INFLUENCE OF LEGISLATION/SUBSIDIES, TO HELP AGRICULTURE AND/OR AGRICULTURAL MECHANISATION, ON THE MARKET OF AGRICULTURAL MACHINERY (The cases of BOSNIA&HERZEGOVINA, BULGARIA, CROATIA, ROMANIA, SERBIA AND TURKEY) Presentation prepared and performed by: Silvio Kosutic, Milan Martinov Goran Fabijanic Authors: PhD Selim Skaljic (Faculty of Agriculture, Univ. of Sarajevo, Bosnia and ) Prof. Nikolay Mihailov (Fac. of Electrical & Electronic Eng., Univ. of Rousse, Bulgaria) Prof. Silvio Kosutic (Faculty of Agriculture, University of Zagreb, ) Prof. Victor Ros (Faculty of Mechanics, Technical University of Cluj-Napoca, Romania) Prof. Milan Martinov (Faculty of Mechanical Engineering, University of Novi Sad, ) Prof. Okyay Kamil Sindir (Faculty of Agriculture, Egee University, ) BA BG HR RO SR TR
1. South-East European Countries - General Data Country surface, agricultural land and utilised arable land in millions ha 80,00 70,00 60,00 Utilised arable land Agricultural land Country surface 76.96 50,00 mil. ha 40,00 30,00 23,75 26,58 20,00 10,00 2,53 5,12 3,13 0,55 5,73 11.10 5,66 3,14 0,80 9,41 14.72 8,84 4,20 3,23 18,12 0,00 Bosnia and 49.42% Bulgaria 51.60% 55.40% Romania 61.70% Percentage of agricultural land 48.00% 34.54% GDP per capita in '000 Bos nia and He rzegovina Bulgaria Rom ania 0,0 1,0 2,0 3,0 4,0 5,0 6,0 7,0 8,0 9,0 10,0 '000
Average income per month Bosnia and Bulgaria Romania 0 100 200 300 400 500 600 700 800 Population in millions Agricultural land in ha per capita 72,07 0,66 0,74 0,71 0,68 0,42 0,37 21,68 3,84 7,76 4,44 10,10 Romania Bulgaria Bosnia and Romania Bulgaria Bosnia and
Main domestic industries Bosnia and Power- Metal Wood generation industry industry and supply Steel, (timber, Aluminium furniture) Bulgaria Manufacture Manufacture Electricity, Manufacture Manufacture of food of basic gas and of textiles machinery products, metal water and textile and beverages products, supply products equipment and tobacco except n.e.c. machinery Manufacture Manufacture Electricity, of food of chemicals gas and products, and water beverages chemicals supply and tobacco products Romania Electric and Food and Metallurgy Crude oil Chemical Road Construction thermal beverages processing, substances transportion materials energy, coal coking, and equipments and other gas and nuclear products products of water fuel treatment non metallic minerals Machine Processing Food Textile industry of raw processing industry materials Manufactur- Electricity, ing gas and water supply Main domestic products Bosnia and Electric Steel, Wood energy Aluminium Bulgaria Coal unagglo- Iron ores Copper ores Limestone Beef and veal, Vegetables Fruit White and merated and and and gypsum meat (excl. potato) manufactured yellow concentrates concentrates anhydrite fresh/chilled: processed and chesse, pig, lamb, sheep, goat, and preserved preserved milk etc. Food and Petroleum Shipbuilding beverages and products chemicals products Romania Electric and Food and Metallurgy Crude oil Chemical Road Construction Textiles, Machinery thermal beverages processing, substances transportion materials clothing and energy, coal coking, and equipments and other and equipment gas and nuclear products products of footwear water fuel treatment non metallic minerals products Agricultural Diverse Processed raw Wood products, machines materials agro food
Main export demands Bosnia and Aluminium Boilers Machinery Mineral Steel Nuclear Agriculture and fuels Iron reactors & food tools products Bulgaria Sun curried Other Black Other wines Entire/half Other Raw tobacco, wheat oleaginous with lamb cigaretts sunflower oriental sunflower alcoholic carcasses, containing seed type contents fresh or tobacco chilled Shipbuilding Refined Chemicals Food and Machinery Wearing Comunication petroleum and chemical beverages and apparel equipment products products equipment and apparatus Romania Machinery Manufactur- Mineral Crude Chemical Food, and ing goods fuels, materials, and related live animals equipment lubricants and inedible products related except materials fuels Agriculture Raw Agro food Industrial materials products exported to region & Russia Vehicles and Articles of Machineries Iron Electrical Articles of Mineral other than apparel and mechanical and machinery apparel and fuels, oils railway or clothing appliances, Steel and clothing and products tramway accessories boilers and equipment accessories of their rolling-stock knitted parts thereof not knitted destillation 2. Agriculture Percentage of Agriculture in national GDP 11,9 16,0 Romania 12,8 7,6 Bulgaria 10,9 Bosnia and 10,1 0 2 4 6 8 10 12 14 16 WB source
