Source: Financiarul.ro.

Insights from the 6th Romanian Food & Agribusiness Conference

On November 9, 2018, BusinessMark hosted the sixth edition of the ‘Romanian Food & Agribusiness Conference‘ at the Radisson Blu Hotel in Bucharest. This event gathered experts from the agricultural sector to discuss pressing issues currently facing industry players.

Current Status of Rural Development Programs

The conference opened with insights from Camelia Iliescu, Director of the LEADER Directorate, Environmental and Climate Measures, General Directorate for Rural Development – AM PNDR. She provided an overview of the absorption rate of the National Rural Development Program (PNDR). ‘Since the launch of the PNDR, public payments amounting to €3.7 billion have been made. Of this, €3.3 billion has been disbursed from the European Agricultural Fund for Rural Development (EAFRD), resulting in a 40.2% absorption rate.‘ Camelia emphasized that the strategic objectives of the PNDR 2014-2020 include restructuring and enhancing the viability of agricultural operations, promoting sustainable resource management, combating climate change, diversifying economic activities, creating jobs, and improving the quality of life in rural areas.

Innovative Agricultural Financing Solutions

Claudiu Coadă, Director of Physical Assets at AFIR, added to the discussion by announcing the upcoming opening of sub-measure 4.1 under the fruit-growing program. He noted that reallocating funds to the plant sector is nearly impossible due to a 20% over-contracting situation. Claudiu also introduced an innovative mobile application designed for consumers seeking quality-certified food products at both national and European levels. The app, named CPAC – Catalog of Certified Food Products, allows users to locate certified food items in real-time and access detailed information about producers and their recipes. Currently, it features 800 agricultural producers.

Financial Support for Farmers

Ramona Ivan, Director of External Relations and Structural Financing at CEC BANK, discussed financing solutions available for the agricultural sector, particularly products aimed at supporting rural farmers as per OUG 43/2013. She outlined various credit options, including Investment Loans for purchasing agricultural land and financing agricultural investments, with repayment periods of up to 84 months for investments and 180 months for land purchases. Working Capital Loans are also available for current agricultural and aquaculture production activities, with a maximum repayment period of 36 months and a grace period of up to 12 months. Additionally, loans for beneficiaries of PNDR 2014-2020 and POPAM 2014-2020 are available to finance investment projects supported by these programs. Ramona highlighted that these credit products are backed by the Rural Credit Guarantee Fund (FGCR), covering up to 80% of the loan value, with competitive interest rates based on the 6-month ROBOR plus a margin of only 1.95 percentage points for loans up to €3 million.

Absorption Rates and Market Challenges

Paul Eduard Kmen, Deputy General Director of the Agency for Payments and Intervention in Agriculture (APIA), addressed the absorption rate, which stands at 96% since the establishment of the PNDR, with payments to farmers totaling €23 million. ‘In 2017, APIA disbursed €800,000 to farmers, including €200,000 for market measures. These payments are sourced from three types of funds: the European Agricultural Guarantee Fund, the European Agricultural Fund for Rural Development, and the national budget. In 2018, APIA is actively processing advance payments for applications submitted this year, having already paid over 500,000 farmers approximately €600 million. Our goal is to attract as many European funds as possible, ensuring timely access for farmers.‘

Trade and Disease Challenges in the Meat Sector

Sorin Minea, President of ANGST and ROMALIMENTA, discussed the challenges of intra-community meat trade and the outbreaks of African swine fever in Romania. ‘We are unable to sell within the European community due to legislation and restrictions in the Romanian market. Additionally, raw meat materials sourced from Romania are 10% more expensive than those from the European community.‘ He provided a brief history of the African swine fever outbreak, noting that it originated in Africa and spread to Europe, affecting countries like Spain and Portugal, which battled the disease for decades. ‘In Romania, the disease spreads from one commune to another, primarily due to human activity. Isolating a farm is not feasible; either all livestock in the area must be culled, or the issue is ignored. A clear legal framework is urgently needed.‘

Innovation in Agricultural Products

Continuing the discussions, Florin Căpățână, Vice President of the Association of Major Commercial Networks in Romania, spoke about innovations in agricultural products. ‘The products you bring to market introduce a fresh perspective. We faced criticism over the summer regarding our trade in agricultural products, particularly Polish apples. What have they done that we haven’t? The difference lies in the support they received from authorities, enabling them to diversify their apple crops and access funding to grow and secure market positions beyond Poland.‘

Building a 100% Romanian Brand

Bibiana Stanciulov, CEO of Sonimpex Topoloveni, shared insights on building a 100% Romanian brand and the efforts involved in the process. You can view her entire presentation here: https://goo.gl/i5ZHJC.

