Required Report - public distribution

**Date:** 8/29/2006

**GAIN Report Number:** RO6017

RO6016

**Romania**

**Poultry and Products**

**Annual**

**2006**

**Approved by:**

![](media/image1.wmf)Susan Reid

U.S. Embassy Bucharest

**Prepared by:**

Cristina Cionga

**Report Highlights:**

Following the widely spread avian influenza outbreaks in Romania,
poultry consumption is slowly resuming growth. In its attempt to provide
domestic industry time to recover prior to country's EU membership, in
July 2006 Romania has taken an aggressive posture on implementation of
certain EU compliant poultry-related measures. This practically puts an
end to the US' top agricultural export to Romania: broiler frozen meat,
despite the fact that the product had consolidated its place on the
market, especially by targeting lower income population.

Includes PSD Changes: Yes

Includes Trade Matrix: Yes

Annual Report

Sofia \[BU1\]

\[RO\]

Table of Contents

[**Production 3**](#production)

[Table 1. Poultry Inventories in Industrial Operations ('000 heads)
3](#table-1.-poultry-inventories-in-industrial-operations-000-heads)

[Production, Supply and Demand Table
4](#production-supply-and-demand-table)

[Consumption 5](#consumption)

[Trade 6](#trade)

[Import Trade Matrix 7](#import-trade-matrix)

[Table 2. Romanian Bindings vs. Applied Tariffs in 2006 (percent)
8](#table-2.-romanian-bindings-vs.-applied-tariffs-in-2006-percent)

[Export Trade Matrix 8](#export-trade-matrix)

[Prices 9](#prices)

[Prices Table 9](#prices-table)

[Table 3. Ex-factory Broiler Meat Prices, USUSD/MT, VAT Included
(end-of-month)
10](#table-3.-ex-factory-broiler-meat-prices-ususdmt-vat-included-end-of-month)

[Policy 10](#policy)

# Production

The upward evolution in the Romanian poultry industry continued in 2005,
a year with average productions, but generally low domestic prices for
grain feed and protein crops. Nonetheless, overall poultry inventories
were down 0.4 percent at the end of 2005, to just 79 million heads,
affected by the numerous highly pathogenic avian influenza outbreaks
registered beginning with the month of October in rural households,
which typically grow layers for self-consumption. Totaling 19.4 million
heads, industrial flocks increased by 12 percent compared to the
previous year (see table 1), while broiler stocks stood at 11 million,
with remarkable productivity gains registered by most producers.

## Table 1. Poultry Inventories in Industrial Operations ('000 heads)

+-------------------------+----------+----------+----------+----------+
|                         | Dec. 31, | Dec. 31, | Dec. 31, | \%       |
|                         | 2003     | 2004     | 2005     | Growth   |
|                         |          |          |          |          |
|                         |          |          |          | 2        |
|                         |          |          |          | 005/2004 |
+-------------------------+----------+----------+----------+----------+
| Layers                  | 5413.2   | 5914.9   | 6816.7   | 15       |
+-------------------------+----------+----------+----------+----------+
| Reproduction stock,     | 1294.2   | 1265.6   | 1390.9   | 10       |
| heavy breeds            |          |          |          |          |
+-------------------------+----------+----------+----------+----------+
| Reproduction stock,     | 242.5    | 182.2    | 195.4    | 7        |
| light breeds            |          |          |          |          |
+-------------------------+----------+----------+----------+----------+
| Broilers                | 9803.2   | 9969     | 11077.9  | 11       |
+-------------------------+----------+----------+----------+----------+
| Total inventories       | 16753.1  | 17331.7  | 19480.9  | 12       |
+-------------------------+----------+----------+----------+----------+

*Source: The Romanian Union of Poultry Producers*[^1]*.*

Broiler meat production in industrial operations expanded by 10 percent,
reaching 225,000 MT at the end of 2005, while in the first semester of
2006 the market suffered from the avian influenza outbreaks that
continued to spread including in a number of commercial flocks, with
notable consequences on poultry meat consumption in the short run (see
RO6004, RO6010, RO6011, RO6014). Thus, despite sustainable increases in
productivity in the Romanian broiler industry for the past 6 years,
inventories diminished with more than 1.3 million heads at the end of
June 2006 compared to the same period of the previous year, as
operators, already carrying significant meat stocks, voluntarily decided
to limit production by destroying hatching eggs to delay populating the
farms. To these, a number of sanitary-veterinary restrictions added,
often translating in culling one-day chicks and destroying embryos in
incubators, which disrupted technological flows in many plants and
reduced the breeding stock for both broiler production and layers.

