The Government's recent decision to subsidise 50 percent of the cost of the irrigation equipment has caused demand from farmers to triple in a matter of days.
The Government allocated 300 billion ROL for this subsidy, less than it did last year (500 billion ROL). "As soon as the measure was announced, demand went up more than three times. Both the equipment makers and the farmers had been waiting for such a measure," Corneliu Pascu, general manager of irrigation equipment maker Iridex Bucharest told Ziarul Financiar. The company is held by Corneliu Pascu (65 percent) and other individual shareholders.
The subsidy is granted only for equipment either produced or assembled in Romania.
Pascu added the solution to improving irrigation in Romania was granting such subsidies for buying new equipment instead of fixing the old systems: "There's no point in fixing the systems in the absence of the necessary equipment. The irrigation systems in Romania are now covering 1.2 million hectares, but only 500,000 hectares are actually serviced by the necessary equipment."
Delia Negoita, general manager of Romet Buzau, another irrigation equipment maker says the 300 billion ROL are very little compared with the huge demand from farmers, particularly because of the last few years' drought: "We were expecting more money, but if the budget can only afford so much, there's nothing we can do about it. None of the measures we proposed, such as the supplier loan or hire purchase was so successful. Unlike the previous years, this year even the small farmers realised they need modern irrigation systems." Romet Buzau is held by PSD (Social Democrat Party) Senator Constantin Toma.
Sales of irrigation equipment amounted to more than 2,100 billion ROL (60 million dollars) in 2002.
"The state-granted subsidy accounted for the bulk of our sales last year. We sold 106 pieces of equipment to companies in seven counties," says Magureanu Nistor, general manager of Novus Constanta, which makes irrigation equipment under a German licence.
Money for irrigation equipment is also expected to come in from the SAPARD funds to be launched this fall, as well as from an 80 million-dollar loan granted by the World Bank.
Any farmer planning to benefit from this subsidy needs to secure an approval from the Farming Departments and then pay 50 percent of the price of the specific piece of equipment to the vendors, which get their money from the Farming Departments later.
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