Romania has made considerable socio-economic progress, but disparities remain wide
Progress has been unequal between urban and rural areas
Romania’s economy has grown at a solid rate in recent decades, closing the gap on living standards with higher-income countries. After the fall of the communist regime in 1989, Romania embarked on a series of social and economic reforms that aimed to transform the country from a highly centralised administration into a democratic and market-oriented economy. Its accession to the European Union in 2007 accelerated reform of the country’s economy, including that of the farming sector.
Close to half (47%) of Romania’s population lives in rural areas, which is among the highest share in the European Union. The national at-risk-of-poverty rate is much higher in these areas than in cities, and the disparities in living standards between urban and rural areas continue to be significant. Rural areas are poorly interconnected and suffer from a concentration of low-skilled labour and weak labour market opportunities.
Trade and agricultural policies are mainly driven by the European Union
Romania’s participation in the multilateral trading system began decades before its transformation into a market economy. The country was an original member of the World Trade Organization (WTO) in 1995. In the years thereafter – following its application for EU membership and the opening of accession negotiations in 2000 – it began to align its trade regime with that of the European Union. Upon EU accession, it adopted the common commercial policy of the European Union.
Like other central and eastern European countries, Romania benefited from pre-accession and post-accession programmes that addressed structural reform in agriculture and other areas related to rural development. At present, Romania’s agricultural support is largely based on the European Union’s Common Agricultural Policy (CAP), with the recent CAP Strategic Plan (CSP) 2023-27 providing the broader policy direction for its agricultural policies and strategies, with a focus on social and economic issues. Several national programmes are also in place and contribute to the overall agricultural and agro-food policy objectives of the country.
While agriculture and food policies are driven by the European Union, the Romanian Government is responsible for strategic planning and implementation
Most policies and regulations affecting the agro-food sector – in particular the EU’s Common Agricultural Policy (CAP) – in Romania are decided at the EU level and implemented at the national level. The new delivery model of the current CAP provides increasing responsibility to Member States on strategic prioritisation and policy choices. This has been reflected in Romania’s recent 2023-27 CAP Strategic Plan. The OECD recently reviewed policies for farming and food in the European Union, and made 15 high-level recommendations concerning payments, regulations, innovation, data strategies, and environmental services.
The agricultural sector is of strategic importance for Romania, but its structural transformation remains challenging
Romania has one of most pronounced agricultural profiles in the European Union, but the sector is characterised by a high number of very small non-commercial farms
Romania has the largest share of agriculture in the Gross Domestic Product (4.2%) and the highest number of farms (2.9 million) in the European Union. Agriculture is of strategic importance: it ensures food security and is a major source of employment, income, and economic activity in rural areas. The farming sector, however, faces major challenges. The main challenge is to overcome the dual structure of the agricultural sector, where successful large farms co-exist alongside a majority of uncompetitive farms. Around 90% of farms are smaller than 5 ha and a small group of large farms (less than 1%) currently own more than half the agricultural land. The vast majority of small farms can be considered as subsistence farms with low technology endowments, limited access to credit, and no market orientation.
This dual structure of the farming sector is the result of several factors. In the context of the transition from socialism to a market economy, the 1990s land reform encouraged the return of collectivised farmland its previous owners, resulting in the proliferation of small farms. In addition, the relatively low price of land, farmland abandonment, and permissive legislation on land markets favoured land acquisition by foreign investors.
The structural transformation of the farming sector is not always accompanied by an enhancement of the value added for agro-food industries
Although the number of farms has declined by a quarter over the last 20 years, the average farm size (4.4 ha) in Romania is still amongst the lowest in the European Union. The structural change of the farming sector has been primarily driven by a steady increase in the number of farms above 5 ha, with an emerging sector of medium-sized professional family farms. This trend results in an increase of the average output per farm and a significant increase in average farm income. Despite these positive signals, however, the agricultural sector continues to be dominated by small family farms and further policy efforts are needed to accelerate the transformation of Romania’s agriculture into a modern and market-oriented sector.
