Romanian farmers to receive EUR 180 direct payments per hectare by 2016

Direct payments for Romanian farmers should grow from about EUR 120 per hectare this year to EUR 180 per hectare by 2016, said Achim Irimescu, secretary of state with the Ministry of Agriculture and Rural Development during the Focus on Agriculture event organized by Business Review today.

“Romania started in 2007 with direct payments worth 25 percent of the EU average and according to the present scheme of gradually increasing these funds, we will reach EUR 180 per hectare by 2016, although the EU average is EUR 270 per hectare. After the reform of the Common Agricultural Policy (CAP) we will reach EUR 200 per hectare, which is an actual growth of only 7 precent,”he said adding theta there is no deadline to reach convergence with the EU average.

The draft for the CAP for 2014-2010 proposes to reduce discrepancies between the levels of payment stipulated by the current legislation – between member states. About seven EU countries could enjoy increased direct payments, including Romania. However, this proposal to balance direct payments between member states also means that some states such as France and Germany, which receive some the highest direct payments per hectare presently, will receive less than they do now.

Given the present economic context and the fact that the countries which receive the highest per hectare payments are also the biggest contributors to the EU budget, political pressures are made in Brussels in order to reduce the scale of redistributions and even reduce the funds for direct payments in a number of countries including Romania, said Irimescu.

He added that this is unlikely to happen and the Romanian government is taking the necessary steps in order to receive during the fiscal period 2014-2020 the same funds for rural development and increase the sums for direct payments.

He explained that Romania started in 2007 with a low level of direct payments because this was determined by low yields. On one hand this was caused by the drought in ’98 and ’99 but also because of the high level of tax evasion, many farmers not reporting all of their production. The level of the direct payment per hectare was calculated at that time as yield per hectare multiplied by EUR 63.

In the EU subsidies represent about 60 percent of the final value of agricultural products.