1 BULGARIAN TOBACCO SECTOR- PAST, PRESENT AND FUTURE Binnaz Ramadan-Department of European Integration and International Cooperation TOBACCO FUND BULGARIA.
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BULGARIAN TOBACCO BULGARIAN TOBACCO
SECTOR- PAST, PRESENTSECTOR- PAST, PRESENT
AND FUTURE AND FUTURE
Binnaz Ramadan-Department of European Integration and International Binnaz Ramadan-Department of European Integration and International CooperationCooperation
TOBACCO FUNDTOBACCO FUNDBULGARIABULGARIA
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BULGARIAN TOBACCO SECTOR - PAST, BULGARIAN TOBACCO SECTOR - PAST, PRESENT AND FUTUREPRESENT AND FUTURE
I.I. HISTORICAL REVIEWHISTORICAL REVIEW
II. BULGARIAN RAW TOBACCO PRODUCTIONII. BULGARIAN RAW TOBACCO PRODUCTION
III. CURRENT LEGISLATIONIII. CURRENT LEGISLATION
IV. BULGARIAN TOBACCO SECTOR IN THE IV. BULGARIAN TOBACCO SECTOR IN THE TERMS OF EU MEMBERSHIPTERMS OF EU MEMBERSHIP
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BULGARIAN TOBACCO SECTOR-PAST, BULGARIAN TOBACCO SECTOR-PAST, PRESENT AND FUTUREPRESENT AND FUTURE
I.I. HISTORICAL REVIEWHISTORICAL REVIEW
Bulgaria is a traditional producer and exporter of Bulgaria is a traditional producer and exporter of tobacco, predominantly Oriental tobaccotobacco, predominantly Oriental tobacco
The raw tobacco production and its processing have The raw tobacco production and its processing have more than 100-years historymore than 100-years history
Up to 1950s – a small scale and extremely parcelled Up to 1950s – a small scale and extremely parcelled out tobacco productionout tobacco production
1976 crop – has reached peak values, achieving the 1976 crop – has reached peak values, achieving the yield of 140 000 tonsyield of 140 000 tons
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BULGARIAN TOBACCO SECTOR-PAST, BULGARIAN TOBACCO SECTOR-PAST, PRESENT AND FUTUREPRESENT AND FUTURE
I.I. HISTORICAL REVIEWHISTORICAL REVIEW 1960 – 1981960 – 19899 the average annual tobacco the average annual tobacco
production varies between 78 000 and 145 000 production varies between 78 000 and 145 000 tonstons
1989 and the following decade – drop and 1989 and the following decade – drop and fluctuations in tobacco production. The annual fluctuations in tobacco production. The annual tobacco production is within 35 000-37 000 tonstobacco production is within 35 000-37 000 tons
1995- the production of Oriental leaf drastically 1995- the production of Oriental leaf drastically drops to the lowest level with 15 000 tonsdrops to the lowest level with 15 000 tons
1995 – 2001- the production varies between 24 851 1995 – 2001- the production varies between 24 851 and 44 395 tonsand 44 395 tons
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BULGARIAN TOBACCO SECTOR-PAST, BULGARIAN TOBACCO SECTOR-PAST, PRESENT AND FUTUREPRESENT AND FUTURE
II. BULGARIAN RAW TOBACCO PRODUCTIONII. BULGARIAN RAW TOBACCO PRODUCTION 1. VARIETIES1. VARIETIES Oriental tobacco - 90% is from the group of Basma Oriental tobacco - 90% is from the group of Basma
typetype Burley (light air-cured) Burley (light air-cured) Virginia (flue cured)Virginia (flue cured)
The ratio of the produced quantities of tobacco The ratio of the produced quantities of tobacco between the three varieties is:between the three varieties is:
- Oriental with 68%Oriental with 68%- Virginia with 24%Virginia with 24%- Burley with 8%Burley with 8%
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BULGARIANBULGARIAN TOBACCO SECTOR-PAST, TOBACCO SECTOR-PAST, PRESENT AND FUTUREPRESENT AND FUTURE
II. BULGARIAN RAW TOBACCO PRODUCTIONII. BULGARIAN RAW TOBACCO PRODUCTION
2.TOBACCO PRODUCTION VOLUME FOR 2004, 2005 AND 2.TOBACCO PRODUCTION VOLUME FOR 2004, 2005 AND 2006 (FORECAST) CROPS IN TONS2006 (FORECAST) CROPS IN TONS
TYPETYPE 20042004 20052005 20062006
ORIENTALORIENTAL 39 983 39 983 36 574 36 574 29 178 29 178
VIRGINIAVIRGINIA 14 233 14 233 10 466 10 466 12 015 12 015
BURLEYBURLEY 4 627 4 627 5 055 5 055 4 944 4 944
TOTALTOTAL 58 84358 843 52 09552 095 46 13746 137
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BULGARIANBULGARIAN TOBACCO SECTOR-PAST, TOBACCO SECTOR-PAST, PRESENT AND FUTUREPRESENT AND FUTURE
