Bulgarian Agriculture: Ten Years of CAP - Results and Future Challenges After 2020

Krasimira Kaneva, Dimitre Nikolov, Plamena Yovchevska

Abstract: The paper is an outcome of IAE researches, revealing the significance of agriculture for the national economy, the trends of development of the main production sub-sectors, the restructuring, the efficiency and the financial stability of farms, according their size and specialization. The purpose is to make an assessment of the impact of direct payments implementation, the coupled support under CAP and the main RDP measures. The expected impacts of the new CAP 2014–2020 mechanisms have been analyzed and the possible challenges with CAP 2020+. The methods of descriptive, comparative and regressive analyses have been used. The data are from reports of the Ministry of Agriculture, Food and Forestry and State Fund “Agriculture”, the appraisals for RDP, the monitoring and the periodicals of the FADN for the period 2007–2016. It was postulated that the significance of the agricultural sector, expressed by its share in the GDP, diminishes despite the slight increase of GVA from the agriculture. The number of farms has strongly decreased, mainly of small livestock and mixed farms. The production efficiency increases as a result of the considerable increase of incomes from subsidies. Without them the profitability norm is low or negative and threatens the farms’ reproduction. The direct payments scheme (SAPS) helps the net income increase in the farms, but causes an unbalanced development of agriculture. The sectoral sustainability is not guaranteed, as producers are oriented towards activities with highest subsidy rather than the best future. The coupled support has a positive impact on subsidies’ reallocation to sectors with a small size of land. It does not lead to an increase in the production which is necessary for Bulgaria, but only increases incomes. The CAP 2014–2020 avoids some distortions but does not change the logic of subsidization. The significant RDP financial resources boost the recovery of agriculture, but the allocation of funds by priority is insufficiently justified and leads to discrepancies between the objectives and results. Shortcomings of the implementation of CAP and RDP provoke significant challenges to the CAP 2020+. In our opinion, Bulgaria should present a different point of view and propose mechanisms and incentives providing improvement of the production structure (raising animal production); increasing the competitiveness of production and the efficient resource use; allocation of larger share of funds for modernization of livestock farms and facilitating the procedures, focusing only on the most important environmental problems (e.g. erosion soil), inclusion of a part of the requirements for environmental and wildlife protection as an obligation for all farmers receiving subsidies. SAPS subsidies should be changed, taking into account other factors in addition to land size.

Keywords: agriculture; CAP; RDP; SAPS

Date published: 2018-11-21