Such measures have had an immediate impact over sector's
competitiveness, as specific indicators (productivity, feed conversion
ratio, mortality) for January-June 2006, still comparable with the most
efficient poultry producing countries, nonetheless stood at levels
slightly poorer than the ones registered in the corresponding period of
2005. Weight gains per day averaged 50.5 grams/day, varying, depending
on farm performances, between 39-60 grams/day. Conversion ratio
increased slightly to 1.87 kg feed/kg of meat from 1.85 kg feed/kg of
meat in 2005.

Despite the slowing down registered by Romania's poultry industry in the
first half of the year 2006, triggered by the highly pathogenic bird
disease in Romania and in the regional context, we anticipate that such
a temporary development will not affect commercial operators in the long
run, given their overall performance indicators. If for 2006 we
currently peg our broiler meat production estimate at 220 thousand MT
(some 2 percent less than last year's production), we expect that the
sector will be able to recover rapidly and resume growth from 2007,
easily adjusting to the conditions of the enlarged common market. The
key to competitiveness is the normally low cost of local corn. Romania
typically produces 8-10 million MT of this crop and has the potential to
double it with improved agronomic techniques. Soybeans, currently
planted on some 150,000 HA, can be also extended on some 500,000 HA,
although the EU membership will put an end in 2007 to country's
successful cultivation of herbicide-resistant varieties.

## Production, Supply and Demand Table

  ------------------ ----------- ------------------- ----------- ------------------- ----------- ------------------- ---------
  **Romania**                                                                                                        

  **Poultry, Meat,                                                                                                   
  Broiler**                                                                                                          

                     **2005**    **Revised**         **2006**    **Estimate**        **2007**    **Forecast**        **UOM**

                     **USDA      **Post              **USDA      **Post              **USDA      **Post              ** **
                     Official    Estimate\[New\]**   Official    Estimate\[New\]**   Official    Estimate\[New\]**   
                     \[Old\]**                       \[Old\]**                       \[Old\]**                       

  **Market Year                  01-2005                         01-2006                         01-2007             MM/YYYY
  Begin**                                                                                                            

  **Inventory        0           0                   0           0                   0           0                   (MIL
  (Reference)**                                                                                                      HEAD)

  **Slaughter        0           0                   0           0                   0           0                   (MIL
  (Reference)**                                                                                                      HEAD)

  **Beginning        0           0                   0           0                   0           10                  (1000 MT)
  Stocks**                                                                                                           

  **Production**     212         225                 230         220                 0           240                 (1000 MT)

  **Whole, Imports** 0           1                   0           0                   0           0                   (1000 MT)

  **Parts, Imports** 151         157                 125         125                 0           115                 (1000 MT)

  **Intra EC         0           0                   0           0                   0           0                   (1000 MT)
  Imports**                                                                                                          

  **Other Imports**  0           0                   0           0                   0           0                   (1000 MT)

  **TOTAL Imports**  151         158                 125         125                 0           115                 (1000 MT)

  **TOTAL SUPPLY**   363         383                 355         345                 0           365                 (1000 MT)

  **Whole, Exports** 0           0                   0           0                   0           0                   (1000 MT)

  **Parts, Exports** 7           7                   6           3                   0           8                   (1000 MT)

  **Intra EC         0           0                   0           0                   0           0                   (1000 MT)
  Exports**                                                                                                          

  **Other Exports**  0           0                   0           0                   0           0                   (1000 MT)

  **TOTAL Exports**  7           7                   6           3                   0           8                   (1000 MT)

  **Human            356         376                 349         332                 0           357                 (1000 MT)
  Consumption**                                                                                                      

  **Other Use,       0           0                   0           0                   0           0                   (1000 MT)
  Losses**                                                                                                           

  **Total Dom.       356         376                 349         332                 0           357                 (1000 MT)
  Consumption**                                                                                                      

  **TOTAL Use**      363         383                 355         335                 0           365                 (1000 MT)

  **Ending Stocks**  0           0                   0           10                  0           0                   (1000 MT)

  **TOTAL            363         383                 355         345                 0           365                 (1000 MT)
  DISTRIBUTION**                                                                                                     

  **Calendar Yr.     70          92                  0           55                  0           0                   (1000 MT)
  Imp. from U.S.**                                                                                                   
  ------------------ ----------- ------------------- ----------- ------------------- ----------- ------------------- ---------

Individual household backyard production account for one third of
poultry meat domestic consumption, but it is expected that this share
will shrink rapidly in the coming years.

