Editors

Gabriel POPESCU
Nicolae ISTUDOR
Dan BOBOC
Jean ANDREI

PROCEEDINGS
of the Third International Conference

COMPETITIVENESS OF AGRO-FOOD
AND ENVIRONMENTAL ECONOMY
CAFEE
Bucharest

ISSN 22859179
ISSN-L 22859179

SCIENTIFIC COMMITTEE
Pavel Nastase, Rector of the Bucharest University of Economic Studies; James MacAskill, British Institute of
Technology and e-Commerce, London, United Kingdom; Andrzej Kowalski, Director of the Institute of
Agricultural and Food Economics, National Research Institute, Warsaw, Poland; Diego Begali, University of
Verona; Nikos Mastorakis, World Scientific and Engineering Academy and Society; Marek Wigier, Deputy
Director of the Institute of Agricultural and Food Economics, National Research Institute, Warsaw, Poland; Drago
Cvijanovic, Director of the Institute of Agricultural Economics, Belgrade, Serbia; George Baourakis, Director of
Mediterranean Agronomic Institute of Chania, Greece; Ion Stancu, Vice Rector of the Bucharest University of
Economic Studies; Nicolae Istudor, Vice Rector of the Bucharest University of Economic Studies; Dimitar
Dimitrov, Rector of the University of Agribusiness and Rural Development; Mariana Ivanova, Vice Rector of
education and international relations of University of Agribusiness and Rural Development; Gheorghe Zaman,
Director, Institute of National Economy; Csaba Jansik, MTT Agrifood Research, Finland; Cristian Hera, The
Academy of Agricultural and Forestry Sciences; Alexandru Lapusanu, Research Institute for Agricultural
Economy and Rural Development; Gabriel Popescu, Director of Department of Agri-Food and Environmental
Economics, Bucharest University of Economic Studies; Dan Boboc, Dean of the Faculty of Agri-Food and
Environmental Economics, Bucharest University of Economic Studies; Florianczyc Zbigniew, Institute of
Agricultural and Food Economics, National Research Institute, Warsaw, Poland; Mirolslawa Tereszczuk,
Institute of Agricultural and Food Economics, National Research Institute, Warsaw, Poland; Angela Mariani,
University Parthenope Naples, Italy; Masaru Kagatsume, Graduate School of Agriculture, University of
Kyoto, Japan; Aristidis Stamatakis, Mediterranean Agronomic Institute of Chania, Greece; Flavio Boccia,
University Parthenope Naples, Italy; Simona Monteleone, University of Catania, Italy; Nicola Marinelli,
University of Firenze, Italy; Panagiotis Kalaitzis, Mediterranean Agronomic Institute of Chania, Greece;
Panagiotis Kefalas, Mediterranean Agronomic Institute of Chania, Greece; Vesselin Mitev, Administrative
Director of University of Agribusiness and Rural Development - Brunch Ruse; Dimitar Yakimov, University of
Agribusiness and Rural Development - Brunch Ruse; Jonel Subic, Deputy Director of the Institute of Agricultural
Economics, Belgrade, Serbia; Vesna Popovic, Institute of Agricultural Economics, Belgrade, Serbia; Marko
Jelocnik, Institute of Agricultural Economics, Belgrade, Serbia; Gorica Cvijanovic, Megatrend University
Belgrade, Faculty of Biofarming, Backa Topola Serbia; Gordana Dozet, Megatrend University Belgrade,
Faculty of Biofarming, Backa Topola Serbia; Dorel Dusmanescu, Faculty of Economic Sciences, Petrolum and
Gas University of Ploiesti; Florina Bran, Faculty of Agri-Food and Environmental Economics, Bucharest
University of Economic Studies; Victor Manole, Faculty of Agri-Food and Environmental Economics, Bucharest
University of Economic Studies; Radu Voicu, Faculty of Agri-Food and Environmental Economics, Bucharest
University of Economic Studies; Mirela Stoian, Vice Dean of the Faculty of Agri-Food and Environmental
Economics, Bucharest University of Economic Studies; Costel Negrei, Faculty of Agri-Food and Environmental
Economics, Bucharest University of Economic Studies; Mircea Gheorghita, Faculty of Agri-Food and
Environmental Economics, Bucharest University of Economic Studies; Mircea Nastase, Faculty of Agri-Food and
Environmental Economics, Bucharest University of Economic Studies; Simona Roxana Patarlageanu, Faculty of
Agri-Food and Environmental Economics, Bucharest University of Economic Studies; Carmen Trica, Vice Dean
of the Faculty of Agri-Food and Environmental Economics, Bucharest University of Economic Studies; Raluca
Ignat, Vice Dean of the Faculty of Agri-Food and Environmental Economics, Bucharest University of Economic
Studies; Mariana Bran, Faculty of Agri-Food and Environmental Economics, Bucharest University of Economic
Studies; Marcela Stefan, Faculty of Agri-Food and Environmental Economics, Bucharest University of Economic
Studies; Raluca Andreea Ion, Faculty of Agri-Food and Environmental Economics, Bucharest University of
Economic Studies; Monica Dudian, Faculty of Economics, Bucharest University of Economic Studies; Iuliana
Dobre, Faculty of Agri-Food and Environmental Economics, Bucharest University of Economic Studies; Carmen
Valentina Radulescu, Faculty of Agri-Food and Environmental Economics, Bucharest University of Economic
Studies; Ildiko Ioan, Faculty of Agri-Food and Environmental Economics, Bucharest University of Economic
Studies; Marilena Papuc, Faculty of Economics, Bucharest University of Economic Studies; Florentina
Constantin, Faculty of Agri-Food and Environmental Economics, Bucharest University of Economic Studies;
Jean Andrei, Faculty of Economic Sciences, Petrolum and Gas University of Ploiesti

ORGANIZATION COMMITTEE
Ildiko Ioan, Faculty of Agri-Food and Environmental Economics, Bucharest University of Economic Studies;
Raluca Andreea Ion, Faculty of Agri-Food and Environmental Economics, Bucharest University of Economic
Studies; Andreea Miron, Bucharest University of Economic Studies

Disclaimer: The responsibility for the content of the papers does not regard the editor and the publisher.
For the content of the papers the only responsibles are the authors and the co-authors.

FOREWORD
Agriculture is a vital economic sector that witnessed the boom triggered by
unprecedented increase in food demand due to demographic growth to be replaced by
fierce global competition accompanied by strengthening of various constrains on the
background of global crises like financial and ecological ones, depletion of natural
resources or hegemony disputes.
Despite the fact that the agriculture of the 21st century is a sophisticated industry that is
based on innovation-driven technology, such dramatic change cannot be properly
addressed by relying on the analysis of previous trends. Coping with the novel
constrains calls for knowledge support for both policy making and businesses in agrofood and environmental economy to be enriched with cutting edge information
provided by approaches built up from multiple perspectives applied on the main
challenges such as globalization, food security, rural development, climate change
impact, vulnerability of the food system, perspective of scarcity for the natural
resources that support agriculture, adequacy of agriculture and environmental
knowledge systems, amongst others.
The third edition of the Competitiveness of Agro-Food and Environmental Economy
(CAFEE) conference, at the Bucharest University of Economic Studies, addressed the
need to improve the knowledge support by bringing together leading experts, decisionmakers, and professionals to capture the research energy devoted to the analysis and
assessment of developments and challenges of agro-food and environmental policies
and businesses within the framework of globalization and European integration.
The studies comprised in the proceedings of the CAFEE conference are addressing a
variety of issues that are presented from different perspectives revealing on the one
hand the manifold implications of policy making in agro-food and environmental
economy, and on the other hand how local contexts create situations that need in depth
analyses and interpretations in order to find solutions that are aligned with the
principles and guidelines provided by global and European approaches.
The overall picture built up by the results of the studies reveals that increasing the
competitiveness of agro-food economy necessitates a strategic approach underpinned
by the better understanding of key aspects such as labour, resource management,
market access, cooperation, and investments.
Modern agriculture is intensive in machinery and/or knowledge, but labour continues
to be important for various reasons including the structure of agricultural holdings or
the favourable outlook of more labour intensive systems such as organic farming.
Hence, an appropriate approach for labour analysis in agriculture remains an important
issue for policy making and it should consider the unit of labour, labour shortage, and
better management of training. In Romania, family is proposed as the most appropriate
unit of labour due to the specific patterns of labour division in the rural family (G.
Popescu). The reasoning is strengthened by the findings for Serbian family farms that
are reported as having a key role to play in speeding up rural development (J. Streten et
al.). Labour shortage is unlikely in competitive contexts, but it could represent a threat
then agricultural employment is unable to provide acceptable incomes.
3

Improved regulation of self-employment in rural areas is needed in order to create

better conditions for the absorption of European funds allocated for supporting young
farmers (R.A. Candoi-Sandu). Regarding the management of training for farmers and
employees in agriculture there it is recommended the adjustment of publicly funded
students within each major fields of study with the medium and long term needs and
trends within the national and European agro-food economy (G.C. Cretan). Increasing
the quality of human resources involved in the management of structural funds at both
public level and beneficiaries is also important for supporting the competitiveness of
agro-food economy within the current context of the European Union (C. Cirstea et
al.). An issue of concern remains the low accessibility of higher education for rural
youth threatening their active participation in the knowledge transfer that should
support the development of competitive agricultural holdings (M.C. Preda).
The natural resource that supports the agro-food economy is land that could be used for
a variety of crops according to the patterns of soils and weather conditions and the
availability of water. The proper management of this resource depends on clear-cut
property relations that will incentives owners to maximize their benefits. The turmoil
created by the shifting and unstable political regime created bias on the establishment
and transaction of property over land hindering farmers ability to apply performing
technologies. Maturation of property relationships, creation and development of land
market, and agreement over the proper relation between small and large size
agricultural holdings should be considered with priority in this direction (G. Popescu),
while absolute pre-emption for local communities, treating land as national asset and
facilitating loans for land acquiring (E.S. Butnaru) are other measures that could
improve the management of the most important natural resource for agriculture.
Amongst the solutions that were analysed in more detail is the lease of land, which
would create the premises for creating larger plots able to support technology intensive
performing agriculture (E. Musat).
Obtaining high yields is not enough for a competitive agro-food economy since food
markets are in fact flooded with large amounts of products originating from intensive
systems mastered by farmers of the developed economies. This created a high volatility
of prices that threatens food security by restraining the access to food products, but also
the food producers who might fail to cover their expenses (B. Bazga and L. Rebega). In
this challenging context a special focus should be granted "for the creation and
expansion of functional local markets" building on the already existing transaction
centres that belong to the distribution chains (G. Popescu). Addressing dynamic market
segments such as the organic or quality food market should be also considered, since
the statistics for industry sales are impressive indicating that the demand for organic
and quality food is growing fast (M. Stoian and D. Boboc; O.G. Stanila and F.M.
Rainof). Moreover, since the underdevelopment, excessive fragmentation, low
productivity, and lack of financing eroded the competitiveness of most farms, organic
systems represent o good opportunity for the market access of Romanian farmers (S.
Stanciu).
Cooperation could be a key process for "establishing a proper ground for the
harmonious interplay of commercial and civil interests toward an increased resilience
of agricultural and rural areas against a volatile economic system triggering the
interference of disturbing short term political interests." (G. Popescu) and it allows
4

"the creation and exploitation of resources based on a new social model (...) and on a
capitalized form of solidarity" (D.C. Popescu). Empiric evidence also supports this
reasoning and it is reported for Calarasi county where the economic and social standing
of cooperative members were higher than the ones of individual producers (R.A.
Ionescu). As factors that prevent faster progress toward cooperation in agriculture there
are reported the perception of risk by smallholder farmers who fear the relinquishment
of their land, the unsuitable legal framework and the lack of effective financial
instruments (D.C. Popescu).
The competitiveness of agro-food economy is also depending on investments made in
this sector. These should take in account the wide range of interdependencies that
influence the calculation of economic efficiency, but also the fact that turnovers might
decrease as it occurred in many regions of Romania. Nevertheless, the implementation
of measure 121 (Modernization of agricultural holdings) is promising, the investments
made resulting in higher incomes and modern equipment purchased for the increase
and diversification of production (A.M. Sandu). Encouraging investment would need
improved tools for risk management in order to enable beneficiaries of European funds
to support the co-financing of their projects (I.E. Petrescu), but also streamlining
investments in processing industry (J. Subic et al.).
Other issues that are of concern for the competitiveness of agro-food economy are
performing management and knowledge transfer. Improving management in all areas
of the agro-food system, but especially in agriculture is necessary for ensuring the
implementation of good agricultural practices and to properly use the benefits of the
agricultural policy (R. Voicu ad C.V. Radulescu). It is also necessary to create a
functional knowledge market that is able to host operative and efficient linkages
between producers (researchers) and consumers (agricultural holdings) of new
information that generates value added (G. Popescu).
The studies that considered the agro-food economy within the environmental restrains
examined the impact of climate change, the pollution generated by agriculture, but also
the promising sector of the organic farming.
Based on empirical evidence from Romanian vineyards it was concluded that climate
change would impact more on the quality of the products than on the yield. In case of
the wine, which is the final product, this could lead to a negative impact on
competitiveness, since in this sector the value added is related more to quality of the
products than to the amount of the production (M. de Salvo).
Agriculture as source of pollution is analysed in three settings, but all of them are
focusing on the emissions of greenhouse gases. One of the studies presents the results
of an empirical analysis conducted for the intensive livestock breeding in Italy. It
reveals that despite important progresses there are still many farms that fail to comply
with the requirements of European legislation. Such situation could be prevented by
increasing the awareness level among consumers regarding the importance of
purchasing certified meat (I.V. Dragulanescu). The other study also presents the
emissions sources of agriculture, but it pursues to outline solutions for increasing
agriculture's contribution to climate change mitigation. It is stressed that although
technical challenges might be important, the creation of an enabling economic
framework would have a more meaningful contribution towards emission reduction,
because the important challenge in agriculture is to maintain profitability within
5

the "sharp blades" of global competition (A.M. Calin and A. Diaconu). Finally, a
detailed EU level analysis of energy consumption and emissions in agriculture reveal
important progresses that are interpreted as outcomes of the more and more effective
climate policy action (A. Zaharia).
The perspectives of organic farming are outlined based on trends captured by the
analysis of global, European, and national data. It was reported that although organic
food represents 1-2% of the total food production, the organic food sales are growing
fast, significantly outpacing sales for conventional food products. Germany is the
largest consumer of organic food in Europe and the second one in the world, while in
Romania the production side is better represented than consumption (M. Stoian and D.
Boboc; S. Stanciu).
Environmental economy studies addressed the major challenges of climate change,
biodiversity, and urban pollution at different scales. The pool of solutions that was
examined comprised mainly market based tools revealing on the one hand their
potential to foster the development of a greener economy, and on the other hand the
most important barriers that prevent a more dynamic progress toward sustainability.
The economic opportunities created by the implementation of environmental policies
are not the most attractive investments, but interplays occurring within globalized
markets could lead to less predictable outcomes. This was demonstrated by an analysis
of the European climate policy. Hence the EU ETS carbon market allowed the
accumulation of surplus allowances by several large companies that besides harnessing
million dollar windfall profits threaten the entire functionality of the system
(F. Bran et al.).
The need for economic underpinning of environmental protection was explained for
nature conservation by a study that pursued the steps of paradigm change in this field.
It reported that biodiversity and ecosystem services are natural assets playing a key role
for the economic strategies (N. Istudor et al.). Empiric support in this direction was
provided by a cost analysis in case of a protected area that differentiated four categories
of expenditure: technical assistance, investments in conservation measures,
management and infrastructure (C. Negrei).
The proceedings of the CAFEE conference provide meaningful insights for many
challenging aspects of the agro-food and environmental economy. These serve the
knowledge development for both top-down and bottom-up approaches. Hence, there
were addressed topics born within the process of downscaling global and European
issues to national and regional contexts, as well as issues that are of major interest at
local level. The reported results have a good potential for improving our understanding
of factors that control the progress toward sustainable development within the restrains
of a competitiveness driven agro-food and environmental economy.

CONTENT
The estimation of climate change impacts on the adoption of sustainable production
processes in viticulture: a multidisciplinary approach ........................................................ 10
Maria DE SALVO, Roberta CAPITELLO, Diego BEGALLI
Changing management paradigms in nature conservation ..................................................20
Nicolae ISTUDOR, Constantin MITRU, Emilia IAN, Daniela MANEA
Proposals regarding the focal points of a future strategy for the development
of rural space and of agriculture in Romania ......................................................................26
Gabriel POPESCU
The role of family farms in rural development of the region ................................................31
Jeli SRETEN, Raji ZORAN, Jandri MERSIDA, Bojan DIMITRIJEVI,
Branka KALANOVI-BULATOVI
Agribusiness and economic development during Polands membership in the EU .............39
Marek WIGIER
Changes in the Romanian agri-food trade competitiveness in the post-accession period ...50
Camelia GAVRILESCU
Objectives of the agricultural and rural development strategy of Romania ........................ 57
Angelica BCESCU-CRBUNARU, Monica CONDRUZ-BCESCU
Public higher education and labour market in the Romanian
agro-food sector what is to be done? ................................................................................70
Georgiana Camelia CRETAN
New challenges for the regional development of Romania
in the 2014-2020 programming period ................................................................................81
Cristina CIOCOIU, Victor MANOLE
A study on quality of life in Romania social and environmental perspective .................... 92
Raluca IGNAT, Carmen Lenua TRIC, Marilena PAPUC, Daniela BIRO
Price volatility, the main component of food security a real key to a sustainable
development ....................................................................................................................... 101
Bogdan BAZG, Laureniu REBEGA
Environmental pollution from intensive livestock breeding ...............................................107
Irina-Virginia DRGULNESCU
The degree of pollution in China ........................................................................................ 119
Anca Laura ROTMAN, Camelia SLAVE
Cost assessment for biodiversity conservation and sustainable use of its components
in Macin Mountains area ...................................................................................................125
Costel NEGREI
Globalization, climate change and carbon markets ........................................................... 132
Florina BRAN, Ildiko IOAN, Mariana IOVIU
7

A study on perspectives of organic farming and organic food market ............................... 143
Mirela STOIAN, Dan BOBOC
Lifestyle and sustainable development - implications for human health ............................ 154
Cristian George POPESCU
Investment activities in agriculture and processing industry
on the territory of the Vrbas municipality state and possibilities ....................................161
Jonel SUBI, Marijana JOVANOVI, Marko JELONIK
Socio-economic characteristics and resource of agriculture of the region ........................ 170
Mersida JANDRI, Zoran RAJI, Sreten JELI, Dragi IVKOVI
Environmental protection between social responsibility, green investments
and cultural values .............................................................................................................179
Jean ANDREI, Mirela PANAIT, Corina ENE
The impact of globalization on the development of cross-border agricultural markets .....188
Oana-Georgiana STNIL, Francesca-Magdalena RAINOF
Price volatility in context of food security for sustainable development ............................ 198
Bogdan BAZG, Iudith IPATE, Nicolae IPATE
Financing entrepreneurial initiatives in rural areas through the National Program
for Rural Development 2014-2020 ..................................................................................... 205
Costin CRSTEA, Florin DINU, Razvan MURARIU
The analysis of absorption rate of structural funds for the 2007-2013
programming period. The case of Romania .......................................................................213
Georgiana Raluca LDARU, Maria Cristina PDURE, Eugen PRIOTEASA
The stimulation of new jobs emergence through self-employment
in Romanian rural area ......................................................................................................224
Robert-Adrian CANDOI-SAVU
The influence of education factor over the stage of development in the rural areas
regarding knowledge transfer ............................................................................................ 232
Maria Claudia PREDA
The impact of liberalization on the Romanian land market sales ......................................244
Snziana Elena BUTNARU
Sustainable development and human capital component ................................................... 251
Petric Sorin ANGHELU, Arghir Vasile CIOBOTARU
Agriculture climate change mitigation agent ..................................................................259
Ana Maria CLIN, Amelia DIACONU
Climate change in local and regional context ....................................................................266
Arghir Vasile CIOBOTARU, Petric Sorin ANGHELU
Rural tourism development strategy in north west of Romania .........................................274
Florentina Daniela MATEI (TITILIN)
Energy use and its related emissions in European unions agriculture ............................. 282
Alina ZAHARIA, Aurelia Gabriela ANTONESCU
8

The importance of implementing the Measure 121- "Modernization of agricultural

holdings" on the rural development in Romania ................................................................ 292
Andrei-Marius SANDU
Organic products a necessity or an opportunity for Romanian agriculture? .................300
Silvius STANCIU
The importance of agricultural cooperatives in post-communist Romania ....................... 312
Dan Cristian POPESCU
Gender and age differences of migrants ............................................................................319
Serban ZODIAN
Land consolidation through exchange of agricultural lease land
in the context of present regulation of the land lease ......................................................... 325
Emil MUAT
Performance of associative and cooperative structures
of Calarasi county analysis of the principles behind their organization ......................... 332
Rare Alexandru IONESCU
Non-wood forest products obtained in the Romanian forestry sector.
Production potential and valuation .................................................................................... 340
Marius Nicuor ALBU, Larisa Delia MIHLCIOIU
An integrating vision on the management of the Romanian food system ........................... 352
Radu VOICU, Carmen Valentina RDULESCU
Impact of investments over the Romanian agricultural sector ...........................................362
Irina Elena PETRESCU
Increasing competitvness of the agro-food sector through inter-regional
disparities elimination ........................................................................................................368
Cristian TEODOR
Romania towards 2020 horizon ......................................................................................... 376
Simona BARA
Agro-ecology, organic agriculture and food sovereignty .................................................. 385
Marta-Christina SUCIU, Gabriela SABU, Florentina CONSTANTIN
Correlations between lifestyle and ischemic heart disease in young patients .................... 397
Raluca IANULA
Considerations upon the Romanian health care system reform
based on other European experiences ................................................................................406
Mihaela Cristina DRGOI, Ramona Iulia ARAVULEA (DIEACONESCU)
Book review
Gabriel POPESCU: Cooperation in agriculture from historical arguments
to the knowledge transfer ...................................................................................................415
Simona BRA

THE ESTIMATION OF CLIMATE CHANGE IMPACTS ON THE ADOPTION

OF SUSTAINABLE PRODUCTION PROCESSES IN VITICULTURE:
A MULTIDISCIPLINARY APPROACH
Maria DE SALVO, Roberta CAPITELLO, Diego BEGALLI
Department of Business Administration, University of Verona; email:
[email protected]; L.ge Porta Vittoria 41, Verona, Italy
Abstract
This research is aimed to assess the climate change impacts on the viticulture applying an
interdisciplinary approach that simultaneously considers climatic, physiological,
phenological, viticultural and oenological aspects. The relationships between climate and
grapevine physiology and phenology are analysed. Moreover the effects on the berry
composition, the grape production and the wine quality determined by the spatial context,
the grape variety and the vintage are accounted. Data from experimental vineyards are
compared with farms data in order to account the effects on the vineyard performances
and sustainability attributable to vine growers choices and strategies.
Keywords
climate change; wine; multidisciplinary approach
Introduction
The impacts of weather and climate on the grape growing are complex and controversial,
and numerous researchers have forecasted that the ongoing climate change will likely
produce winners and losers among the winegrowers (see for instance: Anshenfelter and
Storchmann, 2014), due to the opposite effects on the quantity and the quality of wine.
Market prices and winegrowers revenues are extremely sensitive to the weather conditions.
In the next future global warming could lead to geographical modifications of the
viticulture, favouring the grape cultivation in the areas close to the North and the South
Poles (Fraga et al., 2013).
Numerous studies concern the relationships between wine and climate change. Several
scholars focus on the physical impacts, considering the role of each climate variable, such
as temperature, CO2 concentration, and water availability (Bindi et al., 1996; Ashenfelter
and Storchmann, 2014). Other scholars (Haeger and Storchmann, 2006; Ashenfelter and
Storchmann, 2010a; Ashenfelter and Storchmann, 2010b; Marinoni et al., 2012) analyse the
economic effects, in terms of total production and yields, quality, prices, revenues and
profits variations. Other studies (Battaglini et al., 2009; Bernetti et al., 2012; Nicholas and
Durham, 2012; Vink et al., 2012; Lereboullet et al., 2013) consider the winegrowers
perception and their ability to promote adaptation strategies aimed to face climate change
effects.
A common criticism to all these studies is that they take into account only some aspects of
the problem. Robust forecasts on the climate change effects should derive from analysis
able to consider all the phenomena that have a relevant role in the determination of the
relationships between the climate change and the wine production. In this regard a
multidisciplinary approach able to analyse the impacts on the grape physiology and
phenology, yields and quality of berries and wine is needed in order to identify the most
relevant factors that influence the winegrowers performance in specific climatic contexts.
10

This paper presents the preliminary results of a research aimed to assess the climate change
impacts on the wine industry through an interdisciplinary approach that considers climatic,
physiological, phenological, viticultural and oenological variables. As shown by previous
studies climate change affects the grapevine physiology and phenology (Caprio and
Quamme, 2002; Gouveia et al., 2009; Santos et al., 2011; Santos et al., 2013). This affects
grape quantity and quality and, consequently, the wine production. The winegrowers
behaviour plays a key role because they face the climate change impacts through
modifications of the production technics. As a consequence, some discrepancies between
predicted and observed yields and wine peculiarities could occur. If the model used to
forecast the effects of climate change on wine quantity and quality is able to consider all the
physiological and phenological phenomena involved in these modifications, these
discrepancies can be attributed to the human component.
This paper aims to achieve the following objectives. As a first, it aims to analyse the
relationship between the climate and the grapevine physiology and phenology, highlighting
which components are relevant and how the different phenomena are related each other.
Moreover, it is devoted to study the effects of spatial contexts, vines, and vintages on the
berry composition and the grape production in order to highlight the circumstances in
which climate change can become an opportunity for the wine industry. In fact, climate
changes can generate improvements of the wine quality in delimitated spatial contexts and
for specific varieties. A second objective of the research is the analysis of factors that are
responsible of discrepancies between predicted and observed yields at the farm level.
In order to achieve these objectives the Moldavian viticulture is considered as case study.
Moldavia is one of the most important Rumanian viticulture areas, especially for the
production of white wine. In this area several local and international grape varieties are
cultivated. Moreover, weather and soil characteristics are different between the northern
and the southern counties. As a consequence, the case study appears particularly suitable
for the assessment of the climate change impacts on the viticulture.
The rest of the paper is articulated as follow. Section 2 concerns the methodology and
section 3 reports and discusses the results. Section 4 concludes.
1. Methodology
The study adopts an interdisciplinary approach. It analyzes data about climate, grape
physiology and phenology, berries quantity and quality, and wine quality, and estimates the
correlations between different classes of indices. Table 1 and 2 report these indices.
Spearmans rank correlation coefficients were calculated to analyze significance, direction
and intensity of each relationship. Only results on a selection of indices are reported in this
paper. The selected indices are highlighted in bold in Table 1 and 2.
An ANOVA analysis was carried out in order to determine the factors influencing the value
of each index (Table 3). A different specification was adopted in relation to the type of
index and the nature of available data.
Yields were estimated using data collected from experimental vineyards, which are
compared with farms data in order to highlight the presence of discrepancies due to the
effects of the human component. Yields for the experimental vineyards were determined at
the harvest time.
Climatic, physiological and phenological data concerning the growing periods 2009-10,
2010-11 and 2011-12 were collected at different times of the growing season in three
experimental fields, respectively located in Iasi, Cotnari and Torgu Bujour. Seven different
varieties (Babeasca, Francusa, Grasa de Cotnari, Riesling Italian, Feteasca Alba and Regale
and Tamaiosa Romaneasca) are cultivated in these experimental fields. Harvested grapes
11

were analysed to assess quality and quantity indices. Moreover, the grapes were fermented
to produce wine and it made possible to measure also oenological parameters.
Data on farm characteristics, climate change winegrowers perceptions and their propensity
to adopt specific strategies were collected through a survey carried out on a sample of 55
winegrowers, with 99 vineyards located in the Moldova wine region. Respondents were
chosen among the associates of the Romanian Asociatia Producatorilor si Exportatorilor de
Vinuri (APEV). Data concerns three consecutive years (20102012). The sample is
representative of the statistical population of Moldova winegrowers.

Table 1 Bioclimatic indices

Index

Reference

Formula

Description

((Tavg-10C)* Ie*10^-6)

Real
heliothermic
index

Branas (1974)

Hydrothermic
coefficient

Branas et al.
(1946)

This index indicates the interaction

Tavg: Average temperature*; between light and temperature.
Ie: annual effective insolation
(Tavg* Pgs)

Bioclimatic
viticulture
index

Costantinescu et
al. (1964)

Oenoloclimatic
aptitude index

Aridity index

Teodorescu
(1977)

Tavg: average temperature*;

Pgs: precipitations (mm)*
(T*I)/(P+gg+10)
T: sum of the temperature
degrees*; I: the hours of
effective sun exposure*; P:
precipitation*;
gg: length in days of the
growing period.
T+I-(P-250)
T: sum of the temperature
degrees*;
I: the hours of effective sun
exposure*; P: precipitation*
P/(Tm + 10)

De Martonne
(1926)

P: total annual precipitation;

Tm: mean annual
temperature.
* measured during the period 01.04-30.09.

This index refers to the interaction of

temperature, light and humidity.

This index refers to the interaction of

temperature, light and humidity
considering the length of the growing
season.

This index is used for establishing the

degree of climatic favourability of a
region for grape anthocyanins
synthesis - for the production of red
wines.

This index estimates the degree of

aridity of an area for one year.

Table 2. Physiological, phenological, grape quality and quantity, and wine quality
indices
Class of indices
Physiological
indices

Phenological
indices

Index
Photosynthesis rate
Water Use Efficiency
Length of the I^ phase: from bleeding/weeping to
budburst
Length of the II^ phase: from budburst to flowering
Length of the III^ phase: from flowering to fruit set
Length of the VI^ phase: from fruit-set to veraison
Length of the V^ phase: from veraison to bunch
maturation (harvesting)
Length of the growing season
12

Unit of measurement
molm-2 s-1
ml/mmol

Days

Class of indices
Grape
indices

quantity

Grape
indices

quality

Wine
indices

quality

Index
Yield/plant
Weight of the bunch (WB)
Predicted yield
Relative fertility (RF)
Relative productivity (RP)
Sugar content
Total acidity
Gluco-acidimetric index
Alcoholic content
Total acidity
Density (at 20C)
Sugar content
Dry extract
Total sulfur dioxide

Unit of measurement
kg
g
t/ha
n.inflorescences/n.shoots
RF*
g/l
g/l of tartaric acid
Sugar content/Total acidity
% vol
g/l of acetic acid
g/ml
g/l
g/l
mg/l

Table 3. ANOVA by class of indices

Group of indices as a proxy of:
Climate

Type of ANOVA
Two-way

Grapevine physiology

Four way

Grapevine phenology

Three way

Grape quantity

Three way

Grape quality

Three way

Wine quality

Three way

Variables
Experimental field
Vintage
Cultivated grape variety
Experimental field
Vintage
Phenological phase
Cultivated grape variety
Experimental field
Vintage
Cultivated grape variety
Experimental field
Vintage
Cultivated grape variety
Experimental field
Vintage
Cultivated grape variety
Experimental field
Vintage

2. Results
Results of the Spearmans correlation analysis are reported in Table 4. Climate affects
positively the grape physiology, both in terms of Photosynthetic Rate (PR) and Water Use
Efficiency (WUE). The correlation coefficients between the Bioclimatic viticulture index
and PR and WUE equal 0.6986 and 0.6595 respectively. These physiological processes are
also positively correlated to each other: an improvement of the PR implies a better
efficiency in the water usage ( = 0.9204).
The grape quality is affected by the climate in terms of total acidity ( = 0.7205), due to its
effects on the photosynthesis and the plant water balance. PR and WUE are significantly
and positively correlated with the grape total acidity. The Spearman correlation coefficients
equal to 0.7838 and 0.7725 respectively. The grape sugar content is not significantly
affected by climate and plant physiology and phenology. This result is confirmed also using
all the others climatic indices. The climatic factors that should affect the grape sugar
content are not constraints in the study area. This is also supported by non-significant effect
of climate on the grape quantity. The analysis shows that the yield is also independent of
the length of the growing season, and of the grape phenology. The quantity of grape is
significantly correlated only with the grape sugar content ( = -0.4088).
13

The climate affects the wine quality: an increase of the bioclimatic viticulture index is
associated to an increase of the wine alcoholic content ( = 0.5896) and to a decrease of the
wine sugar content ( = -0.4227). The latter depends also on the grape total acidity ( = 0.3738).
The climate affects the duration of the cycle of production, which is inversely correlated to
the bioclimatic viticulture index ( = -0.5861). The grape phenology also affects the grape
total acidity: the value of the correlation coefficient suggests that in the presence of a longer
cycle, the grape presents a lower value of the total acidity ( = -0.6352). The length of the
growing season, seems to affect also the wine sugar content ( = 0.3667).
Table 5 reports the results of the ANOVA analysis. The index variability depends, for the
majority of the groups of indices, on the vintage, which can be considered a proxy of
climate conditions. The vintage explains the higher quote of variability of all the
physiological and phenological indices and some of grape quality (total acidity and glucoacidimetric index) and wine quality indices (dry extract and total sulfure dioxide).
Conversely, the variety seems to be an important factor in the explanation of all the yields
indices, such as the grape sugar content and the wine total acidity. The spatial context does
not play a relevant role. It explains a little part of the index variability for the bioclimatic,
the physiological and some of the production quantity indices (yield/plant; weight of bunch
and relative productivity). This factor significantly explains some wine quality indices, such
as the alcoholic content, the wine density and the dry extract.
Table 6 reports the observed and predicted yields at the farm level. Results show that the
growing period 2009-10 determined positive production performance for all farms, except
for those who cultivate the Francusa variety, which is the only one with observed yields
lower than predicted yields (-1.33 t/ha). The other two years were characterized by low
production performances compared to expectations. The varieties Italian Riesling (-6.43
t/ha), Feteasca Alba (-4.19 t/ha), and Grasa de Cotnari (-2.24 t/ha) show the worst
performance for the year 2010-11, and the varieties Francusa (-5.71 t/ha), Italian Riesling (2.27 t/ha), Feteasca Regala (-2.15 t/ha) and Feteasca Alba (-1.21 t/ha) for the year 2011-12.
Figures 1, 2 and 3 report temperatures,, precipitations and sunshine hours data measured
during the three years considered in this analysis. Weather indices show that the grape
growing period 2009-10 was a rainy year, whereas the last two years were characterized by
an increase of the temperature range and sunshine hours.
As a consequence, in years characterized by weather conditions that favour best production
performance (rainy years) farms yields are higher than expectations. Oppositely, such as
for years 2010-11 and 2011-12, observed yields are lower than expectations.
Table 8 shows that these relationships are significant. In fact the Spearman correlation
coefficients among temperature, precipitations, and the difference between the observed
and the predicted yields are all significant assuming <0.01. In particular the yield gap
increases if precipitations increase ( = 0.400) and decrease if temperatures increase, both
for the average ( = - 0.234), the maximum ( = -0.199) and the minimum ( = - 0.327)
value. The correlation with the sunshine hours, oppositely, is un-significant.

14

Table 4. Spearman correlation coefficients () between indices

Bioclimatic
viticulture
index

Photosynthesis
rate

WUE

Photosynthes
is rate

0.699 *

WUE

0.660 *

0.920 *

Length of the
growing
season

*
0.586

-0.813 *

*
0.718

0.045

-0.033

0.044

Yield

Grape sugar
0.086
content
Grape total
0.720
acidity
Alcoholic
0.590
content
Wine sugar
content 0.423
Legenda: *significant at

Length of
the
growing
season

Grape
total
acidity

Alcoholic
content

0.168

0.237
*
0.784 * 0.772 *
*
0.635
*
0.261
0.281
0.127
*
**
-0.326
0.367
0.215
*
<1%; ** significant at <5%.
0.033

Grape
sugar
content

Yield

0.036

- *
0.409 *
0.126

-0.227

0.324
0.178

-0.068

0.310

-0.193

- *
0.374 *

0.091

Table 5. Percentage of variance explained by factors selected through the ANOVA

Class on
indices

Index
Heliothermal
index

Experimental
field

Vintage

5% (*)

92% (*)

3%

7% (*)

76% (*)

17%

7% (*)

72% (*)

21%

2% (*)

91% (*)

7%

0%

88% (*)

12%

2%

7% (**)

28% (*)

3%

60%

5%

5% (*)

21% (*)

5% (**)

64%

2%

16% (*)

46% (*)

36%

1%

18% (*)

22% (*)

59%

13%

3%

14% (**)

70%

2%

1%

87% (*)

10%

2%

16% (*)

46% (*)

36%

Variety
real

Hydrothermal index
Bioclimatic
indices

Bioclimatic viticulture
index
Oenological aptitude
index
Aridity index

Physiological
indices

Photosynthesis rate

Water Use Efficiency

(WUE)
From
bleeding/weeping to
budburst
From budburst to
Phenological
indices (length flowering
in days of each From flowering to
phase of the fruit set
growing
From
fruit-set
to
season)
veraison
From veraison to
bunch
maturation
(harvesting)
Yield/plan
Quantity
indices

Phenological Resid
phase
ual

35% (*)

11% (*)

33% (*)

21%

Weight of the bunch

79% (*)

6% (*)

4% (*)

11%

Predicted
hectare

37% (*)

4%

28% (*)

31%

51% (*)

4%

6%

39%

yield

Relative fertility

per

15

Class on
indices

Variety

Experimental
field

Vintage

Relative productivity

28% (*)

20% (*)

8%

44%

Sugar content

17% (**)

4%

1%

78%

18%

0%

54% (*)

28%

Index

Grape quality Total acidity

indices
Gluco-acidimetric
index

Phenological Resid
phase
ual

14%

3%

25% (*)

58%

Alcholic content

12%

35% (*)

16% (*)

37%

Total acidity

33% (**)

9%

9% (**)

49%

9%

26% (*)

26% (*)

39%

16%

17%

12% (**)

55%

6%

22% (**)

25% (*)

47%

56% (*)

27%

Wine quality Density

indices
Sugar content
Dry extract
Total sulfur dioxide

13%
4%
Legenda: *significant at <1%; ** significant at <5%.

Table 6. Predicted and observed yields (t/ha)

2010

2011

2012

Predicted

Observed

Predicted

Observed

Predicted

Observed

Feteasca Alba

7.17

7.37

11.85

7.66

8.83

7.63

Feteasca Regala

7.18

7.73

6.40

8.00

10.29

8.14

Francusa

8.67

7.33

7.75

7.83

12.71

7.00

Grasa de Cotnari

5.76

6.71

9.37

7.13

6.57

6.43

Riesling Italian

4.95

6.08

13.45

7.02

9.55

7.28

Tamaioasa Romaneasca

7.18

9.17

9.00

9.20

8.31

9.13

Fig. 1 Average, minimum and maximum temperature per year

Fig. 2 Precipitations per year, during the growing season.

16

Fig. 3 Sunshine hours per year during the growing season,

Table 7. Spearman correlation coefficients () between the weather variables and the yield gap

Precipitations during the growing season

Sunshine hours
Average annual temperature
Minimum temperature observed during the growing season
Maximum temperature observed during the growing season

Yield Observed Yield

0.400
0.053
-0.234
-0.327
-0.199

Predicted

*
*
*
*

Legend: *significant at <1%; ** significant at <5%.

Concluding remarks
This article reports the main results of the estimation of impacts of climate change on the
viticulture industry using an interdisciplinary approach. Climatic, phenological,
physiological, viticulture and oenological indices were analysed to highlight significance,
direction and intensity of the relationships between these dimensions. The effects of
vintage, variety, spatial context and phenological phase were also accounted to evidence the
circumstances in which wine performances should improve, both in quantitative and
qualitative terms. Finally, annual predicted yields estimated by experimental vineyards
data were compare to observed yields at farm level in order to explain the role of the human
factor and to analyse the efficiency of strategies implemented by wine growers to face
climate change impacts.
The results offer different points of discussion. As a first, the adoption of an
interdisciplinary approach is required in order to analyse all the relevant phenomena that
impact on the response of the wine growers to the weather scenario and the climate. In
relation to the specific context used as case study (Moldavian viticulture, Romania), the
climate affects the quality of wine, both in terms of alcoholic and sugar content. The
analysis highlights the presence of a positive correlation between the bioclimatic viticulture
index and the grape physiology, both in terms of photosynthesis rate and efficiency of water
use. Oppositely, an increase of this climatic index is associated to decreases of the length of
the growing season. The yield seems to be independent on the climate, probably because
precipitations, that play a key role in the determination of this index, is not a constraining
factor for the Moldavian viticulture.
The variability of the grape yield parameters depends on the variety. Only in few cases the
vintage plays a relevant role (yield/plant; predicted yield per hectare). The variability of
oenological parameters is most dependent on the annual weather scenario. The vintage has
a primary role in explaining the variability of the sugar content, the density and the total
sulphur dioxide. The spatial variability is important to explain some indices (alcoholic
content; density; dry extract). Finally, the variety is relevant in the explanation of the
variability of the wine total acidity.
17

The comparison between observed and predicted shows the relevant role played by the
human component on the wine production performance. During the years characterized by
favorable weather conditions observed yields exceed expected yields for a large part of the
varieties. Oppositely, during the years suitable to obtain best quality wines, the observed
yields are lower than expected yields.
The research also presents limitations that should be considered in order to address future
development. It does not consider the differences between experimental vineyards and
farms considered in the survey as it concerns the type of soil and the vineyard training
system. Both these factors could play a relevant role in the determination of the yields.
The analysis could be further improved through a more detailed study about the role of the
human component mainly in relation to the winegrowers ability in the adoption of
technological choices and management strategies suitable to face the climate change
impacts. Also the heterogeneity in terms of educational level, perception of climate change
impacts and farm structure aspects should be considered in more detail. As it concerns the
analysis of the relationships between the climate, grape physiology and phenology, grape
and wine performances, the adoption of a structural equation models could improve the
quality of results because it would allow the study to simultaneously analyze the effects
determined by all the considered dimensions.
Despite these limitations, the study offers useful suggestions for policy makers in order to
promote the adoption of policies aimed to increase the resilience of the Romanian
viticulture to climate change. In the same time the study contributes to define guidelines for
farmers aimed to stimulate the adoption of best practices to face the climate change impacts
on the Romanian wine industry.
References:
1. Ashenfelter O., Storchmann K. (2014). Wine and Climate Change, AAWE WORKING
PAPER
No.
152
(http://www.wine-economics.org/aawe/wpcontent/uploads/2014/03/AAWE_WP152.pdf).
2. Ashenfelter O., Storchmann K. (2010a). Measuring the economic effect of global
warming on viticulture using auction, retail and wholesale prices. Review of Industrial
Organization, 37: 51-64.
3. Ashenfelter, O., Storchmann K. (2010b). Using a hedonic model of solar radiation to
assess the economic effect of climate change: the case of Mosel valley vineyards. The
Review of Economics and Statistics, 92(2): 333-349.
4. Battaglini, A., Barbeau, G., Bindi, M., & Badeck, F.W. (2009). European winegrowers'
perceptions of climate change impact and options for adaptation, Regional
Environmental Change, 9 (2), 61-73.
5. Bernetti J. Menghini S., Marinelli N., Sacchelli S., & Alampi Sottini V. (2012).
Assessment of climate change impact on viticulture: Economic evaluations and
adaptation strategies for the Tuscan wine sector, Wine Economics and Policy, 1: 73-86.
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impact of future climate scenarios on yield and yield variability of grapevine, Climate
Research, 7 (3), 213-224.
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change, Canadian Journal of Plant Science, 82 (4), 755-763. Chevet, J.-M., Lecocq, S.
and Visser, M. (2011). Climate, grapevine phenology, wine production, and prices:
Pauillac (18002009). American Economic Review: Papers and Proceedings, 101(3),
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Fraga H, Malheiro AC, Moutinho-Pereira J, Santos JA. (2013). Future scenarios for
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Variability of Vineyards in Northeast Portugal. 33rd International Symposium on
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Goals, Stresa, Italy.
Haeger, J., Storchmann, K. (2006). Prices of American Pinot Noir: climate, critics,
craftsmanship. Agricultural Economics, 35: 67-78.
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climate suitability assessment, Cercetari Agronomice in Moldova, XLVI (3/155): 95106.
Lereboullet, A.-L., Beltrando, G., Bardsley, D.K., & Rouvellac, E. (2013). The
viticultural system and climate change: coping with long-term trends in temperature
and rainfall in Roussillon, France, Regional Environmental Change, pp. 1-16. Article
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Marinoni O., Navarro Garcia J., Marvanek S., Prestwidge D., Clifford D., Laredo L.A.
(2012). Development of a system to produce maps of agricultural profit on a
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environmental stresses: Insights from winegrowing in Northern California, Global
Environmental Change, 22 (2), 483-494.
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modeling of grapevine yield in the Port Wine region under present and future climate
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Santos, J.A., Grtsch, S.D., Karremann, M.K., Jones, G.V., & Pinto, J.G. (2013).
Ensemble projections for wine production in the Douro Valley of Portugal, Climatic
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tehnologica a soiurilor de vita de vie, Gradina, Via si Livada, 9 (10): 35-43.
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future of South Africa's wine industry, International Journal of Climate Change
Strategies and Management, 4 (4), 420-441.

19

CHANGING MANAGEMENT PARADIGMS IN NATURE CONSERVATION

Nicolae ISTUDOR1, Constantin MITRU1, Emilia IAN1,2, Daniela MANEA1,2
1
The Bucharest University of Economic Studies, Romania
2
Institute of National Economy, Bucharest, Romania
The Bucharest University of Economic Studies; email: [email protected], Str. Piata Romana, no.6,
Sector 1, Bucharest, Romania

Abstract
The crisis of biodiversity is one of the many crises that started at the turn of the millennia.
The concrete form of manifestation is still debated, but there is a relatively great consensus
on the extremely high decay rate as well as on the urgent need for action. The action
strategy is outlined today with a strong economic component, after the recognition of
market mechanisms as being the most effective tools in implementing biodiversity
protection policies. This paper presents an analysis of successive changes occurred within
management paradigms in nature conservation, starting with the identification of the
theories underpinning the economic approach of ecosystems and continuing with the
description of the mechanisms regarding the implementation process of the policies for
nature conservation. Finally, based on the results of the analysis, the succession of
management paradigms in nature conservation is emphasized.
Keywords
ecosystem services, nature conservation, management approach
Introduction
The history of paradigms for managing resources started with the agricultural vision that
led to the restocking approach which was then supplemented by habitat and renewal
management, coded in scientific management, reinvented as adaptive management and
improved with business management, in order to create management by objectives and total
quality management (Bottom, 1996). This evolution can be interpreted as the expression of
the inability to provide sustainable solutions, as well as the expression of a continuous
search for ensuring a balance between conservation and usage. The economic approach of
nature has its origins in several theories developed since the eighteenth century. By
contrast, the concept of ecosystem services is relatively recent, being close to the beginning
of consistent environmental concerns, i.e. the 1970's.
A complete and detailed analysis of the conceptual evolution (fig.1) was carried out by
Gomez-Baggethun et al. (2010), who proposed dividing the process into three stages:
- origin and genesis; consolidation; building market instruments.
Nature conservation is subordinated, as a matter of public policy, to the environmental
policy. Therefore, implementation of this policy will appeal to the same set of instruments
(table 1).
The way in which these tools are positioned towards several characteristics that relevant for
the achievement of closely correlated tools combinations with political objectives
(constraint, visibility, automaticity, direct action) is presented in table 2.
Implementation of environmental policy is a widely debated topic in the literature, so that
we do not focus on a description or analysis of the tools used, but on highlighting specific
aspects for a domain becoming more important for the international environmental agenda
the conservation of biological diversity.
20

The economic expression of ecosystem services value

Connection between economy and ecosystem services is intended to create a system in
which the contributions of ecosystems to human well-being are assigned an economic
expression of value, becoming the subject of market negotiations. This expression is
justified on several considerations:
- decision making process;
- the relationship between biodiversity and poor population;
- compliance with economic principles;
- aligning incentives with the distribution of biodiversity and ecosystem services benefits;
- building a more efficient economy.
Literature begins to delineate the
beneficial functions of ecosystems
as ecosystem services highlighting
social dependence on ecosystems
(the 1970's)

Expansion of
environmental protection
based on market
mechanism/privatization
cycle (late 1980's)
1980

1970

ORIGIN AND GENESIS

GeorgescuRoegen,
The entropy
law and the
economic
process
(1971)
Odum,
Environment
power and
society
(1971)
Hardin,
The
tragedy of
commons
(1968)

Ecosystem services enter

the political agenda and
payment schemes are
intensively sustained
(early 2000`s)

Clarification of ecosystem
services in the literature on
sustainable development
(1990s)
1990

2000

ENTRANCE ON THE SCIENTIFIC AGENDA

Setting WRI
Oil
(1982)
crisis
(1973)
Costanza,
Sachs,
Embodied
Ecoenergy of
development
services
(1974) Daily,
(1980)
Zero
economic
growth
(1977) Second oil
Stockholm
crisis
Conference
(1979)
(1972)
Passet,
Meadows,
Economy and
The limits to
living (1979)
growth
(1972)

Bruntland,
Costanza
Our
and Daily,
common
Natural
future
capital
(1987)
(1992)
MartinezAlier,
Ecological
economics
(1987)
Pearce,
Global
Weak
sustainability Biodiversity
Assessment
and natural
(1993)
capital

ENTRANCE ON THE POLITICAL AGENDA

Daily,
Nature's
Services
(1997)
Costanza et al,
Valuation of
global
ecosystem
services (1997)
Payments for
environmental
services
in
Costa Rica
(1997)

(1989)

2010

Special
issue of
Ecological
Economics
Journal
(2002)
MEA
publication
(2003)

Stern Review:
The Economics
of Climate
Change
(2006)

Results of
MEA
reports
(2005)
Millennium EU
Development Emissions
Trading
Goals
System
(2000)
(2005)

TEEB
Postdam
Initiative
(2007)
Beyond
GDP
(2007)

Source: Gomez-Baggethun, E., de Groot, R., Lomas, P.L., Montes, C. (2010), The history
of ecosystem services in economic theory and practice: from early notions to markets and
payment schemes, Ecological Economics, 69, pp.1213.
Fig.1 Stages of the concept of ecosystem services in modern historyNature
conservation policy implementing
Table 1 Implementation Tools
Tool
Legislation
Market

Mechanism
Constraint
Change

Public Law
Direct regulation
Taxes
Subsidies

Communication
and information

Persuasion

Evaluation of
ecological impact
Duty to inform
Sponsorship of
environmental NGOs
Eco labels

Private Law
Contracts
Liability
Property

Participation
-

Agreements
Education
Information
campaigns

Source: Rojanschi, V., Bran, F. (2002), Politici i strategii de mediu, Editura Economic,
Bucureti, pp.47.
21

Table 2 Characteristics of political tools

Political tool/dimension
Prescribing
Regulations
Penalties
Taxes
Property rights
Land
use
Moratorium
Tradable permits
Payments
Taxes
Expenditures
Grants
Privileges
Direct payments
Public information

Constraint

Direct
action

Visibility

Automaticity

High

Low

Low

Medium

Medium

Medium

High

Medium

High
Medium

Low
Medium

Low
Medium

High
Medium

Low
Medium
Low
Low

Medium
High
Medium
High

High
High
Low
Low

Medium
Low
Medium
High

Low

Medium

Low

Low - High

Source: Kemkes, R.J., Farley, J., Koliba, C.J. (2010), Determining when payments are an
effective policy approach to ecosytem service provision, Ecological Economics no.69,
pp.2069-2074.

The succession of management paradigms in nature conservation After Grumbine (1997),

the factors that favored the integration of social dimension into the management paradigms
of nature conservation are the following:
- the acceleration of biodiversity crisis;
- the fact that the implemented policy initiatives did not prove a real capacity to slow down
the degradation process of biodiversity;
- the development of conservation science (the biology of conservation);
- poor security provided by law regarding the relationship between natural ecosystems and
the pressure factors (industrialization, population growth, affluence);
- increasing of environmental activism and criticism of the policies used in the management
of natural resources;
- the reduced public involvement in the decision making process;
- changing the social perception on the relationship between man and nature.
Nature conservation and the use of natural resources are processes that are facing each
other under different management paradigms. Among the most common management
paradigms we underline:
- dominant use;
- multiple use;
- environmentally sensitive multiple use;
- ecosystem approach to natural resource management;
- ecoregional management (table 3).

22

Key principles

Spatial
demarcation

Biological
objectives

Objectives

Table 3 Succession of management paradigms in nature conservation

Ecosystem management
Ecosystem
Environmenta
approach to
Dominant use Multiple use
Ecoregional
lly sensitive
natural
management
multiple use
resource
management
Promotion of
singular human
use

Promotion of
multiple human
use

Promotion of
multiple human
use in
compliance with
ecological
constraints

Promotion of
ecological
integrity along
with the
sustainable
human use

Species having
economic value

Species and
landscapes with
economic value,
composition

Multiple
species,
composition,
structure

Species and
ecosystems;
composition,
structure and
functions

Management
unit

Management
unit

Management
unit, specific to
problems

Regional scale,
specific to
problems,
ecological
criteria

Maximum
harvest;
protection of
production
means

Maximum
sustainable
harvest,
economic
feasibility

Sustainable
harvest,
minimizing the
environmental
impact and
cumulative
effects,
protection of
species
diversity,
consideration of
economic costs;
public
involvement

The ecosystem
is a metaphor
for holistic
thinking;
systemic
perspective;
spatial and
temporal
scales;
complex and
dynamic
ecosystems;
collaborative
decisionmaking
process;
explicit
approach to
uncertainty;
interorganizati
onal
cooperation

23

Ecoregional
management
restoration and
maintenance of
ecosystem
functions,
together with
the sustainable
human use
Landscapelevel
ecosystem
functions
(ecological
processes)
Landscape
units,
ecological
delineated

The ecosystem
is an
integrative
spatial unit;
complex and
dynamic
ecosystems;
decentralized
collaborative
decisionmaking
process at
ecoregional
level; explicit
approach to
uncertainty;
reorganization
of
administration
on ecological
limits

Multiple use

Industrial
production
platform

Industrial
production
platform

Anthropocentric

Anthropocentric

Limited
production
platform;
landscape
damaged by
management
actions, that
affects
management
Anthropocentric

Constructions
that are
specific to
problems;
focus on
interactions
dominated by
biotic elements

Real
geographical
locations
defined as bio
or geo
ecosystems

Biocentric

Ecocentric

Ethical perception

Ecosystem concept

Dominant use

Ecosystem management
Ecosystem
Environmenta
approach to
Ecoregional
lly sensitive
natural
management
multiple use
resource
management

Source: Yafee, S.L. (1999), Three faces of ecosystem management, Conservation Biology,
vol.13, no.4, pg.717.

The social dimension of nature conservation becomes important along with the expansion
of the multiple use paradigm that captures the need to preserve the "production platform"
ensuring human needs satisfaction. The following management paradigms pay more
attention to this dimension by formulating objectives in relation to human activities and
through encouraging public participation in the decision making process.
Thus, ecosystems management joins other environmental concepts within environmental
protection which enjoy wide acceptability and good representation in policy development,
without any consensus regarding their content. "Sustainable development" and "social
responsibility" are concepts well known for the large number of definitions as well as for
the fact that there are very few opponents. "Ecosystem management" has many definitions
and there are opinions according to which the concept was easily accepted because it was
interpreted differently, depending on the interests of the institutions involved (Yafee, 1999).

24

Conclusions
In this context, biodiversity and ecosystem services are natural assets which play a key role
in the economic strategies to promote development and prosperity. The development and
strengthening of policies for the transition to an economy based on efficient use of
resources is the way forward. MEA (Millennium Ecosystem Assessment) demonstrated the
importance of natural capital for the survival and the well-being of mankind. Other baseline
studies - Global Environment Outlook (GEO-4 UNEP, 2007); The fourth report of the
Intergovernmental Panel on Climate Change (IPCC) regarding climate change (IPCC,
2007); Environmental Outlook 2030 (OECD, 2008); International Assessment of
Agricultural Knowledge science and technology for development (IAASTD, 2009);
Millions submerged report (World Bank and FAO, 2008); World Water Development
Report (UN WWAP, 2009), draw similar conclusions and highlight the threats to natural
assets. From an economic perspective, all these degradation processes generate costs that
should be compensated through the decisional alternatives considered in policy
development.
Acknowledgment
This work was carried out by the Partnership in priority areas - PN II, developed with the
support of MEN-UEFISCDI, project no. 329/2014
References
1. Gomez-Baggethun, E., de Groot, R., Lomas, P.L., Montes, C. (2010), The history of
ecosystem services in economic theory and practice: from early notions to markets and
payment schemes, Ecological Economics, 69, pp1209-1218.
2. Rojanschi, V., Bran, F., Grigore, F., Ioan, I. (2006), Cuantificarea dezvoltrii durabile,
Editura Economic, Bucureti.
3. Yafee, S.L. (1999), Three faces of ecosystem management, Conservation Biology,
vol.13, nr.4.
4. IPCC (2007), Fourth Assessment Report: Climate Change 2007. The Physical Science
Basis,
http://www.ipcc.ch/publications_and_data/ar4/wg1/en/figure-spm-3.html,
10.09.2014.

25

PROPOSALS REGARDING THE FOCAL POINTS OF A FUTURE STRATEGY

FOR THE DEVELOPMENT OF RURAL SPACE AND OF AGRICULTURE IN
ROMANIA
Gabriel POPESCU
Faculty of Agro-Food and Environmental Economics, Bucharest University of Economic
Studies; email: [email protected], Str. Mihail Moxa 5-7, Sector 1, Bucharest,
Romania
Abstract
Agricultural holdings that are currently functional in Romania are contrasting in terms of
economic performance and ability to secure a harmonious rural livelihood. Moreover,
agriculture is unable to value the tremendous economic potential of land leaving most of
the rural population in the shaded corner of poverty. A closer look to facts and figures
regarding cropping, agricultural holdings, and rural population reveals that the current
status and trends are not acceptable. Building on this we outline a number of proposals
grouped in several categories, which are relevant for the main economic and social
relations and processes, toward a future strategy for the development of agriculture and
rural area. These proposals highlight strategic interventions that will improve the
functionality of the whole system. A special focus is granted for cooperation, since this
creates a favourable ground for the harmonious merger of commercial and civil interests
toward an increased resilience of agriculture and rural areas against the volatility of
economic system and the interference of disturbing short term political interest that are
favoured by this.
Keywords: agriculture, property rights, family, land market, cooperation
Introduction
Romania's agriculture is one of the country's most important economic sectors that is
supporting, first of all, the rural population representing a significant part of the total
population, but also the national economy. The disintegration of the economic relations
established during the previous political regime left room for uncoordinated processes
resulting in major dis-functionalities that are deepened within vicious circles developed in a
volatile economic and political framework (Popescu, 2007). Taking in account the current
status and its causes, historical background, but also major doctrinaire lines based on
verified theoretical knowledge (Popescu, 2013), there are outlined a number of proposals
for the focal points a future strategy in this field. These proposals are organized in several
categories that are relevant for the main economic and social relationships from agriculture
and the rural area and build on a vision of a performing agriculture deployed within a
multifunctional rural space with a meaningful contribution to sustainable development.
1. Family
In the rural area and consequently in agriculture the socio-economic and political focus
should be on the family, instead of the individual. The work in the household claims the
presence of the entire family, men and women, youth and elderly. That is why it cannot be
considered statistically as individual work (MacAskill, 2013; Small, 2000).
The responsibilities for specialization by labour division are generic, determined by custom,
that are built, in most cases, on experience, power, physical stamina and others. Therefore,
26

in some circumstances, woman can replace man or elder the young (and vice versa). This
obviously results in a lower effectiveness and takes longer, but the task or tasks are
completed.
2. Property over land
Firstly, agricultural policy should pursue, as priority, the maturation of property
relationships. There are a number of ideas that could lead to the strengthening of land
property regime. It is necessary to establish at the level of commune, as public body, of an
office of agricultural cadastre that will have the role to accelerate and to improve the
effectiveness of the works.
Transferring land books under the authority of judges to reduce the risks of recognizing
proprietorship by documents and facts that are contrary to the rule of law. Realizing a
standardized model system for outlining (by using landmarks) land patches in order to
create a stable and formally recognized regime of patches that takes in account their size
and position relative to relief and neighbourhoods. Homologating models for landmarks
that will mark the limits of properties (patches) since this would make possible the
homologation should be made at national level, by a commission that will comprise
topographers, jurists, IT specialists, architects, and others. The landmarks should contain
identification elements referring to the region, patch, owner and they should have colours
and shapes that are easily seen and could be identified by GPS systems.
A body of surveillance at commune level should be established, under the authority of
municipalities with responsibilities in the defence of properties, crops and yields against
attacks of wild and domestic animals, robberies or damages. Elaborating and applying a
responsible rule of law, even a harsh one, that defence property from any external
interference that could damage the boundaries, surroundings, crops, vineyards and
orchards, quality of the soil and others. Ruling the economic assessment of agricultural and
forestry land in order to substantiate economic categories that will be negotiated on the land
market (price, dividends, rent, royalties, rents). Establishing a body of assessment experts
specialized in the economic valuation of agricultural and forestry lands.
Defining and making operational, in the normal sense, the pre-emption regime for the
transaction of patches in the favour of co-owners, neighbourhoods, and state. The tasks of
responsible and effective defending, maintenance, execution and exploitation of land
improvement works that are on the property should be compulsory. A register in the
responsibility of each mayor should be established. This will regard the litigations on
property regimes determined by robbery, damages, harvest losses, boundary damages,
entrances on land and others.
Increasing the responsiveness of local public authorities especially of municipalities and
police in the operative solving of property related litigations and punishment of the
culpable. Increasing the responsibility of local authorities for land that is not cropped or is
abandoned by owners and transforming them in state owned farm models that will be
established and operated following the example of the farms existing in the inter-war period
in the Romanian agriculture.
Secondly, the agricultural policy should shape the land market. This process is compulsory
toward performance agriculture by the intensification of cropping. The proposals related to
the land market are the following:
- Elaborating a legal framework that will build in a coherent and united manner on
the actions occurring on the land market (selling-purchasing, cooperation,
association, rent, land-lending, life annuity) toward increasing the size of
agricultural holdings;
27

Enforcing the rule of law on the merging of patches by including this action in the
category of land improvement. It should be established a local land exchange
market for exchanging patches and recognizing the exchange based on a value
equivalence;
- Enforcing the rule of law for land purchasing by the state in order to establish farm
models as entities that promote technical progress for local farmers and further for
their selling to young people (there will be preferred professionals with higher
education in agriculture and with entrepreneurial skills) after they are functional
within financing programs with national support.
Thirdly, the agricultural policy should define its positions from doctrinaire and legal points
of view, regarding the relations between the small and large agricultural holdings. In
Romania the small land proprietorship is prevailing from the point of view of the number of
holdings and of the land that is owned, but it is outperforming in terms of effectiveness and
economic efficiency. Its advantages are social in nature, including job opportunities and
providing food for the family of the farmers. Further, the large land proprietorship is
represented by a small number of holdings (around 31 thousands), it is performing ass
effectiveness and economic efficiency, covers 45% of the country's arable land, but
generates and will generate major socio-economic unbalances. In some areas these are
already exist with repercussions that are difficult to be estimated on the country's stability
and independence.
3. The market
Focusing of agrarian and agricultural policies on commercial family holdings is necessary
(Popescu, 2013; Rmniceanu, 2002). In this respect it should be created a modern market,
in complete accordance with the European type, but that is taking in account the
behavioural specificity of the peasant holding.
Research resources should be used for the creation and expansion of functional local market
models, having as departing point the already existing transaction centres that belong to the
distribution chains. Research also should outline a national system, which is flexible,
dynamic and adapted to local specificities for the collection and storage of exceeding
products of peasant holdings. This system should also make the linkage between these
entities and the urban agri-food markets and with the industrial processing capacities.
4. Research
There is necessary to outline a knowledge market that will host operative and efficient
linkages between producers (researchers) and consumers (agricultural holdings) of new
information that generates added value (Popescu, 2007). Currently the knowledge market is
not available for the most of the peasant holdings. An important role should be played in
this model by the cooperative structures, which are the most appropriate representatives of
farmers market interests for the information producers (researchers).
5. Cooperation
The future architecture of the cooperative sector should be outlined taking in account a
number of theoretical milestones.
Implementation and making dynamic of a real and functional cooperative sector of the
economy, necessitates, firstly, a re-launch of growth in the industrial sector. The
cooperative ownership against with the other two forms of ownership determined by
economy, individual private ownership and public ownership, is not in alternative or
substitutability relations, but in an active partnership relation. The power of cooperative is
28

not a result of its propertys size or the one belonging to the associated members. The
power is expressing, firstly, the intensity of the relations between the cooperative and its
members, and secondly, the intensity of the relations between the cooperative and its
external market partners.
The cooperative must not be linked to the land. This will repeat the mistake of the
communists or will fall in the sin of communists. The cooperative must not be subordinated
to political power. In other terms it should be kept as far as possible from political interest,
despite its strong attractiveness. The cooperative system naturally has a larger capacity to
adapt to the public command compared to other private structures from the economy. The
prioritization of activities in a cooperative should consider only the economic, social, and
cultural interests, and disregard the political interests. The cooperative system's major
challenge is to preserve its neutral, equidistant position against economic policies and
through them against doctrines, legal institutions and public.
The activity of the cooperative should be comprised within the scope of the market (agrifood, financial, knowledge transfer) and not of the land market. The cooperative company
should fill the intermediate segment between the civil society organizations and the
commercial company. Thus, the first will be supported by the affirmation of civil rights and
freedom, while the second by increasing incomes and reducing expenses for farmers. The
cooperative principles should be applied in their completeness and unity for individualising
the system. That is why none of the principles recognized by the cooperative doctrine and
enforced by law should not be omitted or neglected.
The cooperative ownership is a private ownership, but is not an individual ownership. Is a
community ownership with rules that are subordinated to the interests of the group that
holds them. Is the property over that the only decision that is counting is the group decision,
not of somebody else's. Not even the state can interfere in the cooperative ownership.
Enrolling in a cooperative group should be based on criteria and procedures that are
underpinned by scientific foundation and act as selection and recruiting rules. These will
pursue unity of profiles, size, but also attitudes that demonstrate entrepreneurial spirit,
generosity, tolerance, desire for knowledge, aspiration for innovation and others. The
homogeneity of cooperative members, from the point of view of their size and economic
power, is a condition that guarantees the good functioning of the entity. Therefore a
cooperative that intends to be functional should not be made out of a mixture of large and
small farmers, but either of large or small farmers.
In a volatile economic system, fiscally unstable and that leaves room for abuses, as it is the
one in the rural area, there is the risk that the cooperative system will not proliferate or
develop appropriately. As effect of economic and social policies being in the responsibility
of public power, the current legal framework envisages mainly horizontal issues, focusing
on management and less on vertical relations.
The associations and cooperatives value exceeding agricultural yields. That is why they are
of no relevance for small land owners or individuals with no land. By association peasants
acquire power. Without this the current status will be perpetuated, meaning poverty and
autarchy. Association is sought for and accepted in extreme economic situations and not in
the intermediary ones. This is then poverty reaches unacceptable levels or then the market
enables fertile conditions for attractive gains.
The core of our reasoning for cooperation and association could be presented in a nutshell
in the following statement: both association and cooperation should not support labour
(there are not a supplementary labour force), but its outcomes (its gains), either it are
shaped as monetary incomes, important for the involved actors, or as profit, as ultimate goal
of commercial structures.
29

Conclusions
The development of agriculture and rural space in Romania is a high priority goal that is
underpinned by strong economic and social reasoning. Coordinating actions at various
levels within the framework of a future strategy is essential in order to overcome major disfunctionalities that continued to deepen during the last decades. This strategy should be
elaborated by considering the following focal points: family, land property, market,
research, and cooperation. Thus, interventions should consider as unit of labour the rural
family, instead of rural individuals due to the patterns of labour division in agriculture.
Further, the agrarian and agricultural policy will have to pursue the maturation of land
ownership, the development of the land market, the establishment of its position regarding
the ratio between large and small farms, the support of commercial agricultural holdings,
the development of the agricultural knowledge market, and the promotion of cooperation.
The later should deserve a special focus since it could be a key process for establishing a
proper ground for the harmonious interplay of commercial and civil interests toward an
increased resilience of agriculture and rural areas against a volatile economic system
triggering the interference of disturbing short term political interests.
References
1. MacAskill, J. 2013. Rurality the impact of social capital, Competitiveness of agrofood and environmental economy, G. Popescu, N. Istudor and D. Boboc (eds.), p. 9-13.
2. Popescu, G. 2007. Cooperarea n agricultur de la piaa funciar la transferal de
cunoatere, Iai, Terra Nostra.
3. Popescu, G. 2013. Probleme vechi, relaii noi n agricultur, Bucharest, Academiei
Romne.
4. Rmniceanu, I. 2002. Probleme structurale ale agriculturii romneti n perioada
aderrii la Uniunea European, IER, 6.
5. Small, G. 2000. An Aristotelian Construction of the Social Economy of Land, Sydney,
University of Technology.

30

THE ROLE OF FAMILY FARMS IN RURAL DEVELOPMENT OF THE REGION

Jeli SRETEN, Raji ZORAN, Jandri MERSIDA, Bojan DIMITRIJEVI, Branka
KALANOVI-BULATOVI
University of Belgrade, Faculty of Agriculture, e-mail: [email protected]
Nemanjina 6, 11080 Belgrade-Zemun,
Abstract
The Region of Western Serbia and umadija has favorable conditions for agricultural and
rural development due to the fact that it disposes of important resources such as: land,
livestock resources, manpower. However, numerous difficulties influenced the development
as a result of inherited property structure of farms, social structure of population, position,
function and role of agriculture in rural development, economic development, but also in
the development of agrar policy itself. Family farms represent the main subjects of
agricultural production, other activities and rural development. Potentials of family farms
of the region enable the members of farms and households to practice activities other than
agricultural production and therefore to influence rural development and development of
rural areas. Rural areas of the region with potentials have possibilities to produce more
food and develop other production related activities with the scope of enabling sustainable
socio-economic rural development, protection of natural resources from pollution, increase
of the land fertility and biodiversity preservation. Agriculture has a special place in
economic development of the region, especially because it represents an important source
of profit and jobs in its numerous branches, and furthermore, it plays the main role in rural
development enabling valorization of local resources and development of small and
medium business activities in different sectors. Regarding crumbled and weak private
sector of agriculture in the context of making conditions for a more balanced development
of rural areas, a rational solution is the one that would create possibilities for a family
farm to become equal with other economic entities in all aspects, in its status and position
in development and economic policies, with the aim of increasing food production and
therefore improvement of the development of rural areas and rural development. For this
reason, it is important to create conditions for the development of comparative advantages
of modern agricultue in rural areas of the region and more ballanced rural development.
Keywords: family farms, region, agriculture, rural development, food production, local
resources.
Introduction
Family farms of the region of Western Serbia and umadija with potentials such as: land,
livestock, manpower have a possibility of increasing agricultural production and of
developing of rural areas. Farms represent the main subjects of agricultural production,
other activities and rural development of the Region (Group of Authors, 2006).
The fact that family farms are undergoing changes is having influence on the development
of rural areas and rural development, making the members of farms to the position of
adjustting in order to survive (Jeli, Jovanovi, 2010). The main activity in rural areas of
the region is agricultural production, but no less important are other activities for which
conditions have been made with the aim of contributing to the development of rural areas,
rural development and food production.
31

The extent to which infrastructure in rural areas will be developed and improved and
instruments for the development and improvement of both agricultural production and other
activities will be provided will influence the development of rural areas, the upgrade of
quality of living of the Regions population and a more balanced rural development.
Aim and methodology of the study
This abstract has a goal to demonstrate the significance of family farms and their role in the
development of agricultural and food production and of other activities in rural
development of rural areas and rural settlements. Special attention is paid to family farms.
The aim of the study is also to illustrate the structure of family farms according to some of
their characteristics and based on statistics published by the Statistical Office of the
Republic of Serbia, other available sources and documents.
Potentials of family farms are significant, however, it is important to create preconditions
for the development of such rural settlements which already have certain possibilities and
potentials for agricultural development, food production, development of other activities for
which preconditions have been created, in order to influence more balanced rural
development (Jeli et al., 2011).
The basic activity of the family farms of the region is agricultural production, which means
that the members of farms and households which are predominantly agricultural practice
this basic activity. However, a growing number of farms and households are mixed,
meaning that, besides agriculture, they practice other types of activities and therefore help
improve the quality of living in a farm/household and develop rural areas.
The main method used in the study is a descriptive statistics method, applied by collecting
of relevant data which have then been organized based on geographic, temporal and
numeric characteristics. The mentioned method has been applied in monitoring of the
tendencies of the family farms land based on the way of using the land, structure of the
parcels, livestock and manpower.
Other methods, such as analysis of documents and comparative methods, have also been
used.
Results of the research
A farm holding is technically and economically independent production unit which has
unique management and where a company, an agricultural cooperative, an institution or
another legal entity, an entrepreneur or a family farm carries out agricultural production as
primary or secondary activity.
A family farm is operated by members of a family who practice agricultural production, as
primary or secondary activity and also:
- farms at least 50 ares ( 1.24 acres) of agricultural land where agricultural production is
carried out, no matter whether it refers to commercial production or not; or
- farms less than 50 ares of agricultural land, but carries out intensive tillage, fruit,
vineyard, vegetable or flower production (greenhouse and nursery production included),
mushroom production or livestock production, i.e. carries out commercial production;
- raises at least two heads of cattle, or one head of cattle and two heads of small livestock or
five heads of sheep or three heads of pigs or fifty heads of poultry or twenty bee colonies.
Companies, agricultural cooperatives and other types of entities with legal entity status can
carry out mainly agricultural production, or can be registered as carriers of some other type
of activity but have parts of their organizational structure which exercise agricultural
production (Statistical Office of the Republic of Serbia, 2011).
32

Table 1 Households and farms according to their legal status

Farms
Description
Households
Legal entities and
Total
Family
entrepreneurs
Republic of Serbia
2.487.886
631.552
628.552
3.000
Serbia North
1.302.590
180.868
179.386
1.482
Serbia South
1.185.296
450.684
449.166
1.518
Western Serbia and
662.769
262.940
261.935
1.005
umadija
Share of Western
Serbia and umadija
26,64%
41,63%
41,67%
33,50%
in the Rep. of Serbia
Share of Western
Serbia and umadija
55,92%
58,34%
58,32%
66,21%
in Serbia South
Source: Authors calculation based on the data provided by the SORS (Statistical office of
the Republic of Serbia, 2013)
The share of the number of farms in the Western Serbia and umadija region in total
number of farms in the Republic of Serbia is 41.63% (Chart 1).

Source: Authors calculation based on the data provided by the SORS (Statistical office of
the Republic of Serbia, 2013)
Fig. 1 Share of number of farms per region in total number of farms
Used agricultural surface is the surface of the land used for agricultural production. Used
agricultural surface comprises of arable land and vegetable gardens, orchards, vineyards,
meadows and pastures.
Table 2 Used agricultural surface of the region (in hundreds of hectares)
Region County

Year

Western
Serbia and
umadija

2009
2010
2011

Arable land
and vegetable
gardens
782
779
781

Orchards

Vineyards

Meadows

Pastures

132
132
132

14
14
14

297
297
297

368
365
366

Source: Statistical yearbook of Serbia for 2014 (Statistical Office of the Republic of Serbia,
2013)

33

Tables 2 and 3 refer to the ways of using agricultural land. Table 3 illustrates that surfaces
under agricultural land did not change significantly in the period 2009 2001 in the Region
of Western Serbia and umadija. Table 2 refers to the way of using agricultural land by the
farms by categories, but besides this, it also refers to surfaces under gardens and nurseries.
The remaining surface comprises of woods, marshes, ponds, other non fertile land, etc. Out
of total agricultural surface used in the Republic of Serbia, 55% of the land under orchards,
54% of the land under meadows and pastures and 52% of the land under nurseries is
located in the Western Serbia and umadija region. Arable land and vegetable gardens
make 20%, whereas the land under vineyards makes 39% or 8,668 hectares. Land under
vineyards is the biggest in Rasinski County (6,406 hectares) and makes 74% of total land
under vineyards in the Western Serbia and umadija region. Mavanski County disposes of
129,238 hectares of the arable land and vegetable gardens, which makes 25% of total arable
land and vegetable gardens in the Western Serbia and umadija region. With 155,342
hectares or 40.3% of the land under meadows and pastures, Zlatiborski County stands out
in the region of Western Serbia and umadija. Zlatiborski County also stands out for the
land under orchards with 20,359 hectares.

Nurseries

Other

Western Serbia and

10.815
518.627 384.617
90.457
umadija
-Zlatiborski County
1.414
46.043
155.342
20.359
-Kolubarski County
1.218
70.042
40.179
13.685
-Mavanski County
2.382
129.238
18.039
11.502
-Moraviki County
1.119
39.625
50.366
12.807
-Pomoravski
910
70.883
14.970
4.195
County
-Rasinski County
1.034
56.137
19.322
9.729
-Raki County
955
31.494
62.717
7.642
-umadijski
1.781
75.165
23.682
10.537
County
Source: Agricultural Census for 2012, SORS (Statistical Office of
2013)

Vineyards

Orchards

Meadows and
pastures

Arable land
and vegetable
gardens

Region - County

Garden

Table 3 Used agricultural land of the farms in the regions per category (in hectares)

8.667

685

343

4
99
93
37

39
33
66
34

51
16
23
44

1.217

21

27

6.406
39

451
16

149
22

772

27

10

the Republic of Serbia,

The main characteristics of the farms from the point of view of the land funds show that the
property structure of farms is divided and reduced to small pieces. Property structure of
farms, due to being significantly divided and reduced to small pieces, has a negative
impact on bigger agricultural production. Thus, there is a need for organization of the land
and also for ending of further reducing of the land to smaller pieces which is a consequence
of inheriting and selling of a land.
Changes in the number of farms and their size are due to numerous reasons, the main of
them being the change of the number and structure of manpower. Decrease of the number
of farmers, especially of active farmers, and increase of the number of households run by
34

older adults influenced the change in structure of farms, rural development and
environment protection (Jeli, 2006).
Change in the socio-economic structure of population in rural areas, decrease of the number
of farmers, depopulation of villages, especially in mountainous regions, significant
population aging influenced the development of farms and rural development (Jeli,
Jovanovi, 2005; Jeli, Jovanovi, 2006).
The share of farmers in the total population is declining, as well as of active farmers, which
causes the increase of the amount of land per capita in farmers and active farmers
population. Being the important producers of agricultural crops, farm holdings contribute to
rural development and environment protection. Agricultural productivity is low and
underdeveloped, mainly due to the fact that farms lack financial resources and that they can
not keep up with modern technologies in the process of agricultural production. In whole
agricultural production, farms are important producers and represent the basis for the entire
development. There is no rural development of the Region without modern agriculture,
without employing of young and educated people who live in rural areas and would become
carriers of rural development. Part of rural population who deal with agriculture within
farms make profits from agriculture, and by being important agricultural producers, they
contribute to the growth of the domestic product and to rural development.
Table 4 Structure of farms based on the number of members and permanently
employed within a farm
7 or
1-2
Region - County
Total
3-4
5-6
more
people
people
Republic of Serbia
631.552
433.399
170.883
25.050
2.220
Western Serbia and
262.940
168.032
80.474
13.375
1.059
umadija
-Zlatiborski County
46.944
28.580
15.094
2.995
275
-Kolubarski County
27.604
17.307
8.599
1.590
108
-Mavanski County
44.701
31.143
11.880
1.572
106
-Moraviki County
29.380
18.601
9.159
1.498
122
-Pomoravski
24.990
16.756
7.099
1.063
72
County
-Rasinski County
34.207
20.546
11.665
1.868
128
-Raki County
28.173
17.797
8.877
1.365
134
-umadijski County
26.941
17.302
8.101
1.424
114
Source: Agricultural Register for 2012, SORS (Statistical Office of the Republic of Serbia,
2013)
Table 4 presents farm holding based on the number of persons permanently employed
within a farm. The highest number of farm holding members permanently employed within
farms live in Zlatiborski County (46,944) and Mavanski County (44,701). With 7 or more
persons permanently employed per farm, Zlatiborski County (275) and Raki County (134)
stand out. Since only in Raki County the number of citizens, households and farms
increased, it would be expected to have a higher number of persons permanently employed
within a farm (5, 6, 7 or more) in the respective part of the table 8. Given the fact that this is
not the case, a conclusion can be drawn that farm members are not permanently employed
within a farm.
35

Table 5 illustrates the number of farms which deal with livestock production. Cattle
production is the most common in Zlatiborski, Mavanski and Raki Counties, while pig
production is the most common again in Mavanski and Raki Counties. Farms which deal
with sheep production are the most common in Zlatiborski and Mavanski Counties.
Poultry production is the most common again in Mavanski County. Therefore, most of the
farms engaged in cattle, pig, sheep and poultry production belong to Mavanski County.
Table 5 Structure of farms based on livestock production
Cattle
Pig
Sheep
Poultry
Region - County
production
production
production
production
Republic of Serbia
177.252
355.052
154.972
413.792
Western Serbia and
96.336
144.089
96.967
173.106
umadija
- Zlatiborski
20.597
17.915
19.052
24.920
County
- Kolubarski
11.620
17.787
13.798
20.353
County
- Mavanski
14.211
30.489
15.965
32.763
County
- Moraviki County
10.821
15.272
12.204
17.996
- Pomoravski
6.231
14.739
6.242
17.931
County
- Rasinski County
9.917
20.198
8.714
22.636
- Raki County
14.051
12.233
7.621
17.787
- umadijski
8.888
15.456
13.371
18.720
County
Source: Agricultural Register for 2012, SORS (Statistical Office of the Republic of Serbia, 2013)
In table 6 a comparative review of the number of heads of cattle, pigs, sheep and goats
through Region of Zapadna Srbija and umadija is given. The highest number of heads of
cattle, pigs and goats belongs to Mavanski County, whereas the highest number of heads
of sheep belongs to Zlatiborski County. Even 34.8% of pigs out of total number of pigs of
the Region of Zapadna Srbija and umadija belongs to Mavanski County (400,391 heads).
The smallest number of heads of cattle and sheep belong to Pomoravski County, the
smallest number of heads of pigs belong to Zlatiborski County, whereas Moraviki County
has the smallest number of heads of goats.
Table 6 Number of cattle, pigs, sheep and goats in the region
Region - County
Western Serbia and umadija
-Zlatiborski County
-Kolubarski County
-Mavanski County
-Moraviki County
-Pomoravski County
-Rasinski County
-Raki County
-umadijski County

Cattle
413.759
78.540
59.387
80.283
37.854
27.255
33.953
53.965
42.522

Pigs
1.151.391
66.004
161.198
400.391
81.593
116.113
132.315
70.412
123.365

Sheep
1.047.328
214.057
161.945
161.878
121.889
63.328
66.490
99.020
131.721

Goats
70.852
10.877
9.002
11.654
6.431
9.666
8.313
7.038
7.871

Source: Agricultural Register for 2012, SORS (Statistical Office of the Republic of Serbia, 2013)
36

In the second half of the Twentieth Century, family farms in Serbia underwent through a
series of changes and events. Change of demographic and socio-economic structure of the
rural population influenced the decrease of the number of total and active farmers, which
caused the decrease of manpower in farms.
Having in mind unfavorable property structure of family farms of the region, it is evident
that farm holdings must become bigger. Certain legislative actions could arrange
inheritance of farmland, which would stop its further crumbling. Size of farmland
influences significantly a range in the number of cattle and pigs per hectare of used land
and in average per farm (Ministry of Agriculture and Environment, National Statistical
Office, 2014).
Comparison of the results of the censuses carried out, including the one in 2011, no matter
the size of the farmland of family farms in the Region, shows that there has been a general
tendency of the decrease in total number of cattle and pigs per hectare of used land and per
farm. Negative tendencies in livestock production indicate that there is a need of defining
an integrated program of livestock development in the coming period aiming at increasing
the number of heads and improving the breed composition of all kinds of livestock.
Changes that followed rural areas did not surpass family farms of the region. An average
family farm and household was reducing in size because the young went away to towns
looking for better life and work conditions, which all caused changes in the structure of
family farms and households.
Conclusion
Important role in rural development belong to family farms and their members whose
principal activity is agriculture and other activities. Total number of households in the
Region of Western Serbia and umadija decreased in the period between two censuses by
16,165 households, and of course family farms prevail over the farms operated by
entrepreneurs and legal entities (Panev, Marinkovi, 2012). Farms mainly deal with pig,
sheep and cattle production, while plant production is mostly achieved through fruit
production, but also vast area of land is under meadows and pastures. According to their
share in production potential and to the quantity of production that they achieve, family
farms represent the most important production unit in the Regions agriculture. However,
not enough attention has been paid to this form of production so far, and major mistakes
have been made with consequences that can be experienced even today. Particularly for this
reason, special attention needs to be paid to their development and reorganization.
Family farms of the region of Western Serbia and umadija point out the unfavorable
property structure. The existing process of de-agrarization is not used sufficiently for its
improvement. This condition has also been caused by unsuitable legal provisions,
especially in terms of its inheriting and renting, as well as by inadequate use of land for
non-agricultural purposes. Given the fact that out of total number of farms in the region
farmers dispose of significant quantity of arable land, by stimulating production, not only
can they improve and speed up development of farms, but they can also contribute to rural
development, development of rural areas and to agriculture in general, and therefore to
protection and improvement of the environment. Having in mind comparative advantages
of agriculture, it is necessary to foster the farms inhabited by young agricultural producers,
with the scope of creating conditions for the farms to become driving forse of rural
development and major food production (Jeli, Jovanovi, 2003). Modern agriculture is
foundation and the most important factor of modernization of agriculture and development
of rural areas.
37

References
1. Group of authors. 2006. Agriculture and Rural Development of Serbia in Transition
Period. Monograph. Belgrade: Serbian Association of Agricultural Economists,
Institute of Agroeconomy, Faculty of Agriculture Belgrade, Mladost-Biro.
2. Jeli, S. 2006. Households as factors of development of agriculture and rural
development. Agroznanje, vol. 7. n. 4.
3. Jeli, S., Jovanovi, . 2003. Role of agrarian policy in the migration of the young
population in rural areas of Serbia and Montenegro. Proceeding: Compatibility of
agrarian policies of Serbia and Montenegro and common agrarian policies of
European Union. Belgrade: Institute of agricultural economics. Novi Sad: Department
of agricultural economics and and rural sociology of the Faculty of agriculture Novi
Sad. Subotica: Faculty of Economics.
4. Jeli, S., Jovanovi, . 2005. Certain factors of rural development of Serbia and
Montenegro approaching EU. Thematic proceeding: Agriculture and rural development
in european integration process. Belgrade: Institute of agricultural economics of the
Faculty of Agriculture, Mladost-Biro.
5. Jeli, S., Jovanovi, . 2006. Demographic structure of farms. Monography:
Agriculture and Rural Development of Serbia in Transition Period. Belgrade: Serbian
Association of Agricultural Economists, Institute of Agroeconomy, Faculty of
Agriculture Belgrade, p. 71-89.
6. Jeli, S., Jovanovi, . 2010. Weak points of transition in agriculture. Sociological
review. vol. 44, p. 595-614.
7. Jeli, S., ivkovi, D., Jovanovi, T., 2011. Monograph, Holding and household
changes, Faculty of Agriculture, Zemun.
8. Ministry of Agriculture and Environment, National Statistical Office, 2014. Strategy for
agriculture and rural development of the Republic of Serbia, in 2014.
9. Penev G. and Marinkovi I. 2012. First results of the 2011 Census of Population and
their comparability with results of prior two censuses. Demography. vol 9, p. 45-67.
10. Statistical Office of the Republic of Serbia, 2013. Census of Agriculture 2012.
Belgrade.
11. Statistical Office of the Republic of Serbia, 2013. Statistical Yearbook of Serbia.
Belgrade.

38

AGRIBUSINESS AND ECONOMIC DEVELOPMENT DURING POLANDS

MEMBERSHIP IN THE EU
Marek WIGIER
Institute of Agricultural and Food Economics, Warsaw, Poland; email:
[email protected], ul. witokrzyska 20, 00-002 Warszawa, Poland
Abstract
According to the three-sector theory by Fisher and C. Clark, the share of the agri-food
sector in creating the GDP decreases along with the socio-economic development. There is
a change in the proportions between the national economy and agribusiness and between
its individual links. However, agriculture, food industry and services for the agribusiness
sector remain an important segment of the national economy. The purpose of this study is
to assess the degree of development of agribusiness and its importance for the national
economy during Polands membership in the EU. To illustrate this, a set of five indicators
representing its manufacturing potential has been used (employment, gross value of fixed
assets, investment inputs), output results (global output) and income results (gross value
added). Based on the investigation of input-output, the present and future trends of its
development in Poland have been determined.
Keywords
agribusiness, economic development, structural transformations, agricultural policy

Introduction
Agribusiness, also referred to as that the food economy or agri-food sector, is the system of
vertically and horizontally integrated branches and units participating directly or indirectly
in the production of food (Kapusta, 2008). According to the classic formula, within this
system the process of manufacturing food products and raw materials takes place (Zegar,
1981). As the section of the national economy, agribusiness consists of three main
aggregates, i.e.: the industry producing means of production and services for agriculture
(sphere I), agriculture (sphere II) and food industry (sphere III) (Davis, Goldberg, 1957).
Products of some branches are used as inputs for others, whereby the most important link of
agribusiness is agriculture. The characteristic feature of the long-term development of
agriculture is its decreasing share in the structure of the national economy and of
agribusiness (Jakubczyk, 2010). The degree of industrialisation has always been a
derivative of the development of agriculture, and, consequently, of the food industry
(Wilkin, 2001). The economic development consisted in a gradual transition from the
agricultural economy to the industrial economy financed from agricultural revenues. This
process has proceeded along with an increase in the level of the socio-economic
development of the country. The share of agriculture in the gross domestic product
decreased, the number of the employed declined and the socio-economic situation of
agriculture was increasingly dependent on what happened outside of it, in other sectors of
the national economy (Wo 1979, Tomczak 2005). The stimulus for the development of the
economy were the modern sectors i.e.. industry, services, IT. In the theory of economics,
those dependencies have been included in the three sector theory1.
1

The concept of the three-sector economic structure, its changes and correctness of the
development of sectors (the theory of three sectors of the economy), is inextricably
39

Currently, the contribution of agriculture to the industrialisation process, sustainable

development, provision of public services or political stability is being reassessed. Today, a
modern agricultural holding is sort of an enterprise. It applies advanced manufacturing
techniques, is horizontally and vertically integrated with other entities, has the welldeveloped marketing system, and in its decisions it is guided by market trends and
consumer preferences. The modern agricultural holding is characterised by a high degree of
complexity, diversity and integration. Thus, the allocation of resources in agriculture
becomes increasingly dependent on market forces and forming networks of interbranch
connections. The agricultural production is increasingly dependent on the progress in
genetic research, the implementation of advanced manufacturing technologies, the
development of research regarding the health and nutritional values of food, the application
of organic production criteria. Distinguishing between the stage of the production of raw
materials and the stage of their initial processing, while still easy, is often more and more
fuzzy. The industrialisation of agriculture and its development become inseparable
processes.
The purpose of this study is to analyse the development of agribusiness in the years 20002012, which includes an analysis of changes in its structure, the degree of integration of its
components, the identification of reasons for changes taking place due to the European
integration processes as well as the determination of strength and nature of the connections
between the agribusiness sector and its environment. Using the statistical and descriptive
methods, an analysis of the CSO data has been carried with regard to assessing the degree
of the development of agribusiness and its importance to the national economy. For this
purpose, five indicators have been used, to illustrate: manufacturing potential (employment,
gross value of fixed assets, investment inputs), output results (global output) and income
results (gross value added) (Wo, 1979).
The study also analysed the changes in the share of agriculture and food industry in the
structure of agribusiness and in the entire national economy, which is an important part of
the studies on their manufacturing potential as well as on output and income results. For
this purpose, we used Leontiefs input-output tables (Leontief 1936). Basing on the
assumptions of the general equilibrium theory, the input-output model allows to analyse the
macroeconomic effects produced, budget redistribution processes, relations of given sectors
with the environment, impact of global processes on the economy through export and
import (Czyewski, Grzelak 2012). Generally, it is a system of equations describing inputs
and results with regard to creating global output, final demand and value added.
The assessment of flows feeding the agri-food sector and of the distribution structure of its
products is a useful tool to assess the place of the food economy in the national economy. It
allows to assess the role of self-supply in the analysed sector and the role of nonagricultural sectors in the system of entities and products. The input-output table also
allows to assess changes in the structure of consumption and export and with regard to the
newly produced value in the food economy as well as to indicate the desired adaptations of
the agricultural policy (Bon, 1986). Therefore, the results of these analyses enable drawing
indirect conclusions about the role and consequences for agriculture resulting from
Polands accession to the European Union and from the implementation of the CAP
mechanisms.

connected with the names of three authors, who built its foundations. This theory was
developed in the 1930s by A.B.G. Fisher, C. Clark and J. Fourastie. It is based on a thesis
about the changing role of the individual sectors in the historically considered process of
development of economies, namely the decrease in the importance of the agricultural
sector; growth, stabilisation and then also decrease in the share of the industrial sector and
the continuing increase in the role of the service sector, related to the economic
development.
40

1. Agribusiness in the structure of the national economy

In the modern economy, macroeconomic conditions, globalisation and integration processes
as well as cultural transformations have a decisive impact on the formation of structural
changes. However, theoretical and empirical studies on these changes indicate certain
universalism of some trends (Czyewski, Grzelak 2011, Pinstrup-Andersen 2002). Firstly,
there is a complete decline in the share of agriculture in creating value added in the
economy, employment, trade and consumption. Secondly, the reduction in the importance
of agriculture is accompanied by an increase in income of the population. Thirdly, the share
of basic agricultural products in the value of finished products declines, which, in turn,
results in an increase in value added in the food industry. However, the idea of development
not necessarily needs to mean transferring resources from agriculture as a sine qua non
condition of the industrial development.
It rather comes down to the method for optimising the contribution of agriculture to the
overall economic growth. Therefore, the point here is not only the size of the agricultural
sector, but also a form of its relations with entire agribusiness, and more extensively, even
with the entire economy. In the countries where the food industry has comparative
advantages, there is a specific process of building an equilibrium between agriculture and
industry and this affects the development of the agribusiness sector and, consequently, the
development of the entire economy. According to the theory by A.O. Hirschman, the best
strategy for the development of the economy is, therefore, the promotion of such actions
which will stimulate, strengthen and then lead to the diffusion of development processes in
the less developed areas (Hirschman 1958).
Table 1. Selected macroeconomic indexes in the years 2000-2012
Specification
GDP value in
billion
PLN
(fixed prices of
2012)
GDP
per
capita (current
prices
in
thousand PLN)
Dynamics of
GDP changes
[previous
year=100]
Share
of
investments in
GDP [in %]
Inflation (CPI)
[previous
year=100]
Unemploymen
t rate [%]

2000
1
025

2001
1
037

2002
1
051

2003
1
091

2004
1
146

2005
1
190

2006
1
264

2007
1
349

2008
1
420

2009
1
443

2010
1
500

2011
1
566

2012
1
595

19,5

20,4

21,1

22,1

24,2

25,8

27,8

30,8

33,5

35,2

36,8

39,7

41,4

104,
2

101,
1

101,
4

103,
9

105,
3

103,
6

106,
2

106,
8

105,
1

101,
5

103,
8

104,
5

101,
9

17,9

15,6

13,5

13,2

13,1

13,3

14,6

16,3

17,0

16,3

15,3

15,9

14,9

110,
1

105,
5

101,
9

100,
8

103,
5

102,
1

101,
0

102,
5

104,
2

103,
5

102,
6

104,
3

103,
7

15,1

17,5

18,0

19,6

19,1

17,6

14,8

11,2

9,5

8,2

9,6

12,5

10,1

Source: Own elaboration based on the CSO data. Statistical Yearbook of the Republic of
Poland, CSO, Warsaw, subsequent years and www.stat.gov.pl access date 20.08.2014
Polish integration with the EU structures was a milestone which affected the acceleration of
structural transformations in the entire national economy. The dynamics of this process
resulted from, inter alia, the adoption in Poland of new solutions and regulations in the
field of the economic policy, including the agricultural and trade policy, access of more
than 505.7 million consumers (Eurostat, 2013) to the market, inflow of public financial
41

resources from the structural funds, cohesion policy and the CAP policy or the free
movement of persons, goods and services. When looking at the changes which took place
in the Polish economy in 2000-2012, we may clearly conclude that it was characterised by
the relatively stable macroeconomic situation (Table 1). Despite the global economic crisis
in the years 2008-2010, the Gross Domestic Product rose by 2-6% per year. The nominal
GDP value per capita increased by more than 100% to the value of ca. PLN 41 thousand in
2012, while the real GDP growth rate amounted to 56%. The factors stabilising the
development rate were high investments, at the level of about 13-17% of the GDP value,
inflow of financial resources from the structural funds and internal demand. The
unemployment rate gradually decreased, from about 15-19% in the period preceding
integration with the EU to about 10% in 2012. The inflation rate oscillated around the
inflation target designated by the Government (from 1 to 4%).
In the years 2000-2012, employment in agribusiness was subject to major changes. In 2002,
4.8 million people were employed in the production of food while after 2012 this number
decreased to about 3.2 million people2. Thus, the share of the agribusiness sector in total
employment in the entire national economy decreased to about 20% (i.e. by about 12
percentage points). Transformations also affected the internal structure of labour force in
agribusiness (fig. 1).

Fig. 1 Structure of employment in agribusiness in Poland in the selected years

Source: Own elaboration on a basis of the input-output table in 2000, 2005, 2010,
http://epp.eurostat.ec.europa.eu/portal/page/portal/esa95_supply_use_input_tables/data/wor
kbooks (date of access 17.11.2014) and http://stat.gov.pl/publikacje/szukaj.html?topic=21
(date of access 17.11.2014); Warsaw 2004, 2009 and 2014 ; Statistical Yearbook of the
Republic of Poland 2001, 2005 and 2013 CSO, Warsaw 2002, 2005, 2013; Statistical
Yearbook of Industry 2001, 2005 and 2013, CSO, Warsaw 2002, 2006 and 2013
In 2012, agriculture employed about 2.3 million people, i.e. 73,0% of all people employed
in the food economy (in 2000 3.9 million people, i.e. 81%) At the same time, the share of
people employed in two other spheres, i.e. in the food industry and in supply increased to
about 14% in each (i.e., by about 5 percentage points each). However, an increase in the
labour productivity in the food industry resulted in the reduction in employment by nearly
60 thousand people (in 2012, it amounted to about 443 thousand). The further development
of the agribusiness sector entails the further shifting of employment from agriculture to
other non-agricultural sections of the national economy.
2

However, this situation has been caused by, inter alia, also a change in the methodology
of counting the employed in agriculture during the National Census and the Agricultural
Census, which took place in 2002.
42

In the years 2000-2012, the share of the food economy in the value of productive assets of
the entire national economy decreased. The gross value of fixed assets of agribusiness over
the analysed period decreased by almost 4 percentage points (to the level of about 10.2% of
the value of fixed assets of the national economy). Admittedly, in agriculture their nominal
value increased by more than PLN 25 billion (to nearly PLN 140 billion in 2012), but in the
internal structure of agribusiness this meant a decrease by about 8 percentage points (to a
little more than 49% of the production capacity of the agribusiness sector fig. 2). Despite
an increase in the value of investments after 2004, agriculture is characterised by a high and
still growing degree of consumption of fixed assets (nearly 77% in 2012 - Statistical
Yearbook of the Republic of Poland 2013). When it comes to the food industry, its share in
the total value of fixed assets in agribusiness increased from 20.5% in 2000 (PLN 41
billion) to 33.1% (PLN 94.0 billion). As opposed to agriculture, these assets are relatively
modern. The level of their consumption in 2012 was about 49.0%. The share of industries
producing means of production and services for agriculture and food industry decreased by
4 pp in 2012 in relation to the year 2000 and remained at the level of about 17.6% (PLN 50
billion).

Source: as in fig. 1.
Fig. 2 Structure of gross fixed assets of agribusiness in Poland in the selected years

A factor causing the modernisation of fixed assets were mainly investments. Over the
analysed period, their value in the entire agribusiness sector was systematically growing
(from about PLN 11 billion to nearly PLN 19 billion), but their share in the value of
investments in the entire national economy slightly decreased (to about 8%). In 2012, the
value of investments in agriculture itself accounted for more than 30.5% of inputs in the
agribusiness sector (fig. 3). Since 2000, we may observe a regular increase in the value of
investment inputs in agriculture. The increase in investment inputs in agriculture is a
chance to stop the process of decapitalisation of fixed assets, however, it applies mainly to
the group of about 200-250 thousands of commercial agricultural holdings. The process of
modernising the food economy also results from growing investment inputs in food
industry operators. In 2012, their value was more than PLN 8 billion, i.e. almost two times
higher than in 2000. Simultaneously, however, their share in the value of investments of the
agribusiness sector decreased by about two percentage points to about 42.6%. In 2012, the
share of the supply sphere amounted to 28.8% (PLN 5.1 billion) of all investment inputs
incurred in in Polish agribusiness.
43

Source: as in fig. 1.
Fig. 3 Structure of investment inputs of agribusiness in Poland in the selected years
In the years 2000-2012, the values of global output manufactured in the agribusiness sector
almost doubled (to about PLN 372 billion), however, its share in the national economy
remained at the constant level of about 13%. Simultaneously, the internal structure of
agribusiness changed (fig. 4). The share of agriculture slightly decreased, from about 30%
in 2000 to 28.0% in 2012, so did the share of the industry producing means of production
(from 20% to 16%). The share of the food industry (being of the biggest importance in
manufacturing global output) increased by 5 percentage points (to 56% in 2012). In 2012,
the value of global output in the food industry exceeded PLN 209 billion. These changes
indicate the formation of the modern internal structure of agribusiness. Inter alia, also
thanks to those processes, agriculture and food sector were affected by the effects of the
economic crisis in 2008-2010 to a small extent only. The fairly large and relatively stable
share of the agribusiness sector in the national economy was also affected by: its growing
competitiveness, EU funds supporting farmers income, investments of the entire sector and
relatively stable internal market which sustained the demand.

Source: as in fig. 1.
Fig. 4 Structure of global output in agribusiness in Poland in the selected years
The share of the agribusiness sector in generating national income was regularly
decreasing. In nominal terms, its value in the period 2000-2012 grew by 36% (to PLN 112
billion in 2012), but the share of the agribusiness sector in creating value added of the
national economy decreased from 10.8% to 7.9%. The decreasing share of agribusiness in
generating national income is a consequence of the structural transformations in the
economy and the faster rate of growth of non-agricultural sections. Simultaneously, the
internal structure of agribusiness itself underwent essential changes (fig. 5). The
44

agricultural sector and industrial production of food, under the influence of restructuring
thereof, improvement in competitiveness and growth in the export value, increased their
shares in the structure of creating value added in agribusiness (from 45% to 49% and from
31% to 36%, respectively). At the same time, the share of the industry producing means of
production and services for the agribusiness sector decreased from 23% to 14%. Structural
transformations and inflow of agricultural policy resources made it possible for the
agricultural sector to develop at a rate similar to the level of development in the entire
economy.

Source: as in fig. 1.
Fig. 5 Structure of gross value added of agribusiness in Poland in the selected years
Input-output in agribusiness
The study on input-output3 is important in terms of determining the changes and relations
taking place in the development of agribusiness. The input-output table, basing on the
assumptions of the general equilibrium theory, is a universal tool for th economic analysis,
allowing to investigate structural changes and relations with the environment. The forces
actuating output of the agricultural sector is the industry, while agriculture provides other
sectors with raw materials and generates the demand for means of production and services.
In the process of integration of agriculture with the industry, the increasingly important role
is also played by material supply. The source of technical progress in the food economy is
the industry, which allows to use novelties in all phases of the production of food. Inputoutput tables allow not only to indicate connections among the individual sectors of the
national economy, but they also show interdependencies in the economy, which determine
its development (Tomaszewicz, 1994). Dependencies among the individual spheres of the
agri-food sector also allow to determine the share of the individual sections of the national
economy in the production of food. Tables 2 and 3 show the size and structure of
agricultural and food industry material supply in the years 2000-2010.
In agricultural material supply in Poland, an important role is played by self-supply. Thus,
agriculture is treated mainly as the raw materials section, as the share of self-supply in the
3

One of the most important methods used to determine the size and structure of material
flows in the agricultural sector is the input-output method i.e. the method of inputs and
results. The author of this method is an American scientist, Wassily Leontief. On the basis
of his input-output table, the production links among the individual branches of the material
production in the national economy are investigated. These links mean using by companies
belonging to some branches of the national economy of products manufactured by other
branches.
45

second sphere of agribusiness is as high as 28%, and although there is a decrease in this
share, it is still a major supplier of means of production for itself. The remaining part of
the intermediate consumption goes to agriculture from the first and third sphere. As a result
of the economic development in the production of agricultural raw materials, the share of
sectors supplying means of production and services to agriculture is growing. In the preaccession period and after Polands accession to the European Union, the share of the first
sphere in agricultural material supply in Poland increased by nearly two percentage points,
to the level of about 46% (table 2). A significant impact on the increase of those values was
exerted by having covered the Polish agricultural sector with the funds under the CAP. An
increase in income, resulting partially from transfers to agriculture, enabled shifts from selfsupply to purchasing industrial means of production.
Among the most important branches, which supplied agriculture with means of production
and services designed for the primary production, we should mention the fuel and energy
industry, chemical industry, services and means of transport industry. The consumption of
electricity and liquid fuels is a real measure determining the degree of development of
agriculture and increase in its modernity. Also, the modernisation of the machinery park
leads to the higher energy consumption in households (Mrwczyska-Kamiska 2013).
Undoubtedly, the increased flow of modern machinery and equipment for agriculture is
affected by the EU funds (Czubak 2013). Investments carried out in agriculture with the
support of CAP funds relate primarily to the purchase of machinery and equipment, mostly
tractors and auxiliary machinery. In the next years, the share of the first sphere in supply for
agriculture should grow, because these are the branches supplying the food production
process with modern means of production and enhancing the social labour productivity
(Grabowski 1997). It is also a determinant of the structural transformations and the level of
modernity in the entire national economy.
Table 2 Size and structure of agricultural material supply in Poland based on the
input-output table, in current baseline prices in the years 2000, 2005 and 2010 (million
PLN, %)
2005
2000
2010
million
PLN

From sphere I
From sphere II

16 814

43,9 18 792

44,6 24 875

45,7

17 022

44,5 16 257

38,6 18 973

34,9

From sphere III

4 437

11,6

16,7 10 590

19,5

Specification

million
PLN

7 045

million
PLN

Total
38 273 100,0 42 094 100,0 54 438 100,0
Source: Own calculations based on input-output tables for 2000, 2005 and 2010, CSO,
Warsaw, 2004, 2009 and 2014
In turn, when it comes to inflows of means of production from the food industry, over the
analysed period this share increased from about 12.0% in 2000 to about 19.0% in 2010.
This is connected mainly with the increased flow of products of the feed and rendering
industry. Deliveries of compound feed are a fairly specific flow; in fact, we are dealing here
with agricultural products after industrial processing. When analysing the sold production
of the feed and rendering industry, we may conclude that the most important products
inflowing to agriculture from the third sphere are feedstuffs. In 2000, the sold production of
ready-to-use feedstuffs for animals amounted to PLN 4.3 billion while in 2005 PLN 5.6
46

billion and in 2012 more than 11.0 billion (Statistical Yearbook of Industry 2001, 2006,
2013 CSO, Warsaw 2001, 2006, 2013).
In the structure of food industry material supply, of dominant importance are sphere I, i.e.
the industry producing means of production and services and sphere II i.e. agriculture.
However, attention should be paid, first of all, to the significant growth of supplying the
food industry with modern machinery and equipment for production, products of the fuel
and energy industry and means of transport. Their share in the structure of food industry
material supply increased in the years 2000-2010 from 27% to more than 40%. These
transformations attest to structural changes taking place in food industry enterprises and
consisting in its modernisation and improvement in competitiveness. Naturally, they are
directly related to the inflow of external capital, including also access to EU financial
resources. The declining importance of agricultural supply (in 2010, it was lower, in
relation to 2000, by about 9 percentage point and amounted to 30.6%) and of food industry
self-supply in a form of semi-finished products for further processing (in 2010, it was
lower, in relation to 2000, by nearly 5 percentage point and amounted to 29.2%) indicates
also the greater service intensity and the growing importance of so-called secondary
processing of food. The result of it is an increase in the degree of food processing and in socalled value added in the final product.
Table 3. Size and structure of food industry material supply in Poland based on the
input-output table, in current baseline prices in the years 2000, 2005 and 2010 (million
PLN, %)
2005
2000
2010
million
million
million
Specification
PLN
%
PLN
%
PLN
%
From sphere I
From sphere II

20 483

27,2

45 240

42,4

53 877

40,2

29 263

38,9

32 835

30,8

40 904

30,6

From sphere III

25 517

33,9

28 656

26,8

39 136

29,2

Total
74 263
100,0
106 731
100,0 133 917 100,0
Source: Own calculations based on input-output tables for 2000, 2005 and 2010, CSO,
Warsaw, 2004, 2009 and 2014
All sections of the national economy participate in the production of raw materials and
finished products. An analysis of interdependencies in the Polish agri-food sector showed
that the transformations proceeded in the desired direction, the internal structure of flows
among the spheres was changing, although these changes proceeded in an evolutionary
manner. In agriculture, the dominant role is still played by internal turnover. A positive sign
is the growing share of the first sphere, which over the analysed period played an important,
growing role of raw materials from the agricultural sector. This is confirmed by a
conclusion that agriculture in Poland is at the early stage of transformations towards the
agribusiness enterprise. In agricultural material supply, the role of the first sphere must
increase, first and foremost, including mainly the service sector. In the future, agriculture
will be of typical raw material nature, i.e. it will supply raw materials to the food industry
and to a decreasing extent it will supply means of production for itself. On the other
hand, the food industry will be a customer of products from the first and second spheres of
agribusiness. In the intermediate consumption for the food industry, the role and share of
industries producing means of production and services will continue to grow. Thanks to the
47

inflow of external capital and new technologies, the food industry to a larger extent will be
using products and services produced in other branches of the national economy.
Conclusions
Polands integration with the European Union has been followed by minor changes in the
internal structure of agribusiness and its share in the Polish national economy in terms of
the analysed characteristics. The structure of employment in agribusiness and its share in
the national economy still remains at the stage of the pre-industrial economy, which is
dominated by the agricultural sector. Virtually, over the entire analysed period, 1/5 of
labour force accumulated in the national economy is used in the production of food. In
accordance with the theory of economic development, in order to lead to a higher level of
development, it is necessary to stimulate the shifting of labour surpluses to other nonagricultural sections. However, the process is already taking place, also with the support of
the agricultural policy activities. Major effects of these changes will be visible, however, in
the longer term.
The challenge for the policy is to stimulate the development of the industrial and service
sectors. Positive signs of changes in the internal structure occurred with regard to fixed
assets and investment inputs. The share of agriculture decreased while the share of the
processing and supply spheres increased. Still, it is necessary to expand the flow of fixed
assets, not only for increasing production resources in agriculture, but also for renewing and
improving the technical efficiency of production processes. A positive sign of changes in
agribusiness are investment inputs growing. An important role in accelerating this process
was played by the EU funds, in particular activities in support of investments and, when it
comes to agriculture (especially large holdings), also direct payments. The speed of the
transformations taking place was slowed down by the economic crisis in the years 20082010. Simultaneously, the agribusiness sector managed to keep the positive rate of
development. This is confirmed, inter alia, by the growing value of production and value
added, the growth in the value of export and the further growth in the positive balance of
trade in agri-food products (mainly thanks to processing). These results also indicate that
agribusiness in Poland is still an important and significant subsystem of the national
economy.

