SPECIAL REPORT

FOOD SUPPLY AND NUTRITIONAL SITUATION ASSESSMENT
IN BULGARIA

15 April 1997

• INTRODUCTION
• OVERVIEW OF FOOD SUPPLY AND NUTRITIONAL SITUATION
• CEREAL SUPPLY/DEMAND SITUATION IN 1996/97 (JULY/JUNE)
• THE 1997 HARVEST OUTLOOK
• FOOD CONSUMPTION PATTERNS AND NUTRITIONAL SITUATION

INTRODUCTION

As part of a UN inter-agency needs assessment mission, FAO Global Information and Early Warning System and the Nutrition Division visited Bulgaria from 26 February to 9 March 1997 to assess the food and nutritional situation, including the supply and demand situation for major foods in 1996/97, food consumption patterns and the access to food by the population during the current economic crisis, and the prospects for the 1997 crop harvest.

OVERVIEW OF FOOD SUPPLY AND NUTRITIONAL SITUATION

Since the initiation of the transition in 1989, Bulgaria has been experiencing a deteriorating socio-economic situation which accelerated beyond all expectations in 1996 when prices rocketed, particularly for foodstuffs, and the national currency depreciated sharply. This situation has seriously affected the purchasing power of the population, particularly those dependent on the state for income. At the same time, the overall food supply situation has deteriorated over the past year, in part due to a continuation of the declining trend in domestic production, but also due to the favourable conditions for exports (both formal and informal) in 1995/96 (July/June) and equally, the unfavourable economic climate for imports.

With regard to wheat, the main cereal crop produced and consumed in the country, a national deficit has occurred in 1996/97 due to a combination of sharply reduced production in 1996 (bad weather worsened conditions for the already depressed agricultural sector), and a reduced level of carryover stocks from the previous year. As bread is the preferred staple food, ensuring continued access to adequate wheat supplies is of crucial importance for the majority of the population. Because of the tightness of state supplies (even including the state reserve), and the uneven distribution of stocks throughout the country, some localized shortages have already occurred, but supplies of bread have generally been maintained to most of the population so far. However, there is great disparity in the price of bread throughout the country, which is causing some unrest among the population and is putting extra pressure on centres where low priced bread is still available. It is reported that the low bread price in Sofia is attracting buyers from other population centres in the area. Prices are lowest where state supplies of subsidized wheat are still available or where municipal authorities are sourcing their own supplies of wheat at virtually open market prices, and then subsidizing wheat flour supplies to the bakeries from their own budget. However, the sustainability of these measures to subsidize bread is in doubt as government supplies of wheat, which can be distributed at the subsidized price, are limited and the municipalities which have taken their own initiatives to supply subsidized bread to their inhabitants are already reported to be operating on credit.

Against the total wheat consumption requirement estimated by the Mission at 2.5 million tons for 1996/97, only 1.9 million tons are anticipated to be available from domestic sources, leaving an import gap of some 600 000 tons for the 1996/97 marketing year. Deliveries confirmed, commercial import plans and food aid deliveries/pledges amounted to some 400 000 tons as of mid-March. Thus, the uncovered wheat import gap to meet consumption requirements until supplies from the new harvest become available is some 200 000 tons. Unless bi-lateral donor support is ensured to cover the gap, the Government will have to find means to

import this amount commercially. As the critical period is expected to be May-June, just before the start of the 1997 harvest, new import arrangements must be concluded very quickly to ensure the continuity of wheat supplies during that period.

Early indications for the 1997/98 marketing year are more favourable. Following a significant expansion in the areas sown to winter wheat crops last autumn, and satisfactory weather conditions so far, the Mission tentatively forecasts a sharp recovery in wheat production in 1997 to 3 million tons, which would be sufficient to meet expected domestic needs in 1997/98.

With regard to other foodstuffs, there is evidence to indicate a downward trend in consumption of meat and milk products. This is mainly a result of sharply increased prices for these products relative to the minimum and average cash income. The ability of the population to buffer the effects of the price rises at present appears to be due to a number of short and long-term coping strategies. Within the township areas, increased cultivation of small backyard gardens (mainly vegetables, pulses and fruit), traditional home preserving, informal flows of food from rural to urban areas, and substitution of meat and dairy products with cheaper, but often lower nutritional quality foods, appears to be sustaining the population at present. In the rural areas subsistence production of cereals and other foods accounts for some 50 percent or more of food needs.

