Банкеръ Weekly

Briefs

AMENDMENTS TO THE GRAIN ACT WILL LIMIT EXPORTS

Amendments to the Act on Storage and Trade in Grain, approved by the Council of Ministers last week, contain ineligible stipulations, the Association of Grain Traders claims. The main objections are connected with the intention to entitle the National Grain Service to issue certificates for export of grain and cereals. There are no such practices in other countries. It will also raise the fees, paid so far by the exporters. According to Nikolai Marinov from the Association of Grain Traders, they currently account for about 17% of the commodity's price, and with the new fees the percentage will probably exceed 22. (The exact increase will set by an ordinance.)At the first sight the problem concerns only grain exporters. But for experts in the branch it is clear that the problems will reflect on the grain producers most of all. Traders are restricted by the regional prices of grain, set in the last two years by countries such as Russia and the Ukraine. If they sell the commodity at USD80/t, Bulgarian exporters will also have to conform with that price. Where from will they get additional money to pay the export fees? There can be only one answer - from the grain producers. So, the purchase price will be reduced by the same amount as of the increase of export fees. But the lower purchase price might be unacceptable for the producers. Thus, exports will be much limited and the excess quantities will remain in the country. Given the low domestic consumption, the grain market will be oversupplied. The proposed amendments stipulate as well a new article 4a, making provisions for the way to subsidize the National Grain and Fodder Service (NGFS). In addition to the subsidies from the budget, the NGFS has proceeds from its operation. But if its participation in the licensing of public grain warehouses and the registration of grain stores is explicable and necessary, the same cannot be said about its obligation to issue certificates for export and to control the quality of grain products and fodders. Grain traders do not accept the requirements for the obligatory issuance of these documents. Thus, exporters would have to pay considerable amounts. What will the NGFS do with this money? Has the scandal of three years ago been forgotten? The mass media then made public the spending by NGFS's former management of more than BGN1MN, collected in a similar way. The NGFS became notorious then by the purchase of computers, mobile telephones, cars and expensive presents for Agriculture Ministry officials, and not a single lev of the money, collected from grain traders, entered the budget. The projected amendments will now create ideal conditions for repeating all that again. The motives for the proposed changes regarding the financing of the NGFS seem strange, too. According to the Agriculture Minister Mehmed Dikme, the proceeds of the NGFS have not been regulated by law. If this is so, how has it operated so far and have its activities been illegal? Control on the quality of grain should be regulated by market economy rules, Mr. Dikme believes. But why should the NGFS be given the monopolistic right to carry out that activity and collect the fees? There are private companies with authorized labs in the counntry. And if we are trying to bring Bulgaria's legislation in compliance with the EU requirements, why don't we look at the fact that in France only three state officials do the work of the NGFS?The members of the Association of Grain Traders are adamant that the proposed amendments to the Grain Act do not give grounds for optimism. They will not result in an improvement of the competitiveness of one of the few Bulgarian export goods and our stepping onto new foreign markets. If the proposed changes are approved, grain production in Bulgaria may be placed in an extremely grave situation next year.

Facebook logo
Бъдете с нас и във