Critical Analysis of the Financial Support Provided for the Dairy Milk Sector in the Conditions of Economic Crisis

I. STANKOV, N. NANEV, K. STANKOV

Abstract: There is not only a missing strategy, but also a policy for the development of the animal breeding sector in Bulgaria. Until now, the MAF hasn’t accomplished successfully any of the anticrisis measures necessary for the sector’s salvation. At the same time, the large scale import of dry milk and milk substitutes from the EU is continuing, which as a consequence places the local milk producers in an incredibly unfavourable situation. The Bulgarian animal breeding sector is lagging behind considerably in terms of the effective utilization of the production resources in comparison to the other member states in the EU. Thus for instance, the costs for feeding of the livestock comprise 27, 7% from the total costs, but in the EU - 27 they are 38, 9% on average. The costs for a veterinary doctor are 6, 1% in Bulgaria and only 2, 6% for the EU – 27. In addition, the inferior feeding and high morbidity rate are some of the main factors for the almost twice as low productivity of the cows – barely 3629 l in Bulgaria, compared to 6133 l for the EU – 27. With the purpose of overcoming the crisis in the milkcow production sector, we suggest a brand new approach for establishing the necessary financial funds from the state budget, presupposed by the urgent necessity for one year reproduction of the animals under the crisis conditions. The size of the one-off payment is determined by the one year amortization basis by animal groups. A critical analysis has been made in this article of the tax and financial policies in the milkcow production sector and a system of anti crisis measures is suggested for its overcoming. In conclusion, we can make the statement that the agricultural policy reform needs to respond immediately to the effects of the economy crisis on the farmer’s business activities, with the aim to relieve the credit access, raise the real income of the farmers and reduce the unemployment in the rural areas.

Keywords: Common agricultural policy; economic crisis; financial support; milk production in Bulgaria

Date published: 2024-09-05