Agriculture in Bulgaria

Atanas Kiskinov

National Dairy Board of Bulgaria

Co-financed by the European Union within the programme "Europe for Citizens" 2007 – 2013

Macroeconomic indicatorsEconomic Indicators 2004 2005 2006 2007* 2008*

Population (in 1000 th) 7761 7719 7679 7679

(est.)

7679 (est.)

GDP (in Billions BGN) 38.275 41.948 49.091 54.864 (est.)

61.711 (est.)

GDP per capita 4919 5434 6392 7144 (est.)

8036 (est.)

Industry %GDP

29.9 30.4

Agriculture %GDP

10.8 9.3

Economic growth 5.7 5.5 6.1 6.4 (est.) 6.4 (est.)

Inflation 4.0 6.5 6.5 7 (est.)

6.9 (est.)

Balance of Payment: Current Account (Mill Euro)

-1131.4 -2621.9 -3934.7

-5898.0 (est)

-6914.3 (est.)

Exports (Mill BGN) 22 192 25 766 31 420 15717 (q2)

n.a.

Imports (Mill BGN) 26 115 32 692 40 741 21640 (q2)

n.a.

Employment rate 27.17 28.94 46.7 n.a. n.a.

Unemployment rate 12.2 10.7 9.0 7 (aug)

n.a.

Gross value-added in agriculture EU

0

100000

200000

300000

400000

500000

600000

1998 1999 2000 2001 2002 2003 2004 2005 2006 2007

EU 15

EU 25

EU 27

Gross value-added in agriculture Bulgaria

Bulgaria

0

200

400

600

800

1000

1200

1400

1600

1800

2000

1998 1999 2000 2001 2002 2003 2004 2005 2006 2007

Bulgaria

Dynamics in Gross Value-added

Indicators 2001 2002 2003 2004 2005 2006

Gross value-added in the national economy (million

levs) 26 356 28 526 30 227 32 942 42 797 49 091

Gross value-added in Agriculture (million levs)

3 520 3 446 3 484 3 567 3 308 3 400

Gross value-added in Agriculture as a percentage

of national gross value-added

13,4 12,1 11,6 10,9 9.4 8.6

Change in overall value-added (%)

0.3 5.5 -1 2.2 -9,5 - 1,7

Labour force in Agriculture as a percentage of overall labour

force in Bulgaria25,8 25,8 25,5 25,0 --  -- 

Agriculture in Bulgaria after 1990

• Fundamental reform in agriculture;• Privatization;• Destruction of old production structures;• State withdrawal from agriculture;• Lack of sufficient governmental assistance

during the period of reforms;• Lack of sufficient financial assistance for

farmers.

Results: Agriculture is no longer an engine of national economy

• Gross value-added in Agriculture stays constant or decreasing whereas gross value-added in industry is increasing.

• Agriculture plays as burden in economy.• Labour force in agriculture is going down.• Managerial capacity in agriculture is extremely

poor.• Low effectiveness and efficiency in agriculture.• Low interest in investments in agriculture.

Results: Extensive and dependable production

• Serious unsolved structural problems• External competition puts the sector under

pressure.• Low competitiveness leads to extensive but

expensive (not enough technologies) production.• Strong dependency on environmental and

climate change.• State efforts oriented mainly to formal reforms in

legislation and meeting the CAP requirements.

Results: Trend to unbalanced agricultural structure

• 78% of arable land is covered by grain and oil-bearing crops. Low production and low employment are essential for these sectors.

• Almost dead sugar-beet sector => high rates of import.• For 2002-2006 land used for vegetables decreased with

14%.• Trend from export-oriented vegetable and fruit sector to

import-oriented structure.• Less land for vineyards and decrease in wine production.• Unbalanced agricultural structure is typical for

developing countries or for countries with unfriendly environmental conditions. Both are not supposed to apply to Bulgaria.

Results: Stock-breeding

• Decrease in number of animals (May 2007 – May 2008:- cows – 2.8% down;- sheep – 6.2% down;- goats – 7.8% down.

• Low productiveness.• Small-sized farms.

• Insufficient row production for the processing industry.• Monopoles established in some sectors (pigs and fowls).

How this situation could be improved?

• Bigger farms, higher technologies, increasing investments;

• Improvement of quality and strong marketing on the Internal market;

• Funds form Rural Development Programme;• Organic farming development;• Improvement of managerial knowledge and experience

in farming;• Establishing and development of strong farmers’

organizations, to whom government should delegate responsibilities and real authority;

• Higher state and NGO assistance considering legislation, financial aid, advisory service.