Taxation Issues in Agriculture

Bianca Vlad, Tax Advisory Partner at MAZARS Romania, discussed fiscal aspects affecting the agricultural sector, including leasing, losses, farmer regulations, reverse taxation, and challenges posed by tax authorities. ‘As of December 31, 2018, the reverse taxation rate for cereals and technical plants is set at 9%. This category includes food products, excluding alcoholic beverages, intended for human and animal consumption, as well as seeds, plants, and ingredients used in food preparation.‘

Technological Innovations in Agriculture

Alongside Sebastian Anghel, Sales Director at Multi Data Soft, we explored technological innovations in agriculture. Sebastian presented a case study highlighting client needs such as aggregating multiple data sources, automatic data management and synchronization, information analysis, and report generation by the business team. The solution provided included Oracle Universal Credits, Oracle Data Integrator, and consulting services, offering benefits like rapid provisioning of Oracle PaaS/IaaS services, easy integration of various data sources, and enhanced productivity through mobile data visualization.

Current Trends in the Dairy Market

Dorin Cojocaru, President of the Romanian Dairy Industry Employers Association, joined us at the ‘Romanian Food & Agribusiness Conference’ to discuss the current state of the dairy market in terms of consumption and investment opportunities. ‘If you wish to invest in the dairy market, be aware that it is highly volatile. Entering the civilized trade of the industry requires a minimum investment of €2-3 million. Focus on sheep milk, as shepherds are lacking milkers. For cow’s milk, ensure a 40% self-supply for your farm.‘ He also noted that dairy product prices are expected to rise due to increased transportation costs, inadequate road infrastructure, and the rise in minimum wage, which was not budgeted for 2018.

Supporting Romanian Farmers

Finally, Laurențiu Gioroc, Manager of Raw Material Collection Planning at Friesland Campina, discussed the organization’s involvement in supporting Romanian farmers. Through the Farmer Development Start Program (2016), the organization aims to enhance both the quantity and quality of milk from partner farms in Transylvania. The implementation includes training sessions, theoretical and practical courses, visits to Dutch farms, silo testing, and a pilot farm management program. Insights from farmers returning from the Netherlands revealed that labor shortages significantly impact farmers, and there is a growing desire for development. Proper differentiation of feed based on the physiological state of cows is crucial, yet only a portion of farmers implement this correctly. Timely attention to cleaning practices and technological advancements in farms is essential.

Event Partners and Support

The event was supported by partners including MULTI DATA SOFT, MAZARS, CEC BANK, AVIS, and Rent for Comfort.

Organized with the support of: French Chamber of Commerce and Industry in Romania: CCIFER, Netherlands-Romania Chamber of Commerce: NRCC, British Romanian Chamber of Commerce: BRCC, and Bilateral Chamber of Commerce Bulgaria-Romania: BCCBR, Zelist Monitor.

Official radio partner: Europa FM.

Media partners include AGERPRES, Business24, Stiriagricole.ro, Administratie.ro, Global Manager, aktual24.ro, Gazeta de Agricultură, Agrostandard, Gazeta de stiri, Curierul Național, Moneybuzz, DeBizz, FEMEI IN AFACERI, Financial Market, Antreprenor in Romania, Financiarul.ro, New Money, SpatiulConstruit.ro, PRbox.ro, Rbe Connect, PRwave, Jurnalul de Afaceri, Ziare.com, IQads, SMARK, 1asig.ro, Agroazi.ro, Social Media Romania, Monitorul de Făgăraș, MATEK, Ziarul Clujean, Cargo Magazin, Portal Management, Inturda.ro, InfoOradea, REVISTA BULEVARD, Transilvania Business, Lumea Satului, Avocatura, Bursa, Energynomics.ro, Auto Motor și Sport, Revista Piața, Tranzit, Cotidianul Agricol.