II. BULGARIAN RAW TOBACCO PRODUCTIONII. BULGARIAN RAW TOBACCO PRODUCTION
3. AREA PLANTED WITH TOBACCO FOR 2004, 2005 3. AREA PLANTED WITH TOBACCO FOR 2004, 2005 AND 2006 BY VARIETIESAND 2006 BY VARIETIES
TYPETYPE 2004 2004 20052005 20062006ORIENTALORIENTAL 27 225 ha27 225 ha 27 835 ha27 835 ha 19 259 ha19 259 ha
VIRGINIAVIRGINIA 7 342 ha7 342 ha 7 954 ha7 954 ha 5 886 ha5 886 ha
BURLEYBURLEY 2 987ha2 987ha 4 234 ha4 234 ha 2 658 ha2 658 ha
TOTALTOTAL 37 554 ha37 554 ha 40 023 ha40 023 ha 27 803 ha27 803 ha
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II. BULGARIAN RAW TOBACCO PRODUCTIONII. BULGARIAN RAW TOBACCO PRODUCTION
4. NUMBER OF REGISTERED TOBACCO GROWERS FOR 4. NUMBER OF REGISTERED TOBACCO GROWERS FOR 2004, 2005 AND 20062004, 2005 AND 2006
TYPETYPE 20042004 20052005 20062006
ORIENTALORIENTAL 58 71258 712 63 84963 849 44 60344 603
VIRGINIAVIRGINIA 127127 114114 118118
BURLEYBURLEY 2 2002 200 2 2362 236 1 5661 566
TOTALTOTAL 61 03961 039 66 19966 199 46 28746 287
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II. BULGARIAN RAW TOBACCO PRODUCTIONII. BULGARIAN RAW TOBACCO PRODUCTION5. EXPORT OF RAW TOBACCO5. EXPORT OF RAW TOBACCO Bulgaria is a traditional exporter of Oriental tobacco Bulgaria is a traditional exporter of Oriental tobacco
and has gained good positions at the world tobacco and has gained good positions at the world tobacco marketsmarkets
The Bulgarian tobacco production is export-oriented. The Bulgarian tobacco production is export-oriented. More than 70 % of the Oriental tobacco is planned More than 70 % of the Oriental tobacco is planned for exportfor export
The total quantity of exported raw tobacco including The total quantity of exported raw tobacco including other tobaccos, waste and tobacco steams for 2005 other tobaccos, waste and tobacco steams for 2005 amounts to amounts to 32 891.332 891.3 tonstons
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BULGARIAN TOBACCO SECTOR-PAST, BULGARIAN TOBACCO SECTOR-PAST, PRESENT AND FUTUREPRESENT AND FUTURE
II. BULGARIAN RAW TOBACCO PRODUCTIONII. BULGARIAN RAW TOBACCO PRODUCTION EXPORT OF RAW TOBACCO FOR 2004 AND 2005 EXPORT OF RAW TOBACCO FOR 2004 AND 2005
ACCORDING TO THE DATA OF CUSTOMS AGENCYACCORDING TO THE DATA OF CUSTOMS AGENCY
TYPETYPE 20042004 20052005
ORIENTALORIENTAL 36 439 t36 439 t 29 270 t29 270 t
VIRGINIAVIRGINIA 2 287 t2 287 t 1 705 t1 705 t
BURLEYBURLEY 693 t693 t 774 t774 t
TOTALTOTAL 39 419 t39 419 t 31 74931 749
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II. II. BULGARIAN RAW TOBACCO PRODUCTIONBULGARIAN RAW TOBACCO PRODUCTION 5. IMPORT OF RAW TOBACCO5. IMPORT OF RAW TOBACCO
According to the data of Customs Agency the total According to the data of Customs Agency the total quantity of imported raw tobacco including other quantity of imported raw tobacco including other tobaccos, waste and tobacco steams for 2005 amounts tobaccos, waste and tobacco steams for 2005 amounts to 13 950.7 tones of which:to 13 950.7 tones of which:
- Virginia – 3 630.4 tonsVirginia – 3 630.4 tons- Burley – 1 245.8 tonsBurley – 1 245.8 tons- Oriental – 240 tonsOriental – 240 tons
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III. CURRENT LEGISLATIONIII. CURRENT LEGISLATION Tobacco production and processing have always been Tobacco production and processing have always been
subject to special regulation and support by the subject to special regulation and support by the governmentgovernment
The state management and the control in the field of The state management and the control in the field of tobacco and tobacco products is carried out by the tobacco and tobacco products is carried out by the Council of MinistersCouncil of Ministers
The main legal acts and rules regulating the sector are:The main legal acts and rules regulating the sector are:
Law for the tobacco and tobacco products (LTTP)Law for the tobacco and tobacco products (LTTP)
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III. CURRENT LEGISLATIONIII. CURRENT LEGISLATION Regulations for the implementation of the law for Regulations for the implementation of the law for
tobacco and tobacco productstobacco and tobacco products
