An Evaluation of alternative strategies for the revitalisation of the horticultural industry in the Plovdiv region of Bulgaria.

Abstract

The process of transition from a centrally planned economy established during the period of Socialism (1944-1989) to a free market economy, began in 1989 and since then a range of reforms (political, economic and agricultural) that have affected the agricultural/horticultural sector in the country have taken place. The agricultural reform began in 1991 with the liquidation of the state Agricultural Industrial Complexes (AICs) and the introduction of private farming that established two main organisational structures: private farms and private co-operatives. The situation in agricultural/horticultural sector in Bulgaria and in the Plovdiv region has been placed in a critical condition with decreased production outputs when compared to the prereform levels due to the loss of established markets, high production costs, limited governmental financial and marketing support, old plots of perennial crops (orchards and vineyards), obsolete machinery and technologies and a highly fragmented pattern of land holding. The aim of this research is to evaluate a range of alternative strategies for the revitalisation and the future development of the horticultural industry in the Plovdiv region of Bulgaria. This was achieved by an investigation of the following: " The national characteristics of Bulgarian agriculture/horticulture as well as the political/legal environment within which the, farms have operated during the transition period. The local characteristics of the horticultural sector in the Plovdiv region, including an identification of the main advantages and problems. " The business operational characteristics of the farms in the Plovdiv region, particularly with regard to current production and marketing structure. " The evaluation by the farm managers of a range of alternative strategic options, based on Ansoff products/market matrix, for the revitalisation of the horticultural sector in the Plovdiv region. The identification of the business characteristics and the evaluation of the proposed alternative strategic options were studied using face-to-face interviews, assisted by a questionnaire, with farmers managing different types of farms in the Plovdiv region. The main findings indicated that the farms, irrespective of their size, land ownership patterns and type of crops, intended to continue with existing production patterns over the next 5 years, which they perceived as a `safe' option for business survival and as a way of life. This it is argued is the result of the influence of the external (political/legal and economic) and internal environments acting upon the farm businesses. The external environment remains inconsistent and unstable characterised by poor agricultural policies and legislation, undeveloped markets and a lack of finance (subsidies or borrowed) for investment in modernisation and products/markets transformations, while the internal environment was characterised by the weak market position, and low competitive power of the small and highly fragmented farms, which were obliged to sell their produce locally and to accept the market price offered to them. However, farm businesses in the Plovdiv region have considerable potential due to the favourable natural conditions, centuries old traditions of growing horticultural crops, the availability of a wholesale market in the region, combined with the significant knowledge and experience of the farm managers. Although the majority of farmers rejected new business approaches they were aware of the new opportunities that arose from the changing business environment. However, they were waiting for the political/legal and economic stability in the country and EU membership when the external environment would they believe be more stable and consistent.