Exclusive: Because The Government Has Still Not Declared A State Of Agricultural Emergency,  Romanian Farmers Lose Over 1 Bln RON In Damages

• 30% of the crop in 34 counties damaged by drought

• Food prices to gain 10% in 2010

• Farmers consider suing the Government for having paid insurance premiums in vain

Severe drought has reduced Romania"s crops by one third this year, causing losses in excess of 1 billion RON against the broader background of a global economic crisis, shattering hopes that the agriculture might be the key to economic recovery.

Based on data released by the Ministry of Agriculture to BURSA, 30 per cent of the overall surface of farming fields in 34 counties (approximately 2.6 million hectares) has been damaged by the drought. Farmers interviewed by BURSA claim that the actual scope of the damage is much greater, in the range of 40 per cent of the overall farming surface of the country and hundreds of millions of euros.

The Ministry"s data on the damaged crops confirm the disaster, as the primary types of crop were 40-to-50 per cent lost: rapeseed - 54.9 per cent, wheat, rye, triticale - 45.7 per cent, two-row barley - 43.1 per cent, barley - 40.2 per cent, sunflower - 32.1 per cent, corn and millet - 26.1 per cent.

• A penniless Government

On top of the losses caused by the calamity itself, the farmers who had insured their crops have not yet seen any compensation from the State or the insurance companies and will most likely not see it this year. The reason is that the Government has still not declared a state of agricultural emergency, which would have allowed insurers to pay damages to the farmers and the Ministry of Agriculture to cover whatever damages would have been left outstanding from the public budget.

The Ministry of Agriculture did send the Government several requests to declare a state of emergency in August, soon after having received the alarming statistics from its local offices. According to our sources, the Government has in the meantime refused four times to take note of the Ministry"s requests and make the payments.

The reason?

The total amount of money necessary for paying the damages would have exceeded 800 million RON, which the Government did not have then and does not have now.

• Pointless efforts

According to the law, insurance companies cover 30 per cent of the damage caused by natural calamity, whereas the State covers the remaining 70 per cent from specific funds in the State Budget.

As the Government refused to declare a state of emergency and thereby to make such payments, the insurance companies also refused to pay their share because, officially speaking, the drought had not existed...

Based on the data released to BURSA, the last request on this subject was sent by the Ministry of Agriculture to the General Secretariat of the Government on 30 September 2009.

Sources in the leadership of the Ministry of Agriculture told BURSA that this request, too, was rejected, apparently as a result of the "political changes" caused within the Ministry by PSD"s decision to withdraw from the Government and the subsequent appointment of interim Minister Radu Berceanu.

Representatives of the General Secretariat of the Government confirmed this information for BURSA, also indicating that political changes had prevented further course of action. They emphasized that no other request had been received from the Ministry of Agriculture in the meantime.

• Farmers: "We"ve lost the money"

Notwithstanding, farmers are claiming that they simply insured their crops in vain. "We insured the crops, we paid the premiums but after the drought came we couldn"t collect the damages from the State and the insurers, as the law stipulates! We are now in November and the Government has refused to pass a decision to define the calamity-stricken areas. We have been asking for it since August. We"ve lost the money!" said Viorel Matei, President of the National Federation of Agricultural Producers in Romania (FNPAR).

The farmers are convinced that the money is irrevocably lost considering that, even if the Government declared the state of agricultural emergency now, the paperwork would take months, but it would not be possible to make such payments for 2009 from the State Budget for 2010. "It can take up to two months to create the application for calamity compensations. This is exactly the reason why we started asking for the state of emergency to be declared in August! The idea was to receive the money in November or December. But now the money is lost. What are we going to do now?" Viorel Matei added.

In turn, Agrostar President Stefan Nicolae told BURSA that the State"s failure to disburse the money to which the farmers were entitled would lead to further protests, as well as to disastrous consequences for the agriculture. "We have sent a note to all union members to inform them of the situation. We could resume protests, because without this money and with the crop already reduced by 30 per cent, next year will be very difficult for us. We"d better expect the worst... The price of bread could go up 10 per cent," Nicolae added.

Under the circumstances, farmers are considering taking the matter to court.

"We will go to court and ask the court to order the Government to declare the state of agricultural emergency, because it is our right and our right has been violated," said Marcel Crudu, a Member of the Board of the League of the Association of Agricultural Producers in Romania (LAPAR).

Under the law, the Government will not be able to disburse compensations in 2010 for the losses suffered by farmers in 2009. Moreover, the current Government has been dismissed by Parliament and has limited prerogatives. It has not prepared alternatives to the legal impasse, nor has it notified the European Commission of the situation.

As the economic crisis is likely to further worsen in 2010 and another drought is expectable, the future is not a pretty picture.