Regulation on the terms and conditions for Regulation on the terms and conditions for
issuing and revocation of permits for industrial issuing and revocation of permits for industrial processing of tobacco and manufacturing of tobacco processing of tobacco and manufacturing of tobacco productsproducts
Ordinance for the conditions and the order of Ordinance for the conditions and the order of recognising organizations of tobacco producersrecognising organizations of tobacco producers
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III. CURRENT LEGISLATIONIII. CURRENT LEGISLATION
LAW FOR THE TOBACCO AND TOBACCO PRODUCTSLAW FOR THE TOBACCO AND TOBACCO PRODUCTS Adopted in 1993Adopted in 1993
Regulates the production, the grading, the buying out, Regulates the production, the grading, the buying out, the industrial processing of and the trade with the industrial processing of and the trade with tobacco, the production and the trade with tobacco tobacco, the production and the trade with tobacco productsproducts
Covers the whole chain from production to final Covers the whole chain from production to final realization of tobaccorealization of tobacco
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III. CURRENT LEGISLATIONIII. CURRENT LEGISLATION THE LAW FOR TOBACCO AND TOBACCO PRODUCTS THE LAW FOR TOBACCO AND TOBACCO PRODUCTS
COMPRISES DETAILED RULES ON:COMPRISES DETAILED RULES ON:
1.1. The quota system for tobacco productionThe quota system for tobacco production
2.2. Grading of tobacco at buying outGrading of tobacco at buying out
3.3. Buying out of tobaccoBuying out of tobacco
4.4. Minimum buying out (purchase) prices of tobaccoMinimum buying out (purchase) prices of tobacco
5.5. Tobacco producers support mechanism (subsidies for Tobacco producers support mechanism (subsidies for the growers)the growers)
6.6. Tobacco FundTobacco Fund
7.7. First processing of tobaccoFirst processing of tobacco
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III. CURRENT LEGISLATIONIII. CURRENT LEGISLATION1.1. QUOTA SYSTEM FOR TOBACCO PRODUCTIONQUOTA SYSTEM FOR TOBACCO PRODUCTION Only tobacco growers registered under the LTTP are Only tobacco growers registered under the LTTP are
entitled to produce raw tobaccoentitled to produce raw tobacco
Every year till December 1 the buyers of tobacco Every year till December 1 the buyers of tobacco declare at Tobacco Fund the quantities, necessary declare at Tobacco Fund the quantities, necessary for contracting and buying out of tobacco for for contracting and buying out of tobacco for municipalities, types and varieties for the following municipalities, types and varieties for the following yearyear
Till November 15 of the current year the tobacco Till November 15 of the current year the tobacco producers submit applications at the municipality at producers submit applications at the municipality at the location of production about the quantities of the location of production about the quantities of tobacco with types and varietiestobacco with types and varieties
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III. CURRENT LEGISLATIONIII. CURRENT LEGISLATION Tobacco Fund summarises the information from the Tobacco Fund summarises the information from the
buyers and producers and prepares a proposal to the buyers and producers and prepares a proposal to the Minister of Agriculture who upon this proposal every Minister of Agriculture who upon this proposal every year till January 15 determines with an order the year till January 15 determines with an order the quantities, the regions, the types and varieties for quantities, the regions, the types and varieties for production of tobaccoproduction of tobacco
On the basis of the order of the Minister of On the basis of the order of the Minister of Agriculture, every year till February, the mayor of the Agriculture, every year till February, the mayor of the municipality determines with an order for the municipality determines with an order for the producers- the quotas for production of tobacco, the producers- the quotas for production of tobacco, the areas, the types, the varieties and the quantities for areas, the types, the varieties and the quantities for production of tobacco. The order is to be presented at production of tobacco. The order is to be presented at Tobacco Fund Tobacco Fund
