A development sector – Romanian agriculture and investments in Romania

Romania has the largest agricultural surface of Europe

The surface of 15 million hectares held by Romania is the largest useful agricultural surface in Europe. Around 41% of employees work in agriculture - in Western countries the average is 3-5%. Productivity is poor: current earnings per hectare are the weakest in Eastern Europe. This is due to a bad surface distribution: some landowners have the largest surfaces; most farmers have only small surfaces. As before, subsidies go to unprofitable state enterprises. The percentage of livestock breeding has been reduced - as in most of Central and Eastern European countries - to 7%. Romania is one of the great European farmers. Baragan is distinguished by major cereal crops. Productions of milk, pork, poultry and apples are concentrated in western regions. Beef production is concentrated in the centre of the country, while productions of fruits, vegetables and wines include the central area, extending to the south of Romania. Romania is a large producer of many agricultural products and is currently expanding its forestry and fishery industry. The implementation of the reforms and the Uruguay Round of the GATT have resulted in reforms in the agricultural sector of the economy.

Romania ranks 11th in the world among farmers and 6th among agricultural exporters. However, 75% of its exports are intended for other EU countries. Cereals, beef, pork, poultry and dairy products - they are the main export products. U.S. agricultural exports to Romania, amounting around $ 200 million annually, consist mainly of soybeans, feed and edible marine species and products at the desire of the consumer, especially foods like snacks and nuts. Romanian exports to the U.S. consist mainly of cheese, processed products and wine. They are over $ 150 million annually.

Romanian agricultural sector depends a lot on European Commission aids, which say $ 1bn. Specific government policy such as the infamous reclassification of French wines as a "health food" to avoid VAT, also goes a long way to create a thriving domestic sector.

Romania is one of the world's largest exporters of agricultural products, particularly wheat and other cereals. Romania is a major exporter of agricultural products in the U.S., but also in Europe and East Asia. As happened with other people, the percentage of population and GDP employed in agriculture has been on the rise dramatically in the 20th century.

Almost half of Romania, around 20 million people live at the country, and one third of the manpower obtains earnings in agriculture. For comparison: in Germany the figure is 3%. According to official data, unemployment in Romania is situated at the figure of 6%. It is to be taken into account the fact that hidden unemployment is much higher, because many workers at the country are not registered and individual insurance is high.

Large structural differences

The structure of enterprises presents a great diversity; there are both very small and large agricultural enterprises. Over half of the useful agricultural surface is operated by families for their own maintenance, by hand, horse and obsolete machines. As size, a family enterprise, located mostly in the mountainous central and northern area of Romania, occupies around 1.8 ha. Large enterprises are located mainly in the south and have an average surface of 270 ha each. There are some who own more than several thousand hectares. An important development is that, due to low prices of around 600 to 1800 EUR per hectare, according to the region, more and more areas have been bought by foreign contractors. In particular, Italian, British and Austrian investors have discovered the lands. On these surfaces is the most modern west-European machinery, contrary to traditional agriculture of small farmers, made with the plough and horse.

Land restitution is not over until today and there was no land reform or reorganization of the cadastre yet.

Organic farming - more than intensive exploitation

In terms of poverty in Romania, in foreign countries the opinion that small farmers in Romania have no money for fertilizer and everything is already organic prevails. Wolfgang Raddatz, who came six years ago in Romania to teach young people about organic farming in experimental groups, was opposed always to this impression. "Many people think that extensive enterprises of small farmers work per se. These said apply of course to mountain regions", says the agricultural engineer from Germany, who feels at home in the meantime in Boiu village near Sighisoara / Schässburg. "However, biological economy is different from what farmers practice here. Specialty knowledge in terms of plant and livestock production is lacking, to work really sustainable." There are very little widespread e.g. crop rotation, as required in organic farming, regular spreading of manure on the field or cultivation of plants for the land base formation. It is very difficult to find light and airy sheds - most of them are like dark basements, often animal dung and urine leak in the street, and from here in the streams. Meanwhile, skeptical neighbors of experimental groups have observed that plants grow well on land, cows give more milk and organic farming can increase the quality and quantity of agricultural products - and that without synthetic fertilizers or other expensive products of protection of the plants. Organic farming exists in Romania since 1989. In 2005, according to the Ministry of Agriculture data 110,400 ha were planted according to organic guidelines (see fig. 1), which corresponds to 0.75% of total agricultural surface of the country. Around 25% of the total organic surface is used for growing cereals, oilseeds. Around 45% of the organic land is pasture. In the breeding of organic livestock, the production of cow and sheep milk for the production of cheese, bee-keeping and poultry breeding for eggs are significant. Important is also the certified organic harvest of berries, aromatic and medicinal herbs. Certification and control are made - besides many other foreign control bodies - by two bodies located in Romania: SC Ecoinspect SRL (Cluj) and Biocert (Bucharest).

ir. Freddy M.E. Jacobs
Managing Director
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