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The Diplomat Conference: The regional context now and how it impacts the agro-food sector
The Diplomat-Bucharest magazine organized on December 11, at InterContinental Hotel Bucharest, the fourth edition of Romanian AgriBusiness Forum 2014, by putting forward the theme of The regional context now and how it impacts the agro-food sector in Romania.
First panel
Daniel Constantin, deputy prime-minister, Ministry of Agriculture and Rural Development- I want to congratulate The Diplomat for this initiative that comes at a delicate time, we must admit, from the point of view of agriculture and taxation. I wish to greet the main actors in the meat and sugar industry present today in the room, as these fields are going through difficult times at the moment. I think the topic we are discussing here today is extremely generous and refers to what agricultural development entails over the next period at a time when we are debating the budget for 2015 and the new National Program for Rural Development which will influence the activity in agriculture and food industry over the next six years. With the National Program for Rural Development we aim to ensure the constant growth of production so that we can ensure the national consumption needs but equally become an important importer- exporter on European markets. We are waiting for the program to be approved by the European Commission and start functioning.
Alex Jurconi, president of the National Federation PRO AGRO- This year we have proven what it means to unite for a common goal. Our goal is the reduction of the VAT to 9 percent for meat products, which would be a reasonable fiscal relaxation measure. We assume that a 5 percent VAT would place things in order on the meat and meat products market. We wish that over the next 90 days, together with the Fiscal Pact initiated last week and the intra-ministerial work groups, to find the best technical solutions and arguments in favor of introducing this fiscal measure as soon as possible. In the meantime, we will maintain growing public pressure so that the general public interest is respected.
Radu Timis, president of the Romanian Meat Association- For the past two years, we have been told that there is no money to the state budget. What we demand from the Ministry of Finances is to see how it collects the VAT. This is what we asked two years ago when Florin Georgescu was minister and this did not happen. During a meeting with a state secretary in the Ministry of Finances, I found out that in the case of bread, only after the VAT cut was applied, they started to monitor the VAT collection. We would be very interested to know whether the Ministry of Finances asked the IMF about the VAT reduction. If we manage to show that the VAT in the meat industry is not collected, and we believe this sum stands at somewhere around EUR 600 million, this could easily prove that a 9 percent VAT would bring at least 2-3 times more money to the budget. The Romanian Meat Industry offered to finance, from our money, a business intelligence solution that can collect all the data that the Ministry of Finances has and show the collection degree.
Ioan Ladosi, president of the Romanian Association of Pork Producers- When Russia set an embargo for European products, we started to hear things like: “You will not be affected because you do not export pork to Russia. This is totally untrue. It is true we do not export to Russia but this whole situation made the price of pork all over Europe to plummet and as such, in Romania, where we still bring half of the pork from abroad, this was normal to happen. It is true we are a collateral victim in all this situation, but finding solutions to counteract the effects of the embargo, should be a priority for the government.
Camelia Sucu, owner of Piata de Gros- The need to reduce the VAT needs not to be proved, it is obvious. A tax reduction in VAT at 5 percent would not only grow the quantity of products made in Romania and the investments made in Romanian agriculture but also the consumption of healthy products, which are important for the health of everyone. Consumers are often buying expensive but low-quality products. A reduction of VAT to 5 percent would have an impact in reducing tax evasion but also directly increase consumption of food products and indirectly the consumption in general. As long as people pay less on food, they are left with more money to spend on other products they need.
Emilian Dobrescu, president of the Sugar Owners’ Association in Romania- A VAT of 24 percent for sugar is one of the highest VAT levels in Europe. May I remind you that in Great Britain it is zero? We are approaching 2017 when there will be no more production quotas in the sugar industry so from that moment on, everything that is produced in Europe can be sold in Europe, and this spells direct menace on Romanian producers. The sugar industry can dissolve as quickly as sugar does in the coffee. From 35 production units in 1990, there are only four left.
Second panel
Nadia Crisan, general manager McGuireWoods Romania- I believe that Romania can be proud it yielded very good crops this year even though we are behind the countries we wish to compete against. I am happy that Romania obtained 265 million euro for cadaster. It is a joint effort of the Ministry of Agriculture and the Ministry for Rural Development. These 265 million euro corroborated with the approximately 140 million euro that the cadaster could obtain from its own revenues represents an important announcement for the evolution of the field.
Dumitru Daniel Botanoiu, state secretary, Ministry of Agriculture and Rural Development- The 265 million euro are part of a bigger sum of 415 million euro dedicated only to the agricultural cadaster. I think it will be finalized in at most four years. 2014 was a difficult year. From the point of view of the results posted by the producers, it was a good year, but there were great volatility and variations in prices. We see extremely high variations from one day to the next. In the year 2000, it was not admissible to have a 2 dollars growth for cereals from one day to the next. Now we can have even 20-30 dollars growth from one day to the next. The embargo from the Russian Federation affected the food and agriculture industry a great deal.
Dorin Cojocaru, president, the Association of the Milk Industry APRIL- I have always demanded the reduction of the VAT across the entire chain. I believe Romania needs a courageous government that should run risks, the same as any manager of a private company. Must we run the country without assuming any risks? There are various institutions that can estimate the risk impact. If you do not cut the VAT over the next months, you will cut the VAT for other companies, albeit not Romanian ones, in six or nine months because there will be nobody left to cut the VAT for.
The Association of Cereals and Oleaginous Seeds- We are experiencing very volatile times from the point of view of the market of cereals and oleaginous seeds. I saw some statistics regarding the connection between various stock exchange related products from 30 years ago and today. The transformation is incredible. Today, the factors that influence the price of cereals cannot be counted. Who would have thought twenty years ago that an OPEC decision regarding the price of oil would influence oleaginous products and even cereals? Too many markets are interconnected and this creates lack of predictability in the field of cereal export.