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2.

3.

4.
5.

Bon, R., 1986. Comparative stability analysis of demand-side and supply-side inputoutput models, International Journal of Forecasting, vol.2, no.2, pp.231-236
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oglnoekonomicznej kraju w okresie kryzysu 2007-2009, Roczniki nauk rolniczych,
Seria G, T. 98, str.
Czyewski A., Grzelak A. 2012. Moliwoci wykorzystania statystyki bilansw
przepyww midzygaziowych dla makroekonomicznych ocen w gospodarce,
Przegld Statystyczny, numer specjalny 1, PAN Komitet Statystyki i Ekonometrii,
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Davis, J.H., Goldberg, R.A. 1967. A Concept of agribusiness, Boston 1957,
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Wrocawiu, Wrocaw
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Leontief, W. 1986. Input . Output Economics. Second ed., Oxford University Press,
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Mrwczyska-Kamiska, A. 2013. Gospodarka Narodowa, nr 3 (259) Rok
LXXX/XXI s. 79-100.
Pinstrup-Andersen. P. 2002. Food and agricultural policy for a globalizing world:
preparing for the future, American Journal of Agricultural Economics, Oxford
University Press, tom 84, zeszyt 5
Tomaszewicz, . 1994. Metody analizy input-output, PWE, Warszawa.
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Wilkin, J. 2001. Polskie rolnictwo wobec procesu globalizacji, Rocz. Nauk. SERiA,
tom III, zeszyt 1
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pp.16-32
Wo, A. 1979. Zwizki rolnictwa z gospodark narodow. Pastwowe Wydawnictwo
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Warszawa
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_regional_level/pl (date of reading: 24.11.2014)
Statistical Yearbook of the Republic of Poland 2013, CSO, Warsaw 2013
Statistical Yearbook of Industry 2001, 2006, 2013 CSO, Warsaw 2001, 2006, 2013

49

CHANGES IN THE ROMANIAN AGRI-FOOD TRADE COMPETITIVENESS

IN THE POST-ACCESSION PERIOD
Camelia GAVRILESCU
Institute of Agricultural Economics, Romanian Academy,
email:[email protected]
Calea 13 Septembrie, 13, Sector 5, Bucharest, Romania
Abstract
Romanian agri-food exports to the EU have increased significantly after accession. The
paper is presenting a study on the significant changes occurred in the competitiveness of
the Romanian exports to the EU and to the main trade partners in the EU, using the CMS
(Constant Market Share) method. The empirical results show that the increase in the
Romanian agri-food exports to the EU may be attributed mostly to the competitiveness
improvement (residual effect) and secondly to a better adaptation to the EU import markets
(second order effect). The increase in the market size of the destination country (market size
effect) is the least important factor, nevertheless positive for all studied countries and
product groups.
Keywords
competitiveness, Romania, agri-food trade, constant market share
Introduction
Romania has an important agri-food sector, due to its share in the economy, productions
and contribution to the general trade. Although having favorable soil and climatic
conditions, since 1990, Romania showed a constant incapacity of covering the domestic
food demand, and, moreover, a continuous need for agri-food imports, far larger than the
exports, resulting in a continuous agri-food trade deficit. Already a few years before
accession, and mostly in the post-accession period, the requirements of the Single Market
imposed important changes and improvements in the Romanian domestic agri-food
production and processing. Moreover, the economic crisis introduced supplementary
constraints in the sector. The increasing trend in imports was reversed, the exports
intensified, and the result was the reversal of the agri-food trade balance trend.
Consequently, the deficit diminished continuously since 2007, and in 2013, Romania
achieved a positive agri-food trade balance, for the very first time in the last 25 years.
1. Literature review
Various ways of assessing the competitiveness of the Romanian agri-food trade have been
used both before and after the countrys EU accession. Previous studies concentrated
largely on the analysis of trade (in terms of values, balances and directions of flows)
(Gavrilescu, 2011), as well as on assessments of related competitiveness indices, such as
the index of revealed comparative advantage, using the Balassa method (Rusali &
Gavrilescu, 2008) or the Lafay index (Rusali, 2012).
The theoretical foundation of the constant market share method was synthesized by
Fagerberg and Solle (1987)
and has been used to assess the competitiveness of the Romanian agri-food trade in the preaccession period in comparison to Hungary by Fogarasi (2008). The present paper is aiming
at providing an insight in the composition factors of the Romanian agri-food sector
competitiveness using the trade performances on different export destination markets.
50

120

5000

100

4000

80

3000

60

2000

40

1000

20

2013

2012

2011

2010

2009

2008

2007

-60

2006

-40

-3000

2005

-2000

2004

-20

2003

-1000

coverage of import by export (%)

6000

2002

EUR million

2. Overview of the Romanian post-accession agrifood trade

On the domestic agri-food supply side, the sector producing raw agricultural commodities
evolved separately and at completely different rhythms from the manufacturing industries
sector. When they entered the Romanian market, the large international retail companies
have not found functional and fluid agri-food chains in the country, able to provide fresh
agricultural products and processed food products in the necessary quantities, at required
quality and at the necessary pace, which is why they resorted to agri-food imports.
On the domestic demand side, the extra demand in both quantitative and qualitative terms
resulted from the economic growth that started in 2001, increased the purchasing power of
the population; as a consequence, it had to face a domestic supply deficit that could be met
only through increasing agri-food imports.
The overall result has been a steady growth in imports of agri-food products (intra + extraEU) up to EUR 4.3 billion (in 2008), followed by a decline during the economic crisis
(down to EUR 3.9 billion in 2009); then growth resumed at a slower pace, reaching EUR
4.96 billion in 2013.
The Romanian exports of agri-food products increased spectacularly immediately after
accession: in just two years, agri-food exports had increased 2.5 times as compared to 2006
(the last year before accession); seven years later, in 2013, exports had increased 6.2 times
as compared to 2006 (figure 1).
The rate of imports increase has been somewhat lower than that of exports: in the first two
years, imports have increased by 1.79 times (2008/2006).
The economic crisis, accompanied by rising unemployment and reduced populations
income has translated into a significant contraction of demand, reflected in a drastic
reduction in the agri-food products imports (-12% in 2009 as compared to 2008). Since
2010, the upward trend resumed for both exports and imports, again at a slower pace for
imports. This evolution resulted in a dramatic decrease in the agri-food trade deficit, from
the peak of EUR 2.2 billion in 2007, down to only EUR 434 million in 2011. In 2013, for
the first time in the last 25 years 1989, the Romanian agri food trade balance became
positive (EUR 331 million), due primarily to the positive balance with non-EU countries,
while the intra-Community trade balance is still negative (figure 2).

total export

total import

balance

coverage of import by export (%)

Source: own calculations based on Eurostat data

Fig. 1 Romanian international (intra-EU and extra-EU) agrifood trade
51

extra-EU import

export intra-EU

extra-EU balance

import intra-EU

2013

2012

2011

2010

2002

2013

2012

2011

2010

2009

2008

2007

2006

2005

2004

2003

2002

extra-EU export

2009

-500
-1000

2008

2007

500

2006

1000

2005

EUR million

EUR million

1500

4500
4000
3500
3000
2500
2000
1500
1000
500
0
-500
-1000
-1500
-2000
-2500
2004

2000

2003

2500

intra-EU balance

Source: own calculations based on Eurostat data

Fig.2 Romanian intra-EU and extra-EU agrifood trade a comparison
In the post-accession period, trends in extra-EU trade have been different from the intra-EU
ones. The extra-EU exports increased continuously, reaching a maximum in 2013 (EUR 2.1
billion), while the upward imports trend in the pre-accession period reversed after 2007,
decreasing until 2010 to a minimum of EUR 720 million, then climbing again in 2011-2013
slightly over EUR 900 million.
The intra-EU exports (dispatches) multiplied 6 times (2013/2006), while the imports only 3
times over the same period. As a result, the intra-EU agrifood trade deficit decreased
continuously, as in the case of the extra-EU balance, by the combined action of exports
expansion and import contraction. The year 2010 stands out in that it is for the first time
after 1989 that the extra-EU agrifood trade balance turned positive: exports exceeded
imports (figure 3), a trend that continued in 2011-2013. In 2013, the absolute value of the
extra-EU balance exceeded that of intra-EU trade balance, resulting in a positive overall
agrifood trade balance, which is a first in the last 2 and a half decades.
After joining the European Union, the efforts of the Romanian agrifood sector were
directed mainly towards increasing competitiveness, resulting in improved efficiency and
product quality along the food chains, allowing for a better countrys presence on the
European Single Market.
3. Methodology and data
The methodology consists in the decomposition of the growth of the countrys market share
into different effects (such as competitiveness effect and structural effect). For such an
analysis, the Constant Market Share (CMS) approach is used.
The assumption on which the CMS model is based is that at the same competitiveness
level, the export share of a country remains unchanged. As a consequence, any change
occurred in the export of a given country can be attributed to general changes in the
destination market (with two sub-factors: the market scale and the market composition
effect) and to a residual factor, which is the competitiveness factor. This is a one-step CMS
model which shows three determining factors of the change in exports (Fogarasi, 2008):
The structural effect (the market size) shows the changes in the exports to the
destination country during the selected period: if the market share of the exporting
country to a specific destination country, for a specific product, remains unchanged
(S0) between the two time periods, this effect expresses how much its exports can
change due to the import growth on the destination country (Q). The share of
exporting country in the destination market is:
52

(1)
where q is the particular country exports to the destination country, and Q the total
imports of the destination country. The market size effect shows how much their whole
exports can change due to the import growth of the target market.
The second component (Q0S) is the residual effect, which shows competitiveness
changes induced by the change in export. A positive value means that the analyzed
country has been more competitive than others on the destination market and therefore
was able to increase its exports. Competition (residual) effect originates from the
changing in the export competitiveness of the exporting country.
There is also a second order effect (or market composition effect) (QS) which
captures the relation between structural and residual effects, and it can be interpreted as
a combination of changing import demand and export supply. The market composition
effect shows the combined result of the changes in competitiveness of the exporting
country and in the import structure of the reference market. As a result, the following
equation can be written:

(2)
The equation (2) can be extended for several products i, exported from the analyzed country
to the destination country:

(3)
The CMS model has some limitations, i.e. the sensitivity to the choice of base period
(starting point) of the analysis, as well as to the level of product aggregation.
The analyzed period in the present paper has been the average of the last three years (20112013), using as base period for comparison the average of the last pre-accession years
(2004-2006). For each destination country in the EU, the average Romanian exports values
have been calculated for the same two periods. The destination countries have been ranked
using the average export values of the base period (figure 3).
The source for data is Eurostat, Combined Nomenclature, at 2-digit level of aggregation
(chapters 01-24). In the present paper, we shall indicate the 24 chapters as HS-01 until HS24 (as in first 24 chapters of the Harmonized System).
4. Results and discussions
The study involved the top 8 destination markets in the EU for the Romanian agri-food
exports: Italy, Germany, Greece, Spain, Hungary, Bulgaria, Netherlands and France (figure
3). These eight countries accounted together for 76.6% in the total Romanian exports to the
EU (in 2004-06), and their cumulated share increased to 81.5% in 2011-13.
The competitiveness of the Romanian agri-food exports on the EU-28 market has been
analyzed by the CMS model. At country level, all three types of effects were positive, in all
the cases (table 1).

53

Slovakia

Bulgaria

Belgium

Denmark

Czech Republic

United Kingdom

Spain

Average 2004-2006

Greece

France

Italy

Netherlands

Poland

Austria

Hungary

Germany

EUR million

900
800
700
600
500
400
300
200
100
0

Average 2011-2013

Source: own calculations based on Eurostat data

Fig. 3 Romanian agri-food exports to top 15 EU partners
The export change (growth) in the Romanian exports to the EU-28 in the analyzed period
has been EUR million 1970, of which 14.4% (EUR million 285) is the structural (market
size) effect; 56.1% (EUR million 1106) is the competitiveness effect and 29.4% (EUR
million 579) is the market composition effect. So the largest part of the change (a little
more than half) is due to the positive effect of competition on the EU market (table 1). On
the other hand, the change in the import structure of the EU influenced more the change in
the Romanian exports rather than the increase of the market size (increase in the EU
imports).
Table 1 Results of the constant market share model calculations
(compared periods: 2004-2006 and 2011-2013)
Country

Structural
(market size)
effect (EUR
million)

EU-28
Italy
Germany
Greece
Spain
Hungary
Bulgaria
Netherlands
France

284.61
34.91
29.48
9.52
19.53
49.98
68.86
15.21
10.13

Competitiveness
(residual)
effect (EUR
million)
1,106.31
289.39
89.54
77.65
70.55
54.45
69.53
114.66
76.64

Market
composition
(second order)
effect (EUR
million)
579.37
96.75
48.88
11.72
24.97
47.28
147.30
82.34
34.82

Change in value of imports

from Romania (average 201113 versus average 2004-06)
EUR
%
Million
1,970.29
462.55
421.05
503.20
167.90
410.92
98.89
256.69
115.05
308.50
151.71
363.53
285.69
978.97
212.20
1,102.14
121.59
645.27

Source: own calculations based on Eurostat data

More details on specific product groups are revealed by the CN-2 level commodity
breakdown. The largest export growth was seen in HS-24 (tobacco and tobacco products),
for which the increased competitiveness was the main driver (78.6%), while the market size
effect was almost zero. For oilseeds (HS-12), the main driver of the export growth has been
the change in the import structure of the EU (market composition effect). For cereals (HS54

10), the competitiveness and the market composition effect were prevalent, almost equal in
share (40.8%, respectively 39.6%). Negative competitive and market composition effects
were present for live animals (HS-01), and vegetables (HS-07).
In the export growth to the studied destination countries, all three effects have been positive
for the total agri-food exports. The lowest competitiveness effect, which held almost the
same share with the market size effect was seen in the exports to Bulgaria (24%) and
Hungary (36%). Larger competitiveness effects, similar to the exports to the EU-28 (5356%) were seen in trade with Germany and Netherlands. Exports to Greece showed the
highest competitiveness effect (78.5%).
In 2011-13, Italy remained the largest export market for Romania, followed by Hungary
and Bulgaria. In the case of Italy, of the EUR million 421 increase in exports, 68.7% (EUR
million 289) can be explained by the positive competitiveness effect, and only 23% (EUR
million 97) by the adaption to the changes in the Italian import structure. The market size
effect had little positive effect (8.3%). The competitiveness effect was very important (7080%) mostly for basic (raw) products such as fruit (HS-08), or primarily processed products
such as meat (HS-02), fish and crustaceans (HS-03), but also for several secondary
processed products, such as: preparations of meat and fish (HS-16), preparations of
vegetables and fruit (HS-20), and beverages and spirits (HS-22). For the products with the
largest export growths cereals (HS-10) and oilseeds (HS-12), the competitiveness effect
was prevalent (41-56%), while the change in the Italian import structure as well as the
increase of its imports (market size) were almost equal in share.
Romanian exports to Hungary increased 3.6 times in the analyzed period. Of the EUR
million 152 increase in total agri-food exports, the three effects had almost the same
influence, with a slight prevalence of the competitiveness effect (35.9%). Similar balanced
effects were shown by milk and dairy products (HS-04). The competitiveness effect proved
very strong in the case of coffee, tea and spices (HS-09), cocoa and cocoa products (HS18), and beverages and spirits (HS-22), while the market composition effect came second in
importance; the market size effect was negligible for these products (less than 4%). The
increase in the Hungarian market size had the largest effect on sugar and confectionery
(HS-17) and animal feed (HS-23). For products such as meat (HS-02), cereals (HS-10), and
oilseeds (HS-12), the change in structure of the Hungarian market has been the main driver
for the increased Romanian exports.
In the case of Bulgaria, of the total export growth (EUR million 286), the market
composition effect had the strongest effect: 51.6% (EUR million 146), while the
competitiveness and the market size effect were equal in share (24%). The change in the
import market structure has been prevalent for most products. On the contrary, prevalence
of the competitiveness effect occurred in none of the 24 product groups at HS 2 level. The
increase in market size has been the most important effect for very few products: 75% for
live animals (HS-01) and 91.4% for bakery and pastry products (HS-19); for these products
both the competitiveness and market composition effects remained low, but positive. In the
case of coffee, tea and spices (HS-09) and preparations of meat and fish (HS-16), both the
competitiveness and the market composition effect are negative, meaning that the increase
in exports is due only to the increase in the Bulgarian demand for these products.
Conclusions
In the decade preceding the EU accession, the disfunctionalities in the agri-food products
chains led to a supply deficit which was covered by increasing imports, resulting in a large
deficit of the agri-food trade balance.
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The improved structures in agricultural production and processing resulted from national
and foreign direct investments, together with the free access on the Single Market after EU
accession, allowed for a very sharp increase in the agri-food trade, as compared to the preaccession period.
In the studied period, Romanian agri-food exports to its main EU partners increased
significantly: from 2.6 times in the case of Greece, to 11 times in the case of the
Netherlands.
The competitiveness of the Romanian agri-food exports to the main EU partners and EU-28
has been investigated. The results of the Constant Market Share analysis indicate that the
increase in the Romanian agri-food export to the EU may be attributed mainly to the
competitiveness improvement and secondly to the market composition effect. The same
conclusion applies for other 6 of the 8 EU destination countries that were studied (Italy,
Germany, Greece, Spain, Netherlands and France). In one case only (Bulgaria), the market
composition effect was prevalent. On the contrary, the market size effect has not been the
driving factor for the export growth in relation with neither of the EU destination countries.
Nevertheless, a breakdown of the exports increase by chapters shows that in relation with
its main EU partners, there was a decrease in competitiveness for live animals, vegetables,
fruit, sugar, cocoa, bakery products and beverages.
Further investigations are needed by changing the base period, in order to test the
sensitivity of the CMS model.
References
1. Balassa, B. 1965. Trade liberalisation and "revealed" comparative advantage. The
Manchester school of economic and social studies. 33: 99-123.
2. Fagerberg, J., Solle, G. 1987. The method of constant market shares analysis
reconsidered. Applied Economics 19 (12): 15711583.
3. Fogarasi, J. 2008. Hungarian and Romanian agri-food trade in the European
Union. Management 3(1): 3-13.
4. Gavrilescu, C. 2011. Intra-European agrifood trade: where is Romania positioned?
Lucrri tiinifice Management Agricol XIII(1): 557-564. http://www.usabtm.ro/utilizatori/management/file/cercetare/20102011/vol_xiii/section1/eco082.pdf
5. Lafay, G. 1992. The measurement of revealed comparative advantages. In:
Dagenais, M. G. and Muet, P.-A. (eds.). International Trade Modelling. London:
Chapman & Hall.
6. Rusali, M. 2012. EU accession impacts on the comparative advantages in
agricultural trade: Romanias case. Economics of Agriculture 59(4): 747-752.
7. Rusali, M., Gavrilescu, C. 2008. Competitive Advantages and Disadvantages in
Romanias Agri-Food Trade - Trends and Challenges. 2008 EAAE Congress,
Ghent, Belgium. http://purl.umn.edu/44118

56

OBJECTIVES OF THE AGRICULTURAL AND RURAL DEVELOPMENT

STRATEGY OF ROMANIA
Angelica BCESCU-CRBUNARU, Monica CONDRUZ-BCESCU
Bucharest University of Economic Studies, Romania, email:[email protected], Piata
Romana nr. 6, Sector 1, Bucharest, Romania
Abstract
The current paper outlines the objectives of agricultural and rural development in
Romania. At the end of the first decade of the 21 st century, Romania still has to recover
considerable gaps as compared to the other European Union Member States, at the same
time with the adoption and transposition of sustainable development principles and
practices in the globalisation context. The first part focuses on strategic targets of
Romanias agriculture and rural development. The paper continues with the National
Strategic Framework priorities for the sustainable development of the agro-food sector and of
the rural area during 2014-2020-2030. The last part presents rural development objectives
and priorities. The conclusion is that the priority for the modernisation of agriculture and
rural economy should be substantiated by the vital economic and social functions of the
agro-food system: ensuring the balanced nourishment of population, the necessary raw
materials for non-agricultural activities and a pro-active and profitable export of agrofood products, increasing the landscapes capital of the rural area and natural environment
protection.
Keywords
Common Agricultural Policy (CAP), sustainable development, rural area, agro food sector,
food security
Preliminary considerations
Following the events of 1990, the need to identify properly substantiated strategies for the
agricultural policies was seriously felt. The defining element of these strategies is the full
connection of Romania to a new development philosophy, belonging to the European
Union and widely spread all around the world the one of sustainable development.
The starting point is the observation that, at the end of the first decade of the 21st century,
after a long lasting and painful transition to pluralist democracy and market economy,
Romania still has to recover considerable gaps as compared to the other European Union
Member States, at the same time with the adoption and transposition of sustainable
development principles and practices in the globalisation context. The lack of financial
resources in the whole economy did not favour an approach similar to the ones of the EU
more developed countries. The 2000s brought the prioritisation of national agricultural
policy alignment with the Common Agricultural Policy, with the efforts related to the
accelerated adoption of the acquis communautaire and to the setting up of specific institutions.
In the field of agricultural policies and their implementation tools, Romania was
permanently seeking for and trying to meet the short term challenges, the political objectives
of more or less electoral nature, the conditionalities externally imposed by international
financial bodies or by international organisations to which our country desires to join.
These various challenges on short and medium term have practically replaced strategies or,
in other terms, these were arguments for justifying the lack of a clear strategic political
approach on the long run in the field of agriculture.
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Despite all progresses achieved during recent years, it is a fact that Romanias agriculture is
still based on the intensive consumption of resources, while the society and the
administration are still seeking for an integrated vision and the natural capital is facing the
risk of damages that could become irreversible. The current strategies are stipulating
concrete targets for shifting in a reasonable and realistic timeframe to the development
pattern generating high value added, driven by the interest in knowledge and innovation,
permanently oriented towards the continuous improvement of peoples life and of their
inter-relations in harmony with the natural environment. Besides the sectoral approaches
(cereals, milk, meat, vegetables fruit, viticulture etc.), with more or less defined
connections between sectors or on agro-food pathways, it is absolutely necessary to
approach topics of horizontal or vertical nature envisaging the whole agro-food sector and on
which the deep reforms in agriculture are based. Since these topics are fundamental for the
setting up of agriculture development policies, it is normal that, once the problem is
identified for each of these topics, various ways, methodologies and tools exist, complying
with the ideology or political vision of governing parties or political alliances.
One highly topical debate on the European public scene is the post-2013 reform of the
Common Agricultural Policy (CAP). This reform, taking place in the context of adopting a
new multi-annual European financial frame, is extremely important since it outlines the
fundamental orientations of European agriculture horizon 2020. For Romania, this is not
only a chance for affirmation and for contributing to the setting up of the future strategy for
one of the most important and consistent European policy in financial terms, but also a
chance to reform itself, according to the new CAP orientations, its own agricultural sector
and the rural space as a whole. Evaluating the current state of art of the Romanian
agriculture and rural area, Romanias membership in the EU and the requirement for
integrating the Romanian agriculture development policies into the EU Common Policy and
the European Strategy for Smart, Sustainable and Inclusive Growth - Europe 2020, the
presidential commission for Agricultural Development Public Policies considers that the
drawing up of the National Strategic Framework for Sustainable Development of the Agrofood Sector and of the Rural Area during 2014 2020 2030 is a high priority for the
Romanian economy, in general and for the Romanian agriculture, in particular. The drawing
up of the National Strategic Framework takes into account the facts related to rural area,
which is not only an economic area, but also a social, cultural and ecological environment
for living, while agriculture is not only an economic branch producing agricultural products
and raw materials for manufacturing, but at the same time it is a rural agriculture with
profound rational traditions, whose preservation, continuity and development will support,
to a large extent, the real presence of Romania in the EU.
1. Strategic targets of Romanias agriculture and rural development
The knowledge of nowadays facts from the Romanian agriculture and rural economy is the
core prerequisite for setting up and implementing a coherent medium and long-term
programme for the European reconstruction of rural Romanian economy, for increasing the
agriculture contribution to the attenuation of current crisis and for resuming the sustainable
economic growth.
The National Strategic Framework, the European programmes and projects intended for
agriculture are set up around the sustainable rural development, as a determinant for
sustainable economic growth that supposes a strong rural economy, built up on a modern
rural infra-structure, the appropriate technical equipment of the rural localities territory and
of rural dwellings based on the use of local natural resources (from rural area) renewable in
the economic circuit, the environment and landscape protection and, as a consequence,
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reaching an acceptable rural living standard through the alleviation and narrowing of severe
poverty in rural areas.
The sustainable economic development could be reached, first of all, only under the
circumstances of making medium and long-term investments in the consolidation of
agricultural holdings and of food processing enterprises, in hi-tech, in the appropriate
equipment of the agricultural territory with irrigation and reclamation systems, anti-erosion,
windbreaks, anti-flood systems. The financial support directly from European and national
funds should be directed towards the achievement of these prerequisites of sustainable rural
development. Likewise, the legal, institutional and financial actions should become more
intensive in view to increase the competitiveness of international and national commercial
circuits, to have an extended participation of Romanian agricultural products on third
markets, first of all on the European single market, as well as in view to attenuate the risks
and turbulences entailed by annual and multi-annual fluctuations of products and prices. A
higher importance should be assigned to the extension of regional and local agricultural
market (7).
The rural area development is based on the sustainable rural development concept, the rural
economy extension and diversification supposing the consonant junction between the
agricultural (and forestry) component and the agro-food and non-food rural economic
component, based on the following principles:
In the preponderantly agricultural areas and in the rural mountainous areas, agriculture
and forestry, respectively, represent the backbone of rural area. At the same time, the
idea of shifting the centre of gravity from the production aspect to the multi-functionality
aspect should be deepened in the agriculture development process.
Bearing in mind that the most valuable natural renewable resource of Romania is soil, the
highest decision-makers of our country have not only the political and economic, but also
the moral obligation to the current and future generations to ensure, through appropriate
agricultural policies, the sustainable exploitation of soil, in accordance with its productive
potential. The growth of agro-food production and of forestry based economy should not
be seen as an end in itself, but as an objective for ensuring the food safety of our
countrys population and as a perspective target of Romania, considering the world
demographic projection estimated to about 9 billion inhabitants of the Earth in the next
two three decades.
The priority of modernising agriculture and rural economy according to the National
Strategic Framework should be substantiated on the vital economic and social functions
of the agro-food system: ensuring a balanced nourishment of the population, the
necessary raw materials for non-agricultural activities and a pro-active and profitable
export of agro-food goods; increasing the landscapes capital of rural area; ensuring a
decent living standard (comparable with the average European level) and environment
protection.
1.1 National Strategic Framework
The setting up of the National Strategic Framework priorities for the sustainable
development of the agro-food sector and of the rural area during 2014-2020-2030 was done
having as starting point the functions of rural area and economy, including the functions of
Romanian agriculture, the need for their accelerated development, the new partnership
Europe farmers in compliance with the reform of Common Agricultural Policy (CAP) for
the period 2014-2020, as follows:
- achieving an agricultural and food production able to ensure the national food security
and to guarantee the populations food security through: doubling the agricultural yields
in the next ten years as compared to the decade 2000-2010; doubling the value of crop
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and animal production in the next decade as against the one of 2010; doubling the value
of processed agro-food production as compared to 2010;
- fully ensuring the domestic necessary of food goods of higher quality and a surplus to
the domestic food consumption, available to exports;
- ensuring the sustainable ecological equilibrium of rural area, on the long run, through
public, public-private or private investments in infrastructure, protection and equipment
of the territory (irrigation systems; hydro-ameliorative protection systems, windbreaks,
afforestation of damaged and cleared lands etc.);
- preservation and safeguarding the renewable natural resources (soil, waters, air) and
sustainable use of agricultural natural resources, firstly the soil, preservation of
biodiversity, implementation of policies meant to attenuate the impact of climate
changes;
- making the national educational and scientific research system compatible with the
European one, ensuring its sustainable partnership with the Romanian agro-food system
(13);
- ensuring a balanced territorial development of rural agricultural economy, extending
the rural SMEs and increasing the employment level, by preponderantly sustain the
active rural population;
- reaching the equilibrium between the Romanian food balance and the increase of
Romanian agro-food goods;
- restraining the less-favoured areas and the severe rural poverty.
Romania has only one chance for its agriculture development: the considerable but rational,
optimal if possible, allocation of investments in infrastructure, agricultural lands equipment
(about 1.7 million irrigated hectares), plantation of windbreaks on about one million
hectares in the most arid areas, modernisation of agricultural holdings, extending the
enterprises of agro-food products storage processing (not only cereals) as well as the
increase of the operation capital both from own sources and from advantageous banking
credits granted to agricultural farms in view to sustain the production levels further
envisaged at the horizon of 2015, 2020, 2025, 2030. It is estimated that, at the horizon of
2030, Romanias food potential would be sufficient for 38.5 million persons, respectively
an availability for exports and non-food consumption of raw agricultural materials of about
49-50 billion .
The setting up of the National Strategic Framework is based on two fundamental ideas:
a) current state of agriculture and the ecological and economic potential of the Romanian
rural areas;
b) Romanias membership to the European Union and the requirement of integrating the
Romanian agriculture into the European agro-food area and of making it compatible with
the Common Agricultural Policy of the European Union.
1.2 Current state of Romanias agriculture and rural area
Four major changes the big agrarian reform of 1921, the agrarian reform of 1949, the
agriculture collectivisation during 1949-1962 and the impact of applying the Land Fund
Law of 1991 and of its related legislation made impossible not only the drawing up, but
particularly the implementation, of a long lasting Romanian agricultural project, similar to
the majority of western countries. The major successive changes in the system generated
instability and, even more serious, the lack of continuity, steadiness and sustainability of
the national agricultural system (14).
Before discussing the setting up of Romanias priorities in the perspective of CAP
reforming, lets have a look at the state of Romanian agricultural sector. From a Eurostat
Report, one could find that, in Romania, there are about 4 million agricultural holdings of
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various sizes, where almost 2 million persons are working, that is 30% of Romanias
economically active population. Though these figures are deeply disproportionate as against
the European average (only 5.6% of the economically active population work in agriculture
in EU27) these are not a matter of concern as such. Problems occur, nonetheless, when
trying to disseminate the structure of these holdings and their economic sustainability. Data
are at least worrisome: out of the 4 million households, approximately 2.5 million own
under 1 hectare and only approximately 900 000 have at least the minimum rate of yield (1
ESU). Despite all these, out of the 900 000 profitable holdings, about two thirds produce
only for self-consumption. A simple calculation shows that out of the 4 million Romanian
agricultural holdings, only 312 000, namely 8%, are economically viable and connected to
the market (particularly big agro-industrial holdings) while the rest of 92% are,
overwhelmingly, subsistence households. Therefore, behind what one could call the
"oversized Romanian agriculture" relies in fact a hidden poverty phenomenon. Most of the
2 million Romanians statistically working in agriculture are only (pseudo)farmers living at
the limit or even below the poverty threshold and which account for an emigration
wellspring. The already visible result could be called the Romanian village tragedy. The
Romanian peasant is not only transforming himself in a modern farmer, but is gradually
disappearing and, together with him, the change for a healthy agriculture. There are three
decades since almost one out of three inhabitants able to work is framed under the category
of population employed in agriculture, while most of those 2.6 million Romanians named
as such are living at poverty limits (11).
Romanias situation is similar to the one existing in countries as Ecuador, Guatemala,
Kazakhstan or Philippines. While most of the European countries developed through
industrialisation and afterwards through the creation of workplaces in services, Romania is
still in the stage where one third of its population works in agriculture, a sector whose
contribution to the Gross Domestic Product is only 6%. In Hungary, only 5% of employed
persons carry out agricultural activities, in Poland 12.6%, while in Ukraine their share is of
17.2%. Likewise, the low productivity of this sector is entailed by the ratio between the
small contribution to the GDP as compared to the high number of persons employed in
agriculture: 29% of Romanias employment which produces 6% of GDP.
The big problem is that most of the people employed in agriculture are not working in the
capitalist, profitable agriculture, but in the subsistence one. During the last decades, the
dynamics of urban development was slow, unable to grow. Until the towns will not
develop, the country will be unable to escape from poverty. The lack of jobs in towns, as
well as of jobs involving non-agricultural activities in villages entailed a freezing of the
people working in the subsistence agricultures share to 29%, declared Professor Dumitru
Sandu from the Faculty of Sociology.
The prevailing facts of the Romanian rural area are marked by serious economic and social
phenomena, the following being most obvious (9):
- agricultural area decrease, due to not working the arable land and its transformation into
heaths (about 1.5-1.7 mil ha/year), disusing and wild making the natural lawns (over 11.2 mil ha), the orchards and vineyards, the use of 8-10% at most of the national
irrigation potential;
- decrease of the husbandry in agriculture, due to the severe decrease in livestock, the loss
of their genetic potential, the damage to a large extent of husbandry production areas;
- physical and social desertification pregnant in rural area, depopulation and sharp ageing
of rural population, the qualitative and vocational worsening of agricultural labour force;
- rural economy is preponderantly primary, with 60% share of agriculture in its structure
(as compared to about 14-15% in the EU), with negative impact on the employment level
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of the economically active population, a low level of processing the agricultural raw
materials and therefore a low value added and taxes cashing for agro-food production;
- extinction of social rural economy (handicraft cooperative, small workshops for
rendering private rural services in villages), a phenomenon whose consequence was that
about one million craftsmen from rural population entered unemployment or
anticipatively retired;
- forestry, especially in the areas with the most valuable forests of our country: Suceava,
Harghita, Maramures, Apuseni Mountains;
- the lack of real administrative autonomy and decentralisation in case of Romanias rural
development (either local, or regional). All the rural development programmes
(European, national, regional or local) are assessed, approved and financed only from the
ministries located in Bucharest. This issue, besides entailing huge amounts for
promotion, financing and execution, generates permanent and sustained corruption, lack
of transparency, equity and equilibrium.
The implementation of regionalisation and decentralisation idea could lead to a reform in
administration, to its more effective functioning, to regional development, to a diminution
of economic discrepancies, to a proactive involvement of citizens (the decisional level
being brought more closer to their needs) for a promotion of subsidiarity principle (one of
the basic principles of the EU) and last but not least, to a better absorption of European
funds (8).
Currently, Romania has the most fragmented agricultural market in the European Union,
with 3.7 million agricultural holdings and an average of 3.5 exploited hectares per holding.
The situation improved during recent years, so that market has two distinct universes: the
one of subsistence holdings, each of them with few hectares, covering overall 4 million
hectares and the areal of some tens of thousands industrial farms, exploiting some other 4
million hectares of land.
The issues related to the lack of effective irrigation systems added to all the above
mentioned. Moreover, one more issue exists: the farmers have no place to sell their
products, since the potential clients from urban area do not have sufficient income to buy
their goods or simply because they choose the imported goods, also declared Professor
Dumitru Sandu. Another reason for the stagnation of employment level in agriculture is that
not all the people who did not find jobs in towns left the country for working abroad. And
the higher cost of living in towns determined, in 2012 for example, over 118 000 persons to
move from towns to villages, thus exceeding the number of those making the reverse
movement, from villages to towns (74 000 persons in 2012).
1.3 Romania's EU membership and Romanian agriculture requirement for the
integration in the EU's Common Agricultural Policy
The technological performance gaps, measured by the average yield of cereals per hectare,
are obvious not only in its low level but also due to the accentuated fluctuation and
instability. In countries such as France, Italy and Spain is a maximum annual production
difference (difference between maximum and minimum annual production) in cereal crops
about 1300 kg/ha, at an multi-annual average production of 6300 kg/ha (20.6%), while in
Romania the maximum difference is 2000 kg/ha, at a multi-annual average production of
only 2770 kg/ha (74.1%), which demonstrates non-performance and large agricultural
annual fluctuations in Romania.
The non-performance of annual agricultural production is generated, primarily, by the still
high dependence on annual weather conditions because the irrigation systems are largely
degraded and non-functional, the farms are poorly equipped with irrigation facilities and the
water for irrigation has a high cost, but also due to the use of obsolete agricultural
62

technologies, with a low consumption of inputs from the category of those supporting
performance (fertilizers, crop protection chemicals) and technical equipment obsolete in
terms of energy consumption and productivity. The drought, whose frequency is
increasingly larger, affects the agricultural production especially in the Romanian Plain,
Dobrogea and Moldova, where there are also areas with the largest irrigation systems, built
between 1960-1990, but broken or unused for about 20 years.
2. Rural development objectives and priorities: horizon 2014-2020-2030
2.1 Common Agricultural Policy
In the rural areas of the EU, the economy is considerably influenced by the agricultural
activity, while the role of agriculture within the three priorities of the post-Lisbon Agenda
is based on:
smart growth the development of a knowledge and innovation based economy
(technological research and development combined with the efficient use of existing
resources entail a higher productivity) (5);
sustainable growth the promotion of a more effective economy in terms of resources
use, more ecological and with higher competitiveness could entail the supply of public
goods (such as the preservation of habitats, bio-diversity and the preservation of rural
heritage) which could contribute, in the concerned areal, to the creation of new
workplaces, through the extension of agriculture and the local markets catering;
inclusive growth the promotion of an economy with a high rate of employment, able to
ensure the social and territorial cohesion (about 13.6 million persons directly hired in
agriculture, forestry and fishery while some other 5 million are hired in the agro-food
sector, this meaning 8.6% of total jobs in the EU and 4% of the EU GDP).
The EU agriculture faces several problems generated by the economic crisis, such as: food
security issues, related to high discrepancies between production and distribution; the
impact of prices volatility upon costs and prices, both on the side of agricultural products
purchasers and on the side of agricultural producers; price variations which are not reflected
alike in the food chain; productivity decrease; pressures for intensive production due to cost
increases; attenuation of climate changes and natural resources adaptation and preservation;
increased effectiveness of resources use and sustainable development at all levels.
These would be the reasons why the CAP reform should approach both market and political
failures, in the sense that: markets need more transparent signals; policies should envisage
new challenges; productivity and innovation should envisage sustainable growth. Within the
European Strategy for Smart, Sustainable and Inclusive Growth - Europe 2020 there are
established the ways to be followed in view to solve the above mentioned challenges.
The economic area will have as political objective the viable production of food meant:
to contribute to the increase of agricultural income and to limit the annual and multi-annual
fluctuations;
to improve the competitiveness in the agricultural sector, should consolidate the position it
holds within the food chain;
to compensate the production difficulties in the areas with specific natural disadvantages,
since these regions present a high risk of land dropouts.
Though Green House Gas (GHG) emissions from agriculture decreased by 20% since 1990,
continuous efforts are still needed in view to reach the objectives of the EU agenda related
to energy and climate, in view to reduce the GHG emissions, to adapt and achieve a
positive contribution through carbon storage and bio-mass production, based on innovation.
In terms of environment and climate changes, the political objective is the sustainable
management of natural resources and the attenuation of climate changes that (6):
63

guarantee sustainable production practices meant to ensure the supply of public goods that
meet the environment related conditions, since a number of public benefits generated by
agriculture are not remunerated through the normal markets functioning;
favour the ecological green development through innovation, which needs the adoption
of new technologies, the development of new products, the change in production
processes, supporting the clients new expectations;
pursue the actions meant to reduce the climate changes impact and allow the agriculture to
adapt itself to the climate changes. Since agriculture is particularly vulnerable to the impact
of climate changes, allowing the sector a better adaptation to the effects of meteorological
fluctuations would lead to a diminution of the negative effects of climate changes.
Though an increased number of rural areas are more and more influenced by external
factors, agriculture still remains the engine of rural economy in the most parts of Europe.
The vitality and the potential of many rural areas are still closely related to the existence of a
competitive and dynamic agricultural sector, attractive for young farmers (12). This is, in
particular, specific to predominantly rural areas where the primary sector accounts for about
5% of the value added and for 16% of employed people as well as in the new Member
States, where importance is given to the consolidation of recent productivity increases and to
reach full agricultural potential (4). Moreover, agriculture plays a significant role in rural
areas through the generation of additional economic activities. In many regions, particularly
within the new Member States, agriculture is both the backbone of rural economy and the
cornerstone of local traditions and social identity. On territorial side, a territorially balanced
development policy would be able to support the creation of jobs in rural area; to improve
rural economy and to promote diversification, allowing the local actors to express
themselves at maximum level; to allow for structural diversity within the agricultural
systems, as well as the improvement of conditions for small farms and for local markets
development, since all around Europe the agricultural heterogeneous structures and the
production systems contribute to the rural regions attractiveness and identity.
2.2 Romanias objectives within the new CAP
The agricultural strategy objectives, according to academician Paun Ion Otiman (2), were
formulated starting from the functions of the rural area and economy, of the Romanian
agriculture, the need of their fast development, the new partnership between Europe and the
farmers, in agreement with the CAP reform for the period 20142020, namely: obtaining a
reliable agricultural production that should ensure the national food security and guarantee
Romanias population food safety; ensuring the ecological equilibrium of the rural area on
the long-run; conservation and protection of useful renewable natural resources; balanced
territorial development of agricultural rural economy and development of agricultural and
non-agricultural rural SMEs and increasing the active rural populations employment level;
equilibrating the Romanian food (and payments) balance and growth of the Romanian agrofood exports; diminution of less-favoured rural areas and alleviation of severe rural
poverty; optimization of the agricultural production structure and of the territorial
distribution of the farming systems; agro-tourism capital growth through the preservation of
the landscape heritage of the rural area; getting the national education and scientific
research system compatible with the European system; elaboration of the Law on
Romanias agriculture orientation, as legislative support necessary for carrying out the
Agricultural strategy.
At the same time, the main administrative and procedural dysfunctions that entailed an
adverse budgeting of European funds for agriculture and rural development during all these
years are to be urgently analysed and solved. European programmes and projects for
agriculture are set up around the sustainable rural development, as a determinant of
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sustainable economic growth, which supposes a strong rural economy, built up based on
modern rural infrastructure, an appropriate technical endowment of rural territory, localities
and dwellings, the use of local natural resources (from rural area) renewable in the
economic circuit, the environment and landscapes protection and, as consequence, an
acceptable standard of rural life (11).
The new philosophy of rural area development is based on the sustainable rural
development concept that supposes the consonant junction between the agricultural
component and the rural agro-food and non-agricultural economy component,
fundamentally on the following principles (10):
- the consistency between rural economy and environment (the balance economyecology);
- the sustainable development programmes should envisage a medium and along term
horizon;
- the diversification of agricultural economy structure, through the extension of agro-food
economy, the non-agricultural economy and rural services;
- the rural area naturalisation, by preserving the natural environment as unchanged as
possible;
- the man-made environment should be as close to the natural rural one as possible;
- the use of local natural resources in the rural economic activity, priority being assigned
to the renewable resources.
Taking into account the equilibrated geographical structure of the agricultural land fund and
the distribution of relief in Romania, the ecological areas of our country allows for the
balanced carrying out of the various agricultural systems (intensive, ecological, multifunctional, conservative, and bio-technological). Considering as starting point the
agricultural performances and the low development level from Romania, if considered in
comparison with the EU ones, we could say that are at the level existing in the western
European countries during 1955-1960 and, as consequence, the Romanian agricultural
strategy should be highly focusing on the consolidation of agricultural holdings and on
increasing the yields, through high investments in the Romanian agro-food system.
Intensive agriculture. The core of Romanian agricultural policies should be the extension of
performing (intensive) agriculture towards the areas where nowadays, these technologies
are not used, for financial reasons. Without increasing the technical performances of
agriculture in the crop and animal production sectors up to the average EU level at the
horizon 2020 and up to the average level of developed countries at the horizon 2030,
Romania will continue to have, in the future as well, a food consumption that will depend
on the Community agro-food trade.
Ecological agriculture, as a version of multi-functional agriculture, supposes technologies
integrating more labour fore and therefore could take over part of the rural labour force.
The ecological agriculture is the single agricultural system ensuring the procurement of
high quality products, controlled and certified in consonance with the nature and the
consumers health. During the last decade, the development of this sector knew a
spectacular evolution, particularly in the countries where food industry and agriculture hold
a high share. At global level, its dynamics was rather accelerated, despite the world
economic crisis. At present, 37.3 million hectares are cultivated under ecological system at
world level. In 2012, 26.700 operators were officially registered in the ecological
agriculture, exploiting over 850 000 certified hectares. These figures are placing Romania
on the 5th position in the EU. During 2014-2020, the potential of this sector could be
maximised through the smart use of future agricultural policy tools, so that Romania could
reach a top position among the world actors in this field (5). It is estimated that, in rich
65

countries, ecological agriculture is currently practised on about 4-5% of the agricultural

area, and due to the much higher prices of eco-products, a considerable increase in areas
under eco-cultures could be envisaged, respectively a significant greening of the
agricultural production during the next 2-3 decades.
Multi-functional agriculture, though less performing for the agricultural holdings, if strictly
speaking in terms of production and profit (as compared to the intensive agriculture), is
however preferred for other reasons (touristic, landscape, environment protection, ecologic,
social etc.). In principle, the multi-functional agriculture meets all the economic functions
of the intensive and specialised agriculture, taking over, nonetheless, some new functions,
such as:
- preserving the vital elements of bio-diversity;
- harmonising the social and cultural functions of rural area in close relationships with a
healthy and diversified agriculture;
- producing raw materials for energy;
- increasing the touristic capital, through the preservation and arrangement of landscapes
heritage.
The multi-functional agriculture supposes the use of more persons employed in agriculture,
for longer periods during the agricultural area as compared to the branches of conventional,
intensive and specialised agriculture.
Conservative agriculture, through the implemented technologies, considerably contributes
to the protection of agricultural environment, the diminution of carbon dioxide and waste
gases emissions (due to mechanical works), the quasi-permanent green coverage of the soil,
the preservation of bio-diversity, the landscapes improvements and arrangements and
particularly the optimal use of primordial agricultural resources soil and water. Taking
into account the long term effects of implementing the conservative agriculture in the
environment, first of all for the soil, the technical performance difference should be
compulsorily supported both in terms of financing and taxation.
Agriculture as a source of green energy. The first notable energetic crisis from the eighth
decade of the 20 century, as well as the pollution decrease, entail new problems for
agriculture. Among the energy alternatives to the crisis of fossil energy materials, with closer
or long lasting depletion, we could mention the agricultural production of bio-energy, thus
agriculture getting a new function: production of raw energy materials. The EU directives
provide for the extended use of bio-fuels from 2% of total consumption in 2007 to 10% in
the next ten years and to 20% after the 2020s.
Bio-technological agriculture. The accelerated evolution of research in the field of genetic
engineering and bio-technology had as direct effect in agriculture the unprecedented
assimilation of scientific results materialised in the extension of cultures with genetically
modified plants, both for the increase in agro-food production and for the increase of
agriculture weight in the energetic economy. As for the energetic function of agriculture, we
also have to emphasize the major impact of bio-technological agriculture upon the agricultural
holdings economy.
During 15 years (1996-2010) the global area occupied by modified crops (soya, maize,
rape, cotton) increased by about 10 million ha/year, reaching 150 million hectares in 2011.
Due to ecological structure of the national agricultural area, Romania is able to cultivate
about 500 000 hectares of genetically modified soya and about 1.5 - 2 million hectares of
genetically modified maize (out of the 3 million hectares cultivated with maize), bringing
an increase the agricultural value of at least 2.5 to 2.5 billion for export of concentrated
feed / grain corn and soybeans. The current pricing system, the elimination of subsidies for
food to be as cheap as possible, without using any form of financial compensation for
66

subsidiary services of agriculture will have negative consequences for farmers in the
medium term and indirectly, on long term, adverse effects in food safety.
Mountainous economy, through national resources that it includes, is one of the economic
and social issues of major importance for Romania. The fact that the mountains of Romania
lie on approximately 73,300 km2 (29% of the country), of which 44,300 km2 covered with
forests, 24,000 km2 of grasslands and 5000 km2 of arable land, where 2.1 million people
live in 1.2 million households and owning approximately 2.9 million hectares of
agricultural land, the importance of mountainous economy for our country could be easily
quantified.
In the mountain area, mountainous agricultural economy, forestry and agro-tourism
economy are intertwined. Mountainous agricultural economy, mostly organic, focused on
pastoral economy (cows rearing and shepherd related activities) can be combined with the
harvesting and processing of forest fruit and medicinal plants from wild mountain flora, to
which the winter and summer agro-tourism activities or activities related to pastoral,
religious or spiritual habits, sports and trekking are to be added, all these being ways to
increase the value added in the mountainous rural economy, of superior turning into
account the natural capital of the mountainous area. A well designed, implemented and
supported mountainous economy could be a chance for Romania, with the condition that
supportive government policies are appropriate to the mountainous area (15).
Forestry should focus on three fundamental lines for the regeneration and increasing the
national forests area, namely (1):
- limitation of annual cuttings to a maximum of 15-16 million m3 timber;
- programmes of annual afforestation in view to reach an average national coverage of
forests area of 40% in 2035, out of which at least 15% coverage in the plain area;
- increasing the timber processing degree in view to reach the average European level per
cube meter of exploited wood (260 /m3 in the EU and 80-90 /m3 in Romania 2010).
Conclusions
The priority for the modernisation of agriculture and rural economy should be substantiated
by the vital economic and social functions of the agro-food system: ensuring the balanced
nourishment of population, the necessary raw materials for non-agricultural activities and a
pro-active and profitable export of agro-food products, increasing the landscapes capital of
the rural area and natural environment protection. At the same time, rural economy, in
general, and agriculture, in particular, represent a huge market for the upstream and
downstream branches, with direct contributions to the development of certain noagricultural branches, as well as the development of agriculture (and forestry) auxiliary
sectors.
In view to ensure a sustainable rural development, the programmes should ensure a rational
management and the preservation of major resources for living, under the circumstances
where the climate is changing both at global and local level, population is continuously
increasing while natural resources are limited. The setting up of overall projects should take
into account hydrological and relief related criteria, in order to eliminate the random,
chaotic and subjective interventions and actions, the current endowments infrastructure, the
waters management, the land and forests arrangements, the tourism interests
(archaeological sites), the technical infrastructure of localities etc. Besides the agricultural
activity, the projects should integrate all the activities framed with a delineated area, while
the core objective would be to ensure the sustainability of resources and environment
conditions.
67

The reform of the Romanian agro-rural sector could generate a sustainable economic
growth and could contribute to the modernisation of the Romanian rural area as a whole. To
this end and in the context of the post 2013 reform of the European Common Agricultural
Policy, Romania has to adopt several extremely necessary reforms.
Europuls representatives indicate three major lines of discussions on these reforms, based
on which a series of final recommendations could be formulated:
Reforming the Romanian agricultural holdings structure:
Promoting and encouraging the agricultural association of farmers, stimulated
through state budget subsidies and through life annuity type programmes.
Involving the young farmers in rural area through various Young farmers type
programmes.
Formulating a more clear position of Romania against the need of equitable
reallocation of direct payments at European level after 2013.
Modernising the rural area and unlocking its economic and human potential:
Co-financing and developing certain projects of critical infrastructure in the rural
area through the European Agricultural Fund for Rural Development (EAFRD)
and the Structural and Cohesion Funds.
Unlocking the human potential of rural area by stimulating the development of
alternative economic activities, such as organic agriculture, eco - tourism,
development and promotion of local labelled products.
Administrative simplification and better inter-institutional coordination:
Administrative simplification and the improvement of co-financing schemes in
view to accelerate the funds accession process and monitoring corruption at local,
county and national level.
Development of highly skilled human capital, as well as the collaboration and best
practices sharing with experts from other EU Member States.
Better inter-institutional coordination between Bucharest and Brussels, together
with employers and farmers associations, NGOs and the academic environment.

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The Romanian Statistical Yearbook - edition 2013

69

PUBLIC HIGHER EDUCATION AND LABOUR MARKET IN THE ROMANIAN

AGRO-FOOD SECTOR WHAT IS TO BE DONE?
Georgiana Camelia CRETAN
The Bucharest University of Economic Studies, Romania;
email:[email protected], Piata Romana nr. 6, Sector 1, Bucharest, Romania
Abstract
Given the strategic importance of higher education (Europe 2020 Strategy) and agro-food
industry (Common Agricultural Policy) for achieving increased competitiveness of EU
economy, economic growth, social welfare and sustainable development in EU member
states, the present paper aims at analyzing the evolution and present state of public higher
education (funding, students, graduates) in close connection with labour market evolution,
in the Romanian agro-food sector. In order to examine the trends in public higher
education and labour market in the agro-food sector we used data on public funding of
higher education, students, graduates and employment. The research conducted led to the
idea that higher education plays a key role in preparing educated and trained workforce
involved in the Romanian agro-food sector which will finally lead to increase employment
of higher educated young people in the same economic sector. The paper also offers some
conclusions on the way in which the evolution of higher education system affects the labour
market in the Romanian agro-food sector.
Keywords
higher education, public funding, graduates, labour market, agro-food sector, Romania
Introduction
Under different sectorial, national and global changes appears the need for every society to
reconsider and even to reinvent itself in order to ensure competitiveness, economic growth,
social welfare and sustainable development. Thus, national authorities have an important
role in providing the proper reforms and legal framework to maximize the functionality of
the involved mechanisms.
Given the important role education and especially higher education plays in the
construction of the European area of knowledge, in preparing individuals to face the
requirements emerged on the labour market and in fostering economic growth, as well as
the significant contribution brought by the agro-food sector to the economic growth, the
research conducted in this paper provides an overview of the supply and demand of highereducated workforce in the Romanian agricultural and agro-food sector.
Thus, considering the increased pressure on both natural and financial resources, together
with an ageing population, the rapid expansion of higher education systems all over the
world and also the growing unemployment at national and sectorial level, the present paper
aims to answer the following question: what changes must be made in the public policy for
agricultural and agro-food higher education in order to meet efficiently the needs of
contemporary labour market in the Romanian agro-food sector?
In order to answer the research question, we analyzed on one hand the evolution and
present state of public higher education in terms of funding, students and graduates, and the
labour market evolution in the Romanian agricultural and agro-food sector, on the other
hand. The aim is to present our findings that are relevant to the research question.
70

Moreover, the paper will also offer some conclusions on the way in which the evolution of
higher education system impacts the labour market in the Romanian agricultural and agrofood sector.
For the scientific approach proposed in the paper, we dealt with data and technical reports,
published by national and international institutions, regarding public funding of higher
education, students, graduates and employment.
The first section dedicated to a presentation of the main results obtained by other
researchers relevant for the research question is followed by the second section where a
short incursion in the actual state of the Romanian agricultural and agro-food sector is
undertaken. The third section presents the results of the investigation related to the
Romanian public higher education in agriculture and affiliated sub-sectors, in terms of
students enrolled, study programs, expenditure, for public higher education in agriculture
and affiliated sub-sectors, and also in terms of supply of higher-educated workforce for the
agricultural and agro-food sector. Section 4 looks at the trends registered in the Romanian
agricultural and agro-food labour market. The last section summarises the main findings
and concludes.
Though several research studies have treated the relationship between higher education and
labour market, the present paper underlines the particular case of the agricultural and agrofood sector in an Easter European state, member of the European Union.
1. Literature review
Research on the field of higher education and labour market is quite broad and addresses
issues related to the impact of an academic degree and field of study on short-term and
long-term unemployment across Europe (Nunez and Livanos, 2010), to the increased
opportunities higher educated workforce has in obtaining an adequate job (Livanos, 2010),
to the link between education policy and labour market outcomes (Falish, 2008), to the way
in which the organisation, funding and management of higher education helps states to
achieve their economic and social objectives (Machin and McNally, 2007), to whether the
investment the government and individuals do in higher education represents well spent
public money and time (Purcell and Elias, 2004), to the employability of higher education
graduates and their transition to the labour market, to a variety of higher education
mismatches within the labour market (Korka, 2010), as well as to the development of a
methodology for establishing the causal relations between higher education graduates and
labour market absorption (Din and Cretan, 2014), or to the development of a tool, based on
the perceptions of the beneficiaries of higher education, that decision-makers could use in
fitting education-job match policies (Din and Cretan, 2013).
The fact that individuals with higher education are more successful on labour market than
those with low-level or medium level education is well known (Vidovic, 2013).
Furthermore, a higher education degree is more effective on reducing the short-term than
long-term unemployment. Though, the situation is quite different on particular subjects. For
example, a higher education degree in agriculture and veterinary can lead to long-term
unemployment above average, but has a significant positive effect on reducing short-term
unemployment (Nunez and Livanos, 2010). Moreover, research conducted on the field of
study suggests that the risk of unemployment is higher within graduates in field of study
having correspondent in the private sector of the labour market, than graduates of
traditional fields of study in the public sector of the labour market, i.e sociology and
humanities, in countries where the public sector is the main employer (Livanos, 2010).
In the last 20 years governments faced a massive and sustained dilation of higher education
system, but even if the number of students multiplied, the public funding per student
71

decreased. Thus, governments focused more on attracting private resources to ensure wide
access to higher education. The study conducted by Yang and McCall (2014) revealed a
negative relationship between the level of public funding per student and number of
students enrolled in higher education, even though GDP per capita and the share of public
expenditure on education in GDP positively affects the number of students enrolled in the
higher education system. Given this context, Machin and McNally (2007) investigated the
impact of the expansion phenomenon of higher education on the labour market. The results
do not suggest an over-supply of university graduates as the average wage gap between
higher education graduates and medium-level graduates is still significant. However, the
research confirms the importance of the field of study. The over-supply of higher educated
workers is more likely to appear, in general as well as in different fields of study, as a
consequence of widening higher education access. Also, the increasing number of enrolled
students may cause over-qualification of higher education graduates. Carroll and Tani
(2013) underline that the rate of over-qualified workforce varies by field of study
completed are associated with the demand of higher education graduates on the labour
market. However, three years after graduation, the phenomenon of over-qualification
diminishes, but does not disappear. Regarding the impact of over-qualification on income
level, the same study indicates that young workforce does not feel the effect of penalty,
while older over-qualified workforce experiences a significant wage reduction, compared to
the appropriate wage for the qualification held.
Beyond these possible effects of a massive higher education system, the rapidly increase in
number of students enrolled could lead to reducing unemployment, during economic crisis,
without having negative implications on public budget. However, the reduction in the level
of public funding per student might damage the quality of education. Moreover, the
government could direct the additional number of students to relatively cheap fields of
study, like social sciences (Plumper and Schneider, 2007).
Even though higher education in particular fields of study requires a smaller effort from the
public budget, the university offer in a certain field of study should be established by the
government according to current and future needs of labour market within the economic
sector acting as the first employer. Brooks et al. (2008) suggest that the demand for higher
educated workforce is influenced by both the quantity and quality of labour demand, i.e. the
estimated number of workers necessary to produce the designed demand for goods and
services and the ability of higher education institutions to graduate higher educated
workforce having the skills required by employers. Nowadays, skills are a necessary
condition for getting a better paid job. The importance of matching higher education with
jobs was also emphasized by Din and Cretan (2014). The authors determined, using Fuzzy
Cognitive Map, the fact that higher education-job match is the most influential concept
within the model of higher education-job match and also influences this dynamic and
complex system. Independent of education level, employment rates fluctuate. Significant
changes in the structure of the GDP could lead to a shift in employment, especially in
particular economic sectors. For example, during the recent economic and financial crisis
the agricultural sector acted as an employer of last resort in several countries (Vidovic,
2013).
Research related to higher education and labour market demand within the agricultural and
agro-food sector is not extensive. Still, there are a few studies addressing either the need for
skilled workforce claimed by the labour market in agriculture and rural development
(Istudor et al., 2010), or both the workforce needs of the agribusiness industry and the
ability of higher education system to meet them (Brooks et al., 2008).
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2. Short incursion in the actual state of the Romanian agro-food sector

Due to geographical reasons, particular climate conditions favorable to agricultural
production, easy access to global markets through the opening at the Black Sea, the
increasing demand for food and agricultural products while supply is relatively the same,
the agricultural sector holds a significant position in the Romanian economy.
Thus, the Romanian agro-food sector has a relatively high share in gross value added
(GVA), above the average share recorded in the EU28 member countries, for the period
2000- 2013 (Figure 1).

Source: processed by the author, using data from Eurostat, august 2014
Fig. 1 Descriptive statistics for the share of agro-food sector in total Gross Value
Added, in Romania and EU 28 member states, between 2000 and 2013, NACE Rev. 2
Examining the levels of the analyzed variable, though Romanian agro-food sector faced
dramatic shifts starting from 2004 (14,1%), its share in GVA is still an important one (6,4%
in 2013), compared to the average share in EU28 member states (1,7 % since 2010).
3. Romanian public higher education in agriculture and affiliated sub-sectors
Since late 1990s, the Romanian public system of higher education experienced a significant
development, in terms of students enrolled, public funding, fields of study and study
programs.
3.1 Tendencies regarding students enrolled, study programs and public funding in
agricultural and agro-food higher education
The number of students enrolled in the field of Agriculture, forestry and fishery, in
Romanian higher education system had a sustained increase from 1998 until 2007, when it
reached its maximum of 24.465 students, followed by one third reduction in 2008, finally
reaching the value of 12.555 students in 2012 (figure 2a).
As shown in the same figure, the total number of enrolled students in Agriculture, in EU 28
member states, fluctuated in the analyzed period reaching its peak of almost 295.000
students in 2007, followed by a 17% decrease in 2008 and levelling off around 272.000
students in the next years. Over the analyzed period, the universities within the Romanian
higher education system enrolled between 4.6% and 8.32% of the total numer of students
enrolled in EU 28 member states in the field of Agriculture, forestry and fischery (figure
2b).
73

a)
b)
Source: processed by the author, using data from Eurostat, august 2014
Fig. 2 a, b Number of tertiary students (ISCED 5-6) enrolled in Agriculture, forestry
and fishery, in Romania (1998-2012) and in EU28 member states (2003- 2012) and the
share of tertiary students (ISCED 5-6) enrolled in Agriculture, forestry and fishery in
Romania, in total number of tertiary students (ISCED 5-6) enrolled in Agriculture,
forestry and fishery in EU28 member states (2003- 2012)
In the academic year 2013/2014, Romanian public universities offered 31 types of
Bachelors degree study programs in agriculture and allied disciplines (table 1).
Table 1 Bachelors degree programs by field of study, in agriculture and allied
disciplines, as of 2013/2014
Field of study

Agronomics

Horticulture
Forestry Engineering

Forestry

Engineering and Management in Agriculture and Rural Development

Food Engineering

Animal Sciences
Environmental Engineering

Economics
Civil Engineering
Environmental Science
Chemical Engineering

Study program
Agriculture
Soil Sciences
Montanology
Plant Protection
Exploitation of machinery and equipment for agriculture and food industry
Horticulture
Landscaping
Wood processing Engineering
Engineering and design of wooden finished goods
Forestry
Forest harvesting
Hunting
Economic Engineering in Agriculture
Engineering and management within public catering and agrotourism
Food Engineering
Agricultural Products Processing Technology
Food Control and Expertise
Fishing and Fish processing
Consumer and Environmental Protection
Natural extracts and food additives
Animal Sciences
Fish Farming and Aquaculture
Engineering and Environmental Protection in Agriculture
Environmental Engineering
Agro-food economy
Environmental Economics
Agro-food and environmental economy
Civil, Industrial and Agricultural Engineering
Ecology and Environmental protection
Food Chemistry and Biochemical technology
Control and food security

Source: processed by the author, using data from the national legal framework, for the
academic year 2013/2014
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Regarding the level of public funding allocated for higher education in Romania, as
percentage of GDP, after a relative stagnation between 2002 and 2005, the share of public
expenditure on higher education in GDP increased from 0.7% in 2002 to 1.2% in 2009
(figure 3).

Source: processed by the author, using data from Eurostat, august 2014
Fig. 3 Descriptive statistics for the total public expenditure on education as % of GDP,
at tertiary level of education (ISCED 5-6), in Romania and in EU28 member states
(2002- 2011)
In the following years the share of public funds allocated to higher education registered a
sharp downward trend reaching the value of 1% of GDP in 2010 and 0.85% of GDP in
2011. Compared to the average value recorded for EU 28 member states, Romania
allocated, with the exception of 2009, a much smaller proportion of GDP to funding higher
education. According to the legal framework, Romanian public higher education
institutions receive funds from the state budget. These funds are allocated, to each
university, under a contract, using a funding methodology and a funding formula to assess
the appropriate level of funding. Thus, according to this methodology universities receive
funds also according to the fields of study they have in portfolio. In this respect, the funding
authority establishes the average cost per equivalent student, by educational level and field
of study, using different cost coefficients.
3.2. Supply of higher-educated workforce for the agricultural and agro-food sector
Between 2003 and 2012, EU28 member states higher education institutions awarded an
average of 54.000 degrees in Agriculture, forestry and fishery. Moreover, the number of
tertiary graduates within the field of agriculture followed an upward trend from 2003
(44.998 graduates) to 2012 (59.973 graduates) (figure 4).
In Romania, the ascending trend registered at the EU level lasted until 2008, when there has
been registered a 33% decrease in the number of graduates Though, the maximum number
of Romanian tertiary gradutes in Agriculture, forestry and fishery was recorded in 2009. In
Romania, after 2009, the number of higher education graduates decreased and continues
this trend as the number of enrolements in Agriculture, forestry and fishery declined, as
shown in figure 2a.

75

Source: processed by the author, using data from Eurostat, august 2014
Fig. 4 Descriptive statistics for the number of tertiary graduates (ISCED 5-6) in
Agriculture, forestry and fishery, in Romania and in EU28 member states (20032012)
The available data at national level on the number of higher education graduates in three
major agricultural fileds, for the period between 1990 and 2012, reveal that until 2007 the
number of tertiary graduates in Agriculture was far higher than that of graduates within the
fields of Food industry or Forestry.

Source: processed by the author, using data from Ministry of National Education, august 2014
Fig. 5 Descriptive statistics for the number of tertiary graduates (ISCED 5-6) in
Agriculture Environmental Science, Forestry and Food Industry, in Romania (19902012)
But, in 2008 the hierarchy changed and the number of graduates in Food Industry almost
tripled. Between 2009 and 2012 the trend in number of tertiary graduates within the three
major fields of study analyzed was descendent. Even though, judging after the number of
graduates, the Food industry holds the first position, followed by Agriculture and Forestry.
4. Trends in the agricultural and agro-food labour market
The share of the Romanian agro-food sector employment in national employment is quiet
high (30% in 2013), compared to the average registered in EU 28 member countries (5,1%
in 2013) (figure 6).
The comparative analysis of the share the agro-food sector holds in total gross value added
with the share the same sector has in total employment reveals that, in Romania, the
workforce employed in the agro-food sector brings less value added than the labour
employed in other sectors of the economy, with high implications on labour productivity
(Figure 7).
76

Source: processed by the author, using data from Eurostat, august 2014
Fig. 6 Descriptive statistics for the share of agro-food sector in total employment, in
Romania and EU 28 member states, between 2000 and 2013, NACE Rev. 2

Source: processed by the author, using data from Eurostat, august 2014
Fig. 7 Descriptive statistics for the share of agro-food sector in total GVA and total
employment, in Romania, between 2000 and 2013, NACE Rev. 2

Regarding the unemployment of young persons (aged 20-34), tertiary education graduates
(ISCED 5-6), while the average unemployment rate for 2003-2007 was 7.1% at the EU27
member states level, Romania registered a lower value for this indicator (6.4%).
Moreover, Romanian unemployment rate of young people (ISCED 5-6) is lower than the
average value recorded at UE 27 member states level, for almost all fields of study, except
the field of Engineering, manufacturing and construction (figure 8).
However, focusing on the fields of study we notice that in Romania, from all fields of study
that of Agriculture and veterinary holds the lowest level of the unemployment rate within
higher education graduates, after the field of Education. This fact could be a direct
consequence of the fact that the Romanian agricultural sector still has a greater availability
to encompass Agriculture and veterinary higher education graduates than graduates from
other fields of study.
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Source: processed by the author, using data from Eurostat, august 2014
Fig. 8 Descriptive statistics for unemployment rate by field of study (ISCED 5-6), age
20-34 years, in Romania and EU 27 member states, 2007
Even in terms of education/occupation mismatch (ISCED 5-6) for young people, within the
field of Agriculture and veterinary, the value of the indicator is lower in Romania than in
EU27 member states (figure 9). Though, in Romania, the mismatch indicator for the field of
Agriculture and veterinary has quite an important value compared to other fields of study,
except that of Services. This feature could be due to the fact that jobs in other activity
sectors might be more attractive for young workers as they guarantee a higher level of
income than the agricultural sector.

Source: processed by the author, using data from Eurostat, august 2014
Fig. 9 Descriptive statistics for education/occupation mismatch by field of study
(ISCED 5-6), age 25-34 years, in Romania and EU 27 member states, 2007

Source: processed by the author, using data from http://prevedu.ro/wpcontent/uploads/2012/07/Raport_cercetare_etapa3.pdft, august 2014
Fig. 10 The forecast of the estimated workforce demand for the higher education
graduates within the field of Agriculture, forestry and fishery (ISCED 5-6), in
Romania, for 2014-2020
78

However, as the results of the research conducted in Romania by the National Scientific
Research Institute for Labour and Social Protection show, the forecast of the estimated
labour demand reveals a decrease in the level of the workforce demand for the higher
education graduates within the field of Agriculture, forestry and fishery until 2016,
followed by a slight increase in 2017 (figure 10).
For the period of 2017-2020, the forecast shows that the labour demand for tertiary
graduates in the analyzed field of study will register a continuous reduction.
Conclusions
Given the strategic importance of agro-food industry in EU national economies for
achieving increased competitiveness of EU economy, economic growth, social welfare and
sustainable development in EU member states, as well as the particular geographical
advantages Romania has, the Romanian agricultural, but especially the agro-food sector has
a high potential for increasing both its performance and competitiveness. But, increasing
performance and competitiveness in the agricultural and especially agro-food industry is
strongly related to the level of education workers within the field have.
Currently, as the analysis conducted by the Romanian Ministry of Agriculture and Rural
Development (Strategy for agro-food sector development on medium and long term for
2020-2030, 2014) shows, Romania needs knowledge based agricultural administration.
From the same study we note that the majority of Romanian farmers, especially small
(semi-)subsistence farms managers suffer from the lack of a clearly defined professional
status, with negative or ambiguous implications for taxation, social security and health
insurance. In this context, considering the results of the research conducted showing that:
the Romanian agricultural and especially the agro-food sector have a great development
potential as well as a relatively high share in gross value added; the unemployment rate for
higher educated young people within the field of Agriculture, forestry and fishery is much
more reduced than the unemployment rate for other fields of study; the number of students
enrolled in public universities within the analyzed field is oversized compared to the
forecasted labour market demand; the completion rate of the enrolled students within the
field is quite reduced; public universities offer a great diversity of Bachelors degree study
programs in agriculture and allied disciplines, state intervention in higher education policy
in the analyzed field should be focused on the adjustment of the number of publicly funded
students within each major field of study with the medium and long term needs and trends
within the national and European labour market, correlated with the cyclical evolution of
the economic sectors taking over the graduates as well as with the development potential of
each economic sector within the national economy. The same analysis could be applied for
each major field of study in order to get a diagnosis of the previous, current and future
supply and demand of labour force.
However, the research conducted should be continued with a more refined analysis based
on input data (financial and non-financial) as well as on output data (graduates and skills)
for the higher education system, within each study program that delivers workforce for the
analyzed economic sector. At this moment such an analysis could not be performed due to
the lack of data required according to the needs imposed by this type of analysis.
Acknowledgement
This work was cofinanced from the European Social Fund through Sectoral Operational
Programme
Human
Resources
Development
2007-2013,
project
number
POSDRU/159/1.5/S/134197 Performance and excellence in doctoral and postdoctoral
research in Romanian economics science domain.
79

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80

NEW CHALLENGES FOR THE REGIONAL DEVELOPMENT OF ROMANIA IN

THE 2014 - 2020 PROGRAMMING PERIOD
Cristina CIOCOIU, Victor MANOLE
Faculty of Agro-Food and Environmental Economics, The Bucharest University
of Economic Studies; email:[email protected], Str. Mihail Moxa, nr.5-7, Sector 1,
Bucharest, Romania
Abstract
The new programming period (2014 2020) introduces new requirements for Romania,
imposed by the new regulations of the European Union with the purpose of increasing the
quality and the transparency of the regional development interventions. Among these
requirements we can find the ex-ante conditionalities, the performance framework, ecohesion and the new necessities regarding information and publicity. Taking the
experience gained in 2007 2013 as a starting point, this paper analyzes each of these
requirements, identifying their possible implications for the elaboration and
implementation of the programmes that will enable Romania to access the European Union
funds that have an impact on regional development. Our study contributes to a better
understanding of the framework within which the regional development interventions will
be put into practice in our country in the coming years and the improvement of the
currently on-going process of legislative, institutional and procedural preparation.
Keywords
Ex-ante conditionalities,performance framework, e-cohesion, information and
publicity, regional development
Introduction
The setting-up of the Romanian legislative, institutional and procedural framework for
2014 2020 is currently in progress. Also, the increasing weight of the European Union
funding for the new programming period is a given fact. In comparison to 2007 2013, the
allocation of the funds that have an impact on regional development - the Cohesion Fund
(CF), the European Regional Development Fund (ERDF), the European Social Fund
(ESF) has increased by 16.77%, reaching over 22.4 billion euros, amount which does not
include the allocation for the cooperation programmes.
The interventions that have an impact on the future regional development of Romania are
included in 6 operational programmes: Large Infrastructure Operational Programme
(covering transport, environment and energy sectors), Competitiveness Operational
Programme (covering research and development, information and communication
technology), Human Capital Operational Programme (covering education, employment,
social inclusion, etc.), Regional Operational Programme (covering competitiveness,
infrastructure, cultural heritage, tourism, urban development, etc.), Administrative
Capacity Operational Programme (dealing with public administration) and Technical
Assistance Operational Programme (for technical support issues). The implementation of
these programmes must be done according to the requirements imposed by the new
regulations of the European Union (EU), among which there are several new requirements
meant to increase the quality and the transparency of the regional development
interventions: ex-ante conditionalities, performance framework, e-cohesion,
information and publicity.
81

Taking advantage, where applicable, of the experience obtained in 2007 2013, this paper
critically analyses each of these requirements in order to identify their implications on the
implementation of the future operational programmes in Romania. Our analysis contributes
to a better understanding of the framework within which the regional development
interventions will be carried out in Romania in the coming years.
Therefore, in the first part of the paper, the ex-ante conditionalities imposed by the EU
regulations are analyzed, considering the manner in which they were transposed in the
Romanian programming documents for 2014 2020, including the status of their
implementation to date. In the second part of the paper, we present the performance
framework, from the perspective of both EU regulations and the programming documents.
In order to fully understand the impact of this requirement, a simulation of the application
of the performance framework is performed on one of the operational programmes from
2007 2013, namely the Sectoral Operational Programme Human Resources
Development.
The third part of the paper focuses on the concept of e-cohesion, which concerns the
transfer of information between the authorities responsible of managing and controlling the
EU funds (managing, certifying, audit authorities, intermediate bodies) and the
beneficiaries. Starting from the requirements of the EU regulations and considering the
steps already made in this direction in 2007 2013, we analyze the main challenges and
opportunities introduced by this concept for both the beneficiaries and the authorities. The
analysis is also based on the strategic and programming documents of Romania for 2014
2020 period regarding this concept.
The fourth part of the paper deals with the requirements regarding publicity and
information, in a comparative analysis between 2007 2013 and 2014 2020. Also, on the
basis of the 2007 2013 experience, it introduces practical suggestions of improvement for
the future. The paper concludes with a series of recommendations regarding the 4
requirements analyzed.
1. The ex-ante conditionalities
Regulation no. 1303/2013 that sets the general framework for the programming,
management, implementation and control of the European structural and investment
funds introduces a new concept the ex-ante conditionality. The definition provided for
this concept is a concrete and precisely pre-defined critical factor, which is a prerequisite
for and has a direct and genuine link to, and direct impact on, the effective and efficient
achievement of a specific objective for an investment priority (The European Parliament
and the Council 2013, art. 19, page. 340). The purpose of these prerequisites is to ensure,
even before the approval of the operational programmes, that there is a strategic and
coherent vision and the corresponding administrative capacity at the level of each member
state for the regional development interventions to be appropriately implemented. The
experience of the past programming periods proved that sometimes the efficiency of the
investments was undermined by delays or bottlenecks generated by the institutional,
political or regulatory frameworks of the member state (Jouen, 2012, page 120).
As a general rule, the ex-ante conditionalities must be fulfilled by the member states
before the official submission of the Partnership Agreement or of the operational
programmes. Nevertheless, as an exception, the deadline can be extended until the end of
2016 if the member state includes in the operational programmes specific actions, for each
unfulfilled conditionality, with clear deadlines and institutions in charge.
The ex-ante conditionalities cover both general and thematic conditionalities, mentioned
in regulation no. 1303/2013 - Annex XI. The 8 general conditionalities concern
82

requirements regarding the administrative capacity of the member state in areas such as
antidiscrimination, gender, disability, the existence of arrangements for the effective
implementation of EU rules in fields like state aid, procurement, environment legislation
and the existence of a statistical database and of a system of indicators. The thematic
conditionalities are specific to each fund. There are 25 conditionalities for the ERDF, 10 for
the Cohesion Fund and 14 for the ESF. These conditionalities impose the existence of
national strategies or policies, such as a smart specialization strategy, a comprehensive plan
for investments in transport, active labor market policy, etc. (The European Parliament and
the Council 2013, pages 438-456)
The mechanism for assessing, fulfilling and reporting on the ex-ante conditionalities is
presented in fig. 1. The implications of this mechanism are very important as unfulfilling
the ex-ante conditionalities in due time may allow the European Commission to suspend
the payments, even at the moment of the approval of an operational programme, if there is a
risk of significant detriment to the efficiency and effectiveness of attaining the objectives
set for a priority axis (a component of an operational programme). The suspension of
payments may be applied also later, if the member state does not report in the 2017 annual
implementation report that all ex-ante conditionalities have been accomplished.
Therefore, it is important to underline the role these conditionalities play in imposing on the
member state to conceive and integrate the interventions that have an impact on regional
development inside a larger strategic framework, at both national and European level, with
the purpose of improving their results.
When analyzing the Romanian draft operational programmes for the programming period
2014 2020, we find that there are still many issues to approach by the end of the year
2016 regarding the ex-ante conditionalities. As such, for the Competitiveness
Operational Programme (POC), there are 7 applicable conditionalities, 3 general and 4
thematic, of which only 14% are fulfilled, the rest being unfulfilled (43%) or partially
fulfilled (43%) (Ministry of European Funds, 2014, pages 121-122). Regarding the
Human Capital Operational Programme (POCU), there are 19 applicable conditionalities,
6 general and 13 thematic, of which only 11% are fulfilled, the rest being unfulfilled (68%)
or partially fulfilled (21%) (Ministry of European Funds, 2014, pages 246-249). For the
Large Infrastructure Operational Programme (POIM), there are 14 applicable
conditionalities, 5 general and 9 thematic, of which only 14% are fulfilled, the rest being
unfulfilled (43%) or partially fulfilled (43%) (Ministry of European Funds, 2014, pages
249-252). Regarding the Technical Assistance Operational Programme (POAT), there are
5 applicable general conditionalities, mostly unfulfilled (80%), the rest being partially
fulfilled (20%) (Ministry of European Funds, 2014, pages 76-77).
In the case of Regional Operational Programme (POR), there are 16 applicable
conditionalities, 5 general and 11 thematic, of which only 6% are fulfilled, the other being
unfulfilled (56%) or partially fulfilled (38%) (Ministry of Regional Development and
Public Administration 2014, pages 193-222). Finally, for the Administrative Capacity
Operational Programme (POCA) there are 3 applicable conditionalities, 2 general and one
thematic, mostly unfulfilled (67%) or partially fulfilled (31%) (Ministry of Regional
Development and Public Administration 2014, pages 114-115). The status of fulfillment of
the ex-ante conditionalities are illustrated in fig. 2.

83

Possible suspension of
payments after 31.12.2016

Reporting on fulfilment at
31.12.2016

Possible suspension of
payments on Operational
Programme approval

Assesment of applicability
and fulfilment by the EC

Details of self-assesment in
the Operational Programmes

Summary of self-assesment in
the Partnership Agreement

Self-assesment of applicability
and fulfilment

Source: Authors adaptation of art. 19 of Regulation no. 1303/2013

Fig. 1 Mechanism of ex-ante conditionalities

Source: Authors adaptation

Fig. 2 Status of fulfillment of the ex-ante conditionalities
84

An overview of this information suggests that a high pressure is to be expected on the

Romanian authorities in order to fulfill the ex-ante conditionalities in due time, according
to the requirements of the new regulations for 2014 2020.
2. The performance framework
Another requirement of the new EU regulations for the programming period 2014 2020
concerns the performance framework. This framework rewards or sanctions each country
according to the performance achieved for every priority axis of the operational
programmes. The performance framework includes 2 separate stages, namely the 2018
milestones and the 2023 targets. As far as the first stage is concerned, 5-7% of the allocated
budget for every priority axis can be granted or not in 2019, depending on the degree of the
physical and financial progress achieved, set as milestones for the year 2018 (The
European Parliament and the Council 2013, art. 22, page 348). In other words, the member
state must demonstrate the physical/financial progress achieved not only when the
programming period ends, but also at some stage in it. The review of the performance
framework in 2019 is illustrated in fig. 3.
In order to better illustrate the implications of the performance framework, we have
performed a simulation of applying it to one of the Romanian 2007 2013 operational
programmes, namely the Human Resources Development Sectoral Operational
Programme. Given that 2018 is the 5th year of 2014-2020, it was equalized with 2011,
which is the 5th year of 2007-2013. Using the information regarding the annual cumulative
targets and the progress achieved up to 2011 collected from the 2011 Annual Report of
Implementation for the above mentioned programme (Ministerul Muncii, Familiei i
Proteciei Sociale 2012, pages 67 - 126) we calculated the percentage of achievement of the
milestones for 2011.

>= 85% of the milestones (for all

indicators or, if there are more than
3 indicators, for all except one
which must reach at least 75%)

The performance reserve is allocated

to the respective priority axis

Reserve is allocated to another priority

axis which has reached its milestones

2018

<65% of the milestones (for at least 1

indicator or if there are more than 2
for at least 2 indicators) = suspension
of payments

< 85% of the milestones

Source: Authors adaptation of regulation no. 215/2014 (European Commission 2014,

pages 68-69)
Fig. 3 The performance framework Stage 1 (Milestone 2018)
From the simulation it resulted that for the first priority axis only 9% of the indicators
achieved at least 85% of the milestone set for 2011, the rest reaching between 0 and 48,5%.
In the case of the second priority axis, the corresponding indicators reached between 1 and
85

47% of the 2011 milestones. Regarding priority axis no. 3, 67% of the indicators achieved
more than 85% of the 2011 milestones, the others reaching between 29 and 72%. In the
case of the priority axis no. 4, 43% of the indicators achieved more than 85% of the 2011
milestones, the rest reaching between 0 and 84%. For the priority axis no. 5, 29% of the
indicators achieved more than 85% of the 2011 milestone, the others reaching between 20
and 81%. For the priority axis 6, 20% of the indicators achieved more than 85% of the 2011
milestone (where applicable), the others reaching between 6 and 49%. The results of the
simulation are illustrated in fig. 4.

Source: Authors adaptation

Fig. 4 Results of the simulation
These data support the conclusion that none of the 6 priority axes would have benefitted
from the performance reserve if the rules enforced by the new regulations were applied. In
addition, each of the priority axes meets one of the conditions necessary for the possible
suspension of payments, due to the fact that at least 2 indicators achieved less than 65% of
the milestone.
The second stage of the performance framework concerns the targets set for 2023. In this
case, financial corrections are applied by the Commission if the targets agreed for every
priority axis, except for the ones regarding the financial instruments or technical assistance
are not fully achieved. On the basis of an achievement coefficient, calculated by dividing
the physical progress by the financial one, the financial corrections are applied as a flat rate
of 5 up to 25%, depending on the value of the achievement coefficient (European
Commission 2014, pages 9-10).
The requirement regarding the setting up a performance framework is not entirely new,
Regulation no. 1083/2006 mentioned for 2007 2013 in art. 50 the possibility for a
member state to set up a 3% performance reserve if it considered this appropriate.
Following the assessment of the progress achieved up to 2010 and reported in 2011, this
reserve was allocated to the most advanced programmes. In contrast to 2007 2013, the
review of performance done in 2019 for the progress achieved up to 2018 is compulsory.
The mentioned review is done at the level of the priority axes, on the basis of clear criteria
included in the new EU regulations.
The performance framework has already been designed in the draft operational programmes
elaborated by the Romanian authorities for 2014 2020. Taking into consideration the
possible financial implications of applying this framework, it is important that its
components are set up in a realistic manner from the very beginning, using the experience
obtained in 2007 2013. Also, it is necessary to closely and constantly monitor the
performance of the priority axes in order to early identify any bottleneck or delays that
could affect the achievement of the milestones and targets set in the operational
programmes.
86

3. E-cohesion
The regulation no. 1303/2013 introduces a new requirement designed to decrease the
administrative burden for the beneficiaries of EU funds the e-cohesion requirement. As
such, the member states must implement the technical means to enable the beneficiaries to
choose an electronic transfer of information to the authorities managing and controlling the
operational programmes, namely the managing, certifying, audit authorities and the
intermediate bodies (The European Parliament and Council 2013, art. 122, page 398). In
other words, if the beneficiaries wish so, starting with January 1st 2016 at the latest, they
should be able to transmit the information regarding their projects to the national authorities
in electronic format only.
Submission
Control

Appraisal

Monitoring

Approval
Contracting

Source: Authors adaptation of Regulation no. 1303/2013 (European Commission 2014,

page 398)
Fig. 5 Options regarding e-cohesion
The national authorities also have several options regarding e-cohesion, given that the
requirement included in the regulation is a minimal one. As such, they can limit themselves
to the requirement as stated in the regulation, allowing the beneficiaries to choose if they
will use this possibility or not (this option is illustrated with grey boxes in fig. 5), they can
transform this possibility into an obligation, conditioning the financing of the projects on
using the electronic exchange or they can even extend the electronic exchange up to the
potential beneficiaries, at the moment of the submission of the financing request.
The regulation also introduces two important principles, with implications for the
relationship between beneficiaries and the national authorities. Firstly, there is the unique
registration of information, at least within an operational programme. This translates into
the obligation of the authorities to communicate among themselves the information
submitted by the beneficiaries without asking the latter to resend any piece of information.
In this respect, there is also the principle of interoperability, which implies communication
between the different electronic systems used by the national authorities, communication
that has to be enabled from the technical point of view but also as far as the type and
characteristics of the data are concerned.
The electronic transfer of information between national and regional institutions and
beneficiaries is not a completely new concept for Romania. In 2007 2013 some steps
were made in this direction, even though the paper documents were not completely
eliminated. The application Actionweb, used within the Human Resources Development
Sectoral Operational Programme represents one such step. This application currently
allows the online submission of the financing requests by the potential beneficiaries. Also,
for this operational programme, the beneficiaries submit the supporting documents for the
87

reimbursement claims in electronic format only (scanned documents). Nevertheless, the

transfer of information is not completely electronic as, for instance, the reimbursement
claims must be submitted in paper version at the headquarters of the authorities in charge.
Another step belongs to the Promotion of the Information Society Intermediate Body,
within the Increase of Economic Competitiveness Sectoral Operational Programme. As
such, the financing requests and all the supporting documents are uploaded and transmitted
by the potential beneficiaries via an electronic application. Nevertheless, the paper
documents must also be submitted at the headquarter of the institution in 5 working days
after the online transmission. We can find a similar approach in the case of the Technical
Assistance Operational Programme, where the information included in the financing
requests is registered in an electronic application MySMIS, from which it is printed and
submitted on paper, together with the appendixes, to the managing authority.
The electronic exchange of information mentioned by the 2014 2020 EU regulations
brings opportunities and challenges for both the beneficiaries and the national authorities.
As far as the beneficiaries are concerned, the administrative burden is likely to be reduced,
due to the elimination of printing, multiplication and transmission costs, related to
performing these tasks. The increase in transparency could also be an opportunity, as the
beneficiaries would be able to know in real time the status of the documents transmitted to
the authorities. The challenges for the beneficiaries might concern access to the Internet and
computer literacy, especially at the level of the small beneficiaries. For the authorities, the
electronic exchange of information with the beneficiaries implies investments in technology
for the development and maintenance of the electronic systems and also an important
mentality breakthrough, given the adjustments that have to be made in order to replace a
well-known paper flow with a new electronic flow. In terms of opportunities for the
authorities, the electronic exchange of information could imply a higher discipline on
behalf of the beneficiaries regarding the quality and the timing of the information
submitted, a reduction in the duration of the processes and an increase in their transparency.
Looking at the future, the 2014 2020 Partnership Agreement of Romania stipulates that ecohesion will be achieved by the electronic application MySMIS 2014+, due to be launched
in December 2014 (Ministry of European Funds 2014, page 455). The application will
cover all the 6 2014 2020 operational programmes.
4. Publicity and information
The publicity and information requirements stipulated in the EU regulations, especially
those concerning the general public, have significantly evolved for 2014 2020 in
comparison to those from 2007 2013. As such, if in the previous programming period,
there was only the obligation to make available to the public the list of beneficiaries,
including the name of the project and the public contribution granted, for 2014 2020 the
amount and format of the public information have changed dramatically.
According to art. 115 of regulation no. 1303/2013, the information regarding the projects
must be available in .xls or .csv format, making possible operations such as search, sort or
comparisons of data (The European Parliament and Council 2013, page 395), thus
increasing the transparency of information and the availability of data for research and
analyses.
The information to be included in these lists or files must comprise a summary of the
project, which is very important as sometimes the title of the project is not sufficiently
suggestive of the content of the project, project start and end date, geographical location,
eligible budget and EU contribution (The European Parliament and Council 2013, page
88

457). Also, the titles of the data fields must be available in at least one other EU language.
The information must be updated at least every 6 months.
The regulation also imposes that the information should be published on a single webpage,
which would facilitate the access of the general public to the information, instead of
consulting several websites, belonging to different managing authorities. All these
measures could also help the potential beneficiaries to identify possible partners or
complementarity links among the different interventions that have an impact on regional
development.
During 2007 2013, the Romanian Ministry of European Funds created and made available
to the public the webpage www.fonduri-ue.ro. Within this webpage, information is
available about the projects that have a financing contract, including the title of the project,
the name of the beneficiary, the total budget, the eligible budget, the registration number
and date of the financing contract, the status of the implementation of the project, the
geographical location and also data regarding the financial progress, namely the
reimbursement claims and their status. Information is available for all the 7 operational
programmes belonging to the programming period 2007 2013. There are several search
options implemented, but no possibility to download data in .xls or .csv.
Furthermore, every Romanian managing authority has its own webpage, the available
information being different from one institution to another. Several examples of good
practice can be identified when analyzing these webpages. For instance, the inclusion of an
interactive map providing information about the contracted projects, as in the case of the
webpage for the Regional Operational Programme (www.inforegio.ro), the availability of
the entire text of the financing contracts, as in the case of the webpage for the Sectoral
Operational Programme Transport (www.ampost.ro) or the provision of a minimum
amount of information about the submitted projects that were rejected during the evaluation
process or the objectives and the expected result for the approved projects, as in the case the
webpage for the Technical Assistance Operational Programme (www.poat.ro).
Regarding the programming period 2014 2020, the webpage www.fonduri-ue.ro will be
further developed as a single webpage that offers information and access to all OPs
[operational programmes] in Romania (Ministry of European Funds 2014, page 27). In
order to better provide information to the general public and to the potential beneficiaries of
EU funds, the webpage should cover also the projects financed by the funds dedicated to
rural development, fisheries and also by other EU and national instruments.
Also, the information provided about projects should include more details about the
physical targets (i.e. objectives expected results, indicators) and progress achieved. As in
the case of the Technical Assistance Operational Programme mentioned above,
information should be made available also about the submitted projects. In the case of the
finalized projects, the information available should illustrate how much was achieved of
what was initially planned, both in physical and financial terms. Taking advantage of the
current technologies, interactive maps could allow a visual representation of the
interventions of all operational programmes that have an impact on regional development.
Conclusions
The programming period 2014 2020 brings new challenges for Romania in the form of
the requirements imposed by the new regulations, requirements that should be analyzed in
depth in order to transform them into opportunities for the regional development of
Romania. These requirements incorporate the ex-ante conditionalities, prerequisites
meant to ensure the existence of a strategic and coherent vision and an appropriate
administrative capacity even before the approval of the operational programmes. Taking
89

into consideration the current status of fulfillment, as mentioned in the draft operational
programmes, a better mobilization of the responsible authorities is needed in order to
ensure that the fulfillment of the ex-ante conditionalities will be achieved in due time for
the upcoming programming period.
Another requirement regards the performance framework which rewards or sanctions each
country according to the performance achieved for every priority axis of the operational
programmes. On the basis of the experience gained in 2007 2013, it is important to set
from the very beginning realistic objectives and to ensure that the performance of the
priority axes is closely monitored in order to early identify any bottleneck or delays.
The requirement regarding e-cohesion, namely the electronic transfer of information
between the national authorities and the beneficiaries, is expected to generate important
changes in the workflows of both beneficiaries and institutions. Last but not least, the
implementation of the requirements regarding information and publicity could translate into
the availability of a large volume of information for the general public, which could be
further used for studies and analyses in order to improve the efficiency and effectiveness of
regional development interventions in Romania.
References
1. European Commission, Commission Implementing Regulation (EU) no. 215/2014
laying down rules for implementing Regulation no. 1303/2013 in OJ L 69,
08.03.2014: 68-69.
2. European Commission, Commission Delegated Regulation (EU) no. 480/2014 of 3
March 2014 supplementing Regulation (EU) No 1303/2013 in OJ L 138, 13.05.2014:
10.
3. Jouen, M. 2012. Cohesion policy and the role played by structural funds in austerity,
in D. Natali, B. Vanhercke (Eds.) Social development in the European Union 2011:
109-130.
4. Ministry of Regional Development and Public Administration 2014. Regional
Operational Programme 2014 2020 (draft). Accessed on 01.11.2014 at
http://www.inforegio.ro/images/programare2014-2020/POR%202014-2020.rar :193222.
5. Ministry of Regional Development and Public Administration 2014. Administrative
Capacity Operational Programme (draft). Accessed on 01.11.2014 at
http://www.fonduriadministratie.ro/wp-content/uploads/2014/08/POCA-2014-2020versiune-oficiala.pdf :114-115.
6. Ministry of European Funds, 2014. Competitiveness Operational Programme
(draft).
Accessed
on
01.11.2014
at
http://www.fonduriue.ro/res/filepicker_users/cd25a597fd-62/2014-2020/po/VO.POC.2014-2020.pdf: 121122.
7. Ministry of European Funds, 2014. Human Capital Operational Programme (draft).
Accessed on 01.11.2014 at http://www.fonduri-ue.ro/res/filepicker_users/cd25a597fd62/2014-2020/po/VO.POCU.2014-2020.pdf : 246-249.
8. Ministry of European Funds, 2014. Large Infrastructure Operational Programme
(draft).
Accessed
on
01.11.2014
at
http://www.fonduriue.ro/res/filepicker_users/cd25a597fd-62/2014-2020/po/VO.POIM.2014-2020.pdf
:
249-252.
9. Ministry of European Funds, 2014. Technical Assistance Operational Programme
(draft).
Accessed
on
01.11.2014
at
http://www.fonduri90

ue.ro/res/filepicker_users/cd25a597fd-62/2014-2020/po/VO.POAT.2014-2020.pdf: 7677.
10. Ministry of European Funds, 2014. The Partnership Agreement of Romania.
Accessed on 01.11.2014 at http://www.fonduri-ue.ro/res/filepicker_users/cd25a597fd62/2014-2020/acordparteneriat/Partnership_Agreement_2014RO16M8PA001_1_2_ro.pdf : 455.
11. Ministerul Muncii, Familiei i Proteciei Sociale, 2012. Raportul anual de implementare
2011.
Accesed
on
01.11.2014
at
http://www.fonduriue.ro/res/filepicker_users/cd25a597fd62/Documente_Suport/Rapoarte/3_Rapoarte_POSDRU/30.07.2012/RAI_POSDRU_20
11.pdf, pag. 67 - 126.
12. The European Parliament and the Council 2013. Regulation (EU) no. 1303/2013
laying down common provisions on the ERDF, the ESF, the CF, the EAFRD and the
EMFF and laying down general provisions on the ERDF, the ESF, the CF and the
EMFF in OJ L 347, 20.12.2013: 320-469.

91

A STUDY ON QUALITY OF LIFE IN ROMANIA SOCIAL AND

ENVIRONMENTAL PERSPECTIVE
Raluca IGNAT, Carmen Lenuta TRICA, Marilena PAPUC, Daniela BIRO
Faculty of Agro-Food and Environmental Economics, The Bucharest University
of Economic Studies; email: [email protected], Str. Mihail Moxa, nr.5-7, Sector 1,
Bucharest, Romania
Abstract
Sustainable development requires responsibility to future generations in this regard, we
could say that the satisfaction felt by every citizen should be motivation for adopting a
sustainable economic behavior. At the same time, only if we can say that the existence of
sustainable development are met the high standards of quality of life. The present research
aims in determined the evolution of the quality of life in Romania, given the fact that
Romania was the first socialist country where the quality of life issue was brought into
attention. The research question is in what manner the European projects have improved
the quality of life in Romania. The hypothesis is that there is just a small improvement of
quality of life indicators that affects social and environmental sectors in Romania after the
absorption of the European funds. In order to obtain the result, we analysed the data
regarding social and environmental aspects and compare them in dynamic and with the
public policies proposed goals. The conclusions show little modifications of these
indicators, therefore, the proposal of the paper is to better manage the European funds of
the 2014-2020 Financial Exercise.
Keywords
quality of life, environment, labour market, european funds
Introduction
Let us imagine Earth as a land identical in all its features. It would be very strange that in a
world dominated by globalization, we see that there is a real effect of this globalization, but
that it is a natural result of the lack of regional or national identity.
So on Earth so different in time and space, in so many ways, economic, social, educational,
traditions and concerns of national, regional and beyond, quality of life is meant to be a
concept that succeed a coverage of all important aspects of societal development.
What would be the purpose, however, the classification of this approach?
Quality of life is a dynamic concept, a living organism. This statement is supported by the
fact that human needs, individual and collective, are in constant change.
Now a century inhabitants of the cities began to experiment with street lighting. Today, if
there are streets in urban areas or incomplete poorly lit, we consider a problem of poor
public management, but not an indicator of quality of life.
Now a century rural Romania to implement land reform attempt to determine the specific
structure of ownership and exploitation of land for agriculture, rural Romania today wants a
young workforce stability to create value-added activity in rural areas.
Needs change over time. Quality of life is quantified differently in time as the individual's
needs are different, as are various facilities at its disposal by society. Therefore, quantifying
the structural change from a historical period to another, because the premises are always
different.
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At the same time, differences in economic, social, educational, health and personal safety
are different in space.
Residents of Japan want keeping a job for life, to be able to create an image of the ideal
Japanese. Europeans and North Americans change their work based on several criteria:
salary, leisure, distance from the house, transport between work and home etc. Africans
certainly a good part of them, they want food and housing and personal and family safety.
Quality of life is totally different between these regions, because the conditions are not
identical, the premises are at totally different poles. And it is due to different needs.
We must keep in mind that these differences are manifested not only vast distances, but
also between regions within a country, a zone between social media and thus between
people.
Residents of Vaslui want a lower unemployment rate at county and jobs for as many of
them. Residents of Brasov city hospital reopening want. Residents of Spna and Rnca
want as many tourists and residents want to improve and intensify County real estate.
Everyone acknowledges the need, just that they are different.
In these circumstances, the question comes naturally: what is the role of quality of life for
all and for each?
First quantify quality of life indicators give a clear picture of the needs of the group and can
influence the formulation of public policies. Role of the State in a market economy is to
ensure the achievement of high standards of quality of life of citizens and to intervene with
specific levers in this regard. Issues such as education, transport, access to culture,
economic conditions, health issues and medical services and citizen safety are
Precise identification of the needs of citizens is the obligation of public authorities and
intervention is necessary, regardless of the doctrine on which this is based. The first sign of
social responsibility of the authorities is to identify weaknesses in the quality of life at the
national level and subsequently to intervene where appropriate.
Secondly, quantifying indicators of quality of life is to harmonize all so different needs of
residents of these areas. Decrease or even eliminate discrepancies quality of life must be
made to the top level of these indicators. In this way, we can talk about efficiency of public
interventions to improve quality of life.
Finally we can say quantifying the relevance of quality of life as a prerequisite for
sustainable development.
Sustainable development requires responsibility to future generations in this regard, we
could say that the satisfaction felt by every citizen should be motivation for adopting a
sustainable economic behavior. At the same time, only if we can say that the existence of
sustainable development are met the high standards of quality of life. A citizen dissatisfied
with working conditions for the education and health care, personal safety is not enough
reason to have altruistic behavior by which to think about his business and human footprint.
Thus, quantifying the relevance and quality of life is a major challenge not support.
Moreover, the large number of institutions that have been initiated in recent years,
increasing the number of actions taken for this purpose, the number of people interested in
these issues shows that the concept of quality of life is not only a topical scientific concept,
but and a prerequisite for development of modern society.
2. Literature review
The changes and phenomena that marked our society during the last centuries enforce more
and more methods for the human behaviour and economic analysis. The already used
instruments seemed not to be enough any and new tools and methods were created in order
to better illustrate the current state of the phenomena.
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The society itself reached superior development levels, in many parts of the globe, and the
population and nations needs have known strong changes. There are new stages of the
lifestyles, new models of food consumption behaviors, new development stages of
agrofood, educational, sanitary system.
Thus, the public opinion strongly asked for superior transparency of the public
expenditures. Therefore, modern mechanisms for a more equal and efficient funds
allocation were developed. All of these elements are part of a bigger perspective: improving
the quality of life of citizens.
Quality of life is a modern concept that was imposed by the societal changes. Organisations
and scientists tried during the last decades to emphasize the importance of the concept. In
the same time, it became a complex and deepened analysed phenomenon.
Quality of life has three main approaches (Fahley, Nolan i Whelan, 2003): it mainly
concentrates at an individual level, but the authorities actions have a macroeconomic
perspective; it is a multidimensional concept and it gathers domains, such as economy,
health, social assistance, education, environment, food, and it confronts own actions; it is
been measured both by the life conditions from a bias position, and wealth from an
objective perspective, trying to harmonise the public intervention with individual
expectations.
In 2009 The Stiglitz Commission in France (Stiglitz, J. et al., 2009) revealed that there are
diferenced between what public authorities beleves quality of life is and means and what
individuals expectations realy are in this regard. In this respet, it reported three main issues
to be analysed: GDP analysis, quality of life and sustanable development, and enviroment.
Moreover, van Zanden (van Zanden, J., et al., 2014) shows in year 2014 that, with the
exception of sub-Saharan Africa, countries have generally become more equal to each other
in terms of well-being than in terms of per capita GDP particularly in recent decades.
The study presents for the first time systematic evidence of trends in areas such as health,
education, inequality, the environment and personal security over the past 200 years.
Thus, not only the income seems to be important, but the consumption and life style, too
(Stoian, M. 2013).
We may affirm that quality of life is the integrator concept of wealth, satisfaction,
happiness, and availability of a person towards society, and it therefore succeeds to offer a
good image of the economic and social development level of the entire society (Ignat, R,
2013, A).
3. Data and Methods
The quantification methods of the quality of life have known a constant development.
There are many modalities used in order to affirm and emphasize the quality of life during
time, and in different part of the world.
In 1989, the United Nation Organizations elaborated the Manual of the Social Indicators, a
guide for the nations actions towards better life conditions, wealth and economic
development.
Since then, many others instruments were used in order to cover these issues and needs.
One of them is OECD Better Life Index, a pioneer instrument that brings into attention the
scientific debate upon well-being and economic development. It combine modern
technology and statistics in order to allow to each person to compare well-being across
countries, based on 11 topics the OECD has identified as essential, in the areas of material
living conditions and quality of life (http://www.oecdbetterlifeindex.org/, Octomber 15th,
2014).
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In each of these studies or guides, statistics were used. The present research aims in
determined the evolution of the quality of life in Romania, given the fact that Romania was
the first socialist country where the quality of life issue was brought into attention. The
research question is in what manner the European projects have improved the quality of life
in Romania. The hypothesis is that there is just a small improvement of quality of life
indicators that affects social and environmental sectors in Romania after the absorption of
the European funds.
In order to obtain the result, we analysed the data regarding social and environmental
aspects and compare them in dynamic and with the public policies proposed goals. The
conclusions show little modifications of these indicators, therefore, the proposal of the
paper is to better manage the European funds of the 2014-2020 Financial Exercise.
3.1. The impact of the European Funds for Romanias quality of life
The most of the European funds for Romania aim for a better quality for life, if considering
the complexity of this concept. If we talk about any of the seven operational projects for
Romania, we discuss upon the subject of well-being, environment, competitiveness,
employment, public services, a more facile access to better life conditions, in general.
The main objective is convergence; all these funds aim to adjust the regional disparities
between Romanian and other European regions, and to provide special life conditions to
Romanians, as European citizens.
The two operational programs that we analysed in this research are Sectoral Operational
Programme Development of Human Resource and Sectoral Operational Programme
Environment.
The main objectives of these two for the 2007-20134 Programming were given as
following:
Table 1 Main objective of SOP Environment and SOP HRD, 2007-2013
SOP Environment
Improving the quality and access to
water and wastewater infrastructure
Development of the sustainable waste
management systems
Reduction of negative environmental
and mitigation of climate change
caused by urban heating plants
Protection and improving of
biodiversity and natural heritage
Reduction of the incidence of natural
disasters affecting the population

SOP HRD
Promoting quality initial and
continuous education and training,
including higher education and
research;
Promoting entrepreneurial culture
and improving quality and
productivity at work;
Facilitating the young people and
long term unemployed insertion in
the labour market;
Developing a modern, flexible,
inclusive labour market;
Promoting (re)insertion in the labour
market of inactive people, including
in rural areas;
Improving public employment
services;
Facilitating access to education and
to the labour market of the
vulnerable groups

Source: Own concept after Sectoral Operational Programme Environment, 2007-2013 and
Sectoral Operational Programme Human Resources Development, 2007-2013

95

The implementation of the programmes was managed different by the involved authorities.
The SOP Environment was not so much accessed as the SOP HDR. We may consider at
least the following explanations for these situations:
- the SOP HDR was much more accessed given the target group formed by
universities;
- the higher quality of the knowledge in the field of accession conditions of the
target group,
- the better competences of universities of writing applications, due to their
expertise in the field of financed research applications;
- the better function of the universities networks that already have had expertise in
the field of partnerships for research and applied science;
- the vast and complex dimension of the environment projects;
- the lack of expertise in the field of environment management and economy;
- the lack of specialists in environment management and economy, in general, and
their lack of interest in the application for the SOP Environment;
- the lack of trust in these funds, in general, that was specific to the first year of
financing.
3.2 The analysis of the Sectoral Operational Programme Human Resources
Development, 2007-2013
This list may continue, but, the fist things that came into mind is that these two funds aimed
for better quality of life and their goals are not very well reached.
Table 2 Impact of the results of SOP HDR 2007-2014 Total number of participants,
ongoing evaluation
Participants
Participants
out of the
in the
Total
% in total
Axe
programme
programme
aimed
population
until
after
31.12.2013
31.12.2013
Education and training
in support for growth
and development of
47.900
54.498
102.398
4,66
knowledge based
society
Linking life long
learning and labour
61.367
120.730
182.097
8,28
market
Increasing adaptability
of workers and
135.696
113.721
249.417
1,13
enterprises
Modernizing the public
489
7.650
496.65
0,000022575
employment service
Promoting active
64.336
213.675
278.011
1,26
employment measures
Promoting social
59.409
99.244
158.653
7,21
inclusion
TOTAL
369.197
609.518
978.715
4,49
Source: Own calculation after Sectoral Operational Programme Human Resources
Development, 2007-2013
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The ongoing evaluation of these projects revealed different situations by the proposed
indicators, and a small impact upon the situation of the population, taking into
consideration the number of inhabitants of Romania. For methodological explanations, the
number of inhabitants in year 2012, respectively 22 million inhabitants.
Table 3 Impact of the results of SOP HDR 2007-2014 level of training, ongoing
evaluation

Axes

Education
and training
in support
for growth
and
development
of
knowledge
based
society
Linking life
long
learning and
labour
market
Increasing
adaptability
of workers
and
enterprises
Modernizing
the public
employment
service
Promoting
active
employment
measures
Promoting
social
inclusion
TOTAL

Number of
participants
in primary
or
secondary
school
(ISCED 1
and 2)

Number of
participants
in posthighschool
(ISCED 4)

Number of
participants
in
universities
and post
universities
(ISCED 5
and 6)

Number of
participants
in
highschool
(ISCED 3)

Total

% in total
population

21.181

16.254

2.159

62.648

102.242

4.65

83.323

67.900

3.066

18.000

172.289

7.83

26.843

62.385

22.504

137.468

249.2

1.133

14

422

85

7.618

528.618

2.40

126.704

95.494

9.236

42.716

274.15

1.25

62.689

36.015

7.233

46.426

152.363

6.93

320.754

278.470

44.283

46.426

689.933

3.14

Source: Own calculation after Sectoral Operational Programme Human Resources

Development, 2007-2013
We may observe (Table 2) that the impact of the SOP HRD is not very high, according to
the percentage of the participants in the total inhabitants of Romania. Obviously, the
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quantification of this impact is made just in quantitative approach, but we should mention
the qualitative impact, too, even this will be felt in all its dimension during time.
Taking into consideration the main objectives of SOP HRD 2007-2013 and according to the
calculations (Table 3), we may affirm that the Axes Linking life long learning and labour
market and Promoting social inclusion have already reached high scores and succeeded in
involving almost as many participants as it was aimed.
Plus, until 31st of December 2012, there were involved 426.086 employees, out of which
there are 31095 freelancers, about 216.255 unemployed, out of which 79.099 long term
unemployed, and 336.367 inactive persons, out of which 125.352 pupils or students.
Therefore, the impact of the SOP HRD in terms of persons, their qualification,
discrimination of the vulnerable groups, partnerships, in terms of their real function and
results, support for human resources in general, is still under the proposed target, as the
Annual Report 2012 has shown.
The most important thing to be mentioned is that this programme covered the period 20072013, during the period of economic crisis and post crisis. Its financial support for an
important part of the Romanian population was consistent, collaborated with the motivation
of accessing by participants of superior qualitative training that would be consistent for
their future careers.
The quantification of the real impact of the programme on unemployment and employment
rate is very difficult to be run, as the involved factors in these complex situations are huge.
Therefore, we do not run this analysis.
3.3 The analysis of the Sectoral Operational Programme Environment, 2007-2013
There are six Axes for this programme and all of them were open in order to receive
applications. The delicacy of this field, the importance of the sometimes unpredictable
results, and the complexity of the issues made out of this programme one of the most
reluctant for the applicants.
There are ongoing evaluations of the implementation of the SOP Environment and part of
these results will be processed here. Also, many of the data that should be evaluated in the
present paper have no public or online availability, and this represents a limit of the present
study. The processed informational should be more complex and technical, but the annexes
of the National Evaluation are not present in the public space, but only the core Report,
with no statistical data. Therefore, we only resume the conclusion of some documents in the
field.
Axe 1, having about 61% of the total funds, was focused on the higher populated cities in
Romania, the first 23, as they generate the most part of the organic pollution, almost 30%,
and the rest of the cities, 89% generates about 38% of organic pollution. In respect to the
proposed indicator, this axe will cover 100% in medium cities and about 80% in small
cities. The best results are in this regards, as at the end of the programme, almost 7.672.000
inhabitants will benefit of water services and 9.100.000 inhabitants will benefit of new
sewering systems.
Axe 2 will take into consideration the targets of the waste management as follows: 75% of
the total quantity until year 2010, 50% until 2013, 35% until 2016. The ongoing evaluation
was made until the eand of some of the projects, therefore, there were no waste
management system ready.
Axe 3 has some problems in the evaluation of the ongoing indicators, as some of its
objectives may be covered by the national programme in the field of air pollution.

