GOOD NEWS IN CRISIS TIME: Fertilizers Industry Is Breathing Again

• The domestic market to come back to life with 400 RON/ha governmental subsidy for fertilizers

• Fertilizer plants to receive again orders from farmers and keep their employees

• Farmers estimate significant crops, as active substance per hectare will triple

The fertilizer industry is starting to revitalize after the standstill caused by the lack of orders from farmers. After the management of the fertilizer plant Azomures decided to resume production in several steps as of Wednesday based on some substantial orders from farmers, the chemical fertilizer industry has received further good news. The Chemical and Petrochemical Union Federation (FSLCP) and the Ministries of Agriculture, Economy and Finance have signed an agreement under which the Government will give farmers 400 RON per hectare to buy EU-made chemical fertilizers.

"The Ministry of Agriculture, Forestry and Rural Development agrees to work closely with the Ministry of Economy and the Ministry of Finance to urgently pass a bill under which farmers who have already started a crop may receive a subsidy in the amount of 400 lei per hectare to purchase chemical fertilizers made in the European Union," reads the agreement signed by Minister of Agriculture Ilie Sarbu and FSLCP President Achile Dutu on 27 January. The same agreement was signed with the Ministry of Economy.

Interestingly, the chemical and petrochemical unions facing massive job cuts because of lack of orders from farmers managed to obtain a subsidy for farmers after picketing the Ministries of Agriculture and Economy without any support from the farmers. The attempts to obtain the 400 RON/ha subsidy for fertilizers started a good while ago, but did not lead to any achievement until recently as officials were afraid of a negative reaction of the European Commission. Our sources say that the initial condition was that subsidies should be used to buy Romanian-made and not necessarily EU-made fertilizers. Concurrently, the Ministry of Agriculture was afraid that they would fully pay for the subsidies from their own budget, which was and still is quite slim. In fact, so is every other ministerial budget until further notice.

The current status is that the subsidy is included in the State budget, but it is not certain that the bill to be issued as an emergency is going to stipulate a freeze of the price of Romanian-made fertilizers. Representatives of the farmers have repeatedly stressed that, so far, the price of fertilizers increased as soon as a form of State support for fertilizer purchases was announced.

Considering that any imports of cheap fertilizers from Ukraine are out of questions because of the recent increase in the Russian gas price delivered to Ukraine and the condition that subsidized fertilizers have to be made in the EU, Romanian farmers will probably turn to Romanian-made fertilizers, which would revitalize the domestic market and industry.

This is also the opinion of FSLCP Vice President Ovidiu Popescu, who explained that Romanian farmers would prefer Romanian-made products because fertilizers made in France and Germany were much more expensive, while other EU Members did not really have a fertilizer industry. In turn, Achile Dutu said that the forthcoming agricultural subsidy bill was "a breath of air for both the fertilizer industry and the agriculture." The FSLCP president also commented that the risk of losing jobs in the industry seemed to have gone as "people have already returned to work." After initial suspicions that the money for the 400 RON/ha subsidy would actually be used for other agricultural projects, farmers are now saluting the State aid.

Viorel Matei, President of the National Federation of Romanian Agricultural Producers (FNPAR), explained that the subsidy was "extraordinary," as Romania was using the smallest quantities of active substance per hectare in the EU, which was taking a toll on productivity. "Because of lack of money, the usual consumption was 37 kilograms of active substance per hectare, but now with the subsidy, we hope to reach 90-100 kilograms per hectare," Matei said. The FNPAR president added that Romania had a natural potential of 700-1,200 kilograms of crop per hectare, much superior to that of some Western European countries, and, with fertilizers, the potential crop could reach as much as 6,000 kilograms per hectare.