should be diminished by MER 24.1).
The WG on Axis I measures think that the measure must start as soon as possible. (This means that current 8 125 90.4 90.4 - - M121 public budget should be diminished by MER 90.4).
There is no interest in the measure; there are national mechanisms (i.e. SFA-PA national schemes), which 9 126 NA NA NA NA compensate the losses from natural disasters. Its budget should be utilized under M121 where it currently stays.
At this moment it seems it is impossible to anticipate more than 6600 beneficiaries under this measure to apply till end 2013 (see also the projection of numbers and payments in Chapter 6). And in evaluators opinion this 10 141 144.6 137.5 110 - number will be reached not earlier than the beginning of 2013. This leaves some 110 MEUR for redistribution among M112 and M121. Beneficiaries should enter a PO?
This measure is very needed for the fragmented BG production in particular sectors. Its attractiveness should be further boosted by consultants under M141 and M114. Or by putting the obligatory condition to M112 and 11 142 12.0 12.0 - - M141 beneficiaries to become members of PO. (Otherwise they will bankrupt in the medium term especially in view of the inequality of the rate of support for different sectors provided under the Direct Payments), and the rumored cartels in the processing chains.
12 143 6.0 3.9 - - In view of the reallocation of funds and the suggested second wave of support for M112 and increased
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Public Remaining p. Subtract Add Conditions and Justifications Measure Budget budget from to N 2007-2013 Code MEUR63 MEUR MEUR MEUR62
non-guarantee budget s for M121, there is a strong need that the M143 is implemented in the old rules and conditions as in the 2007-2009 period.
NAAS must produce at least one PO in each of the BG districts by June 30th 2012. Part of the budget transferred from M111 to M114 could be allocated to this measure. NAAS capacity must be strengthened to produce the expected consultations till the remainder of BG RDP implementation period (till end 2015).
13 211 233.2 180.8 - - NA
14 212 38.9 24.5 - - NA
15 213 108.8 108.8 - - NA. Budget is currently under M214.
16 214 311.0 306.0 - - NA
In the red zone. Little interest for similar reasons as for M122 above. Budget should be transferred to M121, but 17 223 40.4 36.3 -20.4 - for a specific type of investments only – creation/restoration of anti-erosion installations – i.e. perennial strips serving for windshields. Alternatively the budget could be transferred to M226 within the same Axis 2.
18 224 15.5 15.5 - - NA. Budget is currently under M214.
Budget should be increased by transfer from M122, in case it is decided that M121 for biomass cultures is not 19 226 29.5 26.9 +14.1 increased instead. (Further reallocation may be necessary after end-2011 if interest towards the measure is still low.)
20 311 142.3 136.8 -50.0 - Significant part should be reallocated to additional young farmers under M112 (MEUR 50)
21 312 134.6 132.9 - - NA
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Public Remaining p. Subtract Add Conditions and Justifications Measure Budget budget from to N 2007-2013 Code MEUR63 MEUR MEUR MEUR62
22 313 30.7 22.7 - - NA
23 321 430.9 -543.6 - - NA
24 322 166.8 -57.4 - - NA
NA. There is no need to implement the measure. Its budget should be utilized by M321 where it currently 25 341 NA NA NA NA stays.
26 41 53.9 NA NA NA No reallocations recommended
27 431 18.0 NA NA NA No reallocations recommended
28 421 5.1 NA NA NA No reallocations recommended
Budget should partially reallocated to M112 (MEUR 35) and M121 (MEUR 35). The budget in M121 should be 29 511 123.2 ? -70.0 - reserved for the second wave of young farmers.
30 611 181.8 27 -27.0 - Budget should be transferred to M121 – non guaranteed budgets.
TOTAL 3279.0 NA -306.8 +306.8
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In total we recommend to reallocate more than 300 million € primarily to the benefit of measures 112, 114, 121 (priority sectors) under axis 1, measure 226 under axis 2 and measure 312 under axis 3. The rationale is to strengthen the focus on the strategic problems of the Bulgarian rural sector, i.e. addressing the competence and youth challenge as well as the challenge for many small scale farmers in the dairy and animal sectors and in fruit and vegetable sectors to meet international competition. Next section presents a suggested action plan to ensure the reallocation of funds is implemented effectively and efficiently, especially in view that the period for realizing the proposed modifications is very tight. This is particularly true for the longer-term measure M112 and M141 which offer support to BP of 3 to 5 years duration. It is suggested for these holdings to have the possibility to request SFA-PA interim check whenever they have achieved their objectives, not after the 3rd year of the BP. It is also suggested that M141 should be allowed to achieve their objectives by the end of the project not by the time of the interim check (but this may mean that applicants in 2013 will be expected to achieve objectives by 2018).