98

Axe 4 Nature conservation sector has no direct or indirect connection with the quality of
life in Romania, as the Nature 2000 Programme aimed especially the protected species and
nature in general, as animal and vegetable habitat.
At 30th June 2012, almost 89% of the financial allocation for this programme were
absorbed, about 344 projects were approved with 6,56 billion euro.
The number of the created jobs in the context of the SOP Environment are around 11.811 in
the implementation period, and 5425 in the operation period. But there is no evidence in
this regard.
3.4 Prediction for quality of life in Romania for period 2014-2020
Strategy Europe 2020 imposed an intelligent development based on superior investments in
education, strategic partnerships between education and business. The core of the goals for
year 2020 emphasis the social aspects of economic development in Europe, as this strategy
is a human oriented and sustainable based.
Moreover, there are eight recommendations of the European Council for the period 20142020, the majority of them are social oriented.
The national target for year 2020 are, also, human oriented and sustainable based. The most
of the indicators aims at employment arte, education, research and innovation, energy and
sustainable development, social inclusion.
4. Further research
The study has some restrictions, given the yet present lack of public data and information in
the field of quality of life.
The limits of the study are:
- for the quality of life analysis there was no indicator system created, but an
statistic analysis of the indicators in two of the European programmes:
- only two of the SOP were analyzed in the context of the quality of life targets,
even if other programmes target the same issues;
- the lack of public data in the field on environment aspects put into risk the
analysis, as the study has a environment perspective, and there were made just
some connections.
The possibilities of oversee these limits are:
- to better illustrate a system of indicators for quality oin life in Romania, based in
European SOP;
- to enlarge the SOPs in order to have a more complex analysis;
- to collect more data and to show the connections in a more transparent connections
between the European funds implementation and the quality of life;
- to improve the isolation of the impact of the European SOPs in Romania and to
proper illustrate their effects.
The future research should also take into consideration the dynamic of the indicators of
quality of life.
Conclusions
The quality of life in Romania has known real improvement upon time, starting the
communist period, when this concept was used for the first time. The concept in complex
and allows different quantification methodologies in order to demonstrate the wellbeing and
the social and economic development level as well as the quality of living, air pollution and
many other aspects.
99

The European funds have a deep impact upon Romanias economy. At the beginning, the
population was reluctant to them, the perspective of grants was not so attractive. The lack
of knowledge and expertise in the field of project management, doubled by the lack of
competences in generic fields generated a small abortions of these funds.
The object of the paper was reached: the public reports and documentation somehow
allowed to analyze the implementation of these funds, and to calculate the impact of two of
them upon the quality of life in Romania.
The hypothesis of which the impact of this funds was not important was reached, as at the
end of year 2013, the SOP HDR covered a small percentage of the total population, and not
the target of 1,6 million inhabitants.
Except AXE 1 of SOP Environment, the other axes did not provide following their
implementation a large impact upon quality of life, as data shown.
The quality of life in Romania will be better improved in the perspective of year 2020, in
regard to the recommendations of European Council, and National Reform Framework.
References
1. Ignat, R., 2013. A. Calitatea vieii n Romnia rural. Nevoie sau de la vitalitate la
performan economic, Editura ASE, Bucureti
2. Stoian, M. 2013. Promoting sustainable consumption - from theory to practice,
Metalurgia Internaional, ISSN 1582 2214, Nr. 4 / 2013, pag. 250 253
3. Stiglitz, J. E., Sen, A., Fitoussi, J. P. 2009. Report by the Commission on the
Measurement of Economic Performance and Social Progress.
4. OECD 2014. How's Life in Your Region?: Measuring Regional and Local Well-being
for Policy Making, OECD Publishing,
5. van Zanden, J., et al. (eds.) 2014. How Was Life?: Global Well-being since 1820,
OECD Publishing, DOI: 10.1787/9789264214262-en
6. Operational Programme Environment, 2007-2013
7. PROGRAMUL OPERAIONAL SECTORIAL DEZVOLTAREA RESURSELOR
UMANE 2007-2013
8. RAPORTUL ANUAL DE IMPLEMENTARE 2012
9. National Reform Framework

100

PRICE VOLATILITY, THE MAIN COMPONENT OF FOOD SECURITY A

REAL KEY TO A SUSTAINABLE DEVELOPMENT
Bogdan BAZG
Institute of National Economy, Romania
Laureniu REBEGA
The Bucharest University of Economic Studies, Romania
email: [email protected], Str. Mihail Moxa, nr.5-7, Sector 1, Bucharest, Romania
Abstract
The food crisis at the end of the last decade create agriculture prices, price volatility and
food security on the top of the global agenda. Price volatility for the main commodities will
remain in direct connection with the sustainable development. There are many factors that
can influence the sustainable development and the connection between agriculture
potential and the possibility of creating food security in our region. One of the great
challenges of next decade at the global and regional is and will remain a serious problem
especially for countries of the world which are dependent producers of raw materials. Agro
food prices will remain as generate factor of national food insecurity. About 2,3 billion
from world's population are depend on the agriculture production of commodities such as
grain, sugar, rice, meat, cotton, ferrous and nonferrous metals, copper. The first step to a
sustainable development understands the fact that a countrys economy means more than
the sum of its elements, that modifying a subsystem or another and will bring major
changes to the final result.
Keywords
Sustainable development, price volatility, food security, sustainable economic development,
agriculture potential.
Introduction. Concept notions on sustainable development.
It appears that, the best definition for sustainable development is the one proposed by
Brundtland Report, which contains interregional integration aspect. Other examples could
be the following:
According to sustainability principle, all natural resources should be used clever and
only for our real needs (Tietenberg, 1992);
Sustainable development is the process that maintains our patrimony and national
capital untouched for a period of time. We should leave the same capital as legacy for
future generations; capital that comprehends possibilities for a standard potential we
currently wish for (Winpenny, 1991);
Sustainable development is a strategic development that concerns all goods, natural and
human resources and financial resources which bring long-term prosperity.
Not long time ago, the concept of sustainable development supported by English scholars
was criticized by French and Italian scholars. Political weight increased in the field of
natural resources, by means of which principles of scholars in London were proved to be
true. British economists certify sustainable developments multivariate feature, highlighting
interrelations between economy and environment, emphasizing natural capitals specificity.
This lead to economic visions about the world and to the seeming separation from
neoclassic approaches.
101

Sustainable development was based on the following key ideas:

Systematic approach of social human activities in the national space;
The inclusion in the calculation of all types of resources in and unreacted in business;
Observing products through their development; nature-nature cycle, thus a dynamic
vision. Systematic approach of social human activities in the national space leads to the
separation of this macro-system into the following sub-systems:
Production subsystem (implies dominant technological production forces); economic
sub-system with all its categories based on economic value;
Superstructure system (political, judicial, social, cultural, administrative, etc);
Surrounding environment where all social and human activities occur.
Flows of different intensities exist between these sub-systems which underline
interrelations between them regarding material and immaterial quality of life for subject
population.
1. Food security and sustainable development.
This components of agriculture sector, subjects to a wide range of economy-wide policies
as well as measures specific to the sector itself. Further development of the food security
aspects, connected at the sustainable development is expected as experience is gained in
implementing it across a diversity of countries, especially on the Balkans regions.
The relationship between economic country stability and agriculture always are made by
the most important food security factors: agriculture country policies and productivity,
sustainability outcomes, price volatility, public private partnership and agriculture
potential.
Innovation, structural change and access to natural resources are key drivers of productivity
growth and sustainable use of resources. Policies affect these drivers through four main
channels or incentive areas:
Economic stability and trust in institutions, which are essential to attract long-term
investment in the economy;
Private investment, which in turn requires a transparent and predictable environment
that balances the interests of investors and society;
Capacity building, including provision of essential public services;
Targeted incentives for innovation, structural change and sustainable resource use in the
food and agricultural system;
2. European actions and purposes for sustainable development.
Sustainable development means a better present and future quality of life. According to
sustainable development vision, this process includes immediate and long-term purposes,
global and local actions, economic and environment problems, all these elements being in
tight connection. Such a vision cannot be carried only through policies, but society must
embrace certain principles (political, economic, social, concepts).
EU provides a Sustainable Development Strategy with transparent purposes and actions
based on seven priorities, most of them related to environment, from which we remind
(Budica and Puiu, 2009):
1. Climatic change and clean energy;
2. Sustainable transport;
3. Sustainable consumption and production;
4. Natural resources management and conservation;
5. Public health.
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Although people are concerned about finding efficient answers to constant problems raised
by economic crisis (especially in Europe), problems of changing the worldwide economic
pattern remain the same. Because we do not know yet, if mankind has created an authentic
balance between consumption economy and the harsh necessity to protect the environment,
of wisely using natural resources characterized by their finite number and impossible
regeneration over time.
A crucial moment for this approach that concerns the worldwide community taking into
consideration the simple fact that Earth is everyones home and that beyond it do not exist
other resources which can be used was the creation of sustainable development concept.
This international economic pattern was created two decades ago at the Conference in Rio
de Janeiro (Brazil). After twenty years, politicians and researchers believe that an
evaluation of the progress in theoretic consolidation is very useful as is an evaluation for
sustainable developments capacity enhancement.
Through over 100 chef of states and 30.000 officials of mass-media and community
institutions, mankind has proved that it understands some critical issues that influence both
the present and future; mainly some severe development disparities and fast damage of
natural resources. Scientific papers were created to highlight resources` limited feature and
the dominant growth patterns unsustainable feature.
3. Agricultural commodity price volatility factor of global food insecurity
Volatility of commodity prices is a serious problem especially for countries of the world
which are dependent producers of raw materials. About 2,3 billion people, depend on the
production of primary goods such as grain, sugar, rice, meat, cotton, ferrous and nonferrous
metals, copper.
Basic commodity prices are particularly volatile in the short terms; sometimes they vary
even more than 50% - 60% in one year. Clearly, these grimaces of the economy - lower
commodity prices will lead to small gain for farmers and thus fewer jobs for workers in
rural agro-industry.
Food insecurity combined with the inherent uncertainty induces unstable prices and
complicates the whole management and financial planning at local, regional and global
level. All these in turn have a negative effect on countries dependent on raw materials and
manufacturers. But price volatility itself is not the most serious problem, is rather national
and individual income volatility obstructing medium and long term planning of
governments, depending on the cargo units, and thus widens inequality between countries
and lead to further degradation business.
4. Price dynamics for agricultural commodities. Price indices calculated by the United
Nations Food and Agriculture Organization - UNFAO
Food markets have been affected by weather concerns and political tensions in the Black
Sea region, which have boosted the FAO Food Price Index since February. While the 2014
global food import bill could stabilize at USD 1.29 trillion, animal product bills are set to
increase, sustained by rising volumes and prices. In recent months, weather and geopolitical
tensions pushed up wheat prices in international markets. However, the early supply and
demand outlook for wheat in the 2014/15 marketing season points to a generally balanced
situation, with world stocks remaining at relatively comfortable levels in spite of a forecast
decline in world wheat production. With world production of coarse grains headed towards
a sharp decline, inventories will have to be drawn down to meet the projected demand in
the 2014/15 season.
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Price volatility measures the rate at which prices rise or fall in a certain period of time.
High volatility in world prices indicates that for farmers, and especially those in Europe, it
is difficult to decide on their future production because of uncertainty about future prices.
Conflict crises in various regions of the globe directly affect the food security of vulnerable
populations whose access to food are reduced by high prices and cannot afford to buy in
bulk when prices are low.
Dynamics of prices for agricultural commodities in the charts below is more worrisome, the
food production and food in the near future. The FAO Food Price Index is a measure of the
monthly change in international prices of a basket of food commodities (figure 1).

Source: www.fao.org; from 07.08.2014

Fig. 1 Food price and commodity price indexes

Source: www.fao.org; from 07.08.2014

Fig. 3 Food production, utilization and stocks
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Source: www.fao.org; from 07.08.2014

Fig. 4 Food price index in nominal and real terms
Cereal price index calculated and published by FAO increased on average 185.4 points in
July 2014, approximately 16,6% (36.94 points), below one year ago. The recent sharp slide
in cereal prices reflected significant falls in international prices of maize (down 9.2 %) and
wheat (down 5.8 %), a reaction to excellent production prospects in many major producing
countries and to the anticipation of abundant exportable supplies in the 2014/15 marketing
season. However, cereal prices edged marginally higher, on renewed import demand.
(Figure. 3)
Dynamics of prices for agricultural commodities price indices calculated by FAO indicates
clearly a big drop in prices (price volatility) on the first part of the production increases in
key commodities. Given this situation of the main agricultural products base amid
considerable volatility, the effect of contraction rebounds on global markets.
Conclusions
Dimension of Food security has become over past decades a multidimensional and complex
problem. The most important component of it, price volatility, which may occur in key
moments of the further development of the market, requires countries and the international
community to find sustainable solutions. From this perspective, as a nation we need to
respond properly at the food insecurity, national strategies must be based on a specific
analysis of the internal environment in terms of nutrition, with reference to both food
supply and direct access to food security. All these measures should include policies and
strategies that take action to reduce volatility impact for vulnerable populations, with
benefits for both consumers and producers. All this strategies require a strong, developed
and implemented research, to enable the support and involvement of civil society, private
sector and farmer organizations.
For every country should be implemented real targets, such as innovative information
systems to monitor food markets, assess hunger and malnutrition, and provide early
warnings and a specific assistance. To overcome the impact of the food prices surges on the
most vulnerable consumers, social safety nets are a source of risk prevention. In addition,
such social safety nets connected with food reserves may enforce market prices in national
markets. Risk management instruments are another sort of policies that have a specific

105

purpose in controlling the impact of food price volatility on producers. Countries should be
aware of choosing such risk management strategies to stabilize their food import bills.
Volatility in commodity prices core is and had been a big concern, extremely hard to deal
with. The fact is, that, the mankind always knew about this issue and that the governments
should be confident in solving price volatility.
References
1. Bazga, B. 2013. Food security as a determinant factor to improve the valorification of
the Romanian agriculture potential, PhD Thesis, Bucharest, 2013.
2. Manole, V., Istudor, N., Bazga, B. 2011. Food Safety in Romania, The International
Conference Present Issues of Global Economy - 8th Edition - APRIL 16th-17th,
2011 Constanta 2011, Ovidius University.
3. Price volatility and food security, a report by the High Level Panel of Experts, July
2011
4. Food price volatility- implications for ACP countries, Brussels, November 2011
5. Communication from the commission to the European Parliament and the Council,
Brussels, October 2012
6. Price Volatility in Food and Agricultural Markets: Policy Responses, June 2011
7. Extract from the Preliminary Report of the High Level Group of Experts on Food
Security and Nutrition (HLPE) of the World Committee on Food Security (CFS). (doc.
CL 144/9 (C 2013/20 Rome, 13 -15 June, 2012).
8. Task Force on the Food Security Crisis, WFP, World Bank, and WTO, 12 June.
Available at: www.oecd.org/tad/agriculturalpoliciesandsupport/50544691.pdf.
9. OECD 2010. OECD Innovation Strategy: Getting a Head Start on Tomorrow, OECD
Publishing. Available at: www.oecd.org/innovation/strategy.
10. OECD 2011. OECD Green Growth Studies: Food and Agriculture, OECD Publishing.
11. OECD 2012. Agricultural Policy Monitoring and Evaluation 2012: OECD Countries,
OECD Publishing.
12. OECD 2013. Agricultural Innovation Systems: A Framework for Analyzing the Role of
the Government
13. OECD 2011. Agricultural price volatility and its impact on government and farmers: a
few observations. Available at: http://www.oecd.org/swac/events/48215044.pdf
14. The
FAO
Food
Price
Index,
Available
at:
http://www.fao.org/worldfoodsituation/foodpricesindex/en/

106

ENVIRONMENTAL POLLUTION FROM INTENSIVE LIVESTOCK BREEDING

Irina-Virginia DRGULNESCU
University of Messina, Italy; email: [email protected], Via Consolare Pompea, 1,
Messina, Italy
Abstract
In recent years, meat production has increased due to high demand in the market. To meet
the demands producers have expanded the growth and development of farms. Farming and
the meat industry is one of the leading causes of pollution and massive exploitation of
resources. The animals, often bred in an intensive way, contribute mostly to greenhouse
gases and climate change. Therefore, agriculture and livestock are the main causes of
environmental pollution and also the consumption of meat. In particular, it is estimated
that 18 percent of worldwide annual emissions of greenhouse gases are attributable to
cattle, buffalo, sheep, goats, camels, pigs and poultry. The study shows how to pollute are
primarily intensive livestock farming, the way in which they are carried out and the
substances contained in the meals of the animals themselves.
Keywords
agriculture, intensive livestock farming, pollution, environment, sustainability
Introduction
Given that farmers manage almost half of the EU land, the agricultural sector is a pressure
major source on the European natural environment. In the last five decades Common
Agricultural Policy (CAP) has encouraged this sector to become more intensive,
representing the globalization with the highest growth in the world economy. Therefore, the
agricultural sector is responsible for pollution (water, air and soil). Moreover, a substantial
increase of worldwide meat demand require the use of about 70% of global arable land for
livestock and livestock forage. Pollution is the contamination of the environment with
materials that interfere with human health, quality of life and natural ecosystems function.
Pollution of the environment is the result of natural causes, but most of the pollutants
comes from human activities. The impact of meat production on climate change is
highlighted as follows:
- Meat production lead to emissions of nitrous oxide and methane, these are
greenhouse gases more powerful than carbon dioxide.
- Global meat production has grown more than double since 1970, and is expected to
double again by 2050.
- Grazing and food needs for meat the production at large-scale lead to
deforestation.
- Livestock industry uses disproportionally land, fresh water and energy, and is a
major cause of pollution in the world.
- Livestock sector is one of the major contributors to the serious environmental
problems, from local level to global.
Thus, effort to produce bigger results at a cost as low as possible was supported by the use
of antibiotics and pesticides for mitigation of the spread of diseases caused by overcrowded
living conditions on farms. Mutilation and unsanitary conditions are considered common
industrial practice. According to the Worldwatch Institute, 43% of beef is produced by
these methods. On the other hand, agricultural farms use enormous amounts of water and
107

energy and waste created are causing pollution of soil, water and air. To produce 1 kg of
beef it takes about 8 liters of oil to 18,000 liters of water. Cattle are responsible for 16% of
the methane (a greenhouse gas) in our air and, furthermore, 1 kg of animal protein is
equivalent to from 3 to 15 kg of protein from plants. According, the World Health
Organization, more than 50% of the antibiotics produced are used in livestock farms. Farm
animals considered most pollutants are in order: camels, cows, sheep, pigs, poultry.
1. Effects of intensive agriculture
The Danon (2006) notes that the evolution of human history even with the introduction of
technology has tried to get the most with the least investment in the exploitation of land for
the production agriculture. 70% of agricultural land and a third of the world land surface is
used to raise animals and grow feed, compared to only 8% intended to crops for human use
(Anti-Vivisection League Report, 2012). This means that we use the most of land to feed an
animal that will give us back transformed only 10% of the amount of food ingested
(Veronesi, Parrot, 2011). The Tab. 1 shows how many kg of vegetables need for growing
an animal to obtain 1kg of meat we buy at the supermarket. Although the amount of protein
of 1kg of meat is not equivalent to that contained in 1kg of plants, the effectiveness of
conversion of vegetable protein in animals by the beef is only 6% and that to produce 50kg
must eat even 790kg of vegetable protein. In addition, cultivation and livestock need water
an increasingly scarce commodity. To produce 1 soy hamburger are needed 160l of water.
To produce the same amount of veal we consume 1000 liters (Ercin, Aldaya, Hoekstra,
2011). In the report presented at World Congress on the water by the Stockholm
International Water Institute, in cooperation with the Potsdam Institute for Climate Impact
Research (PIK) it says there will not be enough water available to produce food for the
estimated population in 2050 if we follow the current Western eating habits that include
20% produced calories from animal protein, a percentage far higher than the recommended
amount of protein.
Table 1 Kg of vegetables to growth 1kg
Kg of vegetables for 1kg of meat
Animals Kg of vegetables to growth 1kg
(counting 35-40% of slaughter waste)
Veal
13
18
Beef
11
15
Lamb
24
33
Pork
4,3
6
However, there will be enough water if the proportion of animal food is limited to 5% of
total calories with a food trade based on a well-organized and reliable, which we have not at
present (Stockholm International Water Institute, 2012). We could grow many more vegetal
with which to feed many more people. In fact, one third of the cereals grown in the world
and 90% of soybeans are now destined to animal feed (Ercin, Aldaya, Hoekstra, 2011). We
wouldn't witness so to the paradox to which part of the world is starving and another part
gets sick and dies because they eat too much and eat badly and to do it takes away the land
and food to others. Table 2 makes it clear how much water is used depending on the food
that is produced.
The problem, however, also affects the quality of the environment that is seriously
endangered by the heavy contribution in terms of pollutant of meat production in intensive
farming. In fact, the FAO considers that emissions of CO2 (carbon dioxide) from the meat
production is equal to 18% of global ones. To produce 1kg of beef we emit the same
amount of CO2 to produce 75kg of broccoli!
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Table 2 Liters of water/CO2 needed/emitted to produce 1kg of certain foods

Food
Liters of water
Food
CO2 emissions / kg
1kg Corn
900
1 broccoli or cauliflower
0,185 kg of CO2
1kg Rice
3,000
1 liters / kg of milk
2,4 kg of CO2
1kg Poultry
3,900
1kg chicken meat
3,6 kg of CO2
1kg Pork
4,900
1kg of pork
11,2 kg of CO2
1kg Beef
15,500
1kg of beef meat
28,1 kg of CO2
The relationship between how much a food is healthy and its footprint on the environment is
indirectly proportional. What we ought to eat more has a low environmental impact while what
we should avoid has a remarkable polluting footprint. The level of these emissions is due to the
fact that there are many more steps than the production of crops for human consumption, due to
the transport of feed, animal slaughter, of the meat in distribution. And speaking of
transportation, this is a useful mirror that reflects the impact of our diet in the facts km by car:
Table 3 Greenhouse effect generated by different eating habits per capita per annum,
expressed in car km
Organic Conventional Conventional, without
beef
Feeding vegetarian without meat and 281km
629km
dairy products
Style food without meat
1978km
2427km
Style food omnivore
4377km
4758km
4209km*
* Beef replaced by pork
**average consumption of individual products in Germany, 2002 - Eurostat; km with BMW 118d model
with 119g CO2/km.

Source: Dossier of Foodwatch "Klimaretter Bio?", Germany, 2008.

The consequences in terms of climate change are well known and documented. The animal
breeding sector emits 37% of the methane gas (co-responsible for the greenhouse effect),
65% of nitrogen oxide (especially from organic waste), 64% of ammonia emissions
(responsible for acid rain and acidification of the ecosystems) (OECD, 2002).
As mentioned, 70% of agricultural land and 30% of all land is occupied for the production
of feed intended to farms animals or farms for themselves. These figures are also connected
to deforestation or reforestation failure for the change of use of land if previously used for
other purposes. In fact, agriculture and deforestation together contribute to one third of
global emissions of CO2. In particular, the FAO estimated that emissions from
deforestation to make way for crops is responsible for 2.4 billion tonnes of emissions each
year (LAV, 2012). n addition to the production of carbon dioxide and co-responsibility
aggravation of the greenhouse effect, deforestation also produces desertification in dry
areas, erosion, landslides and mudslides in the rainy and hilly lands, pollution of aquatic
ecosystems (due to run-off water), and in the interests of fair-trade market that is gaining
increasing ground, misappropriation of resources for indigenous peoples. These are just
some examples of the impact of intensive farming. The "psychological" reason of a great
change in mass is that the danger is not perceived properly. But, besides this, is added a
poor information on the subject.

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2. The impact of intensive livestock on environmental resources

To get an idea of the resources used by intensive agriculture, according to FAO, livestock
produces 18% of greenhouse gases that trap the heat of the atmosphere, and this determines
the melting ice caps, rising sea levels, natural disasters, thinning of the ozone layer,
constant and increasing desertification. This leads to humans a higher resistance to
antibiotics, new viral diseases (eg. influenza epidemics), damage from pollution, shortage
of land for the production of food for human consumption and increase of land for the
production of animal feed, greater poverty of farmers who live by subsistence, increased
incidence of diseases related to excessive consumption of fats and animal proteins,
including cardiovascular disease, cancer, diabetes, hypertension, obesity. The intensive
breeding then pollutes soils, waters and seas, contaminating nature with potentially deadly
toxins. The meat is in fact one of the products more expensive, inefficient and pollutant
with a very high consumption of resources. When we talk about sustainable development,
we should also report to the diet of the opulent societies, rich in this hyper-protein food but
also to the method of intensive livestock farming to increase productivity and profitability,
to overcrowding and to the poor living conditions of animals. This is an unnatural way to
raise animals that generally the exploitation of environmental resources so often
indiscriminate. Among the reasons to consider the production of meat harmful to the ecosystem are:
1. Soil degradation - The intensive rearing of animals is largely responsible for the erosion
of the soil that can produce degradation and desertification of the environment.
2. Deforestation - For example, the current situation of the Amazon rainforest, where 88%
of the deforested land has been used for grazing, in Brazil, according to data provided by
the CIFOR- Center for International Forestry Research Institute and INPE-for Space
Research of the Brazilian government, in just 6 years (from 1997 to 2003) saw a 600%
increase in beef exports, mainly to European countries.
3. Chemical pollution - Even the pollution of soil and water can be traced back to intensive
farming of livestock and the massive exploitation of the land for monocultures to feed
animals. According to FAO statistics, 50% of the world production of cereals and 90%
of the soybean are intended for livestock feed.
4. Power Consumption - The production of meat, especially beef, is based on an inefficient
system: the economist Lapp (1982) calculated that in just one year in the United States
were produced 145 million tons of grain and soybeans, from the processing of which
were obtained only 21 million tons of meat, milk and eggs. The disproportion between
the quantity used and the final quantity allows us to see how 124 million tons of food
have been wasted, taking away the possibility for millions of people on the planet to
have a full meal a day.
5. Water consumption - Consumption of water for the production of cereals and feed for
animal use, watering the animals and cleaning the stables, is the biggest drain on the
world's water resources with profound impact on the economy of the planet's resources.
Therefore, to produce just 1 kg of beef required 16,000 liters of water (Ercin, Aldaya,
Hoekstra, 2011).
6. Disposal of droppings - Intensive livestock farming have difficulty disposing of
droppings of cattle compared to traditional farming, which would represent a resource of
soil fertility. It is evident that the enormous amount of excrement not assimilable by the
soil produce real environmental disasters and unhealthy conditions of the environment.
7. Global warming and acid rain - The animal droppings directly produce greenhouse gases as a
byproduct of digestion; in particular in the case of cattle this is a highly polluting gases such
110

as methane. Some studies have revealed that the high ammonia content of the droppings of
animals bred may underlie the phenomenon of acid rain.
According to a study by Barilla Center for Food & Nutrition, the environmental impact of
any inhabitant of the Earth who consumes a meal of meat a day is like 37 tennis courts
every year.
According to the report on The actual costs of the production cycle of the meat of the
League antivivisection (LAV, 2012), the zootecnia is the third largest source of pollution
after the industrial installations or energy and transport.
3. Research Methodology
The research methodology involved the creation of an emission inventory, starting from the
census of emissive sources that allows to identify the different types of pollution sources in
the territory of Cuneo Province. So we moved to the data collection, estimated or measured,
relative to the amount of pollutants introduced into the atmosphere by each emissive
source.
Regarding water pollution was taken into account nitrates produced by the release of
nitrogenous substances in the surface aquifers by the farming of livestock but also from the
use of fertilizers on agricultural land. As regards air pollution, the major impacts come from
emissions of ammonia (NH3), methane (CH4) and nitrous oxide (N2O) (De Leeuw, 2002).
The ammonia emissions from agriculture are primarily produced by intensive agriculture
and livestock farming. By comparing the measured values with those ISPRA, it appears that
the ammonia produced by the agricultural sector represents 95% of total emissions at the
national level of this gas, of which 59% comes from the livestock sector. Nitrous oxide
from agriculture represents about 61% of the emissions of this gas at the national level, of
which 12% comes from the dejections from the livestock sector. The methane from
agriculture represents 40% of total emissions at the national level, which in this case are
primarily derived from zootecnia.
4. Livestock farms and environmental degradation
4.1. Collection and organization of spatial information related to livestock farms
The following image shows the location and type of animal bred for all farms where it was
possible to retrieve the information. The work of construction of the geographical system has
been carried out using the open source software QGis. Farms considered in this study account
for about 85% of the animals reared in the province. n the picture we can see that farms are
almost entirely concentrated in the lowland area and that the greater number of these businesses
are breeding cattle. The available data retrieved from the Agricultural Registry Office, updated
to 2011, refer to companies 4,837 of small, medium and large size farming livestock with n.
417,418 heads, fig. 1.
4.2. The pollutants considered and their origins in livestock farming framework
NH3 - The ammonia comes in large part from agricultural fertilizers and the very common
practice today of intensive livestock. Once emitted, ammonia remains in the atmosphere for
only a short period of time, but produce serious effects on animals, plants and air quality.
Ammonia emissions from the agricultural sector as well as having an important role as a
precursor of greenhouse gases such as nitrous oxide, also contribute to the formation of
particulate matter (PM10).
CH4 - In the case of intensive livestock, the formation of CH4 is derived from the digestive
processes (enteric emissions) and the anaerobic degradation of droppings borne by the
organic matter present in them during storage before agronomic use. Methane is a potent
greenhouse gas and is characterized by a global warming potential of about 25 times higher
111

than that of carbon dioxide. The CH4, therefore, plays an important role in raising the
earth's temperature.

Figure 1. Total number of cattle reared localized per municipality

N2O - Within the zootechnical, the main sources of emissions of N 2O are constituted by the
storage and spreading of livestock waste on the ground and as well as directly by the
contribution of droppings on land by the grazing animals. The pollutant N 2O can be
produced during storage as a result of partial nitrification and subsequent denitrification of
wastewater and the amount of release depends also on the storage system adopted. Nitrous
oxide is a greenhouse gas, although it is found in small quantities in the atmosphere, but it
has a global warming potential of about 314 times that of carbon dioxide, and its presence
in the air is increasing.
4.3. Emission factors
For all livestock farms were calculated the emission values, expressed in tones produced
annually, for the following pollutants: ammonia (NH3), methane (CH4), nitrous oxide
(N2O). To calculate the values of these emissions were used: the number of animals raised
in every cattle farm; emission factors relating to each specie considered pollutant, expressed
in kg/head/year. In these calculations were also considered the different categories animals:
in fact, in the case of cattle, the emission values will vary depending on whether they are
cattle, buffaloes or cows. Were calculated emissions of ammonia, methane and nitrous
oxide from three distinct process steps, namely: from animal housing or relaying; from
storage of livestock waste; by the spreading of livestock waste.
For relaying or animal housing means the emission produced by animals that are found in a
confined space, such as byre, or fence, while the storage refers to the emission from the
collection of zootechnic effluents, shoveled and non, intended for exploiting agronomical.
For ammonia was possible to obtain releases from all three phases of the process, while for
methane emissions were calculated for the stages of animal housing and storage of
wastewater. Regarding the emission of nitrous oxide are considered together the phases of
animal housing and storage of the wastewater, using a single factor, as not available in the
literature of the specific factors for each phase. To determine the value of emission of N 2O
112

from spreading was first calculated the amount of nitrogen excreted by each animal reared
in the company, this value was subtracted from the estimated percentage losses of nitrogen
in the form of NH3 emission for each stage. The value obtained was then multiplied using
an emission factor equal to 0.0125 kg N2O-N/kg of N content in the material spilled (since
IPCC). The following tables set out the values of the emission factors used for the three
pollutants and for the three phases of the process involved, considered as the statistical
"best fit" of the range of factors collected from the literature.
4.4. Study Results and comparison with emission inventories
The data of consistency livestock used for the calculation of emissions of ammonia,
methane and nitrous oxide are indicated in tables 4,5,6.
Table 4. NH3 emission factors
Relaying
Storage
Spreading
kg/head/year kg/head/year kg/head/year
Dairy cows
15,46
20,36
12,65
Bovines
6,66
8,96
5,46
Young buffalo
12,61
16,61
11,95
NH3

Table 5. CH4 emission factors

CH4
Relaying
Storage
kg/head/year kg/head/year
Dairy cows
113,24
15,04
Bovines
44,72
7,65
Young buffalo
69,74
11,96
Table 6. N2O emission factors
N2O
Relaying + Storage
kg/head/year
Dairy cows
2,1497
Bovines
0,6683
Young buffalo
1,89
The values available in the regional inventory were calculated based on the livestock
consistency, whose number of animals reared is shown in Table 8.
Table 7. Livestock consistency
Animal species Number of animals reared
2011
2007
Dairy cows
53.461
66.055
Bovines
363.143
361.356
Young buffalo
814
677
In the Regional Inventory, however, the emissions are not distinguished according to the
three phases of the process, but the value is expressed as the sum total and it is not therefore
possible to observe which are the contributions of different pollutants for stage animal
housing, storage and spreading of droppings. Only in the case of methane can be seen
which one is the contribution that comes from the management of manure and that due to
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enteric fermentation, amounting to 11.878 tone/ year and 25,596 tone/ year respectively.
The calculated values show a good overlap with those found in the Regional Emissions
Inventory, as can be seen in table 7. The value of methane, which appears in table 8, is
given by the sum of the contributions due to droppings management and enteric
fermentation, the latter, however, is not calculated for all the different animal categories. In
Tab. 10 are shown the total annual emissions of ammonia, methane and nitrous oxide
subdivided into the categories animal considered and obtained in this study.
Table 8. Total annual emissions of NH3, CH4 and N2O, * from Regional Emissions
Inventory (IREA)
Pollutant Tons/year
2011
2007*
16.640 17.133
NH3
34.529 37.474
CH4
1.066
1.651
N2O
Table 10. Total annual emissions of NH3, CH4 and N2O subdivided by animals reared,
according Regional Emissions Inventory (IREA)
NH3
CH4
N2O
Animal species
(ton/year)
(ton/year)
(ton/year)
2007 2011
2007
2011 2007 2011
Dairy cows
3.203 2.591
8.454
6.858
337
204
Bovines
7.820 7.655 19.673 19.018
815
502
Young buffalo
29
34
56
67
3
Table 10. Comparing emission factors NH3
Animal species IREA 2007 Case Study
kg/head/year kg/head/year
Dairy cows
48,49
48,47
Bovines
21,64
21,08
Young buffalo
42,84
41,17
Table 11 Total annual emissions of NH3, CH4 and N2O subdivided by process steps
NH3 from
animal
housing
(tons/year)

NH3 from
storage
(tons/year)

NH3 from
spreading
(tons/year)

CH4 from
animal
housing
(tons/year)

CH4 from
storage
(tons/year)

N2O from
animal
housing+
storage
(tons/year)

N2O from
spreading
(tons/year
)

827

1.088

676

6.054

804

115

89

Bovines

2.419

3.254

1.983

16.240

2.778

243

259

Young
buffalo

10

14

10

57

10

Animal
species
Dairy
cows

From Tables 9 and 10 it can be observed that the values do not differ much, because the
Livestock consistency does not change too much from year to year. In inventory IREA are
used coefficients that are substantially equivalent to those obtained by summing the
114

emission factors used in this study, related to each stage of the process considered for the
three pollutants investigated. If we compare, for example, emission factors used in the
inventory IREA and in the present study (table 10), for the calculation of atmospheric
emissions of ammonia, expressed as kg / head / year, are obtained values which, as we can
seen in the table below, are superimposed.
The particularity of this case study is that of being able to divide the contributions that the
different categories of animals have depending on the process step considered. Table 11
shows the values obtained. The values of emissions in the National Inventory and relative
to the entire region of Piedmont (2005) indicate that the emission value of ammonia 22,890
tons/year, 62,839 tons/year of CH4 and 2,144 tons/year of N2O, table 12.
Table 12. Total annual emissions of NH3, CH4 and N2O according National Inventory
Pollutant

Tone/year

NH3
CH4
N2O

12.736
33.427
670

4.5. Analysis of data arising from the case study

In Table 14 is shown the contribution of each process step and each type of livestock has in
the emission of NH3, CH4 and N2O.
Table 13. Contribution emission NH3, CH4 and N2O per process step
Pollutant

Bovines spreading
(%)

Bovines storage
(%)

Bovines housing
(%)

NH3

16

26

20

62

CH4

10

65

75

N 2O

33

33

TOTAL
(%)

66

It can be observed that cattle, in all the three phases of the process considered, are contributing
to a considerable extent to the emission of these pollutants. Emissions of NH3 are high for all
types of livestock, since often the collection tanks and storage of the waste are not covered,
while emissions of methane gas are particularly relevant in the case of cattle because, by their
nature, ruminant, they emit gas during anaerobic fermentation that takes place inside of their
second stomach. CH4 emissions calculated for each phase of the process and for the three types
of animals have been spatialized on the municipalities (table 13) in order to see which of them
are characterized by greater emissive flows. We can observe that cattle rearing, mainly
responsible for methane emissions account for 75% of total emissions calculated, and that these
emissions are present in almost all municipalities in the province. The largest number of
methane emissions (fig. 2) from cattle is located in the municipalities of Fossano, which has a
total of 256 companies and Savigliano, with a number of companies amounted to 181.

115

Figure 2. CH4 emissions from cattle livestock

Methane emissions from these two municipalities if we consider only the livestock farming,
amounted to 1,928tons/year in the case of Fossano and amounted to 1,771tons/year for
Savigliano. With regard to the annual emissions of methane gas the municipality with the
most annual flow is Bra with a value of 300tons/year, followed by Racconigi with
271tons/year and Cavallermaggiore with a value of 264tons/year. For emissions of methane
gas into the atmosphere, the municipalities are characterized by the highest annual flow of
this pollutant are: Fossano with 2,753tons, Savigliano with 2,203tons and Cuneo with 1,265
tons. For the nitrous oxide, the highest values occur in the municipality of Fossano with
79tons/year, followed Savigliano with a value of 63tons/year and Cuneo with 35tons/year.
Conclusion
The results of this case study allow for a definition of emissions from livestock activities
and mapping of the main livestock farms. The aim was to identify the emissions that come
from animal housing, storage and animal waste. The knowledge of these data also allows to
have a true estimate of the amount of pollutants emitted into the environment, which are
useful in developing strategies for reductions or elimination of emissions from the livestock
sector.
The data available to us, updated to 2011, refer to 4,837 to small, medium and large
companies of livestock farming (417,418 head). The Piemontese cattle breed is the main
Italian native breed for meat due to numerical consistency of cattle reared in Italy. It is a
beef breed of medium size that converts forage very well in meat and gives high slaughter
yields. The Piemontese cattle breed is distinguished by its high quality, the characteristics
of which are given by the rusticity and morphological qualities, able to simultaneously meet
the needs of farmers, butchers and consumers.
For all livestock farming were calculated the emission values of the pollutants expressed in
tons per year relative to ammonia (NH3); methane gas (CH4); nitrous oxide (N2O). In these
calculations were also considered different categories of animal species. In fact, in the case
of cattle, the emission values vary according to whether they are cattle, buffaloes or dairy
cows, from the three phases of the process related to housing, storage and livestock waste.
The values obtained are significant for the study of the dynamics that regulate the formation
and diffusion of pollutants to which Community legislation sets certain limits. Knowledge
of the phenomenon and the assessment of the contribution of the livestock sector to

116

environment pollution can act as a stimulus to promote the use of best available
technologies to the greatest number of companies operating in the sector.
The value of production from the breeding of beef cattle in 2011 exceeded 3 and a half
billion Euros. ISTAT has relied, in Italy, more than 200,000 livestock farms, and of these,
only 7000 are organic. Even traditional businesses are becoming aware of the problem and
with subsidies and incentives are increasingly using renewable sources to reduce their
environmental impact (Novak, Drgulnescu, 2010). Photovoltaic on the roofs of stalls,
wind farms, and especially biogas for waste valorisation (sewage, food scraps and
processing waste), guarantee the recovery of energy used for the production and
remuneration of part generated in excess. In this way, livestock farming can diversify the
risk, and increase profits becoming more "sustainable", at least from an energy point of
view. The European Union has long been working to improve welfare level of animal life,
both as regards the protection of all animals in breeding, and for the conditions of transport,
stunning and slaughter.
In Italy most of the cattle is gathered in intensive farming. Between Emilia-Romagna and
Lombardy over 700 members of Unipeg, cooperative in the slaughtering and processing of
fresh beef, representing 10% of the national situation, have signed a production protocol in
which are some standards to be met. From space available to each animal (from 1.50 to 3
square meters per head), which should allow everyone to lie down at the same time, to the
replacement of air required to avoid excessive concentrations of ammonia and hydrogen
sulfide. In addition, in the barns must penetrate the natural light and has been imposed for a
minimum period of stay, to prevent the growth of the animals takes place too quickly. Were
banned hormones and proteins in animal feed. Compliance with the rules, with pecuniary
penalties even the suspension of production, is controlled by sampling from a third party
(CSQA Certification). The aim is to achieve ever higher quality standards and to create a
culture of compliance with rules relating to animal welfare and environmental impact. It
would be appropriate that such a specification is extended to the national level and adopted
as guidelines. Therefore, the only way to push transformation of sector and make it really
more "sustainable", is that the consumer avoids wastage and choose certified meat and
related traceability, which meet certain environmental parameters and animal welfare,
inquire and reading food labels. However, it is useful to remember that many farms not
complying with European legislation and still apply intensive farming or factory farming,
which causes pollution. The consequences fall as well as on animals also on the
environment, causing a depletion of environmental resources, the onset of disease and the
aggravation of the greenhouse effect. The consequences in terms of climate change are by
now well documented.
Some data used for this case study were provided by the Registry Office Livestock Farming
and of Agricultural Registry Office of the Cuneo Province, in addition to ISTAT data, by
elaboration and personal research.
References
1. Anti-Vivisection League Report (LAV), 2012. The actual costs of the production cycle
of the meat, On line at: www.lav.it/download.php?t=files&id=4558),
2. Danon, M. 2006. Ecopsicologia, Crescita personale e coscienza ambientale, Milano,
Ed. Apogeo collana Urra, XII.
3. De Leeuw, F. 2002. A set of emission indicators for longrange transboundary air
pollution, Environmental Science & Policy, 5: 135-145.
4. Ercin, A.E., Aldaya, M.M., Hoekstra, A.Y. 2011. The water footprint of soy milk and
soy burger and equivalent animal products - Research Report Series No. 49,
117

UNESCO-IHE
Institute
for
Water
Education,
On
line
at:
http://www.waterfootprint.org/Reports/Report49-WaterFootprintSoy.pdf
5. FAO, on line at: http://faostat3.fao.org/faostat-gateway/go/to/browse/I/*/E
6. Lapp F.M. 1982. Diet for a Small Planet, New York, Ballantine Books, pp.69-71
7. Novak P., Drgulnescu I.V. 2010. Energy and environmental choices within European
Union, Romanian Quality-Access to Success Journal, 116: 1157-1163.
8. OECD, 2002. Environment Directorate, Joint Working Party of the Environment
Policy Committee and the Committee for Agriculture, 14, June 2002. On line at:
http://unfccc.int/kyoto_protocol/items/2830.php/
9. Stockholm international Water Institute (2012). Feeding a thirsty world, Challenges
and opportunities for a water and food secure future - Report 31. On line at:
http://www.siwi.org/documents/Resources/Reports/Feeding_a_thirsty_world_2012wor
ldwaterweek_report_31.pdf
10. Veronesi, U., Pappagallo, M. 2011. Verso la scelta vegetariana, il tumore si previene
anche a tavola, Firenze, Ed. Giunti.

118

THE DEGREE OF POLLUTION IN CHINA

Anca Laura ROTMAN, Camelia SLAVE
University of Agricultural Sciences and Veterinary Medicine Bucharest; email:
[email protected], Bd. Marasti, 59, Sector 1, Bucharest, Romania
Abstract
Environmental pollution has become one of the most debated issues of the contemporary
and one first order for the company management. Man and environment are inseparable
entities, human existence is dependent on the environment, and environmental factors (air,
water, soil) may change as a result of their use by humans. Such pollution occurs,
dimension of life, in the course of which some products resulting from physiological
processes and human activity and animal residues are likely to interfere with the welfare of
the nature and quantity. With the great scientific advances, the amount and nature has
changed dramatically. In recent decades, the degradation of the environment from all over
the planet has fared increasingly worrying amount of pollutants reaching in excess of
imagination. Removing pollution is a problem that causes error correction
Keywords: air, environmental, human, pollution, nature,
Introduction
Environmental pollution has become one of the most debated issues of the contemporary
and a first order for the company management. The man and the environment are
inseparable entities, human existence is dependent on the environment, and environmental
factors (air, water, soil) can change as a result of their use by humans. Such pollution
occurs, dimension of life, conduct which some products of physiological processes and
human and animal activity are residues that may interfere with the welfare, depending on
the nature and quantity.
Environment, the space in which we operate daily, the place where we want to develop and
progress, or to relax, is the vast sphere that must defend the implementation of all levers
and environmental policies and updating environmental legislation, both internal and
international. Considering that the environment is "all elements of physical, chemical or
biological, natural and artificial, which makes human life, animal or plant, or species" (Le
Petit Larousse). or an essential factor for the continuity of the human race, Michel Prieur
shows that the environment is now a "chameleon concept" with specific meanings and
dimensions.
Man, in his daily activity, did a serious damage to the environment. Environmental
protection had become a priority in the last decades, after the human activity had extended
and diversified.
At present, the world is aware that it should increase its activity rate by any key factor and
environmental policies to take into account the fundament of a durable development but
also the other fundaments held by international declarations and protocols.
Pollution, as phenomena that brings changes to natural components, produces noxious
health effects, creates discomfort or impedes the use of some environmental elements,
essential for life (Stockholm and Rio Declaration).

119

Air pollution can affect the upper region of the atmosphere called the stratosphere. As a
result, the exposure to sun's harmful rays affect terrestrial life and threatens the health of
people from all over the globe.
Pollutants are those chemical compounds, harmful to the environment. Depending on the
concentration of the same substance found in nature, it can be pollutant or contamined.
The contaminant is the chemical compound, found in the environment in small
concentrations so that it doesnt produce noxious effects on the ecosystem.
The Smog from the big cities makes difficult, the running circadian activities, people
suffering of a great stress coming in contact with open spaces!
Smog reacts with oxygen and organic acids and the sulfur condenses into drops shapes,
maintaining the fog.
In general the urban pollution, and also the rural air pollution or the smog represents that
mixture of carbon monoxide and organic compounds from incomplete combustion of fossil
fuels such as coal and sulfur dioxide from fuel impurities.
Above the big cities we can speak about the photochemical smog. This reduced the air
quality. Sun rays do not manage to break through the layer created by pollution, make
nitrogen oxides and hydrocarbons to combine and transform oxygen into ozone, a chemical
highly toxic and aggressive agent. Hydrocarbons are oxidized in condensed substances and
forms a visible and pervasive fog.
Air pollution
Air pollution is a big problem of the century that has just begun, the Chinese territory as
one of the most tragic examples today (fig 1).
Air pollution harms all activities on Earth. Regarding the Chinese space, we can appreciate
that life is affected, aquatic and terrestrial life are harmed, people's health is already at risk.
Being air pollution arises, therefore, the problem of transboundary pollution is taken into
account. Thus, the pollution cause severe problems in China, determining the authorities to
take urgent action to avoid the serious consequences on the health of inhabitants of the
cities, and not only; but toxic clouds from China crosses the Pacific Ocean, reaching the
west coast of U.S..
In this sense, the effects of this type of pollution can be considered in space and time.
Acid rain met occasionally, made of burning fossil fuels in China, may be up to a quarter of
sulfur pollution in the western U.S.
As an urgent measure, China has set new air pollution limits to be observed in the provinces
and of reducing the harm of between 5 and 25 %.
Chinese authorities issued a regular basis, guidelines for controlling air pollution in big
cities, but they have limited effects.
Thus, under the new regulations, Beijing, Tianjin and Hebei Province are going to reduce
the number of particles PM 2.5 u 25 % per year. PM 2.5 are dust particles with the smallest
diameter and are the most dangerous, as they can reach the lungs.
Similarly, China's commercial capital, Shanghai, Jiangsu province, Zhejiang, Shandong and
Shanxi have to reduce pollution by 20%. Other provinces have targets of 15% and 10% (fig
2 and 3).
Chinese scientists consider that this serious and unprecedented phenomenon will be felt in
the long term.
In the same time, it had been found that the usage of plant is slowed down, normally, and
the food production of the whole country (Beijing area and much of the six northern
provinces of the country) is threatened.
120

Since air quality conditions multiple daily activities, there were found serious economic
effects: many flights were canceled, highways were closed, tourists were adviced to stay
home.
Appreciable radius that is centered Beijing has been found an increase in the concentration
of particles that can enter into the lungs and circulatory system. This concentration of
dangerous particles in Beijing is at 505 micrograms per cubic meter of air, while WHO
recommends a "safe" 25 level.
Therefore, this difference is particularly serious and alarming.
He Dongxian, a professor at China Agricultural University, Department of Water Resources
and Civil Engineering, showed that new studies suggest that if smog that blocks part of the
country continues, agriculture will suffer similar conditions of a nuclear winter."
Air pollutants stick to greenhouse surfaces and reduce the amount of light inside by 50%,
which hiders photosynthesis, the process by which plants convert light into energy. In a
study conducted by the teacher, the growth of those plants from greenhouse normally was
extended from 20 days to two months and the plants exposed to pollution are more fragile.
Earlier this month, the Shanghai Academy of Social Sciences has revealed in a report that
pollution in Beijing made the city almost "uninhabitable by humans."
Therefore, efforts to reduce pollution will be monitored, that extreme situation created in
China is to reduce the effects in a short time.

Fig 1. Black carbon aerosols processes in the climate system

Nuclear winter - pollution unprecedented
China's economic growth has led to an exponential increase in pollution.
Regarding the actions taken by the Chinese government to reduce pollution, we can
appreciate that this is a pure country. Toxic waste, spilled into rivers, affects fauna and
flora, and worse, ends up in the ocean, where prejudices entire oceanic ecosystem.
The largest country in the world in terms of the number of inhabitants has known for
several years unprecedented economic boom.
These increases/ developments have also a risk: the pollution.
Of course, if you had invested in modern technology, you would have reduced the cost per
finished product but it would have increased exponentially with facilities. Therefore, it was
chosen a production as large and as cheap. In addition, the country obtains 70 percent of its
energy from coal, making it the worlds leading producer of greenhouse gases.
121

Fig 2 Beijing has more than four million private cars, considered to be a major source
of the city's air pollution

Fig 3 Aspects of Shanghai polluation

In China, pollution has taken proportions so that it warns the authorities of making great
efforts to reduce the unprecedented pollution degree.
In Beijing, people wore gas masks, and the government banned students to attend outdoor
sports classes (Ziua News, 2014).
Regarding the smog, it resembles the effects of a nuclear winter. In the area, the biggest
polluters are heavy industry and thermo power station using coal. In this way, Beijing has
promised that these huge sources of pollution will be closed. At the same time, according to
Greenpeace, 570 new such power stations will be built in China (fig 3).

122

Fig 3. Premature deaths from particulate matter air pollution in cities

Fig 4. Aspects of Beijing polluation

Conclusions
In the last decade, China has pursued rapid economic growth without taking into account
the problems that may appear and otherwise they have occurred connected to pollution.
In perspective, it aims to implement radical measures to solve environmental problems.
China declared war to pollution. Thus, it is shown that Nature sent an urgent signal,
regarding to this it is to take place multiple programmes for getting out of the immense
crisis of pollution already settled on Chinese territory. The Chinese government has decided
that follow the closure of 50,000 small coal-fueled furnaces, the increase energetic
efficiency and reduction of pollutant emissions. China recognizes the existence of cancer
villages. Minister of Environment in China recognized existence "cancer villages" only a
few years after statements were made on polluted areas where the disease appeared.
As a result of pollution, there is a gradual global warming. Canadian physicist David Keith
has developed commercial devices, designed to capture the dioxide of carbon from the
atmosphere. If, by this method does not achieve significant results, it would be no variation,
the scattering sulphates into the stratosphere to reflect sunlight into space and to induce
123

global cooling. Another method would be the installation of the vent air gun with a solution
of sodium hydroxide to absorb carbon dioxide.
Particularly serious situation in China brings a warning to all states on five continents.
Thus, people who live near busy roads in Europe are still very exposed to excessive levels
of air pollution. In 2010, there were harmful levels of nitrogen dioxide (NO 2) over the legal
limit values for 44 % of road traffic monitoring stations. In addition, levels of particles
(PM10) exceeded the limit of 33% of these stations. These pollutants can affect the
cardiovascular system, lungs, liver, spleen and blood.
As a warning to the new situation created by the Chinese space, Europe must further reduce
energy consumption involved in transport, whereas the level was only 4.3 % lower in 2011
than the peak in 2007. Energy consumption in the transport sector industries was radically
influenced by economic fluctuations in last years. The carriage transport demand is
particularly close to economical fluctuations, because after a sudden decline between 2008
and 2009, it increased by 5.4% in 2010.
The passengers transport demand fell by almost 1% between 2009 and 2010. This seems to
contradict the long-term trend, as the passengers transport demand grew steadily
throughout the European Union in the mid 90s, when there is an early evidence. Also, the
use of personal vehicle remained more or less constant, despite of the economic downturn
and large fluctuations in fuel prices over the past decade.
In most cases, prices influence people to make choices that are harmful to the environment.
The findings stated that the mid- 90s, buying a car is becoming cheaper in real terms, while
traveling by train and passengers transport on water became more expensive
However, new cars become more and more efficiently. On average, vehicles sold in 2011
were 3.3 % more efficient than those sold in the average year.
The transport sector has to reduce carbon dioxide emissions by 68% between 2010 and
mid-century to meet the EU target. Emissions of greenhouse gases from transport fell by
0.4 % between 2009 and 2010, and early estimates indicate a similar decline between 2010
and 2011. The Unions passed legislation to reduce greenhouse gas emissions by 20 %
between 1990 and 2020. Recent numbers show that EU emissions fell by 16.5 %, while the
EU is to meet this goal. If international aviation is excluded, as is the case of the Kyoto
Protocol, emissions in the EU fell by 17.5 % from 1990 to today. Not neglecting the fact
that emissions in the European Union will continue to decrease to 19 % below 1990 levels
by 2020, with the implementation of policies and measures currently in force.
Most EU Member States should intensify their efforts to reduce emissions of greenhouse
gases by accelerating the implementation of environmental policies.
Increasing pollution in China and other Asian economies can contribute to intensifying
cyclones in winter in the Pacific.
References
1. Le Petit Larousse, 2003
2. Stockholm and Rio Declaration
3. Kyoto Protocol
4. ZIUA NEWS 20 .03 2014
5. http://www.ziare.com/
6. Comunicarea Comisiei ctre Consiliu i Parlamentul European din 21 septembrie 2005
intitulat " Strategie tematic privind poluarea aerului " COM (2005) 446 - Nepublicat
n Monitorul Oficial Communication to the Council and the European Parliament of 21
September 2005 entitled "Thematic Strategy on Air Pollution" COM (2005) 446 - Not
published in the Official Gazette
124

COST ASSESSMENT FOR BIODIVERSITY CONSERVATION AND

SUSTAINABLE USE OF ITS COMPONENTS IN MACIN MOUNTAINS AREA
Costel NEGREI
Faculty of Agro-Food and Environmental Economics, The Bucharest University of
Economic Studies; email:[email protected], Str. Mihail Moxa 5-7, Sector1,
Bucharest, Romania
Abstract
The diagnosis of economic and financial activity on biodiversity conservation in protected
areas is an important support for improving their management. By conducting this
approach, we propose some criteria of classification and of characterization of activities,
as well as, the informational and methodological support to assess the costs. The
applicability of the proposals is exemplified for the Mcin Mountains area from Romania.
So, in the absence of locally longer experience, cost evaluation of biodiversity conservation
might be based in certain circumstances, on the transfer of information arising from
alleged ongoing projects in the field of application of EU Directives and these projects
could support the creation of a database that is so needed to assess the costs of biodiversity
conservation.
Keywords
biodiversity conservation, costs, information, sustainable use.
Introduction
Legislative and institutional support of protected areas management has known a permanent
consolidation on the background of the knowledge to improve relations between natural
capital as a system, and socio-economic system, both at global, regional and national level.
From a practical standpoint, the operational difficulties of management of protected areas,
at least in Romania, derived from socio-economic performance, which limits the amount of
resources that can be allocated for this purpose, and the lack of an adequate framework for
assessing the costs and implicitly for establishing the costs. In this paper, we proposed an
algorithm presentation to ensure consistency and objectivity needed to assess the costs as a
prerequisite for increasing the efficiency of biodiversity conservation.
1. Literature review
The assessment of environmental costs represents a highly debated issue internationally,
because the negative effects of human activities on biodiversity and environment has
increased a lot in the last century and the attribution of a value on biodiversity loss or
environmental degradation is hard to address. Many species and ecosystems are endangered
that is way they must be protected. In this context, the biodiversity conservation is vital.
Hooper and al. (2012) have assess the impact of biodiversity losses on ecosystem change
and their analysis showed a clear dependency of ecosystem change on the local losses of
species, which generate an effect on changes in productivity and decomposition.
Mittermeier and al. (2003) have proposed a methodology for assessing the value of
biodiversity conservation focusing particularly on assessing the irreplaceability in terms of
species endemism. Groot and al. (2010) made a classification of ecosystem services and
presented some ways of quantifying and valuing the ecosystem services, because nowadays
the investments in conservation, restoration and sustainable ecosystem use are increasingly
125

seen as a win-win situation which generates substantial ecological, social and economic
benefits. Christie and al. (2012) consider that is required to build a capacity on valuing
biodiversity in developing countries and present an evaluation of monetary and nonmonetary techniques for assessing the value of biodiversity to people in least developed
countries, because the biodiversity conservation is important in increasing the social
welfare.
Economic valuation of biodiversity is important for the development of policies that protect
biodiversity and alleviate poverty
2. Results and discussion
2.1 Categories of activities
Activities contained in the action plan can be grouped considering the field of deployment,
content and technical characteristics of the results.
1. Depending on the field of deployment:
- environmental activities,
- industrial activities,
- activities in agriculture,
- activities in construction and transportation,
- activities in the field of services.
2. Depending on the content:
- drafting studies and documentaries,
- database creation,
- elaborating strategies and sectorial action plans,
- providing technical and material support,
- providing financial support,
- promoting best practices,
- communication and education.
3. Depending on the technical features of the results:
- technical assistance,
- investment,
- management (operation and maintenance, administrative).
We appreciate that from the perspective of assessing the costs of premises and determining
priorities, the second criterion is more relevant. In this case, the group activities in the
Action Plan are as follows:
- drafting
studies
and
documentaries:
A2,3,4,
B2,6,18,
C1,
C1.1,,1.3,
C2.1,2.2.,2.4,3.1,4.1,4.3,6.2,6.6, D1, F1;
- creating the database and information: B4,5;
- elaborating strategies and sectorial action plans: B6,14,17, C1.2,2.3,2.5,2.6,4.2, E2, G1;
- providing
technical
and
material
support:
B
10,11,12,13,14,16,
C1.4,1.5,1.5,1.7,3.7,3.8,3.9,3.10,5.2,5.3,5.4, 5.5, 5.6,6.4,6.5, F3,4;
- providing financial support: A1, B1,7,8,9, C3.3,3.4,3.5,6.1, E1;
- promoting best practices: C3.6,5.1,5.7, D2, F1,2,5;
- communication and education: G2,3,4.
2.2 Informational and methodological support
2.2.1 The income and expenses budget: It represents a standard document prepared by the
Administrations of National Parks, based on a methodology which responds, on the one
hand, to the requirements of the analysis of each budgetary year, and, on the other hand, to
the reflection of the activities of the National Parks in the System of National Accounts. We
126

emphasize, however, that the budget proposals and their execution does not reflect the gap
between the necessary resources for the functioning of protected areas and those actually
used for this purpose. The degree of failure of the objectives assumed by national parks
administrations would allow, however, an approximate evaluation of the potential costs,
taking into account the nonlinear nature between the funding (underfinanced) and the
attainment of the objectives. For example, in the case of the National Park Nera Gorges, the
annual expenditure for 2008 were evaluated at an average of 3 per hectare (at an
exchange rate of 3.93) of which:
- maintaining trails and refuges: 0.012
- ecological activities: 0.17 .
- public awareness and education: 0.15
2.2.2 Technical assistance to comply with the Directive on Environmental Impact
Assessment (EIA), project EUROPAID /112525/D/SV/RO
In order to estimate EIA costs have been assumed an empirical approach and a
macroeconomic one; the empirical approach involved analyzing the data provided by
several companies which have developed EIA in various fields (industry, agriculture, etc.)
while the macroeconomic approach was intended to express the EIA costs as a share of
gross fixed capital formation, respectively of investment value. To this was added also the
analysis of other EU countries (UK, Netherlands, Denmark, the Baltic countries). The
average cost of EIA was calculated based on an acceptable number of EIA divided into
three size categories of projects value, resulting in a weighted average cost of $ 1389 per
project (calculations were made in 2000 at an exchange rate of 21692.74 lei / $. In the case
of 18 investment projects (on different fields and levels of investment), for which EIA have
been developed, EIA costs ranged between 0.01% and 2.6% of the investment, the
weighted average being of 0.5%.
2.2.3 Technical assistance to assess environmental costs and to develop the investment
plan, project EUROPAID/113747/D/SV/RO
Assessing the costs has covered critical investment projects, grouped in four sections water, wastewater, air pollution and industrial pollution, nature protection - 2007-2013.
Data analysis and projections referred to:
- private projects,
- projects proposed by the National Environmental Protection Agency,
- urban environmental infrastructure projects proposed by the Ministry of
Environment,
- other projects in preparation for co-financing with the support of International
Financial Institutions (IFI).
The findings and results relevant to assess the costs of applying the Action Plan for the
conservation of protected areas in the area of Mcin Mountains are:
Table 1. Investments for critical projects in the areas of water, waste, during
2007-2013 (mil.)
Field
Drinking water
Urban Wastewater
Nitrates
Waste *
Area
Romania
1963.2
3124.6
163
1002
South-East Region
250.6
364.3
27
127
* Waste Framework Directive and storage

127

Table 2. Expenditure for "nature protection" during 2007-2013 (mil.)

Field Technical
Non-recurrent
Recurrent
Area
assistance
management
management*
Romania
170.4
22.3
206.3
South-East Region
66.5
8.7
80.4
* daily activity and monitoring

Total
399
155.6

Table 3. Non-recurring management costs, species and habitat inventory* during

2007-2013 (/ha)
Field
Non-recurrent management
Species and habitat inventory
Area
Total
Yearly
Total
Yearly
Mountain
3.78
0.54
15
2.1
Hillside
3.51
0.50
7
1
Wetland
3.24
0.46
13
1.85
Plain
2.97
0.42
5
0.71
* Based on a pilot project for inventorying the species and habitats in the five biogeographical regions of Romania.
Table 4. Level of expenditure per person to implement the Directives "water",
"wastewater", "waste" (/person)
Directive
Period of time
Annual cost
Cumulative cost
Drinking water
2006-2015
3.06
30.6
Wastewater
2006-2018
4.72
61.3
Municipal waste
2006-2017
4.22
50.7
Table 5. Unit cost* for national protected areas for future Natura 2000 sites during
2007-2013 (/ha)
No.crt.
Activity
Total
Annual
1
communication
4.5
0.64
2
public awareness
1
0.14
3
administration
1
0.14
4
scientific research
2.5
0.36
*unit costs (operation, maintenance, administrative) of standard protection and conservation
measures were calculated on the basis of expenditure from 2004; the average unit cost in
Romania was 2.57 / ha, and for the Mcin Mountains National Park, 1.86 / ha.
For Natura 2000 sites, the average unit cost was 99 / ha, but the estimates were based on
25 / ha, as some areas targeted by LIFE Nature (for which were developed projects and
therefore are known the costs) will represent only 25% of sites Natura 2000.
2.3 Expenditure assessment
2.3.1 Expenditure on "technical assistance"
Projected expenses for South-East Region during 2007-2013:
Cumulative expenses:
66.5 mil
Annual expenses:
9.5 mil
The population of South-East Region (at 1.07.2010):
2 806 204
Annual expenditure on "technical assistance" on a person:
3.4
Population of the Mcin Mountains area:
65 444 persons
128

Annual expenditure on technical assistance in the Mcin Mountains (2007 prices) : 222
thousand /year
annual expenditure on technical assistance in Mcin Mountains area (2010 prices): 211
thousand /year
2.3.2 Expenditure with "investments"
Annual expenditure per hectare per landforms (2010):
- mountain :
0.51 /ha
- hill:
0.47 /ha
- plain:
0.40 /ha
- wetland:
0.43 /ha
Distribution of protected areas in Mcin Mountains area, per landforms:
- mountain:
29 695 ha
- hill, plain:
65961 ha
- wetland:
1400 ha
Annual expenditure of investments in Mcin Mountains area
29695 ha x 0,51 /ha + 65961 ha x0,435 /ha + 1400 ha x 0,43 /ha = 44 440 /an
2.3.3 Administration costs (operational, maintenance, administrative)
Administrative expenses will be assessed in two ways:
Option A: Based on the average cost of standard measures of Mcin Mountains National
Park;
Option B: based on the average cost of standard measures of Romania's National Parks
(version B is also taken into consideration for reducing the effect of "underfunding"
nature protection on cost estimation).
In the "standard measures" taking into account the practice from Romania until 2004, are
not included (fully or partially) the following activities:
- communication,
- public awareness,
- administration,
- scientific research.
a) Administration costs of protected areas of national interest from Mcin Mountains Area:
Considering that the area of protected areas of national interest from Mcin Mountains is
11150 ha, than in table 6 are presented the "standard" expenses and "full cost" (2010
prices).
Table 6. Expenses on protected areas of national interest from Mcin Mountains
Version
/ha/year
Thousand /year
Expenses
A
B
A
B
Standard expenses
2.6
3.5
29
39
Full expenses
4.4
5.3
4.9
59
b) Management costs of protected areas Natura 2000
Considering that the surface of Natura 2000 protected areas in the Mcin Mountains is
85 907 ha, than the standard expenses is 35 /ha/year and full expenses is 36.8 /ha/year
(2010 prices). So, the total expenses are 36.8 x 85 907 ha = 3161.4 thousand /year.
c) Total administrative expenses (2010 prices) are as follows:
Version A: 49 + 3161.4 = 3210.4 thousand /year
Version B: 59 + 3161.4 = 3220.4 thousand /year
129

2.3.4 Environmental expenses with infrastructure (2010 prices) are presented in table 7.
Table 7. Environmental expenses with infrastructure (2010 prices)
Population of
Forecasted cost for
Mcin
The cost for
Environmental
South-East Region
Mountains Area Mcin Mountains
infrastructure
(thousand
(thousand
Area
/person/year)
/year)
Drinking water
12.1
65 444
792
Waste water
17.6
65 444
1152
Waste
6.1
65 444
399
Total
2343
2.3.5 Other expenses (rehabilitation of monuments, flood protection, rehabilitation of
irrigation systems, manufacturing and service activities, etc.) may be approximated as a
percentage, taking as a basis for calculating the costs already identified.
2.3.6 Expenditure on biodiversity conservation and sustainable use of its components, in the
Mcin Mountains area are detailed in table 8.
Table 8. Expenditure on biodiversity conservation and sustainable use of its
components in the Mcin Mountains area
No.crt.

Category of expenditure

Expenses with technical assistance

Expenditure with investments in nature
protection
Expenses for the management of protected
areas (operating, maintenance, administrative)
Environmental expenses with infrastructure
Total

2
3
4

thousand /year
Version A
Version B
211
211
44.4

444

3210

3220

2343
5808.4

2343
5818.4

Conclusions
In the absence of locally longer experience, cost evaluation of biodiversity conservation
might be based in certain circumstances, on the transfer of information arising from alleged
ongoing projects in the field of application of EU Directives. The activities of the Action
Plan of the protected area must represent to a greater extent the reflection of the goals and
the objectives of the Management Plan and not to answer the principle "The more resources
we request the more we receive", thus reinforcing the perception of a situation of
underfunding. The information from Income and Expenditure budgets of protected areas, at
least at national level should be subject to relevant tests, whose results to feed a database
needed to assess the costs of biodiversity conservation.
References
1. Christie, M., Fazey, I., Cooper, R., Hyde, T., & Kenter, J. O. 2012. An evaluation
of monetary and non-monetary techniques for assessing the importance of
biodiversity and ecosystem services to people in countries with developing
economies. Ecological economics, 83: 67-78.
130

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3.

4.

5.

6.
7.

8.

Diane Burgess, Stavros Giorgio. 2003. Tamar Catchment Study, Centre for Social
and Economic Research on the Global Environment.
De Groot, R. S., Alkemade, R., Braat, L., Hein, L., & Willemen, L. 2010.
Challenges in integrating the concept of ecosystem services and values in
landscape planning, management and decision making. Ecological Complexity,
7(3): 260-272.
Hooper, D. U., Adair, E. C., Cardinale, B. J., Byrnes, J. E., Hungate, B. A.,
Matulich, K. L., Gonzalez, A., Duffy, J.E., Gamfeldt, L., OConnor, M. I. 2012. A
global synthesis reveals biodiversity loss as a major driver of ecosystem change.
Nature, 486(7401): 105-108.
Mittermeier, R. A., Mittermeier, C. G., Brooks, T. M., Pilgrim, J. D., Konstant, W.
R., Da Fonseca, G. A. B., & Kormos, C. 2003. Wilderness and biodiversity
conservation. Proceedings of the National Academy of Sciences, 100(18): 1030910313.
Universitatea Bucureti, Departamentul de Ecologie Sistemic, Proiectul Life 99
Nat/Ro/006400: Plan de management integrat pentru Balta Mic a Brilei
Universitatea Bucureti, Departamentul de Ecologie Sistemic, Asisten tehnic
pentru conformarea cu prevederile Directivei de Evaluare a Impactului asupra
Mediului (EIM), proiect EUROPAID/112525/D/SV/RO
Universitatea Bucureti, Departamentul de Ecologie Sistemic, Asisten tehnic
pentru evaluarea costurilor de mediu i elaborarea planului de investiii, proiect
EUROPAID/113747/D/SV/RO

131

GLOBALIZATION, CLIMATE CHANGE AND CARBON MARKETS

Florina BRAN, Ildiko IOAN, Mariana IOVIU
Faculty of Agro-Food and Environmental Economics, The Bucharest University of
Economic Studies; email: [email protected], Str. Mihail Moxa, nr.5-7, Sector 1,
Bucharest, Romania
Abstract
Climate change is pictured like the most threatening environmental outcome of the recent
industry driven economic and social development. Fighting against climate change has a
great legitimacy and the public at large seldom question the necessity of governmental
intervention in this respect. The global financial crisis and the globalized markets are
external factors that tailored some unexpected results of climate policy implementation in
the European Union. Thus, along with expected progress in emission abatement, some
companies improved their economic and financial indicators on the carbon market. The
paper reveals the mechanism of this process, outlines some quantitative milestones and
concludes that the public at large might loss some of the commitment to climate change
mitigation by finding itself in the role of main financial supporter of the climate policy.
Keywords
climate policy, carbon market, allowances, carbon leakage, windfall profits.
Introduction
The economic opportunities created by the implementation of the environmental policies
are not among the most attractive investments. Nevertheless, the framework created by the
diversified political options at national level, on the one hand, and the liberalization
economic exchanges, on the other hand, enabled windfall profits for several actors. These
have been materialized especially within the context of climate policy and resulted in lower
effectiveness of these policies.
On the largest carbon market the market created by the emission trading scheme of the
European Union (EU ETS) there are large economic actors from the energy and iron and
steel industry that use the global competitiveness reasoning built on the carbon leakage
outcome for obtaining more permits than they need, some of them being that are
transformed in windfall profits on the financial market, with minimal interventions for
emission reduction. This evolution was hardly predicted during policy making, but it was
readily noticed and reported by environmental watchers.
At what extent the EU ETS will succeed in reaching the ambitious goals of the Europe
2020 Strategy depends on how environmental and economic policies interact on global
markets. Some aspects of these interactions will be highlighted in order to clarify the main
sources of windfall profits and how they could be related with the threat of carbon leakage.
1. Climate change and climate policy
Climate change is an environmental issue occurring due to an increase in the radiative
forcing of the atmosphere determined by air born pollutants that accumulate over long
periods of time at global level. This increase in radiative (climate) forcing leads to changes
in the general circulation of the atmosphere, which is mainly responsible for the nonperiodic changes of weather at local and regional levels (Bogdan, 1983). The changes of
weather patterns are not connected directly with the amount of pollution produced in a
certain area. The policy relevant characteristic of this physical mechanism is that the
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climate change effects will impact equally on both polluters and non-polluters. It should be
kept in mind that climate change has an uneven impact and it is possible that regions with
no or little harmful emissions will be affected more than the ones with significant emissions
and vice versa. In fact, the most vulnerable nations to climate change are developing
countries with less than ten per cent in the global greenhouse gas emissions, while the
largest polluters (such as USA, China, Russia) are less exposed to harmful effects
(Petrescu, 2013).
Despite the high priority of climate change on policy agenda, at least on the environmental
policy agenda, the public support for mitigation measures is disproportioned. The patterns
of weather and climate, on the one hand, and the private costs of mitigation, on the other
hand, explain a less intense public support.
Climate is very diverse, with large variation between the extremes of a certain parameters
occurring even within small territories. For instance, in Romania, the inhabitants of
Bucharest are accustomed with very high temperatures in summer (even beyond 40 Celsius
degrees), while for the inhabitants of Brasov 30 Celsius degree indicate a very hot summer
day. Further, seasonal differences are contrasting ones, especially within the continental
temperate climate. Therefore, distinguishing between normal non-periodical weather
patterns and the ones induced by climate change is sometimes difficult even at expert level
and fuels bias among public at large. As long as private costs are regarded, most of the
mitigation measures attempt to internalize the costs of climate change. Although this is
occurring at the level of producers, they transfer the costs to final consumers. Thus, the
public ends up concluding that climate change mitigation is expensive and could hinder
his/her wellbeing. It should not be neglected the timescale issue. Thus, climate change
determined damages will happen in a quite indefinite future (usually mentioned as decades,
seldom as years), while climate change mitigation costs are already a supplementary
financial burden. Thus, it is almost unavoidable the interpretation that ones are paying for
nothing.
Despite climate policy and action, the physical mechanism of climate change is still a hot
scientific debate. The imminence of catastrophic events for humankind, predicted even for
short timeframes, imposed operational clarifications that gathered enough reasons to apply
the precautionary principle and to proceed toward policy making and enforcement.
Climate policy is a major environmental concern and it is strong enough to stand against
economic crises and social emergencies. This solid position is given by the fact that its
mitigation is impacting on one core economic sector energy generation. Most of
humankinds energy is obtained by burning fossil fuels. The release of carbon dioxide is
therefore strongly correlated with the energy consumption. Fighting climate change means
to reduce fossil fuel burning or to create the so-called carbon sinks. Both are major
technical challenges, but the main barriers are in fact economic and social ones.
Scientific bias and public reluctance did not prevented climate policy to be enforced. Its
main intervention to reduce emissions is a market based mechanism designed as a cap-andtrade system. This establishes a cap of emissions that is divided in allowances, respectively
carbon permits. Usually a carbon permit covers a tone of carbon dioxide equivalent
emissions. Further the allowances are allocated to all polluters who are trading these
allowances between them. To acquire new allowances to cover supplementary emissions a
polluter is forced to increase costs. This could be avoided if the polluter chooses to invest in
less carbon-intensive technology instead of buying new allowances. In fact, climate policy
creates a novel market that allows externalities associated with greenhouse gas emissions to
be transacted, creating an economic incentive for investments in cleaner technologies.
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Clean Development Mechanism and EU ETS are examples of such emission trading
systems.
Emission reduction is also reached by a reversed market based policy tools, the carbon tax.
In this case, each unit of carbon dioxide emission is subject to a supplementary tax that is
then collected to create financial resources for climate mitigation measures such as
afforestation, thermal insulation of buildings, technological research and others.
2. Carbon markets
Since 1992 then the United Nations Framework Convention on Climate Change
(UNFCCC) was prepared and agreed on by the majority of the worlds states important
progresses could be recorded for the elaboration and implementation of the climate policy.
This was supported by a more and more comprehensive and targeted focus on knowledge
development instrumented by the Intergovernmental Panel on Climate Change (IPCC)
toward an increasing integration in major economic processes.
Carbon markets are not developed naturally by the interplays of major economic actors.
They were created by climate policy as a cost-effective tool to boost low carbon intensity
investments. Under the Kyoto Protocol it was developed the Clean Development
Mechanism, which is considered a regulatory market, along with the EU ETS that covers
EUs main greenhouse gas emitters. Beside these markets, there are voluntary markets
established by companies, individuals, or events.

Source: own representation using UNFCCC data

Fig. 1 The largest CDM projects host countries by number and by CERs
The Clean Development Mechanism (CDM) was defined within the Kyoto Protocol, being
the first global, environmental investment and credit scheme. It provides a standardized
emission offset instrument, represented by the certified emission reduction (CER).
134

A country that assumes emission reduction targets could obtain CERs by investing in an
emission reduction project in developing countries. For each tone of carbon dioxide that is
offset the investing country receives a CER that is counted towards meeting the Kyoto
targets. Investment projects include renewable energy plants, zero energy buildings and
others. The underpinning principle of the mechanism is that reduction of emissions should
be made firstly where it could be achieved with the smallest cost.
China is the main destination of carbon offset projects, the number of which increased from
one year to another reaching more than 1500 projects accounting for 320 million CERs in
2011. Other CDM supported countries are India, Mexico, Malaysia, Viet Nam, Indonesia,
Republic of Korea, Chile accounting for 85% of projects and almost 90% of CERS (fig.1).
As long as the project type is regarded, renewable energy projects are the most numerous,
while waste heat utilization projects accounts for most of the CERs. Other effective projects
for carbon offset include energy efficiency, biomass and landfill gas recovery projects
(fig.2).

Source: own representation using UNFCCC data

Fig. 2 The CDM projects by carbon offset types in numbers and CERs
After almost ten years, the CDM attracted more than 215 billion USD investment in
mitigation and proved that CDM is an effective market based mechanism to fight against
climate change. CDM projects are implemented in 81 countries worldwide and include a
broad variety of types such as: biomass plants, solar power projects, industrial projects,
wind farm projects. CDM recorded more than 7500 registered projects, the most recent
major achievement being the Los Cocos Wind Farm Project located in south-western
province of Pedernales in the Dominican Republic. This project is expected to generate
74.2 MWh of electricity and displace 54.183 tonnes of carbon dioxide emissions from
electricity produced previously in fossil fuel power plants.
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The demand for carbon credits comes from developed countries where the polluting
industries are operating. USA and UK are the most demanding countries on voluntary
markets. In case of CDM the demand is built up by polluting industries from UK, Spain,
Germany, France, Netherlands, Sweden, Switzerland, Japan, Canada, Finland, and Norway.
The EU ETS is a scheme set up by the EU in order to meet Kyoto targets. It works on the
same principles of cap-and-trade for greenhouse gases. Instead of countries, the allowances
are distributed among companies (power plants, factories etc.). Since 2013 the emission cap
is shrinking by 1.74% each year. Thus the overall emissions will be lower with 21% in
2020 than in 2005. Aviation has a separate cap of emissions, which is established for 20132020. The scheme covers 45% of EUs greenhouse gas emissions and allows the interaction
of eleven thousand energy-intensive heavy industry companies and aviation companies.
Each company that is included in the scheme receives a certain number of certificates that
is established by a standard procedure. In case that its emission exceed the amount covered
by allowances the company will buy allowances from other company, facing a
supplementary cost. Allowances could be transferred from one year to another. Companies
could also invest in emission avoiding projects from around the world but within certain
limits. It is assumed that companies will fall short in allowances and face the need to buy
them from the market or avoid this cost by investing in less carbon intensive technologies.
If a company considers that have more allowance than it is needed, it could decide to sell
them. In fact these options are presented in EU documents (EC-Climate Action, 2013) as
follows:
- Investment in more-efficient technology and/or shift to less carbon-intensive energy
sources in order to reduce emissions;
- Purchase of extra allowances or credits on the market.
EU-ETS covers carbon dioxide emissions from power industry, major energy intensive
industry, and from airlines operation. Nitrous oxide and other greenhouse gases emitted by
aluminium production are also covered. The participation to the scheme is compulsory for
all companies acting in these sectors. In some Member States there is applied a size limit
too, according to that only installations that exceed a certain size should be covered.
The first two phases (I: 2005-2007; II: 2008-2012) of allowance emissions was made for
free, meaning that companies had acquired the calculated number of allowances. Starting
with 2013 the allowances are no more allocated only for free, the main procedure to be
implemented being the one auctioning. Nevertheless, free allocation will be phased-out
only in 2027.
For power plants the free allocation was phased-out in eight Member States and replaced
with green investment projects until 2019 for countries that became later part of EU
(Romania, Hungary, Bulgaria, Poland etc.). Thus, almost half of the allowances (40%) were
bought, not allocated for free. Further, the allocation of allowances will be made using
industry benchmarks instead of National Allocation Plans (NAPs).
In case of manufacturing industry, free allocation prevails, even after 2013. From this year,
80% of the allowances were allocated from free, but their number will decrease by 30%
each year until 2020 then all allowances will be bought.
The voluntary market was much smaller than the regulatory ones, but records high growth
rates and is estimated to have an important potential in emission reductions. Total
voluntary markets amount for 576 million USD in value and 95 Mt carbon dioxide
equivalents in 2011 compared with 175 billion USD, respectively 10094 Mt carbon dioxide
equivalents for the regulated markets (Benessaiah, 2012).
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3. Competitive strategies on global markets

Globalization is on-going at the scale and intensity of a phenomenon, the power of its
drivers being a challenge for both research and business administration. There are many
answers regarding why globalization is occurring. Among them economic motivations are
granted with the largest contribution, being underpinned by the goal pf profit maximization.
Underneath there are laying a number of decisions that engage huge amounts of materials
and energy, but above all of money in global transactions. The transparency of decision
making is quite poor fuelling speculations around the capacity of the market mechanism in
fulfilling its role for the balanced repartition of costs and benefits. These are justified, if we
take in account that there are disparities between the economic and social development
levels of countries.
The advance in the progress way has different paths from one country to another but is
expected as an outcome of governmental policies, regardless to the underpinning
ideologies. At what extent this goal is accomplished depends on many factors that are
analysed in various settings. Fact is, more and more companies decide to enter the global
market and adopt various strategies in this respect.
The global market is globalizing because physical distances are shrinking due to internet,
but also transportation technology and because companies are engaging in a race to occupy
first position in more and more countries.
A company is motivated to enter the global market because in this way it will have access
to new customers, valuable natural resources, or cheap human resources. Further, it could
capitalize on resource strengths and spread business risk over a wider market base.
Global competition conditions are met then a product is marketed in many foreign countries
and is expanding operations into additional country markets. The same rivals are competing
in the same national markets pursuing world-wide leadership. In such conditions, the firms
competitive position in one country is affected by its position in other countries, while the
competitive advantage is based on the entire world-wide operation.
The most usual strategies adopted by companies entering the global markets include:
export, licensing, franchising, global strategy underpinned by low cost, differentiation,
focus or a combination of them, and strategic alliances. The best strategy for a product that
has a globalized market is the global strategy, which could consider three options:
- Locating activities in such a way that either cost minimization or product
differentiation is achieved;
- Transfer of competencies and capabilities from domestic to foreign markets;
- Coordinating dispersed activities in a way that cannot be done by any domestic
competitor.
The short-term financial mind set, pointed as financial myopia by Pinto (2010), intensifies
the rush of cost-cutting. This is accomplished especially in countries with lower wages,
taxes or environmental restrains. Although the most of the gain is obtained in case of
human resources, the edges of global competition leave little room for other costs to be
neglected too. Thus the differences in the restrictiveness of environmental regulation still
have a role to play in relocation decisions.
The pollution haven effect was confirmed for many pollutants that include air born ones
like acid rain precursors (nitrogenous oxides, sulphur dioxide) and hazardous waste
treatment and disposal (Michel, 2010; Bran and Ioan, 2009). Nevertheless, in case of ozone
depleting substances and of greenhouse gases, the stringency of the regulation is not
mirrored by relocation decisions. Michel (2010) argues that this could be determined by the
loose implementation that leaves room for cost effective measures or even no measures
without relocation.
137

4. Carbon leakage and windfall profits within the European carbon market
Environmental policies ultimate goal is to transform environment related transactions in
meaningful profit sources that are amongst the first options of the investors. Before the last
phase of carbon allowance emissions in 2013 strong criticism emerged regarding the
effectiveness of the EU-ETS, but more importantly on the so called distributional or side
effects. Out of context these could be interpreted as an accomplishment of the goal of great
profit making by environmental business, since the carbon market created good
opportunities for many companies to gain windfall profits.
When a company faces cost increases for inputs, it could choose one of the following
options:
- Absorb the cost by reducing the profit margin;
- Reduce the cost by improving the efficiency of operations;
- Transfer novel costs to the consumer.
The supplementary costs determined by the carbon market were targeted to steer companies
to the second option. What was the actual choice of companies deserves a closer look, since
few of the real outcomes were anticipated in the design and implementation of the EU ETS.
Windfall profits are distributional effects of a major concern for any governmental
intervention, including the ones that intend to incentivise environmental performance. In
case of EU ETS the opportunity for windfall profits emerged as a result of corporate
pressure on policy making, divergent interests reflected in the national allocation plans, and
the peculiarities of the main economic actors and their products in local and global
contexts.
The corporate pressure of major actors that should face the cost increase associated with
carbon trading was strong enough to influence the design of the EU ETS, including the
level of the cap and how allowances (EUAs) are allocated to companies. A strong reasoning
for supporting the favourable measures raised the question of carbon leakage, especially for
industrial electricity consumers.
Carbon leakage is a pollution haven business model according to that companies that face
higher environmental costs in their host countries will relocate their production in other
states where such costs are lower. Thus the factories and plants will continue release the
same amount of greenhouse gases (carbon leakage), but not on the territory of the host
country, in this case the EU, but on another territory. In addition, the relocation has a very
important social impact too, since it will close up thousands of jobs in EU. Carbon leakage
allows meeting emission goals associated with a certain territory, but the environmental
effectiveness is cancelled since the global amount of emissions is not reduced.
The threat of carbon leakage was recognized in an early stage by the European
Commission. Thus, in 2009 it was established a list of companies that are most exposed to
carbon leakage, list applicable for five years. The list is a result of a wide consultation with
many stakeholders and it comprises many energy intensive production sectors. These
include iron and steel, cement, refinery, paper and pulp, and even food industry.
According to a recent review prepared by Venmans (2012), carbon leakage could take two
forms, such as:
- Trade-driven carbon leakage: passing carbon costs in selling prices creates market
share loss, favouring exports, or if the profit margin is lowered it will compromise
the European investment in new production capacity;
- Energy price driven carbon leakage: the implementation of European climate
policy affects world prices for fossil fuels and favour higher consumption of these
fuels in the rest of the world;
138

Fact is the pollution haven effect was not confirmed for greenhouse gas emissions (Michel,
2010). Moreover, the assessment of the most affected industries reveals that the rate of
carbon leakage is in fact rather low. Venmans (2012) states that trade-driven carbon
leakage was not observed, and long term estimates are divergent.
The EU ETS allowances were established considering previous emission trends of major
sources such as power generation and large burning installations from the manufacturing
industry, plus aviation. The data was collected and reported by the producers and
underwent various cross-checking processes and became input for NAPs. NAPs comprised
mainly over estimations of the emission and the EU wide caps established in the first two
phases were rather high. This process is known as over-allocation and it has a direct
negative impact on the abatement level. It is favoured by lack of transparency and could
jeopardise the functioning of the entire system. For instance, in 2006, then verified
emissions were published the price of allowances collapsed since actors realised that they
do not need more allowances to buy and because banking allowances from one period to
another was not possible. According to Anderson and di Maria (2010), 6% of the first
allocation phase allowances were over allocation.
Table 1 Windfall profits of EU ETS
Sector/Phase/Country
Windfall profit estimations
Power generation, phase I, Great
5.3-7.0 billion euro per year
Britain, France, Belgium
Power generation, phase II, Great
Britain

1.0 billion pounds per year

Power generation, EU 20

35.0 bilion euro

Largest 10, phase II

4.1 billion euro

Refiner, Iron and steel, phase I

14.0 billion euro

Source: Elsworth, R., Worthington, B., Buick, M., Craston, P., Bryne, M. 2011. Carbon fat
cats 2011. The companies profiting from the EU Emissions Trading Scheme, Sandbag.

Despite precautions, windfall profits broke out, and major industrial actors transformed
their strategic positions in important earnings with no supplementary costs associated with
technological improvement. How large these windfall profits were is illustrated by data
presented in table 1.
There were identified the so called fat cats, the companies that accumulated huge number
of allowances. Their market behaviour could threaten the functionality of the EU ETS
according to Elsworth et al. (2011). The allowance accumulation reaches 240 million held
by only ten companies, foreseen to grow up to 330 million. This covers the annual
emissions of many smaller Member States of the EU, like Austria (80 million tonnes);
Belgium (117 million tonnes); Bulgaria (61 million tonnes); Romania (119 million tonnes)
etc.
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Source: own representation using Sandbag and UNFCCC data

Fig. 3 The allowance surplus of fat cats vs the largest emission Member States
The allowance surplus of the fat cats covers around 5% of EUs total emissions, and is
around ten per cent compared with the ten largest emitter Member States (fig.3).
By transforming allowances in money, it results that these companies shared a 4 billion
euro profit in 2010 equalling the environmental budget of the EU in the same period of
time. Today, the size of the profit has shrunken to 1.4 billion, but do to the tightening of the
cap within phase III (2013-2020) it is expected an increase in prices, even beyond 2010
140

levels. Therefore, by doing nothing the profit of these companies will further raise along
with the increase of the carbon price. Moreover, during this time, since companies are not
threatened with the cost increase determined by new investments in technology, could trade
the allowances on the market and earn more profit out of them. The main mechanisms that
are used by companies to make windfall profits out of EUAs are:
- Sell surplus EUAs: ArcelorMittal and Lafarge sold EUAs for 172, respectively
300 million euro;
- Lend EUAs to traders: like money, emission allowances could be lent to banks and
brokers who can further trade them on speculative markets;
- Transfer EUAs costs to consumers: although were distributed for free in the first
two phases of the EU ETS, some companies calculated their value and included
them as costs for their products;
- Exchange EUAs for CERs: taking the opportunity of price differences, companies
could choose which way is best for them and could exchange EUAs by CERs.
Thus for meeting emission targets a company by CERs and bank its own EUAs.
Phase III is expected to reduce this distributional effect. However, the fat cats also have a
great lobby power and they might have an influence on standard setting for the
benchmarking process. Nevertheless, the first option of reducing profit margin and the
second one of investing in eco-efficiency are already phased-out given the success of EUAs
cost transfer to consumers.
Conclusions
Fighting climate change is a long political and economic debate. The general agreement on
the necessity and urgency of climate mitigation efforts is beyond question. Most of the
worlds states are signed a global agreement in this respect. Nevertheless, the latest rounds
for climate policy negotiations are scenes of strong opposition and each goal is fiercely
negotiated.
The main tools used for the implementation of climate policy are the carbon markets that
are regulatory (compulsory) or voluntary. Clean Development Mechanism and EU ETS are
the current regulatory markets where the emissions could be traded as CERs (Certified
Emission Reductions), respectively EUAs (European Union Allowances). Despite careful
design, the interplay of economic actors in this arena did not go as it was expected and the
future of these markets is already questioned. Hence, in Europe, the EU ETS allowed large
emitter companies from iron and steel and cement sector to earn windfall profits with no or
little action taken toward emission reductions. Further, the carbon price is very low, and the
effects of cap tightening are expected to revitalise the area. Meanwhile companies are
gaining windfall profits by transferring costs to consumers, invoking the threat of carbon
leakage and intensify their lobby for preserving this unexpected opportunity.
The outcome of climate policy is a higher price on energy that is transferred to consumers
who will act in consequence. Further, emission abatements are also made, but a great part
of them was reached by reducing production due to crisis than by investing in low carbon
technologies. For the public at large this could be a higher price due to a discourse, rather
than a technological change.
References
1. Anderson, B., Di Maria, C. 2010. Abatement and allocation in the pilot phase of
the EU ETS, Environmental and Resource Economics, 48(1): 83103.
2. Benessaiah, K. 2012. Carbon and livelihoods in Post-Kyoto: assessing voluntary
carbon markets, Ecological Economics, 77: 1-6.
3. Bogdan, O. 1983. Clima Romaniei in Geografia Romaniei, Bucharest, Academia
RSR.
141

4.
5.

Bran, F., Ioan, I. 2009. Globalizarea si mediul, Bucharest, Universitara.

Bran, F., Manea, G., Ioan, I., Radulescu, C.V. 2012. Globalizarea. Manifestari si
reactii, Bucharest, Economica.
6. Elsworth, R., Worthington, B., Buick, M., Craston, P., Bryne, M. 2011. Carbon fat
cats 2011. The companies profiting from the EU Emissions Trading Scheme,
Sandbag.
7. EC-Climate Action. 2013. The EU emission trading system (EU ETS), ETS Fact
sheets.
8. Michel, B. 2010. Is offshoring driven by air emissions? Testing the pollution
haven
effect
for
imports
of
intermediates,
http://www.etsg.org/ETSG2014/Papers/178.pdf, accessed on 10.09.2014.
9. Petrescu, C.D. 2013. Consumer behaviour on organic food: detailed questionnaire
as research instrument, Advances in Environmental Sciences International
Journal of the Bioflux Society, 5 (3): 261-273.
10. Pinto, J. 2010. Staying globally competitive, ISA InTech Channel Chat.
11. Venmans, F. 2012. A literature-based multi-criteria evaluation of the EU ETS,
Renewable and Sustainable Energy Reviews, (16): 54935510.

142

A STUDY ON PERSPECTIVES OF ORGANIC FARMING AND ORGANIC FOOD

MARKET
Mirela STOIAN, Dan BOBOC
Faculty of Agro-Food and Environmental Economics, The Bucharest University of
Economic Studies; email: [email protected], Str. Mihail Moxa 5-7, Sector1,
Bucharest, Romania
Abstract
Both organic farming and organic food market have grown slowly but steadily in recent
decades. Thus, if initially they were only subject to scientific debate, later turned into:
market niches; important areas of legal regulation; topics of debate among consumers;
important links in food chains at national, European or global level. The paper proposes an
analysis of significant recent developments in organic farming and organic food markets,
analysis results will be used in shaping the development perspectives of the two important
components of agricultural and food markets. Research methods used were mainly
quantitative, analysis and comparison occupying an important place in the whole work.
Comparisons were made both in terms of temporal and geographically. Were analyzed
statistics in recent years.
Keywords
organic agriculture, organic food market, analysis, perspectives
Introduction
The opportunity of this research is supported by trends recorded in the agricultural and food
markets in general and food consumption particularly. The contemporary consumers are
very interested in the quality of products and food safety. In this context, organic farming
has seen a consistent growth, both worldwide and in the EU. Research conducted on the
premise that organic farming is a step in the road to agriculture more environmentally
friendly. The aim of research was the analysis of the current state of development in
organic farming sector, organic food market and revealing perspectives on the Romanian
market.
The data used were quantitative and the main sources were the following: Romanian,
European and world official statistics; Research Institute of Organic Agriculture;
International Federation of Organic Agriculture Movements and other.
Food consumption trends consistently support an upward trend for the request and the offer
of organic food. It is manifested in recent years, a growing demand for quality products. In
the coming years, organic farming and organic food sectors can be a real competitive
advantage for Romania.
1. Literature review
Al Gore identifies emerging forces that are reshaping our world: increasing globalization;
digital communications; a balance of power (economic power, political power, military
power) shifted; a flawed economic compass; biotechnology revolutions that transform
agriculture and medicine (Gore, 2013).
Today, the health concern is a decisive factor influencing food consumption behavior.
Concerns about the sustainability of consumption are increasingly in the markets for
agricultural products and foodstuffs. Researchers estimated that the challenge is to produce
143

and consume in a manner that harm the environment as little as possible. (Roca, Ignat,
2014). Numerous studies demonstrate that an important role in increasing the consumption
of organic food is held by changing consumer behavior. Obviously, this change is the result
of information and education processes (Istudor, 2010).
Food consumption patterns have continuously evolved. Factors that influenced the
transformations in the structure of consumption are numerous; food consumption patterns
are determined by the elements of economic, social, cultural etc. (Mrginean, I., Precupeu,
I., 2011). Research carried out recently (Kaufmann, 2012) highlights a number of factors
that can favorably influence the consumption of organic products. Of these, it is noted:
information on the environment; consumer altruism; awareness of environmental issues;
concerns and attitudes regarding environmental issues; availability of information on
healthy products; group membership; transparency; fairness of business practices.
The role of organic farming is to produce cleaner food, more suitable for human
metabolism, in full correlation with environmental conservation and development. The
organic farming benefits are numerous and complex: environmental, social and economic
(Morgera, 2012).
Sustainable agriculture that will feed more than 40 years, a world population of 9 billion
people or more will have to go through many revolutions interdependent: in plant growth;
in soil management; in water use; in the use of fertilizers and landscape management. These
processes can result in a doubling or even a tripling of overall benefits (Wijkman, A.,
Rockstrm, J., 2013).
2. Organic agriculture and organic food market
2.1 Global level analysis
Organic farming world, in 2011, can be summarized as: 162 countries report information on
organic agriculture; 37.2 million hectare represent the total area (inclusive conversion
areas); 10 countries have more than 10% and 15 countries have between 5-10 % organic
land; 1.8 million producers were reported (FiBL & IFOAM, 2013). Certified area increased
continuously, between 1999 and 2011.

Fig. 1 Organic agricultural land in the world (million hectares)

Source: Nic Lampkin, FiBL and AMI

The countries with the largest certified areas are: Australia; Argentina; United States;
China; Spain. The rankings reflect the real situation, even if the reporting periods are
different.
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Table 1 The largest organic surfaces, by countries (millions hectares) (2011)

Countries
Surfaces
Australia (2009 values)
12,0
Argentina
3,8
United States (2008 values)
1,9
China
1,9
Spain
1,6
Italy
1,1
India
1,1
Germany
1,0
France
1,0
Uruguay (2006 values)
0,9
Source: FIBL-IFOAM Survey 2013
The region with the largest certified area is Oceania, followed by Europe and Latin
America. In Africa are certified many operators in organic coffee production.
Table 2 Distribution of organic agricultural land (2011)
Surface
Organic agricultural
Organic
(million hectares)
land (%)
producers (%)
Oceania
12,2
33
1
Europe
10,6
29
16
Latin America
6,8
18
18
Asia
3,7
10
34
Northern America
2,8
7
1
Africa
1,1
3
30
Source: FIBL-IFOAM Survey 2013
Region

Regarding the organic food market, the largest is the USA and the EU is the second. Japan
has a growing market, also Canada. Organic products are attracting increasing interest in
the Japanese population.
Table 3 The largest organic market food (2011) (world) (retail sales) (millions Euros)
Countries
Values
United States
21038
Germany
6590
France
3756
Canada*
1904
United Kingdom
1882
Italy
1720
Switzerland
1411
Austria
1065
Japan*
1000
Spain
965
Source: FIBL-IFOAM Survey 2013; * 2010 values

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According to data published in the Organic Monitor journal, the organic food market has
grown from 23 to 63 billion US dollars during the period 2002-2011. Although it is more
expensive than conventional, many consumers are willing to pay a higher price for the
organic products.

Fig. 2 Organic retail sales (2011)

Source: FiBL-AMI survey 2013
A large number of certified operators are registered in Asia and Africa, the ranking of
countries being presented below. In 2011, the number of certified operators approaching
1.800.000. This indicator has registered a slight decrease after 2009.
Table 4 The numbers of organic producers (2011)
Countries

Number of producers

India

547591

Uganda (2010 values)

188625

Mexico

169570

Tanzania

145430

Ethiopia

122359

Turkey

43716

Peru

43661

Italy

42041

Spain

32195

Dominican Republic

24161

Source: FIBL-IFOAM Survey 2013

Average consumption is still low, maximum amount not exceeding 200 euros/year/capita.

146

Fig. 3 The capita consumption (2012) (euros)

Source: FiBL AMI Organic Data Network Survey 2014
While organic food represents 12% of total food production, at global level, the organic
food sales market is growing rapidly: it holds between 5 and 10 % of the food market share
in the United States (Organic Trade Association), significantly outpacing sales growth
volume in dollars of conventional food products.
2.2 European level analysis
In the last decade, the number of organic food producers and the organic area grew at a
rapid rate. Each year, in EU 500.000 hectares of farmland are converted to organic
production. Between 2000 and 2012, the total organic area increased by 6, 7% per year on
average, reaching aproximately 9, 6 million hectares (from 5, 7 million ha in 2002), ie 5,
4% of the total utilized agricultural area in the EU and upwards of 186000 organic farms.

Fig. 4 Organic agricultural land in Europe (million hectares)

Source: Nic Lampkin, FiBL and AMI

147

In the EU, the organic area represents about 5 % of the total utilized agricultural area. All
data are contained in the latest European Commission report on organic farming in the EU,
published in late July 2014.
Table 5 Organic agricultural land (Europe) (2012) (%)
Countries
Share of total agricultural land
(%)
Liechtenstein
29,6
Austria
19,7
Sweden
15,6
Estonia
15,3
Switzerland
12
Czech Republic
11,5
Latvia
10,8
Italy
9,1
Slovakia
8,8
Finland
8,7
Source: Organic Data Network Survey 2013; FibL AMI Survey 2014
The three countries with the largest organic area are: Spain, Italy and Germany. Permanent
grassland represents 45% of the EU organic. 15% of the organic area is cultivated with
cereals and 13% with permanent crops. The livestock sector accounts for only 1% of EU
organic agriculture.
According to the document cited above, 83% of the organic farms that existed in the EU 27
in 2010 and 78% of the organic area are EU-15 countries. In these countries the European
and national legislation have stimulated the growth of the organic sector.
Due to the constantly increasing demand in the EU, organic market has grown significantly
in recent years. European market for organic food is estimated at 22 billion euros (2012,
according to data published by Eurostat).

Fig. 5 The organic area in Europe (2012) (hectares)

Source: Organic Data Network Survey 2013; FibL AMI Survey 2014
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Table 6 Organic market, by countries (Europe) (2012) (billion Euro)

Countries
2011
2012 (estimated values)
Germany
6,6
7
France
3,6
3,8
Italy
2,0
2,1
United Kingdom
1,8
1,7
Holland
0,8
0,9
Belgium
0,4
0,5
Source: Eurostat
The EU has an important role in food trade, especially in terms of high quality products.
With annual imports and exports worth 196 billion (averages for 2010-2012), the EU is the
main trading partner of world agricultural products. The strength of the EU in terms of
export is the final products that are ready for consumption, both processed and unprocessed,
EU recorded a net trade balance of 6.7 billion (average for the period 2010 2012). These
products include wine, spirits, cheeses and processed meats that produce significant added
value in the food chain.
The main challenges for the organic sector are to ensure steady growth of supply and
demand, but at the same time, consumer confidence. It is essential to ensure system
reliability and added value in a long-term perspective. Besides increasing trade, EU organic
food production system should ensure that imported products meet the strict definition of
the EU on food and farming.

Fig. 6 Organic food and drink sales, by country (%, 2012)

Source: FiBL AMI Surveys; Organic Data Network Survey 2013

European market has remained even in the crisis years 2009-2010 the most developed
organic market worldwide, reaching approximately 50% of global consumption. A good
example of this is Germany.

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Fig. 7 Organic food and beverages retail sales in Germany (million euros)
Source: Hamm Rippin 2000-2009; AMI 2010-2014
Germany is the recognized leader of the organic food market in Europe. This reflects the
strong support of organic food production and at the same time, consumer health concerns.

Fig. 8 Organic food and drink sales (2012) (million euros)

Source: FiBL-AMI Survey, OrganicDataNetwork Survey
The higest consumption per capita are recorded in Germany, France and Italy, as shown the
graph below.

