Third International Conference : AFTER

COMMUNISM; EAST AND WEST

SCRUTINITY
A CALL FOR AN ANSWER:
THE AGRICULTURAL SECTOR
ISSUE IN POST-COMMUNIST
ROMANIA

THIS PAPER IS PRESENTED BY
NICOLAE MARIA SMARANDA - MA
CANDIDATE
ROMANIAN AGRICULTURE
SECTOR
Romania is fundamentally an agricultural country with a very high proportion
of the economy engaged in this sector. Agriculture's importance within the
economy remains disproportionately higher than its importance for Western
Europe as a percentage of GDP.






The rural economy generally lacks diversification and is dependent upon
natural resources.
The current structure of the farming sector in Romania is the result of the
Government's land distribution and restitution policies implemented after 1989.
Romania's agrarian transition has had to cope with the task of reversing the
post 1945 land expropriations and of de-collectivising co-operatives, which had
been the dominant farm structure since the 1950s. The reforms also had to
eliminate the ingrained legal bias that had favoured co-operative and state
owned farms since the adoption of the 1948 constitution.

ROMANIAN AGRICULTURE
SECTOR DURING COMMUNISM
The period between 1947 and 1962 saw the collectivization of Romanian
agricultural lands, focusing on so-called modernization and industrialization of
agriculture by the communist state. Peasants lost the rights to the lands which
they had been working and large numbers of peasants were moved from the
countryside to cities in order to work in state factories, becoming a part of the
industrial sector. Peasants working the land now had to produce only for the
state, were given unattainable production quotas.
From 1948-1989 a generation of peasants was lost, and centuries of knowledge
gained through practicing agriculture was largely lost with it. To be sure, many
Romanian peasants continued to work their land illegally to provide for their
families.
There are some interesting statistics on the website of the United Nations Food
and Agriculture Organization (FAO) statistics showing the evolution of grain
production from 1961 to the present.
Thus, in 1961, Romania produced 4 million tonnes of wheat and 5.75 million
tons of corn per hectare production being 1.34, 1.67 tons respectively. After
decades of great accomplishments in the mid 80's, Romania has reached a
production of 8.5 million tons of wheat (1988) and 11.9 million tons of corn
(1985). The average production per hectare in those years was 3.6- 3.8 tons.
If the record set in the 1988 wheat production is still standing, maize record
was surpassed in 1997 and then in 2004, the year when total production
reached 14.5 million tons and 4.55 tons / hectare
ROMANIAN AGRICULTURE
SECTOR DURING COMMUNISM
ROMANIAN AGRICULTURE
SECTOR DURING COMMUNISM
ROMANIAN AGRICULTURE
SECTOR IN POSTCOMMUNISM
The current structure of the farming sector in Romania is the result of the Government's land
distribution and restitution policies implemented after post 1989. The First was the Land Fund Act
of 1991 which established and limited the restitution and ownership distribution processes, second
was the Land Leasing Act of 1994 (amended 1998) which regulates the relations between lessors
and lessees.
Currently approximately 85% of agricultural land has been privatised. The main form of
privatisation was restitution. However, from 2013 legislation will allow direct foreign ownership.
As illustrated in the Table below, restitution and distribution of land processes carried out
established more than 3.9 million farm holdings, of which 1.6 million are less than 1 hectare, 1.1
million are less than 3 Ha, 290,000 are in the range of 10-20 Ha and 255 are more than 2,000 Ha
(the latter are cultivating 11% of the utilised agricultural area).
Source, Ministry of Agriculture & Development: National Rural Development programme 2007-2013;
20/12/2007