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III. CURRENT LEGISLATIONIII. CURRENT LEGISLATION A register of the tobacco producers and of the areas for A register of the tobacco producers and of the areas for
growing tobacco is kept at the municipalities and at growing tobacco is kept at the municipalities and at Tobacco FundTobacco Fund
A certificate is issued to each tobacco producer about A certificate is issued to each tobacco producer about registration in which is described the quota allocated to registration in which is described the quota allocated to himhim
The tobacco producers registered under the law receive The tobacco producers registered under the law receive tobacco seeds free of chargetobacco seeds free of charge
The resources for production of tobacco seeds are The resources for production of tobacco seeds are ensured by Tobacco Fundensured by Tobacco Fund
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III. CURRENT LEGISLATIONIII. CURRENT LEGISLATION
2. GRADING OF TOBACCO AT BUYING OUT2. GRADING OF TOBACCO AT BUYING OUT
The grading of tobacco is implemented jointly by the The grading of tobacco is implemented jointly by the producer and the buyer and according to the minimum producer and the buyer and according to the minimum quality requirements, co-ordinated with minimum quality requirements, co-ordinated with minimum three classes, determined with the regulations for three classes, determined with the regulations for implementation of the lawimplementation of the law
At dispute the grading of tobacco is implemented by At dispute the grading of tobacco is implemented by state tobacco expertstate tobacco expert
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III.CURRENT LEGISLATIONIII.CURRENT LEGISLATION3. BUYING OUT OF THE TOBACCO3. BUYING OUT OF THE TOBACCO The buying out of tobacco is implemented by persons The buying out of tobacco is implemented by persons
who have right to carry out first processing of tobacco, who have right to carry out first processing of tobacco, received permission by the Council of Ministersreceived permission by the Council of Ministers
The production and purchasing of tobacco is The production and purchasing of tobacco is implemented with writtenimplemented with written (cultivation) contracts (cultivation) contracts between the buyers and the tobacco producers. between the buyers and the tobacco producers. Contracts cannot be concluded without a certificate for Contracts cannot be concluded without a certificate for quotaquota
The buyers are obliged to buy out the contracted The buyers are obliged to buy out the contracted quantities of tobacco up to 20 % of the extra quantities quantities of tobacco up to 20 % of the extra quantities produced from the same areaproduced from the same area
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IIIIII. . CURRENT LEGISLATIONCURRENT LEGISLATION The buying out shall be implemented till March 1 of the The buying out shall be implemented till March 1 of the
next yearnext year The buyer has to present the contract at Tobacco FundThe buyer has to present the contract at Tobacco Fund Every year the buyers have to present to Tobacco Fund Every year the buyers have to present to Tobacco Fund
information about the bought out quantities of tobacco information about the bought out quantities of tobacco with types, quality and prices, at which it has been with types, quality and prices, at which it has been boughtbought
Tobacco is to be bought cured, manipulated and Tobacco is to be bought cured, manipulated and packed by the producerpacked by the producer
The re-sale of cured, manipulated by the producer The re-sale of cured, manipulated by the producer tobacco is prohibitedtobacco is prohibited
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III. CURRENT LEGISLATIONIII. CURRENT LEGISLATION4. BUYING OUT PRICES OF TOBACCO4. BUYING OUT PRICES OF TOBACCO Every year upon a proposal by the Minister of Every year upon a proposal by the Minister of