Concentration in the poultry industry remains high: the seven largest
operations were holding, in mid-2006, roughly 50 percent of country's
commercial production, but small players, producing 1,500-2,000 MT/year,
are also numerous. The large farms are fully integrated from feed
production to hatchery, production and further to slaughtering and
processing, and, occasionally, they even have they own distribution
network. Smaller producers are not integrated and deliver their
production to local slaughterhouses.

Country's anticipated EU membership will drastically impact the poultry
industry in Romania. Broiler production, which according to analysts has
a competitive advantage in the EU context, is expected to increase
three-fold, in parallel with an accelerating market concentration. Egg
production has started to decline, again a natural process from the
perspective of the enlarged EU market.

Despite the fact that many investors were attracted in the recent years
by the sector, in an attempt to position themselves close to the export
markets and because labor costs had been much lower than in the EU,
currently Romania's broiler meat exports shrank dramatically as a
consequence of the avian influenza situation.

At the end of July 2006, the last outbreak was declared extinguished in
Romania. After 10 months of fighting the high path bird disease, the
authorities estimate losses of roughly 200 million euros, while the
poultry sector alone lost about 70 million euros. Between the beginning
of October 2005, when the AI virus infected for the first time birds in
the Danube Delta, and April 2006, over 50 outbreaks were identified in
Romania in 9 counties, in backyard premises or migratory birds. The
veterinary authorities actively took measures to limit spreading of the
disease by culling over 400,000 birds. Government spending on
compensations granted to poultry owners in the affected villages reached
USD 3.2 million within the referred to time period. Few weeks after the
last outbreak was closed in April, new outbreaks were confirmed in
Brasov county. Brasov is a mountainous region in the center of Romania,
far from the migratory birds corridor. The infection source was proven
to be a commercial flock in Codlea, in the county of Brasov, that sold
live chicks in many localities in the neighboring counties. The second
wave of high path avian influenza resulted in large amounts of money
budgeted as compensations to rural households affected by the disease,
as well as various other costs to limit the effects of the disease.
Poultry meat consumption was also dramatically reduced in the short run,
as in fact it was proven that the Codlea plant had supplied several food
retail chains all over Romania (including the capital, Bucharest) with
poultry meat and despite the fact that the veterinary authorities took
energetic measures to track back and remove the products from
supermarkets' shelves. It is estimated that more than 325 MT of poultry
meat were destroyed.

Overall, about 900,000 backyard birds were culled over the 10 months of
active AI outbreaks in Romania. The Ministry of Agriculture paid 13.5
million RON (that is approx. USD 5 million) as compensations for
destroying flocks. Unlike households, commercial farms hit by the
disease were not eligible for compensations unless they proved to have
observed specific biosecurity rules.

From May 13, 2006, the Ministry of Agriculture, Forests and Rural
Development prohibited transportation of live fowl throughout Romania
and passed additional measures to limit the spread of the disease from
autumn, when birds' migration will start again.

## 

# Consumption

Poultry consumption began to slightly decline in October 2005, following
the initial AI outbreaks. Nonetheless, the end of the year gave sales
some boost, especially since local food safety authorities gained
population's trust in controlling the spread of the disease. In the
first quarter of 2006, stocks were higher than the average.

Consumers' reluctance to buy poultry had repercussions on imports as
well, that diminished drastically in the last quarter of last year.
Overall, imports (mainly frozen chicken leg quarters) supplied in 2005
over 40 percent of the broiler meat consumption, especially targeting
the lower-income population segments.

Following the May 2006 outbreak, consumption dropped by an estimated 80
percent for a couple of weeks, while stocks piled rapidly to 25,000 MT
by the end of the month. Sales have started to recover in July, but are
still depressed compared to the same period of 2005. Assuming that no
other major avian influenza crisis will hit the poultry sector by the
end of the year, we anticipate that broiler consumption in Romania will
be down by some 11 percent in 2006, but will resume growth in 2007.
End-year carry-in meat inventories will likely diminish to 10,000 MT.

The trend towards shifting to higher quality products remains the main
trait in consumption, which make producers increasingly interested in
positioning themselves on the market via product branding and packaging.
Roughly 50 percent of the locally produced poultry meat is sold chilled.

