The low mechanization of the agriculture is one of the explanations for the low agricultural productivity of Romania. As it lacks production efficiency, Romania remains sixth among European grain producers only because of its amount of farming land.
“Romania has lost control over mechanization because we do not have a domestic industry any longer. We’re next to last in the European Union. One tractor works 52-53 hectares in Romania and 4.8 hectares in Germany,” explains Gabriel Popescu, a professor with the Faculty of Agrifood and Environmental Economics of the Bucharest University of Economic Studies.
The low mechanization in the Romanian agriculture, the low fertilizer, pesticide and seed consumption, as well as the lack of an extensive irrigation system are the most important reasons for the low agricultural productivity. French farmers, for instance, expect to harvest 7.1 tons of wheat per hectare, Romanian farmers expect 2.5 times less.
Increasing the number of tractors almost completely depends on the actions of the importers on this market. Local production of farm equipment is almost non-existent once plants like Tractorul and Semanatoarea (‘sowing machine’) closed.
“The government pumped subsidies into Tractorul for years but it was unable to survive because it did not adjust its products to the market conditions. The U650 model tractor had been made for 300 hectare average lots and the average lot shrank to 0.6 hectares after 1990,” Gabriel Popescu said.
The only plants still making tractors in Romania are IRUM in Reghin and MAT in Craiova, but they only manufacture several hundred units a year, which cannot cope with the imports.
In the absence of a multinational company infrastructure and tens of millions of euros in budgets a year to develop new products, the remaining farm equipment makers can only operate on the plow or sowing machine niche as well as on those segments less interesting for multinationals.
With no strong local competitors, importers reacted right away, sensing the opportunity arising from the increase in farm investments driven by subsidies and EU-funded projects. Romanian farmers are now using mostly tractors made by companies in Italy, US and Germany. Sales of tractors for farming use amount to EUR200 million to EUR250 million annually according to market data.
The new tractor market stands at only 1,500 to 1,800 units a year, which means a 1% replacement rate. There are 180,000 tractors in Romania and two thirds of them are older than twenty years.
Romanian farmers expect the summer and fall grain harvest to reach 16 million tons, about 30% higher than in 2012, which was a rather poor farming year.
(English version by Loredana Fratila-Cristescu)