1. Bla bla bla Oana Ganea CRPE Research 2 June 2014 Local Action Groups perception and recommendations for agricultural association

2. SUMMARY: 1. Research objectives and methodology 2. Data analysis 3. Most important results 4. Data conclusions 5. Data on respondents CRPE Research

3. The current research is part of the project “Advocacy for measures supporting the development of sustainable agricultural associations in Romanian Rural Development Program 2014-2020”, implemented by CRPE, in the framework of the “Rural development through entrepreneurship and association” program. The overall objective of the project is to provide expertise to the Romanian Government regarding the public policies that aim to support the economically-driven association process of small and medium farmers in Romania. In the current NRDP (National Rural Development Program) 2014-2020 draft, projects aiming at creating associative entities (cooperatives and agricultural associations) are financially supported, through the measures: a) Cooperation – sub measure Short Supply Chains b) Advisory services- as described in the EC Regulation nr 1305/2013, Art 151, the measure could include the sub-measure proposed by CRPE - „Advisory services for the establishment, registration and support for producer groups”, which provides for financing for the following: 1. Establishing a new entity – up to 200.000 Euros for 5 years; 2. Existing organizations – up to 200.000 Euros for train the trainers activities; 3. 1.500 Euro per advice service (there is no „advice” number limits) c) LEADER axis Objectives and research methodology(1/3) CRPE Research

4. The current research is complementary to the studies conducted so far, examining the way Local Action Groups relate to the issue of agricultural association (referring both to the past National Rural Development Program, but also to the next one). The research results will be used in the following studies and activities organized by the CRPE within the project. The specific objectives of the research are: Probing the understanding and attitude of Local Action Groups’ representatives on the issue of farmers association; Identifying existing associative forms and the extent to which they engage in the functioning of the Local Action Groups (membership) The extent to which LAGs financed the creation/development of associative forms in the current NRDP; Collecting Local Action Groups’ proposals to improve the new NRDP, in order to increase the efficiency of projects establishing and supporting the functioning of agricultural associative entities; Research tool: Standardized questionnaire, 18 questions Objectives and research methodology(2/3) CRPE Research

5. Data collection method: Self-administered questionnaire, online. Target population: Representatives of the 163 Local Action Groups in Romania Sample 49 LAGs representatives with key positions (Executive Director, President, Manager, Technical Expert) answered the questionnaire (their geographical distribution in the following slides) Objectives and research methodology (3/3) CRPE Research

6. Geographical distribution of the respondents CRPE Research

7. Geographical distribution of the respondents CRPE Research

8. Local Action Groups in Romania In Romania there are currently 163 Local Action Groups, covering a total population of 6.77 million inhabitants and a surface of 141.000 square kilometres (it is estimated that 70% of Local Action Groups geographical expansion potential has been reached) Based on the approved strategies of NRDP 2007-2013, until now Local Action Groups financed 3 645 projects, worth 167.3 mil EURO. The financial allocation for the LEADER Axis has been doubled in the current NRDP draft (approx. 625 mil EURO) From the perspective of the association process – it is extremely important for LAGs to include in their strategies innovative and atypical measures (RAF intervention-like), which can include a mix of community animation activities, training, advisory etc CRPE Research

9. Economically -driven association– beneficial initiative? Q1. From your perspective, is economically - driven association (agricultural associations, cooperatives, producer groups) a beneficial initiative, meant to increasee competitiveness of small and medium farmers in Romania? Please motivate your answer. Sample: All the respondents, 49, % ReasonsFrequency Inequality1 People are not willing to associate1 ReasonsFrequency Higher selling value25 Enhanced negotiating power13 Ability to make joint investments11 Improved work efficiency8 Better ability to attract funding7 Improved chances of success5 CRPE Research Only 4% of the respondents believe that economically- driven aassociation is not beneficial

10. The existence of associative entities across the LAGs 1/2 Q2. Are there any established agricultural associative forms (eg: associations, cooperatives) across the teritory of your LAG? Sample: all respondents, N=49, % Across most of the Local Action Groups teritory (37 out of 49), there are associative forms CRPE Research

11. The existence of associative entities across the LAGs 2/2 Q3. Are these associative entities members of your Local Action Group? Q5. Do they benefit within the Local Action Group from European financing? Sample: Only respondents from LAGs whose territory include agricultural associative entities (eg: associations, cooperatives). N=37, % Most of the associative forms are members of the Local Action Groups, but they do not benefit from LAG-managed European funding CRPE Research 30

12. Perceptions regarding producers’ intent to create associations Q6. As far as you know, are farmers in your LAG willing to associate? Sample: All respondents, N=49, % More than 50% of the farmers declared that, within their Local Action Groups, producers are willing to associate CRPE Research

13. Measure establishing associative entities in the Local Action Groups’ strategies Q7. In your current Local Action Group strategy, is there a measure financing the establishment of producer groups? Q8. If Q7=YES: Until now, have you financed the establishment of associative forms (eg: the current Measure 142 - Setting up groups of producers)? Sample: All respondents, N=49, % In almost half of the surveyed Local Action Groups, the strategy included the measure establishing producer groups, but until now, no Local Action Group financed the establishment of any associative entity CRPE Research 23 No funding for the associative forms