Along with the deep structural transformation of the sector over the last 20 years, Romania has been increasing its exports in agro food products. However, agro-food exports remain concentrated in products with low value-added such as grain, oilseeds, and tobacco, and this results in a limited integration of the Romanian agricultural sector into global value chains, which is relatively low compared to peer countries.
Access to credit and to land are key barriers to farm restructuring
Access to credit is a major problem for the agro-food sector. In Romania, the unmet demand for financing from economically viable farms and agro-food small and medium-sized enterprises (SMEs) (the so-called finance gap) has grown dramatically in recent years and is currently among the highest in the European Union. Access to finance is particularly challenging for young farmers and new entrants, who also have difficulty accessing agricultural land due to fragmented ownership. Large areas of fertile farmland are increasingly managed by large agro-food corporations and foreign investors. While this may increase opportunities for productive investment and land consolidation, this phenomenon and its impact on farm restructuring must be better monitored.
Labour outflows and generational renewal remain major problems, but recent data have shown positive developments
Depopulation due to ageing and emigration has historically undermined the economic development of rural areas in Romania, which has in turn exacerbated labour shortages in the farming sector. This trend has slightly reversed in recent years, with a net migration flow towards rural areas. Similarly, while 59% of farmers are 55 years old or older, recent data point to a promising increase of young famers entering the sector.
Organic farming is slowly growing, but processing and marketing of organic products do not follow the same positive trends
Although the total area under organic production in Romania ranks seventh in the European Union, the share of organic production in total agricultural land is relatively low (less than 4%) compared to the OECD and EU27 average. Romania has set a national target through the National Plan for the Development of Organic Production to have 6% of total land area under organic agriculture by 2030. Data show growth of both organic areas and producers up to 12 000 organic farmers in 2021, with the average size of organic farms (50 ha) being much higher than the national average farm size. Nevertheless, a more comprehensive strategy for the development of organic sector seems necessary as the growth of processing and the marketing of organic products are not following the same positive trend and the market for consumption of organic products is mostly covered by companies that import processed organic products.
Romania has experienced positive developments in its agricultural productivity, while maintaining relatively low environmental pressures from agriculture
The structural transformation of the Romanian farming sector is leading to increased production, mainly driven by labour productivity
Over the last decade, agricultural output in Romania has seen steady growth, mainly driven by products such as maize and wheat. For these two crops, the country succeeded in narrowing the yield gap compared to the EU average, primarily as a result of the increased use of technical equipment, especially in large farm holdings.
During the 2011-20 decade, agricultural output grew at an average annual growth rate of 1.17%, ending a long trend of negative output growth. Output growth was mainly driven by agricultural productivity – TFP grew at an annual rate of 1.3% – but also by an increase in capital and variable inputs. Most of the gains in TFP came from higher labour productivity. Such improvement is the result of structural changes and gains in efficiency with fewer and larger farms needing less labour. Despite this consistent growth, Romania continues to have the lowest labour productivity levels of the European Union (four times below the EU average) and the largest agricultural labour force, with 1.8 million people employed in the primary sector. The country has significant scope to keep raising labour productivity and TFP.
While agriculture’s share of emissions is increasing, the emissions intensity of agriculture is decreasing
GHG emissions from manure storage and land application are still high due to inadequate storage facilities and outdated equipment used for manure land application. The share of agriculture in Romania’s total net greenhouse gas (GHG) emissions increased from 17% in 2009 to 19% in 2017. However, over the last decade, agricultural emissions grew at a slower rate than the value of total output and the country successfully reduced its agricultural GHG emission intensity.
The environmental performance of Romanian agriculture is overall relatively good, but structural changes could create additional pressures on the environment
The environmental performance of Romanian agriculture can be considered relatively good: 95% of grassland habitat types have favourable conservation status, nitrogen and phosphorus surpluses are below the EU average and water resources are generally in good condition. However, ongoing and future structural changes in the sector could create additional pressures on the environment, e.g. as regards water quality, soil fertility, biodiversity, and GHG emissions. Efforts are necessary to limit GHG emissions and to manage environmental threats by promoting environment-friendly production technologies, practices and products, and by encouraging investment in green technologies.
