A Perspective
With its accession to EU membership on the 1st of January 2007, Romania's agriculture entered a new stage of development facing the challenges of accommodating the dynamic Common Agricultural Policy requirements and the great opportunities of EU financing. With a market of over 21 million people and a total area of 239.000 km2, Romania is the second biggest new EU Member State, after Poland.
Romanian agriculture is characterized by a low productivity of labor, low and unstable yields (mainly due to its sensitivity to draught), worsening agri-food trade balances and low competitivity of products, particularly in comparison with similar products from other EU countries. According to Eurostat data, in 2007, Romania contributed only 4% to the total Gross Value Added of agricultural industry produced by EU-27 and the same percentage for agricultural output despite contributing with 7,75% to the total used agricultural area of the EU-27.
All these shortcomings of the Romanian agriculture indicate the great potential of this sector and also represent big investment opportunities.
Although currently the Foreign Direct Investments (FDI) in Romania amount to 48bn Euro, according to statistical data published by the Romanian National Bank for the year 2006, only 5.5% of the total FDI represented capital investments in food, beverages and tobbacco industries, while constructions and real estate FDIs accounted for only 6.4% of total.
Adding to the above, the increasing trend in agri-food prices and the fact that until 2009 the EU is going to pour more than 4bn euro in the Romanian agriculture as either direct payments or as non-reimbursable funds for rural development projects, we consider that the sector is a huge opportunity for investors and it wil see dramatic and positive changes over the next couple of years.