agriculture the Council of Ministers determines the agriculture the Council of Ministers determines the minimum buying out prices of the tobaccominimum buying out prices of the tobacco
The proposal of the Minister of Agriculture is prepared The proposal of the Minister of Agriculture is prepared by Tobacco Fundby Tobacco Fund
The tobacco cannot be purchased lower than the The tobacco cannot be purchased lower than the determined minimum buying out pricesdetermined minimum buying out prices
The minimum prices are applied for tobaccos The minimum prices are applied for tobaccos produced in line with the requirements of the lawproduced in line with the requirements of the law
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III. CURRENT LEGISLATIONIII. CURRENT LEGISLATION
5. PREMIUMS FOR THE TOBACCO PRODUCERS5. PREMIUMS FOR THE TOBACCO PRODUCERS Premium may be directly granted to the tobacco Premium may be directly granted to the tobacco
producers by Tobacco Fund for regulating the tobacco producers by Tobacco Fund for regulating the tobacco productionproduction
Tobacco Fund may grant additional premium to the Tobacco Fund may grant additional premium to the producers for improvement of the quality of tobacco producers for improvement of the quality of tobacco and for the encouragement of the production of certain and for the encouragement of the production of certain types of tobaccotypes of tobacco
Along with the premiums the producers may receive Along with the premiums the producers may receive targeted financial aid within the minimum purchasing targeted financial aid within the minimum purchasing pricesprices
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III. CURRENT LEGISLATIONIII. CURRENT LEGISLATION The premiums can be granted to the producers only for The premiums can be granted to the producers only for
produced and bought out tobaccoproduced and bought out tobacco
The premium for improving the quality of the tobacco is The premium for improving the quality of the tobacco is paid only for tobacco first and second classpaid only for tobacco first and second class
Tobacco Fund proposes to the Council of Ministers for Tobacco Fund proposes to the Council of Ministers for approval the extent, the kind and the conditions for approval the extent, the kind and the conditions for granting of premiums for one kg raw tobaccogranting of premiums for one kg raw tobacco
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IIIIII. . CURRENT LEGISLATIONCURRENT LEGISLATION The proposal shall be made for tobacco types in The proposal shall be made for tobacco types in
Bulgarian leva for kilogram raw tobacco within the Bulgarian leva for kilogram raw tobacco within the fund approved in the budget of Tobacco Fundfund approved in the budget of Tobacco Fund
The premiums shall be paid after the end of buying The premiums shall be paid after the end of buying out in 60 calendar days after the approving decision out in 60 calendar days after the approving decision of Council of Ministersof Council of Ministers
Tobacco Fund pays the premium directly to the Tobacco Fund pays the premium directly to the tobacco producers through a bank by:tobacco producers through a bank by:
Opening officially for its account to the name of each Opening officially for its account to the name of each tobacco producer, who is registered at Tobacco Fund tobacco producer, who is registered at Tobacco Fund and received quota for production of tobacco, an and received quota for production of tobacco, an account in the bank, servicing the respective account in the bank, servicing the respective municipalitymunicipality
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III. CURRENT LEGISLATIONIII. CURRENT LEGISLATION
Informing the tobacco producers about the payment Informing the tobacco producers about the payment of the premium by the mass media and by the of the premium by the mass media and by the municipal administrationmunicipal administration
Closing officially the bank account 60 days after its Closing officially the bank account 60 days after its opening and the resources are restored to Tobacco opening and the resources are restored to Tobacco FundFund