High Nature Value (HNV) farming is also important in preserving nature and maintaining biodiversity, especially as concerns the species-rich semi-natural grasslands. The challenge of maintaining rich biological resources in landscapes that are associated with agricultural lands will lie in the successful adoption of agricultural practices that contribute to preserve HNV areas and priority species, as well as the habitats of these species.
The irrigation system continues to be obsolete despite increased investment
In addition to climate change and biodiversity, the poor technical condition of Romania’s irrigation infrastructure is an economic and environmental challenge. Irrigation largely relies on pumping from the Danube and other rivers, and obsolete irrigation systems result in low hydraulic efficiency and high cost of electricity. Such high-water costs can be afforded by large commercial farmers, but are prohibitive for small farmers. Although current water withdrawals are below the international benchmark, climate change is increasing the demand for water. The National Strategy for Rehabilitation and Expansion of the irrigation infrastructure aims to increase the irrigated agricultural areas to ensure the necessary conditions for capitalisation of the agricultural potential of productive land that is subject to drought, especially in the south and east of Romania.
Under the 2023-27 CSP, the government has allocated EUR 400 million for the modernisation of existing on-farm irrigation infrastructure and EUR 85 million for the establishment of new, small irrigation systems at the farm level. Investments in irrigation and the adoption of conservation agriculture practices are important adaptation strategies for the Romanian agricultural sector.
The policy and regulatory environment are not fully aligned with the identified priorities
EU policies should be used more strategically to meet the pressing needs of its farming sector
As a result of the pre-accession programmes and its accession to the European Union in 2007, the policy settings affecting the agricultural sector in Romania are strongly shaped by EU policies and regulations. This has led to not only increasing financial support to farmers and rural areas, but also the adoption of more ambitious regulations on the environment and climate change, as well as the adoption of more integrated rural development policies. However, the country is not taking full advantage of the implementation options provided by EU policies.
Although the Ministry of Agriculture and Rural Development (MARD) has released numerous strategic documents on the future of the country's agricultural policies and on the necessary steps to achieve key objectives, such strategies have not fully guided the country’s policy choices. The allocation of CAP financial resources among the different instruments often matches the EU average. For Romania, given the importance of its sector and nature of some of the challenges it faces, there is scope to take advantage of flexible EU policies to implement more strategic and bold approaches. This would strengthen the overall vision for the sector and associated policy choices. For instance, despite the need to promote knowledge transfer and innovation, the share of funding is very low, and the support linked to production, including for non-strategic and emission-intensive sectors, represents a relatively high share of funding.
More can be done to achieve the CAP socio-economic objectives
Increasing the competitiveness and viability of the sector has been a policy priority since the country’s accession to the European Union and the adoption of the CAP. This is reflected in the allocation of financial resources for rural development policies: more than 40% of that budget for the period 2007-13 went to the competitiveness axis, and the NRDP 2014-22 devoted significant funding to investments and business development. Increasing the viability of farms and reducing disparities amongst them are key objectives of Romania’s CAP Strategic Plan (CSP) 2023-27.
Romania could use more proactively the various interventions and flexibility available in the CAP to better adapt its agricultural policy to the specific socio-economic needs of its agricultural sector. This could be done by reallocating some of the more than 60% of CSP budget for direct payments, whose main beneficiaries are a small number of large holdings. This indicates a mismatch between the stated objectives and the current direction of support and reinforces the duality of the system. Romania also allocated 12.3% of its direct payments envelope to coupled payments.
Even though Romania was among the 11 Member States that used the option of transferring funds from direct payments to rural development in the CSP 2023-27, in practice, it transferred only 3% of the initial budget. Moreover, the choice not to apply capping and degressivity for direct payments can exacerbate the distribution bias of income support towards the larger farms. This uneven distribution may also negatively impact the CSP’s objectives for the sector’s modernisation efforts and competitiveness. Efforts should be made to further target support to small and medium-sized farms that are commercially viable.
The CAP is complemented by a range of EU and national programmes…
Romania is adopting a broad range of other EU and national programmes of relevance for the farming sector. Transitional national aid (TNA) is a significant additional support to farmers and is structured as supplementary direct payments that are fully financed by the national budget. This type of support is mainly decoupled from production, with a total budget planned for the 2023-27 period of around EUR 900 million.
