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October 23, 2021
BUSINESS

Ciolos: Unless taxed, agriculture will be underdeveloped

European Commissioner for Agriculture and Rural Development Dacian Ciolos urges Romanian authorities to show a vision on agriculture and said the good crop this year was but the outcome of a favourable conjecture, adevarul.ro writes.

Ciolos declared himself content with the results obtained by Romanian agriculture, yet he cautioned they were due more to an auspicious year than cohesive agricultural policies. “It has been a good year, a good crop, yet, we shouldn’t’ get euphoric about it. Unless for the good luck, agriculture could very well have been a brake on the economy. Unfortunately, the agriculture’s contribution to the Romania economy remains rather unpredictable. Unless we increase the degree of predictability of production and capitalize on it, agriculture’s contribution to the economy remains a double-edged sword,” Ciolos said, in whose view, agriculture shouldn’t be underestimated, “dusted off only when the sun shines and the rains fall when they are supposed to,” and when agricultural production comes handy to economic calculations, or when political calculations engulf farmers during sweet electoral time. Agriculture should not be treated superficially when the budget is being built. Farmers need public financial support because they are asked more than to put a product on the market. A farmer cannot operate the way a business person does, who closes a factory here and moves it where the business is more profitable.

First, it is important that agriculture is acknowledged as one of the main pillars of the Romanian economy, its position in the economy should be strengthened in the long term, not just during the years when nature is generous. The large farms and the agro-industrial units must be enticed to invest in innovation towards a lasting increase in performance and in order to be able to export. The demand for food is growing worldwide – a structural growth. The price of foodstuffs will remain high on the international market. This is an extraordinary opportunity for Romania, which still has an untapped potential for production growth, even in the plain area, where it started to perform better.
The small-to-medium farms must also be stimulated, yet in a different way.

They should put on the market products that went through previous processing by farmers and their organisations, so they get to retain an increasingly larger part of the added value. Processing could be done at farm level or in collection, processing and packaging units belonging to group of farmers. Connecting local agriculture to specific quality products, or even tourism is another possibility. “Unless agriculture is under taxation, we keep going round in circles on underdevelopment. Farmers sell on the black market, by the side of the road, cheap. The farmer won’t be able to draw up the balance sheet, to go to the bank, won’t have access to EU funds. Agriculture should be taxed in intelligent fashion. Gradual taxation, in order that an unbearable financial pressure is avoided being put on producers, mostly on those who make investments, could have a greater chance to succeed,” the EU Commissioner said.

“I have proposed a package of measures dedicated to the young people who start or take over farming. A young farmer, up to 40 years of age, will benefit from an additional 25 pc subsidy/hectare during the first five years. For those countries with small farms, including Romania, there will be a cap of 25 hectares. I have also proposed a scheme encouraging small farmers to transfer their land to those farmers who put products on the market, by means of a subsidy equal to 120 pc the subsidy they would have received under the small farmer scheme,” Ciolos concluded.

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