Bulgaria PM Fumes over Costly Bread despite Subsidies

Domestic | April 6, 2012, Friday // 16:06|  views

Photo by BGNES

Prime Minister Boyko Borisov has voiced his indignation at the fact that bread prices remain high despite the annual subsidy of BGN 1 B paid to grain producers.

Borisov's statement came in response to a question of socialist MP Kornelia Ninova about the reasons for the stalled implementation of the June 2010 agreement between the government and Bulgarian grain producers for an additional subsidy of BGN 70 m per year for the sector.

The Prime Minister explained that the scheme for the distribution of the money through coupons had been delayed due to a request for extra information on the part of the European Commission.

He specified, however, that the subsidy had already been approved by Brussels.
Borisov added that in order for the scheme to be implemented, two laws had to be changed.

The Prime Minister made it clear that the amendments had been drafted by the Agricultural Ministry but had not been presented to the Council of Ministers and to Parliament.

"We are counting on your support for the vote on the legal measures. Each year we pay over BGN 1 B to grain producers but I have not seen bread prices fall. We give them BGN 1 B and yet bread prices rise," Borisov remarked.

Ninova replied that the money given to grain producers was not from the state budget but from EU funds and had been negotiated at the time of Bulgaria's accession to the EU.

"The money allocated under the EU funds cannot be stopped by the government and even if it happens, it will only drive the prices of the commodities up," the MP from the Bulgarian Socialist Party (BSP) stated.

She added that the center-right GERB government had introduced a three-fold increase in social security contributions paid by farmers, which was included in the cost price of bread and other products, meaning that a tangible price reduction was not possible.

Ninova suggested that people's incomes had to increase because they were unable to afford the costly food products.

She went on to ask what had happened to the government's commitment for a reduced fuel excise duty rate for farmers.

"First the government had to get permission from Brussels for state aid. We did not see that, it was never published. Then the Excise Duties and Tax Warehouses Act had to be amended, as well as the Agricultural Producers Support Act. We did not see any changes introduced in Parliament. This issue is important because it directly involves 80 000 agricultural producers. This question concerns not only grain producers but all of us. It indirectly concerns all Bulgarians who eat every day and consume meat, vegetables, fruit, etc. ," Ninova pointed out.

"Excise duty on fuel for agricultural purposes constitutes 20% of the production cost per decare of land. When will you implement this contract," the left-wing MP inquired.

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Tags: Prime Minister Boyko Borisov, bread makers, Kornelia Ninova, Bulgarian Socialist Party, BSP, fuel, excise duty, subsidy, state aid

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