Fig. 9 Consumption in European Union (billion euros)

Source: FiBL AMI Organic Data Network Survey 2014
150

Germany is the largest consumer of organic food in Europe and the second in the world.
The German market remains net importer of organic products. The French government
supports the development of organic farming as a sustainable component of French
agriculture. The development of organic foodstuff in Italy is linked to brands. Sustainability
and a healthy lifestyle still booming encourage the sales of organic foods.
2.3 National level analysis and perspectives for Romanian market
Organic farming is a dynamic sector in Romania which has seen an upward trend in recent
years, both in the plant and animal production sectors. If in 2010 had exports of 1.5 million
euro, today we have reached 60 million euro, but unfortunately this refers almost
exclusively to raw materials. Also, the number of certified operators exceeded 15.000.
Nationally organic products are not expensive; they are really reasonable price that reflects
the work of those who operate in this sector.
Table 7 Dynamics of operators and areas in organic agriculture (Romania)
Specification

2006

2008

2010

2012

Registered operators in organic farming

3409 4191
3155
15544
(number)
Area under organic farming crops on arable
45605 86454 148033,5 174643,95
land (ha)
Source: Communications of inspection and certification bodies
Romanian agriculture affect the environment over the past 50 years, in a manner much
lower compared to other countries. It is estimated that Romanian agriculture is more
"green" than other countries. Romania uses only half the amount of fertilizer that is applied
in Hungary and Poland, or even 25% of what is used in more developed countries such as
the Netherlands or Spain. Another indicator that certifies environmentally friendly farming
practice in Romania is groundwater. Currently, groundwater is the source of drinking water
for rural residents.
Also, in the last years, the farmers, are small or large, have been adopted technologies not
harmful to the environment.
A recent example of good practice is the partnership between the Association of Organic
Agriculture Operators - Bio-Romania and Carrefour Romania, concluded in 2013. The
partnership involves the distribution of organic products from rural producers and
processors in the national network of stores. Thus were listed in hypermarkets about 70
Romanian organic products, including: bakery products; dairy products; rice Romanian bio;
raspberry honey; green apple; wine; green forest fruit frozen and seeds. Romanian organic
vegetables began to be sold in Carrefour stores in Bucharest, starting in April 2014.
Vegetables come from Izbiceni, where there is a large area of greenhouses in conversion.
Organic farming shall by allocate an amount of 200 million euros in future National Rural
Development Programme 2014-2020 (NRDP). In the future NRDP is provided tools that
integrate production and add value to each product. The new RDP were admitted two
tracks, one that relies on supporting competitiveness and large farms, and another aimed at
small farms, including organic farming.
Food safety is an extremely important issue today. In this context, experts identify several
critical points in the food production chains. The most important of these are: animal feed;
farm animals; product collection from individual producers or farm; slaughter houses;
processors of meat and milk; shelves; human factor; black market (Popa, 2013).
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Analysing Romania's potential, we can estimate that crop production, organic farming, and
animal husbandry are the areas in which our country could impose on the European market.
With an area of 300.000 hectares of arable land certified, 500.000 hectares of meadows and
a total of 15.000 operators in the system at the end of 2013, Romania exported 80% of its
production. Unfortunately, exports are represented but very few raw materials and
processed products.
Increasing the number of processors and exports of finished products are essential for
development of organic market. It is estimated that the development of Romanian organic
food brands could be one of the most important tools for successful marketing to the EU
market (and not only). It also requires better and accurate information to consumers about
organic products.
Increasing subsidies for organic farming will contribute to supply development. Thus, small and
medium farmers who will register as operators can obtain larger amounts for their activities that
could reach over 600 euro / ha in 2015 (to farmers who are in the conversion period).
The Romanian Government adopted the Ordinance on regulating the labeling and
traceability of organic products. This Ordinance creates the institutional framework for
establishing offenses and penalties for the activity in organic agriculture, given the
provisions of Regulation (EC) no. 834/2007 and Regulation (EC) no. 889/2008. The project
was motivated, on the one hand, that the fraudulent use of the terms "organic", "biological",
"organic" or their abbreviations, such as "organic," "eco" as trademarks or practices
operation, including product labeling, advertising and commercial documents may mislead
the consumer. On the other hand, were found frequent cases of failure of inspection and
certification bodies for organic farming. Accordingly, the European Commission called for
Romania to take the necessary measures to ensure traceability of organic products in all
stages of production, processing and distribution. It was decided to establish a system of
sanctions which do not comply with obligations under the law. Implementation of measures
aimed at improving the business of organic farming throughout the chain, from the farmer
to the end user.
Conclusions
The organic market is the most dynamic segments within the global food market. Driven by
a public better informed, demand for organic food is growing. The statistics of industry
sales are impressive. For the entire organic food market (global and EU level or more
specifically, in the Romanian economy), trends have been steadily rising. The demand and
consumption of organic products is a clear sign of change in the preferences of a growing
number of consumers Consumers participate more actively to create a sustainable global
economy, becoming aware of the challenges facing our world. In the next decade, more
and more consumers will adopt sustainable behavior, in particular through more careful
selection of what you buy, properly reported both financial strength and the principles of
sustainable development.
Future research will be directed towards an analytical analysis of the markets. The
dimensions will be analyzed, representative products for different countries or regions, the
main trade flows etc. In this context, more information is needed to analyze the various
markets.
References
1. Gore, A., 2013, The future: six drivers of global change, New York, Random House, Inc.
2. Istudor, N., Ion, R. A., Petrescu, I.E., 2010. Research on consumersself-protection
trough a healthy diet, Amfiteatru Economic Journal 28: 436-443
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3. Kaufmann, H.R., Khan Panni, M.F.A., Orphanidou, Y. 2012. Factors affecting

consumersgreen purchasing behavior: an integrated conceptual framework, Amfiteatru
Economic Journal 31: 50-69
4. Mrginean, I., Precupeu, I. 2011. The paradigm of quality life, Bucureti, Editura
Academiei Romne.
5. Morgera, E., Bulln Caro, C., Marn Durn, G., Organic agriculture and the law, FAO,
Rome, 2012
6. Popa, C., Vaschi, M., 2013. 8 puncte critice pe lanul alimentar, Revista Piaa
7. Roca, V., Ignat, R., 2014, The sustainability of fish consumption in Romania: customer
behaviour prior and after the country's adherence to the EU, Amfiteatru economic
journal 35: 243-257
8. Wijkman, A., Rockstrm, J. 2012. Bankrupting nature. Denying our planetary
boundaries, London, Routledge
9. Agricultural Information Company, Germany (AMI)
10. Facts and figures on organic agriculture in the EU, 2013, European Commission
11. FiBL and IFOAM 2013, 2014, Data on organic agricultural world-wide. In
FiBL&IFOAM, The World of Organic Agriculture. Statistics and Emerging trends
12. FiBL, AMI and IFOAM, 2013, Organic market data. In FiBL and IFOAM. The World
of Organic Agriculture. Statistic and Emerging Trends
13. International Federation of Organic Agriculture Movements, Germany (IFOAM)
14. Organic Food Facts, 2010, Organic Trade Association,
15. Research Institute of Organic Agriculture, Switzerland (FiBL)
16. www.organic-world.net/yearbook-2013
17. www.organicdatanetwork.net

153

LIFESTYLE AND SUSTAINABLE DEVELOPMENT IMPLICATIONS

FOR HUMAN HEALTH
Cristian George POPESCU
University of Bucharest, Faculty of Administration and Business, Romania
email:[email protected], Bulevardul Regina Elisabeta 4-12, Bucharest, Romania
Abstract
Lifestyle is a concept closely related to society development and thus the emergence and
widely spreading the concept of sustainable development. In the context in which
environmental factors have been altered because of the hegemonic desire of developed
nations to using natural resources at a rate beyond the regenerative capacity, the
unprecedented indirect effect of impaired human health due to these actions appeared. This
explains the lifestyle concept development and the link with sustainable development. This
article aims to highlight just those indicators that correlate with variables such as pollution
and to show that, regardless of the stage of economic development of a country, the
influence of pollution on health has negative repercussions. In areas where lifestyle is
reflected through positive actions, like environmental protection, the benefit most important
to people is to improve their health.
Keywords
lifestyle, health, pollution, sustainable development
Introduction
Lifestyle, long gone unnoticed until now, is currently one of the most debated topics in the
society. As people used wrong resources, because the direct and indirect environmental
aggressions, lifestyle has become increasingly important. Seeking a current definition of
this term is hardly to be found, but otherwise is very difficult because such a concept is
widely accepted by specialists because of the multitude of features and important variables
due to cultural factors, specific traditions of community and responsibility to receive and
take on new practices in everyday life unverified sample time (Chirila, 2012). However, it
is generally accepted that lifestyle is the particular way of living biological, psychological,
spiritual, social, all told, in a very broad definition, that lifestyle is the way to live
distinctive and recognizable (Sobel, p. 23).
The effects of environmental degradation on human health are of two kinds: direct and
indirect. The direct one is due to the harmful effects of pollution on human health, and the
best example is the air and water pollution. The indirect is manifested by interposing some
activities between harmful human actions on the environment and determining the factor of
human health. In both cases, the same cause has been identified: aggressive and destructive
human action on the environment, and the same effect of degradation of human health.
Currently almost all medical treatises specify pathogens of diseases due to pollution (the
main cause of human aggression on the environment), and the emergence of ecological
textbooks containing references to medical research on issues of health. The link between
154

human health and the environment is the lifestyle that the man intends to adopt for himself,
referring to his own lifestyle and lifestyle related to environment. If the first has short-term
impacts on human health and is easily modified with immediate consequences by
improving lifestyle, the second has medium and long term impacts on human health, and it
is hard to reach and change the attitude of people because the effects are visible for longer
periods of time. In both cases, preventive actions, the environment and the factors that
directly influence human health may result in a correct lifestyle, which in the context of
environmental factor intervention can translate the term sustainable lifestyle.
Complementing the above definition, and having regard to the subject so far, we can safely
say that a sustainable lifestyle is reflected by the expression of individual behaviour
privately which does not influence the quality of life of future generations by corrupting the
biological and physical universe.
Based on this definition, we propose to investigate the effects of pollution on human health
and the way that lifestyle can help to mitigate the consequences through medical way. This
piece of research tries to answer the question: is health influence by human lifestyle? The
objectives of the paper are to identify the correlations between human health, pollution as
result of lifestyle and consumption pattern and countries development to reveal and argue
the possible causes of illnesses.
1. Literature review
The effects of pollution on human health are discussed in literature in different ways for
children and adults. The first category is more vulnerable in the first year of life, many
studies describing the impact of air pollution upon illnesses of children under one year (U.
Gehring et al., 2002). To show some pertinent conclusions, the data regarding air pollution
(in emissions of CO2) can be correlated to an indicator related to health, such as HDI
(Human Development Index). The latter is used in World Health Organisation reports,
because it justifies the impact of cancer disease among population (as main illness spread
along with world economies development (World Cancer Report, 2014).
In literature, specialists use one more indicator: Functional State Index, FSI (Fashel and
Bush, 1970) which is an aggregate indicator of HDI (Human Development Index), HPI
(Happy Planet Index), GPI (Global Peace Index), DI (Democracy Index) and II (Income
Inequality). It is considered one of the most sensitive indicators related to the correlation
between human health and intensive development based on polluting industry and which
leads to environment degradation and, finally, to human health degradation.
Still, because of its complex character which takes into consideration the hope of life,
education and decent life standard, we consider that it can be correlated with the degree of
pollution and cancer disease in a period of time. The main issue is that pollution has long
term effects on health indicators, which leads to the idea of considering different time
series. Thus, any reports on environment shows that the effects of air pollution on human
health can appear after year, even decades. The most vulnerable populations are children
and groups of people after 65 years.
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The correlation between polluting emissions and health can be done considering longs
periods of time of this indicator which reflects the degree of global pollution: pollution as a
result of burning fossil fuels through emissions of CO 2 (the other harmful substances being
associated to this indicator). After all considerations above, the average of CO 2 emissions
per capita from 1995 to 2009 in developed countries will be compared to an indicator of
health related to cancer, as average, in the period 2003-2009.
2. Data analysis
In analysing data of cancer illnesses, the rate to 100,000 thousand inhabitants is normalized
to 10,000 inhabitants, for achieving a similar scale put on the graph together with the
indicator of air pollution: emissions of CO2 per capita. The indicators refer to average
calculated in the period 2003-2007. Correlations between these data show a coefficient of
0.7. What draws the attention is that the correlation coefficient between HDI and pollution
emissions is higher: 0.75. Considering the components of this index of human
development, one can notice that pollution relates to the degree of education and living,
which are important components in using natural resources and their use. Synthesising data,
the top of countries with high cancer incidents per 10 thousand inhabitants, as average of
period 2003-2007, compared to the level of HDI and CO2 emissions are presented.
Table 1 Cancer incidence, HDI, CO2 emissions, 2003-2007 average
Cancer incidence
HDI (Human
CO2
(rate to 10,000 inhabitants)
Development Index
emissions/inhabitant
as average of 2003-2007
very high)
(average 1995-2009)

U.S.A.

34.7525

0.914

16.9

Australia

32.585

0.933

18

Denmark

30.855

0.9

7.9

Slovakia

27.645

0.83

8.1

Spain

26.125

0.869

6.3

0.89

9.2

Japan

21.805
Source: own calculation based on statistical data

156

At the opposite side, data regarding children (under 15 years) cancer and mortality as rate
in total population are centralized, as average of the period 2005 and 2012. Data show an
inverse correlation between HDI and children cancer. This leads to the idea that developing
countries have high rates of children cancer and developed countries have a low rate of
children cancer.

Fig. 1 Correlation between HDI and cancer (deaths and incidence)

Source: own calculations based on statistical data

The situation is different in the case of adults, when the effects of pollution affect human
health after a longer period of time, as data already shown. Thus, in developed countries,
where HDI have high levels, where CO2 emissions have high levels as well, an upward
trend of cancer incidence registered, in the same periods comparable in those regarding the
negative effects of pollution on human health. As the graph shows below, a strong
correlation can be noticed between all indicators presented before.

157

Source: own calculations based on statistical data

Fig. 2 CO2 emissions correlated with cancer incidence rates and HDI
All these data show that human health is closely linked to pollutants, a specific example
being the present research. This finding is particularly important as the precise effects of
different substances on the development of cancerous diseases (causes of) are not yet
known, but the statistical and econometric research has shown that impairment is caused
because of lack of health lifestyle component of environmental conservation. Thus, there
are different categories of people because of their lifestyle are more prone misfit cancerous
diseases. We could say that there are one or more drivers, according to the literature, related
to lifestyle adaptation to human health and can result in a greater proportion of illness that
affected organ pollutant (see table risk factors in the emergence of different types of
cancer). The studies show that the best example is given the close link between
developments of cancer in the last time. Cancer climbed in the rakings as a cause of
mortality from place 5 to place 2 in just 10 years, and projections show that next 10 years
will rise as first index on mortality in the world (estimated by WCR - 2014). We reported
on this disease because it is the most significant affected by pollution on humans, in all
aspects: the pollution of water, air, soil, food and electromagnetic pollution (the main
source influencing the life and health) According International Agency for Research on
Cancer.

158

Table 2 Factors causing cancer

Food deficiencies

30%

Smoking

30%

Heredity factors

15%

Obesity, sedentary

5%

Professional risks

5%

Infections

5%

Alcohol

3%

Drugs

2%

Pollution

2%

Exposure to UV

2%

Source: Beliveau and Gingras, 2006

As shown in the table above, lifestyle puts emphasis on the possible development of
diseases, with a cumulative risk of 70% of getting sick of a cancer disease if humans do not
behave like a component of the environment where they born, grow and dye, being
influenced by external factors considered aggressive pollutants to our health.
Conclusions
Considering of the arguments revealed, some conclusions can be drawn. The human
lifestyle influences its health. Pollution, as a way of living, affects the quality of human life
in all aspects, with regard to environmental pollution that has indirect effects on human
health, and the failure of a lifestyle filled with direct consequences on human health.
Pollution is considered one of the most direct important components of the environment
man.
Countries with high HDI (developed countries) have a high incidence of cancer in adults
and low incidence to children, and high CO2 emissions. Countries with low HDI
(developing countries) have a high incidence of cancer in children and low incidence in
adults, and low CO2 emissions.
Future research may go deep to investigate the pollution impact over health and how we
could chance our life style to keep green the connection between environment and human
health.
ACKNOWLEDGMENT
This paper has been financially supported within the project entitled SOCERT.
Knowledge
society,
dynamism
through
research,
contract
number
POSDRU/159/1.5/S/132406. This project is co-financed by European Social Fund through
Sectoral Operational Programme for Human Resources Development 2007-2013.
Investing in people!

159

References
1. Beliveau, F., Gingras, D. 2006. Lalimentazione anti-cancero, Sperling & Kufer.
2. Bernard S., Cristofer W. 2014. World Cancer Report, IARC, WHO.
3. Blaxter, M. 2003. Health and lifestyle, TR Pb.
4. Chirila P., Popescu C. G. 2014. Prevenirea cancerului cu un studiu economic
comparat, Cluj, Presa Universitara.
5. Chiril P. 2012. Prevenirea bolilor prin stilul de via boli evitabile, Bucuresti,
Christiana.
6. Eriksen M., Mackay J., Ross, H. 2011. The Tobacco Atlas, American Cancer Society,
World Lung Foundation.
7. Foster, J. 2009., The Ecological Revolution: Making Peace with the Planet, Monthly
Review Press.
8. Graziano de Silva, J. 2012, press release, FAO.
9. Gehring, U., Cyrys, J., Sedlmeir, G., Brunekreefz, B., Bellander, T., Fischer, P., Bauer,
C.P., Reinhardt, D., Wichmann, E., Heinrich, J. 2002. Traffic-related air pollution and
respiratory health during the first 2 yrs of life, European Respiratory Journal, 19: 690698
10. Zaman G., Vasile V. 2014. Dezvoltarea Durabil: concept transfersal complex multi si
intradisciplinar, presentation
11. Strategia Naional pentru Dezvoltare Durabil a Romniei, 2013-2020-2030.

160

INVESTMENT ACTIVITIES IN AGRICULTURE AND PROCESSING INDUSTRY

ON THE TERRITORY OF THE VRBAS MUNICIPALITY STATE AND
POSSIBILITIES
Jonel SUBI, Marijana JOVANOVI, Marko JELONIK
Institute of Agricultural Economics, e-mail: [email protected], Volgina Street no. 15,
11060 Belgrade, Serbia
Abstract
Paper presents the investment activities on the territory of the Vrbas municipality, with special
emphasis on agriculture and processing industry, which represent the branches with the highest
growth of investments in observed period (2006-2012). By consideration of the spatial distribution
of totally realized investments within the Vrbas municipality, generally weak and insufficient
investment activity can be noticed, and it ranges from 0,23%-0,45% of totally realized investments
on the territory of the Republic of Serbia, whereby the highest investments in municipality are
realized during the 2011. Identically to republic and to regional level, on the level of the Vrbas
municipality comes to similar trends in distribution of investments in agriculture and processing
industry per employed resident, in other word it is possible to the make differentiation between the
period with growth and decrease of investment activities. It should be underlined a rapid growth of
investments in last year of observed period, despite the presence of the trend of total number of
employees reduction. Territorially observed, all average growth rates of investments in agriculture
and processing industry per employee are positive, therewith the highest rates are realized on the
territory if the Vrbas municipality. In paper are presented so far realized projects within the
territory of Vrbas municipality, as well as planned investment activities that are based on fact that
on the observed territory exist real opportunities for further improvement and widening of current
production capacities.
Keywords
agriculture, processing industry, investment activity, municipality of Vrbas.
Introduction
According to one of adopted classifications, investments are divided on the economic and noneconomic investments. Basic function of economic investments is to secure continuity of
production process on the same level, i.e. achieving of the level of basic reproduction.
Mentioned investments have a role to enable a permanent replacement of worn out fixed assets.
Also, they serve to make possible a reproduction of social process of production on higher level,
i.e. achieving of expanded production (Subi, 2007). On the other hand, non-economic
investments represent all investments in development and improvement of culture, health care,
education, science, etc. (Vukadinovi, Jovi, 2012), in other words they are in function of raising
of general quality of life standard in certain society. Investment activity represents necessary
element of the complete reproduction process, as well as precondition of effective performing of
material production in long term period.
Consequences of economic crisis are noticeable in all economic sectors, as on global level, as well
as in Republic of Serbia, where decrease in investment activities additionally slowed down
economic growth. Within the period of accessing to European Union, Republic of Serbia has
harmonized their goals with the Europe 2020 strategy (European Commission, 2010), which is
based on competitiveness, sustainability, knowledge and innovations, as well as social and
territorial cohesion. Mentioned document was initiated the establishment of developmental strategy
161

of Republic of Serbia until 2020, that is set on new model of economy growth, based on
sustainable and dynamic industry development which can be easily fit into the unique EU market,
providing on that way certain inflow of investments. On the current level of economic
development, many companies in Serbia are characterized by unfavourable business performances
that are manifested throughout fall of market-share and achieved profitability, increase of
indebtedness, inadequate investment and increased volume of diversified business activities instead
of the primary work (Subi, 2008).
As a consequence of global economic crisis, changes in way and dynamic of investing have not
bypassed agriculture too. Although investments are one of the basic factor of development of
agricultural activity, growth of investments depend a lot from technical and technological
modernization of agriculture, so they represent a precondition of stability of national economy
(Subi et al., 2012). In line with that, from significant importance has to be knowing of current
state of investment activity in agriculture, in order to create adequate base for future investment
(both domestic and foreign investors). Because of that, it has to be expected enhanced state
activity through institution building, improvement of investment ambient, increase and
restructure of export, reform of educational system in line with economy needs, more proactive
collaboration between sector of production and scientific institutions, as well as a reform of
labour market and employment policy.
Investment trend within the period 2006-2012, indicates the strong correlation between politicaleconomic credibility of country and investment risk, so it can be possible to conclude that in
Serbia exists expressed oscillatory in investments inflow. Global conditions of investments
attractiveness depend on: geographic position of the area, labour profile, accuracy and devotion
of local administration, successful examples of foreign investment, etc. Economic situation
present in all segments of national economy, inevitably affects to the economic situation within
the territory of Vojvodina region, as well as in the territory of the Vrbas municipality (South
Baka district), which was taken as a referent territorial unit in this research.
Materials and methods
For research purposes, in paper are used statistical data of investment activity on the territory of
Vrbas municipality, with emphasis on realized investments on the territory of South Baka district,
Vojvodina region and complete Republic of Serbia. Relevant data about totally achieved
investments and data about investments realized in certain economy segments (agriculture and
processing industry) were being used, as well as data taken from scientific and professional
publications. In focus of the research were realized investments in economy, achieved investments
in primary agriculture and processing industry per employee, as well as average annual growth
rates of obtained investments for both observed branches, and examples of up today implemented
projects on the territory of Vrbas municipality. Data analysis will enable an establishment of basis
for future development and widening of investment activities.
Results and discussion
For better presentation of the level of importance of domestic and foreign investments for the
economic development on the territory of Vrbas municipality, it was given a review of total
investments, as on national, as well as on regional level. In other words, research included
multiannual investment trend within the economy of Vrbas municipality, as well as economy of
South Baka district, Vojvodina region and complete Serbia (table 1).
In observed period (2006-2012), it can be noted that Vrbas municipality is characterized with
weak and insufficient investment activity, along with expressed oscillations. Totally realized
investments in Vrbas municipality during 2012 are covering 2.96% of totally realized
investments at the level of South Baka district, or 1.18% of totally realized investments at the
level or Vojvodina region, or just 0.29% of investments achieved at national level. Investment
162

activities on the territory of Vrbas municipality, in observed period, ranged from 0.23% to
0.45% of totally realized investments on the territory of the Republic of Serbia. Absolutely
expressed, the highest volume of investments in Vrbas municipality was realized during the
2011 (around 2,208,483,000 RSD), when its share in totally achieved investment at national
level was around 0.45%. On the other hand, absolutely the lowest volume of investments in
Vrbas municipality were realized in 2006 (about 799,999,000 RSD), when its share in totally
realized investments at the national level amounted about 0.23% Although the total value of
realized investments in the municipality in 2012, compared to 2010 has an upward trend, their
share in totally gained investments at the national level had been recorded a fall. Decreasing of
participation is the result of, before all, lower growth of the volume of realized investments on
the territory of the Vrbas municipality compared to an increase of investment activity at the
national level.
Table 1. Spatial distribution of totally realized investments* (in 000 RSD)
Year
2006
2007
2008
2009
2010
2011
2012

UM
RSD
%
RSD
%
RSD
%
RSD
%
RSD
%
RSD
%
RSD
%

Republic of
Serbia**
340.795.050
100,00
482.340.888
100,00
566.836.857
100,00
455.485.248
100,00
425.400.001
100,00
493.100.031
100,00
608.508.303
100,00

Territory
Vojvodina
South Backa
Region
District
94.317.316
36.361.563
27,68
10,67
115.475.861
38.065.109
23,94
7,89
135.206.492
52.622.804
23,85
9,28
103.034.938
42.558.027
22,62
9,34
100.024.608
52.339.704
23,51
12,30
124.208.129
53.419.549
25,19
10,83
150.382.309
59.862.549
24,71
9,84

Vrbas
Municipality
799.999
0,23
1.542.695
0,32
1.852.824
0,33
1.032.556
0,23
1.326.219
0,31
2.208.483
0,45
1.770.846
0,29

Source: Municipalities in Serbia (2007, 2008, 2009 and 2010) and Municipalities and regions in
the Republic of Serbia (2011, 2012 and 2013), Statistical Office of the Republic of Serbia
(SORS), Belgrade.
* Investments in new fixed assets (for all legal entities, except those one that are classified,
according to the article 7. of the Law of Accounting and Audit, as a small companies), in current
prices.
** Data about Kosovo and Metohija are not covered (for the period 2006-2012).
Focusing the economic branches, it is necessary to mention that during the period 2006-2012 was
came to significant changes within the structure of realized investments per individual activities,
not only on the territory of Vrbas municipality, but also on the territory of South Backa district,
Vojvodina Region and complete Serbia. All production activities on the municipal territory
achieved the negligible share within the totally realized investments on national level, but it is
obvious that the greatest growth were obtained in processing (food) industry and primary
agriculture (including hunting, forestry and fishery). Also, it should be mentioned that the highest
fall of investment activity was recorded in following sectors of economy: retail and production of
gas, energy and water. More completely and more real analysis of achieved investments in
observed territorial levels will be done by presentation of investments distribution per employee in
processing industry and primary agriculture (table 2).
163

Table 2. Realized investments* in agriculture and processing industry, per employee

(in 000 RSD)
Indicator/
territory
level

Republic of
Serbia**

Vojvodina
Region

South
Backa
District

Vrbas
Municipality

Year/
Agriculture,
Investments
Employees
Average
hunting,
per
in
annual
forestry and
employee in
agriculture
growth
fishery
agriculture
rate

2006
2007
2008
2009
2010
2011
2012
rate
2006
2007
2008
2009
2010
2011
2012
rate
2006
2007
2008
2009
2010
2011
2012
rate
2006
2007
2008
2009
2010
2011
2012
rate

13.250.369
14.384.811
21.357.929
14.174.921
9.219.328
12.211.147
16.970.492
4,21
8.079.570
8.648.206
16.296.382
9.990.816
6.683.630
10.058.973
11.890.772
6,65
1.057.355
2.246.769
4.661.306
2.702.818
2.345.670
1.472.910
2.523.011
15,60
171.566
274.633
503.226
159.208
138.589
112.004
580.016
22,51

71.487
65.025
68.896
63.878
43.000
34.815
33.002
-12,09
44.073
40.563
41.399
38.367
25.000
20.663
19.759
-12,52
8.846
8.626
9.459
9.103
6.000
5.368
5.294
-8,20
603
589
723
839
473
433
411
-6,19

185,35
221,22
310,00
221,91
214
351
514
18,54
183,32
213,20
393,64
260,40
267
487
602
21,91
119,53
260,46
492,79
296,92
391
274
477
25,92
284,52
466,27
696,02
189,76
293
259
1.411
30,59

Processing
industry

Employees
in
processing
industry

Investments
per
employee in
processing
industry

75.140.099
104.204.035
123.853.505
98.029.228
78.074.541
123.436.591
205.326.541
18,24
29.076.776
40.872.790
47.328.434
32.317.466
33.031.321
55.458.360
66.435.946
14,77
9.331.034
11.470.006
19.061.960
9.711.607
15.898.276
12.384.967
9.279.404
-0,09
252.350
376.425
455.521
421.187
663.479
1.480.804
783.729
20,79

511.850
466.942
483.654
459.950
312.000
295.363
289.286
-9,07
140.725
129.789
134.107
126.960
93.000
90.714
89.130
-7,33
41.073
38.608
43.110
40.840
28.000
27.210
25.742
-7,49
6.148
5.988
5.261
4.925
3.000
2.757
2.197
-15,76

147
223
256
213
250
418
710
30,04
207
315
353
255
355
611
745
23,84
227
297
442
238
568
455
360
8,00
41
63
87
86
221
537
357
43,39

Source: Municipalities in Serbia (2007, 2008, 2009 and 2010) and Municipalities and regions in
the Republic of Serbia (2011, 2012 and 2013), Statistical Office of the Republic of Serbia
(SORS), Belgrade.
* Investments in new fixed assets (for all legal entities, except those one that are classified,
according to the article 7 of the Law of Accounting and Audit, as a small companies),
in current prices.
** Data about Kosovo and Metohija are not covered (for the period 2006-2012).
164

Obtained investments in observed economy branch at the level of Republic of Serbia during the
analysed period are characterized by increase until 2008, after which came to rapid decrease in
investment activity (even for 66,37%), influenced primarily by global economic crisis to the
national economy. After 2010, it came to increase of realized investments in agriculture. Number
of employees in agriculture has a negative trend, and it recorded its minimum in 2012. According
to aforementioned, to a tangible increase in realized investments in agriculture per employee comes
after 2010, and achieves its maximal value in 2012 (514.000 RSD).
Within the observed period the investment activities in processing industry were characterized
by similar trend, such was appeared in primary agriculture. Until 2008 it were recording a
growth of realized investments, after what came to significant fall in investment activity. With
the 2010 it came again to increase in realized investments, where in 2012 was recorded nearly
three times more achieved investments than in the initial year of the observed period. Number of
employees in this economy segment was in constant decline, wherein at least of employees were
recorded in 2012. As like in the case of realized investments per employee in primary
agriculture, realized investments per employee in processing industry were had growing trend
and they reached their highest value in 2012 (710,000 RSD).
Obtained investments at the territory of Vojvodina region, in observed period were
characterized by trend similar to those one achieved at republic level. Until 2008, it was
noticeable a growth of investments in agriculture (realized investments in 2008 were two times
larger than realized investments in 2006). During the 2009 and 2010, it can be seen rapid fall in
investment activities, after which come to their constant growth. Number of employees in
primary agriculture was constantly decreasing (for almost 25.000 employees within the whole
period). So, investments achieved per employee in agriculture were characterized by steady
growth in observed period, with their, absolutely maximal value in 2012 (602.000 RSD).
Investments realized in processing industry are also characterized by small fluctuations. In the
period of 2006-2008 their increase were recorded. With the 2009 came to sharp fall in
investment activity (aftermath of global economic crisis), and then to emergence of their
positive trend, so in 2012 it was recorded twice time more realized investments than in 2009.
Number of employees in the processing industry was characterized by an identical trend as it
was presented in primary agriculture, so achieved investments per employee, it can be said, were
showing constant growth during the observed period.
At the territory of South Backa district, it was recorded the same trend of realized investments in
primary agriculture, as like at previously presented territorial level, so in period 2006-2008 came to
their growth, that was changed by period of rapid fall in investment activities (2009-2011), wherein
in last observed year (2012) came to jump for almost the 60% in compare to previous year.
Number of employees in primary agriculture was negative trend, especially in sub period 2009 2012, when it was almost halve. Such trends were completely affect to realized investments per
employee, so in whole period it was recorded certain level of oscillations of achieved investments
in agriculture.
Realized investments in processing industry are also followed by oscillatory trend, with the
highest peak achieved in 2008. Unfortunately, within the last three years, it can be noticed a
significant decrease in investment activity, with reaching of the absolute minimum in 2012.
Trend of number of employees in the processing industry was pretty much similar to the
achieved trend in primary agriculture at the level of mentioned territorial unit, so it can be
noticed frequent changes of achieved investments per employee in both directions.
Referring to realized investments in agriculture in Vrbas municipality in observed period, it can
be noticed few sub periods: period 2006-2008, when was recorded the growth of investment
activities; period 2009-2011, when came to fall of investment activities; during the last observed
year (2012) came to rapid increase of realized investments, that are for five times larger than
165

investments achieved in 2011. Number of employees in primary agriculture, observed at the level
of local community, was changed from year to year, therewith it was recorded its constant fall
within the period 2008-2012. After a focus at realized investments per employee in agriculture on
the territory Vrbas municipality, expressed oscillations are also noticeable. During the sub period
2006-2008 they have positive trend, and in 2009 they were decreased for 3.5 times. Observing just
last three years, it is interesting that in 2012 came to rapid and expressed growth of realized
activities per employee in agriculture (they were for even 5.5 times higher than the level recorded
in 2011).
Obtained investments in processing industry were characterized by positive trend in period 20062008, after that came to slight decrease (in 2009), and then started intensive growth of investment
activities (investment maximum was achieved in 2011). During the last year within of observed
period (2012), it came to sudden decrease in realized investment, for even two times. Number of
employees in processing industry within the complete observed period had a negative trend, with
absolute minimum reached in 2012. According to aforementioned, achieved investments per
employee in mentioned economic branch in observed period are characterized by a general
increase, with a slight decrease in last year (2012).
Based on the collected data about realized investments and number of employed persons in
primary agriculture, it can be possible to present average annual growth rates of realized
investment in agriculture per employee for the period 2006-2012. Depending on the territorial unit
in focus, following growth rates are recorded: at the level of the Vrbas municipality (30.59%), at
the level of South Backa district (25.92%), in the Vojvodina region (21.91%) and at the national
level (15 54%). Achieved average annual growth rates are positive, while at the municipal level it
obtained the highest value (figure 1).

Source: Municipalities in Serbia (2007, 2008, 2009 and 2010) and

Municipalities and
regions in the Republic of Serbia (2011, 2012 and 2013), Statistical Office of the Republic
of Serbia (SORS), Belgrade.
* Investments in new fixed assets (for all legal entities, except those one that are classified,
according to the article 7. of the Law of Accounting and Audit, as a small companies), in
current prices.
** Agriculture, hunting and fishery.
*** Data about Kosovo and Metohija are not covered (for the period 2006-2012).
Fig. 1 Average annual growth rates of realized investments* in agriculture** per
employed person (period 2006-2012)
According to observed data for realized investments in processing industry per employee, it can
be possible to calculate the average annual growth rates on researched territories for the period
2006-2012. So, mentioned annual growth rates were had following values: at the level of the
166

Vrbas municipality (43.39%), South Backa district (8.00%), the region of Vojvodina (23.84%)
and at the level of Republic of Serbia (30.04%). All achieved growth rates were positive, and the
highest one was obtained at the level of Vrbas municipality (figure 2).

Source: Municipalities in Serbia (2007, 2008, 2009 and 2010) and

Municipalities and
regions in the Republic of Serbia (2011, 2012 and 2013), Statistical Office of the Republic
of Serbia (SORS), Belgrade.
* Investments in new fixed assets (for all legal entities, except those one that are classified,
according to the article 7. of the Law of Accounting and Audit, as a small companies), in
current prices.
** Data about Kosovo and Metohija are not covered (for the period 2006-2012).
Fig. 2. Average annual growth rates of realized investments* in processing industry
per employed person (period 2006-2012)
Future planning of investment activities will be based on the fact that on municipal territory
there are opportunities for further improvement and widening of existing production capacity.
Favourable geographical position of the Vrbas municipality (closeness to the European
Corridor X), long tradition in industrial production, spacious and well equipped industrial and
commercial zones, level of local market development in relation to industrial development, level
of organization of the municipal administration, available and well-trained labour, availability
of natural resources and large areas under high quality soils, existence of a set of local
incentives for future investors, are just some of the reasons why it is considered that any
argument investment in economic activities in the municipality of Vrbas is economically
justified.
In previous couple of years (2011 and 2012) on the territory of Vrbas municipality are invest
some financial assets in implementation of projects for different purposes4. Projects for which
were done the transfer of assets toward municipality, and that are later realized are mostly refer
to:
Projects of waste management improvement at the municipal level;
Projects of sport facilities building;
Projects of investing into the building of nurseries for plant production and ecological
properties;
4

The data were taken from the official web presentation of the Office for Local Economic
Development of Vrbas municipality (KLER).
167

Project of construction of station for the acceptance of animal waste;

Projects with the main purpose of multilingual expression;
Projects of soil reclamation and remediation;
Projects of building and renewal of physical and social infrastructure; etc.
Mentioned projects are mainly financed from the provincial funds (Secretariat of Urban
Planning, Construction and Environmental protection; Secretariat of Education,
Administration and National Communities; Secretariat for Energy and Mineral Resources;
Secretariat of Agriculture, Forestry and Water Management; etc.), as well as from preaccession funds of the European Union (for example, cross-border projects within Serbia
and Hungary).
In next short-term period, realization of next projects is planned:
a. Ecological projects:
- Building of drinking water factory (better water supply on the territory of Vrbas
municipality);
- Last phases in building of central facility for wastewater treatment on the territory of
municipalities Vrbas and Kula (CPPOV Vrbas and Kula).
b. Projects of so called investment destinations:
- Building of commercial-housing zones in settlements of Vrbas;
- Building of commercial zones (near the corridor X highway E-75).
c. Project of realization of freight-transport terminal in commercial zone "Istok".
d. Projects of building of touristic, sport and recreation centres and facilities.
Quick economic development will contribute to strengthening of the Vrbas municipality
competitiveness, so achieving of preconditions and opportunities, on the municipal
territory, toward to economic development based on the principles of sustainable
development (development that requires socially responsible approach to available natural
and social resources, environment and cultural heritage) will be quite possible. Beside
attraction of investments from national level, imperative should be set on attraction of
foreign investors that will directed their funds toward strengthening of national economy,
increase of employment and improvement of the living standards of local population.
Conclusion
Based on the analysed data, conclusions go into direction that on the territory of Vrbas
municipality exist real opportunities for improvement and widening of current economic
capacities, particularly in agriculture and processing industry.
Despite the fact that in spatial distribution of totally realized investments, Vrbas municipality
participates with negligible share (it has characteristics of weak and insufficient investment
activity), it is possible to expect the economic strengthening of mentioned regional centre by
adequate use of all positive characteristics and available resources.
In all production activities Vrbas municipality participates with negligible share into the totally
achieved investments at the republic level, however, it is noticeable that within them the highest
growth have investments oriented to processing industry and primary agriculture (including
hunting, forestry and fishing).
Although in observed period the number of employees in mentioned economic branches has
been constantly decreased, after putting of these branches into the forefront it can be expected a
higher inflow of national and foreign investments, and thus increasing of employment and
creation of favourable conditions for the stay of the working age population on the territory of
municipality.
168

Favourable geographical position, closeness to the European Corridor X, as well as

orientation towards agricultural production and processing (primarily to the processing of
sugar beet, sunflower, meat, milk, etc.) and the existence of good raw material base,
represent a good opportunities for continuous improvement and strengthening of the
competitiveness of the economy of the Vrbas municipality. Also, some efforts have to be
directed towards the improvement of market infrastructure, as to production of goods and
services that are obviously demand in foreign market.

Literature
1. Subi, J. 200): Mesto Junog Banata u poljoprivredi Srbije i Crne Gore na putu ka
evropskoj integraciji, Institut za ekonomiku poljoprivrede, Beograd, Srbija.
2. Subi, J., Mihailovi, B., Vasiljevi, Z. 2008: Investicije kao faktor privrednog razvoja
optine Panevo, Ekonomika poljoprivrede, IEP Beograd, vol. 55, no. 4, pp. 365-378.
3. Subi, J., Jovanovi, M., Negovan, N. 2012: Investicije u poloprivedu i ruralni razvoj,
Poglavle u Monografiji "Strateko planiranje odrivog poloprivrednog i ruralnog
razvoja lokalni zajednica Model MZ Glogonj", IEP Beograd, str. 46-59.
4. Vukadinovi, P., Jovi, Z. 2012: Investicije, monografija, Univerzitet Singidunum,
Beograd.
5. European Commission 2010: Europe 2020 (Key Documents), Bruxeles, Belgium,
available
at:
http://ec.europa.eu/europe2020/documents/related-documenttype/index_en.htm
6. Municipalities in Serbia (2007, 2008, 2009 and 2010), Statistical Office of the Republic
of Serbia (SORS), Belgrade.
7. Municipalities and regions in the Republic of Serbia (2011, 2012 and 2013), Statistical
Office of the Republic of Serbia (SORS), Belgrade.
8. Office for Local Economic Development of Vrbas municipality, available at:
http://investvrbas.com/.

169

SOCIOECONOMIC CHARACTERISTICS AND RESOURCE OF AGRICULTURE

OF THE REGION
Mersida JANDRI, Zoran RAJI, Sreten JELI, Dragi IVKOVI
University of Belgrade, Faculty of Agriculture, e-mail: [email protected]
Nemanjina 6, 11080 Belgrade-Zemun
Abstract
The subject of the research is the analysis of the socio-economic indicators and the state of
agriculture in the region which is located in the south-western part of Serbia. The main
characteristics of the region are: large number of young-age population, great migrations
from rural to city areas and exceptional natural conditions for the development of cattle
breeding. In short, the subject of the case study is the analysis of the basic socio-economic
indicators (receiving of the full, selective, and comparable data), with special emphasis on
the importance of agriculture and processing capacities for rural development in this part
of Serbia. What needs to be pointed out is the importance of revitalization of agriculture
and rural areas, given the fact that that it is economically the underdeveloped area. The
observed region is economically one of the most underdeveloped regions in Serbia. For
decades this region is seen as "traditionally" undeveloped area. The basic characteristics
of this group are the decades-long underdevelopment, as well as the appearance of a new
transitional poverty. The region is faced with accumulated economic (no industrial
capacity, the collapse of large systems, undeveloped entrepreneurship, slow privatization
process), structural (high rate of unemployment), social and demographic problems of the
region. Socio-economic features and agricultural resources represent a significant
potential for the development of agriculture and industry in the region and beyond. The aim
of the study was to realize the internal strengths and weaknesses, as well as the external
opportunities and threats for the agricultural development of this region and also to
include critical analysis of the most important aspects of the system of existing institutions
as well as performing of its business. Conducted analysis can be used for making of major
strategic decisions in order to improve agricultural production in the region.
Keywords
socio-economic features, region, development, agriculture, cattle breeding, livestock.
Introduction
The rise of unemployment and poverty is evident in the south-western part of Serbia. The
structure of the population engaged in primary livestock production is dominated by
socially marginalized class of people who live in poor and difficult conditions, where even
the most basic health and education services are lacking. Livestock production is their only
strategy for survival. For this reason, when designing policies and other institutional
interventions aimed at reducing poverty, it is necessary to develop a special plan for those
whose survival is based on this agricultural branch as compared to those who wish to
contribute to their standard of living with their activities (adjusted Arnold et al., 2001). In
respect to the manufacturers who dispose of economies of scale, modern equipment and
infrastructure, the region has exceptional natural resources, reduced costs of livestock
production as well as young working age population, which altogether make the
competitive advantage on the market. Certainly, the greatest resource of the region is large
proportion of young, working population, providing that education is permanently invested
170

in and that educational structure is harmonized with labour markets of the region.
Sustainability of the agriculture and economy of the region is entirely possible provided
that certain measures of activity are implemented. Primarily, this refers to the making of
adequate human resources in local governments - the Department for Agriculture, as well
as in the agriculture itself, which will be able to successfully implement flexible
mechanisms in the economy and agriculture. The optimal number of experts working in the
institutions will be able to choose the best approach for selection and usage of methods for
funding so as to achieve the greatest benefit for the economy, and not to diminish the
opportunity for sustainable development at the same time.
Work Methodology
Theoretical analysis defined the meaning of concepts, theoretical framework of this study
and analysis of relevant literature. Descriptive method of the existing socio-demographic
characteristics and agricultural resources will create the basis for understanding and
explanation of the condition and perspective of this region. All calculated parameters of the
studied region were compared to the parameters of the Republic of Serbia in which the
region is located. In accordance with problems that were treated in the study and the goals
that were set, the authors presented mathematical and statistical methods as well. Also, by
using the patterns from reference statistical literature, the analysis was performed by using
the index numbers, which determined the dynamics of movement of population and
economic resources of the region studied, which allowed the making of time series, as well
as further statistical analysis and interpretation of such results. At the end, the SWOT
analysis of agriculture in the region was conducted, which basically represented the
analytical method based on which the factors of greatest impact on the business activities in
this sector of the economy were defined. The study used the data from secondary sources,
primarily from published documents of the SORS5, Serbian National programs, programs
and reports of relevant ministries, as well as historical data of domestic and foreign authors
in certain publications. Primary data in most cases implied field work and data collection by
personal interviewing.
Results and the Discussion
Regional demographic analysis is inseparable from the analysis of economic and other
factors that are determining the level of regional development and reducing regional
disparities. Out of the socio-economic point of view, reducing the number of residents is a
major problem, especially if combined with changes in the age structure of the population
and the aging of the population, since it produces negative effects on the labour market and
the sustainability of the social security and health care system. The investigated region
includes the municipalities of Sjenica and Tutin and the city of Novi Pazar. The region
covers the area of 2.542 km2, covering 2.9% of the National territory and it is located in the
south-western part of Serbia. It is bordered by Montenegro on the west and Kosovo on the
southeast. According to the administrative organization, this region belongs to the Zlatibor
and Raka district. According to the latest data from 2011 census, the region's population is
157.957, or 2,2% out of the total population in the country6. Total number of villages in the
region is 293. Average population density of the region is 43,04 inhabitants/ km2, and the
average household size is 4,13.
5

Statistical Office of the Republic of Serbia

According to data from SORS, Census 2011, the population in Serbia is 7186 862
(157957: 7186862) x 100 = 2.2%

171

Decline in the birth rate in Serbia, the rapidly aging population from the base of the age
pyramid, and increasing life expectancy of middle-aged and old population, intensified the
aging of the top of the age pyramid, which contributed to the fact that population in Serbia
formed regressive type of the age pyramid. Index of population change in Serbia for
2011/1981 is 77, whereas the studied region had index of 111 for the same period.
Figure 1 show that in longer period of time, from 1961 to 2001, the population number of
the entire region has risen, but in the period of 2001-2011 the decline in population was
recorded by 7084. In addition to declining birth rates, leaving of the working age
population to the countries with more attractive economic environment is one of the reasons
of the present negative trend in population.
200000
165041
142342

150000
125685

157957

153561
130392

100000

50000

0
1961

1971

1981

1991

2001

2011

Studied Region

Source: SORS, Municipalities in RS 1961-2011

Fig. 1. Population trends in the studied region from 1961 to 2011
Similar trend occurs with the number of households. The aging index for the census data in
the year 2011 for Novi Pazar was 41,46%, for Sjenica 67,03% and the lowest index value
of aging of 35,02% was recorded in Tutin. The average index of aging for this region is
47,83%. The aging index is an important indicator, whose value indicates the demographic
aging process of the population. The average age of the population in the studied region,
according to the 2011 census was 34,2, slightly higher than the 2001 census (33,5), but the
average age of the population in the region is much lower compared to the National average
of 42,2. Index of the functional population, or total dependency rate for the total region,
was 51,2 (the Republic index is 48,7). The dependency of the old population is low, which
is logical, given the fact that this population is young, and its score was 14,3 (the
Republican average is 25,35). A large number of young people under 19 years old represent
one third of the population and potentially they make the most important resource for the
development of the region providing the active investments in the development and the
dynamic adjustment of local education to systems of business plans of local selfgovernments. But, on the other hand, considering that it represents a very demanding group,
this population is also a large burden for the family budget, public funds from the field of
education, health and social care. The richness of this region is the young population, a
higher proportion of working population and a smaller proportion of the old population
compared to the national average, but on the other hand, the unfavourable educational
structure of the population of the region represents the biggest risk for the economy of the
region, as well as non-compliance with the requirements of the economy and the labour
172

market, the inadequate level and structure of expertise, knowledge and skills of the working
population. Changes in the overall economic environment, the needs of the economy and
the development flows of new technologies demand adequately educated and trained
individuals and the nation as a whole. This is a demand faced by every country and society,
whether it is a transitional economy or not. In this context, investment in education and
human capital assumes the character of the financial investments. The quality of the
workforce is one of the limiting factors of the economic development of this region, as
investors avoid places where they do not have available high-quality and skilled workforce.
Serbia does not have the official definition of rural areas, considering the fact that there is
still no compliance with the NUTS regionalization. The criteria applied by the Statistical
Office of the Republic of Serbia do not include standard indicators of rurality that are
encountered in the international practice (population density, population number, the share
of the agricultural population, etc.), but the parts of the country that are residuals of urban
ones are considered as rural areas. Namely, the division to the city/urban and other areas is
essentially based on municipal decisions by which the status of the city (urban) will be
awarded to the settlement with the developed town-planning scheme. Such approach in
defining of rural areas makes the statistical analysis and interpretation of indicators of rural
areas harder. Out of the above mentioned reasons, it is unreliable to make comparisons of
urban and rural population, but it is certain that we can determine the relationship between
the urban and the rest of the population as hereinafter interpreted. Uneven urbanization and
"atomization" of rural areas, which is characteristic of the global society as well, is present
in this region is present. Concentration in urban areas recorded a significant growth in
recent census. The ratio of urban and rural population, according to the 2011 census in the
entire region is 57,40 : 42,30%. Emptying of the territory highly correlates with the increase
in size of the uncultivated agricultural land, which is just another inglorious confirmation
that the depopulation is associated with economic decline by causal connection. The ratio
of the working age population in the city and in rural areas for the entire region is 50,4 :
49,6% in favour of the city.
Emptying the territory represents the biggest security risk. It is certain that in the future
Serbia would not be able to keep the areas in which it remains without the population,
especially in border areas. Results of the 2011 census confirm that villages and small towns
lost the most residents, so if you take into account the fact that along the borders of Serbia
there are only villages, it can be argued with great certainty that over the threshold of
security risks the territories in the border areas are emptied. Based on the research of the
studied region, one of the problems faced by this region, which caused negative economic
trends (especially in rural areas), is the process of permanent migrations. Concentration of
the rural population in suburban and rural areas surrounding the urban centres has
contributed to the economic stagnation and the extinction of a large number of villages.
Product of modern and general technical and technological modernization of (world)
society results in the fact that extremely negative demographic trends occur in the rural
areas in last decades. Neglecting of rural regions, poor infrastructure, economic and
technological backwardness and traditionally present poverty resulted in the fact that many
villages are isolated and extinct as a consequence of that. A particular problem is that in
most cases the young and educated people are less likely to be retained in rural areas
without an attractive economic environment and jobs appropriate to their skills and
preferences. This way, rural areas are left without a labour force, but also without the
significant human resources necessary for economic development and investment
attraction. Modern migrations of younger population towards the city, led to redistribution
of birth rate and transferring of centres of reproduction from village to city. Village ceases
173

to be the bearer of bio reproduction or "demographic incubator" (Jandri M., Rajic Z.,
2012) and city that accepts young rural population is not ready to accept that role. The
result of that is decreasing bio reproduction of total population. The negative tendencies in
the natural movement are badly reflected on the composition of the population of the
villages in this region as well, so that the share of the old groups is increasing, which is
certainly unfavourable base for the increase of the natural growth. Identified causes of
migrations in this region are: unfavourable living conditions, lack of local roads, unsafe
placement of goods, the education of children, poor water supply etc. According to the
official data Novi Pazar records continuous population growth, which pulls many social
difficulties and inconsistencies in the city at the same time, such as: lack of housing,
creation of "illegal settlements", decrease of municipal standards, rising unemployment,
health problems, increase of crime etc. (Jandri M., Raji Z., 2012). According to the
results of this study, rural population states that the problems related to municipal
infrastructure are priority for them and they are ranked higher than economic problems.
The condition of transport infrastructure in the studied region in the second decade of the
XXI century is entirely unsatisfactory. The percentage share of modern roadway in the
2011 census in Serbia was 62,82%, or out of the total roadway of 43 258 km, modern
roadway makes 27 175 km. The studied area has 21,86% of the modern roadway. The data
indicate that there are minimum conditions for the performance of modern transport and
increasing occurrence of limitation and reduced functionality of the existing
communications. Undeveloped road infrastructure is certainly one of the biggest problems
in the region. Many villages of Peter plateau, especially the villages located in the edge of
Ozren and Giljeva mountains have completely isolated position in relation to the
surrounding centres. Connection of isolated villages would mitigate the migration processes
and increase the functionality of communication, thus contributing to the development of
agriculture in this region. In the coming period, the construction of Corridor 11 is planned,
with one part that should be going through the municipality of Tutin and Sjenica. The
planned highway will be very important for the whole Peter plateau but at this point it is
far more necessary to complete a unique network of local roads. Otherwise this corridor for
villages of Peter plateau will lose its importance. Connection of villages into quality and
unique local road network would be of great importance for slowing down the intense
negative demographic processes that affected this part of the region.
In the recent period there were no large (foreign or domestic) investments and the level of
investment of the studied local self-government is far below the average of RS. Local
government structures, already burdened with the current economic crisis, so far only
verbally supported the development of agriculture and rural development, but with no
incentives. In the past, local self-government authorities have given a priority to the
industry, not recognizing the opportunity in agriculture, which reflected badly on
agricultural capacities and resources. This observation is confirmed by the fact that number
of highly qualified staff that work on administrative (according to the municipality on
business and public administration in Novi Pazar four persons are performing
administrative functions in the field of agriculture, forestry and environmental protection).
and inspection responsibilities is very small and undereducated for independent creation of
development projects of modern agriculture. PSSS is sufficiently covered by the
professional staff while the NEA registered personnel from agriculture, forestry and
environmental protection.
Agricultural Extension Service is insufficiently covered by the professional staff (6
employed higly qualified staff cover a number of settlements. Source Agriculture Extension
174

Service Novi Pazar), whereas the NES (National Employment Service) has registered
personnel from agriculture, forestry and environmental protection.
The unemployment rate is quite high, higher by 63% compared to the government, which is
22,4. High percentage of unemployment is significantly caused by the closing of large
public/state-owned enterprises that were carriers of the development of these local selfgovernments. Proximity of borders with Montenegro, Kosovo and Bosnia and Herzegovina
has great impact on the economy of the region. Agricultural production in the region is
mixed and extensive. Land holding (5.48 ha) is significantly higher than the average of
Serbia (3.5 ha), however, the structure itself has little arable land as pastures and meadows
are prevailing. Often the structures of the land of individual farm holdings consist of forests
as well. In the past, re-parcelling was not conducted, so that the land holding of individual
farm holdings is cut-up into a number of smaller parcels that are more or less distant to each
other. The land structure is dominated by natural grasslands and meadows with 33.6% of
agricultural land and pastures with a share of 52.5% of the total agricultural land.
For Peter plateau climatic conditions are limiting factor regarding the production of corn,
so that the corn is cultivated on smaller areas, and it is not dominant agricultural crop as in
most parts of Serbia. Crop yields per unit of the area are quite low due too the fact that the
land is of poor quality class. A comprehensive analysis of the soil has never been conducted
in the region, so that experience and traditions are the replacement for a scientific approach.
There is no market surplus in crop production, and production is intended for feeding of
livestock on the farm. Fruit and vegetable production are based on small parcels of land,
mainly in areas where there are climatic and soil conditions for fruit and vegetable
production (lower regions, river valleys, quality soil, etc.). A small number of farms has
market surplus, which is sold on the local market.
In the region, livestock production primarily assumes cattle and sheep production, as the
number of heads of other animals is symbolic. Livestock fund in the region is decreasing
over the past thirty years (According to the data from Veterinary stations from Tutin and
Novi Pazar and Centre for Rural Development Sjenica, 2012), a trend that characterises the
entire of Serbia. Trend of reduction in the number of cattle and sheep in Serbia is already
present for many years (Jeli S. et al. 2012). Most households have owns one to three cows,
and this category of households is the largest in all three municipalities. When it comes to
racial composition, the Simmental is dominant, whereas the Holstein breed is also slightly
involved (about 10%).
Shortage of milk is a major problem of the dairy industry, both in Serbia and in
neighbouring countries. Statistical data on the production and placement of milk are usually
incomplete, so it is difficult to have an insight into the real production and marketing of
these products. The lack of accurate data of produced and purchased quantities of milk and
dairy products, is explained by their placement through the channels of the gray economy.
Since there are no accurate records of milk and dairy products, social and economic
importance of these products is often underestimated. The data available from the
companies involved in the purchase, processing and placement of milk, significantly
contribute for the dynamics in the commercialization of these products to be explained in
certain extent. Illegal production and unprofessional handling of products after purchase
aims to be limited, by certification and standardization, in order to improve the control and
organization in all phases of the commercialization of these products.
National average of dairy production per cow is 2.458,5 litters, which is less than the
worlds average by 18%, and compared to the European average is less by 50%. The whole
decade since the beginning of 2000, up to the 2010 is characterized by a reduction in the
number of cows and heifers, and stagnation in the production of cow's milk (Arsic S. et al.,
175

2010). There are about 30 large and 200 small and medium-sized dairies engaged in the
processing of milk. The value of milk production accounts for about 8% of the gross
agricultural production, and the share of the dairy industry in formation of domestic product
of the food and beverage industry in Serbia is around 9%. The region has six active,
registered dairies. Only two dairies have redemption over 1.000 t/year, whereas the
purchase of all other dairies in the region is less than 1.000 t/year. On the average, only
20% of the total volume of produced milk is purchased from the farms, which is
significantly lower than the average for Serbia where over 50% of the produced milk is
purchased (Kljajic N. et al., 2009). The emphasized seasonal character of milk production
and the absence of redemption places represent a significant limiting factor in the operation
of dairies. There is a small number of milk cooling tanks on the field, mostly of small
capacity. Transportation is carried out with own, or rented trucks. Compared to the highest
number of dairies in Serbia, studied dairy companies have relatively short lines of supply
(25-50 km), which have reduced transport costs. The lack of processing capacity is a major
issue for the economic development of the region.
Due to the logical sequence of events, one question arises what is missing? The answer
should be looked for in other countries' experiences, successful agricultural producers,
where the mainstay of the economy is this, very important branch. Without livestock
production, it is difficult to imagine a developed agriculture and economy of a country.
Modern concepts of rural development introduce Business Support Centres, which
primarily need to provide upgrades for the products out of the primary production, such as
geographical origin, quality control, sorting, calibration, storage, packaging, branding,
promotion, placement, payment and so on. A disadvantage of this type of support has direct
impact on the collapse of already weak economy of rural areas.
Throughout the SWOT analysis or internal-external matrix features of agriculture
(livestock) of this region were consolidated into one general set of internal forces and
placed in the ratio with external opportunities and threats. This way the condition were
created for recognizing the strength with which agricultural regions participate in a
dynamic environment and identify external factors that create an opportunity or a threat in
further activities related to this industry sector. The most important internal strengths are
reflected in the rich livestock, rich tradition in dairy production and dairy products, a large
number of young working population, large pastures and meadows and areas untreated with
chemical synthetic materials, which altogether provide a solid base for the development of
the organic production. Weaknesses are manifested through a lack of bulky livestock feed,
poor modernization and introduction of technical and technological solutions, seasonal
character of livestock production (destruction of livestock in winter), poor infrastructure,
lack of processing facilities, lack of funding, a high level of under education in rural
population, lack of purchase stations for livestock products. If the weaknesses should be
hierarchically aligned, priority would certainly go to a poor infrastructure. Chances for
revitalization and sustainable development of livestock production in this region can be
seen in the international development programs, national programs of rural development,
bigger support of local self-governments, increasing of processing capacities, and support
for existing, developed capital markets for micro enterprises that dominate in this economy
sector, cross-border cooperation that refers to the neighboring countries, which currently
have a deficit and higher prices of milk and dairy products (Arsi S. et al. 2010), and at the
very end, horizontal and vertical integration of small and medium enterprises.
At this point the connection and associations of entrepreneurs is quite difficult to realize,
because it takes time to restore the shaken confidence in the unions and cooperatives, or
any other type of associations. The region has several "clusters", but the activities and the
176

establishment of their institutions are still at low level. Clear threats to the further
development of animal husbandry in this region are harsh climatic conditions, inadequate
solving of infrastructure issues, migration from villages to the city and the coarsening of a
dairy sector in the surrounding regions, governed by economies of scale and leads to the
fact that many micro enterprises are giving up on work operations. SWOT analysis related
to the agriculture of the studied region, lead to one of the four main findings: Weaknesses
are overpowering the strengths, chances are overpowering the threats, and such internalexternal matrix supports the development strategy of the sector.
Conclusion
Based on the survey results by which a complete, selective and comparable data were
obtained, it can be concluded that the economy of the region is full of structural problems
and that it needs a strong and honest political and financial support of all relevant
institutions in order to survive and prosper in the future. Strategies for the long-term plans
of agriculture are only partially covered by the plans of the sustainable development, which
confirms the fact that agricultural production is totally neglected and unrecognized by local
self-governments as an opportunity for development of the economy of the. All three local
self-governments of the region and the state itself should give a priority to the livestock
production as the only branch of agriculture for which all of the conditions for sustainable
development exist. It is necessary to develop the capital market by foreign financial
institutions, adapted to the financing of small businesses, entrepreneurs and microenterprises, with particular attention to companies with businesses in underdeveloped part
of Serbia. In the conditions of crisis, commercial banks did not have enough understanding
for crediting, so that SME mostly relied on internal sources of financing, which is hard to
maintain, especially for micro businesses. In order to improve the living conditions and to
slow down the process of migration, a common network of local roads that will connect all
villages with the nearest centers should be built.
In the future, when distributing the budget funds, agriculture and rural development should
be given a priority. The funds from the budget should be forwarded to the development
programs such as:
Establishment of new processing capacities,
Improving of racial composition,
Establishing of purchase stations,
Supporting of clusters, associations and cooperatives,
Promotion of activities related to livestock production,
Establishing of silo plants,
Development of organic production,
Development of activities complementary with livestock, etc.
Establishing of larger processing facilities would be justified because hiring of young labor
force and reducing of the unemployment rate would mitigate the negative effects and
burdens on labor markets and social security systems and health care, as well as the
presence of the gray economy.
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178

ENVIRONMENTAL PROTECTION BETWEEN SOCIAL RESPONSIBILITY,

GREEN INVESTMENTS AND CULTURAL VALUES
Jean ANDREI, Mirela PANAIT, Corina ENE
Faculty of Economic Sciences, Petroleum - Gas University of Ploiesti, Romania, e-mail:
[email protected], B-dul Bucureti, no. 39, Ploiesti, Romania
Abstract
In a well functional and competitive economy all the entrepreneurs are aware of the
importance of protecting the environment, development of local communities and the good
relations with stakeholders. The necessity imposed by a sustainable development has many
influences on the companys activities because in order to equilibrate their profit`s
motivation with their social and environment implications. This article is focused on the
way of different investors integrated in their strategies the environment preoccupations.
The actions of companies are shaped by different stakeholders like consumers, public
authorities, shareholders, international organizations and other entities.
Keywords
Environment, cultural values, stakeholders, consumers, corporate social responsibility,
green investment.
Introduction
The primary concern of companies is profit. In time, however, entrepreneurs have become
aware or have been forced to become aware of their role in society and their concerns` area
have extended, they are interested in improvement of their impact on the environment and
on society in general. The interest of entrepreneurs to the local community has a long
history. In the nineteenth century, some industrialists have launched charitable and
philanthropic measures for their workers and their families. One century later, the interest
for corporate social responsibility has grown due to the negative reactions of society in
general to the activity of major corporations.
The limitation of natural resources and awareness of this fact have led to the expansion of
the company's concern for protecting the environment and promoting sustainable
development principles. More and more entrepreneurs have realized that the success of
corporations and social welfare are interdependent. Thus, on one hand, companies need an
educated workforce, natural resources and appropriate institutional and legal framework,
and on the other hand, they provide payment of wages, taxes, create jobs and generate
investment.
Social responsibility is shaped by many stakeholders such as shareholders, customers,
suppliers, employees, public authorities and international institutions. The involvement of
public authorities and international institutions has major implications on the business
companies (Matei, 2013).
The corporate orientation towards environmental issues, social and governance (ESG) was
determined not only by the pressure of consumers and society in general but also by the
activity of European and international bodies. Moreover, the involvement of these
institutions also led to the nuances of the concept of social responsibility and expansion of
this concept into areas such as promoting moral values in decision-making corporations,
fighting against corruption, promoting human rights.
179

The European authorities have started since 1995 a broad awareness of the corporations
`role in society. In 1995, it was launched a "Manifesto of Enterprises against Social
Exclusion", one result being the creation of CSR Europe - a network that supports dialogue
between companies and the exchange of best practices in social responsibility field.
Furthermore, in 2000, at the Lisbon summit, the CSR issue was approached and it was
included on the agenda, given the importance of the company's efforts to achieve the
strategic goal of the EU, to become the most dynamic and competitive economy in the
world, based on knowledge and able to have a sustainable development.
In addition, the EU Sustainable Development Strategy highlights the importance of
corporate involvement in protecting the environment, which is a component of the CSR
with both governance and social aspects. The Green Paper of CSR "Promoting a European
framework for corporate social responsibility" developed in 2001, believes that" to be a
socially responsible enterprise must satisfy both legal requirements and compliance and
investing in human capital, the environment and relations with parties ".
Aware of its role in the world economy in promoting sustainable development, the United
Nations has launched in 2000 a partnership with companies worldwide to achieve its
objectives in this area. Thus appeared the Global Compact (network between the various
entities concerned with social responsibility such as companies, trade unions, universities,
associations, NGOs, government institutions, cities) and Global Compact principles were
developed for companies (which targets four areas: human rights, labor standards, the
environment and fight against corruption). The social responsibility is not an exclusive
prerogative of companies, over time, have been developed Global Compact Principles for
universities, cities and even portfolio investors.
The cities are complex entities faced with many problems, and the results of local
government activity affect many stakeholders. For this reason, GC principles were adapted
for companies and cities that should promote human rights, labor standards, environmental
protection and fight against. In this way, cities have a direct contribution to sustainable
development and indirectly by encouraging entities that operate in their range.
Given the role of universities in the training of specialists and disseminating concepts of
corporate citizenship, social responsibility, business ethics, green marketing or societal
marketing, academia has been involved in promoting social responsibility through
education and research processes undertaken. The Global Compact promoted since 2007,
The Principles for Responsible Management Education -PRME, which creates the
framework for promoting social responsibility by incorporating into the curriculum and
research of the universal values of SR.
The social behavior of publicly traded companies is determined; in some extend, by the
actions of shareholders. The portfolio investors use specific criteria for positive or negative
selection of traded securities. For example, negative screening involves removing securities
issued by companies from certain sectors (weapons, tobacco or gambling) or in certain
countries with totalitarian regimes. In case of positive screening, the investors select
securities issued by companies in the field of renewable energy. Moreover, after becoming
shareholders, portfolio investors establish dialogues with the issuing company to improve
the performance of long-term social responsibility of their respective companies. The
investments in the community and those in social enterprises have gained in recent years.
The investors allocate funds for the development of local communities who are
experiencing difficulties in attracting capital and developing social enterprises. Therefore,
portfolio investors are considering new criteria for selecting target companies, criteria
which take into account social, environmental and governance aspects. In the selection of
securities, portfolio investors are guided by principles of Responsible Social Investment.
180

The transnational corporations are the main promoters of social responsibility at

international level, being a model for small and medium enterprises that have contractual
relationships. Given the strength of involvement in the world economy, the OECD has
developed Guidelines for Multinational Enterprises which were established practices and
standards, voluntary, which can be used by large corporations considering their increasing
impact on sustainable development.
The International Organization for Standardization comes to help companies that want to
prove compliance with standards not only for quality management (ISO 9000), but also for
environmental management (ISO 14000), social accountability (ISO 8000) and even social
responsibility (ISO 26000). ISO certification can be regarded as a market mechanism or a
tool to enhance corporate image and reputation that can brings companies some competitive
advantages. Implementation of management standards is determined by the pressure
exerted by competitors, and the objective need to enter into various partnerships and
contracts with corporations. (Petrescu and Bucuroiu, 2008).Unlike the other standards, ISO
26000 audit and accreditation will not, but a good practice guide which organizations
(public or private) that have social responsibility programs can join voluntarily. This
standard is distinguished by the fact that SR guidelines are compatible and complementary
with the main statements, principles and conventions of the UN, ILO and OECD.
The activity of private companies but also of the public authorities is modeled by Principles
of social responsibility. Green Public Procurement policy developed by the European
authorities has an impact not only on public authorities, but also on private companies as a
result of consequences. Every year, the European authoritys record expenses represent
16% of European GDP, which is why it is considered that public procurement can shape in
a significant manner, production and consumption. Moreover, the demand for green
products by the government may lead to expansion of green technology and market
development of organic goods. Through Green Public Procurement policy, European
authorities thus aligns efforts and concerns recorded worldwide such as the OECD
Recommendation on green public procurement, establishment of Marrakech Task Force on
Sustainable procurement created by Summit Johannesburg Summit for Sustainable
Development (2002), adopting sustainable procurement policies by developed countries
(USA, Canada, Australia, Japan, South Korea) and developing countries (China, Thailand,
Philippines).
1. Social responsibility and green investments
The environmental protection concerns of companies have intensified in recent decades and
more than exceeded the scope of social responsibility. More and more companies have
turned to include the environment protection in their investment strategy (Panaitescu and
Popescu 2008). Thus, besides the concept of socially responsible investments that integrate
social, environmental and governance aspects, the notion of green investment has emerged.
Green or environmentally responsible investment takes only environmental issues into
account. (Boulatoff and Boyer, 2009) believe that "green investing is the act of investing in
companies that have a positive environmental impact". The main change are climate green
investment themes, fight against pollution, water management and wastewater
management, improvement of production processes of polluting industries.
Motivations of investors who choose to make investments are multiple green, but can be
divided into four groups: ethical considerations, the need to observe certain legal
regulations, improving reputation due to the pressure of business partners and consumers,
portfolio diversification to reduce risk and ensure a minimum return. So, the strategies`
investors are based on extra-financial considerations like environment aspects.
181

Table 1: The Common ESG themes

Examples:
climate change, hazardous waste, nuclear energy,
sustainability
diversity, human rights, consumer protection, animal
welfare
G - Governance
management structure, employee relations, executive pay
Source: authors based on Green Investing by Institutional Investors: A European Survey,
p.13
ESG themes
E
(Environmental)
S (social)

The world of green investment is in a development stage and the investors have many ways
to place their financial funds. According with Mercer (2009), there are three types of
approaches to green investment: the thematic approach, screening, and engagement. The
thematic approach is based on some sectors like clean energy, clean technology, water and
wastewater management. The screening supposes that some companies are selected or
excluded taking in account environment criteria. In the case of engagement, the investors
have long-term relationship with the companies, based on a dialogue on environmental and
sustainability aspects, in order to change the companies behavior in favor of the
environment. The performance or the impact of green investment may be evaluated with
specific indicators (table no 2).
Table 2: Indicators of environmental performance or environmental impact
KPI
examples
General
E1 Energy Efficiency
KPIs
E2 Deployment of Renewable Energy Sources
SectorE3 CO2 Emissions
specific
E4 NO, SO Emissions
KPIs
E5 Waste
E6 Environmental Compatibility
E7 End-of-Lifecycle Impact
Source: authors based on Green Investing by Institutional Investors: A European Survey,
p. 15
The investors have many vehicles available on market in order to develop their green
strategies. The main instruments are equities (mutual funds, exchange-traded funds, and
indices), fixed income securities like green or project bonds, alternative instruments like
real estate or infrastructure investment.
From this perspective, an important element is represented by the environmental protection
expenditure by industry, which in this case has a massive importance in promoting
environmental responsibility. Taking into account the country cultural model, it could be
remarked that neither the countries presented in fig.1 spent important amounts of money in
this direction.
As can be noticed from the figure above, the EU-28 average during the 2001-2011 is
relatively constant around the level 0.4%, which reflects a weak interest in improving the
environment conditions. At the European level it can be noticed two groups of countries.
On the first hand, in 2011, countries which values below the EU-28 average as UK (0.2%),
Spain (0.23%) or Portugal (0.23%) and on the other hand countries with a high level of
expenditures as: Slovenia (0.99%), Poland (0.81%), Romania and Italy (0.76%).
182

The environmental investments made by industry usually completes the expenditures made
in the same field in order to improve the environmental conditions and living standards,
both coming in respect of environmental financing procedures.

Source: authors own based on EUROSTAT (20014)

Fig.1. Evolution of environmental protection expenditure by industry, in some EU-28
countries, 2001-2011
In EU-28, the share of environmental investment by industry in GDP, during the analyzed
period, is a little above zero, respectively 0.14% in 2001 and 0.10% in 2011 (EUROSTAT,
2014). In fig. 2 is presented the evolution of the environmental investment by industry
during 2001-2011 in some EU-28 countries.

Source: authors own based on EUROSTAT (20014)

Fig.2. Evolution of environmental investment by industry, in some EU-28 countries, 20012011
Taking into account the data in fig. 2, in case of all mentioned countries it is noticed a
massive downfall during the all period. In case of Romania, if in 2001 the environmental
investment had a share of 0.39% of GDP; ten years later the share was just 0.2% in GDP.
This evolution denotes a lack of interesting in making the environmental investment by
industry and improving the production conditions and using green technologies more
environmentally friendly. For completing the analysis in table 3 is presented the evolution
of environmental taxes as % of GDP in some EU-28 countries, during 2000-2012.
183

Table 3. Evolution of environmental taxes as % of GDP in some EU-28 countries,

2000-2012
Country
2000
2002
2004
2006
2008
2010
2012
Bulgaria
2.7
2.3
3.2
2.9
3.4
2.9
2.8
Germany
2.4
2.5
2.6
2.4
2.2
2.2
2.2
Spain
2.2
2.1
2.0
1.9
1.7
1.7
1.6
France
2.2
2.1
2.0
1.9
1.8
1.8
1.8
Italy
3.2
2.9
2.8
2.8
2.5
2.6
3.0
Hungary
3.0
2.8
2.9
2.8
2.7
2.7
2.5
Poland
2.1
2.4
2.6
2.7
2.6
2.6
2.5
Portugal
2.6
3.0
3.0
2.9
2.6
2.5
2.2
Romania
3.4
2.1
2.4
1.9
1.8
2.0
1.9
Slovenia
2.9
3.3
3.3
3.0
3.0
3.6
3.8
Slovakia
2.2
2.2
2.5
2.3
2.0
1.9
1.8
Finland
3.1
3.1
3.2
3.0
2.7
2.8
3.1
Sweden
2.8
2.9
2.8
2.7
2.7
2.7
2.5
UK
3.0
2.7
2.6
2.4
2.4
2.6
2.6
Source: authors based on European Commission (2014)
The share of environmental taxes as % of GDP during the analyzed period reflects mainly
the effects of the state politics in protecting environmental protection. In case of the EU
older states the share is highly and mainly constant during the period. In case of the new
member states as Romania and Slovakia and also in case of France and Spain the share is
above 2 percentages on GDP.
2. Responsible consumers attitude and cultural values towards CSR Activities of the
organization
In the last decades, societys increased interest regarding environmental issues shifted the
spotlight towards the environmental aspects of CSR, pressing organizations to initiate
specific actions for the support of the environment. As (Bashar, 2014) mentions the
European Commissions CSR-report from 2002, in which CSR is described to establish a
clear connection between companies and societies by addressing both social and
environmental concerns: CSR is a concept whereby companies integrate social and
environmental concerns in their business operations and in their interaction with their
stakeholders on a voluntary basis. (Bashar, 2014)
CSR initiatives undertaken by companies cover several domains, including the environment
(e.g., environment friendly products, hazardous waste management, use of ozone-depleting
chemicals, animal testing, pollution control, and recycling) (Sen and Bhattacharya, 2001).
Being built upon economic, environmental and social principles, CSR has nowadays major
implications for marketing activities such as advertising and branding (Sen and
Bhattacharya, 2001), but little research has been conducted thus far on consumer behavior
aspects of CSR and on its effects on consumer decision making.
Current, more and more consumers become increasingly interested in the social and
environmental dimensions in their consumption, which resulted in encouraging businesses
to engage in CSR practices. Different expressions such as: green consumers,
environmental consumers, ethical consumers, responsible consumers an so on are used to
describe a higher level of expectation towards the companies.
184

Environmental concerns began to prevail during the second half of the 1980s, which led to
a growing importance given to environmental effects of the economy, associated with
consumption and the outlining of the concept of green consumer. Their number increased
during the 1990s (Pedrini and Ferri, 2013), boosting scientific investigation of this segment
of the market.
Different studies underlined the phenomenon called ethical consumerism- which gained
importance in business management, linked to the social and environmental attitude of
consumers. Ethical consumerism reflect consumers expectations from businesses to not
only provide quality products at low costs, but also to comply with their individual values
and to actively and sustainably participate to the development of the community.
Thus, such studies demonstrated that when consumers receive more information about
social and environmental responsibility, they pay more attention to the selection of
goods/services in their purchasing processes. (Pedrini and Ferri, 2013).
Over time, the ethical consumer (interested mainly about social issues) moved towards a
responsible consumer (integrating simultaneously both social and environmental concerns).
This new kind of person is arousing an increasing interest for the social and economic
research, being characterized as sophisticated and environmentally and socially
conscious (Bashar, 2014).
Recent changes in consumers attitudes drives them to evaluate information about product
and organizations in the light of their personal beliefs based on matters such as labor
standards, human rights, health-related issues, and, of course, environmental issues among
the criteria that govern the process of their purchasing decisions (Bashar, 2014).
Studies show that CSR involvement of the company could be the decisive factor when
consumers have to buy similar products with similar price and quality (Smith, Read, and
Lopez-Rodriguez, 2010). In this situation, consumers would prefer to buy from the firm
that has a socially responsible reputation. Thus, it can be concluded that ethical/responsible
customers play a relevant role in encouraging CSR practices, allowing firms to improve
their reputation and market position.
Likewise et al., 2001 support the idea that consumers will support companies that go
beyond delivering economic outcomes and contribute to societys welfare and sustainability
by being socially responsible.For instance, a survey conducted in 2010 by the Institute of
Communications in Greece (Papadopoulos et al., 2011), showed that 52.6% of Greek
consumers have rewarded a socially responsible company (by buying a product or through
positive comments made about it), while 66.7% of Greek consumers have punished
companies not involved in CSR.
Other research show that these attitudes differ significantly from one consumer to another
(Pedrini and Ferri, 2013), depending upon many variables, namely demographical
characteristics:
Age: even if some of these consumers could display a responsible attitude, generally
young consumers show minimal interest for the social and environmental implications
of their market behavior. Such an interest seem to be related to maturity, thus reflecting
self-awareness level or generational changes;
Income: responsible consumers are mostly those having high purchasing power, given
the perception that responsible products have a higher price than common ones. That
is why low-income consumers feel a financial disadvantage which generates skepticism
and poor involvement. In developing countries, where the population struggle to make a
daily living, CSR is not yet a determining factor in buying a product from a company
willing to support CSR (Smith, Read, and Lopez-Rodriguez, 2010).
185

Educational level: graduates show a greater awareness of environmental aspects than

consumers with lower education level. Thus, education has a particular role in reaching
maturity and providing skills that develop the ability to assess the overall implications
of purchases for the environment.
Geographical area: consumers living in more industrialized areas are more aware of the
environmental impact of a business, especially if they usually face environmental issues
(pollution) in everyday life.
Besides, consumers may also be circumspect about CSR initiatives and their genuine basis.
For instance, a Danish study (Papadopoulos et al., 2011) found that marketing
communication based on CSR to be distasteful to some consumers as it serves mainly
corporate interests and is not completely altruistic. It appears that consumers may assume
that a company is self-interested which induces negative feelings if the company puts
exaggerated emphasis on own CSR policies.
Nevertheless, CSR preoccupation of a business appears to be highly correlated with
customer loyalty - which represents a critical orientation for the organization
(Papadopoulos et al., 2011), contributing to maintain existing customers and keeping them
to turn to other market alternatives.
An interesting approach brings to attention the halo effect related to companies socially
responsible behavior, meaning that consumer awareness of one set of CSR actions (e.g.,
recycling) will influence their perceptions of CSR performance in other areas (e.g., ecofriendly production) about which they have little or no information (Smith, Read, and
Lopez-Rodriguez, 2010). Research in this area suggests that consumers may make
extrapolations about CSR performance based on very limited information, allowing the
company to manipulate consumer perceptions of CSR performance.
Also, it should be taken into consideration that, even if many studies show that consumers
purchase decisions are positively influenced by socially responsible initiatives, this fact will
result in little practical consequences if the level of awareness of such initiatives among
consumers is very low (Dolnicar and Pomering, 2007).
Conclusions
The protection of environment is a necessity and companies are preoccupied by this topic in
different extend. Many companies run various corporate social responsibility programs and
promote the environment protection. Other companies and investors are interested in green
investment and they shape their investment strategies in order to take in account the aspects
of environment.
The specific impact CSR initiatives have on consumers has been relatively little studied so
far and more research is needed to deepen the understanding of the CSR initiatives on
consumers purchasing behavior. These directions could contribute to clarify the connection
between consumers and organizations regarding their environmental efforts in terms of
effective purchasing, in terms of choice, price and quality.
Further studies are needed in order to measure consumers perceptions of socially
responsible companies and to highlight the influence of the implementation of CSR policies
on consumers perception and consumers intentions within their behavior. Managers in
charge with CSR always should take into account the evolution of the demographical
characteristics or the age structure for the target customers in order to ensure that CSR is an
instrument for the success and a competitive advantage.
Acknowledgments
This paper is supported by the Sectorial Operational Programme Human Resources
Development (SOP HRD), financed from the European Social Fund and by the Romanian
Government under the contract number SOP HRD/159/1.5/S/136077.
186

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187

THE IMPACT OF GLOBALIZATION ON THE DEVELOPMENT OF CROSSBORDER AGRICULTURAL MARKETS

Oana-Georgiana STNIL, Francesca-Magdalena RAINOF
The Bucharest University of Economic Studies, Romania, [email protected], Piata
Romana no.6, Sector 1, Bucuresti, Romania
Abstract
We are currently living in a world in which there is constant talk on globalization, we can
even consider it a current trend. But what exactly is globalization? What are its
characteristics, its benefits, its problems, what impact does it have on this world? In the
current paper we want to analyze a small part of this phenomenon, namely the impact of
globalization on the development of cross-border agricultural markets. The globalization of
agriculture has been caused by the technological development and the changes in
technology, with the introduction of new working machines making this activity easier to
conduct, thus enabling the increase of production. The cross-border and intercontinental
production also represents an element that makes the activity profitable. The outcome of
this process was the standardization of production in the agricultural domain. However, at
the same time, there is a large negative impact of the globalization phenomenon in the
agricultural sector, namely the significant increase of the unemployment rate, due to the
newly introduced machines, as well as due to the excessive use of fertilizers, which have
damaged the richness of the soil. When the government restrictions were eliminated
through the liberalization of the economy, developed countries have gradually begun
registering a higher profit, destroying the agricultural lands without taking account the
environment impact in the countries where they are active, thus negatively influencing the
life of millions.
Keywords
globalization, cross-border, regional, development, agricultural, market
Introduction
There is no universal definition for globalization and probably there will never be a
definitive definition. The reason is the fact that globalization includes a multitude of
complex processes with a variable dynamic, influencing several, diverse sectors of the
society. It can be a phenomenon, an ideology, a strategy, or all of the above.
Some voices try to define globalization as the method or system of long-term reception
and approach of large contemporary issues, determined by the interaction of multiple
economic, technical, political, social and cultural processes and phenomena, as well as the
forecasting regarding their settlement in a macro perspective by the international
community.
Globalization can also be defined as a large scale process, of integration at a global level
of material flows (both energy resources, raw materials and material components, as well as
finished products), as well as financial and monetary flows, under the framework of
specialized, large scale markets; of liberalization in all directions of flows of persons and
populations, without the existence of restrictions of any nature or under any circumstance;
of democratization of information flows, including scientific and technological information,
to which an easier and low cost access for all the countries in the world can be ensured, as
to a common heritage of humanity; together with the process of political integration in
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flexible structures, which do not damage the specific national characteristics, in the global
security climate guaranteed by the UN
It is universally acknowledged that globalization offers extensive opportunities for real
development at global level, but it manifests itself through an inequal progress between
regions. Some countries become more integrated in the world economy, with a higher speed
than others. The economic globalization can generated satisfaction for those who manage to
approach it to their use and discontent for those that seem to be marginalized during this
process. Thus, the policies targeted at global integration have induced a high dynamism and
prosperity for many countries in South-East Asia, transforming one of the poorest areas of
the world in a region with high economic development potential. At the same time, many
countries in Latin America and Africa have pursued inward focused policies, resulting in
the stagnation of the process of economic development, registering high levels of inflation
and the general increase of the poverty levels among the population. As these countries
changed their policies, to an outward focused approach, the income began to increase.
1. Literature review
Four aspects refer to economic globalization, indicating four types of cross-border flows,
namely: flows of goods and services, flows of persons, flows of capital and flows of
technology. A consequence of economic globalization is the improvements of the relations
between the developers of same type of industries in different parts of the globe (industry
globalization), as well as an erosion of the national sovereignty on the economic activity.
The International Monetary Fund defines globalization as the increase in economic
interdependence of countries worldwide, through the increase of the volume and the
diversity of cross-border transactions of goods and services, the quicker and freer
international capital flow, as well as a large dissemination of technology. The World Bank
defines globalization as the Freedom and capacity of individuals and companies to initiate
voluntary transactions with residents of other countries.
2. Benefits and problems of globalisation
2.1 Benefits of globalisation
As AUSAID of the Government of Austria has shown, the economies of countries that
cooperate well with the international economy have enjoyed constantly higher rate growths
in comparison with countries putting protection barriers to their economy. Open economies
that are well managed have registered an average growth rate that is 2.5% higher than the
growth rate of closed economies to globalization.
Countries with a faster economic growth have had the opportunity to improve life standards
and reduce poverty. India has reduced the poverty rate by half in the last two decades.
Cheaper imports also make a large area of products more accessible to more persons and
thus can contribute to the increase of efficiency and productivity.The enrichment through
the economic gains provided by globalization has lead to an improvement of the access to
medical assistance and clean water, which has increased life expectancy. More than 85% of
the world population had a life expectancy of at least 70 years (which is twice as much as
average life expectancy 100 years ago)
The increased global income and the reduced investment barriers have lead to an increase
of foreign direct investments, which has accelerated economic growth in many
countries.The improvement of the awareness and the responsibility towards the
environmental problems have contributed to positive environmental results, through the
encouragement of the use of more efficient, less polluting technology and the facilitating of
the imports of renewable resources to replace limited internal natural resources.
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An increased interdependency and the development of worldwide institutions, such as the

WTO and the World Bank, which manage the resolution of intergovernmental conflicts,
have allowed the providing of solutions for political and economic internationals tensions
through a rules based approach.The improvement of technology has dramatically the
costs and prices, changing the manner in which the world is communicating, learning,
doing business and curing diseases.
Modern communication methods and the global spread of information have contributed to
the overruling of undemocratic regimes and have lead to the increase in the number of
liberal democracies in the world.The voluntary adoption by commercial companies
worldwide of standards at the workplace for multinational production plants in developing
countries have had an important contribution to the observance of international work
standards. The wages paid by multinational companies in low income and middle income
countries are on average 1.8 or 2 times higher than average wage in these countries.
International migration has lead to a higher recognition of diversity and higher respect for
cultural identities that improve democracy and the access to human rights.
2.2 Globalisation problems
There are social and economic costs for globalisation. The liberalization of trade rewards
competitive industries and penalizes uncompetitive industries, and it is necessary that
participating countries to implement economic restructuring and reforms. While this
process will bring long-term benefits, there are dislocation costs that they have to support
on short-term, with significant social costs for those affected.
Some countries have not been able to take advantage from the globalization process and the
life standard in these countries has continued to decrease in comparison with the progress
registered in the richest countries.
The increase of commercial trade and travel have facilitated the cross-border spread of
human, animal and plant disease, such as HIV/AIDS, SARS and the avian flu. The AIDS
crisis has reduced the life expectancy in some parts of Africa to less than 33 years and the
delays in the tackling the problems caused by the economic pressures have exacerbated the
situation.
The higher interdependence of countries in a globalized world makes them more vulnerable
to economic problems.The environment was damaged by the agricultural industries, as well
as by forestry, mining and fishing activities, an outcome favoured by the corrupt behaviour
in the developing countries. The agricultural seeds companies are destroying the
biodiversity of the planet and are depriving farmers from the subsistence of the means of
existence.
Large economic powers have a major influene in globalized institutions, such as the WTO,
and this can work against the interests of the emerging world. The level of agricultural
protection for rich countries was estimated at a level that is five times larger than that
offered as aid to poor countries.The liberalization of trade and the technological progress
changes the economy of a country, destroys the traditional agricultural communities and
allows cheap imports of fabricated products.
Modern communities have spread an awareness of the differences between countries and
have increased the migration demand to richer countries.
The competition due to globalization can determine a race to the bottom in wage rates and
in work standards. It can favour, at the same time, a brain drain of skilled labor, in case
professional with academic education and high qualifications, such as doctors, engineers
and IT specialists, migrate to developed countries in order to benefit from higher wages and
better perspectives for their career and life standards.
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The culture and indigenous and national languages can be eroded by the modern, globalized
culture.
3. Globalisation of the agricultural sector
The globalisation of agriculture means that each country in the world should have free
access on the markets in other countries, with regard to the agricultural products.
In the agricultural sector, the imports of crops can be traded at lower prices and could be
exchanged for a product using free trade- as stated in WTO regulations. Thus, countries that
focus on agriculture (e.g. the Philippines) could buy or import crops from other countries,
which are cheaper from the perspective of tariffs, if it registers a deficit. Nevertheless, if
they register decreases, the countries that are more advanced from an agricultural
perpesctive can renounce only at their products, giving them to a third party and offering
the lower quality products to their trading counterpart in the third world. Thus, the products
of inferior quality could be received by less advanced country, with the quality control of
the traded products being the main issue in this case.
4. Arguments in favour of globalisation
The countries that register deficits in the production of food will have their requests
fulfilled by the production of other countries. The globalization of agriculture should
increase food production and improve the economic situation of farmers worldwide.
The low productivity of small farmers will be eliminated. There is a direct positive
correlation between higher levels of trade and the increase in life standards.Moreover, the
poor individuals will gain from the globalisation of agriculture. Globalisation will increase
the level of food production.
Multinational companies operating outside the country process food grains and add value to
these products. In this direction, they have introduced modern packaging, which enables the
transport of the products. This evolution could help farmers, to a certain extent. However, the
significance of the food products creates certain dangers, in the direction of overburdening the
food habits of the population. In this direction, one can also mention the danger of changing of
the food crops, as the cooking tradition and eating habits are the result of both the natural
climate conditions, as well as the crops that are cultivated on the local level.
Globalisation has eroded the crops of some countries, causing difficulties to farmers. In order to
successfully tackle increased competition, farmers have begun buying more expensive seeds,
chemical synthetic fertilizers and to use increasingly higher quantities of water.
The difference between agriculture and industry is that in the latter one can measure profit
with certainty. Meanwhile, in the agricultural sector, this also depends on rain and other
natural phenomena. The crop is planted on a seasonal basis and must be harvested at the
most appropriate moment. All the products enter the market at the same time, with the price
being determined by the market, not the farmer. Under these circumstances, governments
worldwide are forced to subsidize agricultural products.
The implication of the globalisation of the market and the corporatist colonialism are not
acceptable, to the same extent to which previous attempts to globalise culture and of
political colonialism were not tolerated. But taking into account the powerful economic and
political forces promoting globalisation, how could ordinary individuals stop this negative
evolution? First, we can help individuals understand the irrefutable existence of a global
ecosystem, a global society and a global economy that does not justify the globalisation of
the market- for example, the elimination all economic borders between nations. Natural
borders are necessary in order to ensure ecological integrity. Cultural borders are necessary
in order to ensure social responsibility. Economic borders are necessary in order to ensure
long-term economic sustainability. Without limits, the world tends towards entropy- to a
world without form, without structure, without order and without life.
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In a global agricultural economy, large farms will continue to replace the small farm on the
global market. Increasingly, large multinational corporations will control large farms. Many
small famrs depend on sales of merchandise traded on international level in order to ensure
cash agricultural income, especially in emerging and the least developed countries. The
most important aspect of the functioning of the agriculture can be the non-cash contribution
to the quality of life. In less developed countries, the major non-cash contribution can be
represented by food, clothes, shelter, while in more developed countries, there are other
type of benefits, including the right to a healthy environment, private life and security, as
well as an independent lifestyle. Nevertheless, in both cases, the economic sustainability of
the farm depends on the cash income from the sale of merchandise in the international trade
system. In the context of globalisation and corporatist colonialism, small family
independent farms will simply not have access to the markets of international trade for
agricultural products. In essence, all the products will be made under the framework of
complete contracts offered by corporations connected to one of the large producers of food
products at global level. Only operations with a large scale will be able to offer this type of
contracts, with these companies potentially under collective ownership.

Fig. 1. Percentage of agricultural land (% of total surface), according to data of World

Bank in AG Land Irigation
7
0
6
0
5
0
4
0
3
0
2
0
1
0

Worl
dEuropean
Union
Roman
ia
0
200
4

200
5

200
6

200
7

200
8

200
9

201
0

201
1

Fig. 2. Percentage of irrigated field (% of total surface)

Moreover, in a globalised agricultural economy, the small farms will be replaced by large
farms, controlled by giant multinational corporations. Small farmers will simply not be able
to compete on a free market, in a globalised economy. Many farmers worldwide are
focusing on horticultural crops in order to ensure the competitiveness of their business.
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Thus, the implications of globalisation could be even more dramatic for the horticultural
sector, as compared to other sectors. However, even more important than this aspect, one
has to emphasize the ecological and cultural limits, which are essential for long-term
sustainability of agriculture. Thus, if all the economic borders all eliminated, the life of
humans on earth as we know it, under the current system, will not be durable and
sustainable.

Fig. 3. Grain Production (kg/hectare), according to data of World Bank in AG Land

Irigation
In this period, the international prices of food products have increased to unprecedented
levels in nominal terms, in comparison to the index of the price of raw food materials of
FAO, which reached a peak in June 2008, before decreasing again at the beginning of 2009
to the level reached in 2006. As one can see in Figure 2, this increase in the price of main
food raw materials was subsequent to the longest and highest increase of the price of raw
materials worldwide in over a century. The factors that stand as the basis for this wave of
price increase are of macroeconomic and global nature, including the rapid economic
growth of developing countries during this period, especially in Asia, but also the monetary
factors, including the increase in the offer of money, the lack of financial discipline and the
evolution of exchange rate (especially the depreciation of the USD). Taking into account a
substantive correlation in the movement of prices of primary raw materials during the
analyzed period, the evolution of the prices of food raw materials, in light of their impact
on food security, were relatively less extensive than those registered by other raw materials.
In a larger context, that of the increase in the price of raw materials, the increase of the
prices of food products was also influenced by a series of problems with the crops induced
by drought, in a moment in which stocks were low. This evolution was also influenced by
the larger degree of integration of agricultural markets to the energy markets, as well as the
important impact, bot targeted and unintended, of government policies. It is important to
note the fact the energy prices, which witnessed the most explosive growth, were sustained
by the production costs of the agricultural products based on energy and fertilizers.
Moreover, another significant influencing component was the increasing demand for raw
materials in order to support the production of biofuels. This impact was largely witnessed
on specific crops and included corn in the United States of America, vegetal oil in the
European Union and, to a lesser extent, sugar in Brazil. The objectives targeted with regard
to biofuel consumption, as well as support policies, have thus established a significant
connection between energy prices and those of raw materials.
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Moreover, the increase in production of raw materials was witnessed to the detriment of
other crops, for which the cultivated area decreased (for example- wheat and soy). The
fears with regard to price inflation for food products has determined a political reaction
with regard to food products pricing (including rice), with both exporters and importers,
acting together, wishing to ensure the supply of food products, putting pressure on the
supplementary increase of prices.
The role of speculation on financial markets is also the subject of rigorous debate. Some
analysts claim that the low interest rates and the low income from other markets have
attracted non-commercial investors to the markets of agricultural goods and that of food
products, with larger prices. Of course, the causality in this case is not established- but the
more likely outcome is that larger prices having led to more chances to attract speculators.
Anecdotic evidence suggests that the number of sellers in the markets has increased in
consonance with the prices. For example, the institutional investment funds, which trade on
long-term principles, and use large indexes, rather than specific markets, could have a role
in the increase of futures prices. Various studies, such as Irwin and Saunders (2010) and
Gilber (2009), offer different conclusions with regard to the establishment of whether the
index funds have caused the 2006-2008 bubble with regard to the price of raw materials.
5. Development of cross-border markets
Along with the regionalization strategy, there is also the objective of the development of a
territorial economic concentration based on clusters (with a high degree of intelligent
specialization for each region). Romania is however behind with regard to the cooperation,
dissemination of information, and the development of efficienct coordination structures
between companies, so that it can promote the business sector, innovation, technological
transfer within the clusters and the possibility to develop brands. Furthermore, there is also
a lack of business culture with regard to quality management and the quality infrastructure,
which are specific to the sector, as well as the difficulty in the development and alignment
of exporters to advanced certification standards requested by external markets, as well as
the need of attracting investments and of streamlining the sector.
Analyzing the cross-border agricultural markets, one has to notice the interesting benefits
they have in store, as well as the support they offer to producers, as well as the efficient
manner in which they identify the concrete needs of the sector.
6. Regional Development of Exports
For all the regions in Romania, the development in public-private partnership of a regional
competitiveness strategy, with the participation of business associations and local public
authorities is necessary in order to increase the competiteveness of the region in the
international trade. The following supplementary arguments can be offered in this direction:
The regions enter in direct competition in order to attract competitive factors and
the promoting of their economic identity;
The export is an essential force for regional development in the context of
globalisation and integration, context in which inter-regional competition
increases;
The Regional Development Plan must be completed in order to tackle the
problems and challenges faced by exporters;
Romania has a National Export Strategy, which must be well implemented and
adapted at regional level;

194

Coordinating and establishing key objectives and resources at regional level

through a strategic approach is an advanced practice among European Union
member states, as well as a pre-condition for the increase of the absorption
capacity of structural funds through projects that can be used by exporting
companies.
Taking into account the current regional disparities, the National Export Strategy integrates
the strategic regional export approaches. Under the aspect of export intensity, the
development regions are in the following situations:
more developed for exports in Bucharest-Ilfov, West, North-West and South
regions
medium developed for exports in South East and Center regions
less developed for exports for South-West and North-East regions
In the regions of development which could get involved in the development of
competitiveness strategic processes, there is no institutionalized structure, like a regional
export council, in order to manage this type of process.
The idea of the creation of export councils at regional level was first vehiculated as part of
the framework of the Export Council, and the management of the National Export Strategy
2005-2009 and the integration in the European Union, when it became more obvious that
coordination, strategy and common vision with regard to sustainable development of export
at regional level is required. This vision should be aligned and integrated in the new
National Export Strategy 2014-2020 and the Regional Development Plan.
The introduction in the framework of the National Export Strategy of different essential
elements regarding regional export strategies is all the more important taking into account
the following aspects:
there are discrepancies, challenges and opportunities that are specific to each
region, which can generate solutions and local regional initiatives, with the regions
in Romania, being less competitive when compared with the other regions in the
European Union, are eligible to receive structural funds for economic
development;
within the European Union, the development regions are competitiveness vectors;
internal and external financing can be facilitated;
regional forces can be targeted towards specific competitiveness objectives.
From a regional perspective, the National Export Strategy and regional strategies will take
into account the following guidelines:
increase of the internationalization of Romanian companies and the participation of
the regions in the international trade;
reduction of discrepancies in terms of export performance, both inter-regionally, as
well as between countries intra-regionally;
attraction of structural funds at regional level for sustainable development of
exports;
development of regional centers to support and promote export;
reduction of current significant differences, from the point of view of economic
performance, both inter-regionally, as well as among counties intra-regionally.
Even the most developed regions have a high degree of concentration of economic
and commercial activities in urban areas, with important parts of the country being
excluded from international trade.

