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Usaid Slovakaid Sfpa Evropsko dvizenje

Seventh Session of Working Group1 – Agriculture and Rural Development (Chapter 11) Second Cycle

Macedonian farmers will have to create production organizations if they want EU help

 

 

Macedonian farmers will have to create production organizations if they want to use EU assistance, and the state must take more measures if it wants to stop the trend of dramatic decline in food production – was concluded during the debate on “Regulation of  agricultural markets ”, held within the framework of the EU National Convention in the Republic of North Macedonia. This was the first session of the second cycle of debates in this Working Group 1 which aim was to present the current situation in the agricultural sector in Macedonia and the measures being taken to reform it and adapt it to the EU’s highly developed and highly protected internal agricultural market. The debate was attended by Minister of agriculture, Forestry and Water Economy Trajan Dimkovski and other experts, professor for agricultural science, farmers’ representatives and other state officials. European experience was shared by Viera Baricicova, an expert from the Slovak Ministry of Agriculture.

-When we entered the EU, we had state agricultural cooperatives and individual farmers. The farmers did not want to join production groups, because they said – this is like in socialism. But, in the eyes of the EU they did not exist, they were too small to be partners in using its agricultural assistance, Slovak expert Baricicova said. According to her, now in Slovakia there are five so-called production organizations, or better groups of producers, which produce 80 percent of the vegetables and fruits, which means they are very powerful when they negotiate purchase prices, the Slovak expert explained. According to her, a production organization may have a minimum of five members, but if there are many like this, it will be complicated because they need to have a five-year production plan, quality assurance system, safe food production, placement strategy and other.

According to her, EU membership does not go with domestic protectionism, as the Union has regulation for the Common Agricultural Market which EU members perceive as a “bible”. It regulates all food sectors except sugar (due to overproduction), tobacco and alcohol. The purpose of the regulation is to maintain a balance between production quantities and prices, to standardize the process through mandatory hedge funds, to provide support programs, by prescribing common marketing and packaging standards, making registers of vines, establishing import and export standards and categories for quality. According to her, the Yugoslav agricultural standards, which are still present in Serbia, who has already started the accession negotiations, are the same as those in the European Union and should not be changed, expressing confidence that Macedonia is also at that level.

Baricicova assessed that agriculture in the EU today is an activity not so much based on physical work as on knowledge. According to her, it is important to produce, but to produce smart. To have a plan in terms of quantity that should be produced, in terms of quality and pesticide consumption, as well analysis for the absorption capacity of the market. But it is also important to know how to advertise, or better sell the products, how to keep prices stable, how to protect the origin of the products, how to label them and other aspects. Therefore, the process involves planning, monitoring and analyzing the situation on the ground, monitoring the climate changes and advertising for better placement. According to her, EU support for the farmers is significant and relates to innovations in the wine sector, renewal or conversion of vineyards, product’s promotion, damage insurance, other investments and fruit and vegetable school program. Being organized in production organizations helps for the concentration of the supplies, marketing, better production planning, optimization of production costs, price stability, risk prevention and research in this sector.

Minister Traјan Dimkovski emphasized that the Ministry is making great efforts to protect the agricultural market from price fluctuations and unfair competition. Since last year, the Ministry has been implementing a project for regulation of the agricultural market that will strengthen the position of all participants in that chain, promote vertical and horizontal integration, and link producers and buyers through strong contracts for production. Dragi Dimitrievski from the Faculty of Agricultural Sciences and Food emphasized that there are various market models and the most competitive is that one which is absolutely unregulated. The lower the level of market regulation, the stronger are the threats to this sector, said Dimitrievski, assessing that so far there has been an limited number of measures which were regulating our agricultural sector, but  mainly as ad hoc solutions, not as a system.

“Our market is significantly liberalized and therefore under strong competition,” he said, predicting that if it remained so, “the dissatisfaction with farmers would grow.” In general, he listed several of its weaknesses: That it is generally small and has an unbalanced supply, that production in some sectors exceeds domestic demands (such as fruits, vegetables and vines) and in others there is a shortage (meat and wheat production). Also, the capacity for export of our farmers is small, the structure is unfavorable and the big problem is the disorganization of the farmers, which in turn results in non-compliance of the contracts between producers and buyers and their weak market position.

