At almost the 11^th hour, i.e. one day before the expiry of the deadline for its submission to Brussels, Plamen Oresharski’s cabinet approved the payment scheme per unit area for subsidies in agriculture 2014-2020. It will come into effect at the beginning of 2015.

In the words of former Minister Dimitar Grekov, the new scheme is “as fair as it can get”. The aim of the amendments made compared to the system applied in Bulgaria over the first period of European subsidies prior to 2013, was to eradicate the existing disproportions in the support given to the individual farmers. Over the abovementioned period, it transpired that 4-5 percent of farmers received over 80 percent of the direct payments per unit. Bulgaria and Romania register an unusually high for the EU concentration of land ownership – few in number big farms and countless small ones. This is the reason why the distribution of farming subsidies in these two countries was the least fair.

To tackle this problem, the Bulgarian government is proposing that the EU-recommended subsidy ceiling per farmer stand at EUR 300,000, and a 5 percent reduction of subsidies per farmer in the EUR 150, 000 to 300,000 bracket. The new distribution scheme includes additional assistance for the first 30 hectares of land, the most widespread farm size. They will get an additional EUR 7.5 per hectare over and above the EUR 15 per hectare farmers are entitled to – a sizeable increase of 50 percent. Here, observers caution that a process is underway of the artificial parceling out of larger farms down to no more than 30 hectares with the aim of getting the additional sum. Since the beginning of the year, the number of agricultural producers working an area less than 30 hectares has gone up by 16,000, experts say. In connection with this, interbranch agricultural organizations have suggested that a reference year be introduced for this bonus, preceding the start of this process of parcellation.

Unexpectedly, the measure gave rise to resistance most of all among the 100,000 small farmholders (0.5 – 3 hectares) who should get an additional EUR 1,250 a year. Some members of the farming community say that this support will help the smallest farms survive, but will stimulate them to remain at the same level rather than develop. Some saw this measure as part of an election strategy for attracting more votes. To prevent “payment per head” when there is no actual farming activity done by the petty landowners, an “active farmer” requirement is being introduced, i.e. someone who is a registered agricultural producer, working no less than 50 percent of their land and receiving no less than one third of their incomes from it.

According to the new direct payment scheme, the share will be tripled (13 percent) of the sum earmarked for assisting related activities in sectors that have been neglected, such as fruit and vegetable growing and stockbreeding.  In 2007-2013 a mere 3.5 percent of the direct subsidies were allocated for this. In 2014 this percentage went up to 6.5; in 2015-2020 it will reach 13, plus 2 percent for protein crops. These additional payments will affect a broader range of activities, such as fruit, permanent crops, bio-products, beekeeping, essential oils.

Another priority in the new payment scheme is support for young farmers, an issue that is critical throughout the EU. In 2015, farmers aged under 40 will have a bonus amounting to 25 percent of the subsidies per unit area, relevant to the first 30 hectares. A separate budget of up to 2 percent of the direct payment package will be earmarked for additional assistance to young farmers.

The direct subsidies budget per unit area for Bulgaria for the 2014-2020 period amounts to EUR 5.3 billion, the total farming budget for the country being EUR 7.5 billion. This is in fact a rather modest budget compared to what the old EU member countries are getting. This, in turn spells the continuing poor competitiveness of Bulgarian farming produce.

English version: Milena Daynova