Saturday, August 30, 2008

Romania eyes harvest rise

BUCHAREST (AFP) - Romania’s wheat harvest is expected to rise this year, boosting growth and stabilising food prices in the country after harsh weather hit crops in 2007, Agriculture Minister Dacian Ciolos said yesterday.“I’m optimistic with regard to 2008,” Ciolos told AFP in an interview, predicting the wheat crop would rise to 7.7 million tons this year.

Total cereal production was expected to amount to 3.5 tons per hectare, thanks to the favorable weather conditions, he said.Romania’s agricultural sector was hit by the worst drought in 50 years last year, when output plunged by half, weighing down the country’s overall economic growth. The wheat harvest barely reached three million tonnes in 2007.“In 2008, the agricultural sector will certainly add to growth,” the minister said.

In the first six months of 2008, Romania’s gross domestic product expanded by a record 8.6 percent.The robust performance is expected to lead to a “stabilization” in food prices and that, in turn, could lead to a slowdown in inflation, the minister said. Nevertheless, farmers themselves would not benefit as much as the wholesalers from the upturn, Ciolos suggested.“The Romanian market is not as well-organised as, say, the French market, and farmers frequently have to choose between selling on the black market or being content with rather modest prices,” he said.

In addition, farmers faced a number of difficult new challenges when Romania joined the EU in January 2007, including the abolition of import barriers for agricultural products, stricter EU guidelines and changes in subsidies. Bucharest is set to receive some 13 billion euros (19 billion dollars) in EU agricultural and rural development subsidies until 2013, but not much of the money will find its way to many of Romania’s 4.3 million farms because their holdings of land are too small.Ciolos called for changes in the tax system, “which currently disadvantages farmers,” as well as state investment.

The EU said in July that it was freezing 28 million euros in agricultural aid to Romania owing to “technical deficiencies” in the way the money was distributed. Ciolos said Romanian experts were currently putting the finishing touches to the system, in line with the EU Commission’s recommendations. “What’s certain is that Brussels has become very strict when it comes to administering the funds,” he said.

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