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Trends in Restructuring of Bulgarian Agriculture

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Trends in Restructuring of Bulgarian Agriculture Trakia Journal of Sciences, Vol. 15, Suppl. 1, pp 167-171, 2017 Copyright © 2017 Trakia University Available online at: http://www.uni-sz.bg ISSN 1313-7069 (print) ISSN 1313-3551 (online) doi:10.15547/tjs.2017.s.01.030 TRENDS IN RESTRUCTURING OF BULGARIAN AGRICULTURE N. Kostadinova* Department of Management, Faculty of Economics, Trakia University, Stara Zagora, Bulgaria ABSTRACT Bulgarian agriculture has been operating for ten years on the Common European market and under the Common agricultural policy (CAP). This period is characterized by dynamic structural changes in the agricultural sector. The process of restructuring the farms is associated with a reduction in their numbers, but an increase in their average size, a deepening of the unilateral production structure with a predominant share of extensive crops, an increase in the level of specialization and concentration of production. The purpose of this paper is to examine the trends in the restructuring of Bulgarian agriculture under the influence of the EU CAP. The following tasks are fulfilled in order to achieve the objective: to analyze the state of agriculture in Bulgaria; to reveal key factors and trends in structural changes in agriculture. The methods used to solve these tasks and achieve the goal are analysis and synthesis, axiomatic, method of statistical groupings and comparison, induction and deduction, structural - functional approach. Expectations from the study are that Bulgarian agriculture has deepened its dualist structure - on the one hand - a small number of large farms specializing in extensive crops and on the other - many small farms producing mainly for their own consumption. Key words: agricultural holdings, agricultural policy, structural changes INTRODUCTION statistical groupings and comparison, induction As a result of the implementation of EU and deduction, a structural-functional Common Agricultural Policy (CAP) approach. restructuring processes aiming to reduce the farm number and their consolidation are taking RESULTS AND DISCUSSION place in Bulgarian agriculture. A dual agrarian The structure of agriculture is a sequence to the structure is being made – on the one hand a changes of the economic, social, political and few large-scale farms, specialized mainly in technological macro environment. These the production of cereal and technical crops, changes are an integral part of contemporary and on the other hand –a lot of small-scale life and determine different points of view in farms, specialized in animal breeding, fruit and the estimation of the structural changes. They vegetable growing, satisfying their own needs. are traditionally identified with changes of the The goal of the present study is to investigate volume and type of the different agricultural the trends in restructuring of Bulgarian activities. The scale of the farm (physical and agriculture under the influence of the EU CAP. economic), product realization, financial To achieve this goal the following tasks are situation, property, technology, characteristics accomplished: analysis of agriculture in of the labor force, institutional arrangements Bulgaria; discussion of the main factors and have an impact on the structural changes. trends of the structural changes in agriculture. In economic literature, related to structural MATERIAL AND METHODS changes there is a consensus among authors Methods, used for the solution to the tasks and concerning the factors which cause these achieving the goals are analysis and synthesis, changes. Structural changes have a complex the axiomatic method, the method of the character. However, there is not an _____________________________ independent and exhaustive theory, integrating *Correspondence to: Nadka Kostadinova, the leading factors and their interactions into a Department of Management, Faculty of Economics, whole system. Trakia University, Stara Zagora, Bulgaria, Email: [email protected], Tel: +359 -42- The 2004-2015 period for Bulgarian 699-416 agriculture is characterized by dynamic Trakia Journal of Sciences, Vol. 15, Suppl. 1, 2017 167 KOSTADINOVA N. structural changes of the farms. A stable trend orchards - by 1.6%, and the price of the towards a threefold decrease in the farm grasslands - by 24.2%. numbers - from 665,5 thousand in 2004 to 254,1 thousand for 2015 (МAF, In the last years the land has been converted Аgrostatistics), with the process of reduction in from a barely liquid asset into a sought product the farm numbers going on more intensively and its price has risen in times. after the accession of Bulgaria to the EU and For the 2004 – 2015period structural changes the implementation of the CAP. are characterized by different intensity and are The market –oriented and economically viable related to the decrease in the farm number of agriculture requires the presence of all organization forms except for the consolidated land for use and possession. The commercial companies (МAF, Аgrostatistics): farm land market creates conditions for the - Processes in the groups of farms, owned by realization of the property rights on the natural persons, have been the most dynamic agricultural land and secures a rational and with a trend in reducing of their number, due efficient land use. The functioning of the land mainly to the terminating of the activity of the market is related to the particular role of the small farms. For the period analyzed here the land as a main and fundamental resource in decrease in the farm number was by 63%, but agriculture, an important factor of production an increase by 39% in the land, cultivated by and development of the land relations, them, was registered; expressing relations between the citizens, legal - There is also a trend in reducing the number entities, local bodies of self-government and of cooperatives. After the accession of bodies of state power concerning possession, Bulgaria to the EU the introduction of direct use and disposition of the land. payments led to the increase in the land price and the rent. At a lower level of efficient For the 2000-2015 period the farm land market production some of the cooperatives did not in Bulgaria is becoming more and more active meet the expectations of the land owners about and dynamic. A growth in the parameters the rent increase. The reasons for the studied is reported each year. Until 2004 the termination of the activities of some market was weak and unattractive, there was a cooperatives are consequences from the big supply of farm land and barely any following: some owners took back their land in demand. This resulted in few transactions and order to sell it or to give it to commercial the average market price reached 140 companies for a higher rent. From 1973 in BGN/dekare. 2004 the number of the cooperatives fell to 811 for 2015, which represents a decrease by 59%, The farm land market became more active for related to the 50% reduction of the land the 2004-2006 period and the number of the cultivated by them; transactions increased by 40% on average -a considerable increase in the number of the annually. The market price increased by 25% commercial societies – it rose to 4323 in 2015, and reached 175 BGN/dekare. which means a threefold increase, accompanied by a threefold increase in the For the 2007-2013 period, when the country usable agricultural area (UAA). was a full member of the EU, the farm land - Against the backdrop of ongoing intensive market was reported to be extremely active. processes in other organizational forms in the The financial support in the CAP framework, ET farm group the change is smaller towards given on the basis of arable land, increased the the reduction of their number and the rise of interest in buying land. For the 2007-2009 the UAA, cultivated by them. period 3.5 million dekares of land was sold, and the transactions made were almost 374 000 Data illustrate that the bipolar model of the .The average market price reached 297 organizational and economic structure in the BGN/dekare at the end of this period. agriculture is becoming sharper and the difference between the sizes of agricultural Compared with 2014, in 2015 the average holdings under legal status is deepening. price of one dekare farm land reached 732 BGN, an increase by 7% was reported. In 2014 The ratio between plant growing to animal the average price of one dekare farm land breeding production is changing dynamically reached 684 BGN, which is by 15.2% more (an important index for the intensification of than that in 2013. In 2014 the vineyards’ price the agriculture) – from 45%: 55% in 1989 to increased by 41.4% compared to that of 2013. 51%: 49% in 1999 and about 70%: 30% in The fields’ price rose by 14.0%, that of 2015. 168 Trakia Journal of Sciences, Vol. 15, Suppl. 1, 2017 KOSTADINOVA N. Extensive crops dominate in our plant growing After 2007 sugar beet, flax, hemp, sorghum, with the wheat at the top, followed by the corn cotton and rye have barely been cultivated. The and barley. This very different structure areas with perennials, such as apples, cherries, represents the influence of the CAP on apricots, have been considerably reduced. Bulgarian agriculture. The financial aid by the Trends in the legume group have been strongly European funds for supporting this branch has negative – particularly in white beans, peas and been successfully implemented by the lentils. Bulgaria has become an ex-exporter production of cereal and technical crops. and importer of almost all vegetables. The potato production is continuing to decreasing. The growth rate is the best expressed by the The interest in restoration of fruit growing is wheat, a principal cereal crop in our country. not big enough. A positive trend has been After 2008 an increase in corn production has observed in the viticulture- wine-producing been observed. In spite of some fluctuations companies began planting new vineyards of the high growth in the general production of certain varieties to provide a quality raw the main cereal crops after the CAP material.
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