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Record produce exports in 2014, problems with animal husbandry
In 2014 agriculture was one of the key sectors of national economy, which brought record yields and incomes from exports of 4 billion euros in the first 9 months of the year.While farmers in the vegetal sectors boasted rich crops compared to 2013, they have to fight against the blue tongue disease in the cattle sector. This pest brought the animal husbandry sector losses of over 200 million euros.
The Russian embargo on foodstuff from EU indirectly affected the pork meat sector in Romania, prices going down by 30%. The Romanian market felt the pressure of excess foodstuff made in EU from countries with export tradition to the Russian Federation.
Agriculture was one of the first sectors for absorption of European funds in 2014 with a rate of 80% in the rural development area and 90% for direct payments.
There are still important stand-by projects expected by farmers which remain priority objectives in 2015 as well as the setting up of Farming Chambers and Mutual funds for farming losses, as well as lower VAT for basic foodstuff.
Record vegetal yields, cereal prices falling
While early in 2014, both authorities and farmers estimated “losses” of 15-20% for wheat and rape because of heat and drought, the autumn rainfalls produced problems for farmers.
“I am glad we conclude 2014 with good crops, although I was sceptical when we had rains and floods. However 2014 was better than the previous year. Last year we had good yields for rape, the best yield ever, we got 7.5 million tons for wheat and 2.1 million tons of sunflower and 11.19 million tons of corn. It is a good result, especially when the port of Constanta was declared number one in EU for cereal traffic,”said the minister of agriculture Daniel Constantin in an interview to Agerpres.
On the background of good cereal yields in Europe and in the world, prices went down in July, August and September, corn registering the lowest price of the last 5 years. Prognoses about the increase of world yield attracted a free price fall.
On Chicago exchange wheat quoted in March grew by 2.5% to 6.65 dollars per bushel. In Paris wheat quotations grew in March by 5% to 209.50 euro/ton, the highest level since April. Corn quotation in March grew by 1.3% to 4.1375 dollars per bushel while the soy bean quotation grew by 0.7% to 10.43 dollars per bushel.
Foodstuff exports of 4 billion euros in 9 months dominated by wheat and corn
Cereal exports have become more profitable lately, Romanian wheat and corn being among the most in demand in foreign markets. Over 5.5 million tons of Romanian wheat and corn were bought in the first 9 months of 2014, 25% more than a year before.
Statistic data show that Romania exported foodstuff of 4 billion euros while trade excess exceeded 349 million euros at the end of September. “Over January-September 2014 Romania’s foodstuff exports were worth 3.902 billion euros, on the rise by 11.2% compared to the same period of 2013, imports recording a slight growth by 1.3% to 3.553 billion euros,” according to the Ministry of Agriculture.
In the same context EU will also set o new record for wheat exports, for the second season on a row, in conditions in which the favorable exchange rate and economic problems in Russia offer EU member states the chance to export the largest wheat crop in history. The volume of export licences for wheat issued until now for July 2014/June 2015 is over the level recorded in 2013/2014 and EC prognoses on exports for the whole year show they will exceed the record of 30 million tons.
Exports of meat products and livestock have remained only on paper although Romania and china signed important accords in the last two years, allowing an opening of the Chinese market for Romanian products. The Forum for Agriculture between China and Central and Eastern Europe was held in October in Bucharest. The meeting was a business meeting with a partner interested in Romania’s farming sector.
“China holds a priority place in Romania’s developing relations with Asian countries and the Indagra forum was a good opportunity to discuss, sign contracts or initiate contracts,” said the minister of agriculture at the event. He mentioned that Romania has become more and more visible in the Chinese market and Chinese companies are interested in investing mainly in the Romanian farming sector. During the event a single Romanian producer had signed an export pre-contract for beef products.
Blue tongue disease, a difficult year for farmers
Blue tongue which appeared for the first time in Romania struck when animal husbandry started to grow in the sheep sector in 2014. “The year 2014 was a difficult one for the animal husbandry sector because it lost the capacity to export livestock in the Middle East. A first case of blue tongue disease was confirmed in May and cancelled our export possibilities to third markets. It was an income Romanian cattle breeders needed. August brought the blue tongue disease reducing our livestock trade,”said Alex Jurconi, the president of Pro Agro for Agerpres.
Authorities say we are limited for export and production and we will be affected by the disease in 2015. The disease might be eradicated in 2016.
9% VAT for bread, fiscal evasion reduced by 300 million lei
The balance sheet after a year of VAT reduction for bread showed that the people’s purchase power grew by 136 million euros and the number of employed people grew by 7,000, according to ROMPAN association.
According to estimates made by the Finance Ministry and the National Commission for Prognosis, fiscal evasion in the bread field dropped by 300 million lei following the reduction of VAT from 24% to 9% from September 2013 to June 2014.
All the positive data announced by the authorities and patrons determined representatives from the meat industry to ask for the reduction of VAT from 24% to 5% in a field with over 3.5 billion euros/year where the state loses over 450 million euros due to fiscal evasion. Romania is one of the countries with the highest VAT for meat in Europe.
Professional associations in the field of meat production and processing, members of Pro Agro National Federation initiated in April 2014 an ample national campaign for VAT reduction for meat and meat products. Over 208,000 Romanians have signed the petition for reduction of VAT to 5% for meat and meat products.
Biological products received special attention from authorities because they could represent Romania’s country brand although exports from ecological agriculture are over 80% raw materials.
“We have over 15,000 operators included in the ecological system agriculture and over 320,000 ha of certified fertile land. There has been increased demand for traditional and ecological products from Romanian consumers besides imports of such products. Although we have raw materials the processing sector is still young, with few and not very diversified products but with with a big development potential,” says Marian Cioceanu the president of Bio-Romania.
Lower VAT for biological food could mean lower incomes by 800,000 euros. The money could be compensated by the increase of bio processed food sold in Romania. Bio consumption in 2013 was 4-5 million euros.
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billion euro target from European funds in agriculture and rural area in 2014
Authorities say that European funds attracted until now from European money are almost 2.5 billion euros.“We are within the proposed target. The priority objective was not to disengage funds. 2.7 billion euros paid until the end of the year is the largest amount paid for investments through PNDR. The largest sums used to go to direct payments in pillar 1. This year we have a record amount of 1.1 billion euros investments and we will reach 1.3 billion euros until the end of the year.”
Unfortunately, the Fishing Operational Program where the sums allocated were 30 times smaller, there will be funds disengaged.Romania risks to lose about 15 million euros from European funds allocated through the Fishing Operational Program 2007-2013 because of the lack of project co-financing by private beneficiaries, said Ciceronis Cumpanasoiu, a general manager in the Ministry of Agriculture.
Fewer traditional products but higher quality
2014 brought new rules for producers in the field of traditional products, reducing 15 times the number of products registered until now, from 4,500 to 300. Actions to obtain European protection for similar products progressed with Sibiu salami and Ibanesti cheese which may be recognized in February.
In the bakery field there is a new offer of traditional products made according to 30 year-old recipes. The example is followed by units from the meat and dairy industries.