Environmental Management in Bulgarian Agriculture – Risks, Modes, Major Challenges

This paper presents a new framework for analysis and improvement of environmental management based on the achievements of the New Institutional and Transaction Costs Economics. Following that new framework we first, identify the major environmental problems and risks in Bulgarian agriculture. Next, we access efficiency of market, private and public modes of environmental management employed in the sector. And finally, we give prospects and major challenges of environmental management in conditions of EU Common Agricultural Policy implementation. Our analysis shows that post-communist transition of Bulgarian agriculture has changed the state of the environment and brought some new challenges such as: degradation and contamination of farmland, pollution of surface and ground waters, loss of biodiversity, significant greenhouse gas emissions etc. Badly defined and enforced environmental rights, prolonged process of privatization of agrarian resources, carrying out farming in structures not motivating in long-term investment, low appropriability of certain environmental rights and high uncertainty and assets specificity of environment related transactions, all these factors have been responsible for failure of market and private modes of environmental management. The strong needs for a public intervention have not been met by an effective government, community, international assistance etc. intervention. Consequently agrarian sustainability has been severely compromised. The assessment of likely impact of EU CAP implementation under “Bulgarian” conditions indicates that the main beneficiary of various new support measures will be the biggest operators. Income, technological and environmental discrepancy between different farms, sub-sectors and regions will be further enhanced. Our analysis has been also supported by field survey data from different type dairy farms from two major milk producing regions of the country. We have found out that a great number of farms have no sufficient capacity for adaptation to new EU requirements for the dairy sector. The bulk of milk producers expect no positive impact of CAP measures on their income, volume and technology of production, investment level, product quality, access to public programs, improvement of environmental care, improvement of animal welfare, development of infrastructure, possibilities for new income generation, and social status of farm households.