Features of the transformation of agrarian relations in Bulgaria after accession to the European Union (2007-2019)

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Features of the transformation of agrarian relations in Bulgaria after accession to the European Union (2007-2019)

Maria Georgieva,

Ph.D (History), Associate Professor National Transport University, Kyiv, Ukraine

Abstract

Keywords: production relations, European Union, agricultural sector of the economy, Bulgaria, adaptation, integration.

Марія Георгієва,

кандидат історичних наук, доцент

ОСОБЛИВОСТІ ТРАНСФОРМАЦІЇ АГРАРНИХ ВІДНОСИН В БОЛГАРІЇ ПІСЛЯ ВСТУПУ ДО ЄВРОПЕЙСЬКОГО СОЮЗУ (2007-2019)

В статті розкрито особливості розвитку виробничих відносин в аграрному секторі економіки Болгарії в умовах її членства в Європейському Союзі. Завдяки залученню широкого кола статистичних джерел, визначено, що сучасне болгарське суспільство переживає глибокі зміни в соціально-економічному розвитку, реакція на які дозволила вивести болгарський аграрний сектор на конкурентоздатний рівень.

Проаналізовано основні тенденції в розвитку аграрної галузі економіки Болгарії після входження країни до ЄС і трансформаційних процесів в секторі. Крім того, внаслідок проведеного глибокого аналізу, доведено, що болгарський аграрний сектор на рубежі вступу до ЄС мав низку проблем, що перешкоджали підвищенню його продуктивності та рентабельності. Після входження Болгарії до Європейського економічного простору, країна мала здійснити ряд заходів на вирішення вищезгаданої проблеми. Зокрема, вона полягала в адаптації аграрного законодавста, заходів державної підтримки до європейских норм та стандартів сільськогсподарського виробництва до європейських норм і вимог. Поглиблення європейської інтеграції та подальший вступ Болгарії до ЄС прискорив трансформацію аграрних виробничих відносин та модернізацію сільського господарства, що супроводжувалося адаптацією та гармонізацією аграрної галузі задля підвищення її продуктивності. agricultural bulgarian economy

Ключові слова: виробничі відносини, Європейський союз, аграрний сектор економіки, Болгарія, адаптація, інтеграція.

After Bulgaria's accession to the European Union, the agricultural sector continued the process of its adaptation to European norms and requirements, which was accompanied by the introduction of production standards, standardization of production processes and quality assurance of products.

The efficiency of agricultural production in Bulgaria depended on the implemented state policy measures to ensure sustainable agricultural development. At the same time, the main directions of state policy in the agricultural sector were financial support for farmers by reducing unemployment in the sector and increasing the competitiveness of the industry. State regulation of the agricultural sector of the

Bulgarian economy is a set of measures implemented by the state for the development of economic processes in agriculture.

Unfortunately, the development of the agricultural sector of the Bulgarian economy after joining the European Union has not been the subject of scientific research by domestic scientists. However, in the works of Bulgarian economists, historians and sociologists, the problem of adapting Bulgarian industrial relations to European requirements has not been comprehensively reflected. This problem is reflected in the works of Bulgarian researchers only in fragments. Thus, in the scientific works of D. Nikolov [5], N. Benchev [1], J. Slavova [7].

A key feature of state regulation and management of the agricultural sector of the economy were measures that had a stimulating or restrictive effect. These measures include subsidies, increase in purchase prices for agricultural products, reduction or exemption from taxes, duties, excises. Restrictive measures of state policy in the agricultural sector include the following measures, opposite to the previous ones, namely: reduction of subsidies, reduction of purchase prices, increase of taxes, etc.

The objects of state policy in the agricultural sector were all agricultural enterprises, including family farms. At the same time, in the Government Program "On Stable Development of the Republic of Bulgaria for the period 2010-2014" [3, p.8] it was argued that the measures used by the state should be aimed at satisfying the interests of all stakeholders, such as the state, agribusiness, farmers and consumers.

The second feature of the state agricultural policy was the existence of national standards for regulating the conditions of agricultural activity, which complemented the legislation and standards of agricultural activity.

