Power costs for irrigation beyond the pockets of farmers

01 Martie 2011


Presa, comunicat presa, naandanjain, thediplomat

Farmers rocked by the withdrawal of subsidies for irrigation have renounced over 80 per cent of their land for watering. Report by Nicoleta Banila

Irrigation is key to the development of Romania`s arable land, but there is a crisis due to farmers` failure to pay to bring the water to their fields.

Only three to four per cent of Romania`s arable land was irrigated last year, according to the National Agency for Land Reclamation (ANIF).

This figure is a massive fall from 2009`s figure of 600,000 hectares to 70,000 in 2010.

This drop is because farmers have not paid for the electricity to pump the water to their plots for 2009.

Between 2007 and 2009, the government gave subsidies to farmers to pay for electricity, so that 90 per cent of the power costs were supported by the state.

In 2010 this measure was abolished.

"Electricity is a vital component in irrigation and can reach up to 80 per cent of water costs," says Viorel Nica, president of the Water Users Association (AUAI).

The Agriculture Ministry says it is working on a series of measures to make water supply cheaper for farmers. "We are trying to establish with the Environment Ministry to bring water for free to pumping stations, from whereon the farmer should bear the costs," says state secretary Adrian Radulescu.

The Ministry of Environment and Forests also aims to control the prices of water resources. Currently, the price of irrigated water is 0.71 Euro per 1,000 cubic meters.

The Ministry plans to take steps this year in Brussels for financial support for irrigation systems. Radulescu says he might use power from Romanian producers who make cheap energy, such as state nuclear and hydro power companies Nuclearelectrica and Hidroelectrica.

However an issue for Brussels will be whether such moved will break state aid rules.

Cash of up to one million Euro is also available through the Water Users` Association (AUAI) to modernise the irrigation system.

In 2010, 228 million Euro was also available from EU financing for rural development.

Radulescu wants to maintain this until 2020 from European funding and Romanian co-financing.

The first session of this support programme was held in March 2010, but none of the 29 projects submitted by the organisations from AUAI were eligible.

"The criteria were too harsh," says Viorel Nica.

Water-user organisations had to already have a modernised upstream irrigation structure and a high index of dryness in the designated area in order to apply for the money.

But another problem was that the 228 million Euro had not been broken down into sub-domains, so that those who asked for money for more fund-friendly projects such as forest maintenance and rural road modernisation managed to beat the irrigators to pocket the Euros.

Foreign appeal

Water supply is now attracting key foreign interest. This year US irrigation systems producer Toro will invest 20 million Euro to build a factory near Ploiesti, which will produce micro-irrigation systems for vegetable growers, agricultural land, orchards and vineyards in east Europe.

Giant Israeli irrigation producer Naan Dan Jain has also come to Romania to offer low-pressure irrigation systems to save power consumption to the developers of non-irrigated land.

However problems include too many small farms, limited access to funds and high costs for energy and water, according to Ileana Stanciu, general manager of Naan Dan Jain [NDJ].

"Currently, state aid and subsidies provided to farmers are not sufficient and it would be appropriate to have a credit programme which offers coherent subsidy in irrigation or public private partnerships," says Stanciu. The company`s subsidiary in Romania has already entered into an agreement to install a sprinkler system for potato production on 60 hectares, amounting to 150,000 Euro.

Meanwhile agricultural giant Monsanto is providing irrigation systems for farmers in a 37 million Euro project, held for five years, during which time the company held an auction for suppliers` equipment and have found banks to ensure the lease for this equipment.

"Initial rates are paid by Monsanto and subsequently farmers pay us with the produced seed, maize or rape," says Gabriel Baeasu, general manager of Monsanto Romania. "In four or five years` time, they can pay us back for this equipment."

This irrigation equipment project began in 2009 and within two years has equipped 22 farmers with 40 plants and this year will add to the list 15 other farmers with a further 22 linear systems.

Another strategy is to move to where the rain falls.

"To solve the irrigation problem, we planted maize in the north of the country, where rainfall is bigger," says George Aldescu, general manager of seed producer Saaten Union.

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