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Romania and CAP Reform


  • Alexandri, Cecilia

    (Institute of Agricultural Economics, Romanian Academy, Bucharest)

  • Luca, Lucian

    (Institute of Agricultural Economics, Romanian Academy, Bucharest)


The first part of this article presents a general overview of the current situation in the Romanian agriculture emphasizing its extreme polarisation and the importance of this sector for the economy. In the second part the emphasis falls on CAP reform. The authors seek to evaluate how the Romanian agriculture has evolved since integration and to estimate the impact of future CAP reforms on this sector. The paper presents the estimated impact of CAP reform on market measures, direct payments and rural development. The formulation of certain simplified scenarios of possible CAP reform provides the necessary benchmarks for a brief analysis of the effects upon consumers’ and producers’ welfare, as well as upon the rural area in general. Based on a simplified model, under some specific hypotheses, the net welfare effect due to the price changes for the selected products is positive in both reform scenarios, yet greater in the case of the radical reform. Regarding direct payments, the authors’ opinion is that for the large farms, some of them operating on thousands of hectares, cannot contribute to the objective of supporting farmers’ incomes. Reform measures will bring in Romania’s case a good operation of agricultural markets and the market orientation of farms, which will result in agricultural incomes based mainly upon the sale of agricultural products rather than upon subsidies or social allocations. As the key-problem of Romanian rural areas is poor infrastructure and the generalized poverty, the solution for the modernization of rural areas seems to be their “urbanization”, through investments in infrastructure, development of community services and a move away from farming to other economic sectors. In order to achieve this, the state has to mobilize internal and external resources for rural development rather than for agriculture. This implies a greater allocation of resources to Pillar II.

Suggested Citation

  • Alexandri, Cecilia & Luca, Lucian, 2008. "Romania and CAP Reform," Agricultural Economics and Rural Development, Institute of Agricultural Economics, vol. 5(3-4), pages 161-180, December.
  • Handle: RePEc:iag:reviea:v:5:y:2008:i:3-4:p:161-180

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    References listed on IDEAS

    1. Jean-Pierre Chauffour & Jean-Christophe Maur, 2011. "Preferential Trade Agreement Policies for Development : A Handbook," World Bank Publications, The World Bank, number 2329, June.
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    Cited by:

    1. Tudor, Monica Mihaela, 2015. "Small scale agriculture as a resilient system in rural Romania," Studies in Agricultural Economics, Research Institute for Agricultural Economics, vol. 117(1), April.
    2. Raluca Ileana ZORZOLIU & Elena GURGU, 2016. "Economic and Social Analysis of Economic Gaps, between 1990 – 2014 and the Influence Factors," International Conference on Economic Sciences and Business Administration, Spiru Haret University, vol. 3(1), pages 146-154, October.
    3. Chirculescu Maria Felicia, 2014. "Analysis Of Financial Instruments The Basis Support The Development Of Rural Areas And Fisheries Sector, Romania During 2007-2013," Annals - Economy Series, Constantin Brancusi University, Faculty of Economics, vol. 4, pages 311-319, August.
    4. Bumbescu Sorina Simona, 2015. "Financing Mechanisms Of Agriculture In Romania," Annals - Economy Series, Constantin Brancusi University, Faculty of Economics, vol. 1, pages 41-49, January.
    5. Cristian - Marian Barbu, 2011. "The Romanian Agriculture - Between Myth And Reality," Annales Universitatis Apulensis Series Oeconomica, Faculty of Sciences, "1 Decembrie 1918" University, Alba Iulia, vol. 2(13), pages 1-30.
    6. Niculescu Oana-Marilena, 2012. "Common Agricultural Policy Post-2013 In The View Of Romania And France," Annals of Faculty of Economics, University of Oradea, Faculty of Economics, vol. 1(1), pages 144-149, July.

    More about this item


    CAP reform; agricultural markets;

    JEL classification:

    • Q18 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Agriculture - - - Agricultural Policy; Food Policy
    • Q13 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Agriculture - - - Agricultural Markets and Marketing; Cooperatives; Agribusiness


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