195

The developd actions will also contribute to regional development in the following
directions:
implementation of projects and programs of rural development targeted towards
export (rural tourism, organic agriculture, IT&C, furniture, crafts, textiles,
viticulture);
programs for the stimulation of the creation of business alliances, including
collective marketing associations at local level in the sectors with a significant
multiplier potential, such as agricultural products and food processing;
encouraging the decentralization of the export capacity from cities to rural areas, in
order to create new skills and job opportunities;
encouraging the creation of alliances between producers.
Moreover, regional strategies contribute to job creation through:
support and strengthening of the key employing sector;
creation of new jobs in new sectors (for example, the high-tech and services
sectors, rural tourism, ecological farms), so that mass unemployment is avoided,
taking into account that Romania has lost its competiteveness in the energy
domain and other large traditional sectors, which generated many jobs;
development of a policy and competitive framework that leads to foreign
investments in these sectors.
Last but not least, the strategies contribute to environment protection through the following
aspects:
the sustainable use of natural resources and, at the same time, the prevention of
pollution, and in case this is not possible, the reduction of emissions and of the
impact on the environment, mainly from industrial activities;
facilitating and stimulating the conformation of exporters to environmental
standards;
environment protection and biodiversity protection at the regional level.
To sum up, the Regional Export Strategy targest objectives such as:
export support for associate producers, who export products using geographical
indications and origin denominations;
consultancy for the development of a support strategy for the formation and
development of clusters and export networks in sectors with a potential of increase
of exports;
management of branding strategies at regional level;
development of internal promotional and exhibition centers with a high degree of
internationalization and specialization at the level of development regions, capable
to promote the Romanian export offer so that it has an impact at international
exhibitions.
Development of regional structures in public-private partnership that are capable of
ensuring the management of regional export strategies (Regional export councils)
and the development of promotion centers at regional level;
Support of the key sectors at regional level;
Development of the export potential of the regions and their offering capacity for
export on external markets.
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Conclusions
The district can be an important instrument that can be used to revitalize rural areas. This is
comprised of the physical capital represented by the territoru in which the companies are
part of a chain of of offer, the human capital, which consists in the resident population and
the social capital, represented by all the relations and interactions developed between those
involved in the process. This allows the understanding and increase in social diversification
that characterises different social areas, as the district can analyse the relationship between
stakeholders.
In an international scenario marked by uncertainty and anticipating that after 2013 the
European Union will offer significant attention especially to a field of efficient policies as a
response to the increase of competition on the markets and represents an interesting
instrument for the governmental intervention in rural development, in an area defined by
quality products. In this direction, in the past years, the European Union has authorized
state aid for the implementation of contracts for supply chains, as well as in the sector of
promotion and modernization of agriculture and the technological development of
companies.
Irrespective of the impact of the globalisation process on the cross-border agricultural
development, it is certain that globalisation is the inevitable route on which the world is set,
an irreversible process that is affecting all of us in the same measure and the same manner.
On the other hand, the lesson learned by analyzing the cross-border agricultural markets
and the effects globalisation has on this domain, on can consider that some will be winners
and others will be losers as a result of this process.
References
1. Anghel, Ion E. 2002. Foreign Direct Investment in Romania, Expert Publishing House,
Bucharest
2. Bafoil, F. 2000. Aprs le communisme, Armand Colin, Paris
3. Bonciu, F. 2001. Foreign Investment in the world economy in Policies and Instruments
of attracting Foreign Investment, Bucharest
4. Braghin, C. 1998. Foreign Direct Investments in Post-Communist Romania, in
Romanian-British Geographical Interchange, Corint Publishing House
5. De Bly, Harm I. 2003. Geography Regions and Concepts, John Wiley and Sons
6. Gamblin, A. 2002. Limites et discontinuits en gographie, Sedes, Paris
7. Groza, O. (2001). The geography industry, Al.I.Cuza University Publishing House,
Iai;
8. Guran Nica, L. 2002. Foreign direct investment. The development of the settlement
system in Romania, Technical Publishing House, Bucharest
9. Lipietz, A. 1993. The local and the global: regional individuality or interregionalism,
Transactions of the Institute of British Geographers, New Series, Vol. 18, No. 1, pp. 818
10. Munteanu, C.; Vlsan, C. 1996. International Investments, Oscar Print Publsihing
House, Bucharest
11. Pecqueur, B. 1999. Dynamiques territoriales et mutations conomiques, LHarmattan,
Paris
12. Pecqueur, B. 2000. Le dveloppement local, La Dcouverte & Syros, Paris
13. Rey, V., Groza, O., Iano, I., Ptroescu, M. 2001. Romania Atlas, Rao Educaional
Publishing House, Bucureti.
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PRICE VOLATILITY IN CONTEXT OF FOOD SECURITY FOR SUSTAINABLE

DEVELOPMENT
Bogdan BAZG, Iudith IPATE, Nicolae IPATE
Institute of National Economy, Romania, Center of Study and Research for Agro
biodiversity (CSCBA), Romania, [email protected], Calea 13 Septembrie, Sector
5, Bucuresti, Romania
Abstract
This article presents a series of interesting aspects regarding the price volatility, as
component of food security in direct connection with the sustainable development. We will
analyses and demonstrate all the factors that can influence the sustainable development
and the connection between agriculture potential and the possibility of creating food
security in our region. Sustainable development is a new type of human strategy that meets
current needs, without compromising the ability of future generations to meet their own
needs. This process incorporates immediate and long-term purposes, economic and
environment problems, agro food potential and all these elements being in tight connection.
Basic commodity prices are particularly volatile in the short term; sometimes they vary
even more than 50% - 60% in one year. Clearly, this problem of the economy - lower
commodity prices will lead to lower incomes for farmers and thus fewer jobs for workers in
rural agro-industry.
Keywords
sustainable development, price volatility, food security, agriculture potential, agriculture.
Introduction:
Sustainable economic development requires intensive agricultural production, new
technology, co-operation between public and private actors in the agricultural innovation
system, a higher recovery of agriculture potential but with a constant protection of the
environment. All these elements will ensure the agricultural production quantity and also all
the elements that can ensure the rear security for our nutrition. Food security refers to food
availability and access. As the UN FAO define, food security exists when all over the
world, all the people, at all times, have a real physical, social and economic access to
sufficient, safe and nutritious food. The first step to a sustainable development understands
the fact that a countrys economy means more than the sum of its elements, that modifying
a subsystem or another and will bring major changes to the final result. Due to the latest
previsions, it is forecast that the global production of cereals from 2013 to balance the total
storage of cereals and, that storage to exceed its level with at least six million of tones
(Bazga, 2013). If we are taking into consideration the major impact that the vulnerability of
food products prices has over the global market, it is necessary to emphasis the state of
Robert Zoellick, the president of World Bank, who made the next affirmation: It is time to
be aware of an emergency given by the general tendency of raising the prices, which
provides sufferance among pours over the entire world. He warned the international
community to be aware of that risk and not to worsen the problem by embargos, banning
the exports and setting administrated accounts. On the same field of food issues, Angel
Gurria, General Secretary of The European Organization for Economic Cooperation and
Development, made the next statement: The agrarian markets have always been volatile,
but if the governments cooperate, the extreme variations of prices can be diminished and
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the vulnerable consumers and producers may be protected. Since the principle worked out,
it has been connected with other definitions, every time expressing the unicity of the
concept, according with the economic growth that should depend on the availability of the
planet resources and of their regenerative rate (Manole et al., 2011).
1. Sustainable
The humanity still continues to consume very fast the natural riches water, energetic
resources, minerals, plants, animals, etc, regardless of their recovery. Massive exploitations
produce damages that will be hard to weigh and we have already begun to pay for the first
consequences. The fact asserts the growing of people consciousness and of the
responsibility of rethinking an economic pattern for the development of the society, and for
the consumers as well, a way that consists with the rhythms we live. The sustainable
development has become a priority for many economists, who remind us that at the bottom
of the strategy must be considered, as one of the main issue, the actual economic crisis. The
viability of social economic development is one of the main principles that route the
strategies, on the basis of principle that being sustainable today means to guarantee a better
future for the next generations. Actually, the society is involved in enterprising new ideas to
assure the safeguard of the environment, health and the willing of consumers to buy among
their activity, of information and of choosing their own directions of production (EC)
tainable production and consuming.
Any people that has the consciousness of his own social role, has the possibility to lead the
market in daily choosing of a good or another, activating a virtuous chain, inside which
every author of the system is called to bring his own contribution. When a product is more
agreeable than another, the choice is memorized and the consumer is now able to insert
changes to the new ones. The companies show no indifference to the choices that
consumers do, because what is sold influences the future trade politics.
The sustainable consuming means, before anything, to promote goods and services which
assure the preservation of natural resources (water, wood, soil safeguard/fertilization, etc),
the energy saving, the reduction of contamination and of waste/trash storage (EC). Any
consuming good that is bought, has only one circle of live. The major impact appears when
the good has been exhausted and gone down with the soil in a way or another, or after it
spreads in the atmosphere. Before making any choice of a good, it is involved a certain
obligation to control whether this good represents a popular brand to certify its ecoviability, with the references to another good less virtuous. An important aid given to the
consumers comes from the certification brands/genesis certifications, which provide clues
about the goods manufacturing and guarantee precise quality criteria for the people health
and the environment protection. All these credits do not constitute an absolute successful
guarantee, because a real certification brand/genesis certification must be the result of
scientific researches lead by specific methodologies that guarantee comfort and utility
(Policy Responses, 2011). In accordance with the circle of life of the good, it is pointed out
that a product has an impact over the environment, not only during its usage or after that,
but during the previous stages of producing, transportation, storage, sell and its safeguard.
Only this way, all the goods may have a real circle of life. The waste cuts are the necessary
condition for a sustainable growth. The European Union has defined some directions for
growth prevention of waste, used goods and packages. One of the main measures, in
accordance with the international requirements for environment safeguard is recycling and
other means of recovering the waste/packages under the 3R formula: Recovering, Recycle,
Rework.
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2. Price volatility indicators a real key for a sustainable agriculture economy

Volatility of commodity prices is a serious problem especially for countries of the world
which are dependent producers of raw materials. About 2 billion people, almost 1/3 % of
the global population, depend on the production of primary goods such as grain, sugar, rice,
meat, metals, ecc.
The EU statistical office of the European Union (EUROSTAT) conclude and also explained
in Rapport EUROSTAT Regional Yearbook 2013 published on 4 th of February 2014, that
the Economic significance of agriculture in 2012, for the EU-27 agriculture generated
around EUR 159.4 billion of value added, aproximatly 1.4 % of the added value for the
whole EU economy (World Committee on Food Security). The contribution of agriculture
fell from 1.8 % a decade earlier (2002), to a low of 1.2 % in 2009, before increasing each
year through to 2012. The regional analysis of agricultural accounts is based on data for
2010, when agricultural value added was EUR 145.3 billion, equivalent to 1.3 % of the
whole economy. The economic importance of agriculture, in value added terms, was
generally much greater in the east and south of Europe than in the west and north. The
relative economic weight of agriculture was highest in the Bulgarian regions of Severen
tsentralen and Severozapaden, where it reached 14.1 % and 12.2 % respectively of total
value added; no other regions in the EU-27 reported double-digit shares although this
was the case in the former Yugoslav Republic of Macedonia (10.8 %)(Eurostat indicators).
But price volatility itself is not the most serious problem, is rather national and individual
income volatility obstructing medium and long term planning of governments, depending
on the cargo units, and thus widens inequality between countries and lead to further
degradation business (8).
For Europe, second part of 2013 and first part of 2014, at the most important commodities,
were the lowest productions compare to 2012. (figure 1.)
400

Opening Stocks 1,8

Production 45,6
Imports 0

300

TOTAL Suply 47,4

TOTAL Food 4,5
TOTAL Industrial
2,3
TOTAL Feed 8,3

200

TOTAL Total 16,2

100

Exports 28
Closing Stocks 3,3

0
est.
2013/14
-100

f'cast
2014/15

est.
Australia2012/132013/14
**

f'cast
2014/15

est.
Canada2012/132013/14

f'cast
2014/15

est.
EU*

2012/132013/14

f'cast
2014/15

-200

-300

-400

Source: International Grain Council. http://www.igc.int/en/

Fig. 1 Grain productions in Europe
The same announce was made also by the Food and Agriculture Organization of the United
Nations (FAO) in his monthly Food Index Price, where is presented and explained the
measure of the monthly change in international prices of a basket of food commodities
(OECD, 2011). The FAO Food Commodity Price Indices show changes in monthly
international prices of major food. The OECD-FAO Agricultural Outlook 2013-2023,
200

published in march 2014, for global cereal supplies in the period 2014/15 booth
organizations present the same situation but in different views (OECD, 2011). (fig. 2)

Source: www.ocde.org; Global cereal supplies in the period 2014/15

Figure 2 Global cereal supplies
The European Union has to bring together the employment objectives and growth of longterm environment objectives, as a Commission document works out, which evaluates the
strategy of sustainable development of the Union that has been set almost a decade ago
(OECD, 2012).The global requirement of natural resources has a blowing growth, the
European fish storage is almost ending and the forests and soils are endangered by climatic
changes. Having a legislative package adopted in accordance with the environment and the
energy, The European Union considers itself at the top of the fighting against climatic
changes and for sustainable development. Regarding to biodiversity, the EU Executive
forecasts that the annual loss from the services field of ecosystem amounts to 50 billion
euros, meanwhile the loss of natural riches being estimated at 7% GDP, until 2050.The
strategy for Sustainable Development, started by EU in 2001 at Gothenberg Summit, had
been renewed in June 2006, during another Summit. It is dedicated to a specific number of
seven challenges such is: climate changes and energy; sustainable consuming and
production; natural resources preservation and management etc.
3. The dynamic of prices
The complexity of dynamic prices on the staples has become more urgent in the context of
actual tendencies. In contrast with the previous years, when the economic agents
concentrated just on the outwards price, now they need to face with a large area of complex
factories, including derivate financial instruments futures contracts and options,
phenomina of normal backward , maturity effects, as well as the link between futures
contracts and outwards prices. The term of staple may reffer to a variety of goods, which
can be very different in production (or extraction), in their usage (as elements or final
goods for consumers) or in the storage period. Thereby, it seems to be logical the
conclusion that, for the explanations of the extremely different stuffs will be required
different theories. There is one theory referring to the behaviour of staples prices, which
inclines to rule: the storage type. The storage type studies the way how scalpers will engage
themselves in staple tranzactions, being based on their expectations according to prices
future changes (OECD, 2013). When the current price is under the level that scalpers hoped
to tower above next period, they will storage the stuffs, with the purpose of selling them at
a higher price next time. Nevertheless, when the current price is over the scheduled amount
201

for the next period,the scalpers wont keep the staff. Supposing that there will be no
stimulants for storaging (so called stock-out), the prices dynamic merely follows the path
of basic offer blows.
That is why the storage type theory is the most appropriate for the basic products, which are
easily to storage, their production being so unpredictable (as the ones depending on the
wheather conditions). The best way to storage the metals is, for instance, to extract not at
all the product. Hence, the essential economic decision which is about to be taken regarding
to metals is referring to the extraction rate, more than to the storage level.
One of the first theories for the metals prices approach is the theory of lease shortage. This
theory claims that, as far as the resources are not regenerative, the owners ask for a bigger
price and so, they will get a rent shortage. A distinctive characteristic is represented by the
way how the animal products prices are set.
That is the fact for which is has to be mentioned a conclusive model for prices evaluation
for the animal products, known as spider web model. This model, which has been
brought in by Ezekiel, claims that the price fluctuations are endogenous, moreover than
exogenous. The storage model rises the next question: how the exogenous offer blows will
be passed over the prices movements? In contrast, the spider web theory explains the fact
that the price fluctuations are the result of the market participants behaviour.
In accordance with the spider web model, the production decision of the economic agents
will be based on the prevalent price, although for the next period of time they will know
that the presumptive price declines.
Nevertheless, the type of naive expectations has been considered unlikely and it received
little attention in the specialized literature. However, it hasnt been completely ignored in
the study made for prices setting of the agrarian staples. A reason for the continuous
interest is its capacity of setting out the prices that oscillate, which have appliance in
dynamic description of animals unions.
Like other assumptions, mentioned above, are not based on the cycle behaviour,this is
coming up, due to the spider web model, with an interesting candidate in helping the prices
forecast of bovines unions.
It is more than obvious that the prices stability and of trade politics may have impact over
the prices behaviour of the staples. Moreover, there are some theories which put the accent
on the importance of the macroeconomic environment, where the monetary spreading
defines the staples inflation on short term.
The properties of the staple prices are made with the aid of four index numbers, which
represents the moments of one distribution of prices: its average, volatility (variance),
asymmetry and flattening. An interest key-point is given by those moments variation in
time and specifically, namely: the average hypothesis and the volatility alignment. One of
the main characteristics of one batch of the price is its persistence, in other words its rate of
self-correlation. The persistence has a basic impact over the batch behaviour, as itself
indicates, in large amounts,the way how the past changes will influence the path of future
changes (OECD, 2013). The storage model theories seem to accept that the agrarian prices
must be stationary. The storage model tries to show how, under the influence of a demand
and of an offer necessitarian character, the goods storage induces the corelation prices. But,
if this self-correlation leads to steady or unsteady process, that is not directly forecast by the
theory.
The theory of financial market efficiency considers the unsteady process a fact. This theory,
advertised by Fama, in 1960, claims that for an efficient market,the prices should not be
predictable and they would follow otherwise an aleatory unsteady course (more specific, a
martingale whose aleatory movement is a model). The reason is that the predictibility of
202

the price can only be temporary, because the predictibility reveals unexploited models of
the prices that atract the investitors. Even if the theory of the efficient market has been
rejected, in the last years, through the results of the finances behaviour studies, the
conclusions indicate the fact that in the majority of financial markets, the prices have a
behaviour at least closer of the unsteady process. While this tow theories are based on the
real expectations, one of them forecasts stationarity, meanwhile another predicts nonstationarity (EC).
The prices of basic agrarian goods seem to be characterized by a high rate of persistance,
which is hard to distinguish among an aleatory course, leading to uncertainty in the next
variations of prices. Another important factor which is added to this uncertainty is the high
volatility of the price, which is specific to agrarian markets.
Theoretically speaking, the presence of volatility may be easily to explain by the inherent
configuration of the demand and the offer in agriculture. The offer cant be easily adjusted
on short term and it is subdued under a major wheather uncertainty, while the demand is
also low on short term. Referring to those configurations, one simple wheather blow may
lead to a price blow, significantly higher.
It is very interesting how the situation tends to reverse when we speak about the staples
prices: growing prices leads to a higher volatility. This phenomenon can be explained by
the storage model, the prices boost shows a tendency in reducing the supplies, which
therefore rises the volatility.
The usage of future prices instead of the prices on the spot, creates further difficulties in
shaping the volatility. The first mark which emerges is the seasonal characteristic, where,
for instance, the volatility is higher in certain periods of the year, usually in the preharvesting season. The volatility is about to grow as the deadline of the futures contract is
getting closer (15).
There are important characteristics which make the difference between agrarian and
financial markets. An astounding difference is that in the agrarian markets, the unexpected
rises of prices incline to increase the volatility.
Conclusions
It is important to have the instruments and the information helpful in recognizing the
authenticity of sustainable products and to be known which guarantees should be available
to the consumer, in order not to be deceived by the advertised messages, which have no
probation.
The volatility may be defined in many ways for a complete description. In the traditional
way,the volatility refers to unexpected price movements. Is there indeed a part from the
price movement which can be expected, be it the periodicity or the tendencies. The
volatility concept would rather refer at the unexpected price movements. Often, the
volatility measures imply two stages: one stage of penetration, lead by a rating stage.
The processed analysis and the investigated literature sugest that a basic understanding of
staple prices - particulary between theory and experimentalism - is missing, as it should be
taken into consideration in politics making process. First, it can be seen that many of the
empirical results are not in the same line with the storage model prediction. Moreover, that
was a challenge in finding common properties for the time range, even between good
assemblies, which are sharing many of their production qualities. The second issue is about
the price persistance.
It actually can be seen that many prices seem to be unsteady, or at least very persistent,
which is a contradiction with the main type of the storage model. This carries out from the
politics making process a difficult duty, as the forecast of persistent prices leads to large
ranges of the predictive error, which have little usage in practice.
203

ACKNOWLEDGEMENTS: This paper has been financially supported within the project
entitled SOCERT. Knowledge society, dynamism through research, contract number
POSDRU/159/1.5/S/132406. This project is co-financed by European Social Fund through
Sectoral Operational Programme for Human Resources Development 2007-2013.
Investing in people!
References
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the Romanian agriculture potential, PhD Thesis, Bucharest, 2013.
2. Manole, V., Istudor, N., Bazga, B. (2011). Food Safety in Romania, International
Conference Present Issues of Global Economy - 8th Edition - APRIL 16th-17th,
2011 Constanta 2011, Ovidius University.
3. Price volatility and food security, a report by the High Level Panel of Experts, July
2011
4. Food price volatility- implications for ACP countries, Brussels, November 2011
5. Communication from the commission to the European Parliament and the Council,
Brussels, October 2012
6. Price Volatility in Food and Agricultural Markets: Policy Responses, June 2011
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Security and Nutrition (HLPE) of the World Committee on Food Security (CFS). (Doc.
CL 144/9 (C 2013/20 Rome, 13 -15 June, 2012).
8. Task Force on the Food Security Crisis, WFP, World Bank, and WTO, 12 June.
Available at: www.oecd.org/tad/agriculturalpoliciesandsupport/50544691.pdf.
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Publishing. Available at: www.oecd.org/innovation/strategy.
10. OECD 2011. OECD Green Growth Studies: Food and Agriculture, OECD Publishing.
11. OECD 2012. Agricultural Policy Monitoring and Evaluation 2012: OECD Countries;
Available at: www.ocde.org
12. OECD 2013. Agricultural Innovation Systems: A Framework for Analyzing the Role of
the Government. Available at: www.ocde.org
13. www.faostat.org
14. www.ocde.ro
15. European Commision EUROSTAT:
http://epp.eurostat.ec.europa.eu/portal/page/portal/eurostat/home/

204

FINANCING ENTREPRENEURIAL INITIATIVES IN RURAL AREAS

THROUGH THE NATIONAL PROGRAM FOR RURAL DEVELOPMENT 20142020
Costin CRSTEA, Florin DINU, Razvan MURARIU
Faculty of Agro-Food and Environmental Economics, The Bucharest University of
Economic Studies; email:[email protected], Str. Mihail Moxa, nr.5-7,
Sector 1, Bucharest, Romania
Abstract
Entrepreneurship is the main engine of growth in any market economy, contributing the
majority share in the gross domestic product and to creating new jobs. In these
circumstances, regional development, including the development of the rural area, is
conditioned by the creation of favorable conditions and appropriate financing instruments,
allowing the stimulation of entrepreneurial initiatives. This study represents an analysis of
financial instruments proposed to stimulate entrepreneurial initiatives in rural areas of
Romania, through the National Rural Development Program. The study is structured in
three parts. The first part is an introduction, which is achieved through a documentary
synthesis regarding the current state of Romanian entrepreneurial initiatives manifestation,
in rural areas. The second part of the study is an analysis of the measures proposed in the
National Rural Development Program 2007 - 2013, which aimed the development of
entrepreneurship in rural areas, and the impact created by their implementation. The third
part of the study analyzes the measures for the development of rural entrepreneurship
proposed by the National Rural Development Program 2014 - 2020. The study concludes
with a series of pragmatic conclusions, drawn from the analysis carried out.
Keywords
Entrepreneurial initiatives; National Program for Rural Development; rural financing.
1. Literature review
Entrepreneurship represents the growth engine specific to any market economy, participatin
g actively in the creation of a majority share of gross domestic product and the creation of n
ew jobs. Essentially, entrepreneurship and SMEs launch new ideas and initiate new process
es that accelerate growth based on a more efficient use of resources. (Miller et al, 2012). Pr
ofessor Paul Almeida of Georgetown University says that SMEs play a unique role, activel
y and critically in the process of innovation, their ability to invent the new technological are
a and improve high technology information networks (Almeida, 2004). Moreover, in recent
decades, at the level of developed countries in Europe and North America, entrepreneurship
has become a target and a way of life for students and young graduates, especially in rural a
reas. Recent studies show that in the developed economies such as the USA or UK, there is
a major contribution of student entrepreneurs to increase the competitiveness and productivi
ty of SMEs, through facilities for young people to initiate start-ups and by financing their e
ntrepreneurial initiatives (Reason, 2014). Stimulating and funding youth to initiate and deve
lop entrepreneurial activities led to remarkable results. According to Hannon et al. (2004) in
the United States, start-ups launched by young entrepreneurs and university graduates contr
ibuted with the percentage of 6-8% to the GDP.
Although at worldwide level, the importance of entrepreneurship and SMEs in the economy
is confirmed, Romania is facing a shortage of entrepreneurship events, fact which underlies
205

the negative economic and social phenomena with effects on medium and long term, such a
s: poor living standards of the population, migration of young people, particularly in rural a
reas, the manifestation of psychosocial problems among children left in the care of grandpa
rents, decreasing the share of GDP derived from entrepreneurial activities etc. (Cirstea,
Dobre, 2013).
Low interest towards entrepreneurship is manifested pronounced in the case of young
people, students or graduates, who do not consider entrepreneurship a opportunity for a
career development on their own. According to a study conducted by the Department for
SMEs and Tourism Business Environment in Romania, 1 in 100 young people decide to sta
rt a business on their own, compared to 1 in 4 young people in the Czech Republic, Poland
and Hungary. Very few young people start a business on their own. The most common reas
ons cited are the lack of funding and bureaucracy (SME Department, Environmental Affairs
and Tourism, 2011). Poor initiative of young people for initiating and developing business
is sustained by the study conducted by the National Council of Private Small and Medium
Enterprises in Romania, entitled "White Book on SMEs in Romania" which makes a fora
y on the current situation of SMEs in the country. According to it, by age groups, the highes
t percentage is owned by 35-45 years entrepreneurs (35.56%) and those between 45 and 60
years (32.05%), while on the opposite we can find the young persons, under 25 (2.03%)
(Nicolescu et al., 2012).
To counteract this negative phenomenon, we consider necessary synergistic efforts for fina
ncing the entrepreneurial initiatives in rural areas, especially for young people.
The engagement of students and young graduates in entrepreneurial activities is also suppor
ted by the scientific literature. Thus, it is considered that, in order to increase quality of life
and reduce the negative social and economic phenomenon with an impact on the medium a
nd long term, it is necessary to increase the standard of living, which has to be done by expl
oiting growth opportunities of entrepreneurship among young people (Cirstea, Dobre, 201).
Specifically, there are required investments in human resource development of the younger
generation, and supporting entrepreneurial efforts and activities in order to allow the initiati
on of profitable activities that can provide them with financial and social rewards sufficient
to determinate them to continue in this segment of the national economy and to develop and
diversify their business activities.
2. Analysis of the National Rural Development Program 2007-2013
After Romania joined the EU structures, stimulation of entrepreneurial initiative has been
financed from multiple sources, including through operational programs financed by the
European Structural Funds and Cohesion. European Structural Funds are an important
resource for business financing in Romania, for competitiveness increase and quality of
workforce and infrastructure, necessary for the development of efficient business.
According to the Ministry of European Funds in the period 2007-2013, from the total
funding of around 33 billion Euros, which Romania has had available to invest, about 7.5
billion lei were allocated to the National Rural Development Program, which means a rate
of about 22%.
In Table 1 is shown the structure of absorption of funds allocated from the National Rural
Development Program 2007-2013, on categories of measures.

206

Table 1: European funds absorption structure of the RDP 2007-2013 (euro)

Projects submitted

Selected projects

Measure
No.

Public
Value

Public
Value

No.

111

Contract / Grant
Decision concluded

Payments

No.

Public
Value

Public
Value

29

19.170.420

15.482.431

112

22.494

630.074.066

13.446

339.118.514

12.990

326.404.035

253.028.840

121

8.154

3.008.189.083

3.375

1.250.133.509

2.786

912.398.941

497.863.724

122

20

3.011.934

18

2.513.937

18

2.499.777

727.424

123

1.762

1.771.015.955

923

908.484.590

628

558.532.743

287.524.979

Scheme XS
13/123A/2008
Scheme XS
28/123F/2008
Scheme
N578/2009

247

113.706.025

215

101.626.174

148

56.870.783

48.236.053

177

78.896.763

157

67.450.879

88

33.881.683

27.047.902

453

311.099.775

292

216.093.918

214

139.410.172

54.166.155

125

1.701

1.789.032.854

555

611.012.899

544

565.818.675

258.554.008

141

88.846

666.345.000

63.543

476.572.500

60.247

394.253.733

241.767.196

86

16.870.702

77

14.390.169

58

10.878.822

3.219.196

Transferr
ed from
SAPARD

69.794

47.420

143

12.415.223

5.084.766

PNDR
142

211

644.587.385

212

357.875.957
1.212.389.681

PNDR
214

Transfe
rred
from
SAPAR
D

9.498

215
PNDR
221

7.837

153.346.343
52

4.354.839

40

3.775.661

Transferr
ed from
SAPARD

25

1.549.907

275.991

13.796

11.452

312

9.499

1.317.172.809

4.187

535.514.693

3.384

437.046.910

247.232.282

313

3.703

569.890.748

2.584

392.089.882

1.865

266.902.622

66.980.384

322

3.317

7.646.850.036

886

1.943.039.631

874

1.746.101.592

1.306.163.158

4.1

7.018

359.399.448

5.021

256.630.907

4.976

254.632.170

26.554.558

421

93

3.295.020

375.944

207

Projects submitted

Selected projects

Measure

99

Public
Value
3.205.795

1.704.000

1.657.317

431.2

163

66.907.378

25.629.823

511

123

54.218.787

56.841.992

Guarantee
schemes for
agriculture and
SMEs

115.313.453

115.313.453

faze 3
fazes
1+2

431.1

112

Public
Value
4.827.533

Payments

Public
Value
4.114.585

No.

Public
Value
4.920.162

Contract / Grant
Decision concluded

No.
111

No.

611
TOTAL

395.007.018
147.734

18.294.125.218

95.438

7.123.651.342

89.283

5.981.119.500

6.305.830.520

Source: Funding Agency for Rural Investments (AFIR)

From the analysis of the table above, it is found that during 2007 - 2013 there were
submitted a total of 147.734 projects with a total value of 18.294.125.218 euro, of which
95.438 were selected for funding projects (64.6%), totaling 7,123,651,342 euro (38.9%).
Of the projects selected for funding so far there are completed a total of 89,283 (93.5% of
the selected projects), which were paid a total value of 6,305,830,520 euro.
Of all the measures proposed by the National Rural Development Program 2007-2013, only
one specifically addressed the initiation and development of micro enterprises in rural areas
in non-agricultural areas, measure 312. This measure aimed to sustainable development of
economy by encouraging rural non-farm activities in order to increase the number of jobs
and additional income (AFIR, 2014). This was achieved through the creation of microenterprises and the development of existing non-agricultural sector in rural areas,
encouraging business initiatives promoted, especially by young people and women,
encouraging craft activities and other traditional activities and reduce dependence on the
agriculture (AFIR, 2014).
From the total projects submitted for funding, a total of 9.499 have been registered for
Measure 312, which represents about 6.42% of the total, placing it 4th in number of
projects submitted, after steps 141 - Setting up producer groups, 4.1 - The implementation
of rural development strategies and 112 - Establishment of young farmers. Also, the
measure dedicated to the foundation of rural microenterprises owned a significant share in
the structure of the projects selected for funding, with a percentage of 4.38% of the total.
Regarding the financial amounts paid so far by the beneficiaries of this measure, they rise
to amounts of 247,232,282 euro, which means a share of 3.9% of the total amounts paid by
the NPRD (PNDR).
Analyzing the data presented in Table 1 it is noticed that, on average, for a selected project
it has been allocated an amount of approximately 73,059.18 euro, an sufficient amount for
the establishment and development of micro enterprises in rural areas in fields such as
services, tourism, trade, transportation and others. However, the number of companies per
1000 inhabitants in rural areas, and profitability are much lower than in developed
European countries.
208

In further study, there are presented measures for financing the entrepreneurial initiatives in
rural areas through the new National Program for Rural Development 2007-2013.
3. Analysis of the National Rural Development Program 20142020
From the analysis elaborated for the implementation of the National Rural Development Pr
ogram in 2014-2020, it was found that in rural Romania, employment opportunities are red
uced, especially in the non-agricultural sector. Moreover, the rural population depends main
ly on agricultural activities giving them subsistence living conditions. The gap between rura
l and urban is shown by the low level of income and employment rate. The need to obtain a
dditional income for the population employed in subsistence and semi-subsistence agricultu
re is absolutely necessary, especially in the context of depopulation trend. At the same time
the need to stimulate entrepreneurial initiatives in rural areas is high and is consistent with t
he need to increase the recovery potential of rural communities and the standard of living in
rural areas.
Small business development is recognized as the most important source of jobs and to
obtain additional income. Addressing the need of increasing the quality of life in rural areas
can result from the development, by farmers small or their families, of small-scale activities
in the non-agricultural domain like agro-tourism and crafts. Also, investments in the
creation and development of service activities, especially production in rural areas will
serve the need to create jobs for the rural population and maintenance of the population in
rural environment (AFIR, 2014). Entrepreneurship in rural areas will be funded from the
new NRDP mainly through the measure "Support for the establishment of non-agricultural
activities in rural areas", which promotes the investment in creating and developing of nonagricultural activities.
In Table 2 it is presented the structure, by years, of the funds allocated by the National
Rural Development Program in 2014-2020.
Table 2 Annual EAFRD contributions in euro
Types of regions

2014

2015

2016

2017

Less developed
regions

1.143.033.279,83

1.141.530.073,61

1.139.995.970,62

1.138.430.319,73

Regions with G
DP/capita> 75
% of EU 25 av
erage

6.815.274,17

6.806.311,39

6.797.164,38

6.787.829,27

Total

1.149.848.554,00

1.148.336.385,00

1.146.793.135,00

1.145.218.149,00

Entrepreneursh
ip stimulation
measure

209

Types of regions

2018

2019

2020

Total

Less develope
d regions

1.136.836.057,43

1.135.157.289,9

1.133.170.724,78

7.968.153.715,99

Regions with
GDP/capita>
75% of EU 2
5 average

6.778.323,57

6.768.314,01

6.756.469,22

47.509.686,01

Total

1.143.614.381,00

1.141.925.604,00

1.139.927.194,00

8.015.663.402,00

Entrepreneurs
hip stimulatio
n measure

250.000.000,00

3%

Source: AFIR

Fig. 1 Financial allocation for National Program for Rural Development 2007 2013
and 20142020
From the data analysis presented in Table 2 and Figure 1, we can see that the financial
allocation of the National Rural Development Program in 2014-2020 is about 27% higher
than the amounts paid in the programming period 2007 - 2013. Regarding the measure
dedicated exclusively to stimulating entrepreneurial initiatives in rural areas is observed
that both in the programming period 2007 - 2013 and in the period 2014 - 2020 are given
financial amounts in proportion of about 3% of the total program.
But to increase the effectiveness of this measure, we believe that joint efforts are needed,
which will materialize in:
Strengthening the administrative capacity by training the staff responsible for impl
ementing measures at central and local level, and avoidance of delegating untraine
d users the tasks related to the domain. In this regard it is recommended to conduct
training courses in the field of EU funds and project management for all those resp
onsible for overseeing the implementation of projects or their development;
Increase transparency by providing more information in a more easily accessible w
ay for users;
Stimulating the public consultation process and the establishment of mechanisms f
or assessing the performance of regional management authorities;
210

Eliminating excessive bureaucracy both at inter-ministerial and inter-agency level

(central-local) and at beneficiary level;
Organize regular information sessions and local debate on accessing European fun
ds;
Reducing the time of evaluation, selection, contracting and payment project by hiri
ng efficient human resources that are certified in the field and in better coordinatio
n between public institutions involved;
Following the example of Poland, Romania should define and implement a
coherent administrative division and a decentralization process in terms of the
Structural Funds. This would lead to streamlining and acceleration in the process
of starting the projects, a better management of funds, with a positive effect on
efficient allocations and decreasing the period of financial reimbursement
payments to beneficiaries.
Conclusion
Following the study conducted the following conclusions can be drawn, regarding the
financing of entrepreneurial initiatives in rural areas:
in the period 2007 - 2013 the measure dedicated to establishing micro-enterprises
in rural areas obtained a significant share in the structure of the projects selected
for funding, with a percentage of 4.38% of the total;
for the period 2014 - 2020 there are assigned substantial financial amounts, for
measure dedicated to stimulate entrepreneurial initiative, representing
approximately 3% of NRDP.
We consider that for a relevant assessment of the effectiveness of measures to stimulate
entrepreneurial initiatives, it is necessary a further evaluation of the impact of these
measures in the post-implementation period. We propose to initiate pragmatic measures for
assessing the profitability of businesses initiated by using the NRDP measures, which
should aim at the turnover and profit growth and other indicators of the living standard of
rural residents.
Also, in order to stimulate entrepreneurial initiatives by young people in rural areas,
sustained and synergistic efforts are needed from educational institutions and business
representatives to guide the students and young graduates to entrepreneurship. An
important role in achieving this goal is the link between business and the university, there
must be given an increasingly higher importance to economic education sphere, which in
order to exist there must be a proper symbiosis between teaching and scientific content and
the competencies and skills required in the business environment at national and
international level (ADAPT. after Dabija et al., 2014).
Another starting point for achieving this goal is the creation and promotion among young
people of appropriate business practices, so that inexperience may not be a disincentive for
them and build the skills they hold, summarized in study by Ceptureanu and collaborators:
discipline, creative and innovative spirit, intuition, perseverance, competitiveness,
adaptability to market demands, dynamism in terms of communication, thinking, feelings
and mode of action (Ceptureanu, 2012).
Among the solutions proposed to be adopted, the most important and pressing issues, is
established however to be those who are considering simplifying the management and
coordination of accessing structural funds, greater transparency of the process and
providing more information to the interested public to access these funds, better
coordination between management and accelerating the decentralization process.
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An important factor in streamlining processes and increasing the competitiveness and

quality of projects is given by the quality of the human resources involved in managing the
Structural Funds, both at the public level and the beneficiary institutions. Therefore,
following the example of Poland and Ireland, it is important to focus on improving human
resources involved in these processes and provide adequate support for those interested in
sustainable business development in rural areas financed from NRDP and other operational
programs.
References
1. Nicolescu, O. si colab, 2012. Fundamentele intreprenoriatului suport de curs Scoala
ANTREMAN, Bucureti;
2. Nicolescu, O., Nicolescu, C. 2008. Intreprenoriatul si managementul ntreprinderilor
mici si mijlocii, Editura Economic, Bucuresti;
3. Popa, I. i colab. 2012. ntreprinderea n aciune Suport de curs Scoala ANTREMAN,
Bucureti;
4. Ceptureanu, S. i colab. 2012. Construirea abilitilor Suport de curs coala
ANTREMAN, Bucureti;
5. Nastase, M., Miller, L. 2012 Being enterprising Suport de curs coala ANTREMAN,
Bucuresti;
6. Reason, L.L, 2014. Preparing our students for an entrepreneurial life: are universities
part of the solution or part of the problem Proceedings of the 1st RSMS International
Management Conference, Murighiol, ASE
7. Consiliul Naional al ntreprinderilor Private Mici i Mijlocii din Romnia 2012
Carta Alb a IMM-urilor Bucurest, Sigma;
8. Departamentul pentru IMM-uri, Mediu de Afaceri si Turism, www.aippimm.ro;
9. Agentia pentru Finantarea Investitiilor Rurale, www.apdrp.ro
10. www.cnipmmr.ro
11. www.ec.eurostat.eu
12. www.pndr.ro

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THE ANALYSIS OF ABSORPTION RATE OF STRUCTURAL FUNDS FOR THE

2007-2013 PROGRAMMING PERIOD. THE CASE OF ROMANIA
Georgiana Raluca LDARU, Maria Cristina PDURE, Eugen PRIOTEASA
Faculty of Agro-Food and Environmental Economics, The Bucharest University of
Economic Studies; email: [email protected], Str. Mihail Moxa, nr.5-7, Sector 1,
Bucharest, Romania
Abstract
This paper focuses on EU structural funds assistance to Romania during the 20072013
program period and provides an overview of Romanias absorption. The EU funds allocated to
Romania under cohesion policy during the 2007-2013 programming period are significant,
respectively around 19,23 billion Eur. The financial allocation of structural funds in Romania
addresses both the Cohesion objective distributed among 7 Operational Programs and the
European Territorial Cooperation objective 4 Operational Programs of European territorial
cooperation of which funds will be managed jointly with other Member States. Romania, like
other countries, was severely affected by the global financial crisis and faster absorption of EU
funds was seen as a factor for alleviating the negative effects of the financial crisis.
Keywords
absorption rate, convergence, operational programs, priority axes, structural funds
Introduction
European non-reimbursable funds continue to remain a real and effective support for both
entrepreneurs and for regional economical and social development. (Florescu et al., 2013)
The objective of reducing economic and social disparities between the various regions of
Europe has a significant impact on various areas relevant for the future of any society, such
as: education, health, rural development, technology transfer, employment, enterprise
development, in order to achieve economic, legal and socio-cultural harmonization.
(Zaman and Georgescu, 2009) The EU funds are a great opportunity also for central and
local administration, in order to support the development of the communities from social
and economic point of view (Bragaru, 2011). The main indicator for evaluation of the
efficiency of the use of the EU funds is the absorption rate. The absorption capacity is
generally defined as the capacity of the countries/regions with low incomes to absorb
productively a large volume of foreign aid. The key factor underpinning increased capacity
to make use of the non-reimbursable support is related to the capacity of the
local/regional/central government to prioritize the areas/objectives for the granted aid.
(Burguignon and Sundberg, 2006) Absorption capacity can be defined also as the extent to
which a state is able to fully spend the allocated financial resources from the EU funds in an
effective and efficient way. This capacity is necessary for obtaining a maximum
contribution of the EU funds to the economic and social cohesion. (Vitek, 1999). The
absorption capacity can be assessed along three components: macroeconomic capacity,
financial capacity and administrative capacity of the member states to efficiently and
effectively make use of the EU non reimbursable funding. The exclusive focus on nominal
absorption rate, while neglecting the efficiency and effectiveness targets (in particular the
value for money objectives) of the EU funds, could make possible that the fast absorption
to have a detrimental effect on the quality of their projects, this being in particular the case
of most EU member states from Central and Eastern Europe. (Tosun, 2014)
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Results and discussions

The funds allocated to Romania under the Convergence Objective are used for achieving
specific objectives of 7 operational programs. Each operational program funds are used for
achievement of several priority axes, indicating the main areas of intervention under which
projects are to be submitted and funded. The European Commission financial allocation for
the Operational Programmes ensures a equitable coverage of several priority areas and
sectors for sustainable and equilibrated economical development in Romania. There are 7
Operational Programs (OP) under Convergence objective: Human Resource Development
OP; Administrative Capacity Development OP; Technical Assistance OP; Regional OP;
Environment SOP; Increase of Economic Competitiveness SOP; Transport Infrastructure
OP. The list of the OPs under Convergence objective is presented below:
1.The Human Resource Development OP HRD OP (PODCA) defines the priority axes
and key areas of intervention of Romania in the field of human resources, as well as the
tools and management issues to ensure a better use of financial assistance of the
European Union (EU) through the European Social Fund (ESF) to support the
interventions for increased competitiveness of human capital in Romania during 2007
2013 programming period. HRD OP is an important tool supporting investments in
human capital as a key resource underpinning the economic development and structural
changes. Moreover, investments in human capital will complete and will provide
sustainable long term productivity growth. HRD OP general objective is the
development and increased competitiveness of the human capital,by by linking
education and lifelong learning with the labor market and ensuring increased
opportunities for future participation on a modern, flexible and inclusive labor market
for 1,650,00o persons.
Specific objectives of the HRD OP are:
The promotion of quality initial and continuous education and training, including
higher education and research?
Promoting entrepreneurial culture and improving the quality and productivity at work?
Facilitate the integration of young people, and the long-term unemployed into the labor
market?
Development of flexible, inclusive and modern labor market?
Promotion of (re)insertion on the market work inactive persons, including in rural
areas;
Improving public employment services?
Facilitating access to education and to the labor market of the vulnerable groups.
HRD OP is addressing the following horizontal objectives: ICT and innovation, equal
opportunities, sustainable development, transnational and inter-regional approach;
projects promoting the horizontal objectives are particularly.
The HRD OP has 6 priority axes which address both system needs, as well as individual
school/university and teachers training needs, namely:
- Priority axis 1 Education and training in support to economic growth and
development for the knowledge-based society which aims to support the
modernization and increased quality and relevance of the initial and continuous
education and vocational training as to the needs of the labor market;
- Priority axis 2 Linking lifelong learning and labor markets which aims at ensuring
equal access for all persons to learning, reducing early school leaving, facilitating
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transition form school to labor market and to equip the employees, through continuous
vocational training, with the specific skills for sustainable integration in the labor
market;
Priority axis 3 Increasing adaptability of workers and enterprises;
Priority axis 4 Modernization of Public Employment Service - promotes a systemic
(national based) approach to support the diversification of the services provided by
the Public Employment Service, as well as increased quality, visibility and access of
these services, aiming to bring the public employment service closed to its final
beneficiaries;
Priority axis 5 Promoting active employment measures;
Priority axis 6 Promoting social inclusion is addressing the specific needs of the
individuals form vulnerable groups to increase their adaptability and the capacity to
get employed, by strengthening entrepreneurship and promoting the social inclusion
and equal opportunities in education, training and employment;
Priority axis 7 Technical assistance - which provides technical and financial
assistance for the management and control systems, with a particular focus on
increasing the managing authority and intermediate bodies capacity of planning,
monitoring, evaluation and control of ESF funding granted under HRD OP.

The HRD OP total allocations were of 15,303 million Lei (exchange rate of 30.09.2014).
Since the beginning of 2007-2013 programming period, there were 15.408 projects
submitted, competing for the budget allocating. There were 4,178 projects approved,
amounting for a total EU funding of 20.106 million lei. There were signed and
implemented 3,605 projects which succeeded in absorbing 28.7 % of the EU allocation
for the HRD OP for 2007 2013 programming period.
2. Administrative Capacity Development OP ACD OP (8) of which general objective is
to contribute to the creation of a more efficient and effective public administration to
socio-economic benefit of the Romanian society.
The priorities of ACD OP are addressing the specific objectives to support better and
more effective public policies and governance:
- Priority axis 1 Structural and process improvements of the public polices cycle
which contributes to the improvement and increased effectiveness of the decision
making, accountability and public policy formulation with particular focus also on
organizational effectiveness;
- Priority axis 2 Improved quality and efficiency of delivering of public services from a
decentralized basis aiming to support sectoral decentralization and delivery of public
services and improve the quality and effectiveness of the services provided by the
public administration (central and local);
- Priority axis 3 Technical Assistance for the management and control system of ESF
for ACD OP managing and intermediate bodies.
By objectives and the priority axes addressed, the ACD OP aims to address the
weaknesses identified in policy formulation and management at all levels of the public
administration (local and central) by focusing on key elements to strengthen
administration accountability and credibility, improve the decision-making process,
better regulation, increased responsibility and organizational efficiency for the public
administration, and support for effectiveness and improvement of decentralization for
improving the quality and efficiency for delivery of public administration services in
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specific priority sectors (e.g. education, health etc.). This OP finances mainly: research
and studies related to the public administration reform management of knowledge and
use of innovative technologies in public administration; studies and research related to
the best practices in EU of reforming public administration; training of the personnel and
equipments for public administration to support reform of public administration and
improvement of decision making and policy cycle management to support; support
(studies, research and training) for the development of training plans, organizational and
institutional strategies, including strategies for ICT use and digital competences, project
management skills; support (training and technical assistance) for the transfer of good
practice and to develop information systems to support activities of OP monitoring and
evaluation.
The ACD OP total allocations were of 915 million Lei (exchange rate of 30.09.2014).
Since the beginning of the 2007 -2013 programming period to 30 September 2014, there
have been submitted about 1,371 projects of which value is estimated at 3,691 million
lei. Only 456 projects had been approved with a value of EU funding of 1,184 million
lei. There have been signed and implemented all the 456 projects approved, which
succeeded to absorb 67.91 % of the EU allocation for the ACD OP for 2007 2013
programming period.
3. Technical Assistance OP TA OP (14) it is a program with an open call for projects
with continue submission from February 2008 to January 2015. The TA OP aims to
ensure a continuous process of implementation of structural instruments in Romania
accordance with the principles and rules of partnership, programming, impact
assessment and progress evaluation, structural instruments information, publicity and
communication, management, including sound financial management, monitoring and
control, according to the principles of shared responsibilities between the Member States
and the European Commission.
The general objective of TA OP is to provide support to the coordination process and
to contribute to the implementation and effective, efficient and transparent absorption of
structural instruments in Romania. The TA OP has two specific objectives: 1) provision
of support and adequate tools for the purpose of efficient and effective coordination and
efficient and deployment of structural instruments for the 2007 2013 programming
period and for the preparation for the next programming period and 2) ensuring
coordinated communication and dissemination, at the national level, of the general
messages concerning structural instruments and provision of specific support for the
Authority for Coordination of Structural Instruments (ACSI for the the implementation
of the communication action plan in line with the Structural Instruments National
Communication Strategy.
The achievement of the TA OP objectives was aimed to be reflected in the increased
absorption capacity and efficient use of structural instruments in Romania. For the
fulfillment of the TA OP objectives, the funding was allocated for three priority axis:
- Priority axis 1Support for implementing structural instruments and coordination of
the operational programs;
- Priority axis 2 Further development and support for the Single Management
Information implementing;
- Priority axis 3 Dissemination of information and to promotion of structural
instruments.
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The TA OP total allocations were of 749 million Lei (exchange rate of 30.09.2014).
Since the beginning of the 2007 -2013 programming period to 30 September 2014, there
have been submitted about 188 projects of which value is estimated at 1,361 million lei;
out of these, 164 projects have been approved and 155 of contracts were signed of a
value of 718 million lei. For the contracted and implemented contracts, the absorption
rate reached up to 39.49 %.
4. Regional OP ROP (10) has the strategic objective of supporting the social and
economic sustainable and, territorially balanced development of the regions of
Romania, in accordance with the regional needs and resources. The ROP focuses in
particular on the needs of lagging behind regions to make them more attractive regions
for living, visiting, investing and working. The ROP is aiming to support the creation of
15,000 jobs and to prevent the increase of regional development disparities (quantified in
terms of GDP/inh) by 2015. ROP has the following specific objectives:
Increasing economic and social roles of urban poles to support more balanced regional
development;
Improving accessibility of the regions, in particular accessibility of urban centres and
neighborhoods;
Increasing the quality of social regional infrastructures with focus on education, health,
social protection and emergency regional infrastructures;
Increasing the regional competitiveness as locations for business;
Increasing tourism contribution to the regional development. Balanced development of
all regions is expected to be achieved through an integrated approach, based on a
combination of public investment in local infrastructure, active policies to stimulate the
business activities and sustaining the capitalization of the local resources, structured on
the following thematic priority axes:
- Priority axis 1 Support for the sustainable development of cities - urban growth
poles, which is aimed at improving the quality of life and the creation of new jobs by
interventions targeting the rehabilitation of urban infrastructure and services and
development of support infrastructures for business and entrepreneurship;
- Priority axis 2 Improvement of local and regional transport infrastructure, aimed at
increasing the accessibility of regions, mobility of population, goods and services in
order to stimulate sustainable economic growth;
- Priority axis 3 Improvement of social infrastructure, aimed at creating necessary
conditions to provide to the population the basic services by improving the health,
education, social public safety and emergency infrastructures;. Priority axis 4
Support for the development of the local and regional business environment, which
is aimed at setting up and developing relevant regional and local business
infrastructures, rehabilitation industrial sites and supporting regional and local
entrepreneurial initiatives, in order to facilitate the jobs creation and sustainable
economic growth;
- Priority axis 5 Sustainable development and promotion of tourism, aimed at
supporting the valorization and sustainable development and promotion of cultural
heritage and natural resources with touristic potential, as well as at supporting the
improvement of touristic infrastructures to increase the regions attractiveness, the local
economic development and jobs creation;
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- Priority axis 6 Technical Assistance, is aimed to support effective implementation

ROP.
The ROP total allocations were of 15,460 million Lei (exchange rate of 30.09.2014).
Since the beginning of the 2007-2013 programming period to 30 September 2014, there
have been submitted about 9,850 projects, of which 4,875 projects have been approved.
There were signed 4,286 contracts of a total of 19,266 million lei. The expenditures
declared to the to the European Commission amounts up to 8,835 million lei, to which it
corresponds an absorption rate of 50.61%.
5. Environment Sectoral Operational Program P SOPENV aims at improving the living
standards and environment, with a particular focus as supporting the capacity to meet the
EU acquis. To this end, the SOP ENV aims at reducing existing gap between the EU and
Romania from the point of view of the quality and territorial and sectoral coverage of
environmental infrastructure. Specific objectives of SOPENV are:
Improve of the quality and access to water and wastewater infrastructure;
Development of sustainable waste management system;
Reducing the negative environmental impact and mitigation of climate changes caused
by the urban heating systems;
Protection and improvement of biodiversity and natural heritage;
Reducing the incidence of natural disasters affecting the population.
For the achievement of these specific objectives referred to above,, six priority axes were
defined:
- Priority axis 1 Extension and modernization of the water and wastewater systems,
to improve access to basic facilities of the water and sewerages systems, to provide
quality water in urban areas and to protect and to rehabilitate water sources in
Romania;
- Priority axis 2 Developing integrated waste management systems and rehabilitation
of historically contaminated sites, aiming at improving the waste management
systems in urban areas, reducing the number of historically contaminated sites,
increasing the coverage of urban population having access to quality waste collection
and management systems;
- Priority axis 3 Reducing pollution and mitigation of climate change by restructuring
and rehabilitation of the urban heating systems to achieve energy efficiency targets in
identified local environmental hotspots, aimed at reducing negative impact on the
environment and human health in the most polluted areas of old urban heating
systems, mitigating of the climate change, reducing pollutant emissions in the
localities envisaged for SOP ENV interventions;
- Priority axis 4 Implement appropriate Systems Management for Nature Protection
aiming to develop and implement efficient active management for protecting areas and
to preserve biological diversity and natural habitats,, with an emphasis on strategic
development in the long term;
- Priority axis 5 Deployment of adequate infrastructure to the prevention of natural risk
prevention in most vulnerable areas, with an emphasis on investments that provide an
adequate level of protection against floods aiming to contribute to the improvement of
economic, environmental, ecological conditions, to ensure protection and
rehabilitation of Black Sea shores etc;
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- Priority axis 6 Technical Assistance, which provides technical and financial support
for the planning, monitoring, evaluation and control processes, with a view of
effective implementation of SOPENV.
The SOP ENV total allocations were of 19,425 million lei (exchange rate of
30.09.2014). Since the beginning of the 2007-2013 programming period to 30 September
2014, there have been submitted about 694 projects, out of which 511 projects have been
approved. There were signed 485 contracts of which value amounts 21,924 million lei.
Expenditures declared to the to the European Commission amounts up to 7,173 million
lei, to which it corresponds an absorption rate of 36.93%.
6. Increase of Economic Competitiveness Sectoral Operational Programme IEC SOP
has as the general objective to increase productivity in Romanian companies, in
accordance with the principles of sustainable development and to reduce compared to the
average productivity of EU. The quantified target consists in reaching about 555 of the
EU productivity average by 2015. For the achievement of the strategic objective, the
following specific objectives were defined:
Consolidation and environment friendly development of the production sector;
Creation of a favorable environment for a sustainable development of enterprises;
Increase in the research and development capacities, stimulating cooperation between
the research, development and innovation institutions/centres and enterprises;
Valorization of ICT use in both the public sector (government) and the private sector
(citizens, firms);
Increase the energy efficiency, including the use of renewable energy, and the increase
of security of supply within the context of combating climate change.
In the conduct of IEC SOP there were defined 5 priority axes:
- Priority axis 1 Innovative and eco-efficient production sector, aiming to improve the
access of SMEs to finance and sustainable development of an entrepreneurial
activities;
- Priority axis 2 Research, technological development and innovation for
competitiveness, aiming to support the development of RDI capacities/infrastructures
and partnerships between universities/research institutes, RDI and enterprises,
technological development and innovation;
- Priority axis 3 ICT for private and public sectors, which aims at extending and
better exploiting the ICT use in both public and private sectors, including actions
related to the development and increased efficiency of electronic services and support
for e-economy;
- Priority axis 4 Increase energy efficiency and security of supply, in the context of
combating climate change, which aims at obtaining an efficient and sustainable
energy system, better valorization of renewable energy resources and supporting
diversification and interconnection of various networks to increase the security of
supply of energy;
- Priority axis 5 Technical Assistance, which has as objective of supporting the
development of an effective OP management, implementation, impact assessment,
progress evaluation and information technology development.
Since the beginning of the 2007 -2013 programming period to 30 September 2014, there
have been submitted about 16,175 projects of a total value of 85,556 million lei. There
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were 7,201 projects approved, of a total value of 15,010 million lei. 5.514 contracts have
been signed, of a total value of 13,177 million lei, to which it corresponds an absorption
rate of 36.40 %.
7. Sectoral Operational Programme Transport SOP - T (POR) has the global objective to
promote a sustainable transport system in Romania, which facilitate the safe, fast and
efficient mobility and movement for persons and goods with a level of service at
European standards, nationally, Europe wide, between and within Romanian regions in
Romania. The fulfillment of SOP T global objective is foreseen as the result of the
achievement of the following specific objectives:
Promoting in Romania of international and transit movements of people and goods;
Promoting efficient movement of persons and goods between regions in Romania, as
well as transferring from remote areas to the priority axes of transport by modernizing
the TEN T and national networks;
Promoting the development of a balanced transport system, by valorizing the
competitive advantage of each transportation modes;
Supporting the development of sustainable transport by minimizing adverse effects of
the activity of transport on the environment and improving the safety traffic and public
health.
Within the framework of the program SOP-T following priority axes are established:
- Priority axis 1 Modernization and development of trans-European transport priority
axes aiming to develop a sustainable transport system integrated in EU networks o
which has as objective in developing road, in particular motorways, rail, and inland
water infrastructures to o increase interoperability ;
- Priority axis 2 Modernization and development of the national transport
infrastructure aiming to develop a sustainable national transport system, which has as
objective of modernizing and developing of the national road, rail water and air
transport infrastructures to increase quality safety and speed of services for
passengers; actions eligible for funding targets, Danube ports, sea and air transport,
Bucharest underground system etc.;
- Priority axis 3 Modernization of the transport sector aiming at increased environment,
human health and passenger safety, which has as of implementing the sustainable
development principles in transport to minimize the adverse effects of transport sector
on environment and to improve the traffic safety on all modes of transport;
- Priority axis 4 Technical Assistance, which has as objective in supporting efficient
SOP T management, implementation, monitoring, and the activities of information and
publicity measures on SOP-T.
Since the beginning of the 2007 -2013 programming period, to 30 September 2014, there
have been submitted about 222 projects accounting for of 70,545 million lei. There were
118 projects approved of a total value of 17,693 million lei. There were signed 105
contracts of a total value of 13,686 million lei to which it corresponds an absorption rate of
34.33%.
The analysis of the evolution of the 7 OPs under the 2007-2013 Convergence objective
indicates a high interest of Romanian potential beneficiaries to access the funding available
under the structural instruments heading; the corresponding key indicators for the interest
of potential eligible are the total number of applications submitted (43,908 applications)
and the total value of the applications submitted (331,457 million lei) which exceeds by the
220

EU allocations. Obviously not all of applications submitted could receive financing and
that not all of them have met all the eligibility and/or evaluation and selection criteria to
receive funding from structural instruments. Of the total application submitted as referred to
above, there have been approved only 17,503 (a 40.80% rate of success) of which for only
14,606 projects contracts were signed and activities implemented. Most of contracts signed
were funded under were for the program IEC-SOP - 5,514 contracts (over 37.75% of the
contracts signed), followed closely by R-OP -4.286 contracts (29.35% of the contracts
signed) and HRD-OP - 3,605contracts (24.70% of all contracts signed).
The prioritization of key economic and social cohesion and development objectives and
needs of the Romanian authorities for the 2007-2013 programming period is reflected in the
financial breakdown of structural instruments by Operational Programs. Thus, the most
significant allocations are specific to transportation and environment infrastructures,
respectively to SOP-T (4,426 mil. Euro) and SOP ENV (4,413 mil. Euro), also regional
development and human resources development objectives benefited of significant financial
allocations - ROP with an amount of 3,966 mil. Euro and HRD - OP with an amount of
3,476 mil. Euro. The financial breakdown of structural instruments allocation by OPs was
also dependent, at a lower extent, by the estimated absorption capacity, based on the preaccession experience. The interest of potential beneficiaries of accessing funding under
various OPs is not directly dependent on the OPs available budgets Thus, the analysis of the
projects submitted since the beginning of the 2007-2013 programming period to the end of
September 2014 supports this conclusion. It is to be noticed a great interest for accessing
IEC - SOP funds, with a total of 16,175 of projects submitted of which value is about
85,556 million lei, followed by projects submitted under HRD-OP - 15.408 applications of
a total value of 69,854 million lei.
The absorption rate remains low. After a slower pace, significant increase in the absorption
rate may be observed between September 2013 and September 2014.
The significant increase of the absorption rate of the structural funds during September
2013 and September 2014 may be explained by: 1) specific project cycles (most of the
projects contracted between 2008 and 2013 have been implemented and completed and
therefore the expenditures declared were reimbursed), 2) measures adopted by Romanian
government to speed up the processing of reimbursement claims of beneficiaries and 3)
impact of advance payments for the project contracted at the beginning of the 2014 (the
increase number of contracts signed in 2014 is the result of the measures adopted by the
government to reduce the disengagement risks of structural funds allocations under
N+2/N+3 rule). The analysis indicate that the ACD - OP is the best performing OP,
respectively it has the highest absorption rate - 67.91%; this is particular case, since all the
456 approved projects of,139 millions lei were contracted and implemented. Also, due to
the measures undertaken by the Managing Authority, the R-OP had a positive ascending
trend of absorption rate which raised from 16.62% in 2013 up to 50.61%, meaning a three
time increase of the absorption rate in 12 months. It is to be noticed that, for the both best
performing OPs it is the public administration as main beneficiaries of the projects funded. .
On one hand the bureaucratic administrative procedures for processing the beneficiaries
reimbursement claims undertaken by the managing authorities and intermediate bodies
have generated a series of blocking problems that have led delays in processing the
reimbursement request and submission of payment claims to the European Commission;
also, non compliance of procedures with EU requirements led, in case of some OPs to the
suspension of payments by the European Commission. Regular, regular legislative changes
concerning, principally, the project implementing conditions, also explain low rates of
absorption; this is the case for the HRD-OP which has at 30.09.2014 the lowest absorption
221

rate (the absorption rate remains at 28.75%), with a less spectacular evolution, we may say
relatively constant from 16.94% in 2013 up to 28.75% in 2014.
Until 30 September 2014, payment claims have been transmitted to the EU statements of
expenditure of a total value of approximately 33 million lei (for which have been deployed
all the verification and validation procedures), with a result in overrunning the threshold of
35% (38.46%) for the current absorption rate, of the EU allocation funds rate in the period
of programming 2007-2013.
Over-contracting is a common measure undertaken by all managing authorities as
prerequisite for higher estimated absorption rate. Thus, the EU contribution to the projects
contracted by amounts for 87,728 million lei (approximately 19,.926 mil. euro),
representing approximately 103% of the total EU funds allocated for the 2007 - 2013
programming period. Still, for the reasons presented above, the value of payments (advance
payments and reimbursements) made by the European Commission, at 30.09.2014, do not
exceed 38,850,463,474 lei and represent only 43.53% of the EU allocations for the 2007
2013 period.
Conclusions
The absorption capacity of the European funds is not yet at the sufficient level, with many
and serious weaknesses which must be solved in order to prevent the occurrence during the
2014-2020 programming period of the further bottlenecks and the risks already encountered
in the 20072013 programming period. Training institutions should become more active in
training and retraining specialists for accessing and sound management of EU nonreimbursable funding, as prerequisites for effective and increased absorption and to support
economic and social progress. Neither that accessing the European funds does not end with
2013, but once again begins with the start of the financing for a new 2014-2020
programming period. For this period - to become more profitable for our country it is an
important contribution to be made by the establishment of an appropriate development
strategy aiming to make effective use of the EU money and to effectively integrate the
lessons already learned form this 2007-2013 programming period. It is the responsibility of
each country to match all directions of investment in a suitable policy to hasten the process
of modernization through a strategy which gives a new horizon and a different perspective
for the leverages of the European funds.
Complex issues concerning the use of the structural and cohesion funds, combined with the
valorization of the lessons learned and integration of best EU practices , should be key
issues underpinning a better management of funds for the 20142002 programming period.
To this end, Romania needs to accelerate its absorption significantly to avoid losing funds
from the next period, respectively 2014-2020.
Acknowledgement
This work was cofinanced from the European Social Fund through Sectoral Operational
Programme
Human
Resources
Development
2007-2013,
project
number
POSDRU/159/1.5/S/142115 Performance and excellence in doctoral and postdoctoral
research in Romanian economics science domain.
References
1
Brgaru, C. 2011. Absorption of European funds, priority objective for local
communities development, Review of research and social intervention, vol. 35.
2
Bourguignon F., Sundberg M. 2006. Absorptive capacity and achieving the MDGs
UNU WIDER, Research paper no. 47.
222

3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21

Florescu, D., Brezeanu P., Onescu L. 2013. Analysis absorption capacity of European
funds under the operational programme human resources development, Annals of the
University of Petro?ani, Economics, 13(1).
Paliova, I., Lybek T. 2014. Bulgarias EU funds absorption: maximizing the potential,
International Montary Fund. Working Paper.
Tosun, J. 2014. Absorption of Regional Funds, Journal of Common Market Studies,
vol. 52, no. 2.
Vitek, L. 1999. Welfare state development during the transition: the Czech Republic
case, 1999 in Caddy Joanne, Jabes J., Improving the relations between the
administration and the public, NISPAcee Publishing House, Slovakia.
Zaman, G., Georgescu, G. 2009. Structural fund absorption: a new challenge for
Romania?, Romanian Journal of Economic Forecasting, 1, page. 3
Administrative Capacity Development Operational Programme Applicant Guide,
http://www.fonduri-EU.ro/res/filepicker_users/cd25a597fd62/Doc_prog/prog_op/6_PODCA/PODCA.pdf
Human Resource Development Operational Programme Applicant Guide
http://www.fonduri-EU.ro/res/filepicker_users/cd25a597fd62/Doc_prog/prog_op/3_POSDRU/POSDRU.pdf
Regional Operational Programme Applicant Guide
http://www.fonduri-EU.ro/res/filepicker_users/cd25a597fd62/Doc_prog/prog_op/1_POR/POR.pdf
Environment Sectoral Operational Programme Applicant Guide
http://www.fonduri-EU.ro/res/filepicker_users/cd25a597fd62/Doc_prog/prog_op/4_POS_Mediu/01.04.2013/POS_Mediu_RO_29_03_2013_fina
l.pdf
Increase of Economic Competitiveness Sectoral Operational Programme Applicant
Guide
http://www.fonduri-EU.ro/res/filepicker_users/cd25a597fd2/Doc_prog/prog_op/2_POSCCE/POSCCE_Romana.pdf
Sectoral Operational Programme Transport Applicant Guide
http://www.fonduri-EU.ro/res/filepicker_users/cd25a597fd-62/stiri-am-oi/08-august2012/09/POST_versiunea_2_03.08.2012.pdf
Techincal Assistance Operational Programme Applicant Guide
http://www.fonduri-EU.ro/res/filepicker_users/cd25a597fd62/Doc_prog/prog_op/7_POAT/POAT.pdf

223

THE STIMULATION OF NEW JOBS EMERGENCE THROUGH SELFEMPLOYMENT IN ROMANIAN RURAL AREA
Robert-Adrian CANDOI-SAVU
Faculty of Agro-Food and Environmental Economics, The Bucharest University
of Economic Studies; email: [email protected], Str. Mihail Moxa, nr.5-7, Sector 1,
Bucharest, Romania
Abstract
The Romanian labor force market is dealing with an irregular transition period which
could be translated through the lack of the labor force on the labor force market. An
important factor for this negative increase is represented by the migration phenomenon.
Furthermore, Romania is dealing with a lack of jobs on the labor market in the rural area.
Nevertheless, 46% of the Romanian population is located in the rural area. In Romania, the
revenue level per inhabitant is very low in this part of the country. The main objective of
this study is to demonstrate that the Romanian people shouldnt try to immigrate to another
European state, when it has all the support from the EU funding programmes to start new
business and to create more and more new jobs on the labor force market in the rural area.
The main research method used to prove the theory of this study is the quantitative research
method, by gathering and comparing all the amount of data regarding the Romanian
population in European context provided by Eurostat, The National Institute of Statistics
and The Agency for Funding Rural Investments (http://www.apdrp.ro/). This study will
present the measures taken on the national level to counteract the migration phenomenon
in Romania. The study will also analyse the problem of the unemployment, in terms of
retraining and professional reconversion of free movement of goods, persons and capital
open with the accession of Romania to the EU's economic and social valences. Employment
is one of the most important channels through which economic growth can be translated
into poverty reduction and less income inequality (Perry et al.).
Key words
cohesion funds, labour force, migration, work productivity
Introduction
Starting with 2004, the efforts made for reforming the state institutions in Romania have
been intensified along with the EU integration. In 2007, the European Council confirmed
the accession decision for Romania. This period is being characterized, among others,
through dramatic changes of the number of employed people. The restructuring program
led to job losses without compensations by creating new jobs on the market at the economy
level. Romania was confronted with a significantly migration that culminated in 2008 with
a half of millions of people who chose to leave the country, according to the National
Statistical Institute data and this situation have created a deficit of job requests on the
market.
The migration wave of the labor force hides two phenomena: the young labor force highly
qualified who leave the country on the one hand and the emigration of the unqualified
workers who preferred to earn more money by working abroad on the other hand.
Hereinafter, this study will be concentrated on bringing the labor force remained in the rural
area in agricultural activities and also non-agricultural through the National development
program 2007-2013: proposed measures and their achievement regarding the labor force
224

from the Romanian rural area. Using the quantitative research method provided by
Romanian and European authorized institutions, we managed to identify the needs and the
possible solutions to solve the problems occurred in the past 15 years in the Romanian rural
area development. This study will outline the measures taken by Romania regarding the
sustainable development in rural areas, to what extent was applied and the immediate
pursued goal, increasing and developing the rural labor force market. With the integration
into the European Union, Romania follows, in terms of agriculture and rural development,
the principles of the Common Agricultural Policy (CAP), which is a set of rules and
measures that are primarily aiming the productivity increasing, ensuring a fair standard of
living of the population who works in agriculture, stabilizing markets, guaranteeing security
of supply, providing consumers with food at reasonable prices.
According to the European Council Regulation no. 1290/2005 regarding the common
agricultural policy financing, there were created two European funds for agriculture:
- European Agricultural Fund (EAGF) for financing marketing measures
- European Agricultural Fund For Rural Development (EAFRD) for financing rural
development programs
1. Rural development national programs 112 Measure
The European Commission vision regarding the information and knowledge transfer can be
found in the 2007 release Improving knowledge transfer between research institutions and
industry across Europe: embracing open innovation - Implementing the Lisbon Agenda.
This release provides that the knowledge transfer consists in a series of activities that aim to
collect and transmit knowledge, skills and competencies from those who generate them to
those who will turn it in economic results. The transmission of information and knowledge
as a process occurs at the individual level and organizational level. This paper is oriented
especially on the individual level that is very important for bringing the migrated labour
force back in the Romanian rural area. The transfer of knowledge involves several steps:
obtaining, processing and transmission. Also, this process can be influenced by several
factors: the knowledge nature, the opportunity and the motivation to transmit the
information, the environmental characteristics where the individual acts and the relations
between individuals.
Starting with 2007, in Romania were implemented several rural development measures.
One of the most important measures applied in the rural area was the 112 Measure and its
objectives were the followings:
- Improving and increasing the competitiveness of the agricultural sector by renewing the
leaders, without increasing the active population in agriculture
- Improving and increasing the competitiveness of the agricultural sector by promoting
young farmers and support the modernization process in accordance with the
requirements of environmental protection, hygiene, animal welfare and the safety at
work
- Increasing the farms revenues led by the young farmers
- Increasing the number of young farmers that starts for the first time an agricultural
activity as a farm leader and encourage them to make investments
The 112 Measure had even from the beginning problems with accessing the funds:
1. We can see from the objectives from above that this Measure refers only to the young
people that are located at some point of their life in a rural area the increasing of the
active population in agriculture was not wanted. We can say that this Measure acted at
the beginning in the young farmers from the rural area favour, aiming to stop the
225

2.

3.
4.

5.

6.

7.

8.

migration of the labour force phenomenon among the young people from the rural area
to the urban area or to other countries.
The young people (18-40 years) suppose to access the funds for the 112 Measure in 6
months from the moment of declaration of their farm to APIA, but not late than 12
months from that moment. If the 12 months term expired, they were no longer eligible
and they couldnt access anymore the 112 Measure.
The condition from point 2 was not applied if the farm had in the first years more than 6
UDE.
The fragmentation of the agricultural exploitations, for the purpose to create artificially
conditions to obtain the payments of the Measure, is against the FEADR (EAFRD)
regulation.
Another problem of the Measures conditions was that the young farmer had to prove he
worked with at least 12 month before for another farm (other than his family farm) and
that he worked 50% of his working time for the foreign farm. This condition is
outrageous from my point of view because basically brings back the slavery and it is
against the low. Because of this condition, on the Romanian agricultural market
appeared agricultural societies that in exchange of 100-200 euro were able to provide
a certification that was proving the 12 months labour without remuneration.
The young farmer that wanted to access 112 Measure had to prove that he participated
to a minimum 150 hours agricultural training. Also for this condition were founded
societies that were able to offer calcification certificate in the exchange of 250-300
euro.
The young farmer was obliged to elaborate and to respect a business plan. If the plan
wasnt followed, the young farmer could have been forced to return the first payment
from the fund.
After obtaining the payment approval according to the project plan the young farmer
was obligated to take professional training classes in management, primary accounting
or environmental ecology.
Table 1 112 Measure
M 112

2009

The amount allocated

per session (euros)

55.000.000

Maximum value of a
project (euro)

25.000

25.000

25.000

25.000

Number of projects
submitted

2.702

1.898

1.311

2.290

1.758

48.793.000
21.302

The number of projects

selected
Public value of the
selected projects (euro)
The average value of the
project selected (euro)

2010 session 1 2010 session 2 2011 session 1 2011 session 2

2012

TOTAL

120.886.096

287.312.496

40.000

40.000

4.083

3.865

7.974

21.833

1.138

534

182

986

6.888

35.483.000

22.194.000

9.339.000

6.840.000

28.844.000

151.493.000

20.184

19.502

17.489

37.582

29.253

61.426.400

50.000.000

Source: http://www.apdrp.ro/

226

Source: Data from table 1

Fig. 1 Submitted and selected projects

Source: Data from table 1

Fig. 2 The amount allocated per session vs. Public value of the selected projects
Although the program was prepared for 2007-2013, accessing of the EU programs started
in 2009 in Romania. Until then, its assumed that they tried to set the foundation of the
program implementation: adapting the program to the Romanian economic conditions.
For the years 2009, 2010 (first and second session) and 2011 (first session) the maximum
value of the fund offered by the program was 25.000 Euro. We can see from the table that
the initial number of submitted projects was 2.702 from which 2.290 were approved and the
medium value of a project was 21.302 Euro.
In 2010 (first and second session) was noticed a decreasing of the requests for accessing
these funds and also a decreasing of the medium value of the accepted project 19.502
Euro. The relevancy of this fact for the present study consists in the fact that in 2009-2010
were made 5.186 self-employments in the rural area and the main activity was the
agriculture. If we consider the terms of use of the funds (30% of the funds can be used for
personal interests) than each self-employee has a medium revenue of 171 Euro monthly.
We can state that, in theory, the people selected for receiving the fund are not thinking
anymore to emigrate. Its possible though to exist a migration from the rural area to the
urban area or vice versa, theyre presence on the plantation being absolutely necessary.
The 2011 year, from a personal experience, does not fit into the decreasing trend of 2009
and 2010. At that time, even from the beginning of the year, was speculated the idea that
the maximum value of an accepted project will increase. Due to the incertitude regarding
the maximum value of the accepted project, were created the next situations:
- In the first session of 2011, we had a total number of request of 4.083; considering the
incertitude, we had also a small number of selected projects 534 (13, 07%).
- The second session of 2011 is even more eloquent regarding the incertitude: from 3.865
submitted projects only 182 projects were selected (4,7%):
227

a) Normally, if we check the data from 2011, we could believe that the low number of
accepted projects is due to tightening the terms of selection, but its not the case here.
b) The conclusion is that the applicants for the funds do not economically depend of the
approval of their projects, a big part of them being already employees. We have here a
problem of substance regarding the granting of the fund:
- the condition of being employed for the person who apply for the fund does not exist;
this is a very important aspect of the problem because these funds could be and still can
be granted to some people that, although they represent a labor force, they havent
worked a day in their life.
The year 2011 is beyond any expectation: we have 7.974 financing requests, but a very low
rate of selected projects 12,36%. From the number of selected projects, we can say that
there are 986 self-employments in the year of 2011.
The idea of better revenue offered to a self-employee in agriculture will attract the labor
force into this domain of economics. We are witnessing a labor force migration
phenomenon to the rural area. This phenomenon will continue only if the labor force is
economic stimulated through some proper programs. The fact that in 2011 the request for
becoming a self-employee represented 57,54% of the total request from 2009-2011,
makes me believe that we are on the good way regarding the self-employment in
agriculture.
For 2013 the maximum value of the fund granted for a project is 40.000 Euro.
Unfortunately, we dont have statistical data to analyze the status of granting the funds and
the number of requests, but I do believe that there are over 10.000 requests for selfemployment in agriculture.
If initially we had a low number of requests, the present problem is: are we able to cover
the big number of requests with the funds offered now by the EU in the agricultural area?
Its still required an analysis of the efficiency regarding the use of these funds. The need to
create new jobs by self-employment, shown by the EU added value in the economy or only
contributed to the welfare of the moment for the self-employment?
2. Support for SMEs (Small and Medium Enterprises) in the rural area 312
Measure
The 312 measure "Support for the creation and development of micro-enterprises" is part of
Axis III - "Improving the quality of life in rural areas and diversification of the rural
economy" and has the overall objective of sustainable development of rural economy by
encouraging non-agricultural activities, in order to increase the number of jobs and
additional income.
The specific objectives of the 312 Measure refer to:
1. Creating and maintaining jobs in the rural area;
2. Increasing the added value for the non-agricultural activities;
3. Creating and diversifying of the services for the rural population provided by the
small enterprises.
The operational objectives of the 312 Measure refer to:
1. Creating small enterprises and developing the existing ones in the non-agricultural
sector from the rural area;
2. Encouraging promoted business initiatives, especially by young people and
women;
3. Encouraging of craft activities and other traditional activities;
4. Reducing the dependency degree in agriculture;
228

Table 2 Measure 312

M312
The amount allocated
per session (euros)
Public value of the
submitted projects
(euro)
Number of projects
submitted
The number of projects
selected
Public value of the
selected projects (euro)

2008

2009

2010

2011

TOTAL

180.367.201

79.317.487

106.097.092

89.000.000

454.781.780

23.690.221

156.906.704

209.086.360

82.016.477

471.699.762

144

936

1.932

2.553

5.565

114

473

966

851

2.404

18.277.418

88.216.084

106.319.465

82.030.556

294.843.523

Source: http://www.apdrp.ro/

Source: Data from table 2.

Fig. 3 Number of projects submitted vs. the number of projects selected (312
Measure)
Although this measure had a noble cause, the people who have benefited from these funds
have founded some hilarious companies in 2011: spa centres (20 units in the rural area),
cinema activities (2 units), with a public value of over 4 million Euro, considering that the
people from the Romanian rural area are in their third age. Here are some other eligible
activities for the funds offered by the 312 Measure: 22 car services, 20 medical/dental
clinics, 8 activities that are using IT techniques, 35 workshops/ halls, 370 non agricultural
machines, 10 warehouses, etc. This measure had determined the emergence of almost
11.000 jobs in the rural area with medium revenue of 1.000 Lei/month/employer, if we
consider that a big part of the projects had maximum points received for the subject
creating new jobs, a new job for 25.000 Euro invested.
3. European fund investments at the local government level
I. Sub measure 125a) The improvement and development of the infrastructure for
agricultural and forestry development and adjustment
- Component a1) Irrigation and other land improvement works
- Component a2) Agricultural infrastructure for access
II. Sub measure 125b) The improvement and development of the infrastructure for
forestry development and adjustment
229

III. Sub measure 125c) Rehabilitation and modernization works of the infrastructure
for preventing and protection against floods
Table 3 - Measure 125a
M 125 a
The amount allocated
per session (euros)
Public value of the
submitted projects
(euro)
Number of projects
submitted
The number of projects
selected
Public value of the
selected projects (euro)
The average value of the
project selected (euro)

2009

2010

2011

2.012

TOTAL

89.264.511

119.880.000

19.049.919

228.194.430

702.217.726

448.478.380

93.664.893

1.244.360.999

719

493

97

1.309

88

123

20

231

90.164.251

111.632.316

19.466.988

221.263.555

1.024.594

907.580

973.349

Source: http://www.apdrp.ro/
This study refers only to the 125a Sub measure. This measure could be accessed locally by
the villages mayors. As we can observe from the table below the total amount/year was
given for 97% of the eligible projects. Due to the fact that for the three years when the
sessions were developed we have 1309 submitted projects and only 231 accepted projects
for financing, shows that locally, in terms of infrastructure improving and developing
related to the development and adjustment of agriculture, it is necessary in the period 20142020 EU allocation of new funds. In a positive way, this measure influences indirectly the
labor force migration from the rural area by creating better labor force conditions. Although
this measure doesnt create new jobs in agriculture, it supports the creation of an attractive
environment for the active occupied population in agriculture. With all the benefits of this
measure, we have to highlight the fact that the people who benefit of these funds are the
villages mayors, who by auctions grant eligible project implementation to the companies
of their intimates.
Conclusions
Regarding the labor force migration phenomenon from the rural area we can state that,
although its hard to identify them, the people who have received EU funds or who were
employed by companies who received the funds didnt intent to emigrate anymore.
The reason for taking the decision to emigrate was eliminated by the safety offered by a
secure income and a safe and stable job. Ensuring the jobs without reducing them is an
essential condition to receive the funds for a project from EU. Basically, for three years
from the project implementation, dismissals are not admitted and in case of resignations the
employers are obligated to make another hiring for the opened position.
In case of self-employment, the individual is obligated to take some classes in management,
accounting or environmental ecology.
From reliable sources, we know that these classes werent made due to some problems
occurred between the Agricultural Minister and the professional change companies. Its
possible like in the next period Romania to face with a refunding for the received funds for
disregarding the funds granting conditions required by the project. We must keep this
situation under a careful observation.
230

The self-employment is essential in the Romanian rural area being the only way to a
sustainable development for the ecological agriculture.
By analyzing the data presented in this study, we can see that the non-refundable EU funds
for agricultural and non-agricultural activities were allocated, but they were used unequally.
Regarding the support for the young farmer by self-employment, the absorbed funds
represented 52,72% from the total available funds. The absorbed funds by the companies
from the rural area for non-agricultural activities represented 64,83% from the total
available funds. By making a simple calculation we have a total value of 295.757.753 Euro
of unabsorbed funds from both measures. If we consider the fact that EU grants 25.00 Euro
for creating a job for a period of three years, than we have an unfulfillment of 11.830 new
jobs in the rural area. The fact that the funding conditions werent satisfied and the fact that
it was created a deficit of new jobs generate instability of the revenue and for the
inhabitants from the rural area. Thus, the existent labor force from a certain period can
decide the emigration to certain areas or countries where their need for a job is being
received by the existent offer from the market.
Granting EU funds to create the infrastructure for easy access to the farmland, irrigations
and other land improvements is very important for attracting new investors and young
farmers in the rural area.
In 2010-2012, for the Measure 125a were allocated 228.194.430 Euro and the absorption
rate was very good 97%. For 2014-2020 there is a request of approximate 1.000 million
Euros for this measure. For this period it must be made sustained efforts to attract new EU
funds simultaneously with improving the granting conditions for those with good economic
initiatives. Attracting well trained young labor force in the rural area represents an essential
condition for sustainable development in agriculture. In the end, we are very well known as
an agrarian country.
Acknowledgement:
This work was cofinanced from the European Social Fund through Sectoral Operational
Programme
Human
Resources
Development
2007-2013,
project
number
POSDRU/159/1.5/S/142115 Performance and excellence in doctoral and postdoctoral
research in Romanian economics science domain
References
1. Boboc, C., Titan, E., Ghi, S., 2012. Labour market inequalities and economic
development, Economic Computation and Economic Cybernetics Studies and
Research, no 4/2012, ISSN 1018-046X
2. OECD, 2009. Promoting pro-poor growth: Employment and social protection.
http://www.oecd.org/dataoecd/63/8/43514582.pdf
3. The Agency for Funding Rural Investments. http://www.apdrp.ro/
4. The Ministry of European Funds. www.fonduri-ue.ro
5. The European Commission, 2007. Improving knowledge transfer between research
institutions and industry across Europe: embracing open innovation - implementing
the Lisbon Agenda

231

THE INFLUENCE OF EDUCATION FACTOR OVER THE STAGE OF

DEVELOPMENT IN THE RURAL AREAS REGARDING KNOWLEDGE
TRANSFER
Maria Claudia PREDA
Faculty of Agro-Food and Environmental Economics, The Bucharest University of
Economic Studies; email: [email protected], Str. Mihail Moxa, nr.5-7, Sector
1, Bucharest, Romania
Abstract
The concept of economy based on knowledge shows that the main development direction of
the economy, economic raise, creating new jobs and so improving humanwelth is
produceing, transfering and using knowledge. Economic development doesnt request only
a great number of people but also quality and training of those people so in the knowledge
based society the accent can stand on raising peoples qualifications, growing the
education level so that information can have continuety, so it wont be lost. Peter Drucker
considered that knowledge becomes the only meaningfull resource nowadays (Vreja, L.V,
The concept of knowledge organization in the current economic environment). But where
does Romania stand regarding the facilitation of knowledge transfer considering that we
are way below the EU average of GDP, and the investments of GDP in the education sector
are around 1 % and about 30% of population works in agriculture, struggles trying to
develop economic activities because of: lack of training, lack of informations regarding
bussiness opportunities, entrepreneurship, the low capacity of fund absorbtion, the old
forms of commerce, undervaluation, the big number of intermediaries that are involved on
the agricultural market, the lack of private and foreign investors, the lack of using
ecological technologies in agriculture and mismatch between suply and demand.
Keywords
knowledge-based economy; education; training; weak human resoruces
Introduction
The EU has realized that the world is changing and to remain one of the world powers it
does not need more people, but that those who are to be well prepared, thus concluded that
a society that continuously develops that is always informed and economically sustainable
to be in progress continuously can provide future knowledge not only viable, but safety can
not be surpassed, can not be ignored and secures again throughout history, a leader in
keeping the reins of the entire world. Thus the Lisbon Strategy, adopted in 2000, establishes
that the European Union must become the most competitive and dynamic knowledgebased economy in the world capable of generating sustained economic growth, a high rate
of labor employment and high social cohesion (Europe 2020). The Lisbon Strategy
principles were preserved, processed and enhanced to the next period, 2010-2020, so 2010
came into force Europe Strategy or Europe 2020.
Europe 2020 is the EU's growth strategy for the next decade. In a rapidly changing world,
the EU wants to become a smart, sustainable and inclusive growth. These three priorities
are mutually reinforcing and are able to help the EU and its Member States to achieve a
high level of labor employment, productivity and social cohesion. In practice, the Union
has set five major objectives - on employment, innovation, education, social inclusion and
232

environmental / energy - to be met by 2020. Member States have adopted their own
national targets in these areas.
Whether we realize it or not, we live in a knowledge based society, even if we are only at
the beginning of time. This new society is lifestyle superior in terms of quality which
involves intensive use of information in all areas of business and human existence having a
major economic and social impact. Knowledge based society involves public access to
information, as a way of working that require high knowledge thus amplified the possibility
of economic globalization, and increasing social cohesion.
Information and the ability to use it is a strategic asset for the development and survival of
any economic activity, the progress we are witnessing is clear evidence that the role of
knowledge in the global economy is the most important.
National economies today are based on international flows of goods, services, people, and
not the least investment ideas. An economic entity is now thought of as an institution
encompassing knowledge; this includes the application, operation, use and transfer of
information. The success of an economic entity can be even greater as intangible assets held
are used to maximum. A definition of these intangible assets given by Baruch Lev in
"Intangibles - Management, measurment, and Reporting" refers to non-physical sources of
future potential benefits enjoyed by an entity or, alternatively, all the economic entity exist
alongside monetary and tangible assets, these intangible assets were acquired by exchange
or domestically produced identifiable costs that have a finite life, have a different market
value of the holding entity and are owned or controlled by economic entity. The literature
shows the concept of intellectual capital, includes a range of activities, from collection,
codification and dissemination of information, the acquisition of new skills through training
and development to process (re)design of business. Intellectual capital is the sum of all the
knowledge that you have all the people in an economic unit which gives the entity a
competitive advantage in the market.
To participate at the market, one must know how to listen, read and be able to understand
what you read to use and enhance the information, but what happens in a EU country where
the level of living is well below the European average, and about 45% of the population
lives in rural areas, are employed in the primary sector and lacks, most of the times, these
basic skills to be considered participants based economy knowledge?
The European Union has made a number of objectives to be met to achieve smart growth.
The first objective is to increase public and private investment in research and development
to 3% of EU GDP thus creating better conditions for research, development and innovation.
In recent years research and development consumes no more than 2% of EU GDP, lower
position against the main competitors in the field, the USA and Japan, which allocates the
first 2.6% and 3.4% the second. Romania allocated to this area less than half the average
percentage of the EU, which positions it on before last place among the EU countries. The
second objective envisaged by the European Union refers to increasing employment rate to
75% for the population aged between 20 and 64, 2020 by the creation of favorable
conditions for employability, especially for women, young, elderly or unskilled and legal
immigrants. The third objective aims at better results in educational plan especially by
reducing school drop to less than 10% and increased to at least 40% of the share of
university graduates or equivalent in the population aged 30-34 years.
1. Literature review
People acted jointly in ancient times to achieve objectives such as food security, defense,
expansion, etc. As joint actions have been the native motivation for the state, the company
has outlined two broad categories of activities: administrative state (state power) and
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economic/commercial (which produce goods and services for society) (Lpuan, 2010).
Today seems to be a new category, the transfer of knowledge, which is the highest strategic
goal of the European Union, the EU wants to be the most competitive and dynamic
knowledge-based economy in the world capable of generating sustained economic growth,
a high rate of labor employment and high social cohesion (Europe 2020 Strategy), which
requires cooperation between people to be able to achieve. A population that owns the
information, owns the world's economic power and the composition of the EU population
in and people from rural areas, representing a particular segment of the population due to
vested customs and traditions, and new resistance and reluctance, which maintains always
(Istudor, 2006) specific features that have kept the authenticity and not need to lose for
them to integrate in the new knowledge economy, but to adapt to new structures favoring ie
cooperative structures. The new company is formed still differs from previous ones by
features such as the accelerating pace of change - which implies an increased speed of
response; rapid generation of knowledge needed to meet new demands and challenges; high
degree of diversification of products and services; lower costs of dissemination of
information and knowledge to the outbreak of modern techniques of communication such
as the Internet (Miron, 2012). Rural areas is not removed from the equation, and this
transfer of knowledge is at a high level, so the EU Member States there are a number of
tools that helps and encourages the spread of information (European Network for Rural
Development, Local Action Groups, etc.).
Cooperatives are structures that make a bridge between operators, between what conception
EU, national governments and research institutions and development as potential solutions
to current and future period, a period of aging population, declining birth rates, labor
employment and average age, underlying trend in rural areas (agri-food sector development
strategy in the medium and long horizon 2020-2030, 2014) and those who should be
information consumers in the rural, "peasants", for example, that alone can not be a force in
the food market and even less knowledge transfer market, but uniting cooperatives are
active players in both markets, thus achieving the EU's objectives of social cohesion and
job growth (Popescu, 2014). Given the quality of the intermediate, it collects, processes and
relays information and knowledge, and from the cooperative members. As part of his
position is twofold, being both consumer and provider of information and knowledge
(Miron, 2012).
Coopertaiste major structures have the advantage of having a direct link between
cooperative members, which facilitates the connection of knowledge and in-depth
understanding of their needs. Allow farmers near bridging the gap between them and
market information gaping (Piktialis & Greenes, 2008) in terms of communication, as the
two main actors, the producers of information (in person research institutes and authorities)
and information consumers (in person farmers) will not "talk" from high to low, the small
can not to process the information received, but from sea to sea, on a par (Popescu, 2014).
Since Romania joined the European Union in 2007, functioned instrument grant to support
the association and cooperation of any kind in rural areas so as to reduce regional
disparities by increasing employment, level of education, improving infrastructure and
living standards, leading indirectly increases the ultimate goal of developing the knowledge
economy. In the period 2007-2013 were awarded funds for both setting up producer groups
and local action groups (PNDR 2007-2013), both associative and newly created structures
results led to the conclusion of experts to provide greater funding for creating cooperative
structures and to support education (PNDR 2014-2020) the new programming period.
I believe that cooperative structures are the best solution for ensuring achievement of EU
objectives and rural integration in knowledge transfer market.
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2. The level of education in Romania as a european country

According to the work Labor market prospects of Romania in the context of Europe 2020,
made for the National Commission for Prognosis, the structure of employment by education
level Assn acquires increasingly higher, especially in the current period, the training is
considered as a key progress. The level of education is the highest form of education a
person exempted in accordance with International Standard Classification of Education in
1997, which translates to a diploma or certificate, where there is no certification is
considered only completion full attendance. When general education classes are followed
by education or training, they will be taken into account.
(Labor market prospects of Romania in the context of Europe 2020, Albu, Caraiani,
Iordan).
Population structure by level of education are taken into account conventional three groups:
primary level, including pre-primary education (kindergarten), primary and lower
secondary education level, secondary level includes post-secondary non-tertiary education
and upper secondary and third level education tertiary. Number of students in the European
Union - 27 ISCED education standards compared to Romania is structured in the following
table:
Tabel 1 The number of students in Romania and EU between 2007-2012
Area/Year
EU 27
Romania
Amount of
participation
(%)

2007

2008

2009

2010

2011

2012

107434222

107512143

107555952

108004781

108304870

4488250

4553850

4532082

4401070

4228067

3988996

4.18

4.24

4.21

4.07

3.90

Source: http://appsso.eurostat.ec.europa.eu/nui/show.do?dataset=educ_enrl1tl&lang=en
If we consider the population of the EU27 and Romania, in the year 2012, there is a
percentage of Romanian population in the total population of 4.02% EU (Eurostat data
processing), but because there are no data on the total number of students Union this year, I
will compare the data available in 2011 when the Romanian population share in total
European population is 4.03% (Eurostat data processing).

Source: table 1
Figure 1 The percent of Romanian students in the total of European students
As can be seen in figure 1, although it is a downward trend in the period 2008-2011, the
share of Romanian students in all European students that year is 3.90%. The figures are
aproximately equal, so we might say that Romania is a country that places great emphasis
on higher education and promotes it, but even so, only a share of about 21% of students in
235

total Romanian population can say the same thing, but this does not show, in fact, than the
plight of the disparity in living standards and education, which are closely interlinked, from
Romania, especially if we consider urban and rural residence.
If we consider the data provided by the National Institute, the statistical number of
graduates on the three levels of study, and by area of residence is:
Tabel 2 Graduates by levels of education and residence in Romania
Years
Level of education

Residence

Year 2007

Year 2008

Year 2009

Year 2010

Year 2011

UM: Number of people

Total

Total

Urban

Rural

Primary

Total

Urban

Rural

Secondary education secondary first cycle

Total

Urban

Rural

Secondary education
second cycle

Total

Urban

Rural

Higher education

Total

Urban

Rural

784,958

739,432

704,172

674,713

536,747

660,726

617,380

583,803

545,878

436,886

124,232

122,052

120,369

128,835

99,861

205,178

201,693

196,721

227,130

182,609

111,745

108,011

104,269

117,771

96,047

93,433

93,682

92,452

109,359

86,562

205,178

201,693

196,721

227,130

182,609

111,745

108,011

104,269

117,771

96,047

93,433

93,682

92,452

109,359

86,562

331,289

303,014

294,668

236,893

192,091

301,083

275,424

267,679

218,417

179,613

30,206

27,590

26,989

18,476

12,478

232,885

214,826

191,291

186,900

136,671

232,690

214,700

191,174

186,740

136,571

195

126

117

160

100

Source: www.insse.ro, tempo online, 29.04.2014

We can easily see from the following graph that the total graduates in Romania decreased
from year to year, both in rural and urban areas.

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Source: table 2
Fig.2 Number of graduates in 2011 by level of education and residence
Marc is given that the Romanian population follows a ratio of about 1 area:3 areas, the
enormous difference between the number of graduates in urban and rural areas. It can be
said that in knowledge economy and continuing education, rural Romanian was completely
forgotten, pushed aside, and the few students in these areas are not part of the conditions
needed to study and contribute to the development of disadvantaged areas and that of the
entire country as a member of the European Union. Given a very simple and pragmatic
thinking we realize that we can not rely on these students or students to stay and help
develop their areas of residence since their constitutional right, that education was respected
within minimum as well as the right to health system performance, and even the right to
life, because the environmental conditions of living very low in rural areas, this right can be
considered to be violated.
3.The influence of education in rural development
To present a clear statement of the level of development of all Romanian villages, Prof.
Dumitru Sandu, along with other collaborators have developed a methodology for
calculating the "Index of development of the municipality" (IDC), index that takes into
account a series of ten statistics which describe the degree of development of a joint.
Values and the calculation of the index acestiu shows where Romania ranks in terms of
development and level of detail because common are hot spots that should act as much in
order to address the low level of our country. In the construction and validation of IDC a
large number of indicators have been taken into account provided by the National Institute
of Statistics, Ministry of Interior, indicators describing the quality of life in most of the
municipalities of the country in all respects. IDC construction were taken into account the
following indicators:- Housing infrastructure comprising living space per dwelling (m2),
domestic gas consumption per household (m2), domestic water consumption per capita in
the public system;Public Financial Resources comprising revenues from own sources per
237

capita capital expenditure per capita, public services and development expenses, housing,
environment and water, per capita;Capital individual economic family - which takes into
account the number of cars per 1000 inhabitants in the village (residing in the
village);Human Capital Community conditioned age - life expectancy at birth, infant
morbidity rate and average population age 15 years and over in its composition.
And for the validation of IDC there were used other 10 indicators: The development of the
village in 2002, aggregation index values DEVSAT02 (Score represents the factorial of
four indices: 1) human capital village (stock education employees per thousand inhabitants,
the proportion of people employed in agriculture); 2) biological capital village (number of
inhabitants, the village population share common population, the proportion of working age
population); 3) development of housing (housing with running water share, share housing
with sanitation, living space per household); 4) The degree of isolation of the village
(village administrative type and distance to the nearest town); Education in the common
stock; Distance from the village center joint to the nearest town; Location village near a
European road; Total fertility rate;Estimated poverty rate at level of common; Population
growth rate in 2008 compared to 2002 = increase of population with permanent residence in
the village for 2002-2008 to 1,000 people in 2002;New housing built in 2006-2008 to 1,000
people in 2007; Arrivals residing in the village in 2006-2008 to 1,000 inhabitants; Flotate
net migration rate in 2008 on the difference between stable and resident population per
1000 inhabitants, the legal population.
Although it may seem insignificant, the stock of education at the village level, as can be
easily inferred from studies of D. Sandu, has a strong influence in complementary areas of
development, so that a low stock of education in rural areas, leading a low participation rate
and jobs outside agriculture also villages with the lowest stock of education is in remote
areas, away from roads and modern infrastructure. Infant mortality rate is another factor
that seems, at first glance, to be influenced by the stock of education, but in fact much
deeper clades, such as the stock of education is higher, the infant mortality rate decreases if
the population of a town is better prepared, then you will be able to cope with infantile
disease, the proximity of the health system, and the ability to prevent them. And finally
stock directly affects education and undeniable income level of a community.

Source: Development communes in Romania, Sandu D., Voineagu V., Panduru F.,
Bucureti, 2009
Fig.3 The average level of commune development by the populations stock
of education
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Agriculture and the low level of education are leading directly to low income and the rural
communities are represented by older population with low levels of education and
agricultural occupation, so that the stock of education is low, so is the income, which
threatens the quality of people's lives.
It can be said that the areas in which the stock of education is low, with a population mainly
employed in agriculture, which are far away from roads and up infrastructure and a low
income level are poor areas, and the phrase reverse is equally true, poor areas as described
above features, such was made in Romania Poverty Map, it looks like this:

Source: World Bank calculation based on the data provided by the Population and Housing
Census 2011 and EU-SILC 2011
Fig.4 The poverty risck rate by countys
It can be seen from the map that Moldova is the poorest region of Romania, followed by
Oltenia; the only problem is that Bucharest has a poverty rate than the rest of the country is
under the poverty or social exclusion.
4.Education and ocupation the main objectives of Romania
The first objective to adjust the issue of social inclusion in the EU are the employment and
education in Romania is much deeper problem, the number of people without a job come in
a greater proportion of rural where and preparedness is weak, so that in the last years the
employment situation is shown in the next figure:

Source: www.insse.ro tempo online, 7.05.2014

Fig.5 Number of working persons

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Source: www.insse.ro tempo online, 7.05.2014

Fig.6 Number of unemployed
It can be seen that the total number of unemployed in rural areas is only following an
upward trend, although in recent years agriculture has been the branch that saved Romanian
economy, fever refurbishment and new equipment that increases productivity are making
those responsible to overlook the fact that many people with no other qualification than
agriculture lose their jobs and wealth instead of increasing the area actually creates pockets
of poverty, which in time become increasingly difficult to "break".
Of the total number of unemployed, the highest proportion (42%) are high school graduates
cycle, they show great potential in several ways, primarily their number if they could be
employed in the labor market unemployment would decrease significantly, and secondly
they are not completely needucai and qualifying courses may be directed to vacancies, but
for which no staff, not least the huge wave of unemployed may become promoter
qualification and continuous training and next arriving in their situation may follow suit,
especially if we consider the power of education that has experience.
By level of education, rural areas, although with a population of 1:3 in total, bringing 82%
of the unemployed without any form of your education, even if their number seems small
(2297 people), we can not be sure that they only because there are many people who do not
want to answer inquiries INS and are not recorded in any databases authorities. High
percentage of unemployed in rural areas, 47% and 54%, occurring on levels of primary
education, secondary education, respectively, a rate of only 14% is the university graduates,
but given the small number of total graduates this cycle, belonging to rural areas is
understandable that the number of unemployed is low.
If we carefully observe the number of employees by level of education and area of
residence in urban see that most graduates are employed by higher education cycle and
fewer free trials, while in rural areas the proportions are reversed, the senior high school
education is the only stage where the two media engages in roughly equal proportions.
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Source: calculation based on www.insse.ro, tempo online, 07.05.2014

Fig.7 The percentage of working graduates
Since Dumitru Sandu made calculations for the index Development communes (IDC) so
was calculated, by the same author, the IDSL - index of social development town, the
advantage is that is applicable to communities and cities. The index has calculated values
for
all
municipalities
and
cities
of
the
country
in
2008
(https://sites.google.com/site/dumitrusandu/bazededate), IDSL values in the chart we can
see a very large scattering of the 3180 localities studied.

Source: https://sites.google.com/site/dumitrusandu/bazededate, 29.04.2014

Fig.8 IDSL
Ordinates were made IDSL values calculated from the average values of 66.15, we see a
higher concentration of localities are below average, as represented on the poverty map,
Dumitru Sandu's calculations show that the Northeast is the poorest in Romania, followed
by some areas of the South, the highest form of development is in Ilfov County - Voluntari
Corbeanca and city in Timi County - Dumbrvita, in Predeal and Buteni, which are the
only places that exceed the threshold 100 units, and Bucharest has 100 units. For Bucharest
we do not need explanations because it is Romanian development pole; for Corbeanca and
Voluntari, as well as for Dumbrvia explanations are simple, highly trained people with
good jobs, ie tending towards EU goals, as each of us wanted to withdraw from the bustle
of the city and thus have moved their families in these communities, we have raised the
standards to which they were accustomed, even more, the same thing is possible in
mountainous localities, urban population wanted an oasis of tranquility so brought home
comforts and conditions, the locals also switching to them, which is evidence that the
development is a slow process, but it can be learned, especially by example and financial
support of the European Union.
Development Index of the municipalities in counties points out a harsh reality but a reality
that leaves no room for optimism or projects delayed for various reasons, Botosani and
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Vaslui are the least developed, with a value of IDC only 35, no other counties are much
better, but Sibiu (67), Brasov (67), Timis (69) and Ilfov (91) that rise above average overall
common parts of the country. Because only 4 of the 42 Romanian counties may appoint
developed in terms of the 10 indicators that make up the IDC situation is more than
alarming and viable solutions to be implemented quickly. There is no time to think about
their own solution, because so far all have been unnecessary, the collages and adaptations
of the solutions seen on TV, considering the example of other countries that have been in
our situation, but managed to get off the last places in the negative charts. EU adopted these
methods by studying and substantiating a long-term plan in Romania, we can become from
a country with a developed growth potential, a full member of EU.
Conclusions
Romania is one of the last places in the European Union in terms of level of development,
our students are well prepared, and the whole world is in an era of knowledge transfer, the
age we lose again start because the already lost and not yet recovered.
Romania is a country with agricultural industrial profile in the industry was gradually
dismantled, and agriculture still weak performance is breath which saves the economy
every year.
Although we are promoters of knowledge the general population is not sufficiently
prepared to face the transfer of information that can process long enough to renew and to
send them on.
The proportion of Romanian students in all European students is equal to the proportion of
the total Romanian population in the European population, but the proportion of rural
students in total Romanian students is much lower.
Romania must reduce the degree of social exclusion across the country by increasing
education and employment; they are factors without which the EU can not achieve the
objective.
Another dangerous phenomenon encountered disparity Romania is not uniform all over the
country are developed, so that we find highly developed areas where the standard of living
is high, citizens have access to the education, health and infrastructure, and areas that
oppose any idea about the quality of life that we might have.
Education system has to be restructured to meet the new challenges of the modern world
and the needs of people to work and to raise living standards.
The largest pockets of poverty are located in Botosani and Vaslui Countys in the NorthEast of the country, they have the lowest development index communes of only 35.
Living standards influence the education of an area, but if not initially invest in education
so that the educated may work, bring ideas and technology and so, create new jobs and
raise living standards.
Without equal development of municipalities we can not speak about active participation in
the knowledge economy of the twenty-first century, the development is a cornerstone of
public education.
References
1. Lucian-Liviu Albu, Petre Caraiani, Marioara Iorda Labor market prospects of
Romania in the context of Europe 2020
2. Vreja, L.V The concept of knowledge organization in the current economic
environment

242

3.

http://adevarul.ro/educatie/scoala/reforma-poloneza-reteta-succesului-testele-pisa1_52ece9e5c7b855ff56fc1968/index.html
4. http://www.capital.ro/harta-saraciei-in-romania-190643.html
5. http://cis01.central.ucv.ro/proiecte/vp-2004-05/files/R4-rural-population-endangeredby-social-exclusion.pdf
6. http://www.edu.ro/index.php/articles/c980/
7. Europe 2020, http://ec.europa.eu/europe2020/index_ro.htm
8. www.insse.ro
9. https://sites.google.com/site/dumitrusandu/bazededate
10. http://www.gnac.ro/politici-europene/politici-europene-in-domeniul-calitatii-educatieisi-formarii-profesionale/
11. http://siteresources.worldbank.org/INTROMANIAINROMANIAN/Resources/Poverty
AssessmentReportRom.pdf
12. http://www.zf.ro/zf-24/avem-cele-mici-investitii-elevi-europa-statul-roman-cheltuieclasele-i-iv-pana-liceu-cate-500-euro-an-elev-polonia-finantarea-doua-ori-mare-iarnorvegia-cinci-ori-11907988

243

THE IMPACT OF LIBERALIZATION ON THE ROMANIAN LAND MARKET

SALES
Snziana Elena BUTNARU
Faculty of Agro-Food and Environmental Economics, The Bucharest University of
Economic Studies; email: [email protected], Str. Mihail Moxa, nr.5-7, Sector
1, Bucharest, Romania
Abstract
The purchase of agricultural land holdings leads to farming efficiency and performance.
Because agricultural land is one of the main strategic resources in land market, the state
must act with great caution and responsibility. In this context 2014 marks the liberalization
of agricultural land market in Romania for potential investors from Europe under the
Common Agricultural Policy. Therefore, as a revealing and in this article, there are quite a
few reasons to believe that the acquisition of agricultural land is at least a subject of great
interest both for farmers Romanian, and especially for foreign investors. What I proposed
to a further importance it is the identification of the correct functioning of the land market
and the impact they have certain basic elements of which the most relevant is the lack of
land register. It also will draw attention to the negative impact that can be generated
socially, through irresponsible sale of land to new owners who will not first take account of
cultural, crop rotation, environmental zoning and overall production. At the end of the
paper I have reserved the right to outline some proposals that I hope they are going to
improve the current situation. The present paper analyses the impact of liberalization on
the Romanian land market sales. The goal is to identify the effect of land liberalization in
the context in which foreign buyers are allowed to purchase land in Romania, since 2014.
In order to achieve this goal, an analysis of Romanian legislation is done in the contents of
this paper, in particular an analysis of the law 17/2014.
Keywords
land market, free movement, cadastre
Introduction
The land market is an objective component of the free and democratic market economy.
Operating rules of the land market are broadly similar to those of any other economic good
market, but there are specific elements. In the first place it is national, the land, as a
material good is special which cannot be territorial deployed, multiplied or manufactured
and it is a vital element in the existence of a nation. In the second place it is no price of land
in general, each field or plot with its price.
,,The land as principal and irreplaceable agricultural good requires special attention
(Popescu, 2014).
The importance and value of land increases as the development of the economy is higher.
Under this criterion the land market in our country behave as such, because the
development of the Romanian economy is lower compared to developed European
economies.
The main problem of the land market in Romania is the lack of cadastre or an owners
database and lots of coordinates and other. In Romania there are a few common cadastres
where all the work is completed, and those are in Transylvania and Banat, but never in
Moldavia and Wallachia.
244

Currently in Romania there is no updated situation onto the unincorporated land cadastre,
although in the last 20 years there have been a number of fundamental changes in the
structure of land.
Last cadastre made before 1989 are worthless because they targeted agricultural lands
owned by the state farms and the collective farms disbanded after 1990 once with the
restitution by the former owners.
A main cause regarding the cadastre failure and the automatic tabulation land and their
commercialization is the lack of heirs documents who received land under the restitution
laws.
Cadastre corrects "facts on the ground with the facts on paper" because the ownership from
the property titles is not always the same as the real one.
The agricultural fund cadastre objectives are those of providing information on the quantity
and quality of agricultural land in order to guide agricultural activities and to solve financial
problems, namely the establishment of taxes, the insurance, renovations, investments,
protection etc.
Some of the most important issues facing our country in terms of property is the
encroaching and overlapping of titles.
Cadastre recognizes the ownership and determines the size of each plot in terms of borders,
positions, neighbors, helping to establish the category of use, taxes and a fair price of each
parcel. Cadastre is the most important economic and non-economic action of which is the
movement of land ownership, namely: buying, cooperation, association, leasing, renting,
etc. Lack of cadastre maps hampers the consolidation and concentration of land ownership,
and the selling of the land.
1. The evolution in time of the agricultural land transactions
After 1990 the first actions taken on land movement was temporarily prohibiting the
alienation of land between living persons. (according to Law no.9/1990).
In 1991 the Law 18 founded the legal circulation of land. So the private land can be
acquired and disposed of by any of the ways established by civil legislation thus remaining
in the civil circuit. According to this the private land can not exceed 100 ha of agricultural
land in arable equivalent, per family, under penalty of nullity of the act of alienation.
In a new political context, starting with year 1996 the law 18/1991 was improved. First by
approval of law 54/ 1998, which implies increasing the limit on land ownership to 200 ha.
Adopting low no 247/2005 brought benefits consisting in approaching the land transactions
on a unitary basis, regardless of their destination: agricultural or forest land. Also the preemption right is completely eliminated.
After these legislative changes the town halls were no longer obliged to keep the evidence
of transactions with extravilan agricultural land areas, and the Ministry of Agriculture could
no longer centralize the data on the land market.
To reduce fragmentation properties the law provides exemption from stamp duty for land
alienation made to strengthen plots and also for the persons entitled to obtain the
agricultural life annuity.
2. Legal framework
In the Treaty of Accession to the EU land as market liberalization has provided the law
which was enacted this year in the law 17/2014.
This law opened doors to individuals who can buy land in the country the same conditions
as Romanian citizens without any restrictions.
245

In this context, the law does not facilitate the acquisition of agricultural land by Romanian
citizens towards European investors.
Moreover European buyers benefit of other credit terms with much lower interest rates,
which encourages and provides competitive advantages to potential investors in Romania,
with a priority to purchase and it exceeds the pre-emption legislation.
Freedom to land has a major impact on the functioning of the market land mechanisms
because the generous offers of the European buyers far outweighs the financial resources of
Romanian farmers, especially people living in rural areas.
According to Law 17/2014, which entered into force on April 11 th, the ones who can buy
agricultural land outside the city in our country are:
- Romanian citizens;
- Citizens of EU countries;
- Citizens of countries who are part of the European Economic Area Agreement (EEAA;
includes Norway, Liechtenstein and Iceland) or the Swiss Confederation;
- Stateless people residing in Romania, an EU member state, in a state of ASEE and the
Swiss Confederation;
- Legal people having Romanian nationality;
- Legal people having the nationality of an EU Member State, of the states who are part of
the EEAA and the Swiss Confederation.
Citizens and legal people belonging to an EU Member State or States which are party to the
EEAA or the Swiss Confederation can purchase agricultural land in Romania in terms of
reciprocity.
According to MARD Order no. 719/2014, for the sale of lands, the seller submits the
request for the display hall offered for sale along with other supporting documents. Then
the town hall transmits to the main structure or to the territorial structures, if appropriate,
fill all documents mentioned above and the list of pre-emptors within 3 days from
completion date.
Within 30 days from the posting of the sale offer at the town hall, under penalty of
forfeiture, any pre-emptive holders wishing to exercise this right at the town hall should
record the offer according to law no 17/2014.
The seller chooses pre-empt potential buyer in accordance with the procedures from art. 7
and communicates to the town hall. The town hall transmit to the main structure or
territorial structures, if applicable, an identification of a potential pre-empt chosen by the
seller, together with documentation.
According to Law no. 17/2014, if the land is purchased by a pre-emptor, we need a final
opinion in order signed the contract to be signed. This opinion is issued by the ADS's
territorial structures for lands with an area up to 30 hectares and the ADS for lands with an
area over 30 hectares.
Specifically, ADS verifies if the pre-emptor meets legal requirements within 5 working
days of receiving data and documents on sale, under the new law to purchase land outside
the city. The control result is communicated by a notice, positive or negative, within 2
working days from the deadline .
According to the application of Law no. 17/2014, the main structure or territorial structures,
issued its final opinion / adverse opinion.
If no pre-emption purchase not its intention, in legal terms, the sale is free, according to the
application of Law no. 17/2014.
Land transfer both by sale and the rent is made difficult because over 50% of agricultural
land is not registered in the cadastral register, the land law was applied incorrectly,
generating occurrence of several types of property documents for the same parcel of land
246

but with different owners, and not least because of high costs to achieve cadastre for
smallholders.
At present the total area of 13.5 million ha of agricultural land that it owns Romania, about
9 million ha is arable. These lands are generating the most interest from buyers. For this
reason all agricultural policies that measures in this field, must follow and focus primarily
on agricultural land use.
According to INS statistics held by the end of 2011 the agricultural area owned by foreign
legal persons was about 470,000 ha area and at the end of 2013 amounted to about 800,000
ha owned.
This fact raises a question mark and this is that the areas are not known exactly legal basis
considering that transactions must take account of the fundamental provisions of the
Constitution, namely:
-Art 1, paragraph 1:,,Romania is a national, sovereign, independent, unitary and indivisible
-Art. 3 paragraph 1:,,territory of Romania is inalienable, we can not sell or mortgage.
Or, purchase of agricultural land and forestry, judgment within the boundaries of
constitutional provisions may result and cause a risk of loss of national identity independent
of the rule of law.
So as not to be affected by the general principles of the existence of the Romanian state,
rendered in Article 1, paragraph 1, the Constitution should have priority in developing any
internal normative act or other state or group of states, especially when it comes to
concluding treaties or agreements.
At the same time the European Commission has warned EU member states expressly that
the law does not permit the introduction a maximum of sale and purchase of agricultural
land.
In recent years the economic and social impact of the share sale and purchase of
agricultural land in Romania was manifested both by affecting social and national security
and also the emergence of globalization increasingly often which caused increasing existing
discrepancies between states of the world.
The massive sale of land to foreigners has generated various litigation and conflicting
states, many offenses are based on the violation of the law, which clearly weakened the
productive capacity of farmers.
A negative impact on the quality aspect of agricultural land can be determined that the new
owners will not take into account cultural, crop rotation, environmental zoning and overall
production.
There are potential dangers and social event since small properties will disappear, rural
areas are depopulated and poverty will increase due to increased degree of aging of the
population.
However, land can not be moved in the land him that they buy, as such the owner - foreign
individuals can just enjoy the freedom to produce. The real problem is that foreigners can
divert profits from agriculture to their home countries.
3. Legal framework of sales land in other EU Member States
Romania is the only country in Europe that has not made any notification to the EU for the
imposition of restrictions on the purchase of land by foreigners.
Thus, unofficial data, 40% of the arable land of 10 million hectares is owned by foreigners
with or without papers. According to APIA, 800,000 hectares of arable land are owned by
foreigners.
In this area there are other several million hectares owned by foreign tenants with right of
first refusal to purchase. Interestingly, the Romanians do not have even one hectare of
247

arable land in any EU country, according to the confederation of farmers. Accession

Treaties concluded by the EU countries left to the discretion of each issue the sale of land to
foreign countries, it is one that keeps the food safety of each state. In this context, the issue
of land sales is a national, not a community.
In the EU accession treaty concluded by Romania stated that farmland is a capital, while
Hungary, said that the land is a national asset.
In Poland the maximum distance from the border at which foreigners can start buying land
is 150 km and also buyers must prove that they have 12 years residency in this country. In
Romania this distance hardly increased from 10 to 20 km through pressures brought by the
Ministry of National Defense
In Bulgaria was voted that until 2020 the land cant be sold to foreigners. The European
Commission has warned that it is a violation of the international commitments and Bulgaria
could be liable for financial penalties.
In Hungary the government is trying to protect farmland through some drastic measures.
Thus, people in Hungary who has been found to be involved in the sale of farmland to
foreigners can be punishable by up to five years in prison.
The Hungarian government decided to offer for lease 200,000 hectares of arable land to
farmers under a new program that applies to parcels of land that are currently leased under
contracts that expire until 31 May 2017. The goal of the program is to strengthen family
farms as well as small and medium enterprises. Hungary plans to reduce the share of large
farms to 20 percent of total arable land, compared to 50 percent today. Through these
measures, the Hungarian legislation seeks to protect agriculture speculation and "foreign
capital".
Estonia has made notification to the EU, but has now introduced a bill which states that you
can not buy land unless you own Estonian citizenship. In Germany you can not buy land
unless proof the payment of taxes in federal republic. Germany protects its farmers and land
resources by national legal instruments pre-emption of local community in favor of the
public interest, taxation and financial instruments, tools structural planning public land.
French law provides that the owner can do what he wants on the land owned by it, because
it is part of the national heritage. In France, no less than five ministries must give consent
for concluding a land transaction. After obtaining the central authorities follow the same
procedure for obtaining the local authorities. Thus, all these measures are almost impossible
to sell land to foreigners.
4. Evolution of prices of arable land in Romania and other countries in Europe
In the year 2014 there is no official data regarding the evolution of prices of agricultural
land, but it talks about a real boost with the liberalization of the sale price of agricultural
land by foreigners, so the price of a hectare of land reaching and 4000 Euro per hectare.
A significant increase is observed in the case of agricultural land price in Romania, it
doubled in the past years. However, our country continues to be one of the areas where
agricultural land prices are 3 to 7 times lower than in the rest of European countries. In
Romania, land prices vary depending on the area. In North-East and South-East, the
average selling prices of land are approximately 2000 Euro per hectare, while in other areas
located near Bucharest, the average prices are approx. 3,500 Euro per hectare.
The sales price for agricultural land can be freely negotiated between sellers and buyers in
Belgium, Finland, West Germany, Greece, Italy, Ireland, the Netherlands, Spain, Sweden,
United Kingdom, Romania. In competitive land markets with free sales prices for
agricultural land, buyers and sellers mutually interact and bargain over the terms of the sale
with each other.
248

Fig. 1 Price of arable land in Romania versus other countries in Europe (2013)different articles
The two most important sales price regulations for agricultural land are minimum and
maximum sales prices (Ciaian, 2010).Their implications on seller and buyer behaviour are
rather different. A minimum price reduces land demand, if the unregulated market price is
lower than the regulated price. In contrast, a maximum price reduces land supply, if the
unregulated market price is higher than the price ceiling imposed. In both cases, a black
market for agricultural land sales may arise, where in addition to the regulated sales market
price, the difference between the equilibrium price and the regulated sales price is paid
under the table.
Conclusions
Given the arguments made in the literature and in accordance with the above outlined these
proposals can improve the current situation:
- absolute pre-emption for the ground access to the local community and the state;
- mineral resources related to land sold to remain in state ownership;
- rational use of technological factors;
- training specialist buyers of agricultural land - foreign individuals
- treating the land as a national asset;
- facilitate obtaining loans for acquisition of land by individuals;
- clarification of legally agricultural properties by making cadastre.
The sale of land is opposite the targeted land reform agrarian reform and land restoration of
property rights.
Agrarian reforms had the effect of reducing the large peasant farms in favor because the
owners were forced to sell land not derived from restitution for 15 years, which has
prevented the Romanian agriculture to perform.
Land is a strategic resource and the most important source of income and the safest for any
state. For this reason, the state must act responsibly and prudently in this direction.
To have an effective land market should be considered transferring land from less
productive users the most productive.
Acknowledgment
This paper was co-financed from the European Social Fund, through the Sectorial
Operational Programme Human Resources Development 2007-2013, project number
249

POSDRU/159/1.5/S/138907 "Excellence in scientific interdisciplinary research, doctoral

and postdoctoral, in the economic, social and medical fields -EXCELIS", coordinator The
Bucharest University of Economic Studies
References
1. Ciaian, P., Knasas, D, Swinnen, J. 2010. EU land markets and the common
agricultural policy, Centre for European Policy Studies, Brusels.
2. Craciunescu, D., Silasi, G. 2013. The liberalization of the land market in Romania
economical, social, juridical and political implications, Journal Annals-Economy
Series no.16, 21-29;
3. Otiman, P., Evolutia structurii proprietatii funciare si a exploatatiilor in agricultura
romaneasca in secolul XX si probleme ale dezvoltarii rurale, Editura Ceres, Bucuresti,
2002;
4. Popescu, G. 2014. Probleme vechi, relatii noi in agricultura, Editura Academiei
Romane, Bucuresti.
5. Popescu, G. 2007. Cooperarea in agricultura, de la piata funciara la transferul de
cunoastere, Editura Terra Nostra, Iasi.
6. ***Legea nr. 17 din 7 martie 2014 privind unele masuri de reglementare a vanzriicumpararii terenurilor agricole situate in extravilan si de modificare a Legii nr.
268/2001 privind privatizarea societatilor comerciale ce detin in administrare terenuri
proprietate publica si privata a statului cu destinatie agricola si infiintarea Agentiei
Domeniilor Statului;
7. ***Legea cadastrului si publicitatii imobiliare nr. 7/1996, modificata prin Ordonanta de
Urgenta a Guvernului nr. 41/2004, aprobata prin Legea nr. 499/2004.
8. www.madr.ro

250

SUSTAINABLE DEVELOPMENT AND HUMAN CAPITAL COMPONENT

Petric Sorin ANGHELU, Arghir Vasile CIOBOTARU
Faculty of Agro-Food and Environmental Economics, The Bucharest University of
Economic Studies; email: [email protected], Str. Mihail Moxa, nr.5-7, Sector 1,
Bucharest, Romania
Abstract
The desire to progress is evident to any community, whether national, regional or local.
Sustainable development is part of economic development. This article aims to analyse
sustainable development in terms of its human capital component. Thus, the article presents
information on both sustainable development and the present situation of the level of
education of human resources. The education level of the population of a community has a
major influence on the decisions that the community can take to ensure economic progress
of the community.
Keywords
sustainable development, human capital, green economy, economic growth, Romania
Introduction
Sustainable development implies a number of changes in how economy is deployed,
changes to be implemented by using various levies within a national and/or global policy.
Since sustainability concerns all fields of activity, it is now recognized as a horizontal issue
and it is integrated in most of the public policies, at least at European level.
Human capital is among the most important assets to support economic development.
Nevertheless, the market economy is unable to provide on its own an enabling framework
for all people. That is why social and demographic policies are developed pursuing to
improve the distribution of wealth on the one hand and the trends of demographic processes
on the other hand.
In Romania, human capital related issues are in fact major challenges from both points of
view and the fact that a large part of the population is living in rural areas has am
augmenting role in this respect.
To ensure that economic growth is necessary to improve investment and competitiveness.
In 2013, Romania registered an average annual growth rate of 3.5%.
In Romania, about half of the population lives in rural areas. This proportion is higher than
that of other EU countries (Park and Jacobs, 2011). Compared with urban areas, rural
settlements are less populated and smaller scale. Contribution and involvement of these
rural communities to economic growth is to a lesser extent.
The rural population is not evenly distributed. In terms of density, the most populated rural
areas are those in the northeast. This birth rate is higher. Also influence the density rural
landscape at regional and county level.

