DLG e.V. - EAF Romania

Romania: From subsistence to agribusiness

Especially since EU accession in 2007, Romania attracts foreign investors. Thirty EAF members visited the country and toured four large farms (3,000 to 6,500 ha) with foreign owners or shareholders. They found that management strategies and business concepts differed substantially.  Additionally, the group met and discussed agriculture with two Romanian farmers with respectively 900 and 1,500 ha. These also followed very different management routes. EAF also stopped-off at one of the largest grain and oilseed merchants in the country and Italian-owned. The visitors learnt that customer service is emphasised here, with raw materials mostly bought for the Italian market.

The long road from subsistence to big business farming

After 1990, families in Romania were awarded farmland according to number of members, the rule being one to two hectares per person, or five to 10 ha per family. With good connections, to local politicians for example, the land area per family could sometimes be doubled.  No official land registry meant area entitlement of families was only registered per ha of total village area and not specifically according to field map. It was thus possible for the authorities to bundle families that did not wish to sell or rent their land into areas around the villages and offer the remaining outlying farmland as tenancies or freehold. In most cases this represented more than 75% of the original village land area. The then existing LPGs (cooperative farms) and state farms mostly did not survive long. Within just a few years, nearly all were bankrupt. Food supply mostly came from domestic sources: nearly everyone in the countryside had gardens for food production and there was a lot of village-near land farmed under informal systems, grazing a few cows or steers or cropping with cultivations by older small-horsepower machinery.

Thirty members of the European Arable Farmer’s Club visit a large grain and oilseed merchant in Banat, Romania.
Photo: Jan Paul van Hoven.

Foreign investors farm 40 percent of land

Only since the mid-1990s have there been secure jobs in industry and commerce, administration and service industries in Romania. And since that time, a wide range of food began to be available on a retail basis: a combination that quickly weaned folk from growing all their own food. From then on it was also possible to rent or buy farmland. Starting in 1997, foreign investors were allowed to buy land, mainly because local farmers had little or no access to capital themselves.  Now (2018), around 40 percent of Romanian farm and forest land is managed by foreigners with up to 80 percent of this actually purchased. Meanwhile, Romanian farmers have enlarged about 70% of their businesses by renting land from communities or from family members, friends and other sources.

From the different nationalities owning farm and forest land, the Germans and Italians are the most represented. Next come Dutch and Danes, with Swedes also among the prominent foreign landowners in the country.

Pig production on expansion course

Recently, Chinese investors have taken over the US Smithfield Group which farms around 3000 ha covering five to seven units in Romania. The company runs 30,000 sows on the farms, producing around 750,000 slaughter pigs annually. Opportunities are good. After all, Romanian self-sufficiency in pig meat is only 35 percent, a situation encouraging other large-scale farms to step into pig production with units of from 500 to 1500 sows and/or 5000 to 10,000 pig feeding places. Livestock production is also encouraged through the requirement to increase manure applications and therefore humus production on farmland.