Although no evidence was found to suggest widespread undernutrition, some specific population groups with below average income may now be facing increased risk of undernutrition. The present economic climate and various public sector reforms especially in the social welfare and health sectors will add further stress to the living conditions of the population living at or below the minimum salary and pension, 11,000 BGL (Bulgarian Lev) [ U.S.$ exchange rate 1500 - 1895 BGL during time of mission] and 10,000 BGL respectively. As a result the percentage of annual income expenditure on food is rising, and food consumption patterns are changing.

Based on the minimum salary and pension levels the vulnerable groups are most likely to be the older retired groups and families with very low or no income who have limited coping strategies in the form of cash or bank savings and access to other food income support mechanisms. It would appear that identification and targeting of social support services to these groups is essential to prevent unnecessary suffering and further reduction in their quality of life during this period of economic instability and reform.

CEREAL SUPPLY/DEMAND SITUATION IN 1996/97 (JULY/JUNE)

Several uncertainties remain over the wheat supply and demand balance for the remainder of the 1996/97 marketing year, mainly with regard to the quantity of wheat and wheat flour held by the state and private sector during the period under observation. The Mission has estimated the level of total stocks of wheat at the beginning of the 1996/97 year at about 100 000 tons. No official data were made available to the mission on the level of state reserves held at the beginning of the 1996/97 year but in mid-February 1997, prompted by the worsening wheat supply situation, the Government indicated that the entire quantity of the reserve at that time, amounting to about 70 000 tons, would be unblocked to supply most needy areas.

Taking into consideration the other main components of the diet, an adequate wheat requirement for human consumption (in all forms) is estimated at 450 grams per day. This is considerably lower than the apparent consumption derived from historical time series wheat balance data at a time when the importance of wheat in the diet is believed to be equally, if not more important in view of the population�s reduced purchasing power for other more expensive foods. However, this is explainable by high wastage in past surplus years when bread was reportedly so abundant and cheap that it was often fed to animals.

With regard to feed use of wheat, a further reduction in animal numbers has cut needs somewhat compared to the previous year. Nevertheless, in view of lower availability also of other feed grains, about 620 000 tons of wheat is estimated to be required for feed use in 1996/97. Other uses (mainly seed) are put at 400 000 tons.

Table 1 - Bulgaria: Cereal Supply/Demand Balance 1995/96 to 1996/97 (000 tons)

Sources: Ministry of Agriculture and Food Industries, Ministry of Trade and Foreign Economic Cooperation,
Ministry of Transport, various independent sources and FAO estimates.

Against the total wheat requirement for all uses of 2.5 million tons [ This includes about 100 000 tons, equivalent to one month's wheat requirements for working stocks to cover the eventuality of a late start to the 1997 harvest.] in 1996/97, only 1.9 million tons are anticipated to be available from domestic sources (100 000 tons estimated opening stocks and about 1.8 million tons from the 1996 production), leaving an import gap of some 600 000 tons for the 1996/97 marketing year. This analysis assumes that all supplies, with the exception of a small amount of privately held reserves, from the 1996 production in the hands of domestic producers will be released onto the market by the end of June. Although there remains some uncertainty on this, the fact that wheat supplies have generally been maintained so far this year, despite low carryover stocks and reduced state purchases of the 1996 harvest, indicates that the bulk of the 1996 production has in fact already been released. Farmers have without doubt been finding markets at higher prices than those originally offered by the government in deals with private mills or even state mills which have been forced to increase prices when faced with completely depleted stocks. Thus, the likely stocks remaining in private hands at the end of February 1997 is estimated by the Mission to be some 30 000 tons, and it is not unreasonable to expect that farmers when faced with the impending new supplies from the 1997 crop will be keen to clear out stocks of old crop wheat, especially if the new crop is promising.

