The livestock breeding coupled support aims to give beef farmers financial aid towards livestock farming and production costs. Its objective stems from Bulgaria’s rural development programme to improve competitiveness and balance the development of the agri-food and forestry sectors in the country. The subsidy supports livestock breeding to increase the production of beef and milk. It lowers the cost of insuring against market risks, such as oversupply, and incentive to produce more meat and dairy. Almost 5,000 farmers were paid under the coupled support for beef cows and/or heifers. These measures support producers by encouraging them to engage in the long-term resilience and sustainability of their farms.
The budgetary impact of this subsidy was estimated to be EUR 9 million per year. If the subsidy were abolished, the producer price of a beef cow would increase from 3.4% to 4.3%. Most of these costs would have to be borne by the producers. Some farmers may be unable to afford the increase and may go out of business. The change would decrease the market volume by 6-8%.
The subsidy also causes environmental impacts, such as CO2 emissions, land and water use, and waste production. It was estimated that abolishing the subsidy would reduce greenhouse gas emissions by 120-160 thousand tonnes. It would also have a positive impact on resource use.
The study of the EU Common Agricultural Policy (CAP) impact on Bulgarian agriculture showed that the number of dairy herds decreased despite direct payments to dairy farmers. This demonstrates the inadequacy and inefficiency of these subsidies. The reformed version of CAP will be targeted toward animal welfare and climate change. If implemented, it would have important social and economic implications for farmers in Bulgaria. One example is compensation paid on a full-time equivalent worker basis instead of a hectare or livestock heads. This would create new jobs, encourage young farmers and conserve the environment in marginal agricultural areas. Another option for reform would be to invest in support for switching to other types of farming through direct payments towards farm outputs. This could lead to stabilisation of the market, income and competitiveness of farms and help achieve sustainability and viability in the agricultural sector.
More information on the livestock breeding coupled support and other candidates for reform in Bulgaria and other Member States can be found in the country case studies and factsheets compilation.