The EU-funded National Recovery and Resilience Plan (NRRP) is another major programme that shapes the country’s reform and priorities in supporting growth, sustainability and resilience, with a large share of the related budget (around 65%) allocated to the green and digital transitions. Key support for the farming sector includes measures on afforestation of agricultural land, infrastructure for agricultural waste management, and investments for the transformation of agricultural high schools into specialised centres for learning.
Romania also uses the allowed margin of the EU legal framework to support the sector with national funds, in particular through the de minimis state aid; that is, payments below EUR 300 000 per beneficiary over a three-year period that are exempted from EU’s state aid control. This type of support is mainly used to support beekeepers, vegetable production, and the animal breeding sector. The government has also established several emergency measures for the livestock sector to mitigate the exceptional circumstances created by the COVID-19 pandemic, and state aid to the crops and livestock sector were granted in response to Russia’s war of aggression against Ukraine.
…but agro-food policies are often characterised by lack of co-ordination and excessive administrative burden
Romania, like most OECD countries, does not have a co-ordination body or mechanisms that comprehensively cover food systems policies. More co-ordination and information sharing tools could help the authorities to identify and discuss potential synergies and trade-offs across food systems-related policies and proposals.
Excessive administrative burden is a possible reason behind the low effectiveness and uptake of several policy interventions, including some of the CAP measures with potential to promote productivity gains and innovation for sustainability and resilience (e.g. co-operation, voluntary agri-environmental measures, productive and non-productive investments). In Romania the barriers that administrative burdens pose to the implementation of agricultural and rural development policies are particularly challenging also as result of the lack of skills, education and training of farmers.
There is scope for a better use of regulatory management tools and for a stronger stakeholder involvement in the policy process
Romania has significantly enhanced its regulatory policy since the early 2000s, notably by mandating regulatory impact assessments (RIAs) for primary laws and subordinate regulations. Nevertheless, the use and quality of RIA is uneven and there is no requirement for periodic reviews of existing regulations. Stakeholder engagement has improved, but mostly covers organised stakeholders and participation is low at the sub-national level.
For the negotiation of EU directives and regulations, Romania does not conduct its own RIAs or engage stakeholders, relying solely on the European Commission’s assessments and engagement processes. In terms of transposing EU directives into national law, Romania is the only EU Member State without a requirement to conduct its own RIA.
A better use of RIA could strengthen the quality of food systems policies in Romania. For instance, regular ex post evaluations and investment in capacity-building could provide policy makers with a more robust understanding of the facts. Similarly, providing more opportunities for stakeholders to be heard could help policy makers to better take into account diverging interests and differing values that surround food systems policies in the country. The extensive consultation process carried out to draft Romania’s CSP 2023-27 is a positive step in this direction.
The effectiveness of new regulations governing farmland markets and other initiatives to attract younger generations to the agricultural sector needs to be assessed
Romania adopted a new land market regulation in 2020 with the objective of prioritising access to land for young farmers and to allow existing farms to expand their agricultural production. This law is part of a broader strategy to deal with large scale farmland acquisitions and farmland fragmentation. The law established new conditions for the purchase of agricultural land, including an extension of the categories of persons with pre-emption rights. However, the new administrative procedures are demanding and cumbersome, and may negatively impact small sellers and buyers in particular.
Other interesting initiatives that favour generational renewal in agriculture include the 2018-22 national programme to attract young people in the agro-food sector through financial support to employers as well as the Tieneri Fermieri programme, by which some of the State Domani Agency’s land is assigned to young people to set up a farm. These initiatives are promising, but their effectiveness in the medium and long term has yet to be assessed.
Co-operation initiatives among farmers are scarce but slowly expanding, driven by supportive national policies
Farmer associations and co-operatives could help small and medium-size farms increase their competitiveness by optimising costs and improving market access and access to funds. Despite the potential advantages of further developing co-operation, the number of farms participating in associations is low with less than 1% of farmers engaged. The economic relevance of recognised producer organisations is also the lowest amongst EU Member States. While a general lack of trust and knowledge about the co-operative system are key barriers to the development of agricultural associations in Romania, a recent increase in the number of registered agricultural co-operatives is a positive sign. A key enabler for this has been an improved legal framework and special tax benefits. Yet, key CAP interventions to encourage co-operation had a very low uptake in the past programming period.
