State Fund Agriculture

  • 136 Tzar Boris III Blvd, Sofia 1618,
  • UIC: 121100421
  • 02/81-87-100, 02/81-87-202

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Contracting Directorate
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Ministry of Agriculture

Interviews - There aren’t enough beneficiaries to absorb the millions allocated for organic farming

Public officials who delay projects must be penalized, Porozhanov says
€304 million from the EU will be allocated for the most attractive measures of the Rural Development Programme (RDP). When we add national co-financing, the sum will reach €360 million. The aid will be used by young farmers, farms planning to modernize and municipalities willing to invest in infrastructure. We asked the head of State Fund Agciculture (SFA) Rumen Porozhanov what other funds will be available to farmers.   
-Mr. Porozhanov, will there be agriculture millionaires thanks to European funding this year?
- The application period ended on June 11. The data shows an increase in the size of land and the number of animals declared for support. Just like last year, we have about 4,000 fewer beneficiaries this year. That is, there were 84 000 candidates this year and 88 000 last year. Land size is growing, however, albeit with only 1-2%. This means that farms are becoming larger, which increases profitableness. There is also an increased interest in complementary national direct payments for tobacco. The scheme has close to 42 000 registered applicants right now. There is a 30% increase in the amount of agri-environment payments and the lands used for organic farming have increased two times and a half. The 2012 financial package for single area payments is €500 million. The distributed money will be proportionate to the lands the candidates declared, and those are almost 3.6 million hectares. This means that last year’s situation will repeat – we have beneficiaries with big plots of land that they have declared for support.
 - How much money did farmers receive this year?
-  SFA has so far paid over 1.7 billion BGN, mainly for land. We have paid over 72 million BGN for tobacco. We have distributed the subsidies for animal husbandry and are about to complete the de minimis payments for sheep breeding – we just started accepting applications for that scheme. We hope that we will have completed all de minimis payments by the end of July. Potato growers who suffered hardships because of the unfavorable market and climate conditions received close to 4.9 million BGN. In the following weeks, we will pay an additional 30 BGN per animal to stockbreeders, or a total of 9-10 million BGN. This way we will reach the national ceiling of 180 BGN per animal.
- Brussels has already refused to pay 40 million under the RDP. Will there be new corrections to the programme?
- The RDP has been progressing at a very good speed for a year and some months now. We contracted over €500 million in 2011 only, and so far this year we have contracted about €130 million. These are subsidies under our contracts with agricultural producers. We expect the amount to reach €500 million by the end of 2012. As of now, we have contracted 54,5% of the programme’s budget, or €1.416 million. We have so far paid over €1 billion, which is 39% of the programme’s budget. The 40 million were decommitted from the Guarantee Fund, which the state applied for in order to guarantee loans and advance payments to SFA beneficiaries.
It is no secret that there are many problems in contracting RDP funds. The Guarantee Fund was one of the measures we took to facilitate RDP beneficiaries who are private persons. The financial crisis and the problems with providing funding made it hard for them to realize their projects. This is why we took several measures – we established a programme for refinancing trade bank loans for private persons’ projects and created a Guarantee Fund. 
- Whendoyouexpect the Guarantee Fund to start functioning?
- We must first start a public procurement procedure under the Public Procurement Law and choose the participating banks. In my opinion, it is best if many institutions are responsible for it. When the procedure is over, we will sign the contracts and the Guarantee Fund will start working. I expect this to happen in the beginning of next month.  
- Is it possible to absorb the remaining 60% of RDP’s budget and what part of them will we have to return to the EU?
- The main risks concern Axis 2 of the RDP. The requirement is that at least 25% of the programme’s budget goes to Axis 2. For Bulgaria, as an economy, this rule creates big problems with absorption. The measures within Axis 2 are the agri-environment payments, the payments for areas with natural handicaps and two of the forestry measures. The problem is that there isn’t enough interest in those measures that would guarantee good absorption. This is why we risk losing RDP funds. Because we cannot transfer money from those measures to more popular ones, we think we won’t be able to absorb the whole resource. We are trying to make agri-environment payments more popular and increase the number of applications. The amount of declared land has indeed grown two and half times this year. However, the programme was designed for 40,000 beneficiaries under those measures and we have a little less than 2, 000 right now. The problem with absorption is a fact. Our aim is to increase interest in those types of measures because they will make up a big percent of payments in the 2014 - 2020 programme period – no less than 25% or 30%. The good news is that the platform of the next programme period will allow us to more easily transfer funds from one measure to another within the axes. RDP debates are ongoing, but I believe that, during the next programme period, we will be very well prepared in terms of administrative capacity and beneficiary interest, and RDP absorption will be better. Of course, no country absorbs 100% of its funds. And since we are talking about the next programme period, it is very important to note that the Paying Agency must adapt to it because we will begin registering agricultural producers under the new regulations in the beginning of 2014.
- What are the benefits and disadvantages of the new Common Agriculture Policy rules for Bulgaria?
- Our package under Pillar 1 – direct payments, will reach €815 million by 2016. What we mainly need to stress in terms of this package, and I know the Ministry of Agriculture and Food has already done it, is that we need to direct more money to coupled payments – for animal husbandry and plant growing. This is because we will not be able to apply complementary national payments and state aid after we start receiving more than 90% of the average payments in the European Union.
- OLAF announced it suspects fraud in ten RDP projects. Is there a risk that the SAPARD problem could recur?  
- There are always single cases where fraud is suspected and those are investigated by the competent authorities. We have a system that allows us to track those cases. In the RDP, this process is not very advanced. As far as I know, there are no more than ten projects under investigation. Four of them are municipal projects and the rest were submitted by private persons. But this is completely normal for big programmes like this one. As it turned out with SAPARD though, more than 90% of fraud suspicions were not confirmed.
- Do you approve of the proposal that public officials be fired if they delay projects for EU funding?
- I think this is justified. Such proposals, however, must be accompanied by relevant decrees. But I can say that SFA already observes the five-month terms for reviewing projects. We make efforts to optimize payment terms as well. Several days ago I issued an order that all payment claims spend no more than five days in the respective regional units before they are transferred to the general headquarters for approval. The administration should work fast and money should go where it is needed. The proposal to penalize public officials shouldn’t remain just a PR campaign, but be accompanied by actual penalties. But as you know, we will soon become state officials, and the state official in Bulgaria is a sacred animal. Firing one can take months.

17 899 635 BGN

From January 1, 2023 until today, under the 2014-2020 RDP (excluding the measures administered by direct payments), the following have been paid.
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