7.2.5. Action Plan to ensure successful implementation after the reallocation of funds The summary of the proposed reallocation in the previous table is the following:
Table 171: Summary of proposed reallocation of funds among select BGRDP measures
FROM MEASURES TO MEASURES In MEUR In MEUR M 111 15.3 M112 67.5 M 122 14.1 M114 (M143*) 15.3 M141 110.0 M121 209.9 M 223 20.4 M226 14.1 M 311 50.0 - - M 511 70.0 - - M 611 27.0 - - TOTAL -306.8 TOTAL -306.8
Evaluators are on the position that the proposed reallocation if funds in Axis I will not be possible without the active involvement of NAAS via the M143 previous full scope of actions in the period 2007-2009. Hence the budget of the measure M143 should also be increased, but after consideration for quantified targets to be achieved by M114 and M143. It is absolutely imperative that all limitations and ranking systems in any private measure are lifted on March 2013. Thus non-priority applicants will have the possibility to apply and absorb the remaining budgets and they will have time to implement the projects till end-2015. Thus there will be no risk of decommitment of funds. The MA and SFA-PA should inform at least 3-5 months before they enforce a particular decision to open/close windows for calls of proposals, to reallocate budgets, to lift all limitations and restrictions to apply for support.
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Table 172: Proposed timeframe of necessary actions to implement the proposed recommendations mainly concerning Axis I measures
YEAR 2011 YEAR 2012 Actions Jan- Oct. Nov. Dec. Jan.- April July Oct.- Sept. Mar. - - Dec. June Sept. Enforce reallocation of funds (WGs and MC decision) / Notify EC Communicate plan 2011-2012: publicize budgets and targets per measure, as well as the windows (and budgets) for selecting the proposals Ensure national financial support schemes supporting the achievement of quantified targets per measure, sub-sector and district Ensure/dedicate sufficient administrative capacity to achieve quantified targets per measure, district and sectors Via separate projects: (i) (i) Identify appropriate technologies (best practices) per agriculture subsector to meet EU priorities (e.g. (ii) water and energy saving, waste management for bio-degradable and non-bio-degradable waste, limitation (iii) of GHG emissions, use of alternative energy (incl. alternative fuels), technologies suitable for eco-farming (iv) and for soil preservation and restoration, etc.). Repeat the same exercise for the forestry sector and for the processing sector as well. Promote the use of the technologies via the Stakeholders associations (M111), Training institutions (M111), Consultants (M114), NAAS (M143 and M114), National Rural Network (M511), LEADER LAGs (M41), district and municipal offices of MAF, district offices of SFA-PA. Stress benefits for the beneficiaries as well as the public benefits created from the introduction of the investments. M511 (ii) Identify appropriate investments and technologies to meet the minimum set of standards and requirements for holdings per particular agriculture sub-sector. Calculate respective costs within respective market price brackets. Repeat the same for the forestry sector and for the processing sector as well. Promote the use of the technologies via the Stakeholders associations (M111-information action), Training institutions (M111-training), Consultants (M114), NAAS (M143 and M114), National Rural Network (M511), LEADER LAGs (M41), district and municipal offices of MAF, district offices of SFA-PA. Stress benefits for the beneficiaries as well as the public benefits created from the introduction of the investments. (iii) Help establishment of specialist family farms: Identify the minimum economic size of holding per agriculture subsector to ensure sufficient family income from operations; identify the necessary investments and the investment budget to achieve such holding; investments should be sufficient to cover the minimum
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YEAR 2011 YEAR 2012 Actions Jan- Oct. Nov. Dec. Jan.- April July Oct.- Sept. Mar. - - Dec. June Sept. obligatory standards and requirements per particular activity and introduce innovative technologies in line with EU priorities (see (i) and (ii) above) (iv) Help establishment of POs: Elaborate and communicate a guidance on the establishment of a Producer Organization and its subsequent operations and support available under CAP I. Stress and illustrate the medium term and long-term financial and marketing benefits from participating in a PO supported under CAP I mechanisms. Prepare specialized expert force in NAAS and consultants under M114 to promote and help the establishment of PO under M142. Note: short term financial support may be necessary for the establishment of the POs (for preparation for recognition by MAF). Using M511 outputs above: ensure that training programs include information about (i) the relevant legislation and necessary investments/technologies to meet the legislation, (ii) the appropriate technologies for meeting EU priorities, and (iii) steps and benefits to form/join a Producer Organization. Call for expression of interest from applicants to carry out the information actions mentioned in the previous M111 section for M511 above. Make sure the budget under M111 is spent with priority for the M214, M112 and M141 beneficiaries: establish close link