Family farming - sustainable model for the development of the rural environment

Ing. Zsolt Cserge – Association of Slovak Young Farmers26 of February 2019

Skopje, Republic of Macedonia

Agriculture in Slovakia

▪ Total agriculture land – 2,38 mil. ha▪ Arable land – 1,4 mil. ha▪ Forests – 2 mil. ha▪ Ownership of land: 75% private

25% state▪ Average farm size: 80 ha▪ Applicants for SAPS: 19 500

(20% of applicants cultivate 80% of land)▪ Share of domestic food products: 40%▪ Average age of farmers: 51 years

▪ Farming as Physical person/Legal person▪ Physical Person – simplified form of farming,

registration at Town hall, only for primary producing.

▪ In case of processing – registration at Trade Licensing Office

Focus on family farming▪ The agricultural and food sector of Slovakia is at a historical crossroad, which raises the need of

adaptation to ever-changing conditions, adaptation to the local and even European market.

▪ The growing influence of the business chains in Slovakia gradually weaken the position of primaryproducers and processors in the market.

- We have only 40 percent of Slovak products on shelfs- Import of cheaper products with a questionable quality- Crisis in different segments.

▪ Farmers, primary producers have been in a difficult economic situation over the past few years. The pooreconomic situation, the weak sales base of its own products in the domestic market, and the weakmarketing strategy have prompted many primary producers to find new alternatives.

▪ In Slovakia, producer and marketing organizations have been established only in a minimal number ofcases, partly due to insufficient knowledge of their importance, structure, benefits and possibilities ofimplementation. Therefore, subsidies are also needed, along with information and know-how for theestablishment of producer and marketing organizations.

▪ The system of producer and marketing organizations in Western EU countries - Grower grows,PM organization sells.

SWOT analysis

Strengths

▪ High potential of effective use of arable land and pastures,

▪ Increasing demand for ecological products,

▪ High added value,▪ Quality domestic products

with controls,▪ Dense settlement structure,▪ Education possibilities,▪ Demand for PMO’s – improve

competitiveness.

Weaknesses

▪ Stagnant production system (worn buildings, facilities and equipment),

▪ Low linking of the agricultural sector to the food sector,

▪ Insufficient utilization of existing processing capacities,

▪ Weakly developed land market due to the fragmentation of land ownership,

▪ Lack of investment, weak flow and access to finance.

Opportunities

▪ Environment friendly equipment, machinery and buildings,

▪ Increased quality of food products,

▪ Diversification of the economic base of rural areas (finalization and sale),

▪ Development of information and communication technologies,

▪ Visibility of rural regions in the context of rural tourism, agro-tourism.

Threads

▪ Increasing influence of retail chains,

▪ Insufficient pace of modernization and innovation and lack of expertise and awareness,

▪ Increase in imports, globalization and decline in smaller regional food businesses,

▪ Rising unemployment in the rural area,

▪ Lower purchasing power of the rural population,

▪ Outflow of qualified and potential human resources from rural areas.

Fragmentation of land ownership

Sales channels for young farmers/family farms

▪ Selling own products directly to the consumers,

▪ Sale from the farm,

▪ Sales through producer and marketing organizations.

Main objectives of direct sales to the final consumer:

▪ To offer farmers the option of selling their products directly from the farm to consumers,

▪ Deliver to local retail facilities, or set up a shop, or being present in the marketplace,

▪ To establish small slaughterhouses and processing plants to offer consumers high-qualityand fresh products and food, which contributes to the development of regions => withouta broker, no margin of the broker makes it more competitive.

For the purpose of direct sale to the final consumer 2 national government regulations were accepted in 2011:

▪ no. 359/2011 laying down requirements for certain food processing facilities and smallquantities.

▪ no. 360/2011 laying down the hygienic requirements for the direct sale and supply ofsmall quantities of primary products of plant and animal origin and the supply of milkand milk products to the final consumer and other retail organizations.

Government Regulation No. 359/2011

▪ Delegated acts from EU Regulation No. 852/2004 and No. 853/2004.

▪ Deals with the following four topics concerning meat:

1. measures to adapt certain requirements for the design, layout and equipment ofslaughterhouses and the smallest production volume facilities, laid down in the Annexes tothe EU hygiene regulations,

2. the definition of what activities of cutting, production of meat products placed in retailfacilities are considered to be marginal, local and limited,

3. small quantities of poultry meat, domestic rabbits, free breeding animals that the primaryproducer may kill on the farm, sell on his own premises or at a local market directly to thefinal consumer or deliver to local retail facility,

4. details of the labeling of meat from animals slaughtered outside the slaughterhouse and theaccompanying document

Prior to commencing operations, the hygiene requirements of the facility and the approvalprocess must be met, so an application for approval to the relevant regional veterinary and foodadministration is required!

Government Regulation No. 360/2011▪ Deals with the following two topics:

1. establishes hygienic requirements for the direct sale and supply of small quantities ofprimary products to primary consumers or local retail facilities and regulates the obligationsof operators of such local retail facilities,

2. defines the supply of milk and dairy products from a retail facility to another retail facility,which is considered to be only marginal, local and has limited activities.

These small quantities of primary products must come from own farm production, harvesting, orprimary producer activities. The primary producer must be registered separately for theseactivities.

They can only be the primary products which correspond to the definition of primary productionactivities and which can not be processed, packaged, modified in such a way that their nature issubstantially altered and contamination may occur.

