Opportunities in Romanian Agriculture in 2015
Agriculture is a significant sector in the Romanian economy due to its size and potential, but its development is still sluggish. Together with the Energy sector it is considered to be one of the main development engines in the Romanian economy. However, many aspects need improving, and business opportunities, be it for export, import or investment, are highly available. Let`s summarise below the major coordinates of doing business in the Romanian agricultural sector in 2015.
Romanian Agriculture has the capacity to feed 35-37 million people (15-17 million more than Romania`s population), but it is underdeveloped. It contributed 6.4% to GDP in 2013, and employed 29% of the Romanian work force. Agricultural land represents 37.73% (14.7 million hectares) of the total land in Romania. 64.1% of this is arable land, 22.5% is pasture, 10.7% is hayfields and 2.7% is vineyards and orchards. Romania has 3.7 million agricultural holdings, the biggest production being crops (70.8%), followed by animal production (28.5%) and agricultural services (0.7%).
The main problems for Romanian Agriculture are the lack of tractors and combines, lack of managers, low productivity and lack of silos. The organic sector is small (only 0.4% of the agricultural land in Romania compared to the EU average of 3.7%) and infrastructure is underdeveloped.
Significant EU funds (€8.15 billions) are available for Romanian Agriculture between 2014 and 2020, to be invested in projects such as: modernising farms, processing units and infrastructure, developing agricultural exploitation and encouraging start-ups in agriculture, forestry, organic agriculture, know-how.
Romania is a net provider of unprocessed agricultural products, but know-how and technology are needed for it to become a producer of value added products. Although EU funding is available, Romanian Agriculture faces a painful lack of financial services.
Buying land in Romania has become easier since January 2014 (foreigners are now allowed to buy land for private purposes and not just for business) but the purchase of agricultural land has to satisfy tests to give preference to local producers where available. If you are interested in doing business in the Romanian agriculture sector it is highly recommended to find a local partner, especially if you are intending to develop projects based on EU funding.
For those interested to source products from Romania, wheat, corn and barley were the most exported grains in 2014, and total grain exports were 6.67 million tonnes, 20.6% higher than in 2013. Generally, the export of agricultural goods is on the rise. Romania is a net exporter of unprocessed products.
Romania has few local producers of agricultural machinery and farm equipment (Mecanica Ceahlau, IRUM and MAT Craiova) which makes Romania a good market for manufacturers looking for new markets for their agricultural machinery.
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