Defective system for cooperatives in Romania

The law governing agricultural cooperatives has been amended several times in recent years, with major changes being made in 2016. These changes were made as a result of the need to establish a suitable regulatory framework to encourage associations in the form of cooperatives.

Romania has a very low level of farmer participation in such associations, despite the many advantages that membership offers. The regulations introduced in 2016 aimed to provide easier access to European funding, thereby making it possible to negotiate a better price for farm produce, and not least to introduce tax benefits.

Nevertheless, farmers who have joined cooperatives have enjoyed only one tax advantage for a limited period, namely a tax exemption. Moreover, members of cooperatives are dissatisfied with the uncertain legal framework and lack of standards on methodology, which prevents them from taking advantage of these tax benefits.

The changes to the legislation encourage farmers to organise on the production side but not on the marketing side, as is the case in all European best practice models. As a result, the main beneficiaries of the new legislation are not local producers but supermarket chains.

What instruments does the Commission have at its disposal with regard to creating an appropriate system for organising cooperatives?