There are several brand names with national penetration, positioned in
accordance with consumer incomes, but also products originating from
smaller operations, with a local presence. The average consumer is not
devoted to a single brand, but product availability (i.e., good
distribution through supermarkets and smaller groceries) plus an
acceptable price/quality ratio are factors that influence preferences
for a certain brand.

Albeit diversifying their choice, Romanian consumers generally show a
preference for dark poultry meat (legs) versus white meat (breast),
although the price differential between the two is still much lower than
in Western Europe or US (Table 3).

Demand for high value-added chicken products (ready-to-cook) is still
depressed on the local market.

# 

# Trade

Poultry is the second largest US export to Romania and the top US
agricultural export. With prices that competitively stabilized over the
past years, US were able to consolidate their position as the main
supplier of poultry meat to Romania. Total year value of poultry meat
exports of US origin was USD 63 million in 2005, or, in carcass weight
equivalent, over 92,000 MT. Despite a surging broiler domestic
production, the reasonably priced frozen chicken leg quarters have
become a steady animal protein source for the lower income population in
Romania. Total poultry imports exceeded 158,000 MT in 2005, of which 58
percent originating from US. The second largest supplier, Brazil,
shipped to Romania another 30 percent of country's broiler imports.

Consumers' reticence to buy poultry, in response to the avian flu
outbreaks, penalized imports as well. U.S. poultry meat exports to
Romania declined by 70 percent in December compared to September 2005.

Nonetheless, domestic industry continued to put pressure on the
authorities to cut imports. This translated into a number of measures
that finally shut down US poultry shipments to Romania in July 2006. The
initial actions were tariff restrictions: on February 13, 2006, the GOR
passed the regulation (Government Decision 200/2006) approving Romania's
new import schedule (valid from February 16 through December 31) and
according to which tariff rates for two poultry products, defined by the
codes 0207 1420: chicken halves and quarters, and 0207 1460: chicken leg
halves and quarters, were temporarily increased for 6 months (February
16 -- August 15) to 70 percent (from 45 percent in 2005). The duty raise
reportedly aimed to help local industry to increase sales and, thus
allow poultry growers to put more money into biosecurity at farm level.
Despite the fact that 90 percent of US' poultry shipments to Romania
typically fall under above specified codes, containers continued to
arrive in the port of Constantza, totaling almost 40,000 MT CWE by the
end of May.

The second set of actions was the effective imposition of
sanitary-veterinary restrictions. On May 5, 2006 the National
Sanitary-Veterinary and Food Safety Authority (NSVFSA) published its
Veterinary Order no. 95 stating that the EU health certificate model for
poultry meat would be enforced within 90 days from publication, which
was to be August 5, 2006. On June 2, 2006 NSVFSA amended the regulation
and imposed the new requirements from June 7. This radical measure
practically prohibits poultry imports originating from US, as there are
no EU-approved poultry facilities in the United States. Currently, US
are not actively shipping to the EU. Poultry meat consignments
accompanied by veterinary documents signed before or on June 7 were to
be accepted for importation in Romania assuming they arrived before
August 5, 2006.

As Romania has taken such trade protectionist measures in advance to its
EU accession, currently USTR proposed that its eligibility in the GSP
program was denied. In 2005, Romania was the 13^th^ largest user of the
GSP program, with the United States importing USD 283 million in goods
from here under the GSP program.

Under such circumstances, we estimate that the total amount of US
broiler meat entering Romania prior to August 5, 2006 would not exceed
55,000 MT. In the remaining months, Brazil and Thailand will be likely
able to substitute part of the amount traditionally shipped by US, while
another share will be grasped by the EU member states.

The annual TRQs for poultry meat originating from EU, exempted from
customs duties in Romania, were increased in 2006 to 9,000 MT for
chilled or frozen, and respectively 1,200 MT for processed poultry meat.
Poultry remains one of the highest protected sectors in Romania (Table
2).

Overall, we foresee a 20 percent shrink in the total broiler meat amount
imported into Romania in 2006. After country's EU membership, assuming
that domestic production will be able to adapt rapidly to the enlarged
market's conditions, imports will continue to fall.

