Q: Once upon a time Bulgaria was one of the major European producers of grain, tobacco, milk products, etc. Now Bulgaria imports a lot of products and in some cases even suffers shortage of grain. What are the main reasons for such a decline in agriculture sector?
A: The main reason is the bad management in the agriculture sector and the strong political interference in the operation of the sector. For the last four years we had two governments in power. One of them was the so called Movements for Rights and Freedom government which was actually a socialist government and the succeeding was also the government of the Socialist Party its self, and those two tried to preserve the old structures in the agriculture sector. With their attempt to preserve the old structures in the agrarian sector, those governments actually blocked the land reform and they also tried to put some pressure in the private sector by promoting the old co-operative mode of operation in the sector. Those governments declared that they would give people opportunities to almost of management of land but in reality they favoured the old co-operatives which were called after a name of a member of the Parliament(theirs) - Orsov co-operatives. And also the wrongly understood market-oriented principles lead to taking wrong management decisions which resulted in the deficit of certain products in our market and the destruction of the balance in the country. The most radical example that I could give right now is the grain crisis. Having in mind that Bulgaria with the reputation of grain traditional producer in Europe two years ago we suffered a great shortage of grain. The main reasons were that the grain was bought from the producers on a very cheap price and then it was exported on a very high price to foreign countries and in that way certain people benefited from the high profit margins. The grain producers did not have any stimulations to produce because the prices were government controlled with the purpose of keeping down the consumer prices . These are the main reasons but it is a very broad subject.
Q: But how the current picture differs from that time?
A: Just a year ago when the government of the UDF took power we suffered a product deficit. The bread we consumed was prepared by imported grain from Poland, we did not have enough meat in the stores and where they had it was at a very high price,we suffered dairy products deficit, eggs shortage and etc. If you take a newspaper that dates back a year ago you can find all that I am saying now. The situation right now with all the measures that we have taken shows great improvement. It is due not only to the measures we have taken but also to the favourable weather conditions we had last year. In actuality we have got product surpluses related to all these products I have mentioned so far. If we have a grain surplus right now that we are exporting to our international markets after a moth time when we collect the grain harvest we are expecting a surplus to 500 000-600 000 tons of grain which will be exported as well. We have enough meat now , the pricing in the shops is moderate and also affordable to the consumer. And we are also expecting that certain quantities should be exported to international markets - still mainly pork. The same is the situation with eggs and chicken meat. One of the main problems last year was the shortage of dairy products and in the moment the quantities that we produce here satisfy completely our demands and it is even enough to export.
Q: But what are the most common agriculture goods currently Bulgaria exports and at what markets?
A: We are confronted with one major problem right now due to the policy and agricultural strategy of our previous governments, our traditional agricultural markets are not existing at the present, our relations have been destroyed . We were able for one year to restore a large number of our production capacities then it is much more difficult to restore our previous export markets. We encounter problems in the export of our agricultural products to EU countries because of the quotes principal- for each product that we export there needs to be a quote set . Our traditional markets in Russia and the Middle East, we have just started to restore our relationship with those markets. It is very hard right now to achieve competitiveness on these of the high rate of the already existing one. We relying heavily on the high quality of our vegetables and fruits because there are with really good taste indicators. Now at the moment we are exporting mostly wine for UK and many other countries including the USA. There is a big interest from China and Japan. We are also exporting bread grain.
Q: Something I noticed coming with the previous question is : here in Bulgaria don’t you think that something has to do with education. Being under the communism regime where for each product there was a season apparently. I noticed that in the other day on the market with the strawberries. People did not realise that they could sell strawberries all year long and they sell it because it is the season right now and that’s it. What do you think about that?
A: Yes, this true and we are working right now on a various projects with the help of different international organisations. The most difficult thing is to change the way of thinking but I think that we already have successes in that aspect and that people take right now seriously the different educational program and the opportunities given by different projects. Until a year ago the people were used to the state taking care of everything and they were constantly waiting for instructions from the top: to tell them what to produce, at what price, whom to sell to. And we are trying to explain that with the process of the liberalisation of the markets and prices ,people should start taking care of their own farms and their own agricultural companies and take decisions for themselves. The liberalisation of prices of agricultural product levelled the prices here and the prices in EU markets which was a driving force in the process of putting the agricultural sector ahead.
| Q: Coming back to the wine subject what could be done to improve the export of wine to the USA?