Agricultural holdings by legal status & size
2002-12


Source, General Census on Agriculture 2002 vol 1. NIS Bucharest 2004
ROMANIAN AGRICULTURE
SECTOR IN POSTCOMMUNISM
ROMANIAN POPULATION INVOLVED IN AGRICULTURE:
ROMANIAN AGRICULTURE
SECTOR IN POSTCOMMUNISM
Romania is a relatively large country with particularly good farm land. Romania is a
predominately rural country, with 60% of the territory of the country being classified as
rural. Much more of the population lives in these areas as well, with 47% of the Romanian
population living in rural areas as of 2008, much higher than the EU average of 15%. In this
rural area, Romania has approximately 14.7 million hectares of agricultural land and this
encompasses over four million farms.
Despite this advantage, the cereal production has decreased every year. The causes are
numerous. First of all, the summer hight temperatures in the south-west region have led to
desertification of large areas and increasing drought. During june august the
temperatures easily reach 35-40 grades Celsius in Romania. There is no working irrigation
system or any money to build a new one and of course there is a huge lack of new
machines. In general, only small areas are held by the elders or are situated in the regions
which have agricultural associations. Also the old Romanian infrastructure descourage
any foreign investors to develop their bussiness in this country as well.
In terms of economic size of farms, Romanian family farms are also quite small compared
to their Western equivalents. Of the over 4 million family farms, only 1.24 million of them
are at least 1 European Standard Unit (ESU) and 98 percent of all Romanian farms are less
than 8 ESU.
The poverty in the rural areas of Romania is hidden behind subsistence and semi-subsistence
farming. These remain the dominant forms of rural life in Romania, a situation which is not matched
anywhere else in the European Union. Subsistence farms are defined as farms which produce only
for self-consumption, and are not regularly selling products. Semi-subsistence farms, on the other
hand, are defined as producing mainly for self-consumption, but also selling a certain part of the
production, in which the 'surplus' part that is sold features a certain degree of regularity and
consistency. The farm size can be measured through utilized area, economic size or market
participation, but the general measurement is European Standard Units (ESUs). Under the
definitions from Eurostat (holdings under 1 ESU are defined as subsistence), 71% of Romanian
farms are subsistence, and this covers 26.7% of the utilized agricultural area (UAA) of the country.
ROMANIAN AGRICULTURE
SECTOR IN POSTCOMMUNISM
According to the National Statistics Institute, in 2006 991,000 ha of sun-flower and 191,000 ha of
soybean were cultivated. Cereal production in 2006 stood at 15.1 million tons, including 5.3 million
tons of wheat and 8.6 million tons of maize.[3] In 2007, a severe drought destroyed over 60% of
crops. Wheat production subsequently fell to 3 million tons, and prices fell 25%. Analysts claimed
it was the worst harvest since 1940.
Sourse: http://epp.eurostat.ec.europa.eu
ROMANIAN AGRICULTURE
SECTOR IN POSTCOMMUNISM
Imports and Exports
One of the richest endowed agricultural countries of Europe, Romania has
long been one of the largest producers of raw agricultural products in the
region. However, in the twenty years since the fall of communism, this
unfortunately is not an area where Romania has excelled. Starting from the
year 1990, Romania became a net importer of agri-food products, and in
1997 an increasing trend was noticed in the deficit of the balance of trade.
Agricultural products accounted for approximately 3% of total exports and 6-
7% of imports by 2005, with agricultural balance of trade deficit of around
1.4 billion Euros that year. This deficit is only growing. In 2009, Romania
was the fifth largest agricultural producer in the European Union, and yet it
imported 3.7 billion Euros worth of agro-food goods.
Sourse :Romania and the Common Agricultural Policy, by Douglas K
Knight, Ecoruralis, October 2010.
EU Membership
The E.U. enlargement has brought a lot of benefits of the agricultural domain in Romania.
Big budgets were distributed in Romania for agricultural investiments. Romanian farmers
financial support from the European Agricultural Guarantee Fund (EAGF) exceeded 4.24
billion euros in the period 2007-2012. But the bureaucracy creates difficulties trying to
acces these founds, due to numerous documents that have to be filled with specific
information. Also many individuals do not know where to go and whom to ask for advice
for their ideas. That is why agricultural associations and individuals are reluctant when the
subject of agricultural projects with EU funds comes up. This way, the agriculture in
Romania struggles in a vicious circle where there seems to be no reachable solution.
Over the past years of EU membership, the government has continually failed to even
process EU funds. Traian Basescu agreed that Romania has a huge bureaucracy, nine
billion euro put at the disposal of Romania, unused. This is inadmissible and this shows
the deep inefficiency of this apparatus.Furthermore, the Romanian state has changed its
policies halfway through implementing them, or simply not implemented its policies. The
failure to pay subsidies promised at the beginning of 2009 by May 2010 left many peasants
more distrusting the government than they were before, and leads to a general feeling of
hopelessness in the government and its ability to create sound policies or carry out any
policy whatsoever.
Romanian farmers have great difficulty in accessing credit, even for relatively minor
projects. Banks in Romania are very hesitant to lend money to Romanian farmers because
the agricultural production specificity, the risk associated to the agricultural production,
the profit rate in agriculture, in general lower than in other fields of activity. In other words,
because farms are small (lack collateral) and are not as profitable as other fields, banks do
not see a good profit-motive in lending to Romanian small farmers.
A CALL FOR AN ANSWER
This problem in Romania is compounded because, as a member of the EU, development of
modern agriculture is becoming more important to policy holders. Also, Romania now has to
compete more than ever on the European market.
If we want to draw a conclusion about the agriculture issue between these two periods of time: the
communism and the post-communist, we can say the following: the agriculture production has
decreased almost every year, very few investments have been implemented into modern
machineries, tehnologies or rural infrastructure, the young people have migrated to western
countries instead of working their own land and the Government seemed to have forgotten about
farmers, because it has not develop any precise rural policies.
My humble suggestion would be: A CALL FOR AN ANSWER is conceived to be a national call-
center which will provide any type of information concerning EU funds in agriculture. A CALL FOR
AN ANSWER will operate for 12 months in the first phase with an option to extend the duration of
its activity and will work in partnership with local and national institutions such as Agriculture
Minister, urban and rural CityHalls, County Consils and different agriculture associations. The
project will register good results visible in increasing the number the number of agriculture
investments with EU funds. The main goal is to regain trust of individuals and agricultural
association in both national and european institutions and to make them realize they have a place
to seek help. Agriculture is one of the most important part in development of a country.