Romania has significant potential in agriculture, but low productivity, says PwC Romania
Romania is one of the European countries with the highest potential in agriculture with the sixth biggest agricultural use area in the EU, but it 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 million ha), 60 per cent represents arable area, out of which around two thirds are used for cereals, making Romania one of the ten biggest cereals exporters worldwide (ninth place in wheat export and sixth place in corn export).
The share of agriculture in Romania's GDP dropped constantly over the last 20 years, from 22.6 in 1993 to under five per cent of the GDP in 2015, due to the structural transformation of the Romanian economy, from an industrial-agricultural economy to one based on services.
Approximately 85 per cent of the total workforce in agriculture is unpaid, working on their own agricultural areas for subsistence, compared with the average share of unpaid workers from agricultural sectors in the EU, where it is 72 per cent.
"All this data leads to the fundamental issue that confronts Romania within the agriculture sector; the relative low efficiency of 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 per cent of the farms from Romania contain under two hectares, and the level of training of the farmers, as 94 per cent of the Romanian farmers said they gained their knowledge in agriculture by practicing it," said Bogdan Belciu, partner in consultancy services for management at PwC Romania and coordinator of the study.
"This is why we thought of optimizing the agricultural areas by registering the properties in the national system of cadastre and improving the manner of grant offerings for the small areas, as well as the increase in the level of professional preparation of the farmers by promoting 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 27.3 per cent of the Romanian active population was hired in the agricultural sector, six times higher than the European average of 4.4 per cent of the active population.
Romania is in the last position regarding the gross added value per hectare, around 600 Euro/ha in 2013, compared with the Western Europe countries where the gross added value exceeds 1,000 Euro/ha. The gross added value on every sector from the economy leads to the formation of the GDP calculation.