251

Investments in human capital are essential. Growth and competitiveness is based on the
performance of the educational system and of the training programmes. Economic recovery
generating jobs is depending on how education systems and training programmes managed
to capture the mainstream skill needs of the labour market. It should be mentioned that
although important, education is not characterized by adaptability. Universities are among
the most conservative institutions, that find difficult to adapt as system to the rapidly
changing patterns of skills and competences that are targeted at certain moments (Bran et
al., 2013).
In recent years, in Europe, there were ample evidence that skills supply does not meet the
needs of the labour market. Thus, in Europe there are over two million vacancies.
Public funding is limited, so an increase in competitiveness can be achieved by effective
investment in education and training.
According to a European Commission study, one in five have low literacy and numeracy
skills. Under these conditions employability is limited (European Commission, 2013).
At European level it was adopted a strategic framework for cooperation in education and
training for the period until 2020. In this framework it is intended to support the
development of education and training systems of the EU Member States (European
Commission, 2010a). It is sought the personal, social and professional fulfilment of all EU
citizens. This is considered as basis for sustainable economic prosperity, employability,
promoting democratic values, social cohesion, creativity and innovation, active citizenship
and intercultural dialogue.
It aims to support efforts to acquire key skills and reduce the weight of low achievers. It
also seeks to foster the acquisition of basic skills and retraining measures and improve
skills by enhancing lifelong learning.
With the help of flexible training, new training methods, and adapting programs for
teachers and trainers is likely to be motivated to acquire a high level of digital literacy.
1. Sustainable development
In the context of globalization, the concept of sustainable development was formulated in
time, within the scientific debate conducted internationally.
Economic and social developments of humanity cannot be separated from the consequences
of human activity on the landscape. These issues were first reported in the 1972 report of
the Club of Rome, entitled Limits to Growth (Meadows Report). This report summarizes
information on the evolution of the five factors (population growth, impact of
industrialization, pollution, food production and natural resource depletion trends).
Report of the World Commission on Environment and Development, Brundtland presented
in 1987 entitled Our Common Future, offered the first accepted definition of sustainable
development: "development that meets the needs of the present generation without
compromising the ability of future generations to meet their own needs" (Bruntland, 1987).
According to the definition, environmental protection and economic growth in the long
term are considered complementary and mutually dependent.
252

The Brundtland Report was prepared on the basis of negotiations and discussions between
the heads of state attending the Earth Summit in Rio de Janeiro in 1992 resolution adopted
at this summit is called Agenda 21 document contains basic principles that should guide
countries world in the type of economic development in this century.
Complex issues of sustainable development have been addressed at the UN General
Assembly Special Session (2000) Summit on Sustainable Development in Johannesburg
(2002).
By including in the Treaty of Maastricht, sustainable development has become a political
objective of the European Union since 1997.
As a continuation of this approach, in 2001 the European Council in Gothenburg adopted
the Sustainable Development Strategy of the European Union. It was added an external
dimension of sustainable development concept in Barcelona in 2002.
In June 2006, adopted a renewed Sustainable Development Strategy for an enlarged
Europe. This document has been designed in a unified and coherent strategic vision. The
overall aim is the continuous improvement of quality of life for present and future
generations. It envisages the creation of communities able to both manage and use
resources efficiently and to tap the ecological and social innovation potential of the
economy to ensure prosperity, environmental protection and social cohesion.
Also, based on the Brundtland Report were developed international documents recognized
the importance of regional and local level to promote sustainable development.
In 2012, the EU Council and the European Commission set out measures to support the
Europe 2020 objectives in terms of growth and jobs.
2. Human capital
Based on the Annual Growth Survey is a need to strengthen the role of education and
training in the Europe 2020 strategy should focus on improving the functioning of
education and training, and the overall level of skills.
To achieve a sustainable pattern of development in all its essential components: economic,
socio-cultural and environmental required a fair assessment of human capital and its
development trends in the medium and long term.
Partnerships in education and training can be the key to better networking of the area labour
market needs. Promoting partnerships can lead to both economic growth and increase
employment.
Demographic and technological innovations produce rapid changes in the business world.
Based on these issues, companies are forced to transform their business models and
strategies. New emerging technologies require a redefinition of the skills of employees.
Training at work has an impact on satisfaction and motivation. It also leads to increased
knowledge, skills and work performance of those forms. At the same time, training in the
workplace results in increased productivity, profit and investment an organization.
In some areas the EU has been a stagnation or even a decline in population. There was a
progressive reduction in the working age population, and an unsatisfactory level of training.
253

Thus, in the near future, the Eastern Europe can become a sparsely populated region with a
declining workforce and an aging population (UE, 2011).

Source: conducted by the authors based on data published on the website of the National
Institute of Statistics, 2014
Fig. 1. The evolution of the Romanian population during1948-2014

Given the existing information on the website of the National Statistics Institute, Romania
is no exception. In figure 1 presents the demographic situation. This chart is based on the
results of population census at various moments between 1948 and 2011, and the existing
data on the INS website, the latest update of the month September 2014.
Compared to 1992, in 2002 the Romanian population decreased by about 1 million people.
It is noted that the decrease is higher for 2011 than in 2002, by 1.5 million people. Among
the factors that decreased mainly are external migration (about 75%) and negative natural
increase (about 25%). It also notes that in 2 years the Romanian population decreased by
nearly 180,000 people.
Given that rural areas have a substantial growth potential, but also a vital social role in fig.
2 presents the weight average population in Romania during 1948-2011.

254

Source: conducted by the authors based on data published on the website of the National
Institute of Statistics, 2014
Fig. 2. Share on average Romanian population during 1948-2011

In the next period, the labour market will take people who are now in the age cohort 5-19
years. Thus, it is important that the groups aged 5 to 19 in rural areas 52% of the population
lives. Thus, for this age group, the share of population living in rural areas is higher than
that of the population living in urban areas. It is important to offer jobs for these people,
and offer education and training as a factor of progress. This distribution of population in
the coming years will affect economic growth and increase the pressure on rural
communities, with direct effects on prosperity, environmental protection and social
cohesion.
For people over 20 years, the percentage of those who have completed at least high school
is about 47%.
For the situation in 2011, in terms of the environment in which they live, there is a big
difference between the percentage of individuals who have completed at least high school
and live in urban areas compared to those living in rural areas. Figure 3 gives the
difference.

255

Source: conducted by the authors based on data published on the website of the National
Institute of Statistics, 2014
Fig. 3. Average level of education
It is noted that 73% of the population living in rural areas is more than a vocational school
or secondary school graduation. Also, 63% of people living in urban areas at least graduate
high school, compared to only 27% of people living in rural areas.
In Romania, following processing of statistical data on educational attainment of the
population aged between 25 and 64 years, the information can be summarized in Table 1.
Table 1. The level of education of the population aged between 25 and 64 years
Without graduating high-school
Census

2011
(total
Romania)
2011
Urban
2011
Rural

TOTAL

Sup.

Postsec.

Sec.

Out of which:
Total
Profess.

Gymnas.

Primary

No
school

11.209.424
(55 % % of
total
Romania
population)

19,14

3,83

28,97

48,05

18,88

23,58

4,35

1,24

6.519.135

28,07

5,10

33,22

33,61

16,66

14,10

2,14

0,71

4.690.289

6,73

2,07

23,07

68,13

21,96

36,76

7,43

1,98

Source: conducted by the authors based on data published on the website of the National
Institute of Statistics, 2014
256

From the table it is observed that almost 70% of the population aged 25 to 64 living in rural
areas did not graduate high school. Also, a third of the population aged between 25 and 64
years living in rural areas, has only 8 grades completed.
Based on the issues identified at the national level, it appears that the European Strategy
2020 three aspects are closely interrelated. These are: developing smart, sustainable and
inclusive development (European Commission, 2010). Integrated approach is needed on
issues related to aging and poorly qualified workforce. You also need to consider that
economic growth is not based on environmental degradation.
Green economy in this way, an economy that reduce environmental risks and ecological
deficits (Sawyer, 2011). Thus, we can say that the green economy is based on strategies on
reducing carbon emissions, improving energy and resource efficiency, and prevent the loss
of biodiversity and ecosystem services (UNEP, 2011). The concept of green economy was
state the first Earth Summit (Rio de Janeiro - 1992).
Conclusions
Economic growth is a necessity, but it must be done by observing the conservation of
natural resources (Bran, 1991). Here it is intended to land, water, plant and animal
biodiversity. Better use of these natural resources leads to a food security and safety, so
necessary lately.
With all these requirements, there is a risk that some rural areas face particular challenges
in terms of economic and social sustainability (European Commission, 2010).
It is necessary to increase and diversify partnerships between education and training
organizations and the labour market. Through these partnerships can facilitate interventions
in education and training. In secondary education, training programs are intended to be
modified so that they contain subjects related to sustainable development.
Individuals who have not completed compulsory education may attend only professional
training level 1 qualification. Thus, it is important to assess the training needs of these
people. Depending on the needs of training, these individuals can participate in training
programs to improve their skills. If these people skills improve, they can handle jobs that
require a higher level of training.
Based on this information, it is important to identify the extent and level of cover jobs in
rural communities. For these people there is the possibility of obtaining a job is based on
education held at this time, either on the basis of higher qualifications acquired through
education and further training. A contribution in raising the education level of people living
in rural communities may have investments in training programs.

Acknowledgement
This paper was co-financed from the European Social Fund, through the Sectorial
Operational Programme Human Resources Development 2007-2013, project number
POSDRU/159/1.5/S/138907 "Excellence in scientific interdisciplinary research, doctoral
and postdoctoral, in the economic, social and medical fields -EXCELIS", coordinator The
Bucharest University of Economic Studies
References
1. Bran, P. 1991. Economica valorii, Bucharest: Economica.
2. Bran, F., Ioan, I., Radulescu, C.V. 2013. Sustainability education within universities in
Competitiveness of agro-food and environmental economy, G. Popescu, N. Istudor and
D. Boboc (eds.): 104-117.
257

3.

Bruntland, G.H. 1987. Our common future, World Commission on Environment and
Development, UN.
4. European Commission 2010. Situation and Prospects for EU Agriculture and Rural
Areas.
5. European Commission 2010a. Europe 2020 A European strategy for smart,
sustainable and inclusive growth.
6. European Commission 2013. The Survey of Adult Skills (PIAAC), Implications for
education and training policies in Europe.
7. National Institute of Statistics, www.insse.ro.
8. Park, Y., Jacobs, R.L. 2011. The Influence of Investment in Workplace Learning on
Learning Outcomes and
9. Organizational Performance, Human Resource Development Quarterly.
10. Sawyer, D. 2011. Green economy and/or sustainable development?, Politica
Ambiental, (8).
11. UE 2011. 2020 Rolul politicii regionale n viitorul Europei. Panorama Inforegio,
(39).
12. UNEP 2011. Towards a Green Economy: Pathways to Sustainable Development and
Poverty Eradication.

258

AGRICULTURE CLIMATE CHANGE MITIGATION AGENT

Ana Maria CLIN, Amelia DIACONU
Faculty of Agri-Food and Environmental Economics, Bucharest University of Economic
Studies; email: [email protected], Str. Mihail Moxa, nr.5-7, Sector 1,
Bucharest, Romania
Abstract
The potential of agriculture for climate change mitigation derives from both increasing its
capacity to sequestrate greenhouse gases and reducing the emissions by improving the
technologies used for tillage and for livestock grazing. Transforming this potential in
mitigation agent for climate change should take in account the fact that agricultural land
provides food for the seven billion inhabitants of the Earth, raw materials for a variety of
products used by humans, income source for billions of people and represents the
foundation of sustainable development in many regions. Meanwhile, agriculture is the main
economic activity for many communities, especially in developing countries.
Keywords
agriculture, climate change, greenhouse gases, production, consumption.
Introduction
Climate change is the most challenging environmental issues heading the global agenda.
Recent reviews of the main drivers indicate that the goal of maintaining the average
temperature change below 2 Celsius degree will not be met. Major increases in greenhouse
gas emissions in China and mild interventions in US, along with the patterns of the energy
consumption are serious concerns for climate policy. On global and European markets the
price of carbon is very low and policy makers are concerned about the effectiveness of this
tool. Despite major progress, renewable energy is still a very low contribution to worldwide
consumption.
The modernization of the technologies used in agriculture significantly reduced the
influence of meteorological conditions over agriculture, but it does not allowed to exclude
climate factor from the group of key variables that have impact on the agricultural
economy. On the one hand, there is a limit regarding the control of the influence. Thus,
even the most advanced technologies succeed to avoid only certain effects of unfavourable
climate conditions. On the other hand, the technical endowment of agricultural holdings is
very different from one region to another, the most modern technologies being available for
a relative small proportion of agricultural land.
Modern agriculture and the production and distribution of food have an important
contribution to greenhouse gas emissions. In the last 150 years, carbon dioxide emissions of
agricultural land is about 480 billion tonnes (Brown, 2001). Agriculture contributes to
greenhouse gas emissions especially by favouring the decomposition of soils organic
matter, decay of nitrogen based chemical fertilizers, crops that necessitate water ponding
(e.g. rise), ruminant livestock and others. Methane and nitrous oxide are the most important
greenhouse gases from agriculture, while the distribution and processing of agro-food
products contributes to the carbon dioxide and freon emissions.
1. Ecosystem services and agriculture
In agriculture there are used large areas of land that function based on the ecological
principles, being agricultural ecosystems. Plants absorb carbon dioxide from the
259

atmosphere and nitrogen from the soil for growth and provide the redistribution of these
substances among different reservoirs, such as biomass from and on the soil, and also the
death organic matter more or less decomposed. Carbon dioxide, methane and nitrous oxide
are released in atmosphere by the breath of plants and decay of biomass and through
burning. Human activities change both the path of emissions and the path of absorption.
The potential for climate change mitigation could be inferred from the structure of
ecosystem services.
The size and characteristics of agricultural sector allow foreseeing a slow, gradual
transformation. In this process will be exceeded one by one mane difficulties determined by
the availability of financial resources, poverty, institutional capacity, technological
progress, social-economic development gaps etc. The possibilities to mitigate climate
change could be analysed from two perspectives: the perspective of agricultural production
and the perspective of the agro-food products consumption.
2. Mitigation by changes in agricultural production
The opportunities for reducing greenhouse gases in agricultural production comprise
options for avoiding emissions and for facilitating the sequestration of some greenhouse
gases, especially carbon dioxide. The ecologic potential of the measures to be applied in the
field of production is to be of 7.2-10.6 Gt carbon dioxide equivalent. These estimations
comprise agriculture, as well as forestry and takes in account soils capacity to absorb
carbon dioxide. The contribution of agriculture is estimated to 0.3-4.6 Gt/year.
The economic potential of various possibilities to mitigate climate change in agriculture
vary from one intervention to other. The greatest potential is for rebuilding soils content in
organic matter. By applying such measures a farmer could ain 100 USD for a tone of
captured carbon (expressed in carbon equivalent). Interventions in livestock grazing could
bring also important gains estimated to 20 USD per tonne. A synthesis of mitigation
measures that could be employed in agriculture is presented in table 1.
Table 1 Possibilities to mitigate climate change within agricultural production
Crt.
Categories
Interventions and impact
nr.
CROPPING
1
Varieties
CO2: technologies with great carbon sequestration
potential varieties, crop rotation, perennial crops,
agricultural biotechnologies
N2O: improving the use of nitrogen
2
Fertilization
CO2: using residual organic matter for the fertilization of
crops
N2O: adjusting fertilization norms, periods of
application, improving precision, using inhibitors
3
Soil tillage
CO2: reducing intensity, retaining residual organic matter
4
Water resource CO2: increasing water availability, including water
management
retention
CH4: decomposing residual matter
N2O: drainage of excess water, reducing nitrogen leakage
and runoff
5
Dropping crops CO2: restoring of natural grassland or other vegetation
for
certain N2O: reducing nitrogen inputs
periods
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Crt.
Categories
nr.
LIVESTOCK
1
Varieties

pastures
2
Varieties

livestock

Interventions and impact

CO2: improving the composition of grassland using

deeply rooted, high production, and resistant species
CO2: adjusting the density of animals, feeding pads,
diversification of feeder production
CH4: improved fodder and additives that reduce enteric
fermentation, including optimization for age, nitrate and
sulphur additives, antibiotics etc.
N2O: adjusting the density of animals according to the
amount of manure
3
Fire
CO2: prevention of wildfires, optimization of controlled
fires for improving pastures productivity
4
Manure
CH4: improved conditions for manipulation and storage,
biotechnologies for decomposition, fodder additives
N2O: fodder regimes that reduce nitrogen excretion,
nitrification inhibitors, optimization of doses and periods
RESTORING VEGETATION
1
Restoring
CO2: restoring vegetation by other interventions than
vegetation
afforestation
CH4: cattle grazing could increase net emissions
N2O: reducing nitrogen inputs
OTHERS
1
Ecological
CO2: restoring the carbon stocks of bogs, avoiding
restoration
of emissions by tillage
organic soils
CH4: emissions could increase
2
Ecological
Reintegration in the agricultural system: afforestation,
restoration
of fertilization, increasing water retention capacity
degraded soils
Source: IPCC. 2013. Chapter 11: Agriculture, forestry and other land use (AFOLU),
Contribution of WG III Mitigation of Climate Change to the Fifth Assessment Report of
the Intergovernmental Panel on Climate Change, pg.23-25, modified
According to Godfray et al. (2010), the analysis and evaluation of interventions that could
be employed in agriculture should consider the following aspects:
- Non-permanence and reversibility;
- Saturation;
- Human and natural impact;
- Dislocation.
Non-permanence and reversibility. Mitigation activities such are the ones for reducing
nitrogenous oxide emissions from fertilisation and emission reductions by fodder
composition have permanent effects, since the avoided emissions cannot rebuild. The same
is true for replacing fossil fuels with biomass or concrete with wood in construction.
The effects of these measures can be offset in certain cases due to natural phenomena that
affect cropping and livestock. These could be early or late frost, insect attacks, wildfires
etc. Although these phenomena could significantly reduce the annual carbon sequestration
rate, the impact on permanent carbon stocks is reduced.
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Saturation. The replacement of fossil fuels or construction materials with other that are less
intensive in carbon could continue without restrains. Unlike this, increasing the carbon
sequestration in soil or in plants cannot be done indefinitely. After a certain threshold, then
the content approaches the natural level the path of sequestration is decreasing. Although
the saturation is not fully reached, the sequestration rates are smaller and remain constant
close to the saturation level.
Human and natural impact. Carbon sequestration capacity is directly and indirectly
influenced by human activities and natural processes. The interventions mentioned in table
1 are human activities that directly contribute the increase this capacity. Both absorption
capacity and storage capacity of carbon could be affected by natural processes such as soil
type and hydrologic regime. Among the human activities with indirect influence there could
be mentioned the ones that favour the formation of tropospheric ozone, which, on its turn,
could offset the stimulating effect of higher carbon and nitrogen concentration.
Dislocation. This process takes place then an intervention reduces or increases the
emissions in other areas than the one where they are applied. If the measures reduce
emissions in an area, but increase them in other region, the net emission reduction is null.
The emissions are transferred from one area to another.
Briefly, climate change mitigation in agriculture could be achieved by facilitating actions
such as:
- Conversion of agricultural waste, especially manure in biogas needs important
investments for installations, but the potential for emission reduction, especially for
methane is very high. It is recommended in regions with high density of animals and
large quantities of manure is accumulated;
-

Expanding organic cropping respecting the requirements of organic cropping results,

among others, in the reduction of greenhouse gases. This is determined by the restrains
of using chemical fertilizers and favouring processes that allow the sequestration and
storage of carbon in soil, diversification of species and varieties, using grass strips,
organic fertilizers etc.;

Facilitating biomass production for energy to support the replacement of fossil fuels in
this way there is supported the energy autonomy of rural areas. Extending the use of
biomass and of biofuels depends on information, crop structure, investments in
processing technologies and storage facilities. On the other hand, using bio-diesel does
not imply major interventions in agricultural machinery (Bran et al., 2013).

Equitable repartition of costs and benefits resulting from ecosystem services provided
by agriculture farmers contribution to the reduction of some ecological pressures and
to the sustainable management of natural resources is of key importance for society and
it should be mirrored in they incomes. Thus, farmers interest in applying climate
change mitigation measures could be significantly improved.

Taking in account the fact that agriculture is the second most important greenhouse gas
emission source, the application of measures and interventions that reduce emissions will
be critical for climate change mitigation. Identifying and assessing of main restrains in the
adoption of these measures should be considered with priority in knowledge generation and
in operational policy making.

262

3. Mitigation by intervention at the consumption level

As long as the demand and consumption of food and agricultural products is regarded, the
interventions for emission reduction will envision waste generation, especially food waste,
changes in food regimes and in wood consumption.
Changing the patterns of food consumption is a controversial topic since there are still
major issues in delivering food security and food safety. The production in large enough
quantities and the access to cheap food are critical factors for food security. Greenhouse
gases could be reduced by changing the demand for agro-food products without affecting
food security and wellbeing by:
- Reducing food loss and food waste on both food chain and final consumption;
- Changing food regime in such a way that greenhouse gas intensive foods are
replaced by foods that are less intensive in emissions (for instance, replacing
animal food with vegetal food while maintaining the proper content in
protein);
- Reducing overconsumption in regions where this is the case.
Replacing animal food products with vegetal food products is a complex issue because in
many situations the animals could be fed on plants that cannot be consumed by humans or
grows on fields with high carbon stocks that cannot be cropped with comestible crops. In
addition, animal food products have a key importance for food security in many regions.
In table 2 there are presented the main possibilities to reduce greenhouse gas emission at
the demand level for agricultural products.
Table 2 Possibilities to mitigate climate change at the level of agricultural and food
products consumption
Crt.nr.
Intervention
Description
1
Reducing losses along the Reducing the losses contributes to reduce the
agro-food chain
energy consumption and of greenhouse gas
emissions for agricultural production,
transportation, storage and distribution and
area needed for cropping
2
Changes in food regime
Where there is possible it will be promoted
low greenhouse gas intensive products. These
changes in the demands structure will reduce
energy inputs and will reduce the area needed
for cropping
Source: IPCC. 2013. Chapter 11: Agriculture, forestry and other land use (AFOLU),
Contribution of WG III Mitigation of Climate Change to the Fifth Assessment Report of
the Intergovernmental Panel on Climate Change, pg.34.
At global level, it is estimated that 30-40% of the food that is produced is lost on the agrofood chain in between harvest and final consumer (Godfray et al., 2010). The energy
embodied in food that is lost is of around 36 EJ/year (FAO, 2011). In developing countries,
around 40% of the harvest is lost at farm level or during distribution due to inappropriate
conditions for storage and transportation and obsolete conservation technologies. In
developed countries, farm level losses and also distribution losses are smaller, but a similar
proportion is lost or is thrown away in the food service sector or by the final consumer
(Hodges et al., 2011).
Food loss cannot be entirely avoided because a part of this is given by removing inedible
parts such as seeds, peels etc. For instance, in Great Britain it was estimated that 18% of
263

food waste are unavoidable, 18% have the potential to be avoided and 64% could be
avoided. Using data for Austria, Netherlands, Turkey and Great Britain it is appreciated that
the food waste generated by one household during one year in developed countries is of
150-300 kg (Parfitt et al., 2010). For a household from developing countries the quantity is
similar being of 280-300 kg (Gustavsson et al., 2011).
Among the possibilities to reduce food losses we could mention the followings:
- Investments in harvest, processing, and storage facilities in developing countries;
- Increasing awareness;
- Financial tools for reducing loss in retail and at the level of the final consumer in
developed countries.
As long as the food regime is regarded, studies based on life cycle analysis (LCA) show
that vegetal food products generate significantly less greenhouse gas emissions than the one
of animal origin, although there are exceptions, such as vegetables grown in greenhouses or
transported by plain. The same caloric and protein content could be provided by vegetal
food products with 10 times less emissions than in case of animal food products (Carlsson
Kanyama and Gonzlez, 2009).
Out of the animal food products, the largest emissions per unit of protein are recorded for
cattle, followed at relatively great distance by pork, poultry, eggs, and dairy products. Beef
production could use five times more fodder than a similar amount of dairy products.
Another issue that should be considered is that specific emissions vary greatly from one
region to another due to different ecological conditions, technologies and production
intensity. The smallest emissions per unit of protein produced are recorded in Europe and
North America, while the largest in Africa, Asia and Latin America. Therefore, climate
change mitigation strategies should focus on developing regions and pursue adapting
intensive animal grazing systems with local ecological, economic, and social restrains.
In case that the food regime remains unchanged, the methane and nitrous oxide emissions
from agriculture will be triple until 2055 (Stehfest et al., 2009). The contribution of food
regime change to greenhouse gas emission reduction is estimated to be comprised between
34 and 64%. The change could be represented by a variety of options from the total
elimination of beef consumption until a healthy and balanced food regime, as it is the
recommended by the Harvard Medical School.
In the assessment of food regime changes potential for climate change mitigation should
be considered several restrains that are related on the one hand with cultural barriers, and
on the other hand to the precision of the estimations. Thus, the implementation of measures
that favour food regime changes could face a strong resistance on the behalf of consumers
who have diets framed by cultural and social models specific to each region (Smith, 2013).
The estimates regarding emissions associated to different agro-food products are not very
effective in capturing the effects determined by the changing carbon storage capacity of
agricultural land. Thus, pastures that support livestock production have a larger capacity to
sequestrate and to store carbon dioxide compared to numerous crops (Schmidinger and
Stehfest, 2013).
Implementing climate change mitigation measures at the level of demand is facing many
uncertainties and restrains. Nevertheless its potential for emission reduction is important
and requests a careful exploration of possibilities and their applicability in different socioeconomic and cultural contexts.
Conclusions
Climate changes result in the modification of climate parameters following patterns that are
more or less predictable. The outstanding performances of modern agriculture are
determined by technological progresses that allowed the intensification of control over a
264

larger and larger number of interactions that are occurring in the agricultural ecosystem. A
great part of these interactions are related with climate conditions and consisted either in
cancelling the effects of climate factors or increasing the correlation between conditions
and the cropped species ecological profile.
From the economic perspective, agriculture recorded less noticeable progresses. Thus
maintaining a profit rate is possible only by intensification and continuous growth of
productivity. Thus, although in the last decades the productions grew several times for
many crops, including basic crops like cereals, the profitability of those crops remained
constant or even fell. In addition, on the agro-food chain, the profit rate of the farmer is the
smallest.
In such conditions, the impact of climate change in agriculture is considered important or
even a challenge for that innovation should provide major technological improvement.
Along with this improvement it should be also integrated the need to reduce emissions in
various stages of production, storage, distribution, and consumption.
Since agriculture is the second largest source of greenhouse gases, accounting for around
one third of the emissions, it is important to seriously consider the possibilities to intensify
the mitigation measures. Meanwhile, cropping absorbs a lot of carbon dioxide and this role
should be fostered by developing more effective crop varieties. Technical challenges are
important, but creating an enabling economic framework is the key goal to improve
mitigation efforts in all sectors, but especially in agriculture since it is the one that is
struggling to maintain profitability within the sharp blades of global competition.
References
1. Bran, F., Manea, G., Ioan, I., Rdulescu, C.V. 2012. Globalizarea: manifestri i reacii, Editura
Economic, Bucureti, pg.59-63.
2. Brown, L. 2001. Eco-economia, Bucharest, Universitara.
3. CarlssonKanyama A., Gonzlez, A.D. 2009. Potential contributions of food consumption
patterns to climate change, The American Journal of Clinical Nutrition, 89, pg. 1704S1709S.
4. FAO 2011. EnergySmart Food for People and Climate, Food and Agriculture Organization of
the United Nations (FAO), Rome, http://www.fao.org/docrep/014/i2454e/i2454e00.pdf, accesat
la 10.07.2014.
5. Godfray H.C.J., Beddington, J.R., Crute, I.R., Haddad, L., Lawrence, D., Muir, J.F., Pretty, J.,
Robinson, S., Thomas, S.M., Toulmin, C. 2010. Food Security: The Challenge of Feeding 9
Billion People, Science, 327, pg. 812818.
6. Gustavsson J., Cederberg, C., Sonesson, U., van Otterdijk, R., Meybeck, A. 2011. Global Food
Losses and Food Waste. Extent, Causes and Prevention, Food and Agricultural Organization of
the United Nations, Rome.
7. Hodges R.J., Buzby, J.C., Bennett, B. 2011. Postharvest Losses and Waste in Developed and Less
Developed Countries: Opportunities to Improve Resource Use, The Journal of Agricultural
Science, 149, pg. 3745.
8. Parfitt J., Barthel, M., Macnaughton, S. 2010. Food waste within food supply chains:
quantification and potential for change to 2050, Philosophical Transactions of the Royal Society
B: Biological Sciences, 365, pg. 3065 3081.
9. Schmidinger, K., Stehfest, E. 2012. Including CO2 implications of land occupation in LCAs method and example for livestock products, The International Journal of Life Cycle Assessment
17, pg. 962972.
10. Smith, P. (2013). Delivering food security without increasing pressure on land, Global Food
Security 2, pg. 1823.
11. Stehfest E., Bouwman, L., Vuuren, D.P., Elzen, M.G.J., Eickhout, B., Kabat, P. 2009. Climate
benefits of changing diet, Climatic Change, 95, pg. 83102.

265

CLIMATE CHANGE IN LOCAL AND REGIONAL CONTEXT

Arghir Vasile CIOBOTARU, Petric Sorin ANGHELU
Faculty of Agro-Food and Environmental Economics, The Bucharest University of
Economic Studies; email: [email protected], Str. Mihail Moxa, nr.5-7, Sector 1,
Bucharest, Romania
Abstract
Climate changes produce a range of effects on society and the environment. The scale and
speed of climate change produce ever more apparent. It is necessary that every part of the
economy to adapt and reduce emissions. In these contexts, local and regional communities
must adapt, otherwise damage costs will increase. In the future, is to be expected and other
effects that can cause damage to costly November. Local and regional communities must be
prepared to adapt to climate change. The effects of climate change could deepen the
economic disparities between local and regional communities. This article presents an
overview of issues related to climate change that occur every day. In this context, regional
and local communities play an increasingly important role.
Keywords
climate change, local and regional communities, emissions of greenhouse gases
Introduction
For 2030, the European Union has proposed that the emission of greenhouse gases
decrease. Thus it is desirable that the emissions of greenhouse gases represent about 50% of
the level recorded in 1990.
Also, another target is the share of renewable energy in 2050 to be 100%. For this you need
to set interim targets for 2030 and 2040.
At the same time, reducing energy use can increase the profitability of energy production
system. Also, increasing the proportion of energy from renewable sources is another lever
to increase profitability.
An economy with low emissions of carbon dioxide presents several advantages. The
transition to a low carbon economy carbon dioxide offers a number of opportunities.
Among these opportunities, economic opportunities are important. Other opportunities are
the social and environmental, but the most important opportunity to transition to a low
carbon economy Carbon dioxide is the beneficial changes in the scope of employment.
Operation of energy systems can be influenced by price fluctuations. An energy system for
which price movements is vulnerable. This can lead to disruption of electricity supply. A
sustainable energy system that has diversified energy resources is a system that can cope
with price fluctuations. However, for such a system, the risk of disruptions in energy supply
is greatly diminished.
At EU level there is sufficient families and consumers which can be classified as vulnerable
consumers. From this point of view it is important to keep prices at a reasonable level. This
approach leads to a correct management of the tax burden borne by the citizens.
On matters involving climate change will have an important role communities from future
local and regional levels. For these communities should be encouraged to address issues
related to climate and energy, it is important that local and regional authorities should be
supported and encouraged to use development and financing schemes.
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Lately notes that climate policies and energy increasingly are considering the use of carbon
stored in sustainably be achieved.
It is necessary that the carbon can be naturally absorbed. For natural absorption of carbon
can be used to increase solutions that consider organic farming and forest resources.
1. Emissions of greenhouse gases
Appropriate behaviour from citizens and businesses can lead to a reduction in emissions of
greenhouse gases.
Local and regional authorities can determine the structure of services used by citizens and
businesses. Local and regional authorities are responsible for landscaping. Economic
development and progress of a community based on basic infrastructure. It is envisaged that
this infrastructure include the possibility of sewage and waste processing, production and
distribution of electricity, drinking water, roads and public transport.
Also, local and regional authorities have an important role in mitigating climate change.
Floods and storms, as extreme weather events, accompanied by power outages are local
events that can cause difficulties community members. The apparent importance of local
fire services and rescue, and effective management of electricity. However, at the local and
regional communities are able to make decisions that allow adaptation to climate change.
Addressing energy may be performed in a more easy. If local can achieve electricity, then
this activity supports the local economy, but also offers advantages for employment at local
and regional level.
In the next period, warming in the northern hemisphere could be more intense than average
warming of the planet, so melting snow in tundra regions could further accelerate global
warming. At the same time, increased drought in some regions, and abundant rainfall in
other regions can threaten food production. These phenomena will result in an acceleration
of the movement of people within one area to another. Should be noted that extreme
weather can cause human suffering and property damage.
These issues highlight the importance of consumption; become particularly important
effects unsustainable consumption. At European level provides a sustainable green growth.
The aim is to implement structural changes to be based on a clear set of goals to reduce
carbon emissions by the year 2030. The green economy with low carbon dioxide is
mentioned in Europe 2020.
The European Union has improved activities in areas such as education and science. It
follows that the economies of the member countries have adequate infrastructure and are
based on low-carbon. We are considering also public and social services, decent work and
employment opportunities for the labour force. Changes observed concern and support for
the needy and vulnerable socially and economically. The creation of conditions for
development of business environment can encourage positive changes in Europe.
The EU has proposed that by 2020 to reduce emissions of greenhouse gases. In EU
countries, electricity consumption fell, registering a shift to electricity produced from
renewable sources. However, due to the recession and structural changes in the industry,
the reduction of electricity consumption and emissions of greenhouse gases have been at
the expense of employment.
Reduction of greenhouse gas emissions by 50% by 2030 compared to 1990 may have the
effect of increasing EU citizens' confidence that emissions of greenhouse gases will
decrease steadily. These objectives should be with the goals of energy efficiency and
renewable energy. Measures that can be taken varies by each Member State's economy, the
structure of emissions of greenhouse gases, the measures already taken, and specific
environmental conditions.
267

Renewable energy differs from one Member State to another, depending on specific
conditions. The influence is given by existing factors, such as: raw materials, natural
environment, production systems and power transmission.
At EU level, the emissions of carbon dioxide are about 80% of total emissions of
greenhouse gases. The carbon dioxide emissions are influenced by various factors: climate,
economic growth, population size, transport and industrial activities.
According to Eurostat data, the European Union, from 2011, in 2012 carbon dioxide
emissions have decreased by 1.6% and in 2013 to 2012, carbon dioxide emissions from
burning fossil fuels decreased by 2.5%.
Also, according to Eurostat, in 2013 EU member state with the highest level of carbon
dioxide emissions was Germany with 760 million tons (an increase of 2% compared to
2012). The following places are Great Britain with 455 million tons, 346 million tons
France, Italy with 342 million tons, 290 million tons Poland, Spain with 224 million tons
and 162 million tons Netherlands. These seven Member States together account for 77% of
total carbon dioxide emissions EU28 in the year 2013 in Romania, in 2013, the level of
carbon dioxide emissions was 63 million tons (down 15% since 2012).
Since the base year 1990, the change in emissions of greenhouse gases in Romania is
shown in Table 1.
Table 1. Changes in emissions of greenhouse gases
Total greenhouse gas emissions (in CO2
Year
equivalent) indexed to 1990
1990
100
1991
81,53
1992
73,76
1993
69,70
1994
68,27
1995
70,79
1996
71,69
1997
66,35
1998
59,22
1999
52,38
2000
54,14
2001
56,11
2002
56,36
2003
58,21
2004
57,03
2005
57,03
2006
58,46
2007
57,64
2008
56,46
2009
48,44
2010
46,81
2011
49,08
2012
47,96
Source: conducted by the authors based on data published on the website of the
EUROSTAT and European Environment Agency (EEA), 2014
268

Figure 1 shows the emission of greenhouse gases in Romania for the period 1990-2012.

Source: conducted by the authors based on data published on the website of the
EUROSTAT and European environment agency (EEA), 2014.
Fig. 1. Emissions of greenhouse gases in Romania for the period 1990-2012
The European Union's climate and energy states that the main objective is to ensure an
energy supply with environmental compliance, social and economic. At the same time
wants to be made to achieve this objective by providing safety and security.
If it improves energy efficiency, we can talk about a reduction in emissions of greenhouse
gases. Similarly, the use of domestic energy sources and the development and application
of innovative energy technologies can reduce emissions of greenhouse gases. Population, a
very important benefit is given to improving public health and the state of the environment,
but also create new jobs.
The rise in the annual electricity is based on a combination of several factors. Thus we list
price changes in global markets, the current system of financing energy efficiency
improvements and renewable energy promotion.
However, electricity price increase may be an incentive to reduce emissions, but also to
develop electricity from renewable alternatives. Still not intended as an increase in energy
prices affect the population.
Advising consumers of electricity can affect how you use energy. Thus the energy audits
can be identified ways of saving energy by improving maintenance. Information systems
could provide information on savings from electricity consumption.
To achieve the transition to a low carbon economy carbon dioxide is necessary to promote
sustainable energy and MBI (market instruments). One such tool is the subsidizing market
electricity from renewable sources. This can be achieved by supporting investment and
operational support, including the implementation of a system of fixed rates. The
experience of several Member States of the European Union can be concluded that the
269

implementation of a system of fixed rates is the most effective. This allows both a rapid
increase in renewable energy production and obtain rates and generous guaranteed return
on investment.
Local and regional electricity generation from renewable sources results in electricity
savings and generate new business opportunities, and local dynamism. Energy
independence and diversity confers protection against price changes and improves
economic autonomy. It also helps support local energy independence economic activity.
At EU level, climate change may result in wider social gaps. This is one of the reasons why
it is necessary to pay special attention to social groups and regions most exposed. These
local communities are already at a disadvantage given the poor health status, low wage
income, inadequate housing conditions or lack of mobility.
2. Local and regional communities
At European level, several cities have implemented programs and practical projects to slow
climate change. One such example is the Local Agenda 21 (Local Agenda 21). It was
released in 1992 Earth Summit. In the last twenty years many local and regional
communities have managed to develop policies related to sustainable development. The
actions were intended to improve the environment, reduction of greenhouse gas emissions
and adapting to climate change. Two other projects were the goals of climate protection:
Alliance for Climate (Climate Alliance) and Cities for Climate Protection (Cities for
Climate Protection). Cities Energy (Energy Cities) is another project that was carried out
activities related to energy issues.
Similarly, the European Energy Award program for municipalities addressing energy
efficiency. Under this program, stimulating local and regional communities to achieve
higher levels of energy efficiency and climate protection. It also promotes electricity
production based on renewable energy resources. The program has attracted the
participation of over a thousand places. To assist the decision makers of the local
community, was written a publication entitled "Save Energy, Save the climate, save
money". By participating in this program, local communitie Swedish city of Vxj has
proposed that by 2030 to reduce carbon dioxide emissions by 100%. In Finland, 14
municipalities are involved in a similar project. Makers of local communities, businesses
and residents working together to promote green economy and to achieve 80% reduction in
emissions of greenhouse gases.
New approaches by creating cooperative energy production based on consumption. Thus, in
Luxembourg, at Beckerich, households and businesses use micro-generators to secure its
energy supply. Existing energy networks enable bidirectional transmission of energy. Thus
electricity consumers and electricity producers are.
To move more easily over climate change, partnered with local and regional communities
to promote exchanges of experience.
At EU level, it was noted that one-third of carbon dioxide emissions and almost 40% of
electricity consumption is due to buildings. Lately, more and more buildings have entered a
rehabilitation process heat. Monitoring is required to renovate the buildings and new
buildings that are being built because energy can be wasted by inappropriate practices.
Thus, it is desirable to use energy-saving performance practices. This saving can be
achieved by maintenance, renovation and regular monitoring of installations generating and
consuming electricity. It is also important guidance to the users and residents of buildings.
To mitigate climate change, local and regional communities can use in agriculture drought
resistant species intense and persistent. At the same time it is necessary to consider the risk
270

to biodiversity. Also in rural areas can take action for afforestation of slopes at risk of flood
propagation.
Deforestation promotes water run-off on slopes and produce a powerful flood.
One major risk of natural phenomena is to landslides. They affect the slopes, the most
widespread and putting on a variety of events.
Forests include vegetable formations extremely complex and diverse, arranged in several
layers, as well as the flora and fauna they host. Forest's natural wealth, whose role in the
national economy and whose multiple functions in maintaining ecological balance are
difficult to assess. Centuries, the forest was seen as a source of raw materials.
Forests are the key factor in maintaining the ecological balance, climatic and fluid, with a
regenerative capacity 3-5 times greater than any natural ecosystem.
In Romania, the forest occupies an area of approximately 6,000,000 hectares, representing
almost a quarter of the total.
Table 2. Wooded area
Year
Area (ha)
1990
25489
2000
12701
2001
13539
2002
16448
2003
14772
2004
14100
2005
14389
2006
15533
2007
10176
2008
11244
2009
10962
2010
10106
Source: conducted by the authors based on data published on the website of the
http://statistici.insse.ro 2014
The data in the table can be represented in the following figure:

Source: conducted by the authors based on data published on the website of the
http://statistici.insse.ro 2014
Fig. 2. Wooded area for the period 1990-2010
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One of the main functions of forests is to protect soil from erosion, to ensure the purity of
water, air, climatic factors improve, while producing sources of raw materials for the needs
of the population and the national economy.
Given the importance of forests have climatic factors and hence improve the mitigation of
climate change, local and regional communities should be more involved in regeneration
activities and expansion of forests. Expansion of forest area through afforestation is no
other forest vegetation outside forest areas and degraded land.
Analysis of the situation in Romania afforestation carried reveals a worrying situation in
terms of sustainable development wooded areas recorded a dramatic decline after 1990,
from 25,489 ha to 10,106 ha in 2010.
Even in urban areas, local communities can implement climate change adaptation actions
by resizing sanitation in urban areas.
Drinking water is very important to the local and regional communities. Reducing losses in
water distribution networks is an action that can mitigate climate change. Also, in terms of
climate change, there must be a re-evaluation of water resources in the basins and subbasins.
In recent years, during the summer season was an alternation of heat waves. This concerns
in particular patients with chronic heart and lung disease or mental illness. Mitigating the
effects of climate change can be achieved by planning mitigation actions from members of
local and regional communities.
Conclusions
For the next period, local and regional communities should consider maintaining air and
water quality. It is useful to adopt methods of heating because they are more efficient in
terms of energy use and air quality compliance.
It wants the EU local and regional communities to promote programs that lead to reducing
energy consumption in buildings in the public institutions. It is desirable that programs
adopted include power plants, and methods of user involvement buildings saving measures
and efficiency.
In the construction sector, small buildings can replace concrete and steel with renewable
wood and wood products. Production of concrete and steel requires high amounts of energy
and non-renewable natural resources such gravel and coal.
The Member States of the European Union, transport is responsible for about 20% of
emissions of greenhouse gases. They come in 60% of private cars. European Commission
proposal for a directive on alternative propulsion systems provides a wide range of fuels
will become available for road transport.
Not yet established the potential technologies are more effective and which ones can be
marketed in different Member States. Thus, local and regional communities may require the
use of fuel with low emissions public transport.
In a short period, geopolitical and global economic map has undergone major
transformations. These profound changes were triggered in part by the financial crisis,
which is accompanied by an economic crisis in the European Union. In these
circumstances, carefully examined the role of climate policy and energy policy of the
European Union of the downturn in structuring future negotiations.
For local and regional communities, sustainable regional planning is another aspect that has
more importance lately. Sustainable planning the territory should take account of
bioclimatic factors. Energy consumption in urban areas and traffic may have the effect of
reducing the quality of life of local communities and regions.
272

Also planning measures may be of increasingly greater, besides economic and social
measures. The use of low carbon fuels or alternative propulsion systems can help mitigate
climate change. However, a contribution to reducing traffic may have and re use of public
transport. In this respect, beneficial changes in behaviour may be members of local and
regional communities (e.g. type car-sharing).
Acknowledgement
This paper was co-financed from the European Social Fund, through the Sectorial
Operational Programme Human Resources Development 2007-2013, project number
POSDRU/159/1.5/S/138907 "Excellence in scientific interdisciplinary research, doctoral
and postdoctoral, in the economic, social and medical fields -EXCELIS", coordinator The
Bucharest University of Economic Studies
References
1. ANPM 2012. National report on the state of the environment year 2012.2.
2. Committee of the Regions 2014. Green Paper "A Framework for Policy 2030 climate
and energy".
3. European Economic and Social Committee 2014. Sustainable changes in societies in
transition.
4. European Economic and Social Committee 2014a. An EU strategy on climate change
adaptation.
5. European Economic and Social Committee 2014b. Market instruments - the EU
economy with low emissions of carbon dioxide.
6. European Economic and Social Committee 2014c. 2015 International Agreement on
Climate Change: Modeling international climate policy after 2020.
7. Eurostat 2014. Early estimates of CO2 emissions from energy use.
8. National Institute of Statistics, http://statistici.insse.ro

273

RURAL TOURISM DEVELOPMENT STRATEGY IN NORTH WEST

OF ROMANIA
Florentina Daniela MATEI (TITILIN)
Faculty of Agro-Food and Environmental Economics, The Bucharest University of
Economic Studies; email: [email protected], Str. Mihail Moxa, nr.5-7,
Sector 1, Bucharest, Romania
Abstract
Rural tourism in Romania is growing, but must be supported by various actions to align
standards held by developed countries. North West of Romania's tourism potential is
complex and natural and anthropogenic valuable, which is the premise, the fundamental
factor and the offer in promoting rural area. The case study followed the evolution of
tourism indicators (number of accommodation structures, accommodation capacity,
number of arrivals and the number of overnight stays, average length of stay) for the period
2006-2013. These indicators were correlated with two other statistical indicators related to
rural population (population, migratory movement of population and employment rate of
rural population, grouped by age).
Keywords:rural tourism, socio-economic development, sustainable development
Introduction
Rural area in Romania is characterized by underdeveloped infrastructure, inadequate social
services and housing and by serious socio-demographic pressures, such as aging and poor
level of education of the population. Rural development strategy aims mainly improves the
living conditions of the population in rural areas and participation in raising overall quality
of life. Rural tourism development cannot take place without a recovery in agriculture,
because most people in this area ensures its existence through its practice.
The main strategic objectives for agriculture and rural development are (Moga and
Radulescu, 2005):
- Strengthening of private property by going to the formation of medium size
holdings.
- Supporting differentiated farmers in promoting elements performance.
- Support the development of agri-environmental measures are applied.
- Training and upskilling of farmers and young people targets.
- Improving the structures for processing, marketing and implementation quality
control.
- Adaptation and development of rural areas.
With these objectives, rural tourism can grow sustainably, which means that the labor force
will have a consistent training and nutrition system will be generated by the organic crops,
exactly what we want to promote.
Rural tourism and agrotourism, by their specific national food consumption in households
where there were made, has an important economic function potentiating capacity farms. If
foreign tourists who spend their holidays in Romanian pensions, rural tourism and
agrotourism export a form of " internal " food products. Since most foods consumed in
tourism activities come (or should come) from own production of household determines, on
the one hand, the profitability of agritourism is high and the prices are below the prices
charged in other forms of tourism. Of calculations travel services specialist that price a
274

breakfast in all households is lower by 40-50 % compared to a breakfast served in a tourist

hotel restaurant network (the same level of classification). The explanation for this
difference in price is easy. Prices of agricultural products produced and consumed in the
guesthouse (household) does not contain added agritourism business, VAT, excise,
transport, storage etc. Meat, meat products, eggs, cheese, milk, butter, jams, pickles, wine,
brandy, cherry, blueberry, etc., prepared by traditional processing methods, its production
come from farms directly agro tourist mass consumer. On the other hand, rural tourism
services (accommodation, services, etc.) do not bear additional indirect costs (overhead,
commissions, etc.) that makes agro product price to be much lower than in urban tourism
product.
1.Literature review
Doing a review of the literature, we started from a premise of the study "Demographic
strategy in Romania", published by Mrcineanu F., Constantine E., Luke E., and R.
Manea in Agriculure-science and practice Magazine, no 3-4 (71-72) / 2009 which
mentioned some relevant ideas for the study:
Rural labor market has regional differences. Agriculture as the main occupational activity
decreased in importance in the north- west and center of the country. Rural labor force in
these regions is increasingly, focused more on industry and services. However, the share of
agriculture in total occupancy was maintained or even increased in other regions.
Emerging trends in the composition of rural incomes indicates, however, that there is a
diversity of activities, revenues from both pensions and wages increased in real terms and
as a share of total rural income and agricultural income exceeding importance in nature,
which recorded some decline.
According to the National Strategic Framework for Development of the food and the
countryside in 2014-2020-2030, Romanian rural economy is mainly agrarian, because in
Romania the agricultural economy itself has a weight of 60.5 % in its structure to only
14.1% in the EU. Profoundly distorted structure of Romanian rural economy causes a
similar structure of the rural population employed by sector (primary sector 64.2%, of
which 56.6% agriculture, 18.5% secondary sector, the tertiary sector 17.3%). Romanian scale rural non - farm economy (SMEs industrial profile, services, rural tourism) has a low
weight and rural tourism in all its variants, except for a few areas (Bran -Moeciu, Apuseni,
Maramure Bukovina) and the Danube Delta is almost nonexistent (11,000 beds in about
1,600 rural locations).
Creating an environment conducive to investment in rural areas, the expansion of SMEs in
rural non- farm economy and processing of primary agricultural products, should become a
permanent local authorities, by realizing the economic decentralization and subsidiarity
decision in rural areas (or rural) labor surplus of micro industrial village with county or
regional financial support by equipping them with the necessary industrial activities
(electricity, heat, gas, water, sewerage, roads and internal telecommunications, etc.), the
model created long, in rural areas of the EU countries.
According to the study conducted by Otiman. (2011). Romanian rural economy
alternatives: agricultural development and rural food insecurity and severe desertification.
Agro services represents a rate of only 0.1% of rural economic structure, while in Europe
the equivalent is 4,4%.

275

2.North-West Region natural and touristic potential

Northwest Region was created by the voluntary association of counties Bihor, Bistrita Nsud, Cluj, Maramures, Satu Mare and Salaj. The surface area is 34,160 km2,
representing 14.3% of the Romanian territory. North West stands as 4th nationally in
respect of the area or place 29 among the 271 regions of the EU.
In the national arena, the North-Western part of the Macro 1 (NUTS1) and is bordered to
the South West region (Banat), in south-east and east central region of North-East region
(Moldova).
Northern Transylvania home to some of the most beautiful national parks and reserves in
Romania. With a varied flora and fauna and unique relief structures in Romania, these
parks offer numerous trails for mountain lovers : Rodna Mountains National Park - the
largest park in the region, Apuseni National Park - the park 's caves, Emil Racovi
National Park, Maramures Mountains - park springs.
Anthropic tourism potential, the variety and value, directly binds long evolution of human
civilization and cultural interference of specific ethnic mosaic Transylvania.
As a result, there is a series of groups of targets, each with different weights in the various
tourist areas identified in the region: historical vestiges (Roman forts, castles, ancient and
medieval cities); religious objectives (churches, cathedrals, monasteries, cemeteries);
monuments; damns and lakes; cultural objectives (museums, memorial houses);
ethnographic manifestations; regions with traditional Romanian culture and civilization,
represented by "countries" and lands: Oas, Maramures Country, Lpu Country, Chioarului
Country, Nsud Country Stone Country, Beiu Country, Silvaniei Country, lands of
Brgaielor or Codrului.
Are famous wooden churches of Maramures, Salaj, Lpus and historical museums,
ethnographic (Outdoor Sectional), music, costumes, singing and traditional cuisine.
Types and forms of tourism: curative tourism and recreational water; recreational mountain
tourism; ecotourism; winter recreational tourism; cultural tourism; religious tourism and
monastic; ethnography, folklore and folk art items; traditional cuisine; business and events
tourism.
Rural Tourism and Agrotourism. Areas with significant rural tourism are: Beiu
Country, Chioarului Country, Lpu Country, Maramure Country, Nsud Country, Oa
Country and Silvaniei Country.
3. Statistical indicators Analysis
Non-agricultural rural economy in the EU is 75 % of the rural economy, while in Romania
it has a share of about two times lower (40 %). Large discrepancies are noted in terms of
non-agricultural rural economy due to much lower share of services (non-agricultural) in
rural areas and, especially, rural tourism, in Romania practically contributes almost zero in
the rural economy.
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3.1 Data on population

Table 1 Population by location and development regions
Development
Regions

Location

YEARS
2006

2007

2008

2009

2010

2011

2012

2013

UM: Number of people

21610213 21565119 21528627 21498616 21462186 21413815 21355849 21305097

Total TOTAL
NORTHWEST
REGION
Rural TOTAL
NORTHWEST
REGION

2729181

2729256

2724176

2721468

2719719

2717532

2712188

2707926

9684035

9650776

9656357

9663516

9643516

9635620

9618389

9623597

1283886

1270093

1269764

1271511

1269864

1270951

1270353

1272146

Source: Statistical Yearbook of Romania

In 2006 the North West population represent a percentage of 12.6 % of the total population
of the country; 47 % of the 2,729,181 inhabitants were living in rural areas. These
proportions have not changed until 2013.
Table 2 Employment rate by age the rural area of the north-west region
Period
Age

1st Quarter, 2014

UM: Percent
Percent

15 - 24 years

30%

25 - 34 years

70,4%

35 - 54 years

75,8%

25 - 54 years

74%

55 - 64 years

44,4%

15 - 64 years

60,2%

Source: Statistical Yearbook of Romania

From the above table it is observed that, predominantly, employment in rural areas in 2014,
falling in the age group 25-54 years, young people up to 24 years have a lower percentage
of 30 %, which means that rural youth migrate for education or job to the city or outside the
country.
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Table 3 Settlings by location and development region

Years

Location

Development region

2006

2007

2008

2009

2010

2011

2012

UM: Number of people

Urban

TOTAL

NORTH-WEST REGION

Rural

TOTAL

NORTH-WEST REGION

176100

175666

185948

166853

236502

164019

181194

16798

18667

17708

16167

22768

15935

17524

157925

198490

203306

163819

222493

160607

191003

18345

23385

23892

20303

28768

20574

24430

Source: Statistical Yearbook of Romania

In the period 2006-2013, from the total number of inhabitants in urban areas, 9.5 % were
those who had migrated to establish their domicile there. Regarding the rural areas the
percentage is 11.6%, which means a small difference that cannot be a trend.
3.2 Data on rural tourism
Table 4 Tourist reception with functions of tourist accommodation on the types of
structures by the development regions
Years
Types of tourist
accommodation
structures

Development Region

2006 2007 2008 2009 2010 2011 2012 2013

UM: Number

Total

TOTAL

NORTH-WEST REGION

Farmhouses

TOTAL

NORTH-WEST REGION

4710 4694 4840 5095 5222 5003 5821 6009

543

554

585

645

658

650

730

709

1259 1292 1348 1412 1354 1210 1569 1598

193

200

225

259

266

206

252

231

Source: Statistical Yearbook of Romania

In 2006, the number of tourist accommodation structures in the North West is 11.5 % of the
total the country. Of the 543 structures in North West, 193 are farmhouses (ie 35 %).
Nationally, the number of farmhouses in the North West is 15 % of the total. As a share
situation does not change much until 2013, but in 2010 (when the number of farmhouses
was 266) was reduced by 15% by 2013.
278

Table 5 Tourist accommodation capacity in operation by type of tourist

accommodation structures in development regions
Years
Tourist
accommodation
structures

Development
Region

2006

2007

2008

2009

2010

2011

2012

2013

UM: mil. Places/day

Total

TOTAL

56

57

59

91

64

68

74

77

NORTHWEST
REGION

Farmhouses

TOTAL

NORTHWEST
REGION

0,65

0,72

0,80

0,96

1,10

1,05

1,27

1,35

Source: Statistical Yearbook of Romania

Accommodation capacity in farmhuses from Northwest, is 12.5 % all total capacity in the
country, receiving such structure. By 2013 this percentage increased to 17 %, an numerical
increase of 106 % in the period 2006-2013.

Development
Region

Tourist
accommodatio
n structures

Table 6 Arrivals of tourists in structures with functions of tourist accommodation

facilities, by development region
Years
2006

2007

2008

2009

2010

2011

2012

2013

UM: Number of people

6216028 6971925 7125307 6141135 6072757 7031606 7686489 7943153

Total

TOTAL

NORTHWEST
REGION

780554

889707

908076

732474

702838

799774

852523

899370

Farmhouses

TOTAL

217020

288508

357617

325686

289923

360696

447113

501746

NORTHWEST
REGION

50452

74305

100558

72666

52321

50506

67434

77260

Source: Statistical Yearbook of Romania

279

Total

Years
Development
Region

Tourist
accommodation
structures

Table 7 Overnight stays of tourists in structures with functions of tourist

accommodation facilities, by development region

2007

2008

2009

2010

2011

2012

2013

Tounsand nights

TOTAL

18991

20593

20725

17325

16051

17979

19166

19362

NORTHWEST
REGION

2362

2549

2536

2098

1884

2084

2111

2113

459

592

743

673

604

741

906

996

99

142

195

140

103

102

137

148

Farmhouses TOTAL

2006

NORTHWEST
REGION

Source: Statistical Yearbook of Romania

The number of arrivals in farmhouses in the North West increased by 53% in the period
2006-2013. Share of the number of arrivals in the north west farmhouses is presently 15%.

For the same period (2006-2013) the number of overnight stays of tourists in farmhouses
increased by 50 %, avant presently account for 15% of total overnight stays in farmhouses
in the country. Reporting the number of overnights to the number of arrivals we obtain the
average length of stay. For farmhouses, in 2006, the average length of stay was 2 nights /
stay, remain constant until 2013. For total number of care facilities, regional (North West),
average length of stay is 3 nights / stay.
Conclusions
At this time, although there are some positive signs of expansion of rural tourism and
agrotourism, however some restrictive factors limit their extension to the capacity offered
by the landscape and traditional culture. Limiting factors (restrictive) are: infrastructure
(roads, railways, banking, postal, telecommunication fast and reliable) ; poor housing
conditions (unsupported no less demanding tourists) offered by most farms ; insufficient
instruction householders (minimum knowledge in tourism, gastronomy specific local
quality, knowing a foreign language) ; insecurity, personal insecurity tourists etc. The fact
that only 0.1 % of Romania's rural economy comes from tourism compared with 4.4% in
the EU, is an economic indicator illuminating to characterize the state of insecurity
Romanian rural tourism. It follows from these figures that require substantial investment
(education, finance, infrastructure, etc.) in the agri-mountain, for the enhancement of rural
tourism resources.
280

Acknowledgements
This work was co-financed from the European Social Fund through Sectoral Operational
Programme Human Resources Development 2013-2020, project number POSDRU
159/1.5/S/134197 Performance and excellence in doctoral and postdoctoral research in
Romanian economics science domain.
References
1. Mrcineanu, F., Constantin, E., Luke, E., Manea, R. 2009. Demographic strategy in
Romania, Agriculure-science and practice Magazine, no 3-4 (71-72).
2. Moga, T., Radulescu, C.V. 2005. Industry and rural services Economy, ASE
Publishing, Bucharest.
3. Otiman, P.I. 2011. Romanian rural economy alternatives: agricultural development
and rural food insecurity and severe desertification. Romanian Academy Publishing
House, Bucharest.
4. National Strategic Framework for Development of the food and the countryside in
2014-2020-2030.
5. Statistical Yearbook of Romania (2014).

281

ENERGY USE AND ITS RELATED EMISSIONS IN EUROPEAN UNIONS

AGRICULTURE
Alina ZAHARIA, Aurelia Gabriela ANTONESCU
Faculty of Agro-Food and Environmental Economics, The Bucharest University of
Economic Studies; email: [email protected], Str. Mihail Moxa, nr.5-7, Sector 1,
Bucharest, Romania
Abstract
The requirements of diminishing the energy use at European Unions level was highly
emphasized when were adopted the 2020 targets in its development strategy. The economic,
social and environmental implications represent the causes that were the basis for this
decision. The agriculture represents an important sector in the EUs policies, because the
member states must assure the food security and safety for the future in very uncertain
conditions and with uncertain incomes for farmers. The main objective of this paper is to
analyze the energy consumption and the emissions generated by it from agriculture at EU
level. For better results, was made a comparative historical analysis for European Union
on 11 years. The results show a reduction of EUs energy consumption from agriculture by
12.29% during 2000-2010 and the CO2 emissions generated by the energy use in
agriculture have decreased by 15.02% during the analyzed period of time, meaning that the
sustainable policies for reducing the energy consumption and emissions in agriculture
started to be effective.
Keywords Agriculture, comparative data analysis, energy use, European Union,
greenhouse gas emissions
Introduction
By adopting the 2020 Europe Strategy, the European Union emphasized the need of
reducing the energy use and the greenhouse gas (GHG) emissions in order to mitigate
climate change. The GHG emissions have increased drastically after the industrial
revolution due to the high use of fossil fuels that is why the policy makers have
acknowledged the necessity of adopting concrete measures for diminishing the energy use
and the GHG emissions in all sectors of economy. The structure of economy in each EU
Member States is different, but nevertheless the agriculture represents an important source
of pollution by emitting methane, ammonia and carbon dioxide from the use of fertilizers
and pesticides, from the use of some pollutant types of crops, from the management
practices of land resources, from livestock, from residues. Also, the agriculture represents
an important cause of energy use that contributes to climate change by using more energy
resources which generate a high amount of GHG emissions. In this context, are required
analyses on the relation between agriculture and energy sector, as well as studies on the
impact of the energy used in agriculture. This paper focuses on finding the evolution of
energy use in agriculture and its related emissions during 2000-2010 for EU28. The
analysis was made only for the 28 countries, with Croatia, although are not presented the
agricultural characteristics for Croatia, because of the lack of data on agricultural indicators
and structure in the analyzed period of time. The data used was provided from European
Commission and FAOSTAT for using it at a comparative historical analysis for all EU
282

member states. The objectives of this research are: to establish some characteristics of EU
member states regarding agriculture that could influence the energy use and the level of
GHG emissions; to achieve a comparative historical analysis of the energy consumption in
EU agriculture in order to determine the Member States that have critical energy
consumption; to apply a comparative historical analysis of the GHG emissions generated by
the energy used in the agriculture of Member States in order to determine its amount of
pollution in total EU agriculture pollution. The results represent a starting point for
improving the current energy and environmental policies.
1. Literature review
The relation between agriculture, energy and greenhouse gas emissions is highly explained
and analyzed by specialists and policy makers, because a high use of energy in agriculture
would lead to increases of GHG emissions, and, furthermore, would contribute to climate
change whose negative effects will be reflected back on agriculture, and on human society
and Earth. Thus, Zaharia and Antonescu (2014) present the relation between agriculture and
climate change like a negative bidirectional relationship, because, from one hand, the
agriculture generates GHG emissions and, on other hand, the climate change affects the
good development of agricultural activities. Also, Pelletier et al. (2011) consider that food
security could be achieved by a careful energy use due to the presence of a complex
relationship between energy use, food system productivity, and energy resource constraints
and that the energy efficiency measures must not be restricted to technological means, but
also must consider the roles of social, political, and economic contexts in shaping current
and future food system trajectories. Other studies focus on determining improvements in
the crop management for reducing energy use, like Alluvione et al. (2011) who demonstrate
that the integrated farming techniques contribute to energy efficiency which ultimately
produces the reduction of GHG emissions from agriculture. There are also studies which
analyze the energy consumption and greenhouse gas emissions for crops, livestock, and
mixed combination of those two. Mixed farms generate higher energy consumptions with
few possibilities of reducing it, but are more flexible over time for system economic
adjustment, and the GHG emissions could be diminished in the case of cattle by improving
the feed management and genetics and adopting organic farming (Veysset et al., 2010). The
greenhouse gas emissions from agriculture could be reduced if is acting on the way of
handling the manure and fertilisers, optimization of animal feeding, cropping practices,
and land use changes with more organic farming, afforestation and energy crops and it
could be achieved a positive energy balance in agriculture by increasing bioenergy without
affecting the food security (Dalgaard et al., 2011). In order to determine the most pollutant
livestock were analyzed different types of livestock, because, around 2005, it farming has
an impact on global warming with about 10% of total GHG emissions from the EU-27 due
to differences in animal production systems, feed types and nutrient use efficiencies
(Lesschen et al., 2011). Smith (2012) considers that in the past years have been developed
many assessment models and methods and have been proposed mitigation measures for
GHG emissions from agriculture considering the fact that population and its food needs are
increasing. According to Harvey and Pilgrim (2011), in order to achieve a bio-economy and
a sustainable agriculture must be considered, as an integrated approach, all the influential
283

factors, like energy and food demand, petro-chemical depletion, the various sources of
anthropogenic climate change involved in land use, as well as, the new technologies
generated by science and the innovation in the field.
2. Results and discussion
2.1 Some indicators of the EUs Member States agriculture
Each Member State presents some characteristics of agriculture and of economy structure
that must be consider when analyzing the use of energy and the generated emissions. The
agriculture sectors of Member States are different in what concerns the utilized agricultural
area (UAA) per holding, the gross value-added, the structure of production, the net outcome
generated, the technology use, and so on. We analyzed the share of agriculture in the GDP,
the employed population in agriculture, the UAA per holding, and the gross added-value at
basic prices from agriculture. According to European Commission (2011), the share of
agriculture in the GDP of EU27, as well as EU15, represented 1.2% in 2010 while in 2000
the EU15 share of agriculture in the GDP was 1.7%. The percentage of rural population and
the employed population in agriculture in the European Union differs from country to
country and this differences influence the analysis of the energy use and its emissions from
agriculture. According to European Commission, only five Member States (France, Poland,
Germany, Italy, and Romania) summed up in 2010 a percentage of 60.4 of total EU rural
population (European Commission, 2014), meaning that for these countries the
development of rural areas is very important. An interesting fact is that, from those five
countries, only Romania and Poland had the highest shares in the employed working
population from EU of 19.1% and of 10.1% (European Commission, 2012), meaning that,
for achieving social welfare, the agriculture sector is critical in Romania and Poland and for
increasing its performance must be implemented effective policies. The EU27average
population employed in agriculture represented in 2010 4.7% of total EU27 employed
working population and this average was overachieved by 8 Member States. In 2000, 7
Member States of EU15 overachieved the EU15 average of employed working population
in agriculture which represented 4.3% of total EU15 employed working population, the
high average value of employed population in agriculture being caused mainly because of
Greece (17%) and Portugal (12.5%), while the rest of the EU27 countries achieved an
average of 10.6% because 5 countries of 12 had the value over 10%. In 2000, the average
of employed working population in Romanian agriculture had been 45.2% of total
employed population, meaning that during 2000-2010 Romania has reduced her share by
more than half (European Commission, 2012). Even though in 2000 EU had only 15
Member States, we have calculated the average of the employed working population in
agriculture for EU27 which represented 7.48% of total EU27 working population from
2000. This descending trend of the working population in agriculture represents a positive
situation, because the effectiveness of agriculture activities, the use of technologies and the
improvements of managerial practices is increasing. The EU27 UAA per holding had in
2007 12.6 ha, the largest area being in Czech Republic of 89.3 ha per holding and the
smallest areas being in Malta of 0.9 ha per holding and in Romania with 3.5 ha per holding.
Somehow, the small UAA per holding in Malta can be justify by the small area of the
country, but, in the case of Romania, this justification cannot be applied because the UAA
of the country is big, so it could be concluded that Romania should increase its UAA per
284

holding for achieving a better agricultural performance in the future. A way of doing that is
association. Another important indicator relevant for the energy use in agriculture is the
gross value-added. The total EU27 gross value-added at basic prices of agriculture in 2010
was 143,810 million euro, the highest net outcome contribution being brought by France
(27,172 million euro) and the lowest being brought by Malta (57 million euro), while the
total EU27 gross value-added at basic prices of agriculture in 2001 would have been
170,362 million euro, the highest net outcome contribution being brought by France
(32,205 million euro) and the lowest one being brought by Malta (88 million euro). In
2010, Romania was situated on 8th regarding the agricultural net outcome contribution,
with 6,456 million euro, while, in 2001, Romania would have been situated on 9th
regarding the agricultural net outcome contribution for EU27, with 5,709 million euro, if it
had been part of EU in 2001 (European Commission, 2001 and 2011). These analysed
agricultural indicators must be the starting point in presenting the evolution of energy use
and of emissions from agriculture, because without them could not be explained the
different uses of energy and the Member States could not be properly compared among
them.
2.2 The energy consumption of Member States in agriculture: a comparative
historical analysis
One of the European Unions objectives in the energy sector is to increase the energy
efficiency in order to diminish the use of fossil fuels which contribute to GHG emissions
and eventually to climate change. As the populations needs are increasing and the nonrenewable resources are decreasing or the capacity of the renewable ones is shrinking, than
food security is very important all over the world, including in EU. The percentage of the
energy used in agriculture and forestry has decreased in EU28 by 0.25% during 2000-2009.
From 28 Member States, 10 countries have registered an increase of this percentage and the
rest 18 a decrease. The energy use in Poland agriculture and forestry registered the highest
decrease from EU28, by 2.43% of total energy use between 2000 and 2009, while in
Cyprus the energy use in agriculture and forestry has registered the highest increase at
EU28 level, by 1.57%. According to FAOSTAT (2014a), in 2009 the highest share of
agriculture and forestry energy use of total energy use has been registered in Poland
(5.51%), in Netherlands (5.41%) and in Denmark (4.98%) while in 2000 the highest share
of agriculture and forestry energy use of total energy use has been registered in Poland
(7.94%), in Netherlands (6.84%) and in Greece (6.01%). Also, in 2009 the lowest share of
agriculture and forestry energy use of total energy use has been recorded in Malta (0.31%),
Germany (0.45%), UK (0.64%), and Luxemburg (0.79%) while in 2000 the lowest share of
agriculture and forestry energy use of total energy use has been recorded in Germany
(0.4%), Luxemburg (0.56%), Cyprus (0.57%) and UK (0.76 %). So, some EU countries
have reduced their percentage of energy use from agriculture and forestry a lot more than
others and some EU states have increased their percentage. The increases of the percentage
of energy use from agriculture and forestry could be due both to increases of energy use
because of a bad management of farms and to decreases of energy use from other sectors of
economy. The total energy consumption in EU28 agriculture has decreased during 20002010 by 12.29%. This decrease could be due to the adaptation of EU strategy for
285

sustainable development since 2001 (European Council, 2001). Figure 1 illustrates the
comparative analyses of the total energy consumption in EU28 over the 11 analyzed years.

Source: FAOSTAT, 2014

Fig. 1 Total energy consumption in agriculture in EU28, between 2000 and 2010
It could be easily seen that in 2010 the highest energy consumptions over European Union
has been recorded in France, Netherlands, Poland, Italy and Spain with more than 97,000
Terajoule each of consumed energy in agriculture, all these countries summing up
664,014.42 Terajoule, while in 2000 Poland, Netherlands, France, Italy and Spain
consumed in agriculture more than 108,000 Terajoule of energy each state, all these
countries summing up 754,786.91 Terajoule of consumed energy in agriculture, meaning
that more than 65% of EU28 energy was consumed in agriculture by only 5 Member States.
In the following, the performed analysis will highlight these five states. There are 9
Member States, among which is also Romania, which registered increases in the total
energy consumption in agriculture during the analyzed period of time, Cyprus and Czech
Republic having the highest increases, by 352.79% and 116.11%. The evolution of Malta
cannot be analyzed due to the lack of data. During 2000-2010, the highest decreases of
energy consumption in agriculture have been recorded in Slovakia and Bulgaria, by 51.58%
and 41.41%. As can be observed in table 1, 4 of the 5 critical Member States presented
above (France, Netherlands, Poland, Italy and Spain) have decreased their total energy
consumption in agriculture and France, the member state with the highest energy
consumption in agriculture in 2010, has increased its consumption during 2000-2010 by
8.86%.
Table 1 Indices of energy consumption in the EU Member States during 2000-2010 *
GasLiquefied
Natural
Residual
EU / Total energy
diesel Gasoline
petroleum
gas
fuel oil
Member consumption
oils
gas
State
%
Austria
Belgium

-24.33
25.73

-9.50
-12.66

Hard
Electricity
coal

Energy for
power
irrigation

-3.15

-20

-69.23

-35.20

1534.37
**

-94.70

221.40

286

GasLiquefied
Natural
Residual
EU / Total energy
diesel Gasoline
petroleum
gas
fuel oil
Member consumption
oils
gas
State
%

Hard
Electricity
coal

Energy for
power
irrigation

Bulgaria

-41.41

-51.02

90

200

-100

-20

29.14

Croatia

-15.50

-15.97

-33.33

52.27

50

-71.43

0.00

Cyprus

352.79

-14.81**

61.05

0.00

116.11

31700

-6.31

-77.78

-91.89

-77.78

-8.97

-11.90

-11.51

-50

-19.78

-40.00

-68.18

31.71

-1.64

Estonia

75.01

142.31

-100

219.33

-50.00

-100

-13.24

0.00

Finland

-5.01

-11.44

0.00**

54.35

40

9.76

France

8.86

22.47

-30.49

-35.75

-50.00

29.16

Germany

-18.95

-100

-100

19.87

Greece

-27.19

-32.76

-50

33.33

-8.42

Hungary

-24.67

-15.36

-36.80

28.57

-88.24

-20.42

Ireland

-12.73

-14.67

-2.11

Italy

-6.25

-9.44

-78.85

21.44

-11.43

14.33

Latvia

84.34

169.23

-100

26.56

-100

0.00

-11.46

Lithuania

12.76

28.13

-80

25.41

0.00

-50

0.00

-0.53

Luxembourg

44.16

50.00

100

14.71

Czech
Republic
Denmark

-33.33 -21.94

Malta

Netherland
s

-20.10

-28.35

-29.33

4.35

93.83

Poland

-25.91

-34.87

25

-83.57

17.26

-65.98

Portugal

-35.45

-46.26

-30

220**

43.50

Romania

8.24

-20.25

2200

9.82

Slovakia

-51.58

-54.23

-100

-33.17

-33.33

-100

-53.65

Slovenia

-12.34

0.00

-20.00

Spain

-10.48

-14.64

10.06

-46.48

-73.02

18.89

Sweden

-16.55

-25.61

10.24

0.00

-44.44

5.71

United
Kingdom

-26.16

-73.70

29.38 5537900

10.00

-85.71

-7.55

EU28

-12.29

-14.07

-64.54

14.38

7.67

0.00

-96.77 177.48
-

2950

-66.67 245.01

-66.84 -19.87

-6.17

Source: own calculations using FAOSTAT data, 2014

*Formula: %=(value of 2010-value of 2000)/ value of 2000 * 100
** Base year in formula*: 2005
The indices which indicate the value 0.00 represent the maintenance of a steady trend and
the ones which have the value -100 show a decrease of energy consumption up to 0. The
287

majority of the developed countries have increased their electricity consumption in

agriculture and have decreased their use of gas-diesel oils. All 12 EU countries, for which
we have been able to calculate the indices, have reduced their gasoline consumption in
agriculture. At EU28 level, the sources of energy which have recorded increases in their use
during 2000-2010 were the energy consumption from hard coal by 14.38% and the energy
consumption from electricity by 7.67%, meaning that the policy makers should propose
more intensive measures for diminishing the energy consumption in agriculture by
supporting green investments, green technologies, green agricultural practices, and by
adopting programmes of education for all the farmers and landowners.
2.3 Emissions generated by energy use in EU agriculture: a comparative historical
analysis
Another EU objective in the energy sector is the reduction of GHG emissions in order to
mitigate climate change and because of the diminution of non-renewable energy resources.
The EU28 agriculture generates about 10% of the total GHG emissions and of about 1.11%
of worldwide GHG emissions and the trend of the emissions generated from agriculture is
descending over time (Zaharia and Antonescu, 2014). In agriculture, the emissions derived
from bad manure management, enteric fermentation, rice cultivation, use of synthetic
fertilizers, bad crop management, cultivating organic soils, burning crop residues and
savannah and from energy use. In figure 2 is illustrated the GHG emissions from energy
use in agriculture during 2000-2010 and could be observed the high share of CO2
emissions.

Source: FAOSTAT, 2014

Fig. 2 Total EU28 emissions from energy use in agriculture between 2000 and 2010, by
type
The emissions generated by the energy use in agriculture have overall decreased during
2000-2010, but the emissions from CH4 have increased by 6.4% while the CO2 emissions
and the N2O emissions have decreased by 15.02% and by 13.76% in the analyzed period of
time. 8 countries from 28 have not decreased their CO 2 emissions from energy use in
agriculture, among which is situated also France, which increased its emissions by 10.51%,
an obvious thing considering the fact that only France from the 5 critical Member States
has increased its total energy consumption in agriculture by 8.86% while its share in the
total EU28 quantity of energy use emissions in agriculture represented in 2010 13.96%. In
2010 and in 2000, Poland, France, Netherlands, Italy, and Spain, have had the highest
quantity of emitted CO2 emissions from EU28 agriculture while the smallest CO2 emitted
emissions have been recorded in Malta, Luxemburg, Cyprus, Slovenia, Lithuania, and
Latvia. 15 EU countries from 28 have increased their CH 4 energy use emissions in
288

agriculture during 2000-2010 and in 2010 Poland, Germany, Netherlands, Spain, and Italy,
had the highest amounts of emitted CH4 energy use emissions in agriculture while Malta,
Slovenia, Luxemburg, Croatia, Cyprus, and Latvia, emitted the smallest quantity of CH 4
energy use emissions in agriculture. Only one of the five critical member States regarding
the highest amount of CH4 energy use emissions generated in agriculture Poland has
decreased its CH4 energy use emissions in agriculture by 8.95%, considering that its share
in total EU CH4 energy use emissions in agriculture was in 2010 22.01% and that has
decreased its total energy consumption in agriculture by 25.91%, while the rest four
countries, namely, Netherlands, Spain, Germany, and Italy have increased their CH 4 energy
use emissions in agriculture by 61.54%, 16.55%, 14.72%, and 10.14% even though their
total CH4 energy consumption in agriculture have decreased by 20.10%, 10.48%, 18.96%,
and 6.25%; all this four countries represented in 2010 43.14% of total EU CH 4 energy use
emissions in agriculture. In what concerns the N2O emissions from energy use in
agriculture, in 2010, France, Italy, Poland, Spain, and Greece had the highest shares of the
total EU N2O emissions from energy use in agriculture, of about 66.16%, while the lowest
shares was in the case of Malta, Luxembourg, Cyprus, Lithuania, and Germany, with about
0.98% of total EU N2O emissions from energy use in agriculture. One of the five critical
Member States regarding the highest amount of N2O energy use emissions generated in
agriculture France has increased its N2O energy use emissions in agriculture by 22.27%,
considering that its share in total EU N2O energy use emissions in agriculture was in 2010
21.39% and that has increased its total energy consumption in agriculture by 8.86% during
2000-2010, while the rest four countries, namely, Italy, Poland, Spain, and Greece, have
decreased their N2O energy use emissions in agriculture by 9.26%, 34.18%, 14.20%, and
32.35%, also because their total N2O energy consumption in agriculture have decreased by
6.25%, 25.91%, 10.48%, and 27.19%. The analyzed situation shows that the countries
which are the highest polluters have the highest impact on environment that is why they
should promote more the sustainable policies and practices in agriculture, especially
France, who is an important actor on the international market in what concerns agriculture.
In table 2 were calculated the percentages of energy use emissions from agriculture in total
agriculture emissions in order to understand the high importance of energy use management
at EU level.
During 2000-2010, the shares of energy use emissions from agriculture in total agriculture
emissions have decreased by 1.2% in the case of CO2 emissions and by 0.2% in the case of
N2O emissions while in the case of CH4 emissions, the share have increased by 0.11%. The
CO2 emissions form energy uses in agriculture have the largest share in the total CO 2
emissions generated by agriculture. All these aspects impose the diminution of CO2
emissions from energy use in agriculture by adopting sustainable strategies for those
agricultural activities that consumes and pollute heavily due to the high use of energy.
Table 2 Percentage of energy use emissions from agriculture in total agriculture
emissions -%Share of
EU28
emissions

2006 2007 2008 2009 2010

20102000

CO2 emissions 18.88 19.10 18.90

18.53 19.16 19.39 18.71 18.36 18.42 17.86 17.68

-1.20

CH4 emissions 0.67

0.70

0.67

0.66

0.69

0.71

0.74 0.73 0.77 0.76 0.77

0.11

N2O emissions 2.87

2.84

2.84

2.84

3.01

3.10

2.89 2.76 2.81 2.77 2.67

-0.20

2000 2001

2002

2003

2004

2005

Source: own calculations using FAOSTAT data, 2014

289

Always, must be remembered that the fossil fuels are limited, the reserves started to reduce
a lot in the past century, so the human society, which is dependent on energy, should be
more careful with the ways of using the energy resources in the future. Also, for now,
without energy resources, the objectives of Common Agriculture Policy, especially food
security, could not be achieved, and all the efforts in this regard made so far would be in
vain.
Conclusions
This research shows the positive or negative situation of EU Member States in what
concerns the agriculture energy consumption and the emissions generated by energy use in
agriculture. The EU strategy for sustainable development proposes the presence of
equilibrium between the economic, social and environmental pillars, this means that the
natural resources must be exploited and use in a more environmental-friendlier manner for
achieving eventually the social welfare. During 2000-2010, the percentage of energy use
from agriculture and forestry has slowly decreased, because were countries which
registered increases that could have been due both to increases of energy use because of a
bad management of farms and to decreases of energy use from other sectors of economy.
Also, the total energy consumption in EU28 agriculture has decreased by 12.29% during
the analyzed period of time; this positive situation generating lowest GHG emissions into
atmospheres from agriculture. Overall, the energy use GHG emissions from agriculture
have decreased during 2000-2010, but the CH4 emissions from energy use in agriculture
have increased by 6.4% and the CO2 emissions and the N2O emissions have decreased by
15.02% and by 13.76% in the analyzed period of time. The CO2 emissions form energy
uses in agriculture have the largest share in the total CO2 emissions generated by
agriculture, around 18%, so it is imperious to act on these emissions and on the agricultural
activities which generates them. The shares of energy use emissions from agriculture in
total agriculture emissions have decreased by 1.2% in the case of CO2 emissions and by
0.2% in the case of N2O emissions and, in the case of CH4 emissions, the share have
increased by 0.11%. The highest impact on environment generated by energy consumption
and its GHG emissions in agriculture is caused by the countries which are the highest
polluters, like France, who is an important actor on the international market in what
concerns agriculture, that is why they should promote more the sustainable policies and
practices in agriculture. So, as the needs of the population are increasing, the food security
and safety must be met, the non-renewable resources are decreasing, the capacity of the
renewable ones is shrinking, and the sustainable development requires the protection of
environment and human health in the economic activities, than the use of energy sources
must be carefully managed in agriculture. It is not enough to treat the bad management
practices, but also t is required to prevent the high uses of energy and the generation of high
quantities of GHG emissions, in order to achieve the economic, social and environmental
equilibrium and to achieve social welfare.
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291

THE IMPORTANCE OF IMPLEMENTING THE MEASURE 121"MODERNIZATION OF AGRICULTURAL HOLDINGS" ON THE RURAL
DEVELOPMENT IN ROMANIA
Andrei-Marius SANDU
Faculty of Agro-Food and Environmental Economics, The Bucharest University of
Economic Studies; email: [email protected], Str. Mihail Moxa, nr.5-7, Sector 1,
Bucharest, Romania
Abstract
This study aims to analyse the access level of the 121- measure "Modernization of
agricultural holdings" and the impact this measure had on farmers in Romania, but also on
the rural development. The measure 121 is part of the NRDP 2007-2013 and it aims to
modernize agricultural holdings, both animal and vegetal. The principal target of this
measure is to increase the competitiveness of agriculture through new investments but also
through better management of resources in agriculture. The paper presents statistical data
from the years 2013 and 2014, the final years of the National Rural Development
Programme 2007-2013. Analysing the measurement data presented on Measure 121, we
can say that this measure is a success of Axis 1 of the programme 2007-2013.
Keywords
National Rural Development Programme 2007-2013, Axis 1, Measure 121, Rural
development, Agriculture
Introduction
The countryside is the permanent value of a nation. In the geographical area that falls under
the ruralconcept, several elements are noticed contributing to the socio-economic
development. These are the population, the natural resources, the agricultural activities, the
tourism potential and the spiritual values.
In defining this area, the Romanian rural area is also introduced which over the recent years
has undergone significant changes. They were necessary when it was seen that "country
life" differs from "city life", economically and socially. The accession to the European
Union has made this transition to be highly publicized by trying to balance the ratio among
rural and urban areas. This was possible by providing a higher importance to the rural
development term.
The rural development is a very important topic for the European Community. The rural
development is intended to achieve a balance between rural values and modernization of
rural life (Borza and Talmaciu, 2011).
"Modernization of agricultural holdings" was created to help increase the economic and
social welfare of members of the rural area. This is part of the National Rural Development
Programme 2007-2013 and is one of the representative measures of the programme. This
article aims to make a detailed analysis of the measure 121 since its implementation until
the current period and the impact it had on the development of the rural area and the
benefits identified after its implementation.
1. Literature review
"Romanian rural area has a great potential for the development of the agricultural sector,
both in terms of input and output in agriculture"(Popa and Vasilescu, 2013). During the
endeavourto achieve viable rural development in the European Union at the level of each
292

Member State, national rural development programmes were drafted for 2007-2013,
broken-down into axes and measures. There are many studies that address rural
development in Romania, but also how the 2007-2013 european programme (NRDP),
influenced rural development by axes and measures (Sin and Nowak, 2013; Serban and
Juravle, 2012). "The general objective of the Measure 121 is to develop the competitiveness
of the agricultural sector through better use of human resources and production factors"
(Stafie, 2013). The use and implementation of measure 121 resulted in a significant
increase of productivity in Romanian agriculture, but also to viable rural development with
direct impact on rural population, economically and socially.
2. The importance of the National Rural Development Programme 2007-2013
The share of rural population in the overall population shows the importance of rural
development. Thus 44% of the world population lives in rural areas, and in advanced
countries this percentage is clearly higher, reaching a threshold of 55%. At European level,
the Commission for Agriculture considers that rural areas account for 85% of the total (Sin
and Nowak, 2014). Given the high share at the level of the European Union,a National
Rural Development Programme was created for each Member State, which had a period of
six years, i.e. 2007-2013. In Romania, the NRDP 2007-2013 was allocated an amount of
EUR 8.124.98.745, that is a percentage of 87.12% of the overall total of 9,324,804,232 of
the National Rural Development Programme 2007-2013. It was divided into:
111 "Vocational training, information and diffusion of knowledge"
112 "Setting up of young farmers",
121 "Modernization of agricultural holdings",
122 "Improving the economic value of forests",
123 "Increasing the value added agricultural and forestry ",
125" Improving and developing infrastructure related to the development and
adaptation of agriculture and forestry",
141" Support for semi-subsistence farms ",
142" Setting up of producer groups ",
143" Providing counseling and advice for farmers ",
221" First afforestation of agricultural land "
211" Support for mountain areas,
212 "Support for less favored areas - other than mountain areas"
214 "Agri-environment"
215 "Animal welfare"
312 "Support for the creation and development of micro-enterprises",
313 "Encouragement of tourism activities"
322 "village renewal and development, conservation and upgrading of rural
heritage",
4.1 "Implementation of local development strategies"
421 "Implementing cooperation projects"
431.1 "Building public-private partnerships,"
431.2 "Operation Groups local Action, acquiring skills and animating the territory
"511" Technical Assistance "
611" Complements to direct payments" (Source: National Rural Development
Programme 2007-2013).

293

Table 3 Plan by axis (in EURO total period) total amount

Axis

Public contribution
Contribution
Total public
rate
contribution
EAFRD+
Sum
EERP
EAFRD+
(%)
EERP
Average for
the entire
period
3,290,903,672
89.27 2,937,630,971
2,792,174,666
85.68 2,392,472,124
2,371,324,905
85.72 2,032,587,312
366,917,508
94.46 3,460,590,603

Axis 1
Axis 2
Axis 3
Axis 4
Technical
110,956,105
90.93
100,895,834
assistance
Complementary
392,527,376
80.00
314,021,901
direct payments
General total
9,324,804,232
87.12 8,124,198,745
Source: Ministry of Agriculture and Rural Development, National Rural Development
Programme 2007-2013, consolidated version
Of the four axes above mentioned, Axis 1 has the most important and largest allocation.
This was in turn divided into 10 measures. Each measure has its targets and objectives that
led to the fulfilment of the overall objectives of the National Rural Development
Programme. The measure 121 "Modernization of agricultural holdings" was among the
most important measures of Axis 1 of the National Rural Development Programme 20072013.The general objective of this measure is to develop the competitiveness of the
agricultural sector through better use of human resources and production factors, and the
fulfilment of national standards and communication standards (Applicants Guideline for
accessing Measure 121 "Modernization of agricultural holdings").
3. The importance of the measure 121 "Modernization of agricultural holdings"
The specific objectives of the measure refer to: introduction and development of new
technologies and processes, production diversification,adjustment of profile, level and
quality of production to market requirements, including organic production, adaptation of
holdings to community standards, increasing the income of the agricultural holdings
supported; supporting the members of producer groups or other associative forms in order
to encourage the phenomenon of association (The Applicants Guideline for accessingthe
Measure 121 - Modernization of agricultural holdings). In Romania, the measure 121 was
allocated the amount of EUR 991,827,895 of which the contribution of the European Union
was 80% and the contribution of the Romanian Government was 20%, the total cost
comprising public contribution and private contribution is of EUR 1,840,962,042. Through
the analyzed measure, non-refundable funds are granted to an extent of 40%-70% of the
total eligible amount of the project, the funds representing public co-financing, to which the
private contribution must be added. The minimum ceiling accepted for a project financed
through 121 is EUR 5,000; this amount represents the total eligible worth of the project.
294

The aid intensity is differentiated as follows:

I. For projects that do not include investments in renewable energy production and use,and
are not associative forms:
1. For the vegetal sector:
1.a construction-mounting projects, maximum eligible amount is EURO 1.000.000, the
share of non-refundable support will be 40% (representing EUR 400,000).
1.b projects for purchase of machinery and equipment, the maximum eligible value of
EUR 700,000, the share of non-refundable support will be 40% (representing nonrefundable 280,000).
2 For livestock sector:
2.a construction-mounting projects, maximum eligible amount is EUR 2,000,000, the
share of the non-refundable support will be 40% (representing EUR 800,000).
2.b projects for the purchase of machinery and equipment is EUR 1,000,000; the share
of the non-refundable support will be 40% (representing EUR 400,000).
3 For projects involving investments for introducing raw milk standard, the maximum
eligible amount is EUR 2,000,000. The share of the non-refundable support will be 40%
(representing EUR 800,000). (Applicant's Guide v11, 2014).
The measure 121 was effective and efficient in comparison with other measures of Axis 1.
If Axis 1 was one of the measures that have achieved a satisfactory overall balance, as 121
was one of the measures which had an upward trend in this axis. This has helped improve
production and transformation processes. These conclusions are supported also by high
financial share in the budget but also a medium-low level of repercussion. (Final Report of
Interim Evaluation of the National Rural Development Programme 2007-2013, 2010).
The upward trend of the measure continued during all 6 years of implementation. Thus, in
2014 a number of 8,154 projects was registered submitted with a public value of EUR
3,008,189,083 of which 3,375 projects were selected with a public value of EUR
1,250,133,509. From these 2,781 projects were contracted projects with a value of EUR
907,559,635. Of these projects, the amounts paid until now amount to EUR 497,863,724
(APDRP).
Thus, we observe a high degree of absorption of about 92% of the public value, more
precisely 91.50%. The measure progress is shown by the number of farms receiving
investment support, namely 2,781 of the total target of 44,458 which represents a level of
6.25% of the total National Rural Development Programme.The financial execution rate is
54.85%, EUR 497,863,724 were used until July 2014 from theallocation of 907,559,635.
At the end of 2013, about 61,28% of submitted project addresses field crop investments,
targeting the purchases of machinery and equipment. The remaining 38,72% address the
other types of agricultural branches. The difference of 38.72% from the investments
addressing other types of agricultural sectors, as follows:
7.31% "Horticulture" (153 projects accepted) with a total amount of expenditure
162,865.824 thousand Euro and public value of 68964.841 thousand Euro;
0.24% "Wine" (5 projects accepted) with a total investment volume of 6737.201
thousand Euro and public value of 2402.813 thousand Euro;
4.54% "Permanent crops" (95 projects accepted) with a total amount of
expenditure 67944.613 thousand Euro and public value of 28117.541 thousand
Euro;
295

5.98% "Milk and milk products" (125 projects accepted) with a total amount of
expenditure of 164,792.041 thousand Euro and public value of 65598.755 thousand
Euro;
1.82% "herbivorous animals" (38 projects accepted) with a total amount of
expenditure 52529.311 thousand Euro and public value of 21505.947 thousand Euro;
8.46% "Pigs" (177 projects accepted) with a total investment volume of 329,042.410
thousand Euro and public value of 134,159.219 thousand Euro;
6.79% "poultry" (142 projects accepted) with a total amount of expenditure
289,556.091 thousand Euro and public value of 104,504.240 thousand Euro;
3.59% "Mixed (crops and animals)" (75 projects accepted) with a total amount of
expenditure of 58773.245 thousand Euro and public value of 23888.297 thousand
Euro (MARD, Annual Progress Report on the implementation of the National Rural
Development Programme in Romania in 2007-2013, 2013).

Although organic farming is a relatively young domestic and a high degree of risk higher
for farmers who choose to use organic production methods, a number of 326 farmers have
turned to this type of production, the remaining 1,766 opting for the type of Conventional
production
The chart below presents the projects accepted so far 121, for each type of agricultural
industry.
Source: Ministry of Agriculture and Rural Development, Annual Progress Report on the
implementation of the National Rural Development Programme in Romania in 2007-2013,
2013
Fig. 1 Measure 121- number of agricultural projects accepted by branch
296

Regarding the types of beneficiaries, the largest share is held by legal entities (72.61% of
all projects accepted under this measure) with 1,519 accepted projects, while that
individuals (in this category were monitored freelancers, individual enterprises and family
structures unincorporated) hold a share of 27.39% of the total projects accepted this
measure, with 573 projects accepted in the 452 farms run by men and 121 farms run by
women.
Regarding the guarantee scheme in 2013 were given 28 guarantees worth 11846.036
thousand euros, corresponding to a total of 18 projects. Level guarantees granted in 2013
decreased significantly compared with the results obtained the previous year. Thus, there is
a decrease of approx. 71% of the number of securities issued or approximately 59% of their
value. Also, the number of projects held up by the guarantee schemes fell by about 70%.
Thus, from April 2010 until now, has been granted a total of 429 guarantees worth
138,207.088 thousand Euro (the Euro denominated date source is 4.0715 lei / euro). RDP
beneficiaries who have obtained guarantees were able to run projects contributing
mechanism to ensure their implementation by facilitating the fund manager has granted an
amount of credit in the amount of 201,328.197 thousand Euro. The situation guarantees
granted in April 2010 December 2013, classified by type agricultural branch falling
project is as follows:
Horticulture 38;
Permanent crops 21;
Wine 2;
Milk and milk products 47;
Pigs 110;
Poultry 7 84, 33
Animals grazing (except dairy) 9;
Mixed (crops and livestock) 19.
Field crops 99 (MARD, Annual Progress Report on the implementation of the
National Rural Development Programme in Romania in 2007-2013, 2013).
At the end of 2013, at the level of the entire country, projects were accepted in all the 8
regions of the country.
Table 4 Number of projects accepted broken down by regions at the end of 2013
Region
Number of projects
Public value-euro
accepted M121
thousands
North-East
229
78,347.199
South-East
South Muntenia
South-West
West
North-West
Centre

501
510
129
218
252
241

Bucharest-Ilfov
Total

155,796.122
161,424.738
44,459.789
84,571.058
101,934.999
108,635.820

12

3,890.116

2092

739,059.841

Source: Ministry of Agriculture and Rural Development, Annual Progress Report on the
implementation of the National Rural Development Programme in Romania in 20072013, 2013
297

The table above shows the absorption of the measure121 differs from one development
region to another. Most projects accepted at the end of 2013 were in the South Muntenia
region with 24,38% while the region with the fewest projects accepted was Bucharest-Ilfov
with 0,57%.
Conclusions
The measure 121 has played an important role in The National Rural Development
Programme 2007-2013. The high absorption level of 92% indicates that the measure
targets were met, and that the beneficiaries considered this measure is beneficial. Therefore,
by accessing this measure, the beneficiaries could adapt their holdings to community
standards. The income of the holdings increased through the investments made by means of
the measure 121.Modern equipment was introduced and purchased to increase and diversify
production.
In terms of paying the tranches of money to the beneficiaries, a threshold of more than 50
was reached, the remaining money is be paid until the end of the projects in progress. The
absorption rate was increased due to the direct involvement of both the beneficiaries and
the State in the problemsfaced at the beginning of the co-financing.
The measure 121 resulted in a homogeneous rural development, relying more on a number
of projects with a small value than projectswith very high values, but with a significant
impact in the regions that could benefit from the contribution of the projects started on the
measure 121.
Acknowledgement
This work was cofinanced from the European Social Fund through Sectoral Operational
Programme Human Resources Development 2007-2013, project number
POSDRU/159/1.5/S/142115 Performance and excellence in doctoral and postdoctoral
research in Romanian economics science domain.

