Social partners in agriculture sector unite to get better deal for producers

Following protests against the absence of social dialogue on price and subsidy policies, the supermarkets’ perceived abuse of their dominant position, and the government’s perceived failure to provide support to Romanian agricultural producers, unions and employer organisations in the farming and food industry sectors made public, on 20 May 2008, the establishment of an alliance that aims to promote its own initiatives as an alternative to government policies.

Agricultural producers’ discontent

2008 has seen a variety of claims from the social partners in the farming and food processing industries. In January, the representatives of the National Federation of Farmers Trade Unions, Agrostar (Federaţia Naţională a Sindicatelor din Agricultură Agrostar, Federaţia Agrostar) and the National Federation of the Food Industry Trade Unions, SindAlimenta (Federaţia Naţională a Sindicatelor din Industria Alimentară, Federaţia SindAlimenta) complained of having been excluded from the negotiations on the budget for 2008, although both of them are members of the Social dialogue committee of the Ministry of Agriculture and Rural Development (Ministerul Agriculturii şi Dezvoltării Rurale, MADR).

At a press conference titled ‘Romanian agriculture and food industry on the brink of disaster’, the unions voiced their discontent at belated access to structural funds, what they saw as the absence of any agricultural policies, rising imports and food price rises for food.

In February, trade unions criticised what they called the ‘hypermarkets’ embargo’ on Romanian agricultural producers, and a lack of government action.

Romanian producers find it very difficult to access retail chain stores because they cannot supply them in competitive quantities to be marketed through megastores. Access charges raise the retail prices for local produce and products when distributed in small quantities.

The chair of The Romanian Food Industry Federation Romalimenta (Federaţia Patronală Română din Industria Alimentară Romalimenta, Federaţia Romalimenta) said that ‘to compete with importers, farmers should unite and make a joint offer to retailers’. Small and widely scattered quantities greatly weaken the negotiation capacity of Romanian producers, who cannot compete against what has become the monopoly of imported fruit, vegetables, meat and other goods.

The employer organisations and trade unions in the agricultural and food industries have petitioned the Competition Council (Consiliul Concurenţei, CC) to conduct an inquest into what they view as an possible abuse of the dominant position of the chain food stores against Romanian producers, by means of artificial price increases, which push local farmers and food processors into bankruptcy and increase prices for consumers.

In March, Federaţia Agrostar added claims related to the price of Diesel oil (which they say is twice as much as for other European countries’ farmers), and to the low subsidies for vegetable and tree growers, and for animal breeders.

Employer/union alliance

Against this background, on 20 May 2008, the unions and employer organisations representing the agricultural and food sectors called a joint national conference on the ‘Producers’ Alternative’. There they decided to unite in an alliance aimed at creating a programme for the development of agriculture, to boost agriculture out of its present crisis, as an alternative plan to the government’s programme.

The members of this alliance are, amongst others, the National Federation of Agricultural Producers of Romania (Federaţia Natională a Producătorilor Agricoli din Romania, FNPAR), Federaţia Agrostar, Federaţia Romalimenta and Federaţia SindAlimenta.

The leader of Federaţia Agrostar said that ‘Romanian agriculture is going through an unprecedented crisis. We have 60% of the agricultural land left unturned, and 80% of the farm produce and food on our market coming from imports.’

The participants said they would do their utmost to persuade the government to accept their alternative programme, because ‘this is not just defending the interests of farm and food workers, but also the interests of consumers.’

The president of Federaţia SindAlimenta summarised the main goals of this alternative programme as follows:

• Negotiation of subsidies;

• Reconstruction of irrigation systems;

• Incentives motivating small farmers to work together;

• Creation of a chain connecting producers, processing facilities and traders.

The members of the alliance are also proposing a code of best practice, under which hypermarkets should be compelled to display their mark-ups and to refrain from denying access to small producers.

The president of the FNPAR has also demanded equal treatment for Romanian and other European farmers – at present, a subsidy in Romania is slightly over €60 per hectare, while in the EU15 Member States it may be as much as € 400.

Commentary

Romania is now grappling with subsistence farming, the one to two hectare farms being overwhelmingly numerous, and decoupled from any modern commercial principles that govern both agriculture and the large production, processing and trading networks. This fragmented structure makes Romanian agriculture unsuited to the EU’s common agricultural policy, and unable to meet the requirements of EU support criteria. The social partners in the agricultural sector are both producers and consumers, but also employers and union members, which prompts them into alliances designed to protect their interests.

PhD Constantin Ciutacu, Institute of National Economy, Romanian Academy