Growth, Competitiveness and Convergence in Romanian Agriculture

Farm fragmentation and the need for consolidation and investment remains a major problem for Romanian agriculture, as documented in this article. One of the key structural problems is over employment in agriculture, which puts a strong pressure on the land and constrains the supply of land for farm consolidation. Another important constraint is that the rural infrastructure is weak, as well as the educational level (both general and professional) of the vast majority of the rural population. Equal access to subsidies is important in preventing further growth in inequality between small and big farms. Despite the magnitude of the problems, there are encouraging signs: significant investment and consolidation is taking place in about half of the farm sector, economic growth is robust in other sectors, the inflow of foreign investment in the food industry and the agribusiness sector has induced important changes in the food chain, the land market, in particular the land rental market, is growing and this could contribute importantly to farm consolidation and a more competitive structure.