Deliveries so far, confirmed commercial import plans and food aid deliveries/pledges by mid-March amounted to some 400 000 tons, leaving an uncovered import gap of 200 000 tons of wheat. Of the amount already confirmed, some 180 000 tons has already been received, mostly through barter deals for fuel and several small commercial import deals from neighboring countries and small food aid amounts. The remaining 220 000 tons which is already confirmed comprises 120 000 tons purchased through the Dominion Grain company and 100 000 tons in a loan deal with Poland to be paid back in kind from the 1997 harvest.

The first shipment of some 30 000 tons of the Dominion Grain deal is due to arrive at the Black Sea port of Bourgas in mid-March, and rail shipments of the Polish wheat are already reported to be arriving in the country. Further shipments of wheat under these two deals are expected to continue to arrive during the remainder of March and April. The government has indicated that it will carefully coordinate distribution of all available wheat to ensure that supplies are maintained to all of the population.

With regard to the as yet uncovered wheat import needs, unless a major bi-lateral donor steps forward the Government will have to find means to import wheat commercially. Several options to finance further imports of wheat are already being considered but much will depend on the outcome of ongoing negotiations with international financial institutions. As the critical period is expected to be May-June, just before the start of the 1997 harvest, new import arrangements must be concluded very quickly to ensure the continuity of wheat supplies during that period.

For coarse grains, the situation is less critical. Maize and barley are the major coarse grains and are mainly used for animal feed. Food and industrial uses account for a small fraction of total utilization of coarse grains. As for wheat, demand for coarse grains as feed is estimated to be much reduced in 1996/97 because of a further cut in livestock numbers, and therefore, despite sharply reduced production for these grains also in 1996, only a small deficit of coarse grains is estimated for 1996/97. It is likely that commercial deals of grain for brewing purposes will account for most of this deficit.

THE 1997 HARVEST OUTLOOK

Very good conditions for autumn field preparation and sowing prevailed from mid-October to mid-November 1996, which is somewhat longer than normal. As a result, despite the problem of inadequate and generally aging machinery, and limited financial resources, farmers have increased the area planted to winter cereals (mostly wheat and barley) by some 20 percent from the previous year to almost 1.5 million hectares. Of the total, wheat is estimated to account for 1.2 million hectares, while 280 000 hectares have been sown to barley.

Table 2 - Bulgaria: Area (000 ha), Yield (kg/ha) and Production (000 tons) of Major Food Crops

Source: 1995 & 1996 National Statistics Institute, 1997 forecast FAO Mission

Farmers� incentive to concentrate limited resources on wheat production seems to stem from the importance of wheat in the national diet, somewhat better prices received for the 1996 crop, and the prospect of high prices also in 1997. Although the Government guaranteed minimum price and that offered by state mills was initially well below international market levels after the harvest last year, market prices increased throughout the year reflecting the short supply situation. To encourage farmers to increase winter plantings for the 1997 crops, and assist them with the purchase of inputs, two schemes for access to soft loans were available in the autumn under the state fund "Agriculture". As in 1995, farmers could contract an area of winter cereal which they intended to plant and receive soft loans for seeds, fertilizers and harvesting costs, relative to the area planted. In return the farmers are obliged to sell, to the state, an established quantity of grain per hectare under contract. The Government has guaranteed that the price paid for the 1997 crop will be no less than 80 percent of international market prices. Alternatively, farmers could contract to sell a set quantity of grain to the state at harvest time for a set price, and in return receive a soft loan relative to the quantity contracted. Additionally, funds held by farmers in banks which have been placed in receivership were unblocked.

With regard to the condition of winter cereals, normal weather prevailed during December and early January and ample snowcover protected winter cereal crops from the risk of frost and greatly improved the soil moisture content after last years drought. The weather in late January and early February was unusually warm and dry and accelerated the development of the crops. Rainfall in the second half of the month further benefited soil moisture reserves, which are estimated to be good to excellent.