The bank account of the tobacco producer can be The bank account of the tobacco producer can be used only for payment of the premiumused only for payment of the premium
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BULGARIAN TOBACCO SECTOR-PAST, BULGARIAN TOBACCO SECTOR-PAST, PRESENT AND FUTUREPRESENT AND FUTURE
III. CURRENT LEGISLATIONIII. CURRENT LEGISLATION Amount of the premium paid per one kg produced and Amount of the premium paid per one kg produced and
bought out raw tobacco for the period 2003-2005 in bought out raw tobacco for the period 2003-2005 in euroeuro
TYPETYPE 20032003 20042004 20052005
ORIENTALORIENTAL 1.031.03 1.111.11 1.311.31
VIRGINIAVIRGINIA 1.021.02 1.031.03 1.121.12
BURLEYBURLEY 1.151.15 1.301.30 1.331.33
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III. CURRENT LEGISLATIONIII. CURRENT LEGISLATION Farmer price (including average purchasing price Farmer price (including average purchasing price
and premium) per kg raw tobacco for 2005 crop in and premium) per kg raw tobacco for 2005 crop in euroeuro
TYPETYPE AverageAverage
Buying out Buying out priceprice
Average Average premiumpremium
Average Average farmer pricefarmer price
ORIENTALORIENTAL 1.611.61 1.311.31 2.922.92
VIRGINIAVIRGINIA 1.431.43 1.121.12 2.552.55
BURLEYBURLEY 0.930.93 1.331.33 2.262.26
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III. CURRENT LEGISLATIONIII. CURRENT LEGISLATION
The amount of the totally paid premium to the The amount of the totally paid premium to the producers for produced tobacco for 2005 crop is producers for produced tobacco for 2005 crop is approximately 60 millions euroapproximately 60 millions euro
The amount of the totally paid targeted financial aid The amount of the totally paid targeted financial aid within the minimum purchasing prices per kg raw within the minimum purchasing prices per kg raw tobacco for 2005 crop is approximately 20 millions tobacco for 2005 crop is approximately 20 millions euroeuro
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III. CURRENT LEGISLATIONIII. CURRENT LEGISLATION6. TOBACCO FUND6. TOBACCO FUND Tobacco Fund has been established by virtue of the Tobacco Fund has been established by virtue of the
LTTP at the Ministry of Agriculture as a legal entity for LTTP at the Ministry of Agriculture as a legal entity for regulating the growing, buying out and trade with regulating the growing, buying out and trade with tobaccotobacco
Tobacco Fund carries out its activity in compliance with Tobacco Fund carries out its activity in compliance with the lawthe law
Bodies of the Fund are:Bodies of the Fund are:
1.The Management Council1.The Management Council- consists of 11 members and its chairman is the consists of 11 members and its chairman is the
Minister of AgricultureMinister of Agriculture
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III. CURRENT LEGISLATIONIII. CURRENT LEGISLATION- The other members are representatives of the Ministry The other members are representatives of the Ministry
of Finance, Ministry of Economy, Ministry of Labour of Finance, Ministry of Economy, Ministry of Labour and Social Policy, Ministry of Regional Development and Social Policy, Ministry of Regional Development and Public Works, and the Bulgarian National Bank and Public Works, and the Bulgarian National Bank
- Determines the conditions and the order for Determines the conditions and the order for management of the resources of the Fund according management of the resources of the Fund according to the objectives of the LTTPto the objectives of the LTTP
- Implements control on the spending of the recourses Implements control on the spending of the recourses of the Fundof the Fund
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III. CURRENT LEGISLATIONIII. CURRENT LEGISLATION2. Executive Director2. Executive Director- Elected by the Management Council of Tobacco FundElected by the Management Council of Tobacco Fund
- Implements the decisions of the Management CouncilImplements the decisions of the Management Council
- Represents the FundRepresents the Fund
- Organises and manages the activity of the FundOrganises and manages the activity of the Fund
