State Fund Agriculture

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

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Ministry of Agriculture

Interviews - We have asked for 15 million euro for the disaster


- Mr. Porozhanov, let’s begin with the natural disaster that in the past few days affected people living in the village of Bisser, along the banks of the Danube River and along the Black Sea coast. Can affected municipalities use EU money from the Rural Development Programme (RDP) to cover part of the damages?
-The RDP measure that covers natural disaster damages is Measure 126, but at the moment it is not active. Its budget is between 10 and 15 million euro. The Ministry of Agriculture and Food (MAF) asked the European Commission (EC) to quickly allow the use of these funds so municipalities can receive them soon. It is possible to use the money to restore roads, drainage systems, public centres and churches. It is important that both municipalities and private individuals are allowed to use the money. When I visited the affected regions last week with the prime minister, I saw that people in Lubimec had lost their greenhouse crops to the floods and can’t recover their losses.
- Will you compensate farmers who lost their animals?
- We introduced the so called “de minimis” scheme which grants 7, 500 euro per farmer. We already paid out 29 000 BGN to 24 farmers from Bisser for animals that were sent to the incinerator. The subsidies range from a little less than 1, 000 BGN to 10,000 BGN per farmer, depending on the number of animals lost. Farmers whose animals were carried away by the flood will also be compensated, but only after the Bulgarian Food Safety Agency verifies that they really owned these animals. Farmers from Svilengrad and the other regions will receive the same compensation. The overall amount of compensation for all affected municipalities is expected to reach 100 000 BGN.
- I would like to get back to the personal incident from December. You were assaulted in front of your home. Do you know who did it and why?
- I don’t know yet. I would prefer not to comment. Тhere is an ongoing investigation and a lot of hypotheses. When I come to think of it, I cannot rule out the possibility that I was assaulted because someone told someone else that I was the bad guy. It could have happened because of denied payments or because of performed checks and verifications. 150 000 farmers and contractors receive subsidies through State Fund Agriculture and another 12 000 people receive financial help through the RDP. We apply the rules very strictly and the 9 EU missions that went through SFA in the fall all confirmed this. Perhaps some people’s interests were affected.
- Prime Minister Borissov said you were assaulted because you discontinued fraud opportunities. Whose fraud opportunities did you stop?
- The RDP now operates quite well and within the established time frames, which means there are no privileged RDP groups and consultants.
- Have such groups ever existed? Who are they?
- I can only assume they existed. Besides, SFA is now doing much better in the court room. Last December we won a huge case worth about 15 million euro involving the SAPARD programme. The curious thing about this case is that the firm didn’t even have a contract under SAPARD, but was suing SFA for lost profits because it hadn’t received EU funding.
- Until recently, you were a member of the supervision board of Bulgartabac’s Sofia factory. Perhaps you had enemies there?
- No, I can rule out this possibility completely.
- The holding was sold for 101.1 million euro but its staff claimed only the raw materials in the warehouses were worth much more. Did the government make a good transaction?
- What you sell is a business, not the assets associated with it. Everything was carried out according to the rules of the Privatisation Agency. If someone had a better offer, they would have gone ahead and made it. Bulgartabac has only two factories now and both focus on export. The holding’s home market accounts for 30%, which is not all that dramatic. What is important for the Bulgarian market is that it exists and continues to command a high excise duty. The holding was sold with two cigarette factories and a company for tobacco processing in Pleven. The rest is only buildings that don’t add any value; they only bring expenses.  
- Do you know who really bought Bulgartabac?
- I don’t and, honestly, I am not interested.
- The “Russian connection” was another version for the assault. You represented the country in the “Bourgas – Alexandropoulis” project. Have you thought about this?
- No, I haven’t. To me, this was an interesting project. My main task was to negotiate with the Russian side. As you know, they hold a 51% share and my aim was to make them prepare a financial model that outlined the economic benefits for Bulgaria. They never sent us a final version of this model approved by the financial consultant on the project. Moreover, there were the ecologic concerns. The unsupported ecologic evaluation affected the final decision of the Bulgarian government. Ultimately, Bulgaria was going to provide access to its territory and take the respective risks connected to tanks being unloaded, but the trade benefits were to go to Russia and Greece.
- There was information that the Bulgarian experts working on the project received bonuses from the Ministry of Finance. Have you?
- I have never received additional compensation for my work on the pipeline. But I find it reasonable to give bonuses when a job was done well.
- You already said that you gave 1 million BGN in bonuses to SFA staff. What principles did you use to decide who deserves a bonus?
- The suggestions come from department heads. I must say that 1 million is a very small amount, considering that last year SFA saved nearly 2 million BGN from salaries.
There are 1 700 people working in SFA. The bonuses were given for overtime work on the weekends, especially during application periods when we were paying the subsidies from the national budget and the compensatory payments for the E. Coli bacteria. These last 2 years we also sent 150 000 notification letters to farmers during the direct payments campaign and multiple other campaigns. The middle management and the staff did a perfect job there.
There isn’t a single person who received as a bonus more than the size of one salary over a 3-month period. To make a comparison: the bonuses in SFA are covered by up to 5% of the “Staff salary” fund, while in other administrations this per cent can reach 25%.   
- You manage the largest EU programme, with a budget of 3.2 billion euro. How much of this money have you paid out to farmers so far?
- By the end of 2011, we had contracted 51.7% of this amount. We had paid out 1.019 billion euro, which is 38.6% when we include the guarantee fund.
- Why do you include the guarantee fund? It was created at the end of 2011 so that Bulgaria doesn’t lose 335 million BGN. The European Commission hasn’t approved of it yet so there is no guarantee that we won’t lose this money.
- Because the fund has been accounted for as a payment. We have announced it as a payment and we expect a reimbursement. The colleagues from the Ministry of Agriculture and Food expect that Brussels will soon approve this transfer of 335 million from the RDP to the guarantee fund, which will make it easier for farmers to receive bank loans.
The annual report on the performance of all EU programmes came out a few days ago. All seven operative programmes combined have paid out a little over 1.5 billion euro. SFA has paid out over 1.5 billion euro only through the European Agricultural Guarantee Fund. We have also paid out over 1 billion euro under the RDP.
- Do you think you have the necessary qualities for a minister of agriculture?
- This subject is speculative and it is not on my agenda. On the contrary, my job in SFA is responsible and engaging enough for me as a financial expert. This subject can create tension between me and the Ministry of Agriculture and Food, which would not be good. In fact, Minister Naydenov and I are on excellent terms. The success we have had has a lot to do with the good coordination between the two entities.
- So Minister Dyankov has never talked to you about becoming an agriculture minister?
- Honestly, never.

17 899 635 BGN

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