Romania agriculture

Over 15,000 agriculture companies were set up in Romania in 2021

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More than 15,000 new firms operating in the fields of agriculture, forestry and fishing were founded in Romania during January-November 2021, up by a whooping 280% compared to the same period a year ago, Trade Registry data showed.

This increase can be attributed to a slew of factors. According to local business daily Ziarul Financiar, company representatives mention the return, the easy access to EU funds, the historic high of cereal prices and production this year, reaching 34 million tonnes.

Agriculture is profitable. For instance, for the cultivation of wheat, a farmer will have expenses of 3.000-3.500 RON/ hectare. However, for a medium production of 7 tonnes/hectare, as it is in common in the Southeast of the country, the income stands at 5.000-6.000 RON/hectare (around 1.000 euro).

Furthermore, the average price of one hectare of arable land in Romania last year was 7,163 euros, while in France was 6,000 euros and in Hungary it was 4,893 euros, according to data published by Eurostat.

Romania is also the seventh biggest agricultural producer in EU. The Southeast European country’s agricultural production reached almost EUR 19 billion in 2019, up by 2.2% compared to the previous year, Eurostat data showed.

agriculture romania
(Source: Eurostat)

The growth recorded by Romania’s agriculture sector in 2019 versus 2018 was slightly under the 2.4% overall growth recorded in the bloc. However, when compared to the average of the previous five years (2014-2018), Romania’s agriculture produced 13.7% more in 2019, the third-highest growth rate in the EU, and more than double the overall 6.2% growth in the bloc.

Romania uses about 13.4 million hectares of land for agriculture, which results in an average production of  1,414 euro per hectare.

Nearly one fifth (19%) of Romanians are employed in agricultural related activities, compared to 4.1% EU member average.

Meanwhile, there are more than 1,500 agricultural cooperatives, more than 200 of which were established in 2019, according to the Romanian Center for European Policies (CRPE).

The number of new cooperatives peaked in 2018, with 280 agricultural cooperatives established, while the think tank estimates that fewer than 200 cooperatives were set up in 2020 due to the Covid-19.

In the first eight months of 2020, 18 agricultural cooperatives drew funds of over 38 million lei (about €7.7 million) to expand their operations, storage or processing abilities, data by the Agency for Rural Investment Financing (AFIR) show.

Only 1% of Romanian farmers are currently in an associative structure, much lower than the EU average of 34%, according to research conducted for Renew Europe.

The average size of a farm is about 3.6ha/holding, which is small compared to the European average of 16.6ha/holding. But the EU has granted the country access to €20B funds to develop this sector between 2021-2027.

Other sectors which saw an impressive growth except agriculture this year, are production and providing electric energy, gas, hot water and air conditioning (197%) and public administration and defense (130%), Trade Registry data showed.

Romania remains one of the European countries with the highest potential in agriculture but despite its prominence in agricultural commodity production,  remains a net food importer.