The effects of a drought will be "quite severe" if weather forecasts prove accurate. The contribution of the agricultural production to the Gross Domestic Product will diminish, imports will rise in some sectors, and the current account deficit will deepen, Minister of Agriculture Traian Remes said yesterday.
"If the forecasts are correct, the consequences will be quite severe. The contribution of agriculture to the GDP will be reduced, agricultural revenues will decrease, and the breeding of livestock will be affected. As a result, taxes from these sectors will also drop. In order to supply the population, imports in certain sectors will increase resulting in an even bigger current account deficit," stated Remes.
He added that he had come up against similar situations in the past.
"It is painful for me to go through the same situation that I experienced in 1999 and 2000 at the Ministry of Finance, when drought seriously affected the GDP. If agriculture had not posted such losses back then, the economic growth that started in 2001 would have started even earlier, in 1999. The last time drought affected Romanian agriculture, the GDP dropped by a few percentage points because of a similar situation to that we are facing now," said Remes. He specified that areas with installed irrigation systems would not be declared calamity areas.
"Disaster areas will not be declared where farmers did not use a system of irrigation, because of the costs involved. Nor will calamity areas be declared in cases where systems were installed, but not irrigated due to maintenance costs, or due to any other reasons," said Remes.
"The associations of water users do not contract irrigation works, due to the money involved for electrical power, upkeep, and security. (...) Those who have a business, also have to sustain it financially," added Remes.
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