2013 in review: Agriculture

It was good weather, and good weather alone, that boosted this year’s agricultural production thus fueling Romania’s economic growth. However, higher crops didn’t necessarily mean higher profits as grain prices dropped below 2012 levels. Nevertheless, the sector’s potential for growth remains on everyone’s lips – local farmers and entrepreneurs, banks, foreign investors and politicians.  

2013 highlights

Romania had attracted by November EU funds worth EUR 2.35 billion for agriculture and rural development. The absorption rate of EU funds for rural development has increased to 63 percent.

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Romania’s 2013 agricultural production is estimated to amount to some RON 80 billion (approximately EUR 18 billion) which is RON 13 billion (approximately EUR 3.9 billion) above the level reported the previous year, according BCR data. About half of the RON 13 billion increase represents gross added value.

Romania’s wheat exports amounted to EUR 300 million in the first 9 months of 2013, up from the EUR 146 million reported during the same period last year.

Dropping grain prices have slashed the profits of local farmers.

Romania and China signed agreement on live animal and meat exports, during the visit of Chinese PM Li Keqiang to Bucharest. Cattle exports to China are estimated to amount to some 500,000 Baltata romaneasca (local cow breed) cows to be delivered over the next 7-10 years.

The average wheat yield in Romania stalled at around 3 tonnes per hectare.

Romanians are estimated to have spent EUR 100 million on organic products in 2013.

Cargill announced a EUR 15 million investment to expand Constanta grain terminal.

Horsemeat scandal in the UK affects local meat industry.

Important transactions this year: Cargill sold local subsidiary to Expur and Insight Investment bought four Romanian farms.

Romanian government cuts VAT for bread to 15 percent.

What’s to come in 2014

Starting January 1^st 2014, foreign citizens will be able to buy Romanian farmland. The Chamber of Deputies has recently passed a law pertaining to the acquisition of farmland and the only limitation to the acquisition of farmland by foreigners will be that farmers from the locality where the land is being sold will have pre-emption rights (40 days).

The first agriculture mutual funds should become functional starting the spring of 2014.

The reform of the Common Agricultural Policy (CAP) kicks in. Romania will benefit from higher subsidies and better targeted investment projects.

Romanian agriculture minister Daniel Constantin has promised that the first measures of the future National Program for Rural Development (NPRD) 2014-2020 will be opened.

Romanian authorities have announced they consider cutting the VAT for more products starting 2014.

Simona Bazavan