The third feature was the relationship and interdependence between the various branches of agricultural production. The development of industrial dependence between industries and increasing concentration of resources in large agricultural producers have led to restrictions on free competition and the tendency to monopolize the market. This circumstance hindered the development of entrepreneurial initiative and was the main reason for state intervention in the development of the agricultural sector, through the introduction of measures to limit the monopoly in the manufacturing sector.

Thus, state support for the development of the agricultural sector was an important element through which it influenced the transformation of the agricultural sector. An effective agricultural policy has facilitated the rapid adaptation of the Bulgarian agricultural sector to European requirements and increased its productivity.

During the period 2007-2019, in order to improve agricultural productivity and reduce negative trends in the agricultural sector in the context of EU accession, the Council of Ministers of Bulgaria adopted a number of resolutions and programs. The most important and regulating the state policy in agriculture were the decision of the Council of Ministers of Bulgaria №564 of July 31, 2014 "On the development of the scheme of direct payments to agricultural producers" [3, p. 11], the order of the Council of Ministers of Bulgaria "On conditions and application of direct payment schemes" and Order "On eligibility criteria for agricultural land for support under the scheme of direct payments for land". The reasons for this process are the refusal of the part of farmers who received little support in the amount of up to 500 euros to apply, because the requirements for applicants were increased. The rest of the farmers considered that these benefits were not beneficial to them, as the costs of applying (payment of social and medical insurance when registering for benefits, according to the Resolution of the Council of Ministers №3 of 17 September 1999) [1, p. 71]. Statistics show that the number of beneficiaries who received direct payments up to 500 euros, respectively, in 2015 - 38.53 thousand, in 2016 - 8.2 thousand, in 2017 - 7.1 thousand or a decrease about 30 -31 thousand farms. There was a decrease in the number of beneficiaries from the group of those who received subsidies, in the range of 500 - 1250 euros, but it is much less - from 22.48 thousand in 2015 to 17.21 thousand - in 2016 and 16.26 thousand - for 2017, a decrease of approximately 5-6 thousand [4, pp. 33-34].

After Bulgaria's accession to the EU in 2007, farmers began receiving subsidies in 2008 to support production activities. The data show that the number of recipients of state aid for the period 2007-2015 increased from 78.7 thousand and reached 98.9 thousand, but in 2016-2019 their number decreased to 67 thousand.

According to the government program "On stable development of the Republic of Bulgaria for the period 2010-2014" and "On the stable development of the Republic of Bulgaria for the period 2014-2018", the Council of Ministers of Bulgaria was to support and develop agricultural production and promote the development of the agricultural market and its entry into the European Economic Area [4, pp. 27-29]. This program provided for food security in Bulgaria.

According to the Rural Development Program for the period 2007 -2011, support for agricultural producers was provided by providing the following types of assistance:

* direct and indirect payments to agricultural producers. A special place in this type of assistance belonged to young farmers, whose activities required greater investment;

• subsidizing the renewal of the material and technical base of agricultural holdings and providing soft loans for modernization of production;

• financing the research work of agricultural research institutes and ensuring their practical implementation in the production process. Training of human resources of the agricultural sector;

• social development of rural areas [7, p. 110]

Expenditures were planned for each of the areas of state policy in the agricultural sector of the Bulgarian economy in the Program, which were financed from the budget.

The analysis of budget expenditures for specific programs to support the development of the agricultural sector showed that the plan of financing the sector in the programming periods 2007-2013 and 2014-2020 was implemented by more than 70% in various areas of the program.

Thus, in 2007-2013, public funds were used under the program "Support for small farms and young farmers." As a result of this program, the construction of 231 farms with a total support of 102 million euros was financed in Bulgaria.

The dynamics of the total number of agricultural farms in the country and the number of beneficiaries of direct payments formed the basis of the relative share of farms that received assistance. There was a positive trend to increase the relative share of supported farms from 21.4% in 2010 to 34% in 2013, and 33.5% in 2016 [4, p. 39].

