The Minister of Agriculture, Yavor Gechev, will quell the starting protests of the grain producers with promises of more European subsidies. On Wednesday, in 15 regions of the country, grain producers protested because of the “uncontrolled” import of grain from Ukraine, in their opinion, which undercuts their price, is treated with “forbidden” preparations and leads them to bankruptcy. However, the action backfired like a boomerang against them, because it caused a storm of indignation on the part of economists and public figures. They are angry that major grain producers collect huge subsidies from the EU every year rather than show solidarity with a country at war. Experts also ask where the cheap bread and flour are with the abundant grain harvest in the country and the abolished VAT. At the end of the day, after the meeting with the farmers, the acting Minister of Agriculture promised them new subsidies, the granting of which is quite controversial and depends on a decision of the EC.
The Minister’s promises for new subsidies
“The Ministry of Agriculture will request extraordinary measures from the European Commission – to activate the so-called agricultural crisis reserve of the EU“, Gechev announced at a meeting with the leadership of the National Association of Grain Producers, organized after today’s protests in the country. To Mediapool, Deputy Agrarian Minister Todor Dzhikov specified that on September 26, the EC will hold a debate on the activation of the agricultural crisis reserve, which is essentially a fund of funds that can be additionally allocated to farmers if they suffer damage from the war of Russia in Ukraine. He clarified that it is not yet clear how much funds Bulgaria would apply for, because the losses of the Bulgarian grain producers must be valued before that.
Sources of Mediapool pointed out that even if the EU acquires this financial instrument, it is more than debatable whether Bulgarian grain producers can benefit from it, since it is difficult to prove that the supply of Ukrainian grain to the EU market, and specifically in Bulgaria, leads to the detriment of the manufacturers.
“Bulgaria stands in solidarity with Ukraine, but Bulgarian farmers suffered serious damage,” the Minister of Agriculture also said, as quoted by his press center.
At the same time, the government of Galab Donev came out with the position that the European Commission should pay special attention to the situation on the market of oilseed crops and apply all possible instruments, including the implementation of extraordinary measures against market disturbances. This is included in the position of the government, with which Bulgaria will go to the upcoming informal meeting of the Council of the European Union on Agriculture and Fisheries, which will be held in the period 14-16 September 2022 in Prague.
“In the Republic of Bulgaria, the disruptions in the sunflower market are causing concern, on which, after the temporary liberalization of trade according to the Association Agreement between the European Union and Ukraine, more than 650,000 tons of oil-producing sunflowers originating in Ukraine have been imported, which presents Bulgarian farmers with serious challenges such as difficult realization of sunflower products in the country, limited warehouses for storing the grain and the corresponding costs, price pressure”the position also says.
What will grain producers protest?
Grain producers have launched protests demanding a ban on the import of grain and oil crops treated with plant protection products not allowed in the EU.
“The main concerns of the industry are related to the lack of effective actions by the national authorities to protect Bulgarian grain and Bulgarian grain producers in connection with imports from Ukraine. It is not for the purpose of transit, but on the contrary – Ukrainian products are sold on the Bulgarian market . They are bought by the Bulgarian processors and traders at non-market prices, far below the cost price of the Bulgarian oil and grain production”explained Kostadin Kostadinov, chairman of the National Association of Grain Producers.
He claims that currently Ukrainian imports are mainly used for consumption and processing in the country despite the presence of sufficient domestic production that meets the high European quality requirements.
“The implementation of Ukrainian grain and oil crops in the Bulgarian processing industry does not lead to a decrease in the price of food products, but only to a deterioration in their quality”he claims.
Farmer protests took place on Wednesday at 11 a.m. in Burgas, Vratsa, Vidin, General Toshevo, Dobrich, Karnobat, Montana, Pazardjik, Pleven, Razgrad, Ruse, Silistra, Sliven, Stara Zagora, Haskovo, Yambol.
BABH: The grain is checked by both the Bulgarian and Romanian authorities
However, the claims of the Bulgarian grain producers differ from the position of the Bulgarian Food Safety Agency. From there, they pointed out that before entering Bulgaria, Ukrainian grain passes through Romania, where laboratory samples are necessarily taken for the treatment of the seeds. Separately, the Bulgarian authorities are conducting additional inspections for pests, the executive director of the agency Hristo Daskalov, who is currently on leave because he is on the list of “Continuing the change” for the upcoming elections on October 2, told Mediapool.
Economists: Why bread does not become cheaper with a surplus of grain
The announced protests of the grain producers predictably turned like a boomerang against themselves. Economists asked if the Bulgarian had no right to eat cheaper bread.
“Bulgarian grain growers protested against cheap Ukrainian grain. So Bulgarian consumers do not have the right to cheaper flour and bread!? Let’s leave aside that if it were Russian, there would be no problem with the grain. Or it doesn’t matter if Ukraine can sell its grain, for to survive as a nation. What a world selfishness and brutal lack of basic solidarity with people in need”economic analyst Ilian Vassilev asked rhetorically on Facebook.
“At these prices, they can also sell outside. Aman from oligarchs who seek protection of their excess profits from the state. The new economic nomenclature, come on, remember that you have to compete. We are not your serf consumers!?”he concluded.
Just a day ago, it became clear from a KNSB study that despite the fact that VAT on bread has been 0% since July, the goods have not become cheaper in proportion to the reduced tax.
Members of the public have also expressed strong outrage at the grain producers’ lack of solidarity with the fate of Ukraine since the Russian invasion there.
“The audacity of the grain-growers is endless – they quietly collect subsidies from the EU and accumulate huge profits – on the backs of the European taxpayer. Now the grain from Ukraine allegedly prevented them from realizing their usual immense profits – and they roar to God. Zero solidarity on their part towards the causes , which the Europeans stand behind. Therefore – no subsidies for large farmers!”pointed out Ruzha Smilova on Facebook.
In the last 7 years, the imposition of a ceiling on subsidies to grain producers has been the focus of Brussels’ common agricultural policy. Since 2014, the rule has been introduced that a farmer cannot receive land subsidies of more than 300,000 euros per year, and they start to be limited as soon as they reach 150,000 euros.
For the new program period 2023-2027, this ceiling is expected to be three times lower – 100,000 euros.
However, the question of whether this ceiling is not circumvented through connected companies is disputed, and the EC itself has admitted that it cannot fully control the connectedness of so many agricultural companies in the EU.