References
1. Borza, M., Talmaciu, M. A. 2011. Consideration Regarding the Reduction of RuralUrban Disparities in the Developing North-East Region, study on Iasi Metropolitan
Area, Ovidius UniversityAnnals of the Economic Sciences, Series XI, Issue 1:213-218
2. Popa, A., Giurca, L., Vasilescu, A. 2011.Romanian Rural Development Under The
Pressure of European Structural Founds, LucrariStiintifice, Seria I,Volum XIII (3): 97106, Facultatea de Management Agricol, Timisoara
3. Serban, A., Juravle (Glaser), A. 2012. RuralulRomanesc in contextual
strategiiloreuropene de dezvoltare, RevistaRomana de Sociologie, Bucuresti, serienoua,
anul XXII, Nr. 3: 265-281
4. Sin, A. C. Nowak, A. 2013. Comparative Analysis of EAFRDs Measure 121
(Modernization of agricultural holdings) implementation in Romania, Proceedings1st
International Conference ESPERA 2031, Procedia Economics and Finance, 2014,
Volume 8: 678-682

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5. Stafie, A.G. 2013. Study of accessing European founds within the management tool for
modernization of agricultural holdings, Proceedings of the Managerial Challenges of
Contemporary Society, Cluj-Napoca, Babes Bolyai University: 117-121
6. Annual Progress Report on the implementation of the NATIONAL RURAL
DEVELOPMENT PROGRAMME in Romania in 2007-2013, 2013, Ministry of
Agriculture and Rural Development, Bucharest
7. Applicants Guideline to access Measure 121- Modernization of agricultural holdings
v11, 2014, www.apdrp.ro
8. Final Report of the Interim Evaluation of the National Rural Development Programme
2007-2013, 2010, MARD, Bucharest
9. National Rural Development Programme 2007-2013, consolidated version, Ministry of
Agriculture and Rural Development, Bucharest
10. www.apdrp.ro

299

ORGANIC PRODUCTS A NECESSITY OR AN OPPORTUNITY FOR

ROMANIAN AGRICULTURE?
Silvius STANCIU
Faculty of Agro-Food and Environmental Economics, The Bucharest University of
Economic Studies; email: [email protected], Str. Mihail Moxa, nr.5-7, Sector 1, Bucharest,
Romania
Abstract
Ecological products may represent a valid alternative for Romanian agriculture. The
national agricultural potential, significant for the organic production, is represented by
large farming areas, which are fallowed for a large period of time, a small number of
industrial polluters in Romania and Romanias tradition in agriculture. The increasing
demand in organic farming products, which became manifest at a community and
international level, may represent an opportunity for local farmers. The poor development
of intensive farming production in Romania may represent a strategic advantage in
developing the ecological agricultural sector. The present paper proposes an organic
product concept assessment, an identification of Romanian agricultures opportunities to
obtain organic raw materials, an ecological product domestic and international market
description.
Keywords
ecological, organic, biologic, production, consumption
Introduction
Organic foods represent niche products, destined to consumers having above-average
incomes, who are careful about their diet and their health. (Dinu et al, 2014). The
continuous development of world population raises complex food safety issues at a global
level. The natural potential, represented by farming lands, climatic conditions, water
resources and mineral components is limited by the planets constraints. Crops need full
development stages until they reach technological maturity, whereas the animal kingdom
has a cycle that comprises development stages that may be compressed /optimized only up
to certain limits. Under these conditions, food shortage sometimes becomes manifest,
which is usually followed by social actions, wars or population migration. Food production
intensive systems, relying on the use of chemical fertilizers, fungicides, insecticides, plant
growth regulators and pesticides or on genetic changes, represent options that only
temporarily solve global food demand but, on the other hand, they raise food ethics issues
and they pose potential risks for human race genetic mutations (Hails, 2000, Pusta et al,
2009). A consumer segment, with sufficient financial resources and access to information,
aware of the potential risks that conventional foods pose, asks for products obtained by
means of ecological farming and processing. These products represent, in fact, the basis for
a healthy nutrition. Unlike conventional farming, oriented towards economic efficiency
maximizing, ecological farming focuses on balancing the social, economic and ecological
aspects. Food organic farming and processing do not have as main purpose cost reduction,
the focus being put on quality and environment protection. Thus, these products are more
expensive, destined, at present, for a consumer elite that values the products natural
properties and a healthy nutrition. Unfortunately, if intensive farming has been practised on
300

a certain surface of farmland, then the return to organic farming principles is a long-term
and costly process.
1. Literature review
On the Romanian market there are a series of food and non-food products with names that
contain the terms natural, ecological, organic or biologic. These words are frequently used
in everyday language most often than not without knowing their real meaning. The organic
product must comply with some quality standards, based on some well-defined and
accurately-determined criteria (Winter and Davis, 2006, Kahl et al, 2012). In many cases
the concept is misunderstood by the consumer, who confuses the terms natural and
ecological, biologic or organic. The consumer purchases products which are labelled with
the term natural without knowing the fact that natural or 100% natural frequently
represents a marketing strategy that does not offer the guarantee of a quality product and
does not indicate an ecological product. In order to avoid the fraudulent use of the terms
ecological, biologic, organic or of the abbreviations bio, eco as trademarks or
use practices for the products that are not obtained in accordance with the ecological
production rules and regulations and that may mislead the consumer, the Government of
Romania issued the Ordinance amending and supplementing the Government Emergency
Ordinance No. 34/200 regarding ecological food products. The national legislation,
correlated with the community one, clearly defines the objectives, principles and rules that
must be applied to ecological production, making references to the conditions imposed on
ecological farming and the processing referring to land conversion, plant cultivation and
animal breeding (without using chemical substances or other genetic modifications), to
adequate marking labelling, selling, inspection and certification.
From the point of view of scientific significance there is no difference between the terms
bio/biological, eco/ecological or organic. Their use is specific to some geographical area
and the terms are not mutually exclusive. Thus, organic is mainly used in the AngloSaxon area whereas bio (from biological) is mainly used in the French - German area. In
the USA and Canada the term organic is used, in the German area both eco and bio
and in Italy or Hungary the term used is bio. In Romania, according to the community
recommendations, the agreed term is ecological, and on the certification logo from the
specified products there are the terms Ecological Agriculture, with the abbreviation ae.
Toncea et al (2009) carried out an overview of the equivalent notions of the ecological
product used by European countries according to the Regulation (CE) No. 834/2007.
Table 1.The use of the terms relating to ecological production in the EU countries
Country
Terms used
Country
Terms used
Austria (AT)
biologishe
Romania (RO)
ecologic
Lithuania (LT)
ekologikas
France (FR)
biologique
Belgium (BE)
biologische
Slovakia (SK):
ekologick,
biologick;
Luxembourg(LU)
biologesch
Germany (DE)
kologisch,
biologisch
Bulgaria (BG)

Slovenia (SL)
ekoloki
Malta (MT)
organiku
Greece(EL)
;
The Czech Republic ekologick,
Spain (ES)
ecolgico, biolgico
(CZ)
biologick
Great Britain (GB)
organic
Ireland(IE)
organic
301

Country
Cyprus (CY)
The
Netherlands
(NL)
Denmark (DK)
Poland (PL)

Terms used
organic
biologisch

Country
Sweden (SV)
Italy (IT)

Terms used
ekologisk
biologico

kologisk
ekologiczne

Hungary (HU)
Latvia (LV)

kolgiai
bioloisks,
ekoloisks
luonnonmukainen

Estonia (EE)
mahe, koloogiline
Portugal (PT)
biolgico
(Source:Toncea et al, 2009)

Finland (FI)

According to Toncea et al (2009), there are organic food products that originate from three
main types of ecological farming: ecological farming proper (organic or biologic),
biodynamic farming and natural farming (forestry farming and permaculture). The
principles of the three types of farming are presented in the community regulations
834/2007 and 889/2008 of the European Commission and in the own standards, like
DEMETER for the biodynamic production.
The ecological farming itself (organic or biologic) proposes an alternative to the
conventional agriculture obtaining high-quality agricultural products, with high
organoleptic properties and digestibility and soil fertility improvement, eliminating all
environment pollution sources. The biologic farming system gives up chemical fertilizers
completely, the necessary nutritive elements being ensured by means of traditional
methods. Lotter (2003) proposes some differentiation criteria between the two production
systems (table 2).
Table 2. Some criteria to compare conventional and organic agriculture
Conventional
Organic
Apply chemical fertilizers to Apply natural fertilizers, such as manure or compost,
promote plant growth.
to feed soil and plants.
Spray synthetic insecticides to Spray pesticides from natural sources; use beneficial
reduce pests and disease.
insects and birds, mating disruption or traps to
reduce pests and disease.
Use synthetic herbicides to Use
environmentally-generated
plant-killing
manage weeds.
compounds; rotate crops, till, hand weed or mulch to
manage weeds.
Give animals antibiotics, growth Give animals organic feed and allow them access to
hormones and medications to the outdoors. Use preventive measures such as
prevent disease and spur growth.
rotational grazing, a balanced diet and clean housing
to help minimize disease.
(Source: Lotter, 2003)
The transition from an intensive farming system to organic production is relatively difficult
and it lasts 1-3 years or a rotation, depending on the intensity degree of the farming system
before conversion. For the certainty of the organic production (biologic, ecological) some
certifications are necessary.These certifications are made by some certification institutions
authorized by the state and/or by the European Economic Commission (EEC) or by the
International Federation of the Organic Agriculture Movement (IFOAM). The certification
is costly and the procedure is complex and strict. Although the conversion period from
302

intensive to organic farming involves a series of losses for the producer, the subsequent
benefits can be significant, taking into account the high prices of the products (Caceka and
Langnera,1986). Reganolds (2013) proposes a series of indicators in order to comparatively
analyse the conventional and organic production farming systems (table 3).
The foundations of biodynamic farming were laid by Steiner in 1924 (Paul, 2011). The
biodynamic production system proposes getting high nutritive value foods by applying a
concept, which relies on the energies of life. (Ponzio, Gangatharan i Neri1, 2013). The
accent in the biodynamic farming production is laid on integrated farming systems, the use
of inter-crops and crop rotation, animal and crop integration, soil protection and
regeneration by means of compost (Carpenter-Bogs, Reganolds et Kennedy, 2000).
Table 3. Sustainability indicators for measuring farming system performance
Economic

Environmental

Social

Farm profitability

Energy efficiency

Yields

Operating costs

Soil and water quality

Nutritional quality of food

Income variability

Soil erosion

Farmland protection from

urbanization

Financial risks

Wildlife protection

Farmworker salaries and benefits

Food costs

Pesticide impact

Well-being of farm communities

(Source: Reganolds, 2013)

Conventional, organic and biodynamic farming differ in how they treat soil, plants and
animals the latter recognising the important interactions between the three and working
towards creating a healthy, self-sustaining harmony. The absence of any synthetic
fertilizers, pesticides, insecticides or other chemical treatments is the basic criterion for
biodynamic, and of course, ecological agriculture. Compared to organic agriculture, the
biodynamic production system uses a manure-based compost, decomposed plants or the
addition of natural minerals, favoring a cyclic circuit of nutrients, fermentation,
photosynthesis or other biological processes.(Reeve et al, 2005). Natural farming represents
a farm-ecological system based on the laws of nature and on minimum human interference,
promoted by Fukuoka (1978). The models for forestry farming and permaculture are natural
ecosystems, in which man can integrate (Toncea et al, 2009). For the pre-conversion period,
LEISA systems are recommended (Low External Inputs Sustainable Agriculture), based on
local resources of soil, climate and workforce. The use of chemical fertilisers and
pesticides, of conventional equipment, of food ingredients and fodder, etc. is allowed only
to cover the resource deficit and only if they do not affect the environment. LEISA is
recommended before conversion in order to balance farming systems as social, economic
and natural potential. Conventional or traditional technologies are reducer or slowly
replaced by ecological ones as the system accepts them and does not reject them.
3. Materials and methods
The data presented were selected from journals, scientific articles, statistical data
collections, legislation and media information regarding organic foods. All the collected
data from the statistical databases FAO, CEE, IFOAM or the National Institute of Statistics
were adequately processed. Series of statistical data have been used regarding annual
productions, farming areas, the number and type of operators, organic product transaction
303

value. The use and processing of statistical data offered the possibility of an adequate
interpretation of the tendencies manifest in the domain of farming production classified on
geographical areas, countries, product categories and economic operators.
4. Surface evolution and ecological farming production
4.1 Organic farming evolution at a global level
Organic farming production registered an impressive global growth lately. The economic
crisis didnt significantly influence the development of ecological farming (Giannakas,
2005). The increasing interest of consumers for biologic products led to producer
adaptation and the use of ecological farming on bigger and bigger farming areas.
Practically, ecological farming is practised on all continents except Antarctica. According
to the data taken from the Research Institute of Organic Agriculture (FiBL, 2014), in 2012
there were approximately 37.5 million ha on which biologic farming was used at a global
level, distributed unevenly on the 6 continents. (figure 1). Although there hasnt recently
registered a substantial growth in the surfaces alloted to ecological production, Oceania
occupies the first place in the world, with 12 million hectares dedicated to bio farming and
a share of over 30% out of the global surfaces. Oceania, and especially Australia, has large
farming areas, destined mainly for animal breeding, on which intensive farming is not
practised.
As an annual average growth pace, Europe is by far on the first place, registering a
doubling of the surfaces destined for the ecological sector in the last few years. Asia
registered a slight decrease of the organicaly cultivated surfaces in 2012 as compared to
2011.

Source: Organic World Net

Fig.1 Surfaces cultivated ecologically by
continents

Source: Organic World Net

Fig.2 Surfaces cultivated ecologically by
countries

In 2012, there were 1.9 million farmers at a global level. According to the data processed
from FiBL (table 4), the greatest numbers of producers were in Asia, continent which
surpasses Europe, Latin America and North America taken together as far as the number of
farmers are concerned. North America is the continent on which one may notice a decrease
in the number of farmers in 2012. A weight of organic producers on continents, as
compared to the global number of producers, is presented in figure 3.
In the rankings of countries on the globe, as far as surfaces alloted to organic farming are
concerned, Australia is on the first place, with over 12 million ha, followed by Argentina
and the USA. Europe is represented by Spain, Italy, Germany and France, with bio farming
surfaces between 1.6 and 1.0 million hectares.

304

Table 4. The evolution of the total number of producers registered at a global level
Continent
2009
2010
2011
2012
2012/
2011
Africa
517156
539402
532101
572862
+40761
Asia
729596
461774
620455
684873
+64418
Europe
257678
277424
292307
321626
+29319
Latin America
284365
270568
315889
316584
+695
Northern America
16855
29860
16598
16470
-128
Oceania
8454
8483
14138
14605
+467
Total
1814104
1587511
1791488 1927020 +135532
(Source of data http://www.organic-world.net)
The size of the farms destined for biologic farming varies between 830 ha in Oceania and 2
ha in Africa. Europe is on an intermediate position, with an average surface of 41.5
ha/production unit.
Table 5 presents a weight of the economic agents that operate in the organic product
domain on categories (merchants exporters/importers, farmers, processors and other
cateogries of economic operators). North America and Oceania do not present some data
regarding economic operator situation in the organic domain, but it is likely that their
number be greater than the one forecasted in table 5 (FiBL, 2014).
Table 5. Economic operators in the organic domain on continents and categories
2012
Africa
Asia
Europe
Latin
Northern Oceania
America
America
Total
of
economic
537914
690145 367387
318188
17707
16080
operators, out of
which
exporters
468
800
298
500
importers
22
222
1920
6
12
other
1259
3512
33
413
categories
processors
562
2991
40031
1065
1237
1050
producers
572862
684873 321626
316584
16470
14605
The average size
2,00
4,70
34,70
21,60
41,53
832,60
of the farms (ha)
(Source: processed data from http://www.organic-world.net)
A hierarchy of countries regarding the total number of farmers who use biologic farming,
illustrated in figure 4, situates India on the first place, followed by Uganda and Mexico.
The last places in top 10 are occupied by European countries (Italy, Spain and Poland).
Argentina, which was on the first place as far as the total surface alloted to ecological
production is concerned, is not included in this hierarchy.
In the category of operators registered as having the main activity in the domain of organic
products, Asia is dominant, followed by Africa and Europe (figure 3). Although in Oceania
there are the biggest organic-farming surfaces, the number of registered producers
represents only 1% of all the global producers.
305

Source: Organic World Net

Fig.3 The distribution of the total number
of organic producers by continents 2012

Source: Organic World Net

Fig.4 Top 10 countries
producers 2012

of

organic

Linked to the increase in the number of surfaces and of economic operators, the organic
food product trade registered an important growh worldwide. With sales of over 22 million
euros in 2012, the United States of America represent the biggest market for organic
products, followed by Germany (7040 million euros) and France, with almost 4 billion
euros (figure 5). According to the FiBL & IFOAM report (2014), the countries that
registered the greatest annual average organic product consumption per capita were
Switzeralnd (189 euros per capita), followed by Denmark (159 euros per capita) and
Luxemburg (143 euros per capita).

a)
b)
Fig. 5. The organic product market on countries in absolute values (a) and their share
in international trade (b) (source FiBL/IFOAM, 2014)
4.2 Ecological farming in Europe
Although some states were affected by the economic crisis, Europe registered one of the
most dynamic growth in point of surfaces dedicated to organic farming, of operator
number, production and consumption. According to the data provided by Eurostat, in 2002
there were 5.7 million organically cultivated ha, whereas in 2011, there were 9.6 million.
There are more than 186000 farms across Europe that practise organic farming. The EU
Member States that joined the EU before 2000 hold most of the organic land (78%) and
have most of the organic farms (83%). In these member states, among other factors, the
national and European legislation helped in stimulating the development of this sector. The
European countries that have joined the EU since 2004 also have had a fast growing

306

organic sector. The above mentioned countries recorded a 13% yearly growth rate from
2002 to 2011 (European Commission, 2013).
Compared to 2011, The European organic product market increased by approximately 6%,
reaching a value of 22.8 million euro (out of which 20.9 euro go to the European Union).
Germany, the biggest market for ecological products, presented a growth close to the
European average (6%). At a European level, the lands covered with crops amounted to
11.2 ha, out of which approximately 10 million ha were registered in the EU. Although the
surfaces seem impressive in absolute values, if compared to the total European farmland,
they represent only 2.3%, and 5.6, respectively, if compared to the total farmland from the
EU.
According to the data presented by Eurostat, the biggest surfaces allotted to organic crops
in 2012 are Spain, Italy and France. Although is the fifth country in point of arable
farmland, Romania occupies a modest place in the European hierarchy of biologic
producers (Table 6 and fig. 5).
In year 2013 a survey among European consumers was carried out in order to assess the
community measures needed in the organic product domain.
Table 6 Europes top 15 organic farmlands 2008-2012(ha)

Fig.
5.
Organically
cultivated
areas
in
Europe, 2012 (Source of
data: Eurostat database)

Spain
Italy
France
United
Kingdom
Poland
Sweden
Czech
Republic
Greece
Finland
Denmark
Latvia
Estonia
Lithuania
Hungary
Romania
Slovakia

2008
691,2
812,1
502,2
582,2

2009
605,4
735,3
525,6
607,9

2010
1,084,6
821,9
571,8
651,9

2011
1,221,8
837,1
701,1
605,6

2012
1,366,9
923,8
855,6
560,0

178,7
246,6
232,9

222,0
303,3
267,5

309,2
329,3
296,4

375,1
385,2
354,6

457,7
424,3
402,7

266,7
134,8
139,0
141,5
71,8
89,8
108,6
71,6
113,1

293,6
143,0
139,5
141,0
76,2
106,0
110,9
83,9
111,5

292,6
142,0
145,6
140,9
82,4
103,2
97,6
83,0
112,3

201,3
161,2
151,4
130,1
101,9
99,4
101,8
96,6
123,3

351,8
161,2
159,1
144,6
119,9
114,5
106,3
103,1
123,3

Fig.6. European organic

logo
(Source
http://ec.europa.eu)
(Source of data: Eurostat Database, 2014)

An online survey, which was carried out in the first half of 2013, raised a lot of interest and
obtained 45,000 responses. The results of the survey, published in September 2013,
highlight the fact that 71% of the consumers trust organic products and that 83% of the
consumers buy organic products because they are not GMOs and because they do not
contain pesticide residues. The survey also indicated that the vast majority of the
respondents (78%) were willing to pay more for organic products. The results of the survey
also show an urgent need for unitary rules at the EU level: 74% of all the respondents
307

require a reinforcement of the European organic product standards and 86% wish for
uniform regulations acrosa the EU in point of organic products. More than half of the
interviewees also strongly believed that the European control system for organic products
should be improved (European Commission, Results of public consultation, 2013).
4.3 Ecological farming in Romania
For Romania, ecological farming represents a niche of the farming sector, which can create
the necessary conditions for a durable economic development, the rural community welfare
increase and natural ecosystem preservation. The objectives, the principles and the rules
applicable to ecological production are stipulated in the national and community legislation.
The national rules, correlated with community stipulations in the ecological product
domain, regulate some aspects regarding biologic production (in the vegetal, animal and
aquaculture sectors) and lay down some strict regulations regarding processing, labelling,
trade, import, inspection and certification. Thus, the inspection and certification of
ecological products is carried out only by inspection and certification bodies approved by
the Ministry of Agriculture and Rural Development. In 2013, there were 14 legal private
inspection and certification bodies. As a result of the inspections carried out by the
inspection and certification bodies, the operators who complied with the production rules
will receive the ecological product certificate and will be allowed to label their products
with the mention ecological. On the label of an ecological product it is compulsory to put
the following mentions: reference to the ecological production, logo, name and code of the
inspection and certification body that carried out the inspection and issued the ecological
product certificate. The national logo ae, specific to ecological products, together with
the community logo, are used in order to complete the labelling with the view of identifying
the products obtained in accordance with the ecological production methods. The
consumers who buy products with the national and the community logo can trust the fact
that at least 95% of the ingredients of which the product is made have been obtained
according to the ecological production method and that the product is in compliance with
the rules of ecological production.
Table7. Surfaces dedicated to ecological farming in Romania (1000 ha)
Categories of surfaces
2008
2009
2010
2011
2012
Organic farming areas,
total
139.6
167.9
183
230
288.3
Certified organic farming
areas
71.6
83.9
83
96.6
103.1
Farming areas in course of
conversion to organic
68
84
100
133.3
185.2
(Source of data: Faostat Database, 2014)
With a medium pace of growth of 23%, the ecological farming sector in Romania presents
a spectacular development in the last few years, especially after joining the EU. In 2007,
the total surface cultivated by means of ecological farming was of 131,448 ha, out of which
46,865 farming areas in course of conversion to organic and 84,585 ecologically certified
surface. According to European statistics presented in table 7, the organically cultivated
surfaces in Romania doubled between 2008 and 2012, major increases also being registered
in the vegetal or animal production. (figure 8).

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Simultaneous with the increase of the farming lands destined for the ecological sector, there
has also been an increase in the number of economic agents in the domain. As compared to
the moment when Romania joined the EU, the number of operators increased with almost
four times in 2012, the increase being accelerated especially in the last few years. Thus, if
in 2010 there were 3155 operators; in 2012 the statistics highlighted 15544 economic
agents involved in ecological product production, processing and marketing.
Table 8. Operator and area dynamics in ecological farming in Romania
Indicator
2006 2007 2008 2009 2010 2011 2012
Number of operators registered in
3409 3834 4191 3228 3155 9703 15544
ecological farming
The area cultivated by means of
ecological farming, crops on arable
45,6 65,1 86,5 110,0 148,0 147,6 174,60
land (thousands of ha)
The area cultivated in agricultural
farming, permanent crops, pastures
51,2 57,6 46,0 39,2
31,6
78,2 105,80
and hay lands (thousands of ha)
The area cultivated in ecological
farming, permanent crops orchards 294 954 1518 1869,4 3093,04 4166,62 7,78
and vine (thousands of ha)
Collection from wild flora (thousands 38,7 58,7 81,3 88,9
77,3
33,8 1,082,2
of ha)
(Source of data: MARD, 2013)
For 2012, pastures and fodder areas held the biggest share of all the surfaces with 44%
(approx. 165,00 ha), followed by grains, with 29% (approx. 130,00 ha), oilseeds and pulses
22% (105,000 ha). The areas cultivated with fruit trees, vine and vegetables hold the
smallest share (2%) and 1% respectively, out of the total areas destined for ecological
farming (figure 7).
Table 9. The areas destined for fruit tree and vegetable cultures in an ecological
system
2007 2008
2009
2010
2011
2012
Cultivated areas (ha) out of 1165 1777
2214
3777
5080
9400
which:
- vegetables
310
259
344
734
914
1200
- fruit trees
742
917
1202
2199
3324
6700
- vine
113
601
668
894
842
1500
(Source of data: MARD, 2013)
The livestock sector also recorded in 2012 an important increase in the number of animals
raised by means of the ecological production system. In figure 8, it is presented the
Romanian livestock ecological production dynamics, important increases in number being
recorded at sheep and goats (+160,000 heads), hens (+85,000 heads) and cows for milk
(+60,000 heads). The beekeeping sector also had an evolution, with 102,881 bee families
raised ecologically recorded in 2012.

309

Source: MARD, 2013

Fig.7 Shares in the ecological crops

Source: MARD, 2013

Fig.8
Livetsock
sector
ecological
production dynamics
The demand for ecologically certified products is increasing on the domestic market.
Ecological products are marketed directly from the farm, by means of specialised stores or
of supermarket chains. The main bio foods purchased by the Romanian consumers were
fresh fruit and vegetables, products processed from fruit and vegetables, plant teas, bread,
pasta, flour, products processed from cow and goat milk (butter, sheep cottage-cheese),
eggs, oil, wine obtained from ecologically certified grapes, products processed from soy,
honey, etc. Because of the low purchasing power on the domestic market, the greatest part
of domestic ecological production is destined for export. Thus, approximately 70 90% of
the ecological products in Romania are delivered to foreign partners, mainly the EU. The
increase in the number of ecological products on the domestic market (approximately 75
million euros in 2011) can be explained by the hypermarket action in the food domain
retailing.
Conclusions
Organic production may represent a lasting solution for the Romanian farming sector.
Underdevelopment, excessive fragmentation, low productivity, the lack of financing led to
a low competitiveness level in the local sector in the competition against intensive farming
systems, small producers being forced to move to ecological production. The increase in the
demand for ecological products on foreign markets, the competitiveness of the local
ecological products and the natural farming potential offer the opportunity of a healthy
development of the ecological production in Romania. The financial support offered to the
local farming system in order to practise ecological farming can ensure ecological product
business continuity on a medium and long-term basis.
Acknowledgements
This paper was co-financed from the European Social Fund through Sectorial Operational
Programme Human Resources Development 2007-2013, project POSDRU number
/159/1.5/S/138907 "Excellence in scientific interdisciplinary research, doctoral and
postdoctoral school, in the economic, social and medical fields-EXCELIS", coordinator
The Bucharest University of Economic Studies
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311

THE IMPORTANCE OF AGRICULTURAL COOPERATIVES IN POSTCOMMUNIST ROMANIA

Dan Cristian POPESCU
Faculty of Agro-Food and Environmental Economics, The Bucharest University of
Economic Studies; email: [email protected], Str. Mihail Moxa, nr.5-7, Sector 1,
Bucharest, Romania
Abstract
The new types of successful cooperative structures developed in European countries have
stimulated a dialogue within Romania on the benefits and the opportunities brought by
these structures. This subject is highly relevant for us taking into account that in a
capitalized economy, agriculture is a simple and efficient response to its needs. Using case
studies for different types of agricultural forms of cooperation, we outlined the main issues
encountered in this field and we proposed systemic solutions which could generate a
proliferation of cooperatives. Our results concern different pylons of efficiency such as
institutional, fiscal, financial or social pylon. In order to effectively response to the
economic dynamic, Romanian cooperatives must adapt to an extended and complex
environment and must have the ability to find performance among resource-poor
populations.
Keywords
agricultural policies, agricultural cooperatives, rural development
Introduction
Nowadays, searching for responsible ways to invest in agriculture has become an important
topic in order to reduce poverty, to generate decent jobs and to improve alimentary security,
and in the same time having in mind the respect of durable environment. In consequence,
we should always think the agriculture through its possible consequence on the
environment, and in the same time through efficient ways to increase productivity.
The International Fund for Agricultural Development (IFAD) underlines that farming has
an important capital of risk, magnified by the recent dynamics of climate change, which has
an important impact on smallholder farmers. To build resilience against insecurity
conditions and to realize a more resistant, viable market place, different forms of
association like agricultural cooperatives or producer groups have increasingly become an
appropriate solution to support the farmers in obtaining higher revenues.
Taking into account the increasing need for the use of this instrument at a global level, we
are questioning the Romanian approach of agricultural cooperatives as a form of
modernizing the agricultural sector. In consequence, our article depicts the activity of
agricultural cooperatives in Romania, their development and their importance in sustaining
efficient productivity. In order to identify lacks of measures and improvements in our
national case, we will analyze different agricultural cooperatives, focusing on their activity,
their difficulties and we will propose solutions which could insert more opportunities for
their development.
1. Literature review
In this part, we will try to depict a theoretical background in what concerns the approaches
to cooperatives, or generally to the idea of cooperation in agriculture in order to benefit of
bigger finances or multiple instruments to product and commercialize. The research
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developed in agro-science makes a difference between production cooperatives more

frequently used in Central and Eastern Europe and marketing /supplying (secondary
cooperatives) used in other states of European Union, which outlines the importance of a
vertical integration in a competitive agricultural sector. However, the existence of
cooperatives is an European trend, based on the need for a greater bargaining strength in the
economic survival.
What is the definition of agriculture cooperatives? Agricultural cooperatives can be defined
as groups of farmers mutually linked in the corporation, which they form and whose
services they avail themselves of, in a double relationship of active participation and full
membership. Their principle activity is not agriculture, as might be expected from their
title, but it is the farmers concerted use of the means at their disposal to facilitate and
develop their economic activities. (Vienney,1980).
According to the International Cooperative Alliance (ICA), a cooperative is an autonomous
association of persons united voluntarily to meet their common economic, social, and
cultural needs and aspirations through a jointly-owned and democratically-controlled
enterprise. More precisely, the values which are at the foundation of a cooperative are: selfhelp, self-responsibility, equality, equity, solidarity and democracy. As essential principles
needed to form a cooperative and to bring it to the maximum level of efficacy, ICA
mentions open membership taking into account that it is a voluntary organization, and also
a democratic member control as it is formed of equal members and all choice influence
each member. Another principle would be member economic participation because all
members have to contribute with capital for their cooperative in order to reach its purposes.
In addition to this, cooperatives have to be autonomous and independent, as the control has
to be exercised only by its members who contribute with capital and who cooperate in order
to be efficient, this cooperation being also another principle of the functioning of
cooperatives. Complementary principles would be education, training and information,
elements which contribute to the development and the adaptability of the cooperative to the
dynamic of the market. Finally, as a last invariable principle, it is important to mention that
the concern for community has to be a horizontal value, essential for a sustainable
development. In consequence, the existence of cooperatives depend on committed
members, values commonly approved, practical measures and structures, all interacting in a
large ecosystem of institutions and activities.
It is important to mention that the cooperatives which constitute the object of our analysis
do not concern the cooperatives in their traditional and controlled form within communist
regimes, but we have in mind the new generation cooperatives, which are flexible
according to the changes imposed by a capitalized agriculture or by a high technology used
by the global concurrence. Comparing to the traditional cooperatives which focuses on
marketing raw commodities or supplying, the modern cooperatives focuses on value-added
products. Other features noticed at the new generation cooperatives refers to the delivery
rights, closed membership, a higher level of initial equity investment and finally
transferability and the opportunity for appreciation or depreciation in the value of delivery
rights. (evarli, Skoko, Nikoli, 2007)
The latest changes which took place at the global level of competitiveness, more precisely
the privatization processes, the emergence of a new form of daunting marketing, global
processes of privatization and deregulation, the concurrence between privately owned and
corporate agribusiness, have changed the relation between states, private actors and
producers. However, these changes bring new uncertainties especially for the small holder
farmers. This is the main reason which makes the agricultural cooperatives a solution to
deal with uncertainty, taking into account that their advantage, at least in theory, lies in
313

having a better chance to pull together a variety of assets in the form of economic capital
(credit, land, and financial investment), social capital (networks that improve collective
bargaining and marketing potential), and human capital (investment in member education
and capacity building) that could enhance the options of individual members, reducing
socioeconomic risk and empowering rural populations. (Vsquez-Len, 2010)
From a judicial point of view, having in mind that agricultural cooperatives are judicial
structures which influence the economic sector, it is always relevant to search the
difficulties encountered by the institutional instruments in correlating the gains of
productivity and the direct results of unprocessed agriculture. Also, scholars have noticed
that the constitution of an agricultural cooperative as a factor of power within the market,
has very times reached the establishment of a contract between agriculture and nation,
more precisely rarely has proved that cooperation is better in efficiency than competition.
(Antonin, Nieddu, 2000)
In what concerns the economic justifications for forming cooperatives, researchers have
mentioned two main elements, more precisely the need for institutional mechanism for
individual producers in order to bring economic balance under control because of excess
supply induced prices, and institutional mechanisms to countervail opportunism and holdup
situations encountered when markets fail. (Cook, 1995)
2.1 Paradigms of practice in Romanian agricultural cooperatives
In 1908, Constantin Stere, an ideologue of the Poporanist trend, who wished to form
cooperative farms for peasants in order to unleash them from aristocratic control sustained
that multiple European countries which rejoice in a high level of industrialization, have
understood that despite technical evolutions, they do not have to neglect the human nature
of the people, therefore cooperation forms of activity had to be sustained and helped to
grow. Until communism, the development of associative structures has known an
ascendant trend, interrupted by the excessive political use of cooperatives and the strong
attachment to property. As for our capitalist period, starting from 1990, the importance of
associative structures has been recognized only at a legal and theoretical level, but there are
still problems concerning the practical forming of cooperatives.
In what concerns the legislative frame, Romanian law provides for three types of rural
associations: farmer associations; cooperative associations; and non-governmental
organizations (NGOs), which are subject to different rules of registration and taxation.
However, only two laws concern the agricultural cooperatives, more precisely law number
566 of 2004 regarding agricultural cooperatives, and another law of 2005 regarding
cooperation, which stipulates the possibility of forming either a cooperative society based
on capitalization, either an agricultural cooperative society. It is important to mention that
we define cooperative society based on capitalization as an association of physical persons
formed in order to capitalize personal products purchased by direct distribution or by
processing and direct distribution, whereas agricultural cooperative society is an association
of physicals persons whose object is collectively exploiting agricultural surfaces detained
by its members, collectively working for land improvement, sharing utilities and machines,
and finally capitalizing agricultural products.
The law regarding agricultural cooperatives provides different distinction within this
category of association. First of all, there are services cooperatives which assure services
for small producers, oriented on small and medium farms which do not dispose of technical
means for agricultural works taking into account that investing in expensive machines for
small holdings is not a justifiable action. Secondly, Romanian law stipulates the existence
of acquisitions and sale cooperative, which has a primary organizational function, by
offering a platform both for the acquisition of technical material and means, and for selling
314

agricultural products. This type of cooperatives is due to tame the competition between
small producers and extended merchants within the unregulated market. Thirdly, Romania
has cooperatives which process agricultural products, by developing processing units and
assuring a permanent presence to small, qualitative brands. Other type of cooperatives is
manufacturing and small-scale industry cooperatives, exploitation and management
cooperatives and finally financing agricultural cooperatives.
According to the Institute for Social Economy, agricultural cooperatives would be a strong
instrument for smallholder farmers, as they dispose of some important economic
advantages, throughout we can mention the reduction of intermediates in the distribution
chain, risk reduction in what concerns products sale, the increase of producers influence in
the price negotiation with buyers. In addition to this, the agricultural cooperatives offer a
constant and trustful income to farmers, a proper and efficient supply of prime materials for
the production process, and a new perspective for producers in order to adapt their
technology.
In 2012, took place the conference Associations of farmers- key actors of social economy
in rural space in order to identify the new challenges, difficulties and opportunities, which
reunited different actors with influence in the rural development, such as special
representatives of the Minister of Agriculture, the Institute for Social Economy and
different representatives of agricultural associations. Researchers outlined that persons who
live in rural environment are highly dependent on agriculture, difficult activity taking into
account the reduced productivity and the limited access to the market for the farmers.
According to data furnished within the conference, Romania encounters different systemic
problems such as an extreme segmentation of agricultural lands in very small distinct
exploitations (Romania having the biggest number of agricultural exploitations in European
Union). However, 99% of the agricultural exploitations are individual subsistence farms,
the degree of association in agriculture being much reduced. As we can see in fig. 1,
according to the most recent data furnished by Eurostat and the General Agricultural
Investigation from 2010, the most frequent exploitations have a small economic dimension,
which implies disparities between investments and gains. In addition to this, the
investigation realized at a national level showed a high level of land externalization through
foreign investors.

Source: Eurostat and Recensmntul General Agricol,2010

Fig.1. The structure of Romanian holdings according to their economic dimension

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The main conclusion was that the Romanian government has to change the legal and
practical approach from thinking the cooperatives as organizational forms of production
instead of thinking them as representative forms of association.
2.2 Diagnostic of the current state of cooperatives
In performing a diagnostic concerning the current situation of agricultural cooperatives, we
used case studies, through a qualitative research method in order to depict main problems
encountered on a specific level by important actors in agricultural field, and by extenso
general difficulties of agricultural cooperatives. We chose to analyze the activity, the
programs and the official data of five different structures, such as two agricultural
cooperatives Borcea de Jos and East Champion Union, a consumer cooperative SuperCoop
Trgul Neam, and finally two representative structures such as National Federation
ProAgro and CentroCoop.
Our analysis focused on the activity of agricultural cooperatives, on the main obstacles
related to Romanian fiscal system, Romanian policy for agricultural cooperatives and the
government support for the development of cooperatives. The agricultural cooperative
Borcea de Jos, the first structure we analyzed, is a cooperative specialized in animal
growth, more precisely sheep and cattle, which is currently searching for funds in order to
benefit of a land sufficient enough for the number of animals detained. East Champion
Union is specialized in processing and preserving fruits and vegetables, also in search of
funds through the Agricultural Chamber in order to build a compost factory for mushrooms.
The problems encountered are similar: the access to external funds and subventions and a
difficulty to access European programs. In what concerns the National Federation ProAgro,
it is a platform which reunites professional organizations in agriculture and sustain their
development, their cooperation and information sharing. The problems emphasized concern
the need for internalization of agro-alimentary cooperatives, a better support for export at
the governmental level, the lack of specialized leaders for cooperatives and the risk of land
alienation to foreign investors as from 1st of January 2014, each person has the possibility
to buy arable land in Romania. The members of National Federation ProAgro also deplores
the lack of adaptability of government to current needs, such as the adjustment of taxes in
what concerns pig growth, taking into account the embargo given by Russia to European
Union, change which could determine the cooperatives specialized in pig growth to enter in
insolvency. Measures such as the delay in VAT payment or improvement of measures
against unfair competition having in mind the important illegal quantity of pork which is
negotiated on black market at very small prices.
Another structure we analyzed is CentroCoop, an association of multiple consumer
cooperatives, which deplores fiscal instability, unsuitable legislative framework such as the
abrogation of the internal audit or the devolution of the role of cooperatives federations
from economic actors to representative actors. Finally, we analyzed the consumer
cooperative SuperCoop Trgul Neam, specialized in four sectors of activity, more
precisely in agro-alimentary products acquisition directly from the producer, the processing
of agricultural products, sales and public alimentation. The main problems invoked
316

concern the payment of VAT at the acquisition of agricultural products and the
misunderstanding of the role of cooperatives by political actors. An example would be the
dissolution of the Cooperative Solidarity Fund or the legislative change which permits an
easy sale of active assets of cooperatives.
Table 1. Diagnostic of current state of agricultural cooperatives in Romania
Systemic difficulties and constraints

Excessive bureaucracy in accessing funds

Inadequate finances
Low production quality due to lack of
qualitative infrastructure, high credits and
high energy costs
Intensification of foreign competition
Tax pressures
Lack of facilities adapted to current and
specific needs
Unfair competition (many producers do
not pay VAT and sell on the black market
products)
Reluctance of farmers caused by the
previous experience of cooperatives
under communist era and forced
collectivization

Unsuitable law for commercially oriented

cooperatives

Weakness and lack of experience of

cooperatives

Possible solutions
Acceleration and flexibility for control
process
Providing technical assistance to obtain
funds for infrastructure, equipment and
technical resources
Development of purchasing hubs
Development of regional cooperation
through active partnerships
Development of new proposals for
financing instruments though European
programs or foreign partners
Reduced VAT on certain branches
Predictability of fiscal system
Market segmentation on sectors
(agriculture, distribution, consummation) in
order to dispose of adapted measures and
actions
Rural campaigns to disseminate theoretical
and practical information about the facilities
and gains of cooperatives. Also, it would
furnish information about how to gain
access to market, finance and appropriate
technology
Participatory and consultative approach in
defining the national policies by the
government, trough working groups or
debate with representative actors such as
cooperative federations
Training for local services providers
The creation of a national department for
marketing studies and feasibility, whose
main attribution should be to provide active
information and data to cooperatives
Workshops for staff, committee members
and ordinary members of cooperatives

Source: Based on personal data processing

After processing the data from our case studies, we tried to found a common problematic
background and to propose solutions for each systematic difficulties encountered by the
agricultural cooperatives in Romania. As it is noticeable, the nature of the problems is
diverse, starting from institutional issues to collective mentalities and past experiences.
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Conclusions
After the collapse of socialistic model of economy in Romania, we have witnessed a
paradigmatic change in what concerns cooperatives, from politically controlled structures to
collective and accountable agricultural cooperative, from external interventions to
democratic forms of cooperation, from the attachment to land to an attachment to market.
This transition, however, has not improved the efficiency and readiness of cooperatives,
which still have problems in adapting to new economical changes such as globalization and
liberalization, or the competitiveness of private agricultural companies. In what concerns
the Romanian approach to agricultural cooperatives, we noticed that if in practice we
witness the emergence of new cooperative organizations, Romania has not adopted new
laws concordant to the evolution of cooperatives, has not provided new forms of
investments, neither an equal system of reward to farmers who obtain just a part of the price
paid by consumers.
Our research has shown that agricultural cooperatives represent one of the main factors
involved in the rural development, based on the creation and the exploitation of resources,
on a new social model of cooperation and a on a capitalized form of solidarity. Also, being
a decisive factor in the economic growth, they are indirect job providers. However, the
common conception regarding cooperatives such as a risk for smallholder farmers to
relinquish their land, the unsuitable legislative framework and the absence for new financial
instruments are strong constraints to the development of agricultural cooperatives. These
structures are still at an early stage of development and their reconstruction should be
attached to a new modern concept based on competitiveness, regional active partnerships,
data sharing and proportional relation between investment and gain.
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Agricole, in AgroRomnia Journal
11. evarli, M., Skoko,B., Nikoli, M.M. 2007., The new generation co-operatives and
possibility of their implementation in the countries in transition, Proceedings of the 100th
seminar of the EAEE, Novi Sad, Serbia
12. Stere, C. 1908. Pe terenul principiilor, vol. XI, Bucureti, Vatra Romneasc
13. Vsquez-Len, M. 2010. Latin American Agricultural Cooperatives and Small-Farmer
Participation in Global Markets, in Latin American Perspectives, Vol. 37, No. 6.
14. Vienney, 1980 in Chloupkov, J. 2002. European Cooperative Movement Background and
common denominators, Department of Economics and Natural Resources, web page
accessed on http://uwcc.wisc.edu/info/intl/chloupkova.pdf
318

GENDER AND AGE DIFFERENCES OF MIGRANTS

Serban ZODIAN
Faculty of Agro-Food and Environmental Economics, The Bucharest University of
Economic Studies; email: [email protected], Str. Mihail Moxa, nr.5-7, Sector 1,
Bucharest, Romania
Abstract
Migration is one of the social processes that influences our society the most. Its not an
independent process but a process connected with many other elements, factors and
processes, influencing each developments. It influences the evolution of demographic,
social and economic processes: the demographic volume and structure of the local
communities and the evolution of their specific social-demographic phenomena, the
structure and functionality of the households from their origin and the destination of
migration flows, connection amongst the local resources and the work force and the
population in the said zone, the quality and personal lifestyle etc. In this paper we will
focus on the sex and gender differences between Romanian migrants for work in
conjunction with the effects of the global economic crisis which started in 2008.
Keywords
migration, gender, age, EU, crisis, differences
1. Introduction
Romanian migration is mostly focused on the movement of people from home towards
bigger cities and to the more evolved West. So, there is an internal and an external
migration process. These massive movements can influence the Romanian economy, labor
market, birth rate etc.
The effects are both positive and negative. For instance the remittances sent by the
emigrants are quite important for those left behind but also for our economy, in some areas
this is the only investment source. On the other hand, the external migration flows leave
our economy without many qualified or unqualified workers, doctors and medical
assistants, farmers but they also have a negative effect on the family institution, for instance
when the children are left behind with the grandparents or worse.
2. The background
In the years 2008-2011, Romania reached the status of primal supplier of migrant labor in
EU, with over 2.5 million migrants. Roughly 70% of the Romanian migrants headed for
Spain and Italy. Some of the main causes being: the jobless in Romania; earnings far from
decent; poor leadership of the Romanian political class; lack of opportunities etc.
In another train of thoughts, its important to underline that its more accurate to talk about
a migration of labor than a brain exodus. The migration for work prevails, most
Romanians migrants having medium or low-skilled jobs and 30% of them didnt even try to
find a job at home. Its interesting that 60% of migrants work abroad with relatives and
friends from Romania.
Most migrants when back evoke the superiority of the countries of destination in terms of
a better life, peoples fairness, better working services etc.
In some academic circles its been theories that at a macro level societal organization
generates certain structural migration models: The family and the traditional household
319

confronted with climate change, market fluctuation, lack of liquidities for investments etc.
reach out to migration as a strategy of risk management. (Remus G. Anghel, I. Horvth,
(coordonatori), Sociologia migraiei. Teorii i studii de caz romneti, Polirom, Bucureti,
2009, p.33)
Therefore, from 2002 onwards, the migration towards EU countries is the solution for a
better life of a significant proportion of Romanias population.
The crisis greatly affected the labor market of all the EU countries and the changes and
adaptations they suffered affected on their end the migration for work. The constructions
and the services where the economic sectors affected the most by the crisis causing job loss
among migrants
Amid this crisis its created a favorable space for an increase in xenophobia and racism,
adoption of more severe laws to prevent migration, measures to protect the homeland labor
market which give migration a rather negative image and certainly makes things harder for
the lives of the Romanian migrants. As a result Romania wasnt allowed to fully join the
Schengen space and the extremists parties in UK, France, and Holland gained power. The
latest EU parliamentarian elections were dominated by the ideological fight between the
pro and anti EU political parties.
3. Analysis
In this context this analysis, the gender and age differences of the Romanian migrants for
work in the EU, aims to describe how migrants adapted at different ages, as females and as
men.
We will split the migration process into two sections: internal and external migration. We
will focus on external migration, which is also split into two categories: migrants who
returned home and migrants who remained abroad due to the economic climate in the EU.
There are no significant differences between migrants who returned and migrants from
abroad regard to gender, age or gender-sex. However, the work experiences of the migrants,
does considerably differ with gender and age.
Most migrants leave for work abroad between the ages of 21 and 27. Afterwards, the
migration decreases only to slightly raise once more between the age of 35 and 37. After
the age of 44 fewer people migrate abroad, but from those who still leave women are in
greater numbers than men. This also explains why the average age of female migrants is 2
years higher than males, 30 years vs. 28 years. (table 1)
Table 1. The profiles of migrants on gender and age (%) (FES-CCSB Poll, 2010)
18-29 years
30-44 years
45-64 years
65 and above
Total

Abroad migrants
Men
Women
Total
18,7
17,1
23
23,4
8,1
9,4
0,1
0,1
49,9
50,1

35,8
46,4
17,6
0,2
100

Returend migrants
Men
Women
35,8
15
23,3
21,8
9,8
8,3
0,8
54,1
45,9

Before leaving to work abroad 15% of the female migrants where housewives or
unemployed but only 6% of men where in the same situation. We can conclude that more
female migrants than men didnt try to find a job in Romania. Those who did try also found
a job in comparable proportion to men (59% vs. 64%). They were workers and craftsmen in
the industry, tradesmen in commerce or they worked in other services, often health or
education.
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Most female migrants found work abroad but had to change their profession and branch.
Therefore, in proportions higher than men they found jobs as technicians, craftsmen or
clerks, in commerce, tourism but more often as unqualified workers in cleaning and people
care services. This is why for females the work mobility is of a descending type.
Men where, more often than women, unemployed workers in Romania, before going to
work abroad, who failed to find jobs at home as qualified or unqualified workers especially
in constructions, transports or agriculture. Unlike females they didnt have to change their
profession and branch as there was a demand abroad for qualified workers in constructions,
transports and agriculture. Therefore, mens work mobility is of an ascending type, from
unqualified to qualified.
Both men and women, when abroad work alternatively in the formal and informal
economy. (With or without a contract) On average the women who work abroad have a
smaller length of service, 5 years vs. 6 for men.
Notable differences between age categories are given by young migrants, 18-29 years.
They were either students, unemployed or stay-at-home before they left abroad. Once
abroad, most of the youngers, both male and female, found jobs in commerce, hotels and
restaurants, where youth is an advantage. Only 6% (vs. 12% from the totality of migrants)
found jobs which required superior qualifications management, specialists, technicians,
clerks etc.
Table 2 Occupational status of Romanian migrants abroad before the first departure
in august 2010 depending on gender
In Romania, before the first departure
Men
Women Total

Total

N
%, from which
Employed personnel
Managers, business owners, senior officials
Specialists
Technicians, craftsman
Clerks
Workers, service operators
Farmers
Trail workers
Machine and installation operators
Unqualified workers
Military personnel
Unemployed and people without a job

420
100
*
5,2
2,9
*
7,6
4,5
21,4
11 *
9,8

Abroad, in august 2010

Men
Women Total

424
100

844
100

479
100

1,9
3,8
4
5,9
19,1
1,4
20,3

1,3
4,6
3,4
3,2
13,4
3
20,8
5,9
5,8

2,1 *
5,2
2,3

1,9

*
9
8,8
50,9
9
8,4

485
100

964
100

4,7
5,8
2,5
29,7
5,4
9,1
1,4
35,7

1,5
5
4,1
1,6
19,3
7,1
29,9
5,2
22,1
0

(FES-CCSB Poll, 2010)

In regard to family migration for work its hard to come up with solid data to analyze.
Though there have been some qualitative enquires focused on the survival strategies used
by the migrant families.
Such studies evocate that men were more affected than women by the crisis because most
where concentrated in the economic sectors which suffered most. (Construction, tourism
etc.) In these cases, when women manage to hold on to their jobs despite the recession, the
decision to return home was alerted, the income made by them being used to sustain the

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family abroad in wait for better times. Often men in these families did, eventually find
some ways to gain money even if this meant the worked in the informal economy.
Both the returned migrants and those still abroad seem to agree on how the crisis affected
them no matter the sex, gender, country of residence or migrant occupation. Many started to
lose their jobs; the cost of living went higher; many salaries where scaled down. Only very
few consider that the attitude of the natives became more reserved or negative or that the
host authorities became stricter.
Table 3 Perceived crisis effects on the migrants (%)
They Started to scale down migrant's salaries
The cost of life got higher
Many migrants started to loose their jobs

30
48
56
55
64
77
67

Returned migrants
Abroad migrants

(FES-CCSB Poll, 2010)

When asked general questions about personal matters, 63% among the returned migrants in
the last year sustain that in the last 6 months spend abroad, their income remained constant.
Only 17% declare that their income scaled down and 20% say, despite de crisis, that their
income scaled up. There are no significant differences here between men and women or
young and adults. The trail workers, no matter the activity sector, tend (a 30% proportion)
to claim that their income scaled down, while (38%) farmers sustain that their income
scaled up. The country they reside does make a big difference in these reports. For instance
73% of the migrants from Italy say they make just as much as they did before the crisis
while only 43% of those who reside in Spain claim the same, the rest either gain or lost
some part of their earnings.
The migrants who choose to return home, to Romania, do it for a number of reasons, being
dependent on the age, education, territorial mobility, country of destination, occupation and
the support networks from abroad.
Even if the returned migrants and the aboard migrants dont differ too much in terms of
age, the chance of the young, age between 18-29, to return home, by comparison with the
option to remain abroad, is 7 times bigger than of the older, above 60 years. Likewise, the
chance of the adults, age 30-44, is 10.37 times higher, controlling the other predictors. In
other words, the hypothesis that the age is the sole favoring factor for the return of the
migrants is not sustainable.
A lower education level of the migrants, 8 grades at most, coincides with a reduction of the
chance to return home.
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Source: Sanculescu, M.S., Stoiciu, V. 2012. Impactul crizei economice asupra

migratiei fortei de munca din Romania, Paideia, p.126
Fig. 1 The returning home from abroad work motivation (%)
The returned migrants differ from those abroad significantly by the fact that they move
abroad more recently, they had less time to adjust.
Also people who worked in more than one country have a higher chance of returning than
those who only worked in one.
The same principle, the circularity of migration, applies to those migrants who work in
agriculture, they have a higher chance of returning home.
Migrants from Italy and Spain are more likely to return than those from other countries.
(UK, France, Ireland etc.)
Despite the destination and all the other factors to having brothers and/or sisters abroad
decreases significantly the chance to return home. In other words the support network is a
key factor in the migrants success abroad. (Sanculescu and Stoiciu, 2012)
The main reason for returning seems to be longing for the family, followed by achieving
the set objectives, job loss, salary decrease etc.
Conclusions
We agree with Sanculescu and Stoiciu (2012) that the economic crisis had, in general,
multiple negative effect over the Romanian migrants who worked abroad. The marginalized
persons on the labor market, with human capital and reduced capital and smaller income are
those who perceive themselves as the most affected by the crisis. Those who felt it the most
where the Romanians who worked as unqualified workers and those who worked without
papers or in the informal economy of the destination country. The prevailing sectors of
activity occupied by migrants, like constructions or hotel services among the other sectors
which depend on the economic cycles were most hit by the recession, causing losses of jobs
and an increase of the unemployment rate amongst the migrant workers than the local
employees.
The crisis itself did not determine a massive flow of migrant return to Romania, and even
those returned most likely only came back temporarily.
Despite the crisis in EU and the slow come back the job opportunities on the labor market
are more attractive than those found on the local Romanian labor market.

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Maybe with the modernization of the agro-food sector, the identification of new methods to
boost the entrepreneur structures and spirit could decrease and even stop the transitional
migration, the working arms drain.
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Constantinescu, M. 2002. Teorii ale migraiei internaionale, Sociologie
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Institutul de Cercetare a Calitii Vieii, Bucureti.
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in Romania, Paideia, Bucureti.
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Rotariu, T. 2010. Studii demografice, Polirom, Bucureti.
Rotariu, T., Mezei, E. 1999. Asupra unor aspecte ale migraiei interne recente din
Romnia, Sociologie Romneasc, nr. III, Iai.
Roubini, N., Mihm, S. 2010. Economia crizelor, Publica, Bucureti.
Sandu, D. 2010. Lumile sociale ale migratiei Romanesti in strainatate, Polirom,
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Sime, Esanu, V. 2005. Migraie i globalizare, Editura Detectiv, Bucureti.
Sanculescu, M.S., Stoiciu, V. 2012. Impactul crizei economice asupra migratiei fortei
de munca din Romania, Paideia.
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Bucureti.

324

LAND CONSOLIDATION THROUGH EXCHANGE OF AGRICULTURAL LEASE

LAND IN THE CONTEXT OF PRESENT REGULATION OF THE LAND LEASE
Emil MUAT
Faculty of Agro-Food and Environmental Economics, The Bucharest University
of Economic Studies; email: [email protected], Str. Mihail Moxa, nr.5-7, Sector 1,
Bucharest, Romania
Abstract
The agricultural lease is defined as "the contract by which one party, called the lessor, gives
the other party, called the lesse, the right to use and exploit agricultural goods, for a
determined period of time, in exchange for a price called rent". Given that in 2014 about
30% of the national agricultural land is rented farmland, regulation lease, is a priority to
meet the economic interests of the lessee and lessor. Leasing is currently regulated by Civil
Code, an important element in this regulation is the prohibition of subleasing, which in
practice, can improve the economic performance of farming of the land lessors by farming
on compact extensive lands. The knowledge of such regulations and their effects in practice,
it is necessary in order to identify ways for agricultural lease to fulfill the role, as desired by
both, the lessor and the lessee.
Keywords
agricultural lease, land exchange, Clrai
One of the challenges of the territorial market in the last 10 years is to include the unused
land in the productive agricultural activity. This can be achieved in many ways, the easiest
of which is to lease the lands, especially the unused ones, so that it may be used by the
active farmers.
Renting is a very useful tool not only for including the wastelands in the productive
agricultural activity, but also for expanding the agricultural exploited farming land. This is
an important condition for achieving a competitive economic agriculture.
In this case, the legal regulation of the lease appears as an extremely important aspect in the
functioning of the land market segment occupied by the lease.
Recent studies pointed out an increasing tendency in the share of agricultural areas leased,
from 17% in 2007 to approx. 27% in 2010 (Presidential Commission of Public Policy for
Agricultural Development) and around 30% in 2014. However, the share of leased
agricultural areas is still considered to be low compared to other EU countries, where the
average is between 40% and 60% of the used agricultural areas.
According to the same studies, leasing is more frequent in medium and large farms. Thus,
the percentage of the leased lands from farms under 100 hectares totals 8%, and it grows up
to 48% in the farms over 100 hectares.
The average surface of an individual agricultural exploit is 1.94 ha, the one managed by
physical persons, individual enterprises, family enterprises is 58.58 ha, while that managed
by a legal person is 193.7 ha. Of the agricultural exploits which are managed by legal
persons, the biggest surfaces are those of the city councils/city halls (an average surface of
575.8 ha/exploit), followed by the agricultural companies (averaging 403.76 ha/exploit)
(Petrescu, 2013). From these data, collected after the agricultural census in 2010, we
conclude that the professional economical structures tent to extend the exploited surface so
that the activity is more efficient and, moreover, seek to exploit larger surfaces of massed
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agricultural fields, in order to cut the expenses of moving the machinery and creating the
conditions to have monocultures on large surfaces.
In Romania, there are significant unutilized agricultural lands in Romania (577 000 ha in
2010), especially within farms under 10 hectares, probably due to some owners being too
old to work the fields or urban landowners who are not interested in agriculture anymore.
Merging these areas with functional farms, especially those that are currently managing
under 100 hectares of agricultural land can be one of the Romanian agricultural policy
objectives to increase and sustain the profitability of farming nationwide. In this regard, it is
necessary to identify methods to increase land market by encouraging the supply and
demand of agricultural land in as many areas of the country.
Having in mind that, as I said, in 2014, about 30% of the national agricultural area is leased
farmland and that this rate has a tendency to grow by over 40% (EU average), regulating
the lease so that it meets the economic interests of both the lessee and the lessor comes as a
priority.
The knowledge of these regulations by linking them to the effects they produce in practice
is necessary in order to identify methods of intervention so that the lease fulfills the role
that both the lessor and the lessee aim at.
Following the same vein, the literature specifies that "rent is the most dynamic segment of
the Land Market". That is to say that the current legislative conditions offer the lease
opportunity to hasten the transition of agricultural goods, from the smallest to the largest
agricultural holding.
(...) One of the basic elements of the Lease is the potential of land supply. Certain
conditions of Romanian agriculture reveals that the supply is an expression of some special
economic circumstances, where the references points are the following: the age of the
owners, the increased number of people residing in rural reference land, precarious
operating capital and so on." (Popescu, 2013)
Presidential Commission for Public Policies for Agricultural Development in the "National
Strategic Framework for Sustainable Development of agri-food sector and rural areas in
the period 2010-2020-2030" sees the proposal as it "may consider encouraging various
forms of the phenomenon of lease, especially for land owned by elderly farmers who can
no longer work their lands. Given the situation, we point out that 55% of the unused
agricultural land is owned by farms smaller than 10 hectares, and it could be brought into
production by stimulating policies of the lease."
Clrai is a standard county in terms of land market dynamics and practice of a high
quality agriculture, agriculture being the main economic activity.
By analyzing the lease contracts concluded in Clrai County by farms organized as
trading companies (S.C. ILDU S.R.L, S.C. CHIREA 2000 S.R.L) or as freelancers (PFA
SULTAN VIOREL, PFA MORARU VALENTIN, PFA MILI IULIAN) located in the
administrative territory towns of Vilcelele, Drago Vod, tefan Vod, the contractual
clauses were tracked. They lead to fulfilling the role of the Lease as agreed by both
Contracting Parties.
Lease analysis is mainly conducted in terms of conditions of the contract, focusing on
lessee analysis and its role in the land market but also on influencing rural development.
The reason for choosing the analysis of these elements is given that they are the main
aspects influencing the land market.
The lease contract is defined as "the contract by which one party, called the lessor, send the
other party, called the lessee the right to use and exploit agricultural goods for a specified
period, for a price called the lease" (Belu Magdo, 2012).
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Characteristics of the lease contract according to the doctrine:

- reciprocal contract, both parts taking up reciprocal and interdependent obligations. The
main obligations of the lease contract are the obligation of the leaser to give the field to
the one who rents and the obligation of the one who rents to use the field as a good owner
and to pay the price of the contract, which is the rent, within the dates set in the contract.
- onerous contract, each part following a patrimonial interest, which is the
counterperformance of the other part.
- commutative contract, the existence and extent of the obligation of the other part being
known from the moment the signing of the contract. Therein, the parts can't add any
clause that leaves the rent level to chance. The legal stipulation regarding calamities is not
included within this characteristic of the contract.
Also
- it has a successive character, the obligations being executed in time. If there is no time set
in the contract, the lease is not perpetual but is considered active for all the time required
to harvest the production of the respective agricultural field from the agricultural year
when the contract was signed.
- Untransferable ownership contract. The lease contract only transfers the use (right to
exploit) of the rented good.
- solemn contract, because the written form of the contract is required ad validitatem. This
request is completed in the law by that of filing a copy of the contract to the local
administration of the area where the rented agricultural goods are, to be filed in a special
register, a fact that doesn't, still, give the contract an authentic character, because the
requirement to file the contract at the local administration can't influence its validity.
- the lease contract has an intuitu personae character, which means it is signed with
consideration to the person who rents. This aspect results from the legal stipulations which
ban renting offices (lease mediators), and also total or partial sublease (art. 1847 of the
Civil Code). The practical implications, and also conditions, of this characteristic are
essential to the way the practical exploiting of the rented agricultural fields take place.
In the previous legal regulation of the leasing contract, it was easier to justify the "intuitu
personae" character of the leasing contract, because the law stipulated conditions that the
leaser must meet in order to be part of a leasing contract. Thus, in article 3 paragraph 3 of
the Law no. 16 of 1994, the leaser was required to have "...agricultural studies or a diploma
on agricultural knowledge or agricultural practice...". Also, the legal leasers' objective had
to be the exploit of agricultural goods.
Given the abovementioned, regarding contracts with legal persons as leasers, we notice that
the "intuitu personae" character is less obvious, as well as the situation where physical
persons who are leasers permanently or temporarily employ other persons to conduct the
activities required by the specific exploit of the agricultural field which is the object of the
contract.
This is why we could share the opinion that the intuitu personae character is not of the
essence, but of the nature of the leasing contract (Toader, 2003), "but in a broader and
maybe unusual sense of the usual consequence of this distinction. That is, in the sense that
the lease is always signed with regard to the person of the leaser, but, when determining the
leaser to give his accord, the specific weight of the qualities of whoever is to exploit the
agricultural goods is sometimes bigger, and other times less significant" (Ptracu and
Berindei, 2009).
Noticing the above, we can conclude that the rent is concluded only with respect to the
qualities of the leaser, the person who leases seeing him as the only one competent to
manage and exploit his agricultural field in efficient conditions so that it ensures him the
327

established rent (the payment of the contract) with as little risk as possible, the leaser being
obligated not just by contract but also by law (article 74 of the Law no. 18 of 1991 of the
territorial fund) to cultivate the field and ensure the protection of the soil.
The mass of the rented fields
In kind, within the lease contract, the person who leases has the obligation to exploit the
agricultural field as a good owner, to exploit the field that belongs to the leaser, being
prohibited from alienating it in any way. In fact the lease is a tool that is not just useful to
attracting the fields that are not exploited in the productive agricultural activity, but also for
the expansion of the surface of agricultural exploits. All the persons who rent and were
analyzed appealed to signing the lease contracts having the objective to expand the
surface of agricultural exploits, thus seeking the streamlining of the activity and the
proper use of the professional agricultural machines they have. This is only possible
through the exploit of some compacted agricultural surfaces of large dimensions, meaning
at least 100ha.
In order to secure the necessary compacted surfaces, the people who lease appeal to an
artifice, which is making some field changes between the leasers, by signing some "verbal
field change contracts" (all the leasers who participated in the study used this kind of an
operation, these verbal records being filed and recorded at city hall - Stefan Voda, Vilcele,
Dragos Voda).The appeal to such an operation requires the leaser to rule the leased field,
but the law clearly forbids the sublease and lease offices (in this sense the doctrine also
consider the lease as being intuitu personae). Because of similar reasoning, the legislator
being able to surrender the lease contract only with the written accord of the leaser, as an
exceptional case, and only by the husband or his major descendents. Also, seeing (Law
16/1994) the lease was defined as the "contract between signed by the owner, the user or
other legal owner of agricultural goods and loaner, regarding the exploit of agricultural
goods (...)" As a result, it is clear that the lease has the objective of exploiting the leased
property but not the right of usage other than that by exploiting itself.
To cover this deficiency due to decoupling the legal regulation of rent from the concrete
needs of the business environment in agriculture, respectively to cover the unlawful
exchange of land that disregards character intuitu personae of lease, some tenants (S.C.
Chirea 2000 S.R.L, PFA Sultan Viorel) insert a clause in the contract wording that tenant
would be entitled to use the land given on lease in land exchanges. In turn this clause
contravenes the principle that lies in Article 1847 of the Civil Code, which makes it null
and void.
The aspect analyzed has the ability to influence major leasing market as the tenant, lackings
possibility, resorts to land consolidation which he means to exploit, believing that this way
they will increase operating expenses and that the equipment can not be used for maximum
performance yield would feel entitled to reduce the amount of rent, in this way diminishing
supply.
Conditions of validity of the contract of lease
(parties to the contract, consent form, subject, rented property insurance, cause)
Parties lease
Lessors can be natural or legal person, must have ownership or usufruct (art. 715 Civil
Code) or legal owner of the goods (persons holding agricultural land under a provisional
title, such as a certificate issued by the local committee for the implementation of the land
law, agricultural companies set up under Law no. 36/1991) rented and the ability to
contract.
Lessee according to new legal regulations, in principle, any natural or legal person can act
as the lessee, Romanian or citizen of an EU member state. According to the old regulation,
328

it requires the tenant to have farming specialization training or knowledge certified by

agricultural or agricultural practice.
Article 74 of Law 18/1991 stipulates that "all landowners are obliged to ensure their
cultivation and soil protection." The lessee being a holder of farmland has, in turn, the
obligation imposed by the legal text quoted, but this requirement is interpreted to provide
land cultivation and soil protection and by entrusting this work to skilled people which only
him can coordinate, not just as it was in the old regulation of rent, to ensure achievement of
personal obligations.
In the absence of legal provisions governing the possible use of legal instruments necessary
for the consolidation of agricultural land, The function to increase surface lease farms to
optimize production may be affected, thus influencing the leasing market.
In circumstances in which any natural or legal person may be tenant, the necessary freedom
for optimal functioning of the market lease is provided, but this can create difficulties by
providing conditions for fragmentation of agricultural exploatations. The lessee is
established by law a right of first refusal to purchase the land on which they operate. We
consider necessary the establishment by law for a right of first refusal to lease land
that adjoins land used. Of course, this right of preemption can only take place considering
that the leaser is offered a rent that is at least at the same level of that offered by another
person who leases, in this way protecting the lease owner's right to negotiate and obtain an
advantageous rent, but also creating the conditions to mass the agricultural fields so that the
free market agricultural farms grow.
Consent to come from a person with discernment, to be expressed with the intention of
producing legal effects and to be not altered by vices. To be valid, the lease must be a
consensus on the essential elements of the contract parties: the leased asset well defined,
rights and obligations of the parties, rent, terms and manner of payment of rent, lease
duration, etc.
Form the written form of the contract is required validitatem ad. This requirement is
therefore completed by law to submit a copy of the contract to the local council in whose
jurisdiction the property is leased agricultural, to be recorded in a special register, which,
however, does not give the contract and authentic character, contract requirement for the
local council is not likely to affect its validity, but only for the purpose of enforceability.
According to art. 1838 Civil Code, "the relevant provisions in terms of land registry remain
applicable ". Although the law does not require this as a condition, the lease contract may
be concluded also in authentic form, in this regard gaining the strenght of an enforceable
contract to pay rent according to contractual requirements. The same strenght is gained also
by the contract registered with the local council contract.
Failure to regist the contract at the local council attracts the penalty of a civil fine payment
nature, for each day of delay, as the court determines. In practice, the provision of sanctions
is still insufficiently cleared, local authorities surveyed (Vilcelele, Stefan Voda Dragos
Voda) failing yet to adopt the measure requested of enforcing the sanctions, not being clear
who has the capacity to bring proceedings, which is the interest harmed, which is the date
by which the contract must be submitted. This is not able to affect market rent.
The Object the object of the lease is accounted for by the leased property, in this case
well-defined agricultural land and rent.
In terms of assets, in this analysis we only examine agricultural land that can be leased,
which must meet the following conditions: - to exist at the time of concluding the contract
and be owned, usufruct or lawful possession of the lessor; to exist in the civil circuit; to be
determined (limited).
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In the sense of the present research, in order to ensure that the leaser brings together, by
means of exploit lease, all the areas he has been given rights of, through the leasing
contracts, into a single great area, whose surface would be that of all the leased fields, we
consider that the object of the leasing contract should be the very right, to be proved by any
legal document.
The rent is the price the tenant owes for operating the lessor's leased assets. The new legal
regulation leaves it to the discretion of the parties the establishment of rent (in money, fruit,
mixed, or the benefits), the modality of payment and the amount of rent that can be
determined or determinable. The leases entered into by some tenants who were surveyed
(PFA and PFA militants Iulian Moraru Valentin) has the rent set in fruits, namely the
quantity of wheat (700 respectively 800 kg of wheat per hectare leased). As for the other
tenants (SC Ildu Ltd Chirea 2000 SRL and Viorel Sultan PFA), the rent is set in fruit rent or
a specified quantity of wheat (SC Ildu Ltd - 1200 kg / ha, SC Chirea 2000 SRL - 1000 kg /
ha, PFA Sultan Viorel - 900 kg / ha) is stipulated as the date of payment renter can opt for
the equivalent in lei at the price the day the amount of wheat due. Contract theory states
that "the rent, as any costs, must be honest, meaning it is is done with the intention of being
paid and serious, that is located in a relative balance with the use of the leased asset" (Belu
Magdo, 2012).
The place and time of payment of rent specified in the contract and in the absence of such
provisions or if they can not be determined by the nature of the benefit, practices or practice
established between the parties, payment is made under Art. 1494 Civil Code, as the place
and date of fruit collection in terms of time.
This element of the contract (the object) is one that can greatly influence leasing market,
and we are refering here to the the leased asset, in this case land subject to the lease but also
the amount of rent. In areas with high fertility class agricultural land, demand for rent is
increased, and so is the amount of rent. The lease offer is influenced especially by the
amount of the lease provided, and other benefits, or facilities which the legislature creates
or may create (eg life annuity - in the localities surveyed there were identified 180
beneficiaries of the stimulus). In turn, the demand can be influenced by the intervention of
the legislature and we are referring here to the subsidy per hectare paid by APIA.
Leased Property insurance for the risk of crop loss due to natural disasters is a clause that
should be included in the contract, being by law valid even in the absence of stipulation
(article. 1840 Civil Code). Therefore providing leased assets is treated as an element of
validity of the contract of lease.
Effects of the lease
Being a mutually binding contract with a sinalagmatic character, the lease creates rights and
obligations for both lessee and the lessor.
Most are the rights and obligations recognized in the literature, with a legal basis or
principles governing civil right. In addition, the parties may establish other rights and
obligations by the contractual terms, the only condition being that they are not contrary to
the legal provisions in force, as it would be ineffective ab initio. An example of legal
consecration clause is a contract clause establishing the tenant required to maintain the
productive potential of the land leased.
The duration of the lease is left to the discretion of the parties, the minimum time is the
time necessary harvesting fruit that will produce agricultural goods in the agricultural year
in which the contract was concluded (stipulated in art. 1837 Civil Code and refers
especially to where length is not determined in the contract) and the maximum term is 49
years. If the contract is determined withdrawal is not allowed. parties may agree, however,
with continued contract, to terminate the agreement.
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Art.1848 of the Civil Code provides that where land if neither party notified the contracting
party in writing, the refusal of the renewal contract with at least 1 year before the deadline,
it renews by right for the same duration as that specified in the contract. Termination of the
lease contract can occur before the death of the tenant in the event of incapacity or
bankruptcy of the lessee or if the estrangement through acts between the living of the leased
property only if it has been expressly stipulated in the contract. This element, the duration
of the lease, is one of the factors that can significantly influence the leasing market.
Conclusions
Following the analysis of the lease is found that although the role of leasing as economic
and legal operation should be to determine the insurance practice agriculture on large areas
under legal conditions, in reality, given the entire economy of legal regulation on the lease,
this is questioned by tenants need to use practical tricks to ensure desired purpose,
circumventing some imperatives of the law which are provided as features the lease
contract.
Tenants who resorted to end lease contracts were aimed at including increasing farm area,
aiming to improve the efficiency of this type and use the appropriate parameters of
machinery and agricultural machinery performance available. But this is only possible
through the exploitation of large agricultural areas, of at least 100 ha. One way to have such
surfaces composed of pooled agricultural land is in practice, the exchange of land held in
lease by the tenant. This operation, however, is inconsistent with the law and with the
principles governing the lease as a legal operation because of the express provisions of the
law (Civil Code) that the lease is a contract in consideration of the person, intuitu personae,
any operation outside explotations the operation being prohibited to the lessee on leased
land. Therefore, for the role of the lease to be fulfilled as desired by the lessor and the
lessee, it is required a legislative intervention to regulate agricultural land consolidation of
farm land in as larger surfaces as possible to ensure the conditions for practicing an
agriculture as economically performant as possible. In this sense, for economical reasons,
we think that we should consider ruling the lease as a contract which ensures the leaser only
gets the right to exploit an agricultural field, with the right to use and exploit as the object
of the leasing contract, and the delimitation of the massed surfaces in physical parts of
terrain should be established by the leasers who operate in a certain town, based on criteria
set by law or regulations of the local council.
This paper was co-financed from the European Social Fund, through the Sectorial
Operational Programme Human Resources Development 2007-2013, project number
POSDRU/159/1.5/S/138907 "Excellence in scientific interdisciplinary research, doctoral
and postdoctoral, in the economic, social and medical fields -EXCELIS", coordinator The
Bucharest University of Economic Studies.
References:
1. Belu Magdoul, M.L. 2012. Renting within the new Civil Code, Hamangiu Publishing
House.
2. Ptracu, B., Berindei, M.G. 2009. Considerations regarding the definition and legal
characters of the leasing contract. Romanian law studies. Year 21(54) 1.
3. Petrescu, C. (coordinator) 2013. The collective organizations of the agricultural and
sylvan land owners, Profile, evolution, tendencies, Polirom Publishing.
4. Popescu, G. 2013. Old problems, new relationships in agriculture. Romanian
Academy Publishing House.
5. Presidential Commission for Public Policy for Agricultural Development - "National
Strategic Framework for Sustainable Development of the Agrifood sector and rural
areas in the period 2010-2020-2030"
6. Toader, C. 2003. Civil right. Special contracts, Bucharest, All Beck Publishing, 2003,
page 184, note 1.

331

PERFORMANCE OF ASSOCIATIVE AND COOPERATIVE STRUCTURES OF

CALARASI COUNTY ANALYSIS OF THE PRINCIPLES BEHIND THEIR
ORGANIZATION
Rare Alexandru IONESCU
Faculty of Agro-Food and Environmental Economics, The Bucharest University of
Economic Studies; email: [email protected], Str. Mihail Moxa, nr.5-7, Sector 1,
Bucharest, Romania
Abstract
Two large agricultural associative structures organized in Calarasi county significantly
impact the specific market: Extension and Rural Development Consortium Vlcelele
(structure which operates under Government Decision 26/2001- on the associations and
foundations) and Ileana Consortium (co-operative structure Tier 2, founded in accordance
with the Law 566/2004). Knowledge of the organization and their operation is likely to
break down the mentality barrier of farmers, who until now has kept them away from
associations or cooperatives, and to increase the number of agricultural members of such
structures, in order both to improve economic results of the farms and to improve the
Romanian rural development. In this aspect, was performed an analysis of the evolution of
economic indicators of the investigated cooperative structures, of their member activities,
to identify and analyze the general characteristics of associative and cooperative structures
and define the role of these structures in modernizing and improving agriculture.
The identifying characteristics of associative and cooperative structures was used as
starting point for the legal regulation of the principles underlying the organization and
operation.
Keywords
farm association, cooperation in agriculture, rural development
After 1991 implementation of land fund legislation`s provisions, it has been highlighted
the necessity of a rule regarding the association and cooperation in agriculture, as a
method of agricultural activity streamlining. In this way, has been adopted law 36/1991,
with reference to agricultural company and other forms of agricultural associations, and
much later, law 566 from December 2004 regarding agricultural cooperative.
Many Romanian farmers, especially those from little agricultural enterprise s, are
extremely reluctant into belonging to cooperative structures in agriculture, as an
explanation can be mentioned the Romanian peasant suffering regarding the communist
collectivization setting up and also keeping the injury brought to agriculture by former
production agricultural cooperatives. After the legislation that regulates the organization
and operation of associative and cooperative structures appeared, timidly started to
flourish this field also in agriculture, the pioneers obtaining remarkable economical results,
given that modern principles, that can be found in the mentioned legislation, and are the
base for spreading these structures.
As small farmers are still reluctant to adhere to an agricultural associative or cooperative, it
is imposed to emphasize the structures characteristics economical and social that clearly
distinguishes the old way of organizing the cooperative from the new principles that
controls association and cooperation in agriculture, especially to show that there is no
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noxious element, but contrary, there are a lot of beneficial elements both economic and
social regarding the affiliation to this kind of structure.
In specialty literature is underlined the market association necessity, being clearly
disassociated from association on land, the first and most important target followed by
agricultural field`s owner from the past, different from European experience, where
cooperation`s objectives are mostly found in the environment of market relations of
associative farms, related to input supply, production transforming and enhancing and
others (Popescu, 2007).
As well, can be noticed the fact that towards the interest given, both cooperation and
association are far away from the desired level (Popescu, 2013)
Keeping the same idea, information from INS indicates in 2010 a huge decrease of
number of members of agricultural cooperatives from 59682 to 4226. This can be seen as a
positive thing, as current members are real and also active, but it can also be concerning,
because it indicates a decrease of trend to association of the population from rural
environment. However, it must be underlined the fact that the period 2000 - 2010 can be
described as a period of huge increase of agricultural associations in Romania, from 48 to
1620, and also for those that display economical activities. From 2000 untill 2010 the
number of agricultural associations increased from 29% to 66 %, in the rural environment.
If we refer to agricultural cooperatives, 2010 is the most important year, when there are
registered with balance sheet a number of 127 cooperative organizations. There is a
number of 3567 employees, resulting 28 employees per agricultural cooperative.
(Petrescu, 2013)
In order to highlight the superiority of the obtained results if there is any affiliation to an
associative or cooperative agricultural structure, is required the analysis of economical
indicators evolution of some cooperative structures together with their members, but also
the analysis of the displayed activity, in order to identify the characteristics of cooperative
and associative structures, and defining the role of these structures into modernizing and
streamlining the agriculture. For identifying the characteristics of associative and
cooperative structures, it is often used as starting point the legal rule of the principle s that
are base for their organization operating.The taken into account indicators are revenues,
expenses, the profit of associative and cooperative structures (by case), but also the
production expenses, (input purchasing, fuel, equipments, insurances), and revenues
obtained de production capitalization, by cooperators and associated members.
Two large agricultural associative structures organissed in Calarasi county significantly
impact the specific market: Extension and Rural Development Consortium Valcelele
(structure which operates under Government Decision 26/2001-on the associations and
foundations) and Ileana Consortium (co-operative Tier 2, founded in accordance with the
Law 566/2004).
Based on this research we can notice the principles on which is created the activity of
agricultural cooperatives, in accordance with the Law 566/2004 :
1. The principle of voluntary and opened association
2. The principle of equal members into taking administrative decisions for the
activity of the cooperative
3. The principle of economical participation of cooperative members
4. The principle of autonomy and independence of the agricultural cooperative
5. Educating, training and informing the members of the cooperative principle
6. The principle of cooperation between agricultural cooperatives
7. The principle of concern for communities sustainable development
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The research has been performed taking into consideration the activity developed by
Extension and Rural Development Consortium Valcelele (structure which operates under
Government Decision 26/2001-on th associations and foundatins) and Ileana Consortium
(co-operative Tier 2,founded in accordance with the Law 566/2004).
The principle of voluntary and opened association
The most important resource of associative and cooperative structures of agriculture is
human resource, mainly being represented by the members. Generally, the members of an
associative structure are a precious capital, especially due to human and social capital they
possess. As previously mentioned, in a research from Prometeus project regarding 794
agricultural associations and presented in Collective organisations of agricultural and
forest owners, profile, evolution, disposition, it can be observed that the number of people
being part of agricultural or cooperative decreased from 59682 in 1996, to 4226 in 2010,
emphasizing the positive aspect of the evolution, namely that those 4226 are real and active
members, and through their activity they realize the organisation`s objectives and also the
general progress in the community they activate.
Related to the case study presented in this material, the number of members it has been
constantly kept, for both analized entities, also because from the beginning, respectively
from the moment the organization was set up, or the member had been registered to
association or cooperative, they all knew the conditions that had to be accomplished in
order to keep the quality of member but also the advantages of being member of association
or cooperative.
In order to be a member, one have to accomplish certain conditions, that are usually
mentioned in the constitutive note or the status of each associative structure. In this way,
depending on the specific of agricultural enterprise or cooperative, the conditions that have
to be accomplished in order to be a member are to leave in a specific area, to be part of a
specific socioprofessional category or to have animals or agricultural field
Members from both structures voluntary affiliated, having the opportunity to call back any
time. The impulse which determined the affiliation of an associative or cooperative
structure depends on individual economical results amelioration and subsidiarily on
consolidating the associative or cooperative structure. Taking into consideration the fact,
we can exemplify as follows:
- inputs cost is smaller with 40 or 50 % for members of an associative or cooperative
structure towards individual agricultural manufacturer. This is due toauctionpurchasing of
large amounts of seeds, pesticides and fertilizers. During 2013 it has been remarked a 40
% decrease of acquisition costs for wheat seeds towards price list comparing with
individual manufacturers which obtained maximum 20 % discount. For sunflower seed
acquisition cost was with 35-40 % smaller than price list, for fertilizers with 15 % than
the price acquired by individual manufacturers.
- during 2013, the cost of fuels purchased by both consortiums, especially the price of
diesel was about 15 coins cheaper than pump fuel price. Individual farmers derived profit
also from price reduction according to purchased quantities, but not more than 7 coins
per litre.
- cooperative members and those from associative structures, have the advantage of buying
agricultural equipments, especially If they are buying a big number of tractors and
equipments for soil processing.
- taking into account funding, cooperative and associative members, had the advantage of
using bank products with smaller rates (as an average of 1 %). Raiffeissen Bank, BRD
GSG, and Transilvania Bank offered this kind of products between 2012 and 2013.
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agricultural production capitalization is advantageously taking place in case of

consortiums than in the case of individual manufacturers, thus ensuring a better price
and a bigger profit for the members. We can take as an example, the sale price of wheat
in the Extension and Rural Development Consortium Valcelele which was 11 % bigger
than an individual sale, and for corn with 8 % bigger.
Members from both consortiums freely affiliated, and they have no restriction from
economical potential of each or location (locality or district) where activity takes place. So,
there are members of Ileana Consortium that have farms with 35 and 5000 hectares in
Calarasi, Ialomita and Prahova, and Extension and Rural Development Consortium has
members with farms between 1 and 2.515 hectares in Calarasi, Ialonita, Prahova,
Constanta, Teleorman and Buzau.
Summing up al the above it clearly results the economical advantages that the cooperative
and associative members have. As a conclusion, we can stress out the voluntary aspect of
the members belonging to the associative and cooperatives organization, an aspect that is
entirely motivated by economic beliefs.
The principle of equal members into taking administrative decisions for the activity of
the cooperative
Within the administrative ruling of the cooperative and associative organization, all
members are equal, each one of them having one vote only. This fact is also stated by the
law in OG 26/2000, as well as in art. 62 of the 36/1991 Law (each member has the right to
vote only once, no matter the value of his social role), but also art. 17 from 566/2004 Law
(no matter what is the scale of contribution to the social capital, each member can only
vote once). In the case of the two consortium, the decision regarding ruling and
administrating with the competence of a general meeting are taken only by having the
majority of votes, each member having the right to vote only once no matter the surface of
the infield he works on, nor the contribution to the social capital. As an example, at the
Extension and Rural Development Consortium Valcelele there are members that have 2
hectares of infield (PF Ivan Dumitru), with 3 hectares (PF Marin Laurentiu), with 400
hectare (SC Agrozootehnica Ulmeni SRL) or 2.500 hectares (SC ILDU SRL). This is an
eloquent argument that can prove the democratic ruling of the associative and
cooperative organizations.
We have to mention that in the presented case Collective organisations of owners of
agricultural fields, forests, profile, evolution, dispositions, executive management of
associative structures from agriculture, is ensured in 83 % of cases only by the members,
in 5% of the cases only by persons outside the organisation, and in 12 % of the cases by
both members and persons outside the organisation. Ths information is a clue that in the
case of associative structures and agricultural cooperatives, management activity is
amateurish, and this can burden the intention of imposing association and cooperation in
agriculture as an alternative to be used in order to optimize the agricultural activity.
The principle of equal members into taking administrative decisions for the activity of the
cooperative, known in specific doctrine as principle ; on man, one vote, is one of the most
important characteristics of a social enterprise, associations and agricultural cooperatives
being part of this category. We also have to record that this characteristic is essential, in
order to delimit from the societies of classical economy, where the majority for taking
decisions is formed according to percentage share of the capital. This principle has the
merit that encourages association through attraction of farmers into organisations,
especially of those who do not own big lands, being attractive the fact that both those little
but also the big ones have same rights into taking a decision, but present the disadvantage
that the majority of little farmers do not know so much about modern management, in this
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way the desire of professionalise the structure of associative management through attracting
qualified personal can not surpass opposition to change for the majority who see in this step
only the expense brought by management professional attraction, without taking into
consideration possible advantages.
The principle of autonomy and independence of the agricultural cooperative
The agricultural cooperatives and associations are set up voluntarily by the associated
members with the scope that is stipulated in the statute and the articles of association of
each of them, independently from any public institution or administrative authority. The
last mentioned can not interfere at all in the management and ruling of the associative and
cooperative operation. As juristic persons they have to be checked by the state bodies
(General Directorate of Public Finance, General Directorate of Anti fraud, The Agriculture
Directorate, and so on) that has the power to correct any illegal activity that may occur, but
this can not be considered interference with the ruling and managing of the activity. Even
though certain decisions regarding the administration of the association and cooperative are
adopted as a result of a compulsory directive coming from a legal rule issued by the Govern
or adopted by the Parliament, this fact also can not be considered an interference in ruling
and managing the juristic person sustained by the Government or Parliament, because it is
considered a general rule. In conclusion, we can rule out a new characteristic of the
cooperative and associative organization: the independence and autonomy in relation with
public and private organizations.
Educating, training and informing the members of the cooperative principle
An important activity that is taking place among the two consortiums that we have just
analyzed is the one of getting associated members informed. The process of informing is
done not only by the direct help of the consortiums salaried, but also by the participation to
seminars, symposium, and presentation. This way, the salaried of the two consortium, those
that are entitled with this specific role, is informing immediately all partners regarding the
evolution of prices on the cereals market, the transportation, insurance and input market.
Also, at the request of any associated member, this person has to obtain the necessary
information. In the course of 2013, the most important activity within the activity of the
consortiums salaried was getting in time the information regarding the cereal market. At the
Extension and Rural Development Consortium Valcelele this activity was essential because
almost 70% of the production that was soled by associated members through consortium
was made at the time and price that producer choose and only 30% of the production was
sold and garnered by the consortium.
In 2013 within the two consortiums were organized informatory and training meetings for
the associated members as following:
3 meetings were held for the presentation of new types and crossbreed of sunflower,
wheat, corn and colza
4 meetings for the presentation of new offers and conditions of provision
2 meetings for the presentation of few offers and the delivery condition of gas-oil
6 meetings for the presentation of input offers (seeds, pesticide, fertilizer).
In 2013, each of the two consortiums organized two general meetings were different input,
provision, fuel producers were invited to present their offer. At these meetings the
participants were offered specialized aid in terms of obtaining European funds, also they
had the change to meet professors from universities and colleges with agricultural and
agricultural economics profiles.
On demand, each member can benefit of help in obtaining meetings with specialist in any
domain that is related to their own activity.
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Analyzing these activities held by the organizations we referred to, we can conclude that
the main characteristic of the agricultural associations and cooperatives is offering the best
information and knowledge to the active agrarian society.
The principle of concern for communities sustainable development
Joining the agriculturalist into the two consortium has brought many advantages to the
communities they belong to: developing and making effective the activity not only brings a
higher budget to the localities, but also creates new jobs, facilitates the rational exploitation
of the resources and protects the environment. In the areas that these two consortiums
function you can notice an higher developed business environment (Vlcelele, Drago
Vod, Cuza Vod, Dor Mrunt- for Extension and Rural Developing Consortium Vlcelele
and Ileana, Fundulea, Lehliu Sat- for Ileana Consortium). All this is presenting as a result
of the characteristic of the cooperative and associative organization that is based on the
long term developing of the communities principle, more exactly the existence of their
social and economic goal in agriculture. Having these organizations in the above mentioned
area has been nothing but an important social help by decreasing the rate of unemployment.
For example, while the rate of unemployment per county is 6,98%, the one in the Extension
and Rural Developing Consortium Valcelele area is a lot more lower 1,9%, Cuza Vod
2,02% Vlcelele 5,3%, Drago Vod and in the area of Ileana Consortium 3,77%,
Fundulea and Ileana 5,2%.
It is important to notice that in a research made and presented in Collective organisations
of owners of agricultural fields, forests, profile, evolution, dispositions, is stated that for
35 % of agricultural enterprises from Romania, delivering services essential for the
community is the main important objective (Prometeus, ICCV, 2013). This is an important
aspect, because delivering services for the community as objective of agricultural
enterprises, is placed after the objective of representation of member`s interests (70 %)
and the objective obtaining economical benefits for the members (28%). To conclude, I
can underline that regarding the main objectives of agricultural enterprises, economical
aspect still governs, but also social aspect has an important percentage. Taking into
consideration that economical situation improvement of the members of agricultural
enterprise has as consequence the improvement of social situation, those 2 elements are
leading to the conclusion that indirectly is being improved the social and economical
situation of members of the communities from which associative and cooperative members
are part of.
However, besides objectives directed to the members, 35 % of agricultural enterprises, also
have objectives oriented towards community, by delivering services indispensable for
community. Those are enforcement services for agricultural work, consultancy deliver,
insuring spaces to deposit agricultural products. All those previously mentioned are
creating conditions into developing the respective communities. Also in the sense of
the role vector for sustainable development of the communities they have associations and
agricultural cooperatives, can be interpreted and all the provisions of the documents
governing the destination of European funds in the agricultural and rural development,
namely those provisions that either attaches score additional applicants belonging
associative structures (associations, cooperatives or producer groups), whether determined
as eligible beneficiaries associative structures.
As an example can be mentioned National Program of Rural Development 2014- 2020, that
within 4.1 investments in agricultural exploitation, 4.2 investments for agricultural
products marketing, 4.3 investments for development, modernization and adaptation of
agricultural infrastructure, has as eligible beneficiary, associative structures from
agriculture, respectively producers groups and cooperatives.
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As an argument for those mentioned above, it also must be brought into discussion that in
the areas with superior class of soil fertility, agriculture met an important development and
modernization, but development of rural area from where the majority of agricultural
workers come from, remained at a low development level. Through this previously
mentioned actions included in PNDR, they try to develop the rural areas, and through
associative structures from agriculture, that can be, for example eligible beneficiaries for
investment projects in processing and commercializing agricultural products, being well
known that one of the methods of adding value for agricultural products, plusvalue that can
mainly stay in the community, as benefits, represented by work places or local taxes, that
can be transformed into improved infrastructure.
The economic contribution of the members of the cooperative principle
Another general characteristic of the associative and cooperatives organizations in
agriculture is the economic participation of the cooperative members. According to this
principle, "Members contribute equitably to the establishment of the cooperative property,
exerting democratic control over it. At least part of this property is indivisible. Conditions
that must be met for compliance with this principle is closely related to the conditions
necessary to become a member but with the legal form of the NGO or cooperative. So,
usually, if prime condition for membership is only residence in a particular area, member
economic participation is represented only by a fee in the amount fixed. This is seen most
commonly in the associative structures that function as NGOs. If the condition for
membership is that they have different areas of land or livestock or other assets and legal
form of the structure is one governed by specific legislation agricultural companies and
agricultural cooperatives, member economic participation is more complex and is briefly
described in below. This fact can be explained with the case of the associative organizations
that were set up according OG 26/2000, and states that all members have the duty to pay a
fee. For example in the case of Extension and Rural Developing Consortium Valcelele, the
fee is 5 RON/ha/year, and in the case of the other cooperative organizations the law says
that the person that can subscribes and pays the number of shares can be a member (art.16,
paragraph 3 from 566/2004 Law). In the case of the association founded according to the
law 36/1991, you can be an associate in an agricultural organization if you only have
infield, animals, machinery or any other type of goods, but also by bringing a financial
contribution in the account of the subscribed parts. This principle is very obvious in the
case of the co-operative organizations that were founded according to the law 36/1991,
more exactly by establishing the criteria of allocating the profit, and in the case of the
associations founded according to OG 26/2000, by providing the necessary quantity of
resources for the function of the association.
Analyzing the operation of the two consortium that are founded and working according to
different normative acts, you can see that there are some specific characteristic like: an
association that is operating as an ONG, similar to Extension and Rural Developing
Consortium Valcelele, is not making any profit, and this is also because the law interdicts
it, the over plus being used only as AGA wants. It is usually used at the progress of the
association, and for promoting its image and interests. On the other hand, Ileana
Consortium, which is set up according law number 566/2004, is making profit that is
distributed to the members of the cooperative, according to their statute. Actually, also in
the case of the cooperative organizations, the profit is used entirely for its own developing.
According to the statute of both organizations, the members have the obligation to sell at
least 70% of the production of cereals that is obtained through consortium, being necessary
to respect the law that is controlling the operation of the producers. But the difference is
that for the quantity of cereals that is sold through Ileana Consortium, because it is an
338

organization that makes profit, a percentage rate applies and goes to the account of the
Consortium. In the case of the Extension and Rural Development Consortium Valcelele,
there is not need to levy a percentage cost from sales, the integral cost is cashed in by the
producer, being a member in the association.
As a conclusion, the general characteristics of the agricultural associative and co-operative
organizations that we discussed and determined along this project underlines the superiority
of the economic results and social standing of the cooperative and associated members in
comparison with the individual producers.
Also, earnings communities where community members are working in various associative
structures or agricultural cooperative is evident, both from an economic perspective as well
as from the social perspective, the area becoming economical attractive and also increasing
the development potential.
We leave it to the sociologists to explain why many farmers are not very keen on joining
the agricultural associations or cooperatives.
Acknowledgement
This paper was co-financed from the European Social Fund, through the Sectorial
Operational Programme Human Resources Development 2007-2013, project number
POSDRU/159/1.5/S/138907 "Excellence in scientific interdisciplinary research, doctoral
and postdoctoral, in the economic, social and medical fields -EXCELIS", coordinator The
Bucharest University of Economic Studies.
References:
1. Popescu, G. 2013. Old problems, new relationships in agriculture. Romanian
Academy Publishing House.
2. Popescu, G. 2007. Cooperation in agriculture, from land market to knowledge transfer,
Editura Terra Nostra, Iai.
3. Petrescu, C. 2013. Collective organisations of owners of agricultural fields, forests,
profile, evolution, dispositions, Polirom.

339

NON-WOOD FOREST PRODUCTS OBTAINED IN THE ROMANIAN FORESTRY

SECTOR. PRODUCTION POTENTIAL AND VALUATION
Marius Nicuor ALBU, Larisa Delia MIHLCIOIU
Faculty of Agro-Food and Environmental Economics, The Bucharest University of
Economic Studies; email: [email protected], Str. Mihail Moxa, nr.5-7, Sector 1,
Bucharest, Romania
Abstract
The main purpose of this work is to emphasize the need for forest products that are being
obtained in the Romanian forestry section. This research will be based on structured
analysis regarding non-wood market products, the existing production capacities and
showing in details the main ways of accomplishing them. The issue regarding the forest
conservation is not something new. It was and still is a very talked about problem and it
had its way into developing our society. Obviously, such a problem could not appear at the
time when the man himself was only an organic component of forest ecosystems, when he
still had no ways for harming the environment. For expanding these aspects of his life, he
damaged a large number of land areas covered with forests, reducing their surface, and in
some regions the distruction troubled the limit that ensures the ecological balance. The
products and services derived from the forest economy system is a subject to be discussed.
It is generally accepted the idea that wood is the main product of the forest. But there are,
along with the non-timber forest products (bark, fruit and pheasants) a wide range of
services that are available to people.
Keywords
forest, non-wood products, accomplishing, export, import, benefits.
Introduction
This research seeks to answer the question regarding the effectiveness of attaining and
manufacturing the forest production in Romania and for the export.
Research objectives: identifying the current status of forestry content in Romania, the
analysis of forest evolution in Romania, identifying the forest efficiency in Romania.
Forests, lands destined for reforestation, the ones that are needed for cultivating, forestry
production or administration, ponds, stream beds, and unproductive land included into
forest areas, under the law, constitutes, whatever the nature of ownership, national forestry
fund. (Forest Code,2014)
1. Literature review
Global hotel markets are being dominated from the perspective of a number of SMEs.
However, even if the number of international hotel chains which are being present on a
market is not large, they hold a significant share of the market value. Decision of hotel
companies in order to conduct business in another country can be motivated by several
goals: expanding sales, geographical diversification, multiple supplies of resources and
labor or workforce, exploitation of reputation, the brand and its image and so on (Tse and
West, 1992).
By choosing the option on how to enter a foreign market can have and stand at the base by
concerning the nature of the company's products. Otherwise, entering a foreign market as a
providing services company is considered to be less influenced by the degree of risk,
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environmental uncertainty or specific activities, as for companies who are producing goods,
but rather the issues regarding employees status, the uncertainty behavior, the development
of trust, and specific activities (Brothers and Brothers, 2003, p. 1196). In the case we talk
about goods, nowadays we can distinguish four strategies concerning the entering on a
foreign market: exporting, licensing, strategic alliance and foreign direct investment
(Bradley, 2001, p. 281; Johansson, 2006, pp. 127-129). Services, however, can be divided
into two categories: "hard services" and "soft services". "Hard services" are those for which
can be separated by the consumption production. These services can be standardized,
making
possible to produce them in mass. "Soft services" are those services for which the
production and consumption are simultaneous. Companies that offer "soft services" used as
a strategy prevailing market penetration license (especially franchise), FDI or those
combinations (Ekeledo and Sivakumar, 2004).
Since the hotel industry belongs to the category of "soft services" ways mentioned above
are individualized such as: franchise, management contract agreements cooperative
consortia (for voluntary chains), joint venture, greenfield investments and taking over a
hotel or hotel chains on the external market (Cristureanu, 2006 pp. 320-324). The strategies
that are most commonly used by international hotel chains in especially large in order to
penetrate a market are franchise contract management (Guillet, Zhang, Gao, 2011, p. 22).
2. Overview of Romania`s forest sector
The forestry sector in Romania includes, to a large extend, state-owned forests, and also
private properties, according to the official regulations in force.
No matter who has the right of the ownership (public or private), forests must be managed
in a uniform manner, following the rules and principles of their sustainable existence, with
many advantages for the human community. Obviously, the needs are increasingly larger in
the communities and that reflects even on the forest systems, both on their existence and by
forcing the permissible limits of their products, mainly wood, but also non-wood, as well as
their positive influence on the environment.
The forest economy represents the silvicultural activities, forestry exploitation and wood
industrialization, including the trade of forest products. Each one of these three technical
and economic activities have been distinguished between them by the nature of production
processes and final products.
The silviculture is being considered a matter of the national economy, producing bio
products and services that includes the following activities: planning and cultivating the
forests, protection and security of their value regarding the wood harvesting and
exploitation of forest products, hunting and fishing in mountain waters. As a matter of the
national economy, forestry agriculture differs from the silviculture in content and
production processes as well as the place and importance of the forests in economical and
social life of the nation.
Forestry has its main purpose in the production of standing timber, its main product being
the wood that is purchased by traders who operates in the profile of forests as the object of
labor and transformed into industrial wood types such as: logs, wood pulp and paper, wood
lath, firewood etc.(Milescu,2002)
The products and services derived from the forest economy system is a subject to be
discussed. It is generally accepted the idea that wood is the main product of the forest. But
there are, along with the non-timber forest products (bark, fruit and pheasants, etc.) a wide
range of services (recreation, sanogene products, production of oxygen, carbon dioxide
storage, protection, etc.) that are available to people.
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2.1. Non-wood forest products obtained in the Romanian forestry section

Non-wood forest products are natural plant resources, lacking all or part of the woody
material produced and reproduced by trees, shrubs and sub-shrubs forest and forest soils
and lands affected to them, which can be harvested and used as such or processed and semifinished industrial types. (Corleanu,1984)
Since the forest wood products, primary, secondary and hygiene are clearly defined, we can
only classify them as non-wood forest products all the products emerging from the forest
economy.
It is important to understand that the non-wood products are not as stable as the wood
products. They appear and disappear as a result of our social needs, being affected as well
by the requirements of manufacturing industries, market, legal and administrative
framework general.
For exemple, wickers, once the pride of the administrations meadow in the southern forest
areas, disappeared after competing with similar products made in China.
Resin, rosin, bark and tanning substances are no longer requested by the manufacturing
industries, being replaced by the synthetic materials.
But there occurred the possibility of obtaining carbon fixation function by applying the
Kyoto Protocol, so appeared the energy plantations.
The non-wood forest products contribute to the improvement and diversification of the
food, providing raw materials for the pharmaceutical, cosmetics and chemical enrichment
fodder base production of energetic materials, fertilizers, construction materials.
They are classified according to the following criteria:
A. The grade of dependency to the forest:
- Depending on the cycle of forest development trees and shrubs (fruit, coltan, cones, leaves
and foliage, seed) or are harvested in the same time (bark, fir, etc.);
- Depending on the forest soil and land affected by it (mushrooms, herbs, medicinal and
aromatic plants, etc.).
B. Depending on the intended use:
- Accessories Food products: berries, seeds, mushrooms, sap etc..
- Forest products for chemical production of rosin and turpentine (gum, bark, wood
containing oleoresins), tannins (bark, cones, coltan, leaves, wood containing tannins),
medicines, essential oils, varnishes (medicinal and aromatic plants, cetin, buds, flowers,
seeds), latex and vegetable waxes (secretions, bark, buds, leaves);
- Forest products for small industries, handicrafts, household: wicker plaiting bast fibers,
winter trees, cetin, cones;
- Other uses: construction materials (bark, twigs), energy (cracked bark), fertilizers (bark,
leaves);
- Forest products of the agribusiness economy: seeds, foliage, herbs;
- Forest products of the economy beekeeping: bee plants. (Corleanu,1984)
3. Forest fruits production in Romania
The total production in Romania for berries peaked in 2006, reaching 28500 tonnes. The
year 2007 saw the lowest production of 23300 tonnes, although the cultivated area was 341
ha compared to 2006. In the next two years of crisis, the production recovered to 26300
tonnes and 27400 tonnes, respectively. In the 2006-2010 period, the main cultivated berries
were strawberries representing between 72.8 to 78.1 % of the cultivated area and 70.9 to
81.1 % of the whole production of berries. These are followed by blueberries which
reached in same period of time from 7.8 to 9.1 % of the cultivated area and from 7.0 to 8.6
% of the total berries production in Romania.
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The production of raspberries declined being affected by the economic crisis and the
weather conditions which affected its growth. In 2006-2007, was among the major berries
produced in Romania, with an area of 100 ha and a production of 2200 tonnes, but in 2008
the area was restricted to only 4 ha, according to the data of FAOSTAT. The year of 2010
recorded a total production of 31 tonnes raspberries harvested from an area of 15 ha.
Table 1 The area planted with berries in Romania
-haSpecification 2006 2007 2008 2009 2010
Total:
3291 3632 3320 3247 3409
Blueberries
300
8
291
285
280
Gooseberry
59
285
12
16
50
Strawberries
2397 28268 2591 2507 2664
Cranberries
87
83
85
83
80
Raspberry
100
100
4
26
15
Other berries
348
330
337
330
320
Source: http://faostat.fao.org/
In the same year, the same area planted in 2006, the production was 19 tonnes,
compared to 115 tonnes. (Faostat)
Table 2 Berry production in Romania
-tonnesSpecification 2006
2007
2008
2009
2010
Total:
28529 23253 26287 27362 26444
Blueberries
2000
2000
2220
2353
2200
Gooseberry
115
29
11
18
19
Strawberries
26612 16496 21233 21969 21434
Cranberries
402
328
364
386
360
Raspberry
2200
2200
17
48
31
Other berries
2200
2200
2442
2588
2400
Source: http://faostat.fao.org/
Cranberries were constantly evolving in terms of cultivated area in this period. This
production has fluctuated, the lowest being in 2007 (328 tonnes), followed by 2008 and
2009 during the economic crisis recovering (364 tonnes 386 tonnes respectively), and then
to decline slightly in 2010 with the amount of 360 tonnes.
4. The price of berries in Romania
The evolution of the berries prices at level of Romania teritory are prezenteed in the table
below.
Table 3 Producer prices of berries in Romania
-USD/tonnesSpecification 2006
2007
2008
2009
Strawberries
1176,6 1449,9 1413,3 1592,1
Blueberries
709,1 1042,4
1130
926,7
Raspberries
1869,4 2775,8 3009,3 2467,7
Source: http://faostat.fao.org/

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Producer groups berry in Romania are: Centrul de Fructe Ulmi-Dambovia,Centrul de

Fructe Bbeni-Vlcea,Denisalbert SRL Cozneti-Suceava,Direcia silvic Galai,Direcia
silvic Harghita,Direcia silvic Vlcea,Geda Mark SRL Pufeti-Vrancea,Horticom SA
Piatra Neam,Interfood Prod Imex SRL Drobeta Turnu Severin,Ocolul silvic DobraHunedoara,Padure Fructe SRL Caransebe,Ripas Franceti-Vlcea,Santa Rita Agro
business SRL-Satu Mare. (RNP-Romsilva)
4.1 Romania's foreign trade of berries
Table 4 The value of Romanian berries exports
Specification
2006
2007
2008
2009
2010
Cranberries
1273
1052
998
107
735
Strawberries
165
0
9
0
56
Raspberries
916
443
433
42
84
Source: International Trade Center/UNCTAD/WTO-Comtrade
date

thousands USD
2011 2011/2010(%)
1937
163,5
113
101,8
158
88,1
UNSD; CRPCIS prelucrare

Main berries exported and imported by Romania which have potential are blueberries,
strawberries and raspberries.
Table 5 The value of Romanian berries imports
thousands USD
Specification 2006
2007
2008
2009
2010 2011 2011/2010(%)
Cranberries
2
150
171
46
58
80
37,9
Strawberries
1451
3683
4112
3726
3830 2651
-30,7
Raspberries
8
323
320
154
195
204
4,6
Source:International Trade Center/UNCTAD/WTO-Comtrade UNSD;CRPCIS
The Romanian forestry sector has a very big potential, but we are not able to use at 100%
procent.
5. Harvesting, exploitation and marketing of non-wood obtained by RNP-Romsilva
5.1 Harvesting, utilization and marketing of forest fruits
Years 2010 2011
RNP Romsilva has proposed for the year of 2011 to buy and harvest from the forest
subordinates a quantity of 5600 tonnes berries generally in the range of specific assortment
forest.
The main purchasing prices varied from each type as: black huckleberry 5.0 tonnes 12.0
lei/kg, red bilberry 2.5-5.0 lei/kg, raspberries 3.5 tonnes 7.0 USD/kg, corn 1.0-1.1 lei/kg,
rosehip 1.0-2.0 lei/kg, underbrush 1.0-3.3 lei/kg, blackberry 1.5-2.0 lei/kg. Purchasing
prices have been maintained at the 2010 level, but were lower than the ones in the 2008 and
slightly higher than the 2009, which contributed inter alia to conduct profitable business.
(RNP-Romsilva)
The fact that the campaign from the 2010, the quantities purchased by foreign partners were
smaller, not allowing the establishment of inventories in 2011 an advantage.
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A favorable aspect of the berries campaign in Romania was the fact that countries like
Poland and Ukraine, which have annual quantities of berries with variety assortment
appreciated by European consumers, this year did not have the fund general merchandise
and quality, so that part of berry market was covered by Romania.
This explains the fact that RNP-Romsilva, through its subordinate forest, had by the end of
October the amount of 6160 tonnes of berries: blueberries- 759 tonnes, raspberries- 237
tonnes, underbrush- 831 tonnes, blackberries- 134 tonnes, Rosehip- 3668 tonnes, corn- 276
tonnes, other fruits- 364 tonnes, having in their category: cherry, currant, hawthorn, etc.
From the amount purchased up until now were capitalized 5958 tonnes fruit based on
contracts, so that in the next period to be capitalized a stock of 202 tonnes, sales secured.
The berries production was made mainly for export, either directly by the companies
Waldnieler (Germany), Prodexim and Balex (Austria), Importaciones (Spain), under the
direction of forestry contracts Alba, Arad, Arges, Bihor, Botosani, Covasna, Neamt,
Suceava, with these partners, either through traditional partners in the country (Silvex,
RFV, SVZ, Penexport), which hold a considerable percentage of the fruit in (Ex. Silvexabout 1800 tonnes, 900 tonnes SVZ Holland, RFV- about 700 tonnes).
In terms of delivery conditions, the capital of berries became frozen and fresh, packed in
paper bags, plastic barrels or cardboard boxes, depending on the demanding partner, in
some casesthe fruit delivery packaging was made by the customer (Ex. Silvex).
Contract prices at the beginning of the campaign were small, they increased in the second
half of the campaign, finally being higher than the ones from the 2010.
Prices that were used in the campaign of berries in 2011 varied as follows: black
huckleberry 2700-3600 euro/tonne, with a tendency to 3820 euro/tonne (DS Bihar), red
bilberry 1500-2300 euro/tonne, raspberries 1750-1950 euro/tonne, Rosehip 560-750
euros/tonne, underbrush 960-1100 euro/tonne, corn 450-800 euro/tonne. (RNP-Romsilva)
Year 2012
RNP-Romsilva has proposed for 2012 the acquisition and exploitation of forest
subordinates having a quantity of 4200 tonnes berries generally in the range of specific
assortment forest.
As in previous years, we wanted, as much as possible from this years campaign to fund
the delivery of cargo to be done mainly intra and extra, which is why the campaign
preceding the collection and recovery of berries, they had into consideration a series of
technical measures- organizational, forestry departments have been notified, including:
1. It was requested the directions forest fruiting forecast preparation for the main species of
fruit: black and red bilberry, raspberry, buckthorn, rosehips, blackberries, sloes, etc. and
taking care of it throughout the campaign. Fruiting configuration made at the beginning
of the campaign led to the conclusion that it can count on a positive campaign.
2. Based on the Impact Study held by ICAS Bucharest, it was obtained for all the directions
forest OPINION Romanian Academy- Commission for Protection of Natural
Monuments, and each direction of locally produced forest obtained an environmental
permit. Considering the latest regulations on intra-extra it was obtained the EORI code,
its existence being mandatory for tracking imports and exports carried by the countries of
the European Community.
3. In order to efficiently collect and harness the berries this year's campaign and to prevent
disruptions in the conduct of this activity, forestry departments were sent a working guide
and were kept informed with the market requirements, pricing, and opportunities of each
period of the season. This is why the central database was created focusing on prices due
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to the permanent connection of the overhead compartment resort, on one hand with the
Forestry Departmen, and on the other hand with partner companies.
4. It was prohibited the assignment of the right to harvest and purchase berries from the
forest managed by RNP- Romsilva, acquisition and exploitation of the stock of goods are
the responsibility of the forestry departments in terms of economic efficiency. It was
considered essential that this activity must remain in the coordination and supervision of
forestry units, which has the task of organizing purchasing points and take necessary
measures regarding the unauthorized access to the forest, during the campaign.
5. With the start of the campaign, forest departments have been warned by the fact that the
situation in the required period of the time, the purchasing prices must be well followed,
meaning keeping them at a level required by the realities of each area. Generally purchase
prices varied on items: black huckleberry 6.0 to 11.0 lei/kg, red bilberry 5.0-7.0 lei/kg,
raspberries 5.0 to 6.50 USD/kg, corn 0.8-1.6 lei/kg, rosehip 1.0-2.0 lei/kg, underbrush 2.5
to 3.3 USD/kg, blackberry 1.5-3.0 lei/kg.
6. Once every 10 days it was requested the transmission of operational forestry units
situation regarding the state campaign berries. The centralized data administration and
analyzed in the special service provided the informing to the management of RNPRomsilva on the progress and results of the campaign and the difficulties encountered.
Although it largely satisfied the need of the campaign, the start was slow, mainly due to the
global economic crisis that has left its mark on this field.
Thus, traditional partners were reluctant in concluding the framework contracts, the
annexes of them, using the strategy of small steps in that initially turned to contracts of
smaller quantities and at prices less attractive to us.
Some negative aspects that influenced decisively berries campaign in Romania were
represented: this springs frosts that made the fructification of the underbrush, rosehips and
sloes to be particularly weak, the few fruits that remained frost free were affected by
drought this summer, being small, shriveled or dried and mostly not suitable for selling, in
many areas fructification was afected by hail, in these cases the quality of the fruits being
unfit for delivery.
This explains the fact that RNP-Romsilva, made through its subordinate forest, by the end
of October, only the amount of 4459.0 tonnes of berries. As assortment achievements we
have the following structure: cranberry- 951.0 tonnes, raspberries- 333.0 tonnes,
underbrush- 511.0 tonnes, blackberries- 173.0 tonnes, rosehip- 1868.0 tonnes corn- 282.0
tonnes, other fruits- 342.0 tonnes, these being found in the category: hawthorn, american
malin, shock, cherries, etc.
From the amount purchased, to date were capitalized 4230 tonnes fruit based on contracts,
in the next period to be capitalized stock of 229 tonnes, for which were provided outlets.
In the assortment of berries, forest departments could not provide the required quantity of
raspberries, for the lack of a commodity fund at quantitatively and qualitatively agreed on
both parts. The seabuckthorn and rosehips freight fund was very small, so in this year's
campaign rosehip and sea buckthorn amount recovered was almost 50 % lower than the
previous year.
The production of berries was made mainly for export, either directly by the companies
Waldnieler (Germany), Prodexim (Austria), and Hg Biohungar Food (Hungary),
Importaciones and samanes (Spain), under the direction of forestry contracts Alba, Arges
Bihor, Salaj, Suceava with these partners, either with traditional partners in the country
(Silvex, RFV, SVZ, Penexport), which hold considerable weight of the fruit in (Ex. Silvexabout 1900 tonnes, SVZ Netherlands- about 250 tonnes, RFV- about 400 tonnes).
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In terms of delivery conditions, berries were frozen, chilled and fresh, packed in paper
bags, plastic barrels or cardboard boxes, depending on the demanding of the partner, in
some cases delivered with the customers packaging (Ex. Silvex and SVZ).
The campaign carried out in 2012 comparative to the one in 2011, there wasnt much
opportunity in delivering fresh fruit. Fresh fruits were used by Penexport company that had
dried rosehip external demand, so they were taken from the southern forest departments
which did not have refrigeration, fresh, summary sorted directly from the purchase. The
total was of about 350 tonnes rosehip. For departments that do not have refrigeration the
facilities of the cooperation is beneficial financially because it no longer requires other
directions, thus reducing transportation costs.
The contract prices at the beginning of the campaign were small, increasing in the second
half of the campaign.
Prices that were used in the 2012 campaign berries ranged as follows: black huckleberry
2300-2650 euro/tonnes, with the tendency at 3000 euro/tonnes DS relationship with the
firm Biohungar Bihar (Hungary), who took the fruit for yogurt: cranberry red 1550
euro/tonnes, raspberries 1700-1950 euro/tonnes, blackberry 700-900 euro/tonnes, Rosehip
500-700 euro/tonnes, underbrush 900-960 euro/tonnes, corn 440-600 euro/tonnes.
Overall prices varied depending on the delivery packaging and the quality of the goods.
Financial results as transmitted from data by forest departments shows that this work was
carried out efficiently, resulting in a profit of 2582,9 million lei. (RNP-Romsilva)
Year 2013
In pursuit, in terms of economic efficiency, the collecting and recovery activities of berries
in 2013, among the measures that were applied are the following:
The adoption of specific programs for each subunit Forestry Department and its
organizational structures;
Empowering employees in the machine direction of the forest (by decision of the
Director) and the employees in the unit forest districts (by order of the head of the forest
district) berry campaign in 2013;
Identify all possible recovery (sale) of all of the fruits harvested and purchased both
domestic and intra- extra markets;
Banning the sale and purchase of the right to harvest berries from the forest managed by
the RNP-Romsilva;
Harvesting and purchasing berries in conditions of legality of forest owners and other area
agricultural land fund each RNP-Romsilva, depending on the volume of demand;
Using for berry harvesting employers only if they have not made the required work time
structure which includes;
Making collaborations, partnerships, etc., with units that have human resource that can be
used in harvesting berries;
The organization of the acquisition points so that they are attractive from the point of
view of the transmission distance from the collection area;
Use, in particular, the utility of the vehicles steering equipment for forestry and forest
districts and transportation procurement activity;
For any use of the fresh fruit will follow the delivery to be made, to the beneficiaries
directly at the point of purchase thus reducing transport costs;
Avoiding travel forestry personnel in other counties or in the jurisdiction of the other
directions forest harvesting and purchasing berries;

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Addressing timely, all questions relating to the operation of the production capacities
related to the activity of berries;
Environmental permit on the basis of the EIA and the advice that we were given by the
Romanian Academy at your proposal to harvest the entire commodity fund its
capitalization;
Building and Steering Committee approval of purchase prices and starting prices in
auctions or negotiation, as appropriate, subject to the sale of fruit species, correlated with
the state in which they stand upon delivery (fresh, chilled, frozen, and so on), with the
supply conditions, etc;
Substantiating the above prices by promoting the principles of market economy and
taking into consideration the conjunctural situation from the national and global
economy, including the fact that we can not afford to conduct business in this area
without making profit;
Organizing legal procedures for selling all of the fruit for this purpose, signing contractsthe framework and associated annexes, in terms of efficiency;
Communication operations RNP-Romsilva([email protected]) the possible
application delivery and price proposals received, to create a database that would benefit
all the forestry sides;
Tracking delivery berries, if possible, directly to the beneficiaries and to minimize cases
of delivery by commission;
Conclusion of direct delivery as well as the commission shall make provision for all
precautionary measures, such as payment of the value of the goods supplied and the
major force in ensuring;
Advising value quantities of fruit harvested or purchased a detour to the forestry or
forestry department (the subunit) that store, process and deliver them to the beneficiaries
will be the actual cost and the profit resulting from capitalization will redistribute directly
proportional to every effort forests, that section;
Intra and extra community made directly will be developed, as in previous years, with
payment in foreign currency, and the units specialized in export deliveries will follow
registration forestry directorate providing transport document accompanying the goods,
in accordance legal provisions in force.
5.2 Harvesting, utilization and marketing of edible mushrooms
Year 2012
Regarding the collection and recovery of spontaneous edible mushrooms, on 31.10.2012 a
quantity of 688 tonnes was achieved in 89%, by making the amount of 594.9 tonnes, either
directly: the internal (54 2 tonnes) and exports (29.6 tonnes), or by assigning the right to
purchase (511.1 tonnes).
Assignor of the purchase was made as a result of the auctions of forest departments in this
regard or bargaining in cases where tenders were not finalized. The transfer rate ranged
between 0.15-0.3 euro/kg.
This year the fund was much lower due to excessive drought which occurred in July, 2012.
Also, the companies interested in the last yars in the assignment of the right to purchase
mushrooms, this year, due to the crisis have not shown the same interest for the acquisition
of spontaneous edible mushrooms. (RNP-Romsilva)

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Year 2013
For the 2013 harvest, the acquisition and enhancement of spontaneous edible mushrooms in
the forest managed by the RNP-Romsilva, will run as follows:
1. Direct acquisition by the Forestry Department organized points, followed its output to be
harnessed to export directly and/or through companies specialized in the export or
domestic mushrooms under the conditions imposed by law.
Purchasing prices will be approved by the Director of Forestry. Particular attention will be
given to supply edible mushrooms as frozen, dried or in brine, correlated with market
demand in terms of quality and efficiency.
2. Assignment of the right to harvest the stock of goods, by economic agents, where
production is high and not guaranteed sales, so avoiding the loss of the stock of goods.
(RNP-Romsilva)
In this case, the duty to organize the points of purchase is on the forestry departments to
have control over the quantities of edible mushrooms collected from the forest. Assignment
of the right to harvest edible mushrooms must be made by the law, organizing auctions and
negotiations. Minimum charge transfer will be approved by the Board of Forestry
Directorate. It will be made a rigorous selection of firms and they will be allowed to
negotiations only companies showing creditworthiness and which have no debts to pay
overhead. The specifications and contracts will be mentioning documents accompanying
the goods, and how to fill them.
5.3 Harvesting, utilization and marketing of medicinal plants
Year 2012
The program established for the period 01.01-31.10.2012 for medicinal plants is 779
tonnes, being attained by the Forestry Department at the rate of 114%. The total volume
purchased (890.4 tonnes) is made of both quantity and value from lime flowers, elder,
wild garlic, hawthorn. The eraning of medicinal plants is largely made domestically except
wild garlic and lime flowers that are exported by specialized companies. (RNP-Romsilva)
Year 2013
The contracts for the sale of medicinal plants by the Forestry Department of the RNPROMSILVA for 2013 will be made after the auction and if its the case from negotiations.
The procedure for organizing and conducting the auctions and auction prices have to be
approved by the Board of Forestry Directorate. There has to be taken into consideration the
following steps:
- Preparation and approval of specifications on the organization and conduct of the auction
and the auction bid preparation;
- The organization of the auction notice will be published in a national daily newspaper and
on www.rosilva.ro at least 10 days before the auction, the notice will contain mandatory
the auction place and time, and quantities of plant species, offered at auction;
- For each auction/negotiation there will be a record of it, which shall be signed by all
participants.
- Will be considered the contract signing in terms of economic efficiency;
It is strictly prohibited the assignment of the right to purchase herbs. (RNP-Romsilva)
6. Modality to use non-wood products in Romania
6.1 Berries
We consider that the activity of buying and harvesting berries, although it doesnt brings
substantial profits to the forest departments should continue in the coming years, especially
since many forest departments have refrigeration, some modernized in recent years.
Moreover, most of counterparties before the start of the campaign, as the signing of
349

contracts is done they give to the forestry departments money in advance, which provides
the financial resources necessary to carry out this work;
The vector target in the acquisition activity and recovery berries is to increase profit, for
which we consider necessary the following measures:
Upgrading the factories of fruits from areas with high potential, starting in the 2013 the
endowment fund to ensure the quality of goods was required by the European
Community. So it is necessary among others to purchase at least one installation to ensure
IQF frozen fruits grain, condition imposed increasingly on foreign market, at right prices;
Obtaining the ISO quality certificates and providing organic products, which in addition to
being imposed by counterparties and foreign market, has the advantage of more attractive
prices;
Analyzing the berries campaign in each direction by the steering committee after its ening
in order to identify weaknesses and take the necessary measures on the 2013campaign;
Promoting this activity of competent staff that is professionally trained regularly and
which has to be ensured continuity in the activities;
Promote a dynamic and effective marketing, able to quickly identify real sales
opportunities in the context of the requirements of the foreign market.
6.2 Edible mushrooms
Most forestry potential directions in this field have abandoned the acquisition and
exploitation of the stock of goods directly, using concession rights acquisition, which
collects money with minimal effort, even zero.
We believe it is necessary for this work to start again from the campaign in 2013, involving
the acquisition of forest fungi directions of spontaneous and capitalization frozen, brine or
dried directly or by commission.
There must be organized marketing activities to support the product, with the aim of
identifying possible partners, as well as having the knowledge of foreign market
requirements of this segment.
6.3 Medicinal plants
RNP-ROMSILVA strategy in terms of culture, harvesting and exploitation of medicinal
plants will need to develop a clear change in mindset for most management teams from the
departments of forest, primarily of those who, in recent years, due to less objective reasons,
did not intend to continue on this segment, which although is more painstaking, contributes
to the financial resources of direction with minimal cost;
The development work on this segment, both in terms of installation of specialized crops
herbs and quantities harvested and used assortment of spontaneous and species will need to
be accompanied continuously by a dynamic and efficient marketing, able to identify
quickly the real possibilities of selling.
Conclusions
The present study highlights a number of distinguishing elements such as: logging, like
other products of the forest, is an act of great significance in the existence of a forest and as
such must be given the attention needed by the foresters; the forest in Romania is relatively
homogeneously distributed in regions and ownership; the types of species of the forest area
in Romania shows major differences; evolution of national forest shows major changes due
to multiple laws regarding the ownership to make into private large areas of forest;
regardless of the nature of ownership, state or private, the forests housekeeping should be
unitary, observing their sustainable management under the Forest Code; businesses logging
of the forest must perform their work in accordance with the rules of forestry, given the
importance of this process in the life of the forest; providing expert knowledge of economic
agents in the exploitation of timber and accessory products, harvesting and maintaining
intact their compliance of environmental factors such as soil, seedlings and trees remaining
after these operations; giving the support by the competent economic factors to logging and
purchasing products and technical accessories modern technology to increase the economic
and environmental efficiency.
350

References
1. Apostu, I. 2012. The specific features of vegetable production in Romania, The
Academy of Economic Studies from Bucharest.
2. Corleanu, S.A. 1984. Produsele accesorii ale pdurii, Editura Ceres, Bucureti,
3. Milescu, I.A. 2002. Economie Forestier, Editura Grup Editorial Crai Nou-Muatinii,
Bucovina.
4. Mortan, M., Ratiu, P., Suciu, L.E., Veres, V. 2012. The potential and limits of the
fruits-vegetables sector in Romania, Babes-Bolyai University, Faculty of Economics
and Business Administration.
5. Tudoric, A.V. 2012. Stage of fruit growing development in Romania, Academy of
Economic Studies, Bucharest, Romania
6. Codul Silvic, A. 2014
7. Strategia RNP-Romsilva 2012-2016
8. www.rosilva.ro (Regia Naional a Pdurilor-Romsilva)
9. http://faostat.fao.org
10. www.icas.ro

351

AN INTEGRATING VISION ON THE MANAGEMENT OF THE ROMANIAN

FOOD SYSTEM
Radu VOICU, Carmen Valentina RDULESCU
Faculty of Agro-Food and Environmental Economics, The Bucharest University
of Economic Studies; email: [email protected], Str. Mihail Moxa, nr.5-7, Sector 1,
Bucharest, Romania
Abstract
The paper contains a synthetic approach on Romanian food system: opportunity of its
existence, its structure, relations between economic agents which operate within it, their
management and the extent to which those directs producers, especially farmers, to the
pursuit of economic flows of goods and money, which are specific, found in the vertical
integration processes. Based on observations gathered after studying the food system, it
was highlighted, inter alia, the need to improve management, increase its contribution to
the creation of permanent relations between economic agents of the system connecting to
these more and more agricultural holdings which develop their commercial side, stronger
reception of the interdependence between them and strengthening partnerships for coming
in this respect with some courses of action.
Keywords
agricultural holding, management, food system, enterprises
Introduction
The food, specific to theoretical approaches and practical achievements as part of the
national economy, is to provide food security and safety for population. Opportunity of its
existence is, of course, of wider economic and social interest.
Strengthening food system, in order to fulfill its role, depends on what happens in this
respect, at the level of economic organizations of agriculture, food industry, and trade in
agricultural products etc. which enter in its composition, these providing its overall and
sequential picture.
A look at the Romanian agri-food system can capture, among other things, the extent to
which its various components and their management exercised over them ensures a proper
functioning and improvement of its social and economic performances. At the same time
you can foreshadow ways to improve management and other areas of agro-food system,
which function in the complex conditions of the modern world.
Method
The theme of the work is extensive and many aspects of it are felt in the functioning of the
agrifood system, but difficult to detect in a concrete form, cyclical. More information flows
in the system and outside it anonymously.
It was used a theoretical and factual documentation, consultation and different sources were
observed phenomena that occur in various components of the agrifood system.
Informations obtained were interpreted and the data were subjected to processing and
analysis. We took into account the dependency relations between economic agents in the
system and the extent to which management responds to such chains of processes
(production, sale, consumption, etc.) seen as a sine qua non for the functioning of the
agrifood system.
352

The analysis was accompanied by the synthesis requested by broader thematic area of the
work specific, in general, of an agrifood system systems and, in particular, of the
management of the economic agents from its structure, these being numerous and different
in many ways.
Results and dicussions
1. Agrifood system short characterization
The agrifood system is very complex, interfering many activities, belonging to branches or
sub-branches of the national economy. In addition to ensuring food security and safety of
members of a population of a country, the opportunity of setting up and of its functioning is
presented also by its economic effects, either directly (contribution to GDP, providing
employment, highlighting the resources etc.) either propagated, these being found, among
other things, in stimulation the increased production in those areas which provide a series of
entries, to which are added the social effects with particular relevance in terms of
improving the living conditions of members of society (fig.1). Moreover, if we refer only to
agriculture, it had, as is well known in recent years, an important contribution to economic
growth in our country and thus ensures the demand of industrial processors and consumers
towards some agricultural products (Malassis and Ghersi, 1992).

