Dr. Valentin Saykov,
Chairman of “Civil Initiative Bulgaria 2050“
The long years of waiting for the adoption of the euro in our country implied in-depth analyses of the moment, conditions and consequences of such an important economic step. Instead, the debate on the euro is increasingly being downgraded and reduced to a fierce political confrontation on a favorite topic of ordinary Bulgarians and politicians about price speculation.
For years, we have witnessed periodic campaigns against large retail chains, led mainly by opposition parties and non-governmental organizations. When they decide that the situation has become intolerable, the rulers ride on the discontent and come up with some measures, the only result of which is to throw dust in the people's eyes. Usually, there is talk of quotas for Bulgarian producers at the stands, of price control on the way from the producer to the retailer, etc. Such measures have never yielded a tangible result for either consumers or producers.
The first reason is the fact that if there is speculation with prices, it happens regardless of the state services that are called upon to fight it. Currently, the heads of these services are convincing their superiors and taxpayers that the solution is to increase the number of staff for speculator hunters. The extent to which the increased quantity will translate into better quality is questionable, especially considering the conclusions of a scientific study that was recently presented at the UNWE. For the eighth consecutive year, a team led by Prof. Borislav Borisov, supported by the UNWE, the D. A. Tsenov Academy of Economics and the Institute of Public Administration, is researching the state and prospects of the state administration in our country. The main conclusion in the report is that the administrative capacity index in our country is falling and in 2024 it will be below the level of eight years ago, when these studies were started. Increasing the efficiency of the state machine goes through improving the organization of its work, not through inflating the staff.
Political propaganda ignores the truth that the best weapon against high prices is free competition. The role of the state in a market economy is to encourage competition, not to appoint new and new officials to tour the markets and extort traders.
Campaigns against speculation will not yield results for another fundamental reason. They do not look at the main problems of the two key sectors for people's lives - agriculture and trade. These problems are insufficient production and monopolization.
Bulgarian agriculture has long failed to meet the country's food needs. Most of the fruits and vegetables we consume come from abroad. These include half of the tomatoes, a large part of the cucumbers, peppers, potatoes, etc. The picture is similar with fruits. Domestic production covers only selected crops at the level of domestic consumption. In general, the country's exports cover less than 20% of imports by volume and are mainly limited to cereals and oilseeds.
Half of the pork and beef in Bulgarian stores is also imported. In dairy products, the ratio seems better, but at the expense of the record import of dry milk, which puts strong pressure on domestic livestock farmers. Thus, the Bulgarian cheese we buy is often Bulgarian in terms of label, but not in terms of content.
The list could go on, but let's stop there.
The worrying picture is despite European subsidies for the sector. After its targeted destruction in the early nineties with the liquidation of cooperatives and the return of land to its real boundaries, agriculture in our country took a path of development that logically led us to the current situation.
Weak competitiveness, low labor productivity, fragmentation of production - these are the main reasons why we see so few Bulgarian products on the shelves of grocery stores. Added to these is the inability of Bulgarian politicians to protect the interests of domestic producers on the European stage.
Consolidation is a prerequisite for increasing competitiveness in the modern world. The question is how to do it?
The Bulgarian village faces two options. The first is to continue along the current latifundist path, in which land and the means of production are concentrated in the hands of a finite number of large landowners. The second is to revive cooperatives, which can give small producers the advantage of scale. Bulgaria has traditions in the cooperative movement long before September 9, 1944. Unfortunately, after November 10, 1989, “cooperative“ became a dirty word in the mouths of those who dictated fashion in government.
The transformation of the old socialist cooperatives into a new type of market enterprises was the basis of the painless agrarian reforms in the Czech Republic, Slovakia and other former socialist countries. Cooperatives of independent producers are the backbone of the exceptionally strong agriculture of France and many other member states of the European Union.
The choice of the two paths has not only economic, but also social dimensions. With the latifundist path that we have taken, the end result is a few very rich and a mass of extremely poor. With the cooperative path of associating agricultural producers, we will have many sufficiently wealthy farmers who provide a decent life for themselves and the people around them. And for consumers in the city, the benefit will be in more, more diverse and better-priced goods in stores.
The past 35 years have shown that strong cooperatives cannot be built only by the spontaneous unification of small producers without the help of the state. It is the state that must create the conditions and incentives for such consolidation with a new organization of production, supplies and sales of products. Only the state can help cooperatives create their own sales network, with which to break the monopoly of large retail chains. This should be done by encouraging and supporting independent producers and traders to unite, and not by creating a new monopoly under a large political umbrella, such as the idea of turning the “Bulgarian Post“ into grocery stores.
The slogan “Beat the speculator!“ is a direct path to the soul of the voter and is much easier to implement, at least in words. The call “Let's help the producer!“ is the right path to prosperity, but it will bring dividends in the future. Its implementation requires a lot of effort and investment. The first slogan is the choice of today's politicians. The second should be the choice of society, which is obliged to find the right people for its implementation.