Poultry subsidies scrapped as on Jan. 1

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In keeping with European regulations, the current poultry subsidy of 1.6 lei per kilogram is being scrapped as of January 1, because the three-year transition period during which Romania was allowed to grant such subsidies is running to end.

The Romanian authorities announced that they would notify Brussels within shortest time of the aid forms that can be granted beginning 2010. The assignment of funding from the state budget to support the welfare activity in the poultry breeding sector could reduce the impact the subsidy cancellation as of January 2010 could have on domestic breeders.

“We took steps with the Ministry of Agriculture to obtain some welfare subsidies, as this is accepted by the European Commission regulation. This support will be notified to Brussels and I consider that there are chances for us to replace the subsidies disbursed by the end of this year,” president of Romania’s National Poultry Breeders Union (UNCPR), Elijah Van told.

He stressed that the financial support is in average 1.6 lei per kg of poultry chicken, similar to the subsidy breeders were receiving from the state budget between 2007-2009. According to the cited source, in order to qualify for these types of subsidies, the breeders must observe particular rules for a minimum of five and a maximum of seven years.

As for the 20 percent price rise for poultry meat announced as of January 1, 2010 in order to offset the scrapping of subsidies, Van said that this will not happen because, there is currently a stock surplus and January is a month of slothful sales. According to Van, in 2009 Romanian poultry breeders succeeded in doubling exports from 9,000 tons in 2008 to about 20,000 tons.
However, about 25 percent of the chicken meat on the market – that is 100,000 tons per year, comes from imports, with the Netherlands being the top supplier of chicken thighs.

“Given that no VAT is being charged between EU countries, the importers buy the meat from abroad and can sell it cheaper than local producers. Unfortunately, the authorities have taken no steps to stop such tax evasion practices,” explained Van.

The new Minister of Agriculture, Mihail Dumitru, announced that his main priority would be the notification of aid forms granted to agriculture as of January 2010.
“Beginning this January we need to replace the current forms of state aid with new ones, because the transition period is running to end, and see what other forms we can introduce with the European Commission’s assent,” the Agriculture Minister said recently.

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