Additional policy efforts are necessary to ensure the long-term resilience and sustainability of the agro-food sector
The structure of the farming sector presents challenges for achieving environmental objectives through cross-compliance
As regards agri-environmental objectives and policies, the CAP 2014-22 sought to achieve agri-environmental policy objectives through the combined and complementary effects of environmental cross-compliance, Green Direct Payment (the so-called greening), and the second pillar voluntary measures. Due to the high number of small farms, the beneficiaries of CAP direct payments who need to comply with the conditionality requirements make up only one-third of all farms. Romania was among the countries with a large area that was exempt from the greening measures (i.e. above 40% of the total agriculture area) under the CAP 2014-22 period.
Risk management strategies do not adequately meet current and expected challenges
Droughts and floods resulting from extreme weather conditions have increasingly affected agricultural production over the last decades and are among the most pressing problems in Romanian agriculture today. While Romania has advanced towards an integrated approach to disaster risk management, it should improve management tools in agriculture by better designing insurance and facilitating the development of other risk management tools including those financed through the CAP. Indeed, less than 1% of Romanian farms, mostly large ones, have adopted EU CAP risk management tools. The most vulnerable producers – the small and medium farms – do not buy insurance either due to a lack of knowledge or because high premiums. With risks increasing due to climate change, the development of risk management products suitable for such farmers is essential. In the medium- and long-term, climate change is expected to further increase the number and depth of extreme events in Romania, and it is therefore crucial to facilitate farmers’ access to risk management tools and funding to compensate for losses resulting from natural disasters.
Further efforts are needed on training and advice targeted to sustainability and resilience objectives
EU Member States are required to put in place a Farm Advisory Service (FAS) to provide information to farmers on cross-compliance obligations, greening, and the application of rural development measures. The FAS put in place in Romania is weak and fragmented, particularly with respect to cross-compliance and agri-environment measures.
Romania has approved a long-term strategy (LTS) to reduce GHG emissions and specific measures have been proposed for agriculture and LULUCF sector emissions. As for agriculture, the LTS acknowledges the key role of the CSP 2023-27 to support the farming sector in its efforts to reduce GHG emissions. To maintain a low level of GHG emissions from agriculture, it is necessary to further encourage farmers to keep the soil covered and to advise them on how to use land management techniques that help maintain carbon in the soil, on how to use precision agriculture, build storage facilities, and use modern equipment for manure application.
Dietary habits and food security require attention
Romania has developed multiple policy measures to encourage healthier diets, but recent trends suggest there is space to strengthen these efforts. One-fourth of all deaths in Romania can be attributed to dietary problems; fruit and vegetable consumption is the lowest in the European Union and has decreased in recent years.
The 2019-21 period represented a setback for Romania in terms of reducing the prevalence of severe food insecurity in its population, which surpassed 2015 levels in 2021. The creation and rapid growth of the Federation of Food Banks of Romania and the introduction of e-vouchers as a food assistance programme for certain low-income households are positive developments.
Efforts to measure and treat food waste appear insufficient
Romania lacks reliable data on food waste levels and is the only EU Member State not reporting data to Eurostat in accordance with EU reporting methodologies. This limits the capacity of public authorities to monitor food waste reduction goals, to evaluate policy actions, and to compare its performance against its peers. Romania’s capacity to treat food waste is significantly lower than the EU average and is decreasing, in contrast to most EU27 countries.
The Romanian agriculture knowledge and innovation system (AKIS) is in its early stage of development
Lack of skills, education and training for farmers is a key barrier for a more productive, resilient, and sustainable sector
Romania has started to build its agricultural knowledge and innovation system (AKIS). Despite steady improvements in recent years which reflect the more targeted policy interventions and increased funding, the Romanian AKIS is unable to address the multiple innovation challenges faced by the agro-food sector. While some of these challenges are common to other EU Member States, including the co-ordination and design of increasingly complex policy interventions, the duality of the Romanian farming sector and the low level of education of farmers pose additional challenges.
