Mr Mugur Craciun, Mr Dacian Ciolos and Ms Carmen Turturea

23 MARCH 2005

  Q780Lord Livsey of Talgarth: Well, not actually the farms, but the infrastructure for marketing the products of the farms, the machinery, the marketing of the food from the farms, do you have anything like that?

  Mr Craciun: I would mention in this respect the co-operation between dairy farmers where they have a system already and they have their organisation to collect milk in especially the hill areas to a certain level of technology in connection with the processing plants, and this is the kind of activity that is working. I would not say the same for grain. Everybody is producing grain and then they are looking for different buyers, for different traders.

  Q781Lord Livsey of Talgarth: What I think we would like to know is whether you can develop what you have got now. Have you got plans to develop this infrastructure into the future to make it more efficient?

  Mr Craciun: The intervention of the market has to respect already established rules in European markets, but it is necessary first to equilibrate Romania having very dependable agricultural activity and it is very necessary that the State actually and later on the European Community, with us as a member, have intervention systems on the market for different products. This would be quite difficult to be realised due to different support of different countries. From western countries to eastern countries, the state support for agricultural products is decreasing. At the same time as the borders will disappear, the competition will be different and farmers' products will not be fair.

  Q782Lord Livsey of Talgarth: You mentioned the development of the infrastructure of credit, transport, advice and water. What other infrastructure are you trying to develop? Because you are so agricultural, are you developing your added value to your product by investing in plant and are you actually looking for investment funds for that and are you doing it already?

  Mr Craciun: It is true that selling only grain, cereals or oil crops, would not be expected to have such a tremendous increase for a farmer's budget. I mentioned at the very beginning that the farmers have to use their skills and local, I would say, culture to promote their products.

  Q783Lord Christopher: Correct me if I am wrong, but all you have told us, which is quite fascinating and challenging, suggests to me that, say, in the next five to seven years there is going to be a limit to the amount of money you can actually spend properly on the things you have to do and that unless that is taken into account, then it is not in fact going to work. If I have understood you correctly, you will have something like another seven million pensioners, you have a relatively modest population with a number of your skilled workers who have come over here, and I have had some working around me and they are very good indeed, so am I right in thinking that there is a limit to what you can spend in the next five or six years, without putting a figure on it? If we gave you 100 million euro or one billion euro today, you could not actually spend it all because there is a limit to the physical nature of the task you have got, the labour you have, the skills you have, so there has to be a programme which gradually gets you through what you want.

  Mr Craciun: The best example in this respect is the way that we use the SAPARD money. To spend money, we need institutions to absorb it and to organise it in the right way. If tomorrow it rains with money on the country, I am fairly sure that it would not be very efficiently used. First, before asking for money, we are building the institutions, we are building the systems to control and analyse how the money is allocated and our principle with a limited amount of money is to allocate this limited amount of money to the hot points where it is very strictly necessary and not to spread the money all over for social reasons. I would like to mention that in 62 years, now is the first time that the Ministry of Agriculture has the Liberal Party leading it. It has been decided to apply the liberal system in agriculture, the free market economy, and it does not matter, the political cost. We have to realise the efficient agriculture and to develop the rural infrastructure even at the cost of losing popularity, but there is no time to lose.

  Q784Chairman: But under Ceausescu, basically all the land was nationalised and now it is being un-nationalised and you have got 1.2 million claims from families, saying, "Give us our land back", even if it is only one hectare.

  Mr Craciun: Yes.

  Q785Chairman: It is a huge problem, a huge challenge.

  Mr Craciun: That is why there is a law in Parliament that we are creating of the land law court to separate civil trials and land trials, if you know what I mean. It is another kind of court just to solve it immediately and to put people in the way of working.

  Chairman: Under the circumstances, it seems almost irrelevant to talk about the single farm payment.

  Q786Lord Plumb: I think it is very relevant to talk about the single farm payment in the sense that the mind boggles when you think of distributing the single farm payment to 1.2 million farmers. Nevertheless, as things develop and you join the European Union hopefully in 2007, that being so, you will perhaps see some of the difficulties which arise between now and then in other countries. There are many farmers in this country who are finding it extremely difficult at the moment to find their way through the detailed points that are made for the applications, so are you satisfied that you have the necessary institutional and administrative structures to deal with the applications, the applications that obviously farmers are entitled to in subsidy form, as you join or as you proceed after joining the Union?

  Mr Craciun: For the time being, we are very related by plot identification. Last week the Government modified by emergency ordinance the law that made secret the aerial pictures of the land impossible to use for land identification followed by direct payment. For the future, the trend of joining the land will be much more accelerated by farm development, farm support, rural area diversification. For 2009, we are thinking at the national level that Romania will have two paying agencies. One will be the actual paying agency that we have and then we will transform the staff and the structure of the SAPARD programme so that it is also organised at the country level and workable. It is workable and it is already accredited, but unfortunately has used the money up to 2009 and at that time we will have two paying agencies to correlate direct payments of such programmes with other payments.

  Q787Lord Plumb: Can I ask whether you think the ceilings which were set in 2002 are sufficient to include the funding of the schemes that you have in mind in Romania?

  Mr Craciun: The money is enough according to the actual financial power of the farmer to bring collaterals for the programme, but immediately we will support them by registering the land in a free way by rural credits and 15,000 euro per farm and we suppose, we are sure that the farms attracted by SAPARD will be higher than used.

  Q788Lord Haskins: Does Romania have any interest in the outcome of the forthcoming WTO negotiations at Doha and how might they affect Romania, the free trade negotiations?

  Mr Craciun: There are fields where we are not directly affected, say, in terms of sugar. Romania is especially an importer of sugar, though we produced it years ago, but we are not directly affected because we join the European rules, so not directly affected by WTO this autumn. In terms of milk, it would be at a time when Romania will reach its quotas. Actually Romania is producing five million tonnes of milk and processing 1.2 million of milk and the quota is three million. We have a lot to do at the moment to reach the quota. I am afraid we cannot transfer the quota to other countries, but our national programme for milk processing development is divided between milk plants in four categories and probably the last one, D, will never reach the standard, but the first three would be motivated to have development programmes. WTO is not directly affecting us.

  Q789Chairman: Thank you very much indeed and thank you for finding the time with your colleagues to come here this morning. May I say that we look forward to welcoming Romania to the European Union and we wish you every success in the very substantial changes and the transformation which you will be making in your agriculture. We wish you all the best in that and thank you for taking time to explain it to us today.

  Mr Craciun: Thank you on behalf of the Romanian Government for this meeting which is making us feel that Great Britain is a real supporter of Romania for the next couple of years and of course after when we will be part of the European Community. Thank you, my Lords.

  Chairman: Thank you very much.