Peter Baco, the Agriculture Minister in the government of former Premier Vladimír Mečiar, declared himself satisfied with agricultural developments in his final report on the sector in July 1998. But agriculture experts said the last four years under Baco had brought the farming sector to its knees.
"This is one of the worst years Slovak agriculture has ever been through," said Ivan Oravec, vice chairman of the Union of Slovak Cooperative Farms. "It's an absolute fiasco," agreed Ivan Rosíval, an agriculture expert with the new government.
Baco's approach to the field was set out in two documents - the first his programme declaration from October 1994 and the other a document called Conception and Principles of Agrarian Policy, approved in Parliament in June 1993, which represented the basis of the agrarian programme of the Mečiar government.
"The conception itself included some good ideas, but unfortunately farmers were not able to fulfill the requirements," said Rosíval. "This was partially caused by the negative steps of the ministry, but also by the whole situation and development of the Slovak economy."
One of Baco's aims was to reach a level of economic stability in agriculture by creating such conditions that average companies would generate profits. This basic health would allow the companies to grow annually and widen their access to lines of credit.
But from 1994 to 1998, the indebtedness of agrarian companies actually climbed to 4 billion Sk ($111 million), according to the Slovak Agriculture and Greengrocer's Chamber. The likelihood of getting loans has also fallen, even as interest rates have been skyrocketing.
"Farmers could take loans at 30 to 35% interest, but the profitability of the agricultural sector is only 10%," Rosíval noted. In October, short term interest rates rose to over 100% on the money market.
Another of Baco's aims was that 70% of all agricultural companies would be capable of self-induced growth. But experts forecast that only 38% of Slovak farming ventures are profitable, and that even those companies which do show figures in the black may only be posting accounting profit rather than positive cash flow.
The Baco ministry also aimed to bring farm wages up to at least 90% of the average wage in other sectors of the economy. When Baco inherited his chair, agrarian wages were 93% of the average. Today they sit at 77%.
Among the most important aims of the former government was the goal of decreasing imports of agrarian commodities and increasing export of those which are able to compete on foreign markets (like meat, vegetables, etc.) When Baco took office, imports were 7 billion Sk ($194 million) greater than the value of exports. Over four years, this figure climbed to 13.2 billion Sk ($367 million) (see chart, this page).
Surprisingly, agricultural sector losses have fallen from 3.4 billion Sk ($94 million) in 1994 to 960 million Sk ($27 million) in 1997. But farming experts said the improvement could not be regarded as a victory. "A loss is a loss, no matter how high it is. Profit is a victory," said Rosíval. The Agriculture Chamber, for its part, is forecasting a considerable increase in losses for 1998.
