Romanian farmers attending the ZF agribusiness event on Monday said Romania could become an agricultural power only if it turned wheat and corn into milk and meat through livestock farming. During its eight years as an EU member, Romania has lost 0.7 million head of cattle and 1.6 million head of swine.
“We can boost the value added if we convert primary production into naturally processed products. Livestock turns wheat, corn or alfalfa into milk and meat, and only then the value added comes via industrial processing,” said Nicusor Serban, owner of the 2,000 cattle farm Agroserv Mariuta in Calarasi (southern Romania).
Agriculture has seen a zigzag growth in Romania’s first eight years with the EU, but the country managed to stand out only as a cheap agricultural commodity seller.
Railroad cars filled with grain and live animals queued in the Constanta Harbor, Romanian products worked their way onto export markets, but without a powerful livestock farming sector, the Romanian agriculture is nothing but a giant with feet of clay. Livestock farming is the only thing that ensures an increase in the value added in agriculture, as wheat, corn and rapeseed farming generates low profit margins.
“We are now very low in terms of cattle numbers, we have 2 million head, while France has 23 million and double the farmland,” said Mihai Miron, owner of the 1,000 cattle farm Bioterra in Alba at the event organized by ZF in partnership with PwC, Carrefour and law firm Schoenherr.
In the absence of a growing livestock farming business, the grain and vegetables remain the largest segments of the local agriculture sector, while in Poland and France, two of the development models of the local market, the largest segments are the livestock farming and livestock product markets.
The livestock farming disaster in Romania comes after two and a half decades of almost constant decline, which turned the country’s agriculture into one of the most imbalanced in Europe. Vegetal agriculture accounts for three quarters of the sector, with livestock farming’s share dropping from 35% to 26% in the past decade. A significant contribution to this decline came from the small livestock farms, those businesses on the border between subsistence and commercial farming.
The Agriculture Ministry will greenlight all the lines of funding for the EUR8 billion available for EU-funded investments “in a matter of days”. The focus will be on small and medium-sized farms, cooperatives and livestock farming.
“We are focusing on medium-sized farms and small farmers establishing medium-sized farms take priority,” said George Turtoi, state secretary with the Agriculture Ministry.
The stake here is the ‘middle class’ in the agriculture sector, as the authorities seek to lower the number of several hectare farms that have no commercial production. The lines of funding for the next seven years were devised to direct funds precisely to such farms. The authorities hope to boost yield and the volume of agricultural commodities turned into finished products on the processing lines of the food industry.
“We are prioritizing the processing in a chain; we focused funds on irrigation, roads, water and sewer. We are prioritizing investments made in communes, where they can create value added. The purpose is to cut operating costs,” Turtoi added.
The large farmers, however, do not agree with the Ministry’s strategy.
At the event on Monday, they challenged the strategy of the authorities to direct EU funds mostly to small farms over the next seven years.
Agroserv Mariuta’s Nicusor Serban said that foreign farmers who have several hundred head of livestock in the Netherlands and Belgium were selling their businesses in their home countries and coming to Romania to build ten times bigger operations since the market allows it. Radu Timis, owner of cold cuts business CrisTim and also cattle farm investor, concurred.
“When I saw the eligibility criteria for the EU-funded investments I chose to borrow money from the bank. My opinion is that the EU does not want us to have big farms, so we won’t be any kind of competition to them,” the CrisTim founder said at the ZF event on Monday.
The small and medium-sized farm segments can be helped to grow by the workforce in rural areas that has neither the employee nor the unemployed status, Bioterra’s Mihai Miron said.
“What Romania is lacking is channels. There has to be a channel of specialized people to collect beef calves from those who want to sell them,” Miron said.
This system of channels has proven to a working solution in Romania for connecting vegetable and fruit farmers to the retail networks and vegetal
farmers to processors.
(English version by Loredana Fratila-Cristescu)