There are 8 Regional Directorates at Tobacco Fund in There are 8 Regional Directorates at Tobacco Fund in the main tobacco regionsthe main tobacco regions
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III. CURRENT LEGISLATIONIII. CURRENT LEGISLATION The financial recourses of the Fund is collected from:The financial recourses of the Fund is collected from:
- Contributions in extent of 30 % of the value of the Contributions in extent of 30 % of the value of the excise for the purchased excise bands for tobacco excise for the purchased excise bands for tobacco productsproducts
- Fines, confiscation and other sanctions in favour of the Fines, confiscation and other sanctions in favour of the State under the Law after deducting all cost incurredState under the Law after deducting all cost incurred
- Donations, supports, obtained sums and other Donations, supports, obtained sums and other recourses specified by law or an act of the Council of recourses specified by law or an act of the Council of MinistersMinisters
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IV. THE BULGARIAN TOBACCO SECTOR IN THE TERMS OF IV. THE BULGARIAN TOBACCO SECTOR IN THE TERMS OF EU MEMBERSHIPEU MEMBERSHIP
On January 1, 2007 Bulgaria joins to the European On January 1, 2007 Bulgaria joins to the European UnionUnion
According to the Accession Treaty for Bulgaria and According to the Accession Treaty for Bulgaria and Romania:Romania:
- Direct payments shall be introduced in line with Direct payments shall be introduced in line with phasing-in schedule: 25%, 30%, 35%...of the then phasing-in schedule: 25%, 30%, 35%...of the then applicable level of such payments in the Community as applicable level of such payments in the Community as constituted on 30 April 2004constituted on 30 April 2004
- SAPS (Single Area Payment Scheme) + CNDP SAPS (Single Area Payment Scheme) + CNDP (Complementary National Direct Payments) shall be (Complementary National Direct Payments) shall be applied in the agricultureapplied in the agriculture
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IV. THE BULGARIAN TOBACCO SECTOR IN THE TERMS OF IV. THE BULGARIAN TOBACCO SECTOR IN THE TERMS OF EU MEMBERSHIPEU MEMBERSHIP
SAPS + CNDP – are to be applied until the end of 2009 SAPS + CNDP – are to be applied until the end of 2009 with the possibility of renewal twice by one year with the possibility of renewal twice by one year (2009+1+1)(2009+1+1)
- SAPS amount = national ceiling/ number of elig.ha SAPS amount = national ceiling/ number of elig.ha (utilised agricultural area)(utilised agricultural area)
- CNDP = complementary payment using national CNDP = complementary payment using national budget and RD funds in accordance with provisions on budget and RD funds in accordance with provisions on National Strategy for Agriculture and RD; authorised National Strategy for Agriculture and RD; authorised by the Commissionby the Commission
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IV.THE BULGARIAN TOBACCO SECTOR IN THE TERMS OF IV.THE BULGARIAN TOBACCO SECTOR IN THE TERMS OF EU MEMBERSHIPEU MEMBERSHIP
Eligibility criteria for receiving direct payments under Eligibility criteria for receiving direct payments under SAPS and CNDPs:SAPS and CNDPs:
- The farmer has to submit aid application at the Paying The farmer has to submit aid application at the Paying Agency ( Integrated Administration and Control System)Agency ( Integrated Administration and Control System)
- Minimum size of eligible area per holding- 1 ha (except Minimum size of eligible area per holding- 1 ha (except for permanent crops and vineyards-0.5 ha)for permanent crops and vineyards-0.5 ha)
- Minimum size of the agricultural parcel- 0.1 haMinimum size of the agricultural parcel- 0.1 ha
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BULGARIAN TOBACCO SECTOR-PAST, BULGARIAN TOBACCO SECTOR-PAST, PRESENT AND FUTUREPRESENT AND FUTURE
IV. THE BULGARIAN TOBACCO SECTOR IN THE TERMS OF IV. THE BULGARIAN TOBACCO SECTOR IN THE TERMS OF EU MEMBERSHIPEU MEMBERSHIP