14. Opportunities to finance the establishment and functioning of associations in LAGs. Q12. Do you consider advisable financing the establishment and functioning of agricultural associative entities (agricultural associations, cooperatives, producer groups) in your Local Action Group in the next 7 years (the new NRDP)? Q13. Why would you not include such projects in your Local Action Group strategy? Sample: All respondents, N=49, % Almost all the respondents consider financing the establishment and functioning of associative entities advisable CRPE Research Reasons why they would not include such projects in their strategy Frequency Farmers do now wish to form associations 2 The initiative has to come from the farmers 1

15. The attitude of various Local Action Groups entities towards the establishment of producer groups Q14. What is the attitude of various Local Action Groups entities towards the establishment of producer groups? Sample: All respondents, N=49, % CRPE Research Companies have been reported as the most skeptical as to the establishment of producer groups

16. Improvements of the current situation Q15. Taking into consideration the last EU funds programming period, what do you think should be changed in terms of the support for establishing and financing association in agriculture, in order for these entities to become operational? Sample: all respondents, N=40, % Increasing non-refundable grant s(for investments, intensity of up to 90% )7 Support in the first three years of functioning5 Support for the establishment of associations, not for their functioning5 Eligibility of associative forms on various measures4 Tax incentives4 Corelating legislation on the various judicial forms – associations, cooperatives4 Simplifying the documentation in order to access European funds4 Information campaigns2 Shortening the recognition period for producer groups2 Making associative entities eligible on other NRDP measures1 Making the sales person’s salary an eligible cost1 Making conditions regarding the production sold by the association less restrictive1 Granting facilities for sales1 Increasing funding for the projects with a processing component, accessible by producer groups 1 Rendering the associations established according to the Associations and Foundations Law eligible for the NRDP1 Agricultural cooperatives should be financed according to their sector1 The application form should not require submitting the property title on the land on which the investment is carried out, only a usage authorization1 Good practices examples1 Higher score for associative entities1 CRPE Research

17. NGOs standing within the Local Action Groups Q16. How many NGOs are members of your Local Action Group? Q17. How many of these would you assess having managed to coagulate the community around common/public interest? Sample: all respondents, N=49, % CRPE Research Number of NGOs members of the surveyed Local Action Groups Number of LAGs Between 1 and 10 NGOs33 Between 11 and 18 NGOs10 Between 20 and 35 NGOs5 No answer1 Total49 NGO efficiency (perception)Number of LAGs 0-25% of the NGOs21 30-44% of the NGOs9 50-75% of the NGOs13 80-100% of the NGOs5 No answer1 Total49

18. Most important results (I) Across the territory of most of the Local Action Groups (76%) there are established associative entities – most of them are represented by livestock farms and forest/meadow associations – therefore, associations that do not conduct economic activities in common. Few vegetable or cereals associations were nominated; These associations are members of the Local Action Groups (76%), but haven’t received European financing via the Local Action Group; More than half of the LAG representatives say that, on the territory of their respective LAG, there are producers who wish to associate  they are aware of the resources and the local vectors that can coagulate around them associative entities; Half of the surveyed Local Action Groups included in their initial strategies the measure aiming at supporting producer groups, but until now, no LAG has financed any such associative entity. The reasons why these measures failed could make the object of an in-depth study (interviews); At the same time, the study revealed that the LAGs are willing to finance associative forms in the next seven years (only 3 LAGs said they do not wish to take on such a measure due to the lack of interest on behalf of the farmers). CRPE Research

19. Most important results (II) According to the respondents, the highest degree of skepticism regarding the establishment of associative entities comes from companies; local authorities have a positive attitude towards associative forms, as 49% of the Local Action Groups representatives declared. Regarding the measures that should be included in the new NRDP, the respondents consider that: 1.Grants made available to associative entities should be bigger, especially for investments; 2.Associations should be assisted in the first three years of functioning (validation of the RAF model); 3.Grants should support the establishment of associative entities, not only their functioning (second validation of RAF program); 4.Associative entities need dedicated tax incentives; 5.Legislation should be simplified and clarified, as most of the time is inconsistent; 6.The salary of a sales agent should be considered as an eligible cost; 7.The financing rate for the projects with a processing component, accessible to producer groups, should be increased; 8.The application form should not require a title property, but the right of usufruct on that respective land. CRPE Research

20. Conclusions – from the point of view of the RAF program Logistics centers (food hubs) are extremely necessary (with sorting, packing, minimum processing facilities) “The group could set up centers for storing and packaging the products; thus, it could become a serious competitor for importers” Focus points: Particular attention to the LAGs that declared there are no producers willing to associate within their territories; The survey may represent a starting point in determining the areas best suitable to finance the associative projects (eg: by establishing a set of indicators targeting specific categories: Q1,Q6,Q7,Q12) – the LAGs aggregating the biggest number of positive answers are the most suited to be included in a project stimulating the creation of associations; Reflection points: The topic of investments necessary to support associative entities is part of most of the answers offered by the LAGs. Are the new structures ready to support investment projects from the very establishment? Ways to include atypical measures (following a similar methodology to the one proposed by the RAF program) in the new LAGs strategies. CRPE Research

21. Data about the respondents Average farm size 1-5 ha27 6-10 ha9 11-20 ha3 21-50 ha4 Over 50 ha6 Total49 Main agricultural activities within the LAG’s territory Number Livestock25 Grain fields17 Vegetable14 Fruit growing5 Beekeeping4 Forestry1 Rural tourism1 No answers8 CRPE Research Number of small and medium farmers (aprox 1-30 ha or 2-50 EDU) that received financing through the NRDP 2007-2013 Under 1020 10-3020 31-508 51-1001 Total49

22. We would like to thank the National Federation of Local Action Groups for their support in applying this survey! CRPE Research