Bulgaria’s PM: Liberalisation of foodstuffs imports from Ukraine will reduce prices of basic foodstuffs, cut inflation

Bulgaria’s government is backing the proposal, tabled in Parliament, to exempt the import of wheat, corn, rapeseed and sunflower seeds from Ukraine from mid-September this year, with Prime Minister Nikolai Denkov saying that the move would reduce prices of basic foodstuffs and reduce inflation.

A draft decision tabled in the National Assembly and on this week’s Order Paper says that Bulgaria does not support the extension of the Ukrainian import ban beyond September 15, 2023, which allows wheat, rapeseed, sunflower, and corn to transit through Bulgaria, Poland, Hungary, Romania, and Slovakia, but bans the products’ availability on the countries’ domestic markets.

The measure was introduced by the European Commission following protests by farmers in these countries.

Denkov told the weekly Cabinet meeting on September 13 that imports will stimulate competition in the market.

This, in turn, would lead to a reduction in the prices of basic food products and inflation, which is one of the Cabinet’s main priorities.

This would have a favourable impact on Bulgarian consumers – especially people with low incomes, and will help to fulfill the criteria for Bulgaria’s accession to the euro zone, which is another important priority of the government, Denkov said.

The abolition of the restrictions would further increase the revenues in the budget.

“Since the beginning of 2023, the missed benefits for the budget from imports and exports amount to 146 million leva. These funds could be used for education, health and culture or to support the agricultural sector,” he said.

The release of imports would ensure the activity of the plants for refined oil and biodiesel, which work for the Bulgarian and foreign markets.

Denkov rejected the claims of agricultural producers about the “lack of any state support for the sector”.

He said that in 2022, agriculture received about 1.6 billion leva in subsidies and aid.

In 2023, about two billion leva had been paid out and are scheduled to be paid out. Of this, 890 million leva were European funds and 388 million leva was national co-financing through the Agriculture State Fund.

Separately, 390 million leva from the central budget and 290 million leva was from the budget of the Ministry of Agriculture and Food.

“The statement that the state does not care about the sector is false. It is also good for the sector to take care of the state when it formulates its demands,” Denkov said.

“Since the beginning of September this year we study the European experience to limit markups along the chain from the agrarian producer to the final consumer. We will discuss and propose a mechanism to limit these markups as a temporary measure to support producers and consumers,” he said.

Together with the lifting of the ban on imports, Bulgaria will ask the European Commission (EC) for additional compensation for the losses of Bulgarian agricultural producers, especially those of sunflower.

Increased production costs in the sector put many farms in an extremely vulnerable situation and they are in dire need of funds.

Bulgaria will call for an amendment to the Temporary Framework for State Aid Measures in Crisis and Transition to Support the Economy after Russia’s Aggression against Ukraine, with the limit of 250 000 euro for one agricultural holding being increased to an amount that would allow -adequate support for producers affected by the crisis.

Apart from that, the existing infrastructure in Bulgaria requires additional measures to accommodate the increased transit traffic related to exports from Ukraine to third countries.

Therefore, the Bulgarian government will insist that the EC financially and organizationally support the improvement of the technical infrastructure along the Solidarity Corridors through Bulgaria, as well as the development of the railway corridors that are used for the same purpose, Denkov said.

He said that the Cabinet is committed to strengthening the phytosanitary control of products arriving from Ukraine to ensure their safety and the health of citizens. Bulgaria will demand the same from the other member states on the way of these imports to Bulgaria.

“With all this, we will show nationally responsible care for the whole society, not just for one sector,” Denkov said.

(Photo: government.bg)

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