Export and Import of agricultural and food products 4.000 3.500 3.000 2.500 Export Import 3.203 million 2.000 1.500 1.000 500 0 118 Bosnia & 850 831 637 715 1.217 435 1.558 1.000 750 Bulgaria Romania 1.778 Export and Import of agricultural and food products with EU countries in % of total % 100 90 80 70 60 50 40 38 Export Import 41 42 70 64 42 51 41 67 45 30 20 10 0 Bulgaria Romania
Trade balance for agricultural and food products 1.500 1.425,0 1.000 500 195,0 250,0 0-500 -502,0 million -1.000-1.500-732,0 Bosnia and -1.123,0 Bulgaria Romania Cereals production area in '000 ha '000 ha 6.000 5.500 5.000 4.500 4.000 3.500 3.000 Wheat Maize Cereals total 3.200 5.541 14.000 12.000 10.000 8.000 13.500 9.300 2.500 2.000 1.500 1.000 500 0 197 321 73 Bosnia & 1.044 416 1.811 Romania: Wheat including rye 406 700 227 1.748 612 1.220 Bulgaria Romania 2.000 6.000 4.000 2.000 0 545
Industrial plants production area in '000 ha '000 ha 1.800 1.600 Industrial plants 1.448 1.700 1.400 1.200 1.000 800 694 600 400 420 200 0 9 Bosnia & 117 Bulgaria Romania Employment in agriculture 5.600.000 113.000 925.000 150.000 2.893.000 500.000 Employment Bosnia and Bulgaria Romania
Average farm size ha 6,0 5,5 5,0 4,5 4,0 3,5 3,0 2,5 5,2 5,9 2,0 1,5 1,0 3,2 2,5 2,3 3,0 0,5 0,0 Bosnia and Bulgaria Romania Distribution of farm size (Bosnia and ) under 5 ha 5-10 ha 10-100 ha over 100 ha 83,30% 13,70% 2,90% 0,05%
Distribution of farm size () under 5 ha 5-10 ha 10-100 ha over 100 ha 85,70% 9,50% 4,70% 0,05% Distribution of farm size (Romania) under 5 ha 5-10 ha 10-100 ha over 100 ha 20,30% 61,40% 12,80% 5,50%
Distribution of farm size () under 5 ha 5-10 ha 10-100 ha over 100 ha 18,00% 67,00% 14,10% 0,90% Distribution of farm size (Bulgaria) up to 0.9 ha 1-99.9 ha 100-999.9 ha over 1000 ha 40,70% 34,70% 19,60% 5,00%
Distribution of farm size () under 5 ha 5-10 ha 10-100 ha over 100 ha 35,00% 14,00% 39,00% 12,00% 3. Agricultural machinery Total number - 2 axle tractors 951.000 326.000 Romania 166.000 190.000 Bulgaria 32.000 Bosnia and 34.000 0 100.000 200.000 300.000 400.000 500.000 600.000 700.000 800.000 900.0001.000.000 TRACTOR NUMBER
Tractor distribution by numbers and power categories number 550.000 500.000 < 40 kw 40-60 kw > 60 kw 548.600 450.000 400.000 350.000 356.950 300.000 250.000 200.000 150.000 100.000 50.000 0 27.300 6.300 13.900 12.300 3.150 Bosnia & * 142.550 39.650 6.600 38.900 119.350 390 1.677 4.691 2.311 Bulgaria Romania ** *** **** 45.700 * Category 40-60 kw started with > 37 kw and containe category > 60 kw ** Category 40-60 kw started with > 37 kw *** Distribution in enterprises and cooperatives, Category 40-60 kw started with > 38 kw, Category > 60 kw started with > 66 kw **** Category > 60 kw started with category > 51 kw and Category 40-60 kw started with > 37 kw Average tractor engine power per surface, kw/ha kw/ha 7,0 6,5 6,0 5,5 5,0 4,5 4,0 3,5 3,0 2,5 5,4 2,0 1,5 1,0 0,5 0,0 2,0 Bosnia and 3,0 1,7 1,5 0,3 Bulgaria Romania
Hectares of utilised arable land per a tractor (2-axle) ha / tractor 80,0 75,0 70,0 65,0 60,0 55,0 50,0 45,0 40,0 35,0 30,0 25,0 20,0 15,0 10,0 5,0 0,0 16,0 Bos nia and 68,0 57,0 19,0 4,0 10,0 Bulgaria Romania Total number combine harvesters 11.811 2.298 Romania 29.867 7.023 Bulgaria 10.280 Bosnia and 1.702 0 5.000 10.000 15.000 20.000 25.000 30.000 COMBINE HARVESTER NUMBER
Tractor production Romania 10.580 3.304 1.052 5.504 44.695 Bosnia nad 86 10.550 300 500 Two-axle One-axle Export and Import of agricultural machinery 150 140 130 120 124 Export Import 110 100 90 91 80 73 70 60 million 50 40 30 20 10 0 38 25 Romania 20
Trade balance for agricultural machinery 0-10.000.000-20.000.000-30.000.000-40.000.000-50.000.000-48.150.000-60.000.000-70.000.000-71.060.000-80.000.000-86.205.823-90.000.000-100.000.000 Romania 4. Prospects of agriculture General Points - All countries are either soon members of the EU or intend to join the EU as well as WTO. - Agricultural production plays an important role in their economy, sociology, demography and recently, protection of the environment and preservation of cultural heritages. - There is a huge market for agricultural machinery in the region. - Further development depends on political and economic stability in national, regional, European and global level. Regional Organization - AESEE Association of Agricultural Engineering in South Eastern Europe - a Regional Member of CIGR International Commission of Agricultural Engineering - already have close relations with the EurAgEng and planned to join in the future - Greece and are the most important for linkage The general conditions and problems are quite similar in all six countries: - two of them are very soon members of the EU - two of them are candidate countries already having negotiations - two of them intend to join the EU, at preparatory phase, but political situation is still doubtful
