Romania's farms: rising yields but plenty of room to improve

Romania's bumper 2011 harvest confirms the country's position as one of Europe's leading agricultural producers. Yields have risen impressively, thanks in part to EU funding. But productivity remains low by European standards. The slumbering giant of Romanian agriculture is still performing well below its potential.

Overall cereal grain production rose 24.3 per cent to 20.78m tonnes in 2011, the national statistics office has said, as reported in the local press. Output of maize reached 11.6m tonnes and that of wheat 7.1m tonnes, making Romania Europe's second and fifth largest producer of the crops, respectively.

Agriculture was an important driver of the economy last year, accounting for 0.7 points of Romania's 2.5 per cent GDP growth and making up between 8 per cent and 10 per cent of overall GDP, according to Lucian Anghel, chief economist of Banca Comerciala Romana (BCR), the country's biggest bank. Farming took up some of the slack from other sectors that have slowed, such as real estate.

Most reports have dwelled on the effects of good weather on swelling the crop. But Anghel points out that much of Europe enjoyed favourable weather conditions in 2011 and that Romania's output growth was considerably higher than the EU average.

Stelian Fuia, agriculture minister, told beyondbrics that rising commodity prices and more effective delivery of subsidies were important factors. He notes that Romania has reduced the area of agricultural land not under cultivation from 3m to 1m hectares over recent years partly due to these incentives.

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