– The road to the EU is paved, so it is better to make reforms faster. They are difficult because there are even 4,000 regulations, he concluded.

Vaska Mojsovska from the National Farmers’ Federation said that on the ground the picture of agriculture is not bright.

– For about ten years we have had a rise in production prices and a decline in purchases. Agricultural production also was damaged by negative effects of climate change, and this contributed to disappointment among farmers. The amount of agricultural products produced now is half than ten years ago, Mojsovska said. It is not difficult , she said, to produce food, but the producers  need to make a living from it, adding that agriculture provides 12 percent of GDP and that 180,000 families exist from it She warned that if this downward trend in agricultural production continued, we would all suffer the consequences, as imports would rise and hence the prices. The biggest problem, according to her, is product placement and then low purchase prices. Problems include the lack of synchronized production, disorganization among farmers themselves, unfair competition in purchases, lack of post-harvest strategies, lack of market analysis, low production per area and, he said, the selfishness and personal interests of some of the big companies (wineries, dairies …) They manipulate with low purchase prices and a disrespectful attitude towards farmers.

Aleksandra Martinovska-Stojceska from the Faculty of Agricultural Sciences and Food made several recommendations how to regulate the agricultural market. Among them: the support to be focused on income-generating activities, investments and structural measures, producers to join the production organizations, the inspection over the food production to be straighten, to have register of all purchasers and maintain and update statistics in this area. Adrijana Velevska, State Adviser for Rural Development, reported that there has been a move towards a farmers’ association and negotiations are already underway to register it as fruit’s production organization in Resen. She also reported that the EU-funded project is also underway in the Ministry and they are working also on school schemes, i.e. providing fruit and vegetables for students. She expected that this pilot project will be implemented the next year, after all necessary regulations are adopted.

Biljana Petrovska-Mitrevska from the National Farmers’ Federation pointed out that we have an excellent Law on Agriculture and Rural Development, but it is not respected, so although penalties are provided for illegal buyers, it exists only on paper. Igor Andreevski, Head of the Department of Gardening at the Ministry, participating in the discussion emphasized that to implement the laws and regulations, resources are needed, and in our country they are very small. According to him, while in the EU more than 36% of the total budget is allocated for agriculture, in our country that percentage is only 3%. We have to think where we are in agricultural development, he said, stressing that it is an unattractive profession that is being supported in the world. Dragi Dimitrievski responded with a rhetorical question – how much money is enough to make farmers happy? According to him, the EU has spent over 50% of the budget for this purpose before, but now these funds are being cut. However, he concluded, compared to other countries in the region, Macedonia is not so bad with the allocation of about 140 million euros annually for agriculture, since according to the support per hectare it is one of the countries in the Balkans that gives the most. For him, the biggest dilemma was whether those funds should be directed more towards subsidies or rural development, deciding personally on the latter. “If you give them subsidies they can buy a car or go on vacation. Like this, they will do projects,” Dimitrievski said. For him, the biggest problem is the disorganization of farmers, and he cited Slovenia as an example where, after joining the Union, eight farms were collapsing every day. Baricicova also confirmed that, but citing opposite successful examples in Hungary, where 160 production organizations were registered and in Poland, where there were only two large, but with 150 members. Her recommendation was to create such groups before joining the EU, because it will be more difficult after.

There was also the question how after so many subsidies the food production was reduced in the country, what representatives of the National Federation of Farmers opposed, arguing that without them, with actual purchase prices and production costs, plus migration of people, production would be even lower.

Mileva Gjurovska from the National Convention emphasized that this topic is different and more important than others because Macedonia is an agricultural country and there is a lot of work that needs to be done here to comply with the way this sector is regulated in the European Union. She stressed that we could not simply copy a model from some other neighboring country or from the EU, as 40% of the population in Macedonia is rural and it is unrealistic to require every individual farmer to become a legal entity. We must, she thinks, look for our own model, but if that transition is not made quickly we will have expensive food – something that is yet drastically noticed in the country.