Economics of transition Agriculture and the agricultural reform in Bulgaria and Romania. Leen Schroven Silvie De Roose Joris Motmans Lourens van Dijk Roxane Romme

Agriculture in Bulgaria General background The employment in the agricultural sector The reforms in Bulgaria Production and productivity EU accession

General background Situated in the heart of southeast Europe Population:  GDP per capita in dollar terms in 1999: 1510  share of agriculture: 17% Agricultural sector well endowed with natural resources 6.2 million hectares land (55% of the area) crop and livestock production

Employment in the agricultural sector Linked to the general economic situation Reforms  Fall of unemployment in the rural areas Reason: increase of individual farmers

The reforms in Bulgaria Started in 1989 Land reform 1991: LALOLU The restitution of land to former owners The privatization of state co-operatives 1992: Law Terms and procedures for transformation Includes minimum privatization targets for each year

The reforms in Bulgaria The price and trade policies 1991: price liberalization 1991: state monopoly in foreign trade removed Privatization of marketing system Crucial for the future of agriculture Demonopolization of the upstream and downstream sectors Now: almost all enterprises are privatised or liquidated

Production in Bulgaria agricultural production: > 1999 : declined with more or less 40% shares of crop and livestock production: relatively stable, approximately 50% livestock sector: sharp fall in cattle, pig, sheep and poultry numbers

Productivity in Bulgaria low labour productivity rise in subsistence farming

EU accession 2007 Bulgaria's agricultural sector gains from EU accession : EU subsidy payments overcompensate the reduction in market income

Romania: General background Politics: Transition began in International politics : EU and NATO Economic data: GDP per capita = $ Euro area: GDP per capita = $

Romania: Agriculture 1. Employment largest sector in employment (36,5%) co-operatives & state farms small, privately-owned farms

Romania: Agriculture 2. Production & productivity volume of gross agricultural output: stable small farms: effect on crops & livestock Low productivity: employment (36,5%) gross value added (13%)

Reforms in Romania Land reform Strict supervision of the government Property rights Distribution and restitution Access to credit National and international funding

Implications for the sector Rural Development package 3 instruments: PHARE, ISPA, SAPARD SAPARD: Help with problems of structural adjustment + implementation of acquis Overall aim: Support Romania in taking the remaining steps necessary to meet the criteria for membership

Policy Discussion Moving towards development and implementation of coherent rural development policy Reinforce administrative capacity New state support policy Increase of staff + other resources Land registration, interbranche organisations, quality policy...

Policy Discusion Legal measures for restructuring the agricultural sector - more stable + transparent rules for privatisation - negative social + economic implications for rural communities Acceleration of transposition of agricultural acquis Operation of common market organisations: at very early stage