Files
Abstract
Topical literature sees agriculture's ability to provide food and cash income as a major
role in poverty reduction. However, it can only be a driving force for economic
development for very poor countries. Economic indicators confirm that Romania is not a
very poor country, although poverty has been an issue. During recent years, Romania has
progressed successfully in reducing poverty. On the one hand, this can be attributed to its
positive overall economic development. On the other hand, agriculture has served as a
social safety net for many millions of people. Now the agricultural sector is dominated by
subsistent and semi-subsistent farm households headed by persons of retirement age
without formal agricultural training. Only 40% of the utilised agricultural area (UAA) is
operated from commercial private and corporate farms. Thus, their creating incentives for
economic growth are unlikely. While large-scale corporate farms are already integrated in
agri-food chains, the upcoming group of commercial private farmers will have to show
that it can compete on the agri-food market.
Although agriculture has been contributing to poverty reduction, there are good reasons to
believe that future economic development will rather come from outside the agricultural
sector and agriculture will continue to play the role of a social safety net.
Strengthening the Romanian agricultural sector calls for concerted policy actions that are
targeted to different groups. Fostering land restitution to former owner families,
developing a functioning land sales and rental market, and providing access to agricultural
product markets could promote the resurgence of a highly productive group of commercial
private farmers. Non-farm job creation in rural areas could provide income opportunities
for an abundant agricultural labour force. Both new farmers and potential non-farm
employees seem to require profession-specific advice and training to become competitive
in their transition environment. The large group of pensioners could be convinced to exit
the agricultural sector if they could rely on an income from social provisions that covers
their daily needs.