Romania has recently made efforts to modernise schools with an agricultural profile, but most farmers and those working in agriculture (95%) have no agricultural education or only a primary level of overall education. This is the result of the limited offer of education and professional training in agriculture and the low uptake of existing life-long learning programmes in rural areas. Additional policy efforts are necessary to address the education and skills gap of farmers.
Better use of national and EU policies to foster the adoption of technology and innovation
The modernisation of AKIS has been on Romania’s agenda for many years, but the financial resources devoted to innovation through national policies and the CAP remain limited. Innovation policies in agriculture rely heavily on EU funding. Yet planned investments for CAP knowledge and innovation measures in 2023 were the lowest in the European Union (0.7% of support as compared to the 2.7% average for the EU27). To increase innovation and technology adoption, the share of the budget devoted to innovation, information, training, and advice could be increased, and the uptake of these measures by professional and market-oriented farmers improved.
The European innovation partnership for agricultural productivity and sustainability (EIP-AGRI) is the main policy tool to co-ordinate funding and actors for innovation in the European Union, combining CAP measures with other EU research and innovation programmes (e.g. Horizon Europe). This policy tool aims to promote bottom-up multi-actor agricultural partnerships and has a very good potential to foster AKIS development in Romania. However, the number of so-called EIP-AGRI Operational Groups (OGs) is very low: only 1% of the European Union’s OGs are located in Romania. Most of these focus on sustainable farming practices and approaches such as precision agriculture and organic farming, in line with the European Union’s priorities. Since these projects apply the principles of interactive innovation models bringing together farmers, researchers and innovation brokers, their further development would not only help innovation to reach Romanian farmers, but also foster collaboration amongst AKIS actors.
Investment in research, development, and innovation (R&D&I) is low and participation in international projects is limited
Public agricultural research in Romania faces limited funding and this hampers the upgrading of research facilities and the implementation of research projects. The European Union’s research innovation programmes are the main source of funding for R&D&I, but Romania ranked last among EU countries in terms of the funding per inhabitant of the European Union’s research and innovation framework Programme 2014-20 (Horizon 2020). National instruments play a secondary role, but in recent years an increased budget has been assigned to the national programme Agriculture and Rural Development (ADER), which finances research that aims to develop a smarter, more resilient and diversified agricultural sector. Despite this positive development, however, Romania continues to allocate one of the lowest research budgets in the European Union for agricultural research, at just EUR 1.1 per capita, compared to EUR 6.4 in the EU27.
In addition to the EU-funded research programmes, Romania participates in various European and global networks on agricultural research and development. The National Strategy for Research, Innovation and Smart Specialisation aims at fostering the integration of the national research system within the international research community. Nevertheless, the level of Romania’s agro-food science outputs in the international arena is limited, contributing 0.03% and 0.3% respectively to world agro-food patents and publications, similar to Bulgaria and Lithuania. Romania stands out with a higher share of outstanding publications and a relatively high level of collaboration with foreign partners in agro-food outputs, with 22.9% of total patents and 20.9% of publications involving foreign collaborators, above the OECD and EU27 averages.
Advisory services are insufficient and do not fully respond to the diverse needs of farmers
Over the last three decades, the highly fragmented agricultural advisory system in Romania has experienced frequent and not always consistent reforms. It leans heavily on public services that are too often unable to meet the diverse needs of farmers. The number of public consultants (around 500) is insufficient and they can only focus on assisting farmers to access CAP funding and to provide advice on how to comply with EU requirements and standards. Romania also has a broad range of private advisors, including consultancy firms, input suppliers, as well as farmer organisations and NGOs. CAP funding that could support advisory services is underutilised and assistance to farmers on the ground continues to be limited (e.g. on novel technologies and sustainable farming practices) due to the high farmer-to-advisor ratio.
This Review proposes recommendations on how Romania could improve its policies and practices in the sector and to make better use of the CAP for strategic planning and implementation to respond to its stated priorities. The Review does not evaluate the policy and regulatory frameworks established by the European Union. Key recommendations are set out below.