The relative share of beneficiaries from farms that met the conditions of the SAP ES was high and tended to increase - from 72.5% in 2010 to 85.4% in 2013 and 82.3% in 2016 [4, p. 41].

Although the analyzed period covers two programming periods of the EU SAP: 2007-2013 and 2014-2020, there was a clear trend to increase payments to agricultural holdings in the form of direct payments. Subsidies paid from EUR 166.4 million (BGN 325.45 million) in 2008 increased to EUR 774.1 million (BGN 1,514.0 million) or an increase of 4.7 times [4, p. 42].

Under the budget program "Modernization of Agricultural Farms" 2007 -2013 with a total amount of assistance - 1 billion euros, more than 240 thousand agricultural enterprises received assistance to upgrade the machine and tractor fleet.

In the programming periods 2007-2013 and 2014-2020, two budget programs "Vocational training, information activities and dissemination of scientific knowledge" and "Development of new varieties of crops, agricultural processes and technologies in agriculture and processing" were implemented. According to these programs, the funds were directed to research and development of new technologies and agricultural techniques, their implementation in practice; support for the training of agricultural staff by expanding the network of educational institutions and their accessibility; cultivation and conservation of genetic resources of plants and animals.

Under the budget programs "Payments for natural constraints to farms in mountainous areas of Bulgaria" and "Payments for natural constraints to farmers in forest areas" funds in the amount of 433.2 million euros were provided to farms to reimburse the costs of farming in complex natural and geographical areas. conditions of land location, such as logistics costs, recruitment to work on a farm in hard-to- reach areas.

In addition, state support for the agricultural sector of the Bulgarian economy was aimed at updating agri-environmental management methods. Thus, the budget program "Agri-environmental payments" allocated 435.3 million euros to compensate farmers for the costs of environmentally friendly farming (the use of ecological systems of plant protection, fertilizers and seeds. Also, the budget program "Support for the creation and development of agricultural micro -enterprises "was allocated 127 million euros to create conditions for the development of small agricultural enterprises, namely - the provision of benefits in the lease of land, purchase of machinery and agricultural tools, seeds, fertilizers and information and consulting services to farmers.

The development of the infrastructure of the Bulgarian village, increasing its socio-economic attractiveness and increasing economic activity was regulated by the budget program "Reconstruction and Development of the Village". Under the program, € 166.7 million was earmarked to reimburse the cost of building greenhouses, outbuildings, and medical and social care facilities. In general, in the period 2007-2019, 3 health care points were built in the country under this program. Lozen, Sofia region, village Tsalapitsa, Plovdiv region and the village of Poplars of the Varna region [1, p. 119].

In addition, budget programs were implemented by the Academy of Agricultural Sciences. Thus, the budget program "Professional training and provision of information about the business entity" directed 30 million euros to provide educational and consulting services to young farmers and acquaint them with the latest advances in agricultural science. However, this type of support for agricultural holdings did not have a certain incentive effect.

In 2007, the Government's Single Land Payment Program, the Energy Producers Support Program, was introduced for the first time. For this purpose, all the necessary regulatory and legal prerequisites for the full and effective implementation of subsidy schemes for agricultural producers were created. In accordance with the Law "On

Support of Agricultural Producers", relevant orders were adopted to regulate specific mechanisms for submitting applications for subsidies [5, p. 132]:

• Order of the Council of Ministers of Bulgaria №107 of August 23, 2007 "On the conditions for submitting applications for schemes and measures to support the agricultural sector";

• Order of the Council of Ministers of Bulgaria №9 of May 2, 2007 "On the conditions of support for grain producers";

• Order of the Council of Ministers of Bulgaria №105 of August 22, 2008 "On the conditions for installation, maintenance, access and use of an integrated system of administration and control of the agricultural sector."