## Import Trade Matrix

  ------------------ ---------------------- ------------- ----------------
  **Country**        Romania                              

  **Commodity**      Poultry, Meat, Broiler               

  Time Period        CY                     Units:        MT

  Imports for:       2005                                 **Jan-May 2006**

  U.S.               92,255.00              U.S.          39,603.00

  Others                                    Others        

  Brazil             47,671.00              Brazil        13,851.00

  Germany            4,722.00               Germany       3,114.00

  Netherlands        3,269.00               Netherlands   2,000.00

  Canada             2,802.00               Canada        864.00

  Belgium            1,479.00               Hungary       693.00

  Hungary            1,453.00               Belgium       504.00

  Italy              1,386.00               UK            439.00

  Argentina          822.00                 Italy         390.00

  Poland             578.00                 Ireland       370.00

  UK                 436.00                 Argentina     258.00

  Total for Others   64,618.00                            22,483.00

  Others not Listed  1,535.60                             533.00

  Grand Total        158,408.60                           62,619.00
  ------------------ ---------------------- ------------- ----------------

## 

## 

## 

## Table 2. Romanian Bindings vs. Applied Tariffs in 2006 (percent)

+---------+------------------------------+--------+-------+-----------+
| HS Code |                              | WTO    | 2006  | Special   |
|         |                              | bound  | ap    | EU        |
|         |                              | tariff | plied | p         |
|         |                              |        | duty  | reference |
+---------+------------------------------+--------+-------+-----------+
| 0207.11 | Chicken cuts and edible      | 96     | 45    | 0 for TRQ |
|         | offal, fresh or chilled      |        |       | (1)       |
|         | (whole birds)                |        |       |           |
+---------+------------------------------+--------+-------+-----------+
| 0207.11 | Chicken cuts and edible      | 96     | 45    | 0 for TRQ |
|         | offal, frozen (whole birds)  |        |       | (1)       |
+---------+------------------------------+--------+-------+-----------+
|         |                              |        |       |           |
+---------+------------------------------+--------+-------+-----------+
|         |                              |        |       |           |
+---------+------------------------------+--------+-------+-----------+
| 0202    |                              |        |       |           |
+---------+------------------------------+--------+-------+-----------+
| 0207.14 | Chicken cuts and edible      | 96     | 45    | 0 for TRQ |
|         | offal, frozen                |        |       | (1)       |
+---------+------------------------------+--------+-------+-----------+
| 02      | Chicken halves and quarters  | 96     | 70\*  | 0 for TRQ |
| 07.1420 |                              |        |       | (1)       |
|         | Chicken leg halves and       |        | 70\*  |           |
| 02      | quarters                     |        |       |           |
| 07.1460 |                              |        |       |           |
+---------+------------------------------+--------+-------+-----------+
| 0207.13 | Chicken cuts and edible      | 96     | 45    | 0 for TRQ |
|         | offal, fresh or chilled      |        |       | (1)       |
+---------+------------------------------+--------+-------+-----------+
| 0207.27 | Turkey cuts and edible offal | 96     | 35    | 0 for TRQ |
|         | (including liver) frozen     |        |       | (1)       |
+---------+------------------------------+--------+-------+-----------+
| 1602.31 | Meat and meat offal of       | 180    | 45    | 0 for TRQ |
|         | turkeys, prepared or         |        |       | (2)       |
|         | preserved, nesoi             |        |       |           |
+---------+------------------------------+--------+-------+-----------+
| 1602.32 | Meat and meat offal of       | 180    | 45    | 0 for TRQ |
|         | chicken, prepared or         |        |       | (2)       |
|         | preserved nesoi              |        |       |           |
+---------+------------------------------+--------+-------+-----------+

(1) TRQ for poultry meat (fresh and frozen) is 9,000 MT.

(2) TRQ for prepared/preserved poultry meat is 1,200 MT.

> \* Between Feb. 16 -- Aug. 15, 2006

European Union (EU) forbade poultry meat imports from Romania as soon as
highly pathogenic AI strain was confirmed. Although the ban's removal is
expected due to the fact that the last outbreak was closed at the end of
July, no significant recovery on poultry exports is possible in 2006.

Reciprocally, Romania is also entitled export under TRQs 9,000 MT of
fresh or frozen poultry meat as well as 2,125 MT of processed poultry
meat duty free to EU.

