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A Few Considerations on Financing Sustainable Development of Agriculture and Rural Area in Romania

Author

Listed:
  • Gosa, Vasile

    (Banat University of Agricultural Sciences and Veterinary Medicine, Timisoara)

  • Nagy, Andrea

    (Romanian Academy – Timisoara branch, Research Center for Romania’s Sustainable Rural Development)

Abstract

The sustainable development of agriculture and rural area in Romania is conditioned by a series of factors, among which the financial resources hold a top position in our opinion. Considering the current level of capitalization on the Romanian holdings and the competition on a free market implying direct confrontation with the much better positioned European partners, in terms of endowments and as well as of financial resources, we have to take action in order to reduce these differences. The instruments and mechanisms of intervention and financial support applied in Romania during various transition stages had an administrative character, without a strategy set based on documented analyses, so that the financial effort has not turned into the expected evolution of the agricultural and rural economy on the whole. The public funds for agricultural support, after the accession to the EU, proved to be insufficient, so it is extremely necessary to design our own finance system with the help of the banking credit. The public funds from the EU budget, meant to finance the rural development measures included in the National Rural Development Program, for 2007–2013, represent a significant amount of more than 8 billion euro. By analyzing the destination of this amount by measures and activity fields, we can notice that the agricultural financial support represents only 14.7%, the non-agricultural activities 19.9% and the infrastructure development 20.2%, which is a significant financial effort, though insufficient for the rural economy revigoration.

Suggested Citation

  • Gosa, Vasile & Nagy, Andrea, 2008. "A Few Considerations on Financing Sustainable Development of Agriculture and Rural Area in Romania," Agricultural Economics and Rural Development, Institute of Agricultural Economics, vol. 5(3-4), pages 129-142, December.
  • Handle: RePEc:iag:reviea:v:5:y:2008:i:3-4:p:129-142
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    More about this item

    Keywords

    sustainable development; financing instruments and mechanisms; subsidies; direct payments; European funds; agricultural credit.;

    JEL classification:

    • Q14 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Agriculture - - - Agricultural Finance
    • Q56 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Environment and Development; Environment and Trade; Sustainability; Environmental Accounts and Accounting; Environmental Equity; Population Growth

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