During the study period, the Single Land Payments Scheme (SESP) was introduced in Bulgaria under the EU SAP. In order to achieve a consistent agricultural policy and take into account national specifics, it was planned to implement the SEP in Bulgaria by December 31, 2018 [6, p. 27]. The program proposed to increase the number of farmers who could receive financial assistance. To this end, the minimum size of farms that could receive payments was reduced to 0.5 ha for all types of farms. The introduction of the SES in Bulgaria has enabled farmers to receive funding from the European Agricultural Guarantee Fund. The amount of the fee was determined per hectare of land used and was not related to the type of production activity of the farm. According to the EPSU, the following types of land plots were supported:

• Arable land (arable land);

• Pastures and meadows - when applying for support under the SEPS, the density of grazed animals was taken into account and controlled - not less than 0.15 units per 1 ha;

• Lands occupied by perennials.

A prerequisite for the provision of assistance was the compliance of the land with the requirements of cross-compliance and agricultural activities on it.

In April 2007, Bulgaria submitted a request to the European Commission for approval of the size of the land subject to financial support under the Single Land Payment Scheme and in accordance with European legislation. The decision of the European Commission (EC) of 31 May 2007 approved 3,805,638 ha of agricultural land and the minimum farm area of 1 ha and 05 ha, respectively, for land with perennial plantations [2, p. 90].

By the Resolution of the Council of Ministers of Bulgaria of 12 December 2006 "On the amount of funds provided for the payment of a single payment per unit of agricultural area" a request was submitted to the EC for approval of additional national direct payments in accordance with European legislation. By decision of the European Commission of 30 May 2007, this amount was set at EUR 60,536,113 in total aid [2, p.91].

In 2008, the Resolutions of the Council of M misters of Bulgaria №105 "On the conditions of creation, maintenance, access and use of the integrated system of administration and control of agricultural lands" and the Resolution of the Republic of Bulgaria №107 "On the conditions for submitting applications for agricultural support programs" were updated. Because the main requirement for the application of the SES was the presence of an integrated system of administration and control of agricultural land, which was built and operated in accordance with European legislation. In Bulgaria, the development of this system began in 2006, and by the end of 2007 it was ready for implementation. In order to disseminate information about SES among farmers, a large-scale information campaign was launched, during which the media and interested farmers were explained the schemes and measures for direct payments for agricultural land.

The information campaign started on March 1, 2007 and during the first 4 years (2007-2011) 179,106 applications were submitted for the total agricultural area of 3,384,375 hectares. This gave rise to the process of verification of all submitted applications in June 2011, which led to the following results:

• Applications declaring land plots larger than 1 ha were subject to more thorough scrutiny.

• Applications involving farms that have already received financial assistance from other subsidiary and financial programs.

An appeal period (10 days) was set for such applications, during which agricultural producers had to prove their right to receive financial assistance. As a result of the inspection, it was established that only 74 thousand applications were free of errors and inaccurate data. Thus, 73,792 farmers received a subsidy of BGN 321.3 million under the SED and 61.4 thousand farmers received BGN 109 million under national programs for financing the agricultural sector of the economy. In addition, during the 2007-2011 inspection period, about 3,000 farmers did not receive support under any of the programs, and 2,700 farmers were sanctioned for doing business for providing inaccurate information.

Further implementation of the EU SAP during the period of Bulgaria's membership in the European Union provided great opportunities for the development of the Bulgarian agricultural sector, as well as provided for compliance with European norms and standards of production.

Special attention in the EU SAP in the period 2007 -2013 was paid to the policy of competition of agricultural producers. Elements of this policy were the condition of state support for agricultural production [8, p. 212].

Since 2007, Bulgaria has combined the terms of national programs of state support for agriculture and the rules of assistance from European funds, which provided for a number of restrictions and compliance with certain procedures and rules for the provision of state resources for the benefit of farmers. During the two programming periods, the following state aid was implemented in Bulgaria:

• state aid in the context of the terms of the annex to the Treaty of Accession of the Republic of Bulgaria to the European Union;

• financial assistance provided in accordance with EU Regulation №1860 / 2004 and EU Regulation №1535 / 2007;

• new programs to support agricultural producers, designed to support the development of the agricultural sector of the Bulgarian economy [6, p.113].