## Export Trade Matrix

  ------------------ ---------------------- ------------- ----------------
  **Country**        Romania                              

  **Commodity**      Poultry, Meat, Broiler               

  Time Period        CY                     Units:        MT

  Exports for:       2005                                 **Jan-May 2006**

  U.S.               0                      U.S.          0

  Others                                    Others        

  Netherlands        5,194.00               Netherlands   1,293.00

  Germany            743.00                 Germany       309.00

  France             454.00                 Austria       26.00

  Greece             89.00                  Singapore     3.00

  Moldova            76.00                  France        3.00

  UK                 75.00                  Iran          2.00

  Austria            44.00                  Thailand      2.00

  Belgium            25.00                  Panama        1.00

  Panama             11.00                  Bahamas       1.00

  Georgia            11.00                  Malta         1.00

  Total for Others   6,722.00                             1,641.00

  Others not Listed  88.00                                4.00

  Grand Total        6,810.00                             1,645.00
  ------------------ ---------------------- ------------- ----------------

In February 2006, out of a total of 53 poultry meat plants, 19 were EU
compliant, 20 were to be able to meet the EU requirements on January
2007, 2 had been granted a transition period up to January 2010, while
12 plants had been placed into the so-called D category (that is,
establishments not expected to meet the EU requirements and scheduled to
be closed down). Nonetheless, some of the plants in the last category
currently submitted restructuring plans including under SAPARD funding
(that is, EU assistance for rural development) and may move up to one of
the other categories by the date of accession. After country's EU
admission (currently scheduled for January 2007), products from
establishments subject to transitional arrangements will not be sold to
other Member States and will be clearly identified.

# 

# 

# Prices

A rapid depreciation of broiler meat prices was triggered by the avian
flu situation in Romania beginning with October 2005. In January 2006, a
historical low was reached for all products, including white meat
(chicken breast). Some recovery of the market is expected in the coming
months, with increased sales, aided including by the increased producer
subsidy allocated by the GOR from June 2006.

## Prices Table

  ------------------- -------------------------- ----------- -------------
  **Country**         Romania                                

  **Commodity**       Poultry, Meat, Broiler                 

  Prices in           USUSD                      per uom     MT

                                                             

  Year                2005                       2006        \% Change

  Jan                 1823                       1477        -19%

  Feb                 1898                       1647        -13%

  Mar                 2115                       1813        -14%

  Apr                 2079                       2106        1%

  May                 2035                       1752        -14%

  Jun                 2007                       1814        -10%

  Jul                 2243                                   

  Aug                 2455                                   

  Sep                 2618                                   

  Oct                 2225                                   

  Nov                 1840                                   

  Dec                 1677                                   
  ------------------- -------------------------- ----------- -------------

Dark meat price typically represents 85-90 percent of the price for
chicken breast, a differential much lower than in Western countries,
because of the preference domestic consumers show for chicken legs
(Table 3).

## Table 3. Ex-factory Broiler Meat Prices, USUSD/MT, VAT Included (end-of-month)

  ----------------- ----------------- ----------------- -----------------
                    Whole birds       Bone-in breast    Bone-in legs

  June 2004         2,163             2,764             2,466

  June 2005         2,392             3,323             3,006

  December 2005     2,056             2,855             2,401

  January 2006      1,866             2,782             2,253

  February 2006     2,001             3,004             2,585

  March 2006        2,090             3,011             2,483

  April 2006        2,160             2,911             2,609

  May 2006          2,069             2,992             2,549

  June 2006         2,184             2,943             2,572
  ----------------- ----------------- ----------------- -----------------

Source: Union of Romanian Poultry Producers

The official monthly average exchange rate is used in all cases.

# 

# Policy

Like in the previous fiscal year, budgetary outlays to stimulate poultry
inventories and production were repeatedly readjusted in 2006, as the
GOR, in the first place, intended to continue its programs to strengthen
the sector until country's EU accession, while later on took emergency
measures to help growers to recover from the bird flu crisis. Several
support measures qualify as "Green Box"-type and are exempted from the
reduction commitment (e.g., budgetary allocations to preserve the
breeding stock). Market price support (disbursed as procurement
payments) is provided for broiler meat and count in the Aggregate
Measurement of Support (still observing the "de minimis level").

In January 2006, via a Ministry of Agriculture's Order, the unit subsidy
was set up at 1.4 RON/head for broilers delivered for slaughtering at
approved slaughterhouses and weighting at least 1.75 KG. The Order
refers to all subsidies granted on the basis of the GOR Decision no.
1853/2005. The total budgeted amount was set up at 81 million RON
(roughly, USD 30 million) and actual disbursements are subject to
observance by the claimant poultry growers of specified biosecurity
measures. On June 9, 2006, the unit subsidy was doubled, a measure
applauded by the Union of Poultry Producers. Currently, the Ministry of
Agriculture, Forests and Rural Development is considering reducing the
per head subsidy to the initial level of 1.4 RON.

[^1]: The members of the Romanian Union of Poultry Producers is
    estimated to count for about 90 percent of country's industrial
    poultry production.