Adopt a coherent policy mix to accelerate structural change in agriculture
Reorient policy support to foster structural transformation and entrepreneurship
Target support to small- and medium-sized farms that are commercially viable. Current policies result in high levels of income support to large farms; instead, efforts should be made to support commercially oriented small- and medium-sized farmers. This should be provided through policies that minimise market distortion and help accelerate the structural transformation of the sector, increasing agricultural productivity and improving employment opportunities.
Facilitate an equitable phasing-out of non-competitive small farms and surplus labour. Ensuring an equitable phasing-out of the labour surplus in agriculture could be aided by the provision of training to facilitate the transition to other jobs in the agro-food or other sectors.
Strengthen the use of national and EU support to promote entrepreneurship. There is scope to re-allocate part of CAP and national support in agriculture currently used for decoupled (e.g. TNA) and coupled payments to interventions that have a higher potential to promote farmers’ entrepreneurship, including support to investments in infrastructures, advisory services, and knowledge. Romania could also consider ways to make better use of the room for manoeuvre in the CAP and is invited to take account of relevant recommendations in the OECD review of the European Union.
Strengthen support for generational renewal and farm restructuring
Further promote generational renewal. Efforts to continue to promote generational renewal in agriculture could make greater use of CAP interventions and national instruments. The experience gained from the recent programmes designed to attract young people to agriculture and favour their access to land is a valuable starting point to further explore new and complementary solutions. Targeted support for young farmers and new entrants should be better integrated with specific support on training, as well as with programmes that facilitate their access to land and credit.
Undertake an in-depth assessment of trends in land ownership. This assessment would require investing in data to measure the phenomenon of large-scale farmland acquisitions by foreign investors and the access of young farmers to land, and to assess the effectiveness of the policies and regulations currently in place to facilitate land consolidation and farm restructuring.
Create an enabling policy environment for a more competitive and resilient agro-food sector
Adopt an integrated policy approach to further stimulate farmer competitiveness and co‑operation
Adopt a comprehensive sectoral strategy to better integrate farmers in the value chain. This strategy should respond to the specific needs of each segment (small-, medium- and large-scale farms) to create the conditions for a market- and export-oriented sector in the medium- to long-term. Policy packages should cover marketing initiatives, as well as support to promote more commercially oriented and profitable production systems, and a higher degree of processing and marketing of agricultural production. A comprehensive strategy for the development of the organic sector should be adopted.
Further encourage associations and co-operation within the agricultural sector. Assess current and previous measures to promote co-operation to understand their low rate of success and inform future interventions. Various forms of associations or public-private co-operation schemes could be promoted, starting with information and promotional campaigns to increase awareness of the benefits of participating in associative forms. Such initiatives should include farmer-to-farmer sharing experiences of their success stories.
Strengthen administrative capacity and address implementation issues
Facilitate the adoption of risk management tools through additional tools and advice. A broader adoption of risk management instruments in agriculture is crucial to limiting the adverse effects of natural disasters on agricultural production. There is scope to further support farmers in managing production-related risks by addressing implementation gaps in the CAP risk management tools. Support measures for insurance for crop and animal production should be complemented with dedicated advice on a holistic approach to risk management, and information campaigns.
Invest in administrative capacity to improve policy management and implementation. It will be important to continue to use national and international funding (e.g. from the European Union and World Bank) to enhance the human capital and administrative and institutional capacity of MARD and the co-ordinated agencies. Efforts should be made to further develop civil servants’ skills to increase the efficiency and effectiveness of policy design and implementation, including on audit, control, and evaluation. This should be combined with efforts to reduce paperwork and the administrative burden of MARD procedures.
Explore alternative deliberative processes to encourage stakeholder engagement (e.g. citizen’s assemblies and panels). Consider conducting stakeholder consultations and performing RIA during the negotiation stage for major EU directives and regulations. Introduce a requirement to perform RIAs when transposing major EU regulations.