The state policy in the agricultural sector of the Bulgarian economy was carried out under the support programs under the EU SAP, which were provided before accession to the EU and which Bulgaria could use until the end of the third year from the date of accession, ie until the end of 2010. Agricultural support continued to be provided and after the end of the transition period, it must be approved by the European Commission. In accordance with the approved Regulation №1535 / 2007, the amount of the minimum financial assistance provided under the EU SAP support program was set at EUR 7,500 per farm for agricultural production of vegetables, fruits and tobacco [7, p. 148]. As for the support of enterprises engaged in the processing of agricultural products, it was provided in accordance with EU rules on aid to industrial enterprises. The total amount of financial assistance to industrial enterprises provided for economic activities could not exceed 200 thousand euros for three years (according to Regulation 1998/2006) [7, p. 149].

During the study period, farmers received state aid in the form of targeted subsidies, reimbursement of interest on agricultural loans and capital subsidies on loans for investment projects and tax benefits. State aid was provided through the State Fund "Agriculture" and the State Fund "Tobacco", which in the period 2007 - 2019 acted as bodies in the system of the Ministry of Agriculture and Food, which provided state financial assistance.

In September 2009, the funds allocated under the SAPARD pre-integration program were unblocked, and the European Commission resumed payments to all support groups for the agricultural sector of the Bulgarian economy. In total, for the entire period of SAPARD program implementation, contracts with agricultural producers for 3,509 projects were approved and concluded.

As of December 31, 2009, all approved projects were implemented, which indicated a high investment interest in Bulgarian agriculture. In addition, as a result of the effective implementation of SAPARD investment programs in the agricultural sector in Bulgaria, during the period of Bulgaria's membership in the EU, the main source of support was the allocation of direct subsidies for the development of Bulgarian agriculture. The unit of calculation was the size of the land plot. Thus, in 2009 the amount of direct payments provided for in the EU Regulation 889/2009 under the terms of the EU SAP was 290 million levs, ie 162 levs / ha of agricultural land [5, p. 141]. The amount of assistance provided depended on the size of the land and the type of crop grown on that land.

As already mentioned, in addition to the European subsidies provided, EU agricultural legislation allowed Member States to subsidize farmers with additional funds from the national budget or by reallocating funds from the European Fund for Rural Development.

Accordingly, the following types of state support for the agricultural sector were used in Bulgaria:

• national surcharges for the use of agricultural land. The total amount under this scheme was 221.3 million levs, which was directed primarily to support agricultural land used for growing vegetables, grains and fruits;

• National surcharges for livestock farms we re introduced in 2009 and paid until 2019. They were fully financed from the state budget of Bulgaria, however, after the EC approval procedure. National surcharges to livestock farms were carried out in three areas: assistance aimed at supporting cattle farms; aid for sheep and goat meat and dairy farms; assistance to non-productive farms specializing in breeding ewes.

Thus, the budget programs implemented within the framework of the state policy in the agricultural sphere were aimed at stimulating the development of economic activity in the Bulgarian countryside, supporting its agro-industrial potential and were partially or fully financed from the state budget. However, most government support programs for the agricultural sector were not sufficiently substantiated and were not a priority. The main criteria of budget programs financed from the budget were to meet the strategic goals of agricultural production in Bulgaria and socio-economic development of the Bulgarian countryside, namely employment of the rural population, overcoming poverty and impoverishment of the village, increasing agricultural productivity and increasing the level of life of peasants.

The purpose of determining the long-term priorities of state support programs was to ensure the harmonious development of the Bulgarian countryside and its sustainable economic development, which was to be based on the introduction of an innovative model of agricultural production and integration into the European Economic Area.

Thus, based on the analysis, the following conclusions can be drawn:

- Significant financial resources were used by agricultural holdings through direct payments, which were not available in Bulgaria;

- About 1/3 of farms received state support;

- Uneven distribution of support among beneficiaries - accumulation of significant funds by large economic structures, small or insignificant amount of support to small farms.

Slight positive changes during the current programming period of the EU SAP (2014-2020) compared to the previous one towards a more balanced and even distribution of support between agricultural holdings.

List of sources and literature

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