Which is the main obstacle to the proper absorption of EU funds?

In my opinion, the biggest problem is the lack of regional and national policies in most sectors of the economy, which led to a lack of vision for sustainable development. This 20-year deficit led to a gap between useful management practices and actual business needs.

The EU funds should not be taken as the alpha and omega to all problems. They should be seen as a tool for implementing EU and national policies. If a given team is to implement any reform, it should not aim to expose only the errors and irregularities of its predecessors. It should produce a longterm vision for the development of each sector. When you inherit a void of policies, you must work to compensate for this void.

Does that mean that the priorities for the Rural Development Program are set improperly?

It is necessary to boost agricultural production that generates the highest yield. At present, only grain production, which is intensive enough, is subject to EU funds. On the other hand, there is no mechanism to help threatened sectors such as milk, meat and vegetables production.

I am glad grain production is well developed but only one agricultural sector cannot generate normal income for those living in villages and employed in agriculture. We should not subsidize only the measures that are at present attractive for Bulgarian farmers. Officials from the Agricultural Ministry use terms such as "popular and unpopular measures” to endorse a given policy and policy makers should not design subsidy policies on a basis of popularity. We hope the new teams from the Ministry of Agriculture and Food, and State Fund Agriculture will change that attitude. They showed that they are walking in the right direction having restored the confidence and the damaged line of communication with the European Commission. After the unblocking of funds under the SAPARD program, an accelerated approval of projects under the Rural Development Program, on which people rely greatly, is in progress.

What should be the approach for allocation of EU Funds?

It is not accidental that the European Union has allocated nearly half of its budget to improve living standards of people living in rural areas and the sectors related to feeding the population. The spending of the funds should not be an end in itself. By simplifying the task, we focus on that goal alone. It is time to create a national vision for the development of the Bulgarian village and agriculture.

Which sectors should absorb the greater portion of EU funds?

So it happened that sectors in the greatest crisis received the least candidates for EU subsidies. Livestock production is one such example. We all know that the price of milk is sold below its production cost for a second year in a row and companies are subjected to a lack of financing. However, there is no policy in place to aid the sector.

As another example, we can look at the part of the Rural Development Program that was meant to subsidize semi-sustenance agricultural companies (only part of their income is derived from agricultural production). It was a very successful measure, but the funds were not utilized, since the project aid amount was too small and the administration did not create simple procedures to encourage participation. At the same time, there is an unnecessary rush towards the  Young Farmer program. At one point it appeared that those with history in farming cannot apply, as the money for semi-subsistence farms was transferred to that of the Young Farmer program, at which 5000 projects have been submitted. But do we know that after the access to the funds these candidates will continue to engage themselves in farming?

If the SAPARD program was blocked, then surely that for rural development will follow suit, much for the same reasons. It is not clear to me why policy makers have decided to invest in young farmers who may not stay in the agricultural sector instead of supporting the people that have already made the first steps.

What solution do you offer from the standpoint of your experience?

Policy makers should actively interact with professional organizations, people from the real business and research institutes. Currently there is no such dialogue and this condems clerks to be just tool operators. If administration officials were interacting with business representatives, we could have long ago established programs that encourage vegetable, meat or dairy production. Market mechanisms can be deployed for their development. We cannot solve our internal problems with recipes from Brussels, we have to establish ways to protect domestic production so that Bulgarian industries do not disappear. Administration officials must abandon the role of ‘the bad student’ who has his ears pulled. But in order to place demands, we all must put an effort to build confidence and motivation into the officials working with the administration of EU funds. Only then we can hope to achieve sustainable results in accordance with public expectations.

Heavy administrative procedures are often cited as a problem during application procedures?

We believe that the procedures are not too ‘heavy’ and in case of a better organization would not create difficulties. The problem in State Fund Agriculture cames from the additional control measures imposed on the administration that have no analogue in Eastern Europe. Administration officials are asked to conduct investigations that are normally carried out by specialized agencies such as police and prosecuton. The big problem in utilization of EU funds remains the lack of credit lines and therefore the State must allocate resources promised through the banking system. And this resource needs to be affordable for farmers.

You are also consulting aprojects under the OP Competitiveness Program. What causes its setbacks?

The state has deserted its industry management for nearly 20 years. The Ministry of Economy and Energy has not implemented policies in recent years. So the utilization of EU funds in this field is the worst yet. The financial crisis showed that government officials in the leading economies did not withdraw from the real-life problems of its industries. In Bulgaria the retreat was complete. Lack of industry policies led to skewed investment in various sectors of the economy, such as real estate. At the same time, governments in Central and Eastern Europe stimulated their industries. Investors in the automotive and high technology sectors in Romania, Czeck Republic, Hungary and Slovakia were aided by various national programs. Hence we expect of our policy makers to begin using the best management practices of their European colleagues.