More effective policies are needed to improve the environmental sustainability of the agro-food sector
Encourage the adoption of sustainable farming practices
Promote agricultural practices and investments to maintain low GHG emission intensity. The structural transformation of the sector towards larger and more market-oriented farmers may pose additional environmental and climate challenges. In order to maintain the positive trends of reduced GHG intensity, policy support should focus on investments in infrastructure and adoption of sustainable practices. This is especially important for the livestock sector, where investments for improved manure management are needed. Promotion of these practices and investments for broader adoption of voluntary agri-environmental measures also requires additional investments in training and advisory services. Soil carbon sequestration practices, such as crop rotations, catch and cover crops, and other carbon farming practices, should be prioritised.
Maintain the farming activities that safeguard traditional biodiversity through targeted interventions. Although 95% of the grassland habitat types in Romania have a favourable conservation status, pressures on biodiversity continue, e.g. in the Natura 2000 grasslands. It is therefore necessary to encourage the maintenance or adoption of extensive agricultural practices in High Nature Value (HNV) farming areas through targeted and tailored support measures.
Raise the ambition of agri-environmental interventions. Romania could increase its budget on eco-schemes and voluntary agri-environmental targeted measures to further improve the agri-environmental performance of the sector. Moreover, Romania should combine such interventions with knowledge transfer measures. Advisory services should raise farmer awareness of environmental pressures and sustainable practices and provide advice on best practices and compliance with EU agri-environment requirements and standards.
Improve the design and implementation of food system policies
Strengthen the existing policy mix to encourage healthier food choices. Promote healthy diets by strengthening school meal programmes, and assess whether their current budget is adequate in light of the significant decrease in the variety of fruits and vegetables offered to children. Explore the development of demand-side policy interventions to encourage environmentally-sustainable food choices, building on experiences from OECD countries. The recent food e-voucher programme should be evaluated to explore the possibility of using this instrument to encourage healthier food choices.
Promote an integrated policy package for food waste management. Increase efforts to measure and report food waste according to EU standards. Implement a separate collection system for bio-waste and encourage local initiatives to reduce food waste and increase treatment (i.e. that encourage in-house composting).
Adopt a comprehensive agenda to strengthen the agricultural knowledge and innovation system
Invest more in agricultural research, education, and training
Develop an ambitious education agenda in co-ordination with other relevant ministries and agencies. This agenda should address the education gaps of farmers to meet the multiple challenges and opportunities of food systems. There is a need to offer attractive agricultural education for the young and opportunities after graduation. A modernised, future-oriented curriculum should include theoretical and practical classes, covering areas such as digital technologies, environmental management, and entrepreneurship.
Improve the skill-level of farmers via training and a lifelong learning approach. The offer of formal education should be accompanied by training and advice opportunities so that farmers can develop their knowledge and skills at every stage of their career. Given the current low level of participation in life-long learning programmes in rural areas, the current offer should be re-evaluated and adapted to existing needs while overcoming potential barriers.
Adopt a strategy to improve the performance of agricultural research. There is an opportunity to continue building on the knowledge and capacities of other EU countries through cross-country collaboration within (and beyond) the European Research Area. To gain greater visibility in the international arena, Romania could consider increasing the level of national R&D funding and co-funding, clarifying national agricultural R&D priorities.
Place knowledge and innovation at the centre of agricultural and rural development policies
Use all policy levers to strengthen advisory services. It will be important to invest in creating a well-functioning network of trusted, independent advisors to provide advice, especially to small and medium market-oriented farmers. This may require more effective collaboration between central and local governments and the private sector. Experiences from other OECD countries could provide a useful guide.
Investigate the low uptake of knowledge and innovation-related measures. An important first step would be to review the role of the various national AKIS actors and stimulate their active participation in producing and adapting agricultural knowledge and innovation. There is also scope to further promote the creation and diffusion of EIP-AGRI Operational Groups. Information campaigns explaining the purpose and functioning of such initiatives and simplifying the access to funds could help increase their uptake, especially in the early stages of implementation.
Improve the capacity of the sector to absorb innovation funding with a view to reorienting agricultural support towards knowledge and innovation systems. Since investments in knowledge and innovation are relatively limited compared to the needs of the farming sector, Romania should refocus support from decoupled and coupled payments towards investments in AKIS to guide the transformation of agriculture towards productive, innovative and sustainable pathways. For this expenditure to be effective, it will be important to first improve the absorptive capacity of the sector.
