Structural changes and labour adjustments in rural Bulgaria

The rural areas in Bulgaria cover more then 80% of the country territory and account for about 29% of the population. Their development depends strongly on agricultural sector. The paper examines structural changes in agriculture, labour market situation in rural areas and presents the main results of the survey performed in three region of Bulgaria. The study shows a substantial decline in the number of farm with economic size between 0,5 and 3 ESU and a stable increase in the number of large farms. Major factors having impact on farm restructuring are: improvements in economic situation, in particular the increase in real income, positive developments of land market, deterioration of age structure of rural population and the habits of rural population to keep some agricultural activity. An important development of subsistence and semi subsistence farms is observed indicating two opposite processes: a process of transforming of a small part of semi-subsistence into commercial farms or into higher economic size group and another part of them converged to subsistence farms. The number of subsistence farms with economic size 0,5 – 1 ESU also declined as the reduction is either due to reduction of farm activity or due to exit from the sector. The most important option for employment and source of income in villages studied is agriculture, but the earned income is much below the national average The most important factor having impact on a decision to start a job outside agriculture is “To ensure households leaving standards/ generate cash income”. Generally the respondents do not think that they will have possibility to start their self employed business outside agriculture in the next 5 years. Only 25% of them expect to stay in agriculture as nearly 50% of the commercial farms will keep operating and only 17% - 26% of small farms will remain in the sectorrural development, farm restructuring, labour markets, Community/Rural/Urban Development, J21, R23,

Development of Agricultural Market and Trade Policies in the CEE Candidate Countries.

This synthesis report focuses on the evolution of agricultural market and trade policies in the Central and Eastern European (CEE) candidate countries in the period 1997 to 2001. The developments were crucially influenced by (OECD, 2000a): ⢠the situation in world agricultural markets; ⢠the overall macroeconomic development in the countries considered; ⢠the prospective EU accession; ⢠bringing domestic agricultural policy in line with the Uruguay Agreement on Agriculture (URAA). High 1997 agricultural prices on world commodity markets were followed by a marked depression in 1998. With the exemption of milk products this trend continued in 1999. Likewise the economic and financial crisis in Russia had a considerable impact on agricultural policies. It hit the regions´ exports resulting in a decline in industrial as well as agricultural output1. Thus, compared to the previous years most of the CEE candidate countries experienced a slow down or even negative rates of growth in their Gross Domestic Product (GDP) in 1998 and 1999. In addition those countries felt increased budgetary pressures. Agricultural market and trade policies largely reacted to these developments. Border protection was increased in many countries in 1998. This was combined in some cases with export subsidies, and ad hoc producer aids to mitigate the adverse effects. The prospect of EU accession also had an influence on the agricultural policy design in the region with many countries implementing EU-type policy instruments. Thus, the importance of per hectare and per head payments increased in the region, quota like measures were implemented in some countries and as part of this development Estonia introduced tariffs for agro-food imports. Finally, many countries also continued to adjust their policies to comply with their commitments agreed to in the World Trade Organisation (WTO). Despite these general tendencies there are also differences in the development of agricultural policies between the various CEE candidates. Chapter 2 therefore provides an overview of the changes of agricultural market and trade policies in each of the 10 accession countries. It addresses the policy issues market access (e.g. tariffs, special safeguard measures), export subsidies (value and quantities) and domestic support (intervention policies, direct payments, input subsidies, production quotas). Chapter 3 provides a brief assessment of recent policy developments in the region in the light of EU accession and WTO commitments. The development of prices and values, e.g. export subsidies, agricultural support expenditure, were presented in the background papers provided by the country experts in current prices in national currencies. In this synthesis report they are in addition converted in Euro. This firstly allows for a better comparison among the CEE candidate countries as well as between those countries and the EU. Some of the accession countries still suffer from high inflation and thus a strong depreciation of their currency. Thus secondly, the conversion to Euros allows the comparisons to be made in real terms.Industrial Organization, International Development, Productivity Analysis,

Macroeconomic Impacts on Bulgarian Agriculture during Transition

An unstable and erratic macroeconomy in an economy in transition might be expected to affect agricultural performance. This is tested for Bulgaria between 1992 and 1997 using impulse response functions from a vector autoregressive (VAR) model. Despite data limitations, it is found that shocks to the foreign exchange rate and interest rate feed into farm prices and agricultural exports but equilibrium will be re-established within 5 years. Agricultural policies may not be sufficient to counteract the wider macroeconomic forces.

Structural changes and labour adjustments in rural Bulgaria

The rural areas in Bulgaria cover more then 80% of the country territory and account for about 29% of the population. Their development depends strongly on agricultural sector. The paper examines structural changes in agriculture, labour market situation in rural areas and presents the main results of the survey performed in three region of Bulgaria. The study shows a substantial decline in the number of farm with economic size between 0,5 and 3 ESU and a stable increase in the number of large farms. Major factors having impact on farm restructuring are: improvements in economic situation, in particular the increase in real income, positive developments of land market, deterioration of age structure of rural population and the habits of rural population to keep some agricultural activity. An important development of subsistence and semi subsistence farms is observed indicating two opposite processes: a process of transforming of a small part of semi-subsistence into commercial farms or into higher economic size group and another part of them converged to subsistence farms. The number of subsistence farms with economic size 0,5 – 1 ESU also declined as the reduction is either due to reduction of farm activity or due to exit from the sector. The most important option for employment and source of income in villages studied is agriculture, but the earned income is much below the national average The most important factor having impact on a decision to start a job outside agriculture is “To ensure households leaving standards/ generate cash income”. Generally the respondents do not think that they will have possibility to start their self employed business outside agriculture in the next 5 years. Only 25% of them expect to stay in agriculture as nearly 50% of the commercial farms will keep operating and only 17% - 26% of small farms will remain in the secto

Participatory policy development for regional sustainability of agriculture

The EU Rural Development Policy framework is a result of complex interactions at different levels - European, national, regional and local. Ideally, the decision making process about its implementation should be shared by these different levels of governance. However, the implementation approaches vary between member states reflecting their individual governance models. This research examines the utilization of the ‘bottom-up’ approach for the development of visions for regional sustainability of agriculture and pathways to reach them in a model region in Central South Bulgaria – Bessaparski Hills area, which is a Natura 2000 zone, Important Bird Area and High Nature Value farmland

State of Production and Trade with Wheat in Bulgaria

The grain-production and processing is a strategic and structure-determining sector of the economy of the country, insuring the food stability of the country. Presented are the results from the carried out study of the production and trade with wheat as part of the whole food chain grain – flour – bread. Analyzed is the state of the production, the domestic and foreign trade with wheat for the period 1990 – 2003, characterized with deep transformation of the agricultural production in the transition to market economy. Revealed are the tendencies in the development, problems and reasons, provoking them. Based on the analysis are presented generalized conclusions and directions for increasing the competitiveness and achieving a sustainable development of this important sector.