THE MINISTER OF AGRICULTURE, MIHAIL DUMITRU: "The ministry has no money left"

• The Ministry of Agriculture has no more money left to support the sector

• Agriculture needs over 500 million Euros • Farmers are told to borrow from banks

• "I have no hopes that the budget will be increased upon the first budgetary revision", says Dumitru

The coffers of the Ministry of Agriculture is empty, Mihail Dumitru the ministry of Agriculture said yesterday. And it will remain empty in the near future. "We have no hopes that we will get more money", said Mihail Dumitru, when asked if the budget of the Ministry might be increased on the first revision of the budget in this year.

The Minister of Agriculture explained: "First of all, there was no budget revision. First of all, the Law of Fiscal Responsibility has significantly restricted the possibility budgetary revisions. Concerning the first budgetary revision, I have no idea how the first budgetary revision will look because I haven"t seen any of its drafts. I have no hopes that we will get more funding".

The statements were made at the end of a conference organized by the officials of the European Commission in Romania, together with the Ministry of Agriculture, during which was also discussed Romania"s contribution to the future reform of the Joint Agricultural Policy.

• The agricultural sector needs 500 million Euros. Farmers are told to borrow from banks

The agricultural sector needs over 500 million Euros in funding for the six state aid schemes which were negotiated with the EU, as the treasury of the Ministry is empty.

Mihail Dumitru said: "We have six types of support that we have worked on and negotiated with the European Commission, and we need around 500 million Euros, approximately 2 billion lei. This is money that we don"t have at the moment and that we will only have next year".

Under these circumstances, the minister suggests that farmers borrow from banks: "We will try to make the commitments this year, meaning to collect the applications for payment, and to pay them next year. based on these commitments, the farmers will be able to borrow from banks, but we will use the Guarantee Fund for Rural Loans to guarantee them, and farmers will be able to perform their work this year". "And next year, once we receive those aids, farmers will be allowed to return their loans".

In order to facilitate the process, the minister said that this year, farmers will be able to borrow from banks at a subsidized interest rate, with this type of state aid being a work in progress.

• Dumitru: "Everyday we think about how we are going to cut spending"

When asked if other types of support from the state budget are possible, for segments which have potential such as traditional products, in order to eliminate the need of waiting for European funding, Mihail Dumitru said: "The budget has no funds. Once we get more money we will consider and introduce other types of state aids.

Right now we are in a crisis, everyday we think about ways to cut expenses".

Concerning the cuts in spending the ministry, Mihail Dumitru said that in the near future, 2800-2900 employees will be laid off and said that a 10% bonus for harmful work environment was cut from the wages of employees.

"We are taking these steps because we need to fit within the budget that we have", the Minister said.

The official has admitted that it is possible that some of the employees will sue over the loss of this bonus, but he said: "I doubt that such a lawsuit would be successful, the measure is legal".

• The high stakes of the European Fund

Since the state budget can no longer provide the funding needed to finance agriculture, the Ministry of Agriculture is betting on European financing sources.

Mihail Dumitru explained: "We are preparing a bonus for organic agriculture. This will be given to farmers who are willing to give up on conventional farming, in other words stop using pesticides and artificial fertilizer, and practice ecologic farming instead. It is a bonus that will be paid from European funds to approximately 1,800 farmers and we have allocated around 3 million Euros for this. The measure will be applicable starting in the second semester of 2010. Next year we will try to introduce an environmental measures, to help finance the costs of certification and conversion, which will be financed through the National Rural Development Program".

The minister also said that the funds of the EAGF (European Agricultural Guarantee Fund) for 2009 were completely absorbed and mentioned that for the first time ever five fish farming projects received 4.7 million Euros in funding. The minister added that other nine projects will receive 27 million Euros in funding.

• Mihail Dumitru: "Some of the members of the Parliament of the Democrat Liberal Party (PD-L) have accused me of not communicating efficiently with the party"

The minister of Agriculture, Mihail Dumitru, yesterday said that he received criticism from several members of the Parliament of the Democrat Liberal Party that he did not communicate adequately with the party.

His statement just as rumors were floating that the minister might be dismissed, together with other ministers with no political affiliation of the Boc cabinet, such as Şeitan or Vlădescu, to be replaced by a minister of the newly created political party called UNPR ( the National Union for the Progress of Romania).

The official denied the fact that the criticisms that targeted him came from prime-minister Emil Boc: "I don"t expect to be fired and I won"t resign. These are just rumors (...). I was told that I did not communicate with the party and the members of our parliamentary group, even I though I went before the Parliament every time I was summoned and visited the commissions once a month, according to the regulations. (...) It was the members of the parliament that criticized me, not the prime-minister. No government reshuffling was discussed in Wednesday"s government meeting".

When asked if it was true he was preparing for and exam for a position in the European Commission, Mihail Dumitru said: "It"s a personal option, I won"t confirm it, nor deny it".

• Culiţă Tărâţă, in the cards for the Ministry of Agriculture

The name of Culiţă Tărâţă, one of the most important players in the Romanian agriculture business and one of the most controversial, is being increasingly thrown around among politicians as a possible replacement for the current minister: Mihail Dumitru, who might return to Brussels, where over the last three years, he served as a negotiator and coordinator of the Rural Development Program for Romania with the European Commission. The minister of Agriculture, Mihail Dumitru, did not confirm, nor deny his possible return to his position in Brussels, but said that his replacement as a minister was not discussed in the last government meeting.

What"s more, the minister of agriculture considers that there would be no reason for him to be replaced, even though the members of the parliamentary group of the PD-L accused him of deficiencies in communication.

The potential appointment of Culiţă Tărâţă as a replacement of the current minister is being discussed more frequently these days, especially after he left the Social-Democrat Party (PSD), right after Victor Ponta was elected as its president. At the time, the media speculated that the departure of Culiţă Tărâţă and his move to the independent group led by Gabriel Oprea, is a way for him to ensure the continuation of his concession for the Great Island of Brăilei, which is Romania"s most important farming region. Besides, this controversial contract has made the former PSD parliamentary into one of largest player in the Romanian agricultural sector, as he was considered one of the "grain barons" for years. The largest company he controls, which he also uses to manage the Great Island of Brăila, is called TCE 3 Brazi, but he has also been involved in other businesses in the agricultural sector, such as: "Agricola Prod", "BoviSelect", "Agrocarm Prod International" or "Herb Elv Com".

Another potential candidate that could be used as a replacement of the current minister could be Valentin Steriu.

M.R.