Primary producers can sell directly to the consumer at the farm or local marketplaces or supplysmall quantities of primary products to local retail facilities - fish, raw milk, eggs and honey,cereals, buckwheat, sorghum, millet, legumes, oilseeds, potatoes, vegetables, fruits, herbs andcultivated mushrooms.

List of measures in Rural Development Program 2014-2020:

▪ Measure 1 - Transfer of knowledge and information actions▪ Measure 2 - Advisory Services▪ Measure 4 - Investments in material assets▪ Measure 5 - Restoring the potential of agricultural production▪ Measure 6 - Support for young farmers, small farms and

businesses▪ Measure 7 - Basic services and renovation of villages in rural

areas▪ Measure 8 - Investments in the development of forest areas▪ Measure 10 - Agro-environment - Climate Action▪ Measure 11 - Organic farming▪ Measure 12 - Payments related to NATURA 2000▪ Measure 13 - Payments for areas with natural or other

constraints▪ Measure 14 - Animal welfare▪ Measure 15 - Forestry-environmental and climatic services and

forest protection▪ Measure 16 - Cooperation▪ Measure 19 - LEADER▪ Measure 20 - Technical assistance

EU priorities:• fostering knowledge transfer and innovationin agriculture, forestry and rural areas,• enhancing the viability and competitivenessof all types of agriculture, and promotinginnovative farm technologies and sustainableforest management• promoting food chain organization, animalwelfare and risk management in agriculture• restoring, preserving and enhancingecosystems related to agriculture and forestry• promoting resource efficiency andsupporting the shift toward a low-carbon andclimate-resilient economy in the agriculture,food and forestry sectors• promoting social inclusion, poverty reductionand economic development in rural areas

Measure 6 - Support for young farmers, small farms and businesses

Sub-measure 6.1 - Support for young farmers

Conditions:

▪ Max. 40 years old

▪ Agricultural education

▪ Grant - €50 000,- in 2 payments (70 – 30%)

▪ Startup grant, fulfilling a business plan in max. 5 years

Sub-measure 6.3 –Support for small farms

Conditions:

▪ Grant - €15 000,- in 2 payments (50 – 50%)

▪ Family farms with history, fulfilling a business plan in max. 5 years

Measure 16 – CooperationSub-measure 16.4

Responds to the need:▪ Supporting the sale of domestic production through producer organizations and the development of short

supply chains,▪ Increasing added value by improving the quality of domestic agricultural production and stimulating

production,▪ Creating new jobs and strengthening the economic viability / viability of small rural businesses.

Support is granted for two areas: 1.) Development of short supply chainsdefined as a supply chain, with no more than one mid-organization between the farmer and the consumer;

2.) Development of local marketsfor the purposes of the measure defined as a 100 km radius from the place of origin of the product or as the territory of the higher territorial unit (district, region) in which the producer is located.

List of current direct support1. from the European Agricultural Guarantee Fund (EAGF)

Separate direct payment schemes:

a) the Transitional Simplified Basic Payment Scheme (Single Area Payment, SAPS),b) payment for agricultural practices beneficial to the climate and the environment,c) payment for young farmers.

Direct Payments Schemes:

a) sugar beet payment,b) payment for hop production,c) payment for cultivation of selected fruits with high labor costs,d) payment for cultivation of selected fruits with very high labor costs,e) payment for cultivation of selected vegetables with high labor costs,f) payment for cultivation of selected vegetable species with very high labor costs,g) payment for tomato cultivation,h) payment for the breeding of marsh, jar and goat,i) payment for fattening of selected categories of bovine animals,j) payment for cows with milk production.

List of current direct support2. from the European Agricultural Fund for Rural Development (EAFRD)

Support for rural development program measures

a) payments for areas with natural constraints or other specific constraints, like:- Mountain areas,- areas facing significant natural constraints,- areas affected by specific constraints;

b) payment within NATURA 2000:- on agricultural land,- on forest land;

c) agro-environment-climate payments, which includes the following operations:1. integrated production in fruit growing,2. integrated production in vegetables,3. integrated production in wine-growing,4. multifunctional field margins - biozones on arable land,5. protection of biotopes of natural and semi-natural grasslands,6. protection of biotope of pasture,7. protection of biotopes of droplets,8. protection of water resources - Protected water area Žitný ostrov,9. breeding and keeping endangered animal species;

List of current direct supportd) payments for ecological farming, the measure includes the following payments:

- payments for transition to organic farming practices and methods,- payments to maintain organic farming;

payment can be made on:

- arable land,- vegetables, strawberries, medicinal plants, spice plants or aromatic plants,- potatoes,- fruit sets intensively:

a) youngb) fruiting.

- fruit orchards others,- vineyards:

a) youngb) fruiting.

- permanent grassland;

List of current direct supporte) animal welfare payments, the measure includes the following operations:

1) improving care for dairy cows,2) improving the housing conditions for fattening pigs,3) improving the living conditions of sows and pigs after birth,4) improving the welfare of poultry;

f) forestry-environmental and climatic services and forest protection, the measure includes the following operations:

1) payments for forest-environmental commitments in protected bird areas,2) payments for forest-environmental commitments in areas of European significance.

g) payments for first afforestation of agricultural land.

3. from the state budget of the Slovak Republic (SR)

Forms of transitional national payments:

1) additional national area payment,2) additional national payment for hops,3) supplementary national payment for livestock units.

Thank you very much for your attention!