Romania's 10 most important agricultural events in 2020
The drought has reduced cereal production, but the appetite for investment of the players in the market has not decreased. 2020 means significant losses for agricultural producers in the vegetable sector, the estimates of the European Commission being that cereal production will decrease by more than 40%, to 18 million tons. Also, the COVID-19 pandemic year brought a few legislative changes. Transactions, albeit fewer or less than in other years, still took place.
The European Commission estimated in mid-October this year a 40% decrease in cereal production in Romania, the largest in the European Union, due to the pedological drought in the agricultural year 2020. The absence of a functional irrigation infrastructure and shelterbelts could translate this year in a total harvest of merely 18 million tonnes, compared to almost 30 million tonnes in 2019.
The drought has affected both farmers and traders, as well as livestock farmers and meat processors. However, compared to 2007 or 2012, the drought this year was regional, the most affected area being South-eastern Romania, followed by Moldova, where farmers` production was at a minimum of the last 10-15 years. On the other hand, central and western Romania had good or even record productions.
In 2020, there were European non-reimbursable funds granted for rural investments in the amount of 650 million euros, the highest value so far
Romania received non-reimbursable funds amounting to 9.15 billion euros from the European Union in the financial year 2014-2020, through the National Rural Development Program (PNDR), the absorption rate thereof being 74%, according to data from the Agency for Financing Investments Rural (AFIR).
In the final straight this year over 656 million euros reached the accounts of Romanians in the rurual side, as non-reimbursable European duns, the highest values so far, claimed previously Mihai Moraru, the general manager of the institution.
ADS leases 50 hectares to young people with agricultural studies
The State Domains Agency (ADS), the institution handling the agricultural land in the public domain, announced the auctioning of over 700 hectares for concession, where young people up to 40 years old, with agricultural studies, can get from the State maximum 50 hectares of arable land, according to Government Emergency Ordinance 54/2020.
Thus, for a start, 14 young people could get 50 hectares, to start or to expand an agricultural business. The first example is that of Marcel Pop, a young man from Satu Mare county, who has a family business in the cereals field, together with his father and brother, and who contracted 49.6 hectares, in order to increase the production capacity.
The contracts for concession by direct award will be signed for a 20 year period, with the option to extend for another 10 years, according to state officials. ADS offers concession land only in the districts of Călărași, Dâmbovița, Galați, Dolj and Hunedoara.
"Unirea" Agri-Food Trade House, a 93 million lei project, is dead
The Agri-Food Trade House Unirea SA, a state company founded in November 2019, with a share capital of 93 million lei from the state budget, aiming to capitalize on primary agricultural production by opening a chain of 80 grocery stores, failed after a year of existence.
The indoor agri-food markets have been closed
In early November, the government decided that indoor agri-food markets and fairs should be closed during the state of alert, given that the health protection measures are not being observed, and the number of SARS Cov-2 virus infections could increase. However, three weeks after this decision, the authorities changed their minds.
The governors did not measure initially the impact of this measure on the economy, just as they did not perform any measurements when they stopped for a week the non-EU grain exports during the state of emergency. After announcing this decision, the state representatives did not know how many markets there are in Romania, how many Romanian products are sold there, or how many producers and traders sell their goods there every day.
The representatives of the associations in the field stated at that time that millions of people were affected, and that the number of markets would be in the thousands.
Later though, Adrian Nechita Oroș, the Minister of Agriculture, announced that Romania has only 514 agri-food markets, which returned to normal functioning after the first week of December.
Labour export
About 2.000 Romanians left in April with charters, to work in agriculture in Germany, several hundred cramming in only one day to board the plane from Cluj-Napoca, although they had only just returned to Romania in a hurry, due to the global COVID-19 pandemic.
Some were not wearing masks, others had large luggage, what is certain is that the local authorities didn`t stop them from going to work for the Germans, although the entrepreneurs in the agricultural sector and in the food industry have been saying for several years that they were facing a shortage of personnel. Before they could be motivated to get by in their country, they boarded the aircraft to Germany, for seasonal work.
High value transaction
TC Capital, a company active mainly in real estate, owned by the Turkish citizen Ali Çapa, purchased a grain and oilseed farm in Buziaş, Timiş county, spreading over 6,550 hectares, for 23.5 million euros.
The Turkish businessman intends to diversify the operations into intensive agricultural activities with high added value, such as blueberry and hazelnut plantations, as well as into extensive production of cereals and oilseeds. He has invested in recent years in the Cosmopolis residential complex, as well as in Hyperion Towers.
Tinmar Energy took over Intercereal in full
Tinmar Energy, a company dealing mainly in trading energy, gas and petroleum products, controlled by the Romanian entrepreneur Augustin Oancea, took over Intercereal, an important cereal farm in Ialomiţa county, part of the Interagro agribusiness group of companies developed by Ioan Niculae.
Intercereal cultivates cereals on 24.300 hectares, owns a silo with a total capacity of 62.000 tonnes in Movila, Ialomiţa, and a silo with a total capacity of 44,000 tonnes in Feteşti. In 2019 the area cultivated with cereals in Ialomiţa county was about 230.000 hectares, and Augustin Oancea, through Intercereal, will sow over 10% of it, according to ZF calculations based on data from the Ministry of Agriculture.
Holde Agri Invest took over Agromixt Buciumeni, a farm of 3.500 hectares
Holde Agri Invest, a company with local capital working agricultural land, took over Agromixt Buciumeni from Ion Alexandru, a business present on the market for three decades, growing cereals on about 3.500 hectares in Calarași county. The value of the transaction, which took place this year in April, is 5 million euros.
With this transaction Holde has doubled its area of land, and aims to reach a portfolio of at least 20.000 hectares of worked land over the next ten years, after investments of over 50 million euros in business development.
Law 175/2020 amended the selling procedure of agricultural land outside the built-up area
Law 175/2020, amending and supplementing Law 17/2014 on some regulatory measures for the sale and purchase of agricultural lands located outside the built-up area, and amending Law 268/2001 on the privatization of companies holding public and privately state owned lands for agricultural use, and establishing the State Domains Agency, expands the categories of pre-emptors, makes the sale procedure more complex, and increases the procedural deadlines.
Thus, if there were initially only four categories of pre-emptors (co-owners, tenants, neighbouring owners, and the Romanian State), now there are also young farmers (up to 40 years old), the Academy of Agricultural and Forestry Sciences "Gheorghe Ionescu-Şiseşti", and the research & development units in the fields of agriculture, forestry and food industry, but also individuals with domicile/residence in the administrative-territorial units where the land is located or in the neighbouring administrative-territorial units.
Also, the sale will no longer be free, but can be made within 30 days, only by private individuals or legal entities dealing with agriculture and having their domicile or residence in Romania for the last 5 years. Moreover, within one working day from the date of registration of the sale offer, the mayor's office had the obligation to display the sale offer for 30 days at its headquarters and on its website.
Source: ZF Corporate
