Romanian agricultural land, 40 times cheaper then in Western Europe

According to the British daily the Telegraph, Romania's arable land is a safe investment for both agricultural companies and investors, given the soaring prices of agri-food products and land worldwide, the Ziarul Financiar daily reads. Romania's agricultural land is also 40 times cheaper than in other western European countries. In Romania the price of one hectare of land ranges from 1,000 to 2,000 euros depending on the area, according to the information posted on the Internet, in the Netherlands the price amounts to nearly 50,000 euros, in Denmark 1 hectare costs 28,000 euros while in Greece prices vary from 2,400 euros to 2,500 euros, according to the Eurostat data. The Telegraph says that Romania is a good market for agricultural land as it owns nearly 10 million hectares arable land, but also because the land in other countries such as Hungary or the Czech Republic is two-three times more expensive. Lower prices of agricultural land attracted in Romania Danish, British, German or Lebanese investors. The interest for the Romanian agricultural land is not a surprise given that for an investment of 2 million euros for 1,000 hectares an investor will gain revenues of 1 million euros from a sole grain crop, for an average price of 250 euros per tonne and a production per hectare of about 4 tonnes. For now, Romania's largest owners of agricultural land are the companies with Romanian capital, but the ten-largest companies in this ranking include also two firms with foreign capital. The companies Maria Trading and Agro Chirnogi, controlled by a Lebanese business group, own over 25,000 hectares of agricultural land, while Delta-Rom Agriculture, controlled via a Luxembourg-based offshore owns 10,000 hectares. Other investors such as Vital&Heyl German company or JD Agro Danish firm shifted their interest towards smaller areas ranging from 1,500 to 5,000 hectares. Over the last period, these investments became more and more visible, taking into account that in the last years the farms with areas of over 50 hectares bought 350,000 hectares from the small owners, according to figures released by the Paying and Intervention Agency for Agriculture (APIA). Romania's agricultural area covers 14.7 million hectares out of which 9.4 million arable land, 3.3 million hectares of pastures, 1.5 million hectares of hayfields, 218,000 hectares cultivated with grape vines and 206,000 hectares of orchards.

Agerpres - ROMANIAN ECONOMIC HIGHLIGHTS, June 27, 2011, No. 26