According to the data of the National register for According to the data of the National register for tobacco growers kept at Tobacco Fund only 5 % of the tobacco growers kept at Tobacco Fund only 5 % of the registered growers (mainly Virginia producers) would registered growers (mainly Virginia producers) would be able to meet the requirements for receiving direct be able to meet the requirements for receiving direct paymentspayments
The Accession Treaty for Bulgaria and Romania lays The Accession Treaty for Bulgaria and Romania lays down the possibility for payment, independently of the down the possibility for payment, independently of the CNDPs regime, of state aid in the agriculture after the CNDPs regime, of state aid in the agriculture after the accessionaccession
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BULGARIAN TOBACCO SECTOR-PAST, BULGARIAN TOBACCO SECTOR-PAST, PRESENT AND FUTUREPRESENT AND FUTURE
IV. THE BULGARIAN TOBACCO SECTOR IN THE TERMS OF IV. THE BULGARIAN TOBACCO SECTOR IN THE TERMS OF EU MEMBERSHIPEU MEMBERSHIP
““SUNSET CLAUSE” SUNSET CLAUSE”
The provisions regarding the state aid and agriculture The provisions regarding the state aid and agriculture after the accession stipulate that” (…) aid schemes and after the accession stipulate that” (…) aid schemes and individual aid granted to activities linked to the individual aid granted to activities linked to the production, processing or marketing of products listed production, processing or marketing of products listed in Annex I to the EC Treaty (…), put into effect in a new in Annex I to the EC Treaty (…), put into effect in a new Member State before the date of accession and still Member State before the date of accession and still applicable after that date, shall be regarded as existing applicable after that date, shall be regarded as existing aid within the meaning of Article 88 (1) of the EC Treatyaid within the meaning of Article 88 (1) of the EC Treaty
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BULGARIAN TOBACCO SECTOR-PAST, BULGARIAN TOBACCO SECTOR-PAST, PRESENT AND FUTUREPRESENT AND FUTURE
IV. THE BULGARIAN TOBACCO SECTOR IN THE TERMS OF IV. THE BULGARIAN TOBACCO SECTOR IN THE TERMS OF EU MEMBERSHIPEU MEMBERSHIP
The aid measures shall be communicated to the The aid measures shall be communicated to the Commission within four months of the date of accessionCommission within four months of the date of accession
The communication shall include detailed information The communication shall include detailed information about the aid schemes-legal basis, form of the aid, about the aid schemes-legal basis, form of the aid, amounts foreseen and durationamounts foreseen and duration
The aid measures shall be regarded as “existing” aid The aid measures shall be regarded as “existing” aid within the meaning of Article 88 (1) of the EC Treaty within the meaning of Article 88 (1) of the EC Treaty until the end of third year from the date of accession- until the end of third year from the date of accession- “GRACE PERIOD”“GRACE PERIOD”
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BULGARIAN TOBACCO SECTOR-PAST, BULGARIAN TOBACCO SECTOR-PAST, PRESENT AND FUTUREPRESENT AND FUTURE
IV. THE BULGARIAN TOBACCO SECTOR IN THE TERMS OF IV. THE BULGARIAN TOBACCO SECTOR IN THE TERMS OF EU MEMBERSHIPEU MEMBERSHIP
After decision concerning payment of “existing” aid in After decision concerning payment of “existing” aid in tobacco sector, at a governmental level being taken, tobacco sector, at a governmental level being taken, Bulgaria will communicate to the Commission the aid Bulgaria will communicate to the Commission the aid measures laid down in the LTTPmeasures laid down in the LTTP
If the Commission approves the communicated aid If the Commission approves the communicated aid measures, applied in the tobacco sector in line with the measures, applied in the tobacco sector in line with the LTTP as “existing” aid, then Bulgaria will be entitled to LTTP as “existing” aid, then Bulgaria will be entitled to maintain its national aid to the raw tobacco producers maintain its national aid to the raw tobacco producers until the end of third year from the date of accessionuntil the end of third year from the date of accession
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