“It all started with some businessmen in Giurgiu County. There were 23 farmers at first and now their number has gone up to 39. Most of the land farmed is rented but some of it is their own,” says Tudor Nenu, the chief executive of the Vlasca 2008 cooperative, who got into agribusiness in 2006 after having worked for banks for over a decade. “A farmer works at least 200 hectares and 2,200 hectares at most.”
The group of farmers is among the few that managed to operate so much land together, which is compares to the amount of land that major farmers of the country operate.
Vlasca 2008 cooperative is a novelty on the local agricultural market, considering grain farmers have not rushed to form partnerships so far. The lack of an appetite for partnership is visible, considering Romania is at the bottom of the European Union country list when it comes to farmland fragmentation. The average Romanian farmer works 3.5 hectares of land, according to the data provided by the Ministry of Agriculture and Rural Development (MADR).
“Companies operating farming land are reluctant to team up in Romania because of the image of this concept before 1990. Cooperative farming was not invented in Romania though,” Nenu says.
After the communists came to power in the post World War II Romania, people were forced to give up their land to form collective farms, hence the reluctance for partnerships in this business, once people got to own farmland again.
The Vlasca 2008 CEO says that both grain traders and pesticide vendors are “battling” to gain contracts with this cooperative, considering the business volume such a client generates.
“Farmers decide together what to grow each year and the quality of the crops is the same for all members. We conduct auctions, traders come and we choose the best price.”
The Vlasca farmers bought pesticides, fertilizers and hybrid seeds worth about EUR10 million together last year.
The decision to buy something is taken after a mutual agreement is reached on the crop structure, Nenu says.
“We buy large amounts of the same product to get better prices. I estimate we got 20% to 30% discounts through this purchasing system,” Tudor Nenu explains.
The high orders placed by Vlasca 2008 got big names on the seed or pesticide market such as Monsanto, KWS, Dupont and Bayer interested.
“They have 39 customers in one office. When they build their budgets this is where they begin because they have the certainty of payments and quantities.”
The cooperative members use the same strategy when selling their crops, too. Vlasca 2008 held auctions and signed contracts worth EUR20 million to EUR25 million with grain and oilseed traders and processors last year, according to ZF’s calculations based on the prices and production figures provided by the cooperative.
Vlasca 2008 members do not work together only when it comes to purchases and sales. The rise in agricultural raw material prices and the inflow of European funds into the economy over the last five years have allowed them to build new barns, small silos or buy new agricultural machinery and they are now planning to apply for European funds with a joint project. The first target is a grain mill. They are also interesting in buying trucks to use in the busy times after the crops are harvested.
“We were also going to buy a helicopter to dust the crops a while ago but there are some legal problems with that, as far as I understand,” Nenu concluded.
(English version by Loredana Fratila-Cristescu)