among approved applicants under the measures and the training and information projects here. Windows for collection of proposals for the new training programs and information actions. Reallocate budget. Redesign measure (eligibility conditions and ranking system – district focus), decentralize implementation and publish ordinance. [Ensure there are funds for M112 beneficiaries for M112 general competitiveness in M121 budget and for diversification of activities in M311 budget] Windows for collection of proposals 1st 2nd 3rd 4th Using M511 outputs above: ensure that consultations include information about (i) the relevant legislation and necessary investments/technologies to meet the legislation, (ii) the appropriate technologies for M114 meeting EU priorities, and (iii) steps and benefits to form/join a Producer Organization. MA could put regional quantified targets to be achieved by the consultants per measure (similar to the
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YEAR 2011 YEAR 2012 Actions Jan- Oct. Nov. Dec. Jan.- April July Oct.- Sept. Mar. - - Dec. June Sept. recommendations for M143 below) Reallocate budget. Reserve budget for suggested target groups of beneficiaries. Redesign measure (eligibility conditions and ranking system – district focus), decentralize implementation and publish ordinance. Communicate to applicants at least 3-5 months ahead the periods, the budgets, the expected numbers of supported beneficiaries per window. Use the communication to actively promote participation in PO and the benefits from investing in the innovation technologies, including the ones for EU priorities. Windows for collection of proposals – beneficiaries: contracted under M112 1st65 2nd 3rd66 Windows for collection of proposals – beneficiaries: contracted under M141 1st67 2nd 3rd Windows for collection of proposals – beneficiaries: contracted under M142 1st 2nd 3rd M121 Windows for collection of proposals – beneficiaries: contracted under M214 1st 2nd 3rd Windows for collection of proposals – beneficiaries: animal holdings – gen. competitiveness (G.C.) 1.10-25.12.2011 1.02.- 15.08.- 30.05.2012 15.12.2010 Windows for collection of proposals – beneficiaries: farmers in fruit and vegetables (G.C.) 1.10-25.12.2011 1.02.- 15.08.- 30.05.2012 15.12.2010 Windows for collection of proposals – beneficiaries: farmers in tobacco production to convert (G.C.) 1.10-25.12.2011 1.02.- 15.08.- 30.05.2012 15.12.2010 Windows for collection of proposals – beneficiaries: green houses (G.C.) 1.10-25.12.2011 1.02.- 15.08.- 30.05.2012 15.12.2010 M 141 Reduce budget. Redesign measure to give priority to the districts lagging behind. (ensure general competitiveness budgets in M121; ensure strengthened NAAS capable to organize the M141 in PO under
65 For M112 beneficiaries in the first wave: 2008-2009. 66 This is optional if there are still budget/applications and interest of unsatisfied M112 beneficiaries registered to apply for M121 support. Same applies in this column for all other targeted beneficiaries below. 67 For M141 beneficiaries in the first wave: 2008-2009. MIDTERM EVALUATION OF THE RURAL DEVELOPMENT PROGRAMME OF BULGARIA 370
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YEAR 2011 YEAR 2012 Actions Jan- Oct. Nov. Dec. Jan.- April July Oct.- Sept. Mar. - - Dec. June Sept. M142, but also to prepare them for M121, M123 and/or participation in M311) Windows for collection of proposals 1.10-25.12.2011 1.02.- 15.08.- 30.05.2012 15.12.2010 NA M142 Windows for collection of proposals Constantly open; applications should be considered within stipulated periods - not with delays. Negotiate the Use of old M143 scope till end 2012. Allocate regional quantified targets for consultations under M112, M141, M142, and M214 (but also for M121, M123, and M311 for the previous beneficiaries). Targets should be consistent with the efforts to balance the territorial use of the support under the M143 agriculture supporting measures. Strengthen the administrative capacities of the offices to be able to carry out the allocated consultations. Ensure consultations on the kitchen table are possible in the isolated villages (i.e. budget for fuel is ensured). Use the materials recommended for M511 above, during the consultations. Guarantee MEUR 6.0 for beneficiaries under M112, M141, and M214. Redesign the measure to target with priority the districts where BGRDP uptake is lagging behind. Redesign the measure to prioritize job creation (more job places created – more ranking points). Redesign the measure to prioritize the services M311 and production enterprise offering innovation in the municipality (first such business in the municipality).
ADD the ones you made today!!! Windows for collection of proposals 1st 2nd 3rd Redesign the ranking system of the measures to give more priority support to: M311&M312 - Creation of Job Places - Districts of need of greater restructuring of agriculture (tobacco, subsistent farming into non- agriculture acitvitiies)
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YEAR 2011 YEAR 2012 Actions Jan- Oct. Nov. Dec. Jan.- April July Oct.- Sept. Mar. - - Dec. June Sept. - Women, Young people under 40 years of age - Proposals of greater multiplier effects to the local economy.
The contents of this Report are the sole responsibility of Agrotec SpA and can in no way be taken to reflect the views of the European Union
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