Legislation Clearly, already now all countries in the region follow International, ISO, and European standards. There are no significant discrepancy. International and European legislation is either accepted directly or implemented in national ones. This will be in future even more improved Some testing, homologation, is in some countries compulsory, but can not be obtain as barrier for trading. Prices are acceptable and fair. This is more or less kind of protection from inappropriate design and quality. There are no or modest custom duties, exceptionally over 10%. In the future stronger legislation can be expected concerning engineering solutions, market available, for sustainable agriculture. Typical examples: engines, soil compaction, sprayers, fertilizer broadcasters Some legislation should respect locally specific problems such as support of economically week groups and regional cooperation etc. Further liberalization of agricultural product and agricultural machinery trading is expected. Subsidies How will WTO DOHA declaration affect the sector? The countries from the region apply different subsidies system: - Almost none, Bosnia and - Limited, and - Four categories, two or three can be accessed, - Similar or same as EU countries, Bulgaria and Romania The challenges: - Who should be supported? - To which extend should be supported? - How to organize subsidies to reach target group? Future Depends on EU and WTO policy SAPARD i.e. IPARD programs will be followed: - Subsidies for mechanization and equipment stated to be more appropriate than others. These directly or indirectly contribute to welfare of farmers. - Some local specific cases should be solved using specific type of subsidies - Subsidies should be used to solve societal, environmental and economic problems as well as production plan and productivity increase. - Special subsidies, kind of development support, should be introduced for advanced machines, first of all environmentally sound.
Visions All colleagues explicitly expressed volition to follow trends of sustainable agriculture by implementing of new technologies and machinery. Some of examples are: - New environmental friendly soil tillage procedures, - Implementation of Good Agricultural Practice, documented production, as a tool of reaching traceability, - Site specific farming - New generation of engines, sprayers and other machinery - Development of production of safety food - Introduction of energy and raw material production in agriculture - Food security Majority of the countries are interested in intra-regional and international cooperation in the field of tractors and agricultural mechanization manufacturing. Some collaborations and investments in the region are already in function and some preparations for future in progress, but especially in former socialistic countries is expected much more. Development of local available potentials can contribute better employment of local labor and improvement of machinery used in agriculture. Contribution in this sense will be supported by government. Introduction of on farm post-harvest processing will be even more focused, as a tool of getting added value of farmers products. Further training of farmers is also identified as serious duty of agricultural engineering profession. Generally three groups of farms has been identified: - Big company farms, whose are commonly also processors of agricultural products. - Medium and big farms of advanced farmers and cooperatives. - Small farms, in many cases up to 5 ha. Third group of farmers are the majority. These farmers are belonging to economically weakest social layer. As long as there will be no call for employment by the industry and services sectors, they must stay and survive in agriculture. In all countries the need to support development of rural areas, to create better living standards of inhabitants, comparable with this in urban areas, is serious societal task.
AESEE organized first Round Table: Agricultural Engineering and its Role in Development of Rural Areas held in Izmir-, September 25-27 2005. Next one is planned to be held in, September 2007. New CIGR WG, founded in September 2006 in Bonn Rural Development and the Preservation of Cultural Heritages President Prof. Dr. Kamil Okyay Sindir Ege University, Izmir,