Romania has significant potential in agriculture, but low productivity, says PwC Romania study

Georgiana Bendre 07/03/2017 | 14:26

Romania is one of the European countries with the highest potential in agriculture, with the sixth biggest used agricultural area from EU, but has a low productivity due to several factors, according to an analysis by professional services firm PwC Romania.

Romania registered in 2013 a used agricultural surface of 13.9 million hectares, behind France (28 million ha), Spain (29 million ha), UK (17.3 million ha), Germany (16.7 million ha) and Poland (14.4 million ha), but bigger than Italy (13.1 million ha), Hungary (5.3 million ha) or Bulgaria (5.1 million ha).

Out of the Romanian available area (8.2 milion ha), 60 percent represents arable area, out of which around two thirds are used for cereals, making Romania one of the biggest 10 cereals exporters worldwide (ninth place in wheat export and sixth place in corn export).

The share of agriculture in Romania’s GDP dropped constantly in the last 20 years, from 22.6 in 1993 to under 5 percent of the GDP in 2015, due to the structural transformation of Romanian economy, from an industrial-agricultural economy to one based on services.

Approximately 85 percent of the total workforce from agriculture is unpaid, working on their own agricultural areas in subsistence, compared with the average share of the unpaid workers from agricultural sector in EU, where it is 72 percent.

“All these lead to the fundamental issue that Romania confronts with in the Romanian agriculture, the relative low efficiency of the agricultural production. There are many things to be improved in the Romanian agricultural field. There are several factors that affect this low efficiency, such as the fragmentation of the agricultural areas, as almost 75 percent of the farms from Romania have under 2 hectares, and the level of training of the farmers, as 94 percent of the Romanian farmers said they gained their knowledge in agriculture by practicing it,” said Bogdan Belciu, partener in consultancy services for management at PwC Romania and coordinator of the study.

“This is why we though of optimizing the agricultural areas by registering the properties in the national system of cadaster and improving the manner of grants offering for the small areas, as well as the increase in the level of professional preparation of the farmers by promoting the vocational and agricultural technical schools, “ added Belciu.

However, Romania still has the highest share of the agricultural sector in GDP out of all the EU countries, three times higher compared to the European average. Moreover, in 2014 there was 27.3 percent of the Romanian active population hired in agricultural sector, 6 times higher than the European average of 4.4 percent of the active population.

Romania is on the last positions regarding the gross added value on hectare, around EUR 600/ha, in 2013, compared with the Western Europe countries where the gross added value exceeds EUR 1,000/ha. The gross added value on every sector from the economy leads to the GDP formation.

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Georgiana Bendre | 27/03/2024 | 17:32
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