A: May be a little bit more advertising and a better marketing strategy. Nature was very favourable to Bulgaria , our vineyards are of very high quality and our wines share the same rate and they are being appreciated on international. I think that it is a very good business because prices here are very low and the profit margin could be very high from that segment.
Q: You mentioned marketing and advertising but is there any already in the USA?
A: This is done by the producers them selves because all the wine producing companies have already been privatised. Very recently in UK during a presentation of wines coming from all over the world , the Bulgarian wines ranked in the top 50 and I can also additionally give the exact name of that forum.
Q: The lack of financial resources and machines are considered to be the main problems of Bulgarian agrarians. How are going to solve those and other main problems? How are you going to help and stimulate the Bulgarian agrarians?
A: Yes , this is a real fact. Right after we took power we started taking measures in that regard. What we first did was making the import of all agricultural machinery duty free and tax free. This cheapened the machinery by 30-40%. All the leading companies in that business started establishing their representative offices here right away and now we are offering very high quality agricultural machinery in Bulgaria. There are offices of : Keis, John Dear, Ferguson, Klas, Fehn, Fiat, Hewholland and also the traditional companies producing the agricultural machinery from Russia and the former Socialist Countries. Preferential rates were preserved this year and all the agricultural machinery and equipment is duty free.
Q: Do you offer any programs for financing the agricultural producers, lower prices, buying on a monthly bases of equipment and etc.?
A: We are putting our efforts into several aspects. We are negotiating currently with the representative offices of the leading agricultural machinery producers. We have reached agreements already for different leasing plans. They are offering discounts and preferential rates for Bulgaria and a longer grace period. And in the same time we have a state agricultural fund through which we offer financing of agricultural producers . Actually through this fund financing is offered for acquisition of lands, buildings, machinery, equipment at preferential conditions.
Q: Your Government plans a privatisation program. Did Bulgaria finished the privatisation of the state owned agricultural companies?
A: We have not finished this process yet but compared to the former socialist government we have speeded up the process 3 or 4 times. Last year we have sold 100 agricultural enterprises of a total 255 enterprises sold for a period of 4 years- almost the half of all ever sold. Mostly they were sold to local buyers because not a lot of interest was registered coming from foreign investors and also because of lack of advertising and information in the foreign countries. Since we are offering very attractive enterprises, for instance wine cellars which produces very good wine that are located in very good regions with wonderful quality vineyards. With good advertising this would get a lot of foreign investors here because it is a good business. At the moment the privatisation of the big grain stores is on the way and there is a big interest shown by a lot of world famous companies dealing with grain, and I hope that they would participate in the auctions .
Q: Which would be the main public companies that are still to be privatised, the most interesting ones for foreign investors?
A: The most interesting enterprises are the state owned grain mills because it is a good business. It is a bread production and you can not do without bread and it is always a profit making business. Also the fodder production enterprises.
Q: Now I would like to ask you a more global question. How confidant are you in the future of Bulgaria?
A: If I am nit confidant enough I would not be here
. I am sure we will succeed. Bulgaria has very good
natural conditions. People are very hardworking
, they are very well educated and skilled. Land
is very fertile and the country has a very good
strategic geographical location. And what is most
important is that the country has already a serious
government which enjoys the support of its electorate
and it is trusted by people and the Parliament.
All necessary conditions are in place here hoping
to attract foreign investors. Because every investor
who is willing to make profit will take the challenge
to invest in a country like ours. Not to speak of
the fact that Eastern European countries are at
the moment a hit, very popular in the developed
countries. So the ones who would be more experienced
would have a better opportunity to make a profit.
There are great opportunities over here that have
not been exploited so far. We are expecting them
and every body who would be interested to come and
visit Bulgaria would find out what I just said was
true and would be willing very much to invest in
Bulgaria. |
BULGARIA, 
