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Romanian farmers need to integrate further within the value chain

Given the fact that in the coming 20 years the global demand for food will grow by 70 per cent, Romania can play an important role in providing the necessary supply, Reinder Schaap, the counsellor for Agriculture, Food and Nature at the Netherlands Embassy in Bucharest, told The Diplomat – Bucharest

2014-08-09 00:30:06 - From the Print Edition

Although the Romanian agriculture has a lot of potential, it needs to improve certain elements in order to develop properly and to cope with future challenges, including the cadastre and irrigation system. However, another major issue the local market needs to tackle is the current structure of the agricultural value chain, where the Romanian farmer is not active enough. "Romania's agriculture has a very good perspective in the future, but it lacks the structure," said Schaap. "The Romanian farmers should use its potential, should invest in the [value] chain and should work together. Romania is a big exporter of wheat, maize, sunflower and rapeseed, but there is very little processing of those products within the country. The farmers need to integrate more into the chain and control parts of it. They produce the grain, but they have to think about what is going to happen afterwards as well."

Foreign companies hold about ten per cent of Romania′s ten million-hectare arable land, according to local estimates. Schaap placed the Netherlands in the top five foreign investors active in Romanian agriculture, estimating that they hold between 15,000 and 17,000 hectares of local land. The main important Dutch players are the German-Dutch joint venture DN Agrar and Rabofarm, a subsidiary of Rabobank. "The percentage of the Dutch investors is estimated to be 1.5-1.7 per cent of the total value of land owned by foreign investors, so we are the fifth-largest player," says Schaap. "There are other big owners ahead of us like Denmark, Italy, Austria, and Spain. However, the Dutch people are more involved in farming than others, who just buy the land in order to sell it."

By the end of 2013, the value of bilateral trade between Romania and the Netherlands exceeded the values registered in 2011 and 2012 with a total of 3.57 billion Euro, up by 11.77 per cent over 2012, according to the Netherlands Romanian Chamber of Commerce (NRCC) data. Exports registered 1.53 billion Euro, up by 20.17 per cent compared to 2012, while imports totalled 2.03 billion Euro, up by 6.17 per cent over 2012.

Of the total exports to Netherlands, 8.1 per cent (125 million Euro) represent agricultural products, the main traded items being cigarettes, sunflower seeds, poultry meat, maize, ethyl alcohol and rape seed. In terms of imports, Romania opens its gates for poultry meat, pork meat, live pigs, cut flowers and plants, representing 18.4 per cent (375 million Euro) of total imports. "Although the financial crisis affected the agricultural bilateral exchange in the past few years, I believe the figure will grow," said Schaap. "However, we should add to those agri-food figures the agricultural machinery and chemical inputs as well, because they are not taken into account."

With an arable area ten times smaller than Romania′s, the Netherlands is the second largest exporter of agricultural products in the world after the US. Schaap told The Diplomat – Bucharest that one of the secrets of the Netherland's success lies in the fact that more than 95 per cent of the total 75,000 Dutch farms present in the country are family-owned.

"The secret of Holland is the family farm that goes from father to son or daughter," said the official. "Moreover, we are very specialised. A farmer has either a livestock farm, or a crop farm. Very few farmers have the two things mixed up." Reinder Schaap came to Romania in September 2012, bringing an experience of more than 25 years in agricultural policies and development.

By Alexandra Lopotaru

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