Assuming normal weather continues, some improvement in average yield over last year�s drought-reduced level is expected. However, much will depend on farmers� access to fertilizers, chemicals for disease, pest and weed control, and serviceable machinery at the time of harvest. In early 1997, rocketing inflation and greatly increased input prices have decreased further the likelihood off farmers accessing adequate amounts of these required inputs, despite government provision under the state fund "Agriculture" mentioned above. There is even much doubt as to the number of farmers actually benefiting from the fund as there are reports of insufficient finance from the fund reaching the banks which are charged with its administration. The official forecast of an average yield of winter cereals of 3000 kg/ha this year is regarded to be too optimistic. On current indications, the Mission estimates a yield of some 2500 kg/ha as a more realistic forecast. This compares with the drought-reduced yield of 1866 kg/ha in 1996 and a five-year average of about 2700 kg/ha. On this basis, the Mission tentatively forecasts wheat production in 1997 at 3 million tons, 68 percent up from the reduced crop in 1996 but still below the five-year average of 3.2 million.

Prospects for the maize crop still to be planted this spring have deteriorated somewhat with the recent worsening of the economic situation in the country. The planted area may increase from last year�s reduced level but is unlikely to reach the 600 000 hectare level planned by the Ministry of Agriculture. In addition to the sharply higher costs of fuel and inputs, demand for this major feed grain has declined with the downturn of the livestock sector. As for the situation with the winter cereals, limited finances for inputs, and additionally the bad state of repair of irrigation equipment will likely constrain maize yields well below potential.

With winter crops still under development and spring crops not yet sown it is too early to accurately estimate total cereal output in 1997. Based on the quantitative and qualitative information that is already available, the Mission tentatively projects that 1997 output could be sufficient to meet the domestic grain needs in 1997/98. However, a deterioration in prospects and the possibility of a tight cereal supply demand situation again in 1997/98 cannot yet be ruled out. Therefore the situation calls for close monitoring in the months ahead.

FOOD CONSUMPTION PATTERNS AND NUTRITIONAL SITUATION

Observed findings did not support any significant undernutrition problems. There were insufficient nutrition status data available at the time of the Mission to identify the level of moderate and severe undernutrition problems in any population group. The National Nutrition Surveys in the past 20 years concentrated on food consumption, micro nutrient and obesity studies (Dobrichka and Bourgas regions). During more recent non-representative surveys in Sofia the nutrition status of retired people (1994) and pregnant women (1993) had been studied. The results did not support an energy deficit but rather a possible micronutrient deficiency.

Data relating to children under five years and school children were not available. There appeared to be no systematic approach to nutritional surveillance although two sources of anthropometric data were identified i.e. Mother and child clinic data and school health data, that could have provided the mission with nutrition status trends. The data did not appear to be available at the time of request.

Food consumption patterns appeared to be strongly influenced by the purchasing power of the population. Data collected and collated by the Ministry of Labour and Social Welfare (MLSM) which shows a marked increase in food prices compared to basic incomes during 1996 and January/February 1997. However, Table 3 shows that the consumption of bread products appears to have remained relatively stable in comparison to other basic foods, regardless of the price increase.

Table 3 - Average monthly consumption of basic foods per capita, 1991-1996 (including breakdown for rural/urban differences reported in December 1996).

Source: National Statistics Institute, Sofia.
*Figures are higher than reported in other data sets. Seasonality factors affect consumption of fresh fruit and vegetables.
Consumption during summer is noted to be as high as 6.9 kg July 1996 Fresh fruits, and 9.1 kg for fresh vegetables.

The percentage of energy obtained from fat, protein and carbohydrate appears stable over 1993-1995. Unfortunately data were not available for 1996. However the household food consumption data from the National Institute of Statistics (NSI) for 1996 ( Table 3) do show a decreasing trend in meat and dairy products. The decreasing trend may be partly explained by the rise in prices (Appendix 1) and devaluation of the BGL but also partly due to the downward trend in agricultural and food production since the early 1990s.

The average per caput energy value according to available figures was within the recommended daily intake (RDI) level for low physical activity. At moderate activity level the average per caput intake was below the RDI for men but within the limit for women. It would appear that energy needs are presently being met. However the present pattern of food consumed appears to rely on substantial intakes of cereal products (bread), possibly increased fat (to maintain energy levels) and very limited intake of fruit, vegetables(seasonality factor included), meat and dairy products. Even though the level of energy appears to be acceptable for low physical activity the quality of the diet in terms of future long-term nutritional adequacy remains highly questionable. The pattern of foods consumed appears to suggest that more people are now eating a limited range of foods.