Note:
IN inputs
AGR- Agriculture
CRPABAV- Retail trade of raw agricultural products and living animals
IA Food industry
CRABT En-gross trade of agro-food products, beverages and tobacco
CABBT Retail trade trade of agro-food products, beverages and tobacco
CONS Consumption; CI Individual consumption; CC- corporate consumption
IPETIMM Technical device, information, materials producing enterprises
EXPA Export of agro-food products
IMPA Import of agro-food products
HORECA Hotels, restaurants, caffeterias
POFAGR products that pass by the agro-food chains (are not subject of sellingpurchasing)
Fig.1 The Romanian agro-food system
353

Some indicators which characterize the enterprises in the system, on fields of activity, are
given in table 1.
From the structural point of view it is found a large number of businesses in the Romanian
agrifood system, the ones from agriculture being the predominant.
Table 1 Enterprises from Romanian agrifood system
Average
Number of
Turnover mil.
No.
Fields of activity
number of
enterprises
lei
employees
1
Agriculture (2010)
3 859 043 * 2 780 000** 64 259.5***
2
Wholesale trade of 1736
10765
10568
agricultural
raw
materials and of
live animals (2010)
3
Food
industry 7691
163005
37491
(2012)
4
Wholesale trade of 6995
80130
57291
food, beverages and
tobacco (2010)
5
Retail sale of raw 49681
192191
41167
agricultural
products and living
animals in nonspecialized stores
with predominant
food, beverages and
tobacco (2010)
6
Retail sale of food, 5988
20746
2859
beverages
and
tobacco
in
specialized stores
(2010)
* Agricultural holdings
** Employed persons
***Production value of agriculture
Source: Balea, Virginia, Lctu, Teodora, Istrate, Eugen (2012). Rezultate
ale ntreprinderilor din comer i servicii, Institutul Naional de Statistic,
Statistic al Romniei 2013

% microenterprises
in total
87.2
88.4

65.0
81.3

94.8

93.5

i performane
2012; Anuarul

Thus, in 2010 there were over 3.8 million agricultural holdings with an average used size of
3.4 ha. Moreover, it is known that Romania is the EU state that has most of the agricultural
holdings.
In developed countries the number of of farms has decreased, with a concentration of land
held in service by increasing land of the enterprises from the food industry, especially those
in the field of food distribution. In France, for example, a country that has an agricultural
area twice greater than ours, is recorded, in 2010, the existence of 516,100 holdings
returning an average of 53.9 ha exploited agricultural area. However, some time ago in

354

France, in the food distribution and services, that offered "product-service", worked about
as many people as were employed in agriculture (Miclet et al., 1998).
The smaller number of holdings, in conjunction with the infusion of capital with a low
share of population in agriculture and high level of yield per hectare determines differences
of productivity between French and Romanian agriculture and beyond.
With all the progress of food in which we find, in 2012, 7691 enterprises, and trade in
agricultural products, however, subsistence production, and even the one of semisubsistence can lead us to what is known as agricultural state of our food system with
present elements related to the one of transition and the one of agroindustrial, final stage
reached in some countries being the agricultural tertiary stage, based on a strong expansion
of food services (service-based economy) (Miclet et al., 1998). Of course, we cannot but
keep in mind that in agriculture, even in our conditions (e.g. wine), key elements of the
information economy, recourse to information technology management processes.
Romanian food system organizations bear the seal of the new type of economy, generated
by crossing to private property arisen from the profound reform known by Romanian
society after 1990 the economic organizations of agro-food system have emerged through
the restoration and establishment of private property, in the case of the agriculture, by the
privatization of former state enterprises or by entrepreneurial initiatives for the food
industry, in commerce, etc.. Turbulent environment of the 90s, which were established
several economic organizations marked their operation, making it difficult to develop and
strengthen them to "settle down" gradually, although it appeared in the first decade of the
second millennium, a strong financial crisis, which called great effort on their part to
manifest viable.
In agriculture where prevails individual holdings may occur the transformation of some of
them into commercial holdings, narrowing the area of subsistence or semi-subsistence.
However, operating structures of Romanian agriculture seem to not be aligned to those of
Europe, with, on the one hand, many subsistence and semi-subsistence holdings, and on the
other hand the holdings that use an average of thousands of hectares. In 2010, the
agricultural holdings with legal personality in number of 30698 exploited almost 6 million
hectares of agricultural land, the average used agricultural area being 193.74 ha. In the case
of the ones without legal personality, much larger (over 3.8 million), the average
agricultural area used was only 2.02 ha (table 2).
Table 2 Exploitation structures

Explanations

Agricultural
holdings

Used agricultural area which has

returned an average
On an
On an
agricultural
agricultural
holding
holding that
ha
used agricultural
land

Agricultural
3828345
1,95
holdings without
legal personality
Agricultural
30698
190,78
holdings with
legal personality
Total
3859043
3,45
Source: Romanian Statistical Yearbook 2013.
355

Used
agricultural
area

2,02

7465 273

193,74

5 856 564

3,57

13 321 837

The above situation is questionable. The good part seems to be according to the findings
that large size holdings are mainly suppliers of production of goods for trade, meaning that
is entering the food system pathways.
As experience shows, the functioning and stability of food systems assume that
organizations are found in dynamic interaction (Miclet et al., 1998). Products pass from
"hand to hand" as a result of vertical integration processes, the integrator "poles" being the
organizations in the processing of agricultural raw materials. In doing so, it creates the
conditions for, among other things, monitoring the traceability of products, which is very
important for food security of the population (Istudor, 2010). In developed agrifood
systems vertical integration is dominant. Once entered on the chain, the agricultural
products are integrated in transformation processes directed by managerial actions aiming
to obtain food supplies.
In our terms, this only happens to a certain extent, significant amounts of various
agricultural products are "processed" in individual holdings for own consumption and for
occasional sale of excess (Voicu, 1998). For some holdings the relations with downstream
are sporadic. Moreover, it was pointed out by various agricultural organizations, that much
of the quantities of different products are not in exploitation flows or are sold in
unorganized form, the last aspect is not necessarily a bad thing, but harm the functioning of
the agrifood system.
The above phenomenon on the opening of economic agents in agriculture compared to
upstream and downstream relationships can also be found in the case of big agricultural
holdings.
Their attitude has an economic determination, so the price level on pathways of various
products, insufficient amount of supply, its lack of homogeneity and poor quality make
possible the orientation, for example, of some industrial processors for import of raw
materials and to export of agrifood products, excelling the benefits accruing to them from
these operations. There is a "fracture" between some areas of agriculture and downstream
agents, which reveal some weaknesses of agrifood system in accomplishing its function of
ensuring the food security of the population.
In developed countries there is a high concentration of manufacturing activities and trade in
large enterprises, small producers complaining that they exert pressure on them (Miclet et
al., 1998). Thus, for example, in France, according to the authors cited at the end of the last
century, 130 agrifood enterprises had intake of 66% to the turnover of the sector, while the
contribution of very small enterprises was 10.5%. Large enterprises accounted for 50.1%
and the small ones 21.3% of the number of employees of the food industry. In the United
States, four companies controlled 80% of slaughter cattle, nearly 60% of the pork meatpacking industry and 50% of production and transformation of barbecue chickens. In the
same country, the four largest grain processing enterprises transformed 74% of American
corn, 62% wheat and 80% of soybeans produced in the USA.
Table 3 Concentration in food industry 2012
Branch

Turnover*
Mil.lei

Number of
enterprises

Average
number of
employees

Food
37 941
7 691
163005
industry
Source: Romanian Statistical Yearbook2013
* Provisional data
356

Cumulative %
of total CA
First 5

First
20

5,1

14,3

Cumulative% of
total number of
employees
First
First 5
20

5,5

12,7

Regarding the concentration of trade, we note that in France, five companies controlled
94% of all sales of food and five large retailers in the United States in the diet had 42% of
food sales in detail.
In Romania, the concentration in food is much less (Table 3).
Thus the top five companies in this branch, ie 0.07% of their number produced 5.1% of
turnover, and the top 20 accounted 14.3%. In order, this group of companies had 5.5% and
12.7% of total employees in the food industry.
The level of concentration in the food industry is reflected in the structure of its enterprises
by size classes by number of employees that is dominated by micro-enterprises that have
65% of their total (Table 4).
Table 4 Food industry enterprises structure
Branch
0-9
10-49
50-249
Food industry %
65,0
27,1
6,7
Source: TEMPO online

Over 250
1,2

In terms of trade that takes place in the agrifood system, its degree of concentration is
higher than that of the food industry. Thus, in 2010, the top 20 enterprises in wholesale of
agricultural raw materials and live animals accounted 57.1% of its turnover. In the retail
trade in specialized stores for selling predominantly food, beverages and tobacco, the top 20
companies accounted 54.23% of the turnover (the big companies intervene).
Given the concentration phenomenon encountered in developed countries that found, at
least to some extent also at us, the idea of supporting the individual holdings which will
process agricultural products must take into account the extent to which they may face
competition from major domestic and international manufacturers, in terms of costs, of
ensuring all requirements regarding product quality, of penetration in various markets, of
relations with economic agents from the food distribution etc.
Theoretically, it is advantageous to sell products derived from the processing of agricultural
raw materials (is adding value, the obtained prices are higher, etc.) but it is important that
this to be verified in practice. Information on what is happening in the production and trade
of traditional Romanian products could be a precondition for making decisions referring to
the opportunity of processing raw materials in some individual agricultural holdings.
2. The diversity of management approaches (attitudes) in agrifood system
Management in agriculture, but also in other areas of the agrifood system is easily
observed, exercised by very different people after: the general training, professional and
managerial; age; attitude towards change, of what is new, which is again manifested
especially in agriculture, subsistence holdings, elements of tradition in crop and livestock;
citizenship, with local and foreign managers, the latter comes either from the EU or from
other parts of the world (holders of a richer experience, from countries with a strengthened
market economy); attitude concerning the opening of agricultural holdings to the
environment, these operating or not as open systems.
It is required the perception that all are part of a system and, therefore, their actions must
converge to its proper functioning, reaching also their own interests, these being manifested
in agrifood business world. In the system there is a "fabric" of attitudes, economic and
managerial behaviors which creates influences from the macro-environment and megaenvironment, which reflect the complex nature of the agrifood system.
If we consider the evidence presented above, we can say that the managerial "tuning fork"
is very broad. Thus, the operation with terminology (decisions, information, management
style, etc.) is foreign to many people, especially among those employed in agriculture.
357

Tradition includes, however, certain terms (different formulations by area) that remind us
what it means current management but of perspective with reference to example how will
be carried out in an agricultural year (operational management) and respectively what shall
be cultivated in the next year and the resources necessary for this purpose and their
insurance.
At the other "pole" are both in agriculture and especially in other parts of the agrifood
system, managerial concerns related to knowledge management, the result of a certain level
of training, often academic.
The two situations that can unfold between intermediate points will coexist in agriculture
more or less time depending on various factors, among which there is the involvement of
young people in business in this industry, whom are required at installation and on the
occasion of financial support to have a certain level of training, which is found in other
European countries and started in our conditions in the case of training farmers in
subsistence farming. It remains to be seen whether financial support, during the installation
of young farmers, will be at the desired level, taking into consideration: working conditions
in agriculture, improved considerably as a result of the modernization of fixed capital,
social ones (access to education, culture etc.), the risks are much higher than in other
economic sectors.
With such a diversity of managers may occur decisions (even if some of them do not call
them so), between which there are vast differences in the rigor of their background process
that requires consideration of a large number of influence factors, these following to be
known of several related reasons and of the extent to which are held various knowledge.
From this perspective, the weakest link of the agrifood system seems to be agriculture,
those who manage subsistence agricultural holdings and to some extent, the ones of
subsistence, holding little general and specialized knowledge. Will prevail, therefore, the
orientation activities, consumption needs of families (food consumption and 'intermediate
consumption') subsistence holdings which sell certain quantities of different products will
take into consideration their market situation, concerning to the environment and not only
to their internal one.
Many agricultural producers that own individual holdings, due to reasons related with
subsistence, low prices, pressures coming from different beneficiaries etc., are reluctant in
connecting with economic flows. From this point of view the functioning of supply chains
is poor and makes imports more attractive for downstream firms.
If we consider the agrifood system in its entirety, we find that people who exercise the
management of various organizations from its structure perceive differently need to conduct
relationships on product chains. Many farmers, owners of individual holdings, manifest,
because of the reasons to ensure their subsistence, low prices, pressures in negotiations by
various stakeholders, reluctance to connect to various economic flows, functioning of
channels, also from this point of view, lacking the downstream resorting to imports.
This phenomenon can be found in the case of large agricultural producers if we consider,
for example, that in the time of harvest, when it reaches a high level of production, are
lowering the prices so they may resort to exports. Of course, prices can not be controlled,
and the owner of the land, the ownership and / or operation is the owner of production
achieved and can decide accordingly. But, the operation and strengthening agrifood system
are linked also to the situation awareness that eventually all (producers, traders etc.) are in
the same "boat". Establishment of partnerships and pathways regulating processes of
products, which are said to exist in countries with developed agriculture, appear as
necessary. In this way, we can ensure the maintenance of reasonable levels of prices of
products on various channels, which will generate income correlated as much as possible
358

with the interests of those in interaction. In our conditions such a way to do last long and
the progress of agriculture, the holdings acquiring the capacity to provide quality products
and quantities required on channels, which can not be broken by organizational forms such
as for the individual ones, producer group and association or cooperative outlets. In doing
so, their bargaining power will be greater, both in relationships with beneficiaries and
providers. The work of producer groups is, in this sense, a convincing argument.
3. "Steps" to improve management
It is a known and accepted phenomenon that management has particular relevance to our
world, whether we look at the economic or social level, the management being currently
more or less efficient in all human actions. Perception of such states implies an active
attitude for management to become a state of mind, all those involved in its exercise in the
organizations from agrifood system must show interest in theoretical and practical aspects
thereof, any reluctance being counterproductive. Must not forget that, in one way or
another, the management is exercised and the final results are, however, different according
to its quality. It is important to be a good achievement of management, monitoring
activities to be permanent, to be able to intervene in cases of misconduct and, in general,
actions to be oriented towards achieving objectives. The difficulties of the environment, of
which it is not responsible the management in organizations, it should not be opposed, but
it is necessary that through appropriate decisions, to be found solutions to answer so the
organization to operate, to develop and to change.
The above calls the induction of as much knowledge, including in management, in the
agrifood system. The training, information, guidance, advice etc. should be strengthened, as
requested by the knowledge economy. They are needed in every area of management and
especially in agriculture.
The formation of farmers who have semi- subsistence farms, setting up young farmers and
other actions are ways that can broaden the knowledge of different ways in agriculture. The
agricultural producer himself must have more openness and observe how it behaves his
counterpart in other countries, who operate with knowledges (from the ones in agriculture
to ones in informatics) and what degree of general and specialized training has. Are created
opportunities, which can be valued in terms of good agricultural practices and strong joint
family holdings, now becoming domestic and international trade flows of agricultural
products.
Our agricultural practice shows that managers of large holdings through what they do are
turning to the requirements of the agronomic and management sciences. They have a
different perception of the environment and, in particular, of the business, are convinced of
its role and by the need to adapt to it (though they wanted more favorable), in order to exist.
They focus on productivity; some of them being integrated in groups and by their size have
some bargaining power in dealing with economic agents downstream and upstream.
Those who exercise the management of economic agents in the agrifood system need
economic knowledge and business culture (lead, but some are entrepreneurs). The thinking
must be strategic especially because of the changes in consumption patterns caused by
various factors, including the recommendations made by the medical world. Changes also
occur in other areas, the factors which determine them from the environment, which must
be known, surprising its trends, some of them being generators of opportunities that can be
valued by initiating business. Through what will be done should meet the changes that, as
H. Fayol said, must scrutinize future, which positively influence the functioning and
existence of the enterprise (Thietard, 1989).

359

With respect to environmental knowledge is required from the management enterprise a

state of wakefulness (Bacanu, 1997), the attention being directed to its behavior in order to
be perceived its changes, which in the current period are very fast (Rusu, 1999).
Must not be overlooked the aspects of managerial communication if we consider the
positive effects that are generated when it is conducted in a proper climate to obtaining
performance.
The knowledge area of managers is certainly large enough to solve many problems which
are not only technical and economic but also psychosocial, which determine the behavior
and availability to tasks of staff and subordinates.
Conclusions
a. The picture, be it brief, of agrifood system and of its organizational management, takes
out, however, that its functioning and strengthening represent challenges for any
country that wishes to ensure food security for its population, that require time, material
and human effort and agricultural policy to support such an approach.
b. In Romanian agrifood system operates a number of economic agents, predominantly
those in agriculture; while in other countries it was reduced, increasing those working in
the food distribution and who provide services related to food.
c. The management can be found in the case of economic agents from agrifood system,
but its forms are different: dominated by empirical or scientific evidence.
d. The differences in management approaches depend mainly on general, professional and
managerial education of those who put it into practice.
e. The management of economic agents in the agrifood system is expected to subsume,
among others, to achieve their dynamic interaction, ie each to produce what, how and
how much for those who follow in the food chain or outside of imports, because
agrifood system will have difficulty of functioning.
f. The extent to which the agricultural holdings are open to the upstream and downstream
relationships is determined by the status of each, those of subsistence and semisubsistence showing a poor concern in this regard, especially in organized forms, while
the commercial links with the environment is their reason to be.
g. The scale agrifood system, if we consider the many economic agents in its composition,
the activities carried out, human and financial resources mobilized etc. generate a
multitude of decisions, their rigorous substantiation being inextricably linked to: the
attention paid to management, perception of its role, of the knowledge of operating
managers, of value judgments they make etc.
h. In all areas of agrifood system, but especially in agriculture, is necessary to improve
management in order to ensure, inter alia, the implementation of good agricultural
practices and to be properly used the benefits of agricultural policy.
References
1. Balea, V., Lctu, T., Istrate, E. 2012. Rezultate i performane ale ntreprinderilor din
comer i servicii, Bucharest: National Institute of Statistics.
2. Bcanu, B. 1997. Management strategic, Bucharest, Editura Teora.
3. Istudor, N. (coord.) 2010. Proiectarea unui sistem informaional pentru monitorizarea
trasabilitii n producia crnii de porc, acord de Grant nr. 141 921/13.08.2008,
EurogamaInvent.
4. Malassis, L. Ghersi, G. (coord.) 1992. Iniiation lconomie agro-alimentaire, Paris,
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360

5. Miclet, G., Sirieux, L., Thoyer, S. 1998. Agriculture el alimentation en qute de

nouvelleslgitimites, collection economie agricole &agroalimentarire, Paris, B.U. IX
Dauphine.
6. Otiman, P.I. 2012. Structura agrar actual a Romniei, o mare (i nerezolvat)
problem social i economic a Romniai, Revista de sociologie, (5-6).
7. Rusu, C. 1999. Management strategic, Bucharest, All Beck.
8. Thietard, R.,A. 1989. Management, Paris: Press Universitaires de France.
9. Voicu, R., Rdulescu, C.V. 2013. Managementul unitilor agroalimentare, Bucharest,
ASE.
10. Voicu, R., Radulescu, C.V. 2013. Tradition and transition in the Romanian agricultural
management as neo-factor of competitiveness and economic performance, in
Competitiveness of agro-food and environmental economy, G. Popescu, N. Istudor and
D. Boboc (eds.): 75-84.
11. Romanian Statistical Yearbook 2013.

361

IMPACT OF INVESTMENTS OVER THE ROMANIAN AGRICULTURAL

SECTOR
Irina Elena PETRESCU
Faculty of Agro-Food and Environmental Economics, The Bucharest University
of Economic Studies; email: [email protected], Str. Mihail Moxa, nr.5-7, Sector
1, Bucharest, Romania
Abstract
The paper represents an analysis of the evolution of the investments from the agricultural
sector in the period 2006 2008, a period that represented the end of the SAPARD in
Romania and begging of NRDP, when important amounts of European founds have been
accessed by this sector. The investments represent an important indicator to present the
effort made by the agricultural exploitation and in order to measure the impact of these
investments it has been chosen the turnover as effect indicator. From the analysis, it is
shown that only some regions have recorded increases of the turnover in comparison with
the investments made because it started the financial crisis and the agricultural sector has
been affected like all the other sectors of the economy.
Key words
investment, turnover, agriculture, rural development
Introduction
The importance of agriculture for the Romanian economy is given by high agricultural
potential which has represented by the agricultural area of Romania, totaling 14.8 mil. Ha,
representing 8.2% of total EU (6th place after France, Spain, Germany, United Britain and
Poland) and large rural population (44% of the population lives in rural areas). Also,
Romania's arable land is 0.41 ha / capita compared to the EU average of 0.21 ha / capita.
Although it has a high agricultural potential, however Romania's performance in this sector
are well below the EU average, due to: low productivity; excessive land fragmentation; the
poor state of rural infrastructure; aging; high tax evasion; large areas of land uncultivated;
absorption of European funds etc. The agricultural sector accounts for a significant share in
the GDP and GVA in the Romanian economy, however the use of agricultural production
in the industry is quite low. In order to increase the competitiveness of Romanian agro-food
sector, funds should be allocated and created a series of financial instruments enabling
investment in processing and marketing activities of agricultural products.
Over time, both the Romanian government and the European Union stimulated the
agricultural production by a series of financial instruments such as: the single area payment
scheme, the complementary national direct payments for crops and livestock, reducing of
taxis, animal welfare subsidy, subsidizing insurance premiums, interest on loans etc. A very
important element in stimulating investment in the agro-food industry is subsidizing
interest on loans because they underlie accessing European funds for rural development by
providing co-financing part. The sector also faces problems caused by climatic factor
addicts, so creating instruments to cover these risks is very important, more so as the share
of loans to the agricultural sector is only 4% of total loans as due to the high risk associated
with such activities.
Compared with other sectors, the investments in agriculture have a number of
particularities, such as (Blidaru, 1999):
362

 The labour force involved in the investment projects involves more persons than projects
in industry, while investments in fixed capital have a lower weight.
Diversity interdependence between production activities and sub-branches gives a
complex character for the calculation of investment and efficiency calculations.
The wide variety of investments makes necessary the use of specific indicators of
investment efficiency calculation and analysis of agriculture as a consequence of very
diversified which are obtained, such as:
Increasing the productive quality of soil by eliminating potential causes that generates the
reducing them;
Improving the climatic characteristics of productive agricultural perimeters on which
some natural factors harmful acts;
Increased agricultural production and farm income thereby.
1. Economic performance from the Romanian agricultural sector
The economic performance of enterprises in the agro-food sector was estimated through an
indicator of economic and financial results or turnover. This is one of the most important
indicators of economic viability is assessed by the volume of business activity.
Table no.1 Number of enterprises from the Romanian agricultural sector
2006
2007
2008
Differences
Number
Number
Number
Absolute
Relative
Regions
TOTAL
12911
13714
13941
1030
107.98
NORTH-WEST
1638
1809
1824
186
111.36
CENTER
1726
1803
1803
77
104.46
NORTH-EAST
1650
1788
1903
253
115.33
SOUTH-EST
2100
2259
2298
198
SOUTH-MUNTENIA
2252
2340
2386
134
BUCHAREST - ILFOV
750
828
839
89
SOUTH-WEST
1066
1064
1055
-11
WEST
1729
1823
1833
104
Source: author`s calculation, TEMPO ONLINE, National Institute of Statistics

109.43
105.95
111.87
98.97
106.02

The analysis of table 1 shows that most businesses from the Romanian agricultural sector
(47% of the total) are concentrated in developing regions with the greatest agricultural
potential, namely South-Muntenia, South-East and North-East. These regions have the
highest agricultural land. North East has a predominantly agrarian character and known and
the largest increase in the number of enterprises in this sector in the period 2006 - 2008 (+
15.33%).
Table no. 2 The turnover from the Romanian agricultural sector
2006
2007
2008
Differences
Regions
Mil. RON
Absolute Relative
TOTAL
7912
9070
12462
4550
157.51
NORTH-WEST
618
848
1063
445
172.01
CENTER
608
752
1002
394
164.80
363

Regions
NORTH-EAST
SOUTH-EST
SOUTH-MUNTENIA
BUCHAREST - ILFOV
SOUTH-WEST

2006
705
1570
1614
1353

2007
Mil. RON
888
1790
2165
893

2008
1547
2412
3116
999

Differences
Absolute Relative
842
219.43
842
153.63
1502
193.06
-354
73.84

355
478
818
463
WEST
1089
1256
1505
416
Source: author`s calculation, TEMPO ONLINE, National Institute of Statistics

230.42
138.20

The turnover represents one of the most important indicators of economic and financial
results that measure the volume of business activity. In the Romanian agricultural sector,
turnover has risen significantly (+ 57%) in the period 2006 - 2008. Analysing it`s evolution
by regions, it appears that South region has the highest turnover, accounting for 25% of the
country, being the region with the greatest agricultural potential in terms of arable land.
Although Southwest region recorded the lowest values of turnover in each of the three
years, it has the highest increase (+ 130%) of the analyzed indicator, followed by the
Northeast (+ 119%). The lower turnover is generated by the low number of businesses in
these regions, the predominant agriculture subsistence and semi-subsistence. The only
region that recorded a decrease in turnover in the agricultural sector is the Bucharest-Ilfov
region because businesses have turned to other sectors.
Table no. 3 Evolution of the turnover from the Romanian agricultural enterprises
2006
2007
2008
Diferences
Mil. RON/enterprise
TOTAL
NORTH-WEST
CENTER
NORTH-EAST
SOUTH-EST

0.61
0.38
0.35
0.43

0.66
0.47
0.42
0.50

0.89
0.58
0.56
0.81

Absolute

Relative

0.28
0.21
0.20
0.39

145.87
154.47
157.76
190.26

0.75
0.79
1.05
0.30
SOUTH-MUNTENIA
0.72
0.93
1.31
0.59
BUCHAREST - ILFOV
1.80
1.08
1.19
-0.61
SOUTH-WEST
0.33
0.45
0.78
0.44
WEST
0.63
0.69
0.82
0.19
Source: author`s calculation, TEMPO ONLINE, National Institute of Statistics

140.39
182.22
66.00
232.83
130.36

2. The gross investments in the Romanian agricultural sector during 2006-2008

As defined by the National Institute of Statistics, gross investment in tangible goods
represent value of investments made during the reference period in all tangible goods,
meaning those bought from third parties or produced on own account (production of
tangible assets) and whose duration of use is greater than 1 year. Reduced allocations do
not provide technical and technological modernization needs of agriculture being lower
than contribution of agriculture to the national economy and do not ensure the reducing of
disparities in productivity comparative with other member states of the European Union
(Toma, 2009).
364

Table no. 4 Gross investments from the Romanian agricultural sector

2006
2007
2008
Diferences
Mil. RON
Absolute Relative
TOTAL
2458
4520
4159
1701
169.20
NORTH-WEST
169
271
239
70
141.42
CENTER
160
270
274
114
171.25
NORTH-EAST
216
327
367
151
169.91
SOUTH-EST
408
516
649
241
159.07
SOUTH-MUNTENIA
427
590
826
399
193.44
BUCHAREST - ILFOV
266
1014
387
121
145.49
SOUTH-WEST
130
176
286
156
220.00
WEST
682
1356
1131
449
165.84
Source: author`s calculation, TEMPO ONLINE, National Institute of Statistics
Investments in the agro-food sector in Romania were encouraged by allocating EU funds
both in the pre-accession period and especially in the post-accession period. In the preaccession period, Romania implemented the SAPARD program, having received about 3.5
billion. Euro, the most important allocation being for the measures aimed to investments in
this sector. During the post-accession, Romania has implemented the RDP, having
allocated 8,022 billion. Euro from the European Union to increase competitiveness,
environment and diversification of activities in rural areas. The agro-food sector in
Romania shows large differences in competitiveness compared to other Member States of
the European Union, of the main causes are:
- The existence of psychological barriers in implementing associative forms, although there
were a number of financial instruments to encourage them;
- Lack of fixed capital and poor technical equipment of farms;
- Low interest credit units for the sector that caused a delay in accessing European funds.
The need for investment in agro-food sector is demonstrated by the growing interest of
farmers to access measures for the purchase of machinery, irrigation systems, upgrades etc.
The main problem of implementation of investment measures was related to the cofinancing from beneficiaries, most farms are forced to resort to loans. Credit units from
Romania showed little interest in this sector of the financial crisis and the high degree of
risk posed by agricultural activities.
Tabel nr.5 Gross investments/enterprisis from the agricultural sector in the period
2006
2007
2008
Diferences
Regions
mil. RON
Absolute Relative
TOTAL
0.19
0.33
0.30
0.11
156.70
NORTH-WEST
0.10
0.15
0.13
0.03
127.00
CENTER
0.09
0.15
0.15
0.06
163.94
NORTH-EAST
0.13
0.18
0.19
0.06
147.32
SOUTH-EST
0.19
0.23
0.28
0.09
145.36
SOUTH0.19
0.25
0.35
0.16
182.58
MUNTENIA
365

Regions

2006

2007
mil. RON

2008

Diferences
Absolute Relative

BUCHAREST
0.35
1.22
0.46
0.11
130.06
ILFOV
SOUTH-WEST
0.12
0.17
0.27
0.15
222.29
WEST
0.39
0.74
0.62
0.22
156.43
Source: author`s calculation, TEMPO ONLINE, National Institute of Statistics
The analysis of table 5 shows that the biggest investment is in Bucharest-Ilfov and West
due to higher financial potential investors in this area and the capacity of these areas to
attract foreign investors. In the analyzed period we find that all regions recorded increases
in investment due to accessing European funds (end and beginning of the program
SAPARD and RDP). The major boost investment in agriculture per unit recorded in the
South-West and South-Muntenia.
Tabel nr.6 The rise of turnover based on the gross investment in agriculture
2006
2007
2008
Diferences
RON
Absolute Relative
TOTAL
3.22
2.01
3.00
-0.22
93.09
NORTH-WEST
3.66
3.13
4.45
0.79
121.63
CENTER
3.80
2.79
3.66
-0.14
96.24
NORTH-EAST
3.26
2.72
4.22
0.95
129.15
SOUTH-EST
3.85
3.47
3.72
-0.13
96.58
SOUTH-MUNTENIA
3.78
3.67
3.77
-0.01
99.80
BUCHAREST
5.09
0.88
2.58
-2.51
50.75
ILFOV
SOUTH-WEST
2.73
2.72
2.86
0.13
104.74
WEST
1.60
0.93
1.33
-0.27
83.34
Source: author`s calculation, TEMPO ONLINE, National Institute of Statistics
Turnover is a very important indicator for determining the position of the enterprise market
and to achieve profitable activities. The investment is an important factor in influencing its
size. Economic efficiency of investments in the agricultural sector is measured by the
growth of turnover resulting from investments. In the period under review, it appears that
companies in the agricultural sector in most regions saw declines in turnover relative to
investments, except for North West, North East and South West. These decreases are the
result of the financial crisis that has influenced and business enterprises in the agricultural
sector.
Conclusions
The main problem of the agricultural sector in Romania is low competitiveness, showing
important gaps compared to other European Union member states. To enhance the
competitiveness of the sector, were allocated significant amounts of EU funds for
investments, both in the pre-accesion period, during and especially after joining the EU.
The period under review (2006-2008) is a presents aspects from both periods, the end of
366

SAPARD program and begging of NRDP implementation, which resulted in a significant

increase in investment in the sector. Meanwhile, the financial crisis is starting period, with
negative implications for profitability indicators in any sector of the national economy,
including agriculture. The turnover in the agricultural sector increased, but compared to the
investments it has decreased in most regions except North-West, South-West and NorthEast. Although Western and Bucharest-Ilfov region recorded the highest values of
investments in a company, however they experienced important declines in sales relative to
the amount invested. In order to encourage investment in the agricultural sector should be
considered some development tools for risk management in order to increase interest for the
lending units, such beneficiaries of EU funds could easier ensure the co-financing for
investment projects.
Acknowledgement
This work was cofinanced from the European Social Fund through Sectoral
Operational Programme Human Resources Development 2007-2013, project number
POSDRU/159/1.5/S/142115 Performance and excellence in doctoral and postdoctoral
research in Romanian economics science domain.
References
1. Blidaru, G., Ionita, I. 1999. Eficienta investitiilor in agricultura, CERES, Bucuresti.
2. Istudor, N. 2006. Dezvoltarea rural i regional a Romniei n condiiile integrrii n
Uniunea European, ASE Publishing, Bucharest.
3. Toma, E., Dachin, A., Cecilia, A. 2008. Agricultura Romniei n procesul de integrare
european, Ars Academica Publishing, 2008.
4. Zahiu, L. (coord) 2006. Agricultura Uniunii Europene sub impactul Politicii Agricole
Comune. Bucharest: CERES Publishing.
5. National Rural Development Programme 2007 2013.
6. Cadrul Naional Strategic pentru Dezvoltare Durabil a Sectorul Agroalimentar i a
Spaiului Rural n Perioada 2014 2020, editura Academiei Romne.

367

INCREASING COMPETITVNESS OF THE AGRO-FOOD SECTOR

THROUGH INTER-REGIONAL DISPARITIES ELIMINATION
Cristian TEODOR
Faculty of Agro-Food and Environmental Economics, The Bucharest University
of Economic Studies; email: [email protected], Str. Mihail Moxa, nr.5-7, Sector
1, Bucharest, Romania

Abstract
The research aims to analyze the evolution of the performance agro-food sector by
development regions in the EU integration process. In the first part of the paper are
presented the economic characteristics of Romanian agricultural sector and the most
important issues and vulnerabilities in the process of increasing the competitiveness of
agriculture. For setting goals, we considered relevant, on the one hand, an analysis of the
evolution of macroeconomic indicators values of agriculture in Romania and their
importance for the post-accession period the national economy and on the other hand,
making a comparative analysis for the period post-accession by development regions of the
Romanian agricultural production to major crops. To highlight the impact of Romania's
accession to European Union were analyzed the evolution in crop production per hectare
in the post-accession period. We analyzed the total grain production of wheat and corn by
regions because these crops occupy most of the surfaces for farming in Romania. Further,
have been analyzed the share of cultivated surfaces with cereals into the total arable land
in the period 2007 2013. Evolution of production yield per hectare for analyzed crops,
can indicate the level of the disparities between regions of Romania. In the paper have been
identified major vulnerabilities that lead to inconsistency agricultural production
Romanian 2007-2013 with proposals of some measures in order to reduce inter-regional
disparities in Romanian agriculture.
Key- words
economic evolution, agricultural production, yield, development regions.
Introduction
Large areas of agriculture and natural conditions favorable places Romania on the first
positions among EU member states in terms of agricultural potential. However, the
development of Romanian agricultural sector recorded some gaps in national and interregional level. We observed a high degree of competitiveness in the large farms, those
using about 28% of the utilized agricultural area. The specificity of the Romanian
agricultural sector composition is given by the large number of small farms, which are
characteristic of low efficiency, productivity or efficiency of production below potential.
The General Agricultural Census from 2010 shows that in Romania there were 3,859,043
agricultural holdings, of which 3,828,345 were unincorporated. The average area of these
farms is around 3.45 hectares and 31,000 farms had an average area of about 190 ha.
Around 110,000 people were employed in agricultural activities using a total area of
7,000,000 ha. In Romania, during 2003- 2010 the number of farms decreased by 14% and
in the EU the number of farms decreased by 20% (Ministry of Agriculture and Rural
Development).
368

In 2012, in Romania 1,048,000 holdings were subvention, of which 978,000 were smaller
areas of 10 acres each (Ministry of Agriculture and Rural Development). This situation that
persists today and appeared immediately in post-revolutionary period, with the application
of the law on restitution. In the course of integration of Romanian agriculture into common
agricultural market, competitive, excessive fragmentation of agricultural land in Romania is
representative of a "brake" and also a vulnerability. Another problem arises in Romanian
agriculture is the land abandonment. In 2010, the abandonment of agricultural land
represents about three million hectares. The main cause is the aging population in rural
areas without possibilities and without more labor force.
1. Importance of the Romanian agro-food sector for the national economy in the
period 2007 2013
Although Romania records an increase in the total value of agricultural production in recent
years, it is a fluctuating, with significant differences from one year to another. In 2008 the
total value of agricultural production was 66.9 billion RON, and in 2009 there was a
substantial decrease to 59.9 billion RON. In 2010, the value was close to that of 2008, was
64.4 billion RON. The year 2013 brought the highest value of total agricultural production
in the history of Romania, with a value at around 83 billion RON (The National Institute of
Statistics). By finding variability values obtained, it can be concluded that it depends
largely on weather conditions from year to year. Agricultural activity in Romania is one of
the main sectors of the economy with direct influence on the evolution of Romania made
economic level from one year to another. This aspect is influenced by the variation of each
year. Production value substantially influences the macroeconomic outcomes in Romania.

Source: Annual Report of Romanian National Bank, 2013

Fig.1 The share of the economic sectors In GDP
From figure.1 it is noted that in the analyzed period the agriculture branch has represented
in average about 6-7% of the GDP of Romania. Through an overview of the prospects of
agriculture in the European Union and beyond, this activity has made major changes in
recent decades. If we look at the pre-accession period of Romania into European Union, it
is found that between 2001 and 2006, agriculture accounts for between 10% and 15% of
GDP (Annual Report of Romanian National Bank, 2013). In conclusion, the declining share
of agriculture in GDP in 2007-2013 to the period 2001-2006 is not necessarily a bad thing.

369

This change occurred primarily as a result of economic developments in GDP of other

sectors (especially industry and services).
Analyzing Romania's external balance of agro-food products we find that in 2009 there was
a deficit of 1.3 billion euros. Our country exports agricultural products amounting to 2.1
billion euros and importing 3.4 billion euros.
In 2010 the external deficit on agro-food products in Romania was over 700 million Euro,
decreasing from 2009. Analyzing the contributions of the main agricultural sectors in
Romania in 2010, they had the following configuration: crop production in value of 43.4
billion RON, representing 67.5%, 20.4 billion RON animal production, representing 31.6%,
and services in agriculture which amounted to 557.2 million RON, representing 0.9%.
From the analysis we can see that the total agricultural output produced each year in
Romania has a high degree of variability.
2. Increasing Romanian performance of agricultural production at the main crops in
the period 20072013
Agricultural production in Romania at the main crops is analyzed in terms of yields, the
quantity of products produced per hectare from Romania's accession to the European Union
until 2013. The research aimed at the analyze of agricultural production at the main crops
by development regions, in terms of Romanian agricultural sector belonging to the
Common Agricultural Policy. We analyzed the total production of cereals, wheat and corn,
production of these crops occupy most of the agricultural areas in Romania and may
represent a standard for imaging the analysis efficiency of the agricultural sector in
Romania.
Table 1 Cereal yields in the period 20072013
Years
Total/ Regions

2007

2008

2009

2010

2011

2012

2013

UM: Kg/ Ha
TOTAL

1523

3229

2815

3316

3989

2357

3856

Region NORTH-WEST

2480

3528

2705

3499

3831

2659

3831

Region CENTER

2623

3299

3003

3380

3896

2461

3640

Region NORTH-EAST

1481

3380

2998

3379

3824

2048

3983

Region SOUTH - EAST

1121

3034

2279

3173

4100

1997

3544

Region SOUTH -MUNTENIA

1131

3308

2855

3277

4225

2614

4285

Region BUCHAREST - ILFOV

924

3066

2520

3291

3889

2530

4151

Region SOUTH-WEST
OLTENIA

834

2913

3144

3140

3583

1879

3391

2602

3426

3072

3660

4181

3170

4150

Region WEST

Source: National Istitute of Statistics, 2014

370

From table no. 1 we can notice that the results of production per hectare of cereals from
2007 until 2013 recorded a substantial growth in Romania, reaching values twice as high
during this period. However, this positive development of grain production had not have an
uniform increase in all developing regions of Romania. There is a spectacular development
in Bucharest Ilfov Region from 924 kg per hectare obtained in 2007 to 4151 kg per hectare
obtained in 2013 (the second best result on production per hectare). However, the analysis
of the evolution of their agricultural production in Bucharest-Ilfov region is less relevant,
since total output is decreasing. The main reasons that caused these changes during the
analyzed period were massive transfers of farmland toward investment property for
residential, industrial and office buildings. The region South-Muntenia has the highest
growth in grain production during 2007- 2013, from 1131 kg per hectare to 4285 kg per
hectare. A very positive development in terms of yields had North-west regions, the North
East and West.
Table 2 Grain yield in the period 20072013
Years
Total/Regions

2007

2008

2009

2010

2011

2012

2013

UM: Kg/ Ha
TOTAL

1541

3403

2421

2688

3663

2652

3468

Region NORTHWEST

2381

3445

2228

2920

3620

2968

3811

Region CENTER

2520

3283

2789

2753

3656

2647

3312

1741

3205

2615

2696

3366

2317

3173

1424

3572

2142

2725

3732

2353

3224

1253

3535

2330

2621

3822

2669

3772

997

3366

2218

3008

3791

2846

4174

789

3054

2607

2478

3219

2396

2831

2734

3437

2806

2993

4032

3878

4342

Region NORTHEAST
Region SOUTHEAST
Region SOUTHMUNTENIA
Region
BUCHAREST
ILFOV
Region SOUTHWEST
OLTENIA
Region WEST

Source: National Istitute of Statistics, 2014

From table 2 it is observed that the largest amount of wheat production per hectare was
obtained in 2013 recorded in the Western Region by 4342 kg per hectare. And the most
spectacular growth, excluding Bucharest-Ilfov Region (low relevance, total production
decreased) was South Muntenia Region from 1253 kg per hectare in 2007 to 3772 kg per
hectare. South West Region had a positive development in terms of increased production
per hectare for wheat, but to a lesser extent compared to other regions, from 789 kg per
hectare in 2007 to 2831 kg per hectare in year 2013.
371

Total/Regions
TOTAL
Region
NORTH-WEST
Region
CENTER
Region
NORTH-EAST
Region
SOUTH-EAST
Region
SOUTHMUNTENIA
Region
BUCHAREST
ILFOV
Region SOUTH
- WEST
OLTENIA
Region WEST

Table 3 Corn yield in the period 2007 2013

Years
2007
2008
2009
2010
2011
UM: Kg/ Ha
1526
3215
3409
4309
4525

2012

2013

2180

4491

2785

4037

3429

4275

4425

2730

4269

2946

3845

3826

4428

4668

2542

4299

1411

3676

3399

3881

4239

1976

4541

863

2409

2451

4337

4759

1677

4261

943

3026

3824

4583

4963

2552

5201

698

2966

2959

3980

4470

1719

4716

888

2843

3801

4303

4061

1458

4257

2641

3589

3498

4557

4480

2890

4201

Source: National Istitute of Statistics, 2014

From table 3 shows that the total production surplus of maize production per hectare is
substantial comparing 2007 to 2013, from 1526 kg per hectare to 4491 kg per hectare
representing the largest increase per hectare amoung all analyzed crops. The biggest trend,
and the highest yield achieved in South Muntenia Region from 698 kg per hectare in 2007
to 5201 kg per hectare in 2013 also, Bucharest-Ilfov Region (low relevance, decreasing
total production) and the North East, South East were important developments in terms of
yields from 1411 kg per hectare in 2007 to 4541 kg per ha in 2013, respectively, 863 kg in
ha in 2007 to 4261 kg per hectare in 2013.
Table 4. Evolution of irrigated surfaces by regions in the period 2007 - 2013
Years
2007
2008
2009
2010
2011
2012
2013
Regions
UM: Kg/ Ha
Region CENTER
993
961
1296
235
328
783
329
Region NORTHEAST
Region SOUTHEAST
Region SOUTHMUNTENIA
Region
BUCHAREST
ILFOV

4251

3119

8721

1993

2146

3883

4933

185264

137545

182079

64473

76133

131816

13923
1

88378

47884

70375

12526

18748

25643

26341

779

167

70

372

2007

2008

38857

65301

Regions
Region SOUTH WEST OLTENIA
Region VEST

Years
2009
2010
2011
UM: Kg/ Ha

2012

2013

30548

3608

5326

3230

9843

3661

487

614

254

1721
2689
Source: National Istitute of Statistics, 2014

Evolutions since Romania's accession to the European Union until 2013 shows a decrease
in irrigated areas for Center Region from 993 ha in 2007 to 329 ha irrigated in 2013 same
"trend" had South-east Region from 185,264 hectares in 2007 to 139,231 ha in 2013, SouthMuntenia from 88,378 ha in 2007 to 26,341 ha in 2013, South West at 38 857 ha in 2007 to
9,843 ha in 2013 from Western Region 1721 ha in 2007 to 254 ha in 2013 only developing
region that has seen an increase in irrigated areas during the post EU accession to the
North-East, from 4251 ha in 2007 to 4933 ha in 2013 for the North West Region have given
according to the National Institute of Statistics.
The analysis performed on the growth performance of agricultural production in Romania
at major crops in 2007-2013, there was a substantial increase in yields by region, excluding
Region Bucharest-Ilfov for low relevance. However, the surplus production per hectare
obtained is characterized by an inconstant trend in the period.
In the research entitled "Increasing competitiveness of Romanian agriculture by eliminating
inter-regional disparities," I considered as important the analyse if the evolution of the share
of cultivated areas with cereals into the total arable areas in the period 2007 2013. Since
this research may indicate the extent to which increases in grain yield obtained are reflected
in the evolution of the use of arable land for grain production.
Table 5. Evolution of the share of cultivated areas with cereals into the total arable
areas in the periof 2007 2013
Years
Regions
2007
2008
2009
2010
2011
2012 2013
Region NORTH-WEST

53.01

45.31

42.17

%
44.88

43.16

42.67

45.43

Region CENTER

41.06

41.04

42.90

38.64

41.39

39.72

40.38

Region NORTH-EAST

53.06

50.17

49.50

47.74

48.88

54.36

49.20

Region SOUTH-EAST

53.54

59.90

61.39

60.43

61.02

63.23

65.76

Region
SOUTHMUNTENIA
Region BUCHAREST ILFOV
Region SOUTH-WEST
OLTENIA
Region WEST

58.58

61.93

64.35

60.13

62.50

68.51

64.47

48.04

30.08

30.28

35.37

29.75

32.53

38.29

63.98

64.83

65.84

59.76

63.59

63.15

65.50

50.62

53.41

53.97

51.01

58.19

57.64

59.26

TOTAL

52.74

50.83

51.30

49.75

51.06

52.73

53.54

Source: Data processing, NIS, TEMPO ONLINE

Table 5 shows that the share of areas cultivated with grain in the total arable land in
Romania during 2007-2013 has a positive development from 52.7% in 2007 to 53.5% in
373

2013 However, if we analyze each region of development, it appears that the four regions
the share has increased and in the other four has decreased. The Northwest Region has
decreased its share from 53% in 2007 to 45.4% in 2013 As the Center Region, from 41% in
2007 to 40.4% in 2013 in the North East Region 53% in 2007 to 49.2% in 2013 BucharestIlfov region recorded the largest decline in the grain growing areas of the eight
development regions of Romania, from 48% in 2007 to 38.3% 2013 it may be noted that
the decrease in grain weight acreage within Bucharest-Ilfov development region
corresponds to the boom real estate crossed by Romania (2008 and 2009). After the prolific
real estate market has followed a period of declining real estate market in recent years.
Observed an increase in the share of grain acreage during 2011 - 2013, from 29.8% to
38.3%. The Southeast Region recorded the largest increase in the share of area cultivated
with cereals, from 53.5% in 2007 to 65.8% in the year 2013 the share increases were also
recorded in the South-Muntenia, South West and West. If we analyze the evolution of the
total weight of grain acreage of arable suprfeei totualul 2007-2013 is noted that during
2007- 2010 at a total weight loss of 52.7% in 2007 to 49.8 in 2010. overall share of cereal
acreage records a "trend" in 2011 increased slightly from 51% to 53.5% in 2013.
Conclusions
From the analysis of the importance of Romanian agricultural sector to the national
economy in 2007-2013 concludes that the declining share of agriculture in GDP in 20072013 compared the period 2001-2006 is not necessarily a bad thing. This change occurred
primarily as a result of economic developments in GDP of other sectors (especially industry
and services). Research of the progress made in the main crops regarding production per
hectare in cereals, maize and wheat, highlights the substantial increases in agricultural
sector in Romania has achieved in terms of production per hectare in 2007-2013. The level
of growth is an important indicator, is essential in forming a clearer picture of the degree of
efficiency and progress achieved, as well as the competitiveness of Romanian agriculture to
the European Union. These increases can be found in all development regions of Romania,
with values varying from one region to another development, but almost all the increase is
characterized by developments sinusoidal. The total surplus of maize production per
hectare is substantial comparing 2007 to 2013, from 1526 kg per hectare to 4491 kg per
hectare, representing the largest increase per hectare for all analyzed crops. The biggest
trend, and the highest yield is achieved in South Muntenia Region from 698 kg per hectare
in 2007 to 5201 kg per hectare in 2013 analyzing evolution of production per hectare by
regions points Bucharest - Ilfov as it has a relatively low relevance for the agricultural
sector as adjacent areas of Bucharest and Ilfov county area are streamlined in permanent
land exchanges. Most of the agricultural areas present interest for covered property or
residential investment. Bucharest-Ilfov Region recorded the largest decline in the grain
growing areas of the eight development regions of Romania, from 48% in 2007 to 38.3% in
2013 can be seen that the decrease in grain acreage share across Bucharest-Ilfov
development region corresponds to the boom real estate crossed by Romania (2008 and
2009). After the prolific real estate market has followed a period of declining real estate
market in recent years. Observed an increase in the share of grain acreage during 2011 2013, from 29.8% to 38.3%. Variability, or inconsistency of production per hectare
characterizing the entire area under cereals in Romania is caused by a number of factors,
among which the most important is the dependence on weather conditions year.
Dependence evolution of Romanian agricultural productivity may decrease the level of
annual rainfall and rehabilitation developing irrigation infrastructure. The only region that
recorded an increase of irrigated surfaces during the post EU accession is North-East, from
4251 ha in 2007 to 4,933 ha in 2013. Overall decline in irrigated areas during the post
accession to the EU in five development regions of seven that have agricultural activities,
374

excluding Bucharest Ilfov region, shows a systemic problem is an important vulnerability in

alignment farms in Romania to the competitiveness of the European Union. To increase the
competitiveness of Romanian agriculture is needed, among other things, the upgrading of
equipment performance or endowment techniques and technologies. Compared to other EU
countries in the year 2009 are notable differences: Germany 681 200 tractors, Lithuania 118
041 tractors, Luxembourg 6527 tractors, Poland 1577290 tractors, Spain 1320599 tractors,
Romania 176,841 tractors (Eurostat, 2013). Efficiency results in vegetable farming,
production and income from it, depends on the use of fertilizers and pesticides. Average
consumption of fertilizer per hectare of EU countries is 200-250 kg, much lower than the
quantity used in Romania, only 70 kg per hectare (Eurostat, 2013). Another vulnerability is
the phenomenon of land abandonment. In 2010, about three million hectares were left
fallow (Cadrul Naional Strategic pentru Dezvoltarea Durabil a Sectorului Agroalimentar).
The main cause is the aging population in rural areas without possibilities without more
labor force. In conclusion, the Romanian agricultural potential is significant. Large areas
and favorable agricultural conditions led to increased competitiveness in the large farms,
those using about 28% of the utilized agricultural area (Agricultura Romaniei in procesul de
integrare europeana). Other problems that hinder the development of the Romanian
agricultural sector is the inefficiency of regarding land market, credit, consulting services,
specialized marketing, poor absorption of EU funds, competitive market atomized,
disasters, climate change, rising energy prices leading to increased irrigation cost price.
Acknowledgment
This work was cofinanced from the European Social Fund through Sectoral Operational
Programme
Human
Resources
Development
2007-2013,
project
number
POSDRU/159/1.5/S/134197 Performance and excellence in doctoral and postdoctoral
research in Romanian economics science domain.
References
1. Gavrilescu, D., Giurca, D. (coordinators). 2000. Economie Agroalimentara, Expert
Publishing Bucharest.
2. Istudor, N. 2008. Compatibilizarea organizaiilor economice cu profil agroalimentar
din Romnia cu cerinele sanitare, sanitar-veterinare i de mediu ale Uniunii
Europene, Edited by Academy of Economic Studies, Bucharest.
3. Otiman, P. 2011. Alternativele economiei rurale a Romaniei: dezvoltarea agriculturii
sau insecuritate alimentara si desertificare rurala severa, Romanian Academy
Publishing House, Bucharest.
4. Toma, E., Dachin, A., Alexandri, C. 2009. Agricultura Romaniei in procesul de
integrare europeana, Ars Academic Publishing.
5. Lampkin, N., Foster, C., Padel, S., Midmore, P. 1999. The policy regulatory
environment for organic farming in the European Union, in Organic Farmin in Europe:
Economics and Policy, Hohenheim, p.ii
6. Manole, V.; Boboc, D., Ion, R.A.; Istudor, N. 2005. Filiere agroalimentare, Romanian
Academy Publishing House, Bucharest.
7. Reports, studies and government documents.
8. European Environment Agency 2009. Signals / Agriculture and environment.
9. Cadrul Naional Strategic pentru Dezvoltarea Durabil a Sectorului Agroalimentar i a
Spaiului Rural n Perioada 2014-2020-2030
10. Ministry of Agriculture and Rural Development www.madr.ro
11. The National Institute of Statistics, www.insse.ro
12. Eurostat,(2013), www.epp.eurostat.ec.europa.eu
13. Annual Report of Romanian National Bank, 2013
375

ROMANIA TOWARDS 2020 HORIZON

Simona BARA
Faculty of Agro-Food and Environmental Economics, The Bucharest University
of Economic Studies; email: [email protected], Str. Mihail Moxa, nr.5-7, Sector 1,
Bucharest, Romania

Abstract
Romania, as EU Member State is an integral part of the Europe 2020 Strategy, which has
as main objective a future smart, sustainable and inclusive development. It should be noted
that in Romania the economic sectors with potential for smart specialization, and included
in the Europe 2020 Strategy, are 11 and them reflect the ability of our economy to have (i)
an important economic role and influence on employment, (ii) a strong competitive
dynamics, and (iii) a significant capacity for innovation, technological development and
providing a high level of the added value, which can support the European Commission's
objectives of the Europe 2020 Strategy. This paper aims to present, on the one hand, an
overview of the general state of Romania in the period 2010-2014 vis-a-vis the objectives of
the Europe 2020 Strategy and, secondly, to point iterate through the Partnership
Agreement objectives of our country for 2014-2020, and some of the actions needed to be
developed by the Government in view to achieve them.
Keywords
education; employment; energy efficiency; European funds; GHG emissions; renewable
energy; risk of poverty; smart, sustainable and inclusive development.
Introduction
On March 5, 2014 was published the EC document entitled Balance Strategy for Europe
2020 for intelligent and sustainable growth and socially inclusive (COM 2014). The main
finding of the EC is that, overall, SM registered mixed results, as the global financial and
economic crisis has had a negative impact on employment levels and increased labor
poverty. However, the global financial and economic crisis has limited developments in
terms of achieving objectives through "Europe 2020" Strategy. Also in the Balance "Europe
2020" the EC notes that there was a exept that referred to the objective of reducing
emissions of greenhouse gases. At this last objective the positive impact was determined
especially by reducing overall production and transport activities.
In this context, the Commission's assessments are that the more realistic scenario for the
next period 2014-2020 will be the (i) slow economic growth and (ii) the progress in
achiving the Europe 2020 objectives is mixed.
This paper evaluates the first four years of the effective implementation of "Europe 2020"
in Romnia. Also, it put in evidence the most important directions for development during
the period 2014-202. The article is a sinthesis of the main documents regarding our future
development in a European context.
1. General state of RO during the period 2010-2014 vis-a-vis of the targets established
by The Strategy Europe 2020
The assessments made in the document Balance "Europe 2020 Strategy" appears, clearly,
that the European Union is currently in progress or very close to achieving its goals on
education, climate change and energy, but it is not in terms of objectives achieving relating
376

to occupation employment, R&D and innovation, reducing poverty, increasing performance

gap between Member States and within the regions.
Concerning the assessements for Romania included in the document Balance "Europe 2020
Strategy " it shows that in view to achieve the targets set-out for our country it is necessary
to orient the efforts to the target indicators (i) Reducing GHG Emissions and (ii) Early
School Leaving.
For the other target indicators (Employment Rate, Share of GDP spent on R&D, Renewed
Energy, Increase Energy Efficiency; Tertiary Education, Reducing the Population at Risk
of Poverty or Social Exclusion) Commission appreciated that the situation is under control
and there are real prerequisites to achieve them during the next time.
The state of the target indicators from "Europe 2020 Strategy" during the period 2010-2014
is presented below compared with the EU ones.
1.1. Employment Rate in the year 2013 by ESF was financed 404 projects aimed to
stimulate employment for long-term of unemployed people (in accordance with POS
DRU DMI 5.1. Developing and implementing active employment measures) so that
active measures attended 70,432 people (of which 34,796 were women or 49.4% of
total and 22,018 were young, or 31.3%). Also, to increase employment level
contributed continuous training programs financed by the ESF, which was attended by
179,840 people, out of which 81,943 were women (45.6%).
Table 1 Current situation and targets from The Europe 2020 Strategy for the EU and
RO

EU Target
for 2020

Employment Rate,
%
Share of GDP spent
on R&D, %
Reducing GHG
Emissions,
compared with
2005, %
Renewed Energy, %
Increase Energy
Efficiency, %
Early School
Leaving, %
Tertiary Education,
%
Reducing the
Population at Risk
of Poverty or Social
Exclusion (no. of
pers.)

RO
Target
for 2020

Situation
from RO,
in 2013

Gaps
between
RO 2020
and RO in
2013,
Percent
points

Annual
Growth Rate

20102013

20142020

75.0

70.0

63.80

6.20

21.3

0.9

3.0

2.0

0.48

1.52

0.2

0.2

20.0
20.0

19.0
24.0

51.85
20.79

-32.85
3.21

-17.3
6.9

-4.7
0.5

20.0

19.0

16.6

2.40

5.5

0.3

10.0

11.3

17.40

-6.10

-5.8

-0.9

40.0

26.7

21.80

4.90

7.3

0.7

20,000,000*

580,000

240,000

340,000

80,000

48,571

* Average is 740,741 persons per each MS.

Source: EC. 2010. Europe 2020.
377

From EAFRD dedicated to rural population, were financed projects for training,
information and diffusion of knowledge. In order to support economic growth and social
25,456 or young owners took over a farm that participated in training programs. It should
also be noted that investment in the setting-up and development of micro-enterprises led to
the creation / maintenance of 7,540 jobs, as well as providing of alternative income sources
in rural areas. However, Romania is with 6.2 percentage points below the national target for
2020 esteblished by Europe 2020 Strategy.
1.2. The Share of GDP Spent on R&D increase the system performance of RDI and
stimulating private investment in this area, reflected by 2007-2013 NPRDI or ERDF,
materialized by funding 1,385 projects for human resource development-oriented
research and by financially supporting over 1,000 companies involved in R&D
projects. Also, were finalized 14 RD large infrastructures in the fields of environment,
materials, products and processes, health care, exploratory and frontier research.
Expenditure to support this RD large infrastructure projects accounts over 230 million
RON, only during January-September 2013.
In order to strengthen the European dimension of the Romanian Research, it continued
implementation of two projects Extreme Light Infrastructure Strategic Project and for
the "International Centre Danube" a Project for advanced studies regarding the system
of delta, rivers and seas. In 2013 Romania compared with the national target for 2020
registered 1.52 percentage points below the reference level set.
1.3. Reducing the GHG emissions - These initiatives include actions to combat climate
change and promote sustainable development. Thus, between 1990 and 2011, total
GHG emissions (including Land use, land use change and forestry - LULUCF)
decreased by 54.84% (from 217,131.87 Gg CO2 equivalent to 98,054.21 Gg CO2
equivalent). The values of GHG emission recorded during the reporting period shows
that Romania is in line with the assumed objective of reducing them.
1.4. Renewable energy during the period January 1 to September 30, 2013, renewable
energy sources (RES) were supported by applaying the scheme of green certificates
through the Environment Fund. Thus, the number of households which received
financial support for installation of heating systems using renewable energy accounted
18,444 entities. Also, with funding from the Environment Fund were implemented 40
projects that will sustain the increase of alternative energy share from clean and free of
GHG emissions in the total energy consumption (electricity capacity of the heating
systems installed in these projects is 185.30 MW). Also for this area are underway by
Sectorial Operational Programme for Environment, a number of 7 projects accounting
2,033.72 million RON for the refurbishment of large combustion installations and for
increasing of energy efficiency.
The power indicator Romania was renewed in 2013, with 3.21 percentage points below the
national target for 2020.
1.5. Increasing energy efficiency - is achieved, mainly, through State Aid Scheme in view
to promote high-efficiency cogeneration, by the Heat and Comfort Heating
Programme, as well as actions to increase the energy performance of residential
buildings. Thus, 37 antreprenors have received State Aid Scheme to promote highefficiency cogeneration. In 2013, the amounts awarded as bonus for the period April
2011 - June 2013, by the State Aid Scheme to promote high-efficiency cogeneration,
were 2.2 billion RON. Also, For The Heat and Comfort Heating Programme for 20062015 only in 2013 was allocated from the state budget 33.37 million RON. For eg. in
2013, to enhance energy performance of residential buildings on have made payments
for 1,105 housing units (47,748 apartments), which worth 163.53 million RON.
1.6. Early school leaving - to prevent and combat this phenomenon, by Sectorial
Operational Programme for Human Resource Development (SOPHRD) Projects have
378

been undertaken measures: organizing preparatory class for children aged six years;
continued implementation of annual social support programms for pupils from
disadvantaged backgrounds; continue to support vocational education and dual training
(TVET); development of vocational education, secondary education (TVET) and of the
post. However, in 2013, were developed 163 new curricula for primary education.
Between 2011- 2013, the Rate of Early School Leaving has suffered a slight positive
development - it decreased from 17.5% (in 2011) to 17.1% (first Q/2013).
1.7. Tertiary education were continued efforts to modernize the system of qualifications
in higher education and to its correlation with labor market needs. Also, continued
operational National Register of Qualifications in Higher Education (NRQHE)
ensuring to users the ability to consult it. Ministry of Education try to continue the
studies regarding the labor market, started in previous years, both through the
submission of projects financed through SOPHRD and the analytical work of recently
established of National Council for Higher Education Statistics and Forecasting.
1.8. Reducing the Number of Population at Risk of Poverty or Social Exclusion in this
area were awarded funds totaling 155,239 million RON (during the first 9 months of
the year 2013), the average monthly number of beneficiaries being 266,130 families.
Also funded by the ESF were: 52 projects / retraining and professional reconversion,
involving 9,955 persons from vulnerable groups (out of which 32% by Roma people;
19.8% of persons with disabilities; 45.6 % drug addicts / alcohol dependents; 2.6% of
young people leaving the child protection system); were created 285 social economy
start-ups, which allowed the emergence of 1,305 jobs; national programs have
continued in view to improve access to health care for vulnerable persons 18
interventions were performed in the area o prophylactic and curative health of women
and children and 987,246 pensioners (with a monthly income under 700 RON), who
have benefited from the program to compensate 90% of price drug reference
2. The factors which influenced the performance of the Romanian economy during the
period 2010-2014
With all these achievements, the business environment from Romania is still affected by
different factors mentioned in the Global Competitiveness Report 2013-2014, of The World
Economic Forum, among which: the large number of tax regulations, their unpredictability
and the relatively high rate of taxation; instability of economic policies; difficulties in
access to finance for entrepreneurs. All these components hold 63.4% of the Global
Competitiveness Index set-up for Romania.

Source: World Economic Forum. 2013. The Global Competitiveness Report, 20132014.
Pg. 324. Editor Schwab, Klaus. Geneva
Fig.1 The most problematic factors for doing business in RO during 2013-2014.
Percent
379

According to the Global Competitiveness Report 2013-2014 Romania is currently ranked

on the place 76 of 148 countries in the global ranking of competitiveness. In this context on
mention that the country's competitiveness is measured by a combination of 12 criteria/
pillars of competitiveness which are: institutions; infrastructure; macroeconomic
environment; health and primary education; higher education and training; goods market
efficiency; labor market efficiency; financial market development; technological readiness;
market size; business sophistication; innovation.

Source: World Economic Forum. 2013. The Global Competitiveness Report, 20132014.
Pg. 324. Editor Schwab, Klaus. Geneva
Fig. 2 Global Competitiveness score for main objectives in the case of Romania,
during 2013-2014
Concerning the he place took of Romania within Global Competitiveness Report 20132014 on can mention that it is slightly higher than the one held last year. Analyzing the
level of the scores take into account in setting up the future position in the world taking into
account the 12 pillars on can suggest the folowing recomments:
i. To strengthen the state of the most important pillars that influrnced the performance
and that achieve over 50% of the score; on can stress that the score have the range
between 0 and 7; the pillars which must be reinforced are: Business Sophistication
Romania has the score 3.6 ant it represents 51.4% of the total score; Good Market
Efficiency scoring 3.9 or 55.7 %; Labor Market Efficiency score 4.0, respectively
57.1%; Financial Market Development - score 4.0, respectively 57.1%; Technological
Readiness score 4.1 or 58.6%; Higher Education and Training score 4.4,
respectively 62.9%; Market Size score 4.4, respectively 62.9%; Macroeconomic
Environment score 5.1, respectively 72.9%; Health and Primary Education score
5.5, 78.6%, respectively);
ii. To identify the best solutions to increase the output in the other areas that can become
strengths and where Romania are in the second half of the rankings, such as: Innovation
actually score is 3.0 or 42.9% of the total score; Institutions 3.3 score and
respectively 47.1%; Infrastructure 3.3 score and respectively 47.1%. In this context it
is importnt to identify the national directions for industrial policy and to look after
inside of them to establish smart specialization areas which can be developed in
Romania.

380

However, there are areas in which Romania is a performer at the international level for
example within the IT sector. It should be noted that on the Romanian market in this area
there are Western and Asian competitors who are leaders in the field of IT, also. Romania is
still no sufficiently exploited its potential from agriculture and food industry, also.
3. Objectives for 2014-2020 iterated by the Romanian Partnership Agrreement 20142020
Partnership Agreement (PA) of Romania for 2014-2020 with the EC is based on 11
thematic objectives (OT), which are similar with main investment directions as follows:
i. Stimulate innovation and competitiveness of enterprises in view to increase their
added value;
ii. Stimulate growth and create new jobs;
iii. Improving research and innovation system performance - including the quality of
higher education; enhancing cooperation with business and attract within the research
and innovation system private investment on tha basis of strategic partenership
between public and private sector;
iv. Developing and enhancing agricultural potential and orientation of the sector towards
higher value added activities;
v. To support the restructuring of farms and increase the role and importance of family
farms;
Table 2 Financial allocations by programs included in the Romanian PA
for 2014-2020
Programme
Allocations
SIF*
Eur
1.
OP** dedicated to scale
infrastructure
ERDF+CF
9,418,524,484
1.1.
ERDF
6,934,996,977
1.2.
CF
2,483,527,507
2.
OP dedicated human capital
SEF+YEI
4,326,838,744
3.
OP dedicated administrative
capacity
SEF
553,191,489
4.
OP dedicated competitiveness
ERDF
1,329,787,234
5.
OP
dedicated
technical
assistance
ERDF
212,765,960
6.
OP for regional development
ERDF
6,700,000,000
7.
National Programme for Rural
Development
EFARD
8,015,663,402
8.
Progr for Maritime Affairs and
Fisheries
EFMAF
168,421,371
9.
TOTAL SIF
x
30,725,192,684

%
30.7
22.6
8.1
14.1
1.8
4.3
0.7
21.8
26.1
0.5
100

*SIF Structural Investment Funds, out of which: ERDF European Regional

Development Fund; YEI - European Fund for Young Entrepreneurs; CF - Cohesion Fund;
ESF - European Social Fund; EFARD - European Fund for Agriculture and Rural
Development; EFMAF European Fund for Maritime Affairs and Fisheries;
OP** - Operational Programme;
Source: PA of Romania, june, 2014, MEF, Romanian Government
381

vi.

In fisheries and aquaculture sector investment will be conducted to projects that

have the following objectives:
o Limiting the impact of fishing on the marine environment,
o Identifying and promoting new forms of revenue for the employment by
diversifying the products and increasing the added value of products offered
to the market;
vii. Supporting people's access to the labor market, improving skills, as well as
combating youth unemployment; ensure a better connections between the skills
of the workforce and labor market needs, particularly in tertiary education and
vocational education;
viii. Intensify education and care for preschool children, those in primary and
secondary education, especially for disadvantaged minority communities and setup projects that will have the following objectives:
o The transition from a centralized institutional structures for children, the
elderly and people with disabilities to the systems placed under the
responsibility of local communities;
o Health support and help disadvantaged communities by promoting primary
health care units and outpatient and / or e-health services;
ix. Coordination of transport infrastructure from Romania with the General
European Plan; this priority will be extended until 2030;
x. Investing in waste, drinking water and wastewater - as general environmental
requirements to which the EU is a party;
xi. Improving the quality of national public administrative activities by initiating
and implementing structural reforms.
Table 3 Romanian economic sectors with potential for smart specialization during the
period 2014-2020
Smart Specialization Areas
RDI Strategy 2014-2020
Directions of industrial policy
Important
economic role
and with
influence on
employment

Competitive
Dynamics

Innovation,
Technological
Development
and ValueAdded

Tourism and
Ecotourism
Textiles and
Leather
Wood and
Furniture
Creative
Industries
Automotive and
Components
Information and
Communication
Technology
Food processing
and Beverage
Health and
Pharmaceuticals
Energy and
Environmental
Management
Bio-economy
(agriculture,
forestry, fisheries
and aquaculture),

Bio
eco
no
my

Information
Technology and
Communication,
Space and Security

Energy,
Environment
and Climate
Change

Eco-nanoTechnologies
and Advanced
Materials

Health
Care

382

Smart Specialization Areas

RDI Strategy 2014-2020
Directions of industrial policy

Bio
eco
no
my

Information
Technology and
Communication,
Space and Security

Energy,
Environment
and Climate
Change

Eco-nanoTechnologies
and Advanced
Materials

Health
Care

Biopharmaceutical
and Biotechnology

Source: Basis Document, Ministry of Foreign Affairs, Report on the Implementation of the
National Reform Programme 2013
By The Romanian Partnership Agreement 2014-2020 were defined priority areas for the
competitive development of our country, which is the synthesis of a strategic choice to
concentrate all efforts in those directions which are able to provide the best results. It
should also be noted that on not neglect other branches. In this moment Romania identified
its own economic sectors with potential for smart specialization during the period 20142020. The directions for industrial policy are: (i) the industrial branches with an important
economic role and with influence on employment; (ii) competitive industries; (iii)
innovation, technological development and added-value.
On is estimated that the synergistic effects from sectors considered priorities for the
competitive development of the country will be able to achieve the targets allocated to
Romania by The Europe 2020 Strategy for a smart, sustainable and inclusive Romanian
society.
Conclusions
The positive issues, but also the less solved problems by Romania during the period 20102014, were mentioned by the National Bank of Romania, chief economist Valentin Lazea,
which mentions: "... Romania has a very good situation.... but macro indicators which are
contributing factors of GDP are deteriorating... and for capital recovery is needed: to
accelerate the absorption of EU funds; to initiate and introduce in practice some incentives
for foreign direct investment; to develop for the workforce pro-natalist policies and to
establish immigration policies more efficient; productivity can not be increased without
substantial reform in education... ".
Several analyses regarding the implementation of European Programmes in Romania in
terms of achieving the optimum strategic targets for the period 2014-2020 dived to a series
of actions, out of which are worth to mention:
Development of public policies based on (i) socio-economic preliminary research
project and (ii) on intermediate assumptions in view to realize necessary
corrections for ongoing global developments, European ones, including European,
regional and national, also. Such panoramic analyzes represent a new approach
which can put in evidence the experience accumulated and new knowledges.
They are designed to serve as a basis for consultation and dialogue with European
and national partners in order to achieve the proposed strategic targets with
maximum efficiency.
A rethinking of the current complex system of eligibility rules and other
conditions imposed to achieve the European funds in order to avoid, in the future,
some poor targeting of EU funds and sub-optimal use of the EU budget. This
proposal is based on finding of the European Court of Accounts "... Many of the
errors identified by the auditors are related to poor implementation of procurement
rules and procedures that may occur deliberately or inadvertently, when the rules
are not well understood..." (ECA.2014).
383

Reorient targeting and public funds management in view to ensure a European

dimension, to ensure real and visible effects for the Romania and its citizens, for
those benefits that could be achieved only with costs incurred at national, regional
or local level. In this way on not only will reduce the risks of error of different
interpretations and therefore of inconsistent application of the law, but it will also
create real conditions to use of EU funds to finance activities in full compliance
with Europe 2020 objectives avoiding the "deadweight effect(EU funds are used
to finance activities anyway as implemented by the Member States and other
beneficiaries or funds are insufficient to achieve the desired effects).
Regarding the economic sectors with potential for smart specialization during the
period 2014-2020 it is necessary to design a global strategy with specific targets
and financial allocations for the next periods, because on appreciate that only
Strategies for the European funds are not enough and the local public-private
initiative needs a wide framework or action.
With such tools to support future socio-economic decision policy on will be able to deliver
quality results, with a positive impact on people's lives and able to adjust the desired
changes in the real world. On consider that it is necessary that the main findings of actions
above to be published in a periodical news-letter of the Ministry of European Funds.
References:
1. Vcrel, I., Bulgaru, M., Ionescu, C., Mitru, C., Voineagu, V. (editors). 2008.
Knowing Romnia. Member of the European Union, Revista Romn de Statistic,
Bucharest.
2. Academia Romn, Fundaia Naionl pentru tiin i Art, Societatea Romn de
Statistic. 2014. Cunoate Romnia. Retrospectiv 2007 2013, Capitolul 55. Locul
Romniei n viziunea Strategiei Europa 2020 (unpublished paper).
3. EC.2010. Communication from the Commission. Europe 2020. A European strategy
for smart, sustainable and inclusive growth. Brussels, 3.3.2010. COM (2010) 2020.
4. EC. 2014. Review of "Europe 2020 - Strategy for smart, sustainable and inclusive
society". Brussels, (COM 2014).
5. European Court of Auditors. 2014.
6. Ministry of European Funds. 2014. Romanian Partnership Agreement 2014-2020.
Bucharest.
7. Ministry of Foreign Affairs. 2013. Report on the Implementation of the National
Reform Programme 2013 September 2013.
http://www.eca.europa.eu/ro/Pages/NewsItem.aspx?nid=5381.
8. World Economic Forum. 2013. The Global Competitiveness Report, 20132014. Pg.
324. Editor Schwab, Klaus. Geneva

384

AGRO-ECOLOGY, ORGANIC AGRICULTURE AND FOOD SOVEREIGNTY

Marta-Christina SUCIU,
The Bucharest University of Economic Studies, Romania, email:
[email protected], Piata Romana, no.6, Sector 1, Bucuresti, Romania
Gabriela SABU,
Memorial University Grenfell Campus, Canada
Florentina CONSTANTIN
Faculty of Agro-Food and Environmental Economics, The Bucharest University
of Economic Studies; Str. Mihail Moxa, nr.5-7, Sector 1, Bucharest, Romania
Abstract
This paper aims at analyzing the expansion of the agro-ecology and organic farming in
Romania. The topic was chosen because of its increasing importance in our country, in
Europe and all over the world. Peoples interest in healthy living and the increasing
demand for organic products transforms the agriculture sector from an industrial big
food one towards agro-ecology and organic farming based on the application of food
sovereignty vision. Our paper consists on a desk research. By taking into account new
theoretical and practical approaches and by investigation some relevant statistical data in
the field of organic agriculture, we had identified that there are still incomplete parts that
makes things difficult in Romania when it comes to apply organic agriculture principles
and to ensure the authenticity of certain organic products. We consider that Romanian
operators should promote their products first of all at the national level, in order to awake
the interest of the consumers in this field, although it could be quite difficult mostly within
areas with high level of poverty. Food sovereignty is opening new opportunities for local
small-scale farmers by increasing their capability to explore their rights to decide not only
what can be chosen for consumption but mostly what, how, when and for whom to produce
organic safety and health food.
Keywords
organic farming, agro-ecology, organic products, food sovereignty, food security,
sustainable development
Introduction. The paradigmatic shift from industrial agriculture towards agroecology
During 1950s, the term industrial agriculture was looking for profit maximization
within agribusiness and the so-called big agriculture(Sabau, 2014). This type of
agriculture had been based on an intensive use of pesticides, intensive irrigation, and cheap
fossil fuel energy. As an effect 80% of arable land was cultivated under the auspices of
monoculture producing and transgenic crops (that had increased to an average level of 12%
of the arable land). Collateral damages of the big agriculture started to appear and to
amplify their effects. Human civilization experienced biodiversity loss (75% of the
agriculture crops) due to the nitrogen contamination and to the greenhouse gas emissions
(30-48%). Industrial agriculture contributes with 2530% of greenhouse gas emissions
(Altieri and Nicholls, 2012, p. 2).We are approaching critical limits in the phosphorus
cycle, fresh water overuse (70% of global withdrawals) and arable land degradation: 2
billion hectares had been degraded since 1950s (Nijs, 2014). We face important economic,
385

social, cultural and environment challenges that affect the level of economic efficiency and
effectiveness:
Arable land misused. Global arable land had been used for animal feed and only fewer
for food. Global potential arable land located in Latin America (Argentina, Brazil,
Bolivia, Colombia) and Sub-Sahara Africa (Democratic Republic of Congo, Angola,
Sudan) are subject to land grabs.
Output loss. 40% of food is wasted in todays systems.
Concentration. Just three companies control more than half (53%) of the global
commercial market for seed and 10 pesticides companies control 95% of the
agrochemical sales worldwide.
The world currently produces sufficient calories per day (2,100 kilocalories per day) to feed
the global population. However, we experienced a global malnutrition expressed by data
such as: 805 million people suffer from starvation; another billion are undernourished,
mostly children (FAO, 2013); 29 million deaths/year are due to overeating (17,5 million for
cardiovascular disease, 3,8 million for diabetes, 7,9 million for cancer) and 155 million
children are overweight or obese. Unfortunately we also experience a global hunger and an
important food crisis. Many authors believe that industrial agriculture is responsible as well
for the food crisis. Industrial agriculture had almost disconnected farmers from their land.
Over the last 50 years, 800 million people have moved from rural areas to cities and to
foreign countries (IFAD, 2008). Industrial agriculture destroys the economic, social and
environmental vitality of the local agricultural systems.
It becomes obvious all over the world that it is high time for a paradigm shift. As
highlighted by Debbie Barker, industrial farming had amplified hidden effects conducting
to hunger, global migrations, and climate change, among many other undesirable effects
(Barker, 2007). Under these auspices we consider that agro-ecology and organic farming
are viable alternatives that can and have to replace industrial agriculture. Thus these sectors
request special dedicated research studies and investigations. Our paper is mostly a desk
research based on a brief literature review and on the investigation of some statistical data
dynamics with respect to the chosen topic.
1. Brief literature review
Based on a brief literature review we had identified that agro-ecology is considered both as an
applicative science and as an art. If we look for the pragmatic approach, agro-ecology is
considered as a science that applies ecological principles in order to design and manage agroeconomic systems in an effective and efficient way. The main ideea expressed by agro-ecology
suggests that small-scale farmers are more tempted to replace the pesticides and chemical inputs
(used intensively by the industrial agriculture) by natural processes and products (such as natural
soil fertility) that may keep farmers and peasants more close to the natural environment as
compared to the industrial agriculture (Altieri and Nicholls, 2012, p. 2).
Many authors consider also that agro-ecology is as well an art:
of learning from nature and employing in a smart, sustainable and inclusive way the
agricultural ecosystem.
of feeding people by providing a healthy and safe food production (Lapp, 1971).
That is based on exploring better the capability of the small-scale farming. In line with
this approach, United Nations declared 2014 as the International Year of Family
Farming
(http://www.agriculturesnetwork.org/what-we-do/advocacy/2014-iyff;
http://www.ifad.org/events/op/2014/roundtable.htm.)
386

The agro-ecology highlights also the importance of a shift from food security to food
sovereignty perspective.
Food security describes a situation when all the people belonging to a local community or
to a nation can satisfy their needs and food preferences by getting access to food any time
in any location available for all its members (Burchi, 2007, p. 7). This requires a physical
and economic access and involves both a quantitative (sufficient food) and qualitative
dimension (safe and good quality food with respect to needed nutritious provided in the
case of a diet as well). Food security acts like a prerequisite for a long-run sustainable
development of a nation or a local community based on an active and healthy life of the
people that live within it (FAO, 2002). The above definition of food security was developed
in 1996 when 184 countries, met in Rome for the World Food Summit.
Via Campesina launched the idea of Food Sovereignty at the World Food Summit in 1996
(http://www. viacampesina.org/en/). The concept was further defined on the First Forum
for Food Sovereignty hold in Slingu, Mali in 2007. At the end of this forum it had been
adopted the Nylni 2007 Declaration that had also defined food sovereignty (Nylni,
2007). While food security has mostly a top-down orientation, food sovereignty is looking
for a bottom up approach that focuses on small-scale farmers and on their right to get access
to food. This approach looks for a broader, holistic vision that joints economic, social,
environment and cultural dimensions of the sustainable development. Into this respect,
according to food sovereignty principles people have the right not only to get access to
healthy and save food, but also to respect their cultural identity by choosing an appropriate
food type that respects also psychological, cultural ecologically and other non-economic
criteria. While food security focuses more on consumption, food sovereignty looks also for
the small-scale farmers as producers and for their right to decide about what, how, when
and for whom to produce. Food sovereignty respect individual rights both as consumers and
as potential suppliers. Despite the fact that industrial agriculture has focused on the
corporations profits (important for agribusiness) food sovereignty is people oriented and
looks for the individual desires, aspirations and needs. It respects people rights both as
consumers and/or producers. Food sovereignty invites to the rebuilding of a more safe and
sustainable agriculture and food systems (such as agro-ecology, and organic food that
preserve also biodiversity). Food sovereignty applies the types of policies that are
supporting individual peasant and family farmers. Expressed in a more simple way, while
food security focus on consumers & global consumerism (by supporting indirectly multi
national companies interested to stimulate global consumption in order to maximize their
profits, no meter the quality and the availability of food for all the people), food sovereignty
highlights the role of individual producers (small-holder farmers) to decide how to feed
themselves and their own families. Food security is about assuring food in the
hypermarkets for developing global trade and commerce, while food sovereignty respects
the right of individuals to decide how to explore their ability to grow their own food and
feed themselves and their families according to their individual needs, traditions, habits,
respecting their cultural identity and social aspirations (Food Sovereignty 2014,
http://www.grassrootsonline.org/publications/multimedia/slideshows/food-sovereignty;
Food Sovereignty, 2014, USC Canada, http://usc-canada.org/the-issues/food-sovereignty).
Due to its importance, eight countries had included food sovereignty into their
Constitutions: Ecuador, Venezuela, Mali, Bolivia, Nepal, Nicaragua, Uruguay and Senegal
(Beauregard, 2009).

387

Agro-Ecology and Food Sovereignty

An interesting issue regards the connection between agro-ecology and food sovereignty.
Agro-ecology complements the goals of food sovereignty adding also two other dimensions
of sovereignty: energetic and technological sovereignty (as illustrated in figure 1).

Source: Altieri and Nicholls, 2012, p. 26

Fig.1. The synergetic connection between the three types of sovereignty and agroecology
Some authors suggest also a holistic and cross-disciplinary approach with respects the socalled human ecology that is part of a worldwide movement towards agro-ecology based on
ecological sustainability and social justice. While industrial agriculture and food security
attempt to maximize multinational corporations profits, providing food for global
consumers no meter if all the people can afford to buy it, agro-ecology and food
sovereignty are more human centred and are looking also to assure equal rights and
opportunities for all the people with a special attention concerning small-scale farmers.
Agro-ecology supports a holistic approach and looks for a multifunctional, crossdisciplinary perspective that interconnects the economic, social and environment
dimensions of the long-run sustainable development (figure 2).

Source:
Barker,
D.,
2011,
http://www.centerforfoodsafety.org/files/thewheeloflife_barker_40796.pdf
Fig.2. A multifunctional and cross disciplinary perspective of agro-ecology

388

p.22,

Agro-ecology recognizes also both conventional and diversified land use, including the
perspective of organic food production. Being interested to identify if there are any
differences between yields obtained from organic and conventional production, researchers
from University of Michigan compared these types of yields by taking into account a data
base of 293 examples. These researchers used the 293 data base in order to estimate the
average yield ratio between organic and non-organic (conventional) products. For the
majority of the food categories taken into account, the average yield ratio allows for a clear
distinction of the typology of countries development level classified with respect to the
value of the average yield ratio. Thus, the authors provided a distinction between: a lower
than 1.0 ratio, for the developed countries and a corresponding rate greater than 1.0, for the
developing countries (Altieri and Nicholls, 2012, p. 25). Further, based on the average yield
ratios, the authors tried to model the global organic food supply that could be grown based
on applying organic farming.
The main results of this research study indicate that the current agricultural land base can be
used in order to produce food on a global level by applying organic methods. This organic
food production seems to be quite enough for feeding the actual number of human
population, and even for a larger one in the near future (Badgley et al, 2007,
http://www.stopogm.net/sites/stopogm.net/files/Orgsupply.pdf, p. 86). We consider that
this type of research can be continued by making a distinctive comparative analysis of
world regions by taking into account the different expected trends in the population
dynamics. For instance, if we will refer to Europe, it is well known that on this continent
we deal with an aging population due to a demographic crisis that had affected substantially
both the number and the composition of the population. On other continents such as Africa
and parts of South-Eastern Asia, the number of population is increasing and it is expected
to increase at least until 2050 and 2060 (according to UN population prognosis). If we add
also the fact that industrial agriculture uses 70% of the worlds agricultural resources to
produce just 30% of our global food supply, we have to realize that agro-ecology and
organic farming are viable alternative that need to replace the industrial agriculture. Agroecology provides prerequisite for food, energetic and technological sovereignty. Decision
makers have to promote agro-ecology and organic farming based on the principles of food
sovereignty. By applying food sovereignty vision, we will feed the population, both the
present and the future generations.
2. Sustainable development and organic farming
As highlighted before according to the holistic perspective regarding the long-run
sustainable development, organic agriculture is a viable and robust answer to the economic,
environmental and social challenges faced by our contemporary world. Organic agriculture
is applied in almost all the countries of the world. It looks for specific production systems
that avoid the use of synthetic products such as fertilizers and pesticides.
Organic products
Products can be label as "organic" if almost 95% of their inputs used in the agricultural
production are organic. Organic products include: wine made from organic grapes, baby
food, beer, yoghurt, cakes, pastries, cereals, bread, biscuits, cold meats, fruit juices, and
vegetables.
2.1 The evolution of organic agriculture all over the world
According to Organic 3.0 initiative organic agriculture has a holistic nature and is a
viable opportunity to address global challenges. The report Organic Agriculture
Worldwide: Key results from the FiBL-IFOAM survey on organic agriculture worldwide
2014 published under the auspices of the Research Institute of Organic Agriculture (FIBL)
and of the International Federation of Organic Agriculture Movements (IFOAM) by Helga
389

Willer and Julia Lernoud in March 2014 includes statistical data from 164 countries. The
data had been collected based on a dedicated survey conducted between July 2013 and
February 2014 (http://www.organic-world.net/yearbook-2014-presentations.html/). This
report illustrates that worldwide there are 37.5 million hectares of agricultural land
organically cultivated by 1.9 million producers. In figure 3 there is illustrated the
distribution of the organic agricultural land by continents in 2012. While Oceania has
almost one-third of the global organic agricultural land, Europe has more 30 percent and
Latin America just 18 percent of the worlds organic land (http://www.organicworld.net/yearbook-2014-presentations.html/, p. 15).

Source: FiBL, 2014, p. 4

Fig.3 Distribution of the agricultural land by continents in 2012
At the global level, organically cultivated land areas had increased since 2011 by 0.5
percent. The countries with the largest organic agricultural cultivated surfaces are: Australia
(12 million hectares), followed by Argentina (3.6 million hectares) and the United States,
with
2.2
million
hectares
(FIBL,
2014,
http://www.fibl.org/fileadmin/documents/de/news/2014/willer-2014-global-data.pdf/). The
countries that reported the highest numbers of producers until the end of 2012 are: India,
Mexico and Uganda. Figure 4 illustrates the distribution of the top ten countries with the
largest organic food markets.

Source: FiBL, 2014, p. 8

Fig.4 The top ten countries with the largest markets for organic food in 2012
390

Seven of these countries are located in Europe (Germany, France, UK, Italy, Switzerland,
Austria, Spain)
2.2 The evolution of organic agriculture in the European Union
As illustrated before, 30 % of the world's organically managed land is in Europe. Eurostat
data dedicated to the organic sector are available starting from 1998. The European Action
Plan for Organic Food and Farming (Action 3) highlights the need to collect specific data
for the organic agriculture sector (http://ec.europa.eu/agriculture/markets-and-prices/morereports/pdf/organic-2013_en.pdf, p. 8). At the end of 2012, in Europe 320'000 farmers had
cultivated organically 11.2 million hectares. This surface represents 2.3 % of the
agricultural land in EU (Willer & Lernoud, 2014, p.5). The countries that have the largest
organic agricultural land in Europe are: Italy, Spain and Germany (Willer and Lernoud,
2014). The distribution of organic land in Europe (figure 5) highlights that (Willer, 2011):
Russia and Iceland have less than 1% organic land, mainly because they are located in
the Northern side of the continent and the climate doesnt favour agriculture there.
France, United Kingdom, Romania have between 1% and 5 % organic agricultural land
of their total land.
Germany, Italy, Spain, had between 5 % and 10 % certified organic land of their entire
territory.
Only seven countries on the European continent have more than 10% organically
cultivated land: Liechtenstein, Austria, Sweden, Switzerland, Estonia, the Czech
Republic and Latvia.

Source: FiBL, 2014

Fig.5 Share of organic agricultural in some European countries
Compared to 2011, the organic land in Europe increased by 0.6 millions hectares and
higher increases are expected to come in the future. The European market size in organic
products was of approximately 22,8 billion Euros in 2012 (Willer and Lernoud, 2014).
2.3 Organic agriculture in Romania
The purpose of organic production is to obtain products of high quality based on
environmentally friendly processes that do not harm the health of humans, plants or
animals. As suggested by a Romanian research study now Romanias legislation in in line
with EU requirements and orientations (Voicilas, Alboiu, 2014, p. 383).
In Romania, on the certification logo, it is written Agricultura Ecologica, with the
abbreviation AE. In Romania, the control and certification of organic products is ensured
at the present moment by private inspection and certification bodies accredited, in
conformity with the European standard EN ISO 45011:1998.
391

Statistic data regarding the dynamics of the Romanian organic agriculture system
The number of certified operators in organic agriculture was of 15.544 in 2012 even there
were 26.736 operators who notified their activity in the organic agriculture system at the
level of county specialized institutions for agriculture. Based on the operative data
communicated by the county institutions for agriculture the number of certified operators in
the organic agriculture system in 2013 was of about 16.500 As illustrated in figures 6 this
represents and increase of the registered organic operators by 4, 85 as compared to 2006.

Source: Operative data from MARD, 2014

Fig.6 Dynamics of registered organic operators 2006-2013
The increasing trend is illustrated also by the dynamics of registered organic agricultural
area for all the three categories of organic agriculture illustrated in figure 7.

Source: Operative data from MARD, 2014

Fig.7 Dynamics of registered organic agricultural area

392

According to the organic farming system requirements, certified agricultural land was
97.000 hectares (0.7% of total agricultural area) in 2006 and over 288.000 ha in 2012 (2 %
of total agricultural area). The main organic crops are: cereal grains, forage crops and
pastures, oilseed, vegetables and fruits (cherries, sour cherries) (MARD, 2014). From 2000
to 2012, organic agricultural land area increased by 16.5 times (from 17.400 hectares to
288.259 hectares). This corresponds to an average annual growth rate of 25%.
The importance of the organic agriculture in Romania is increasing (Voicilas, Alboiu,
2008). Organic operators (farmers) were registered at MADR and classified by three broad
categories of products: crop, livestock and beehive products. In Romania most organic
farmers are located in a few counties: Suceava (North), Mure and Sibiu (Centre), Tulcea
and Constana (South-Est) (Voicilas and Alboiu, 2014, p. 387).
Organic farming is beneficial for the environment, as well as for the health of animals and
the human beings. According to the above mentioned authors, in Romania the organic
sector might be considered in the next period as an important niche market. The main
reasons are: the increase of the number of operators; the association of the small organic
farmers so as to co-operate in the marketing of organic products; an increase in the
number of municipal and regional organizations directly involved in the implementation of
the National Export Strategy in its initial stage; an increase in the number of foreign direct
investment projects and investments in related activities in the rural area; an increase and
diversification of the organic farm output; capacity improvement in terms of products and
value added (Voicilas and Alboiu, 2014, p. 393-394)
Conclusions and Recommendations
The increasing awareness of the importance of product quality on human health has
contributed a lot to the development of favourable opinions regarding the development of
agro-ecology and organic farming practice. There is also an important trend regarding the
development of markets for these products, given their specific characteristics (high prices
of the products and low market share). The increasing demand for organic products has led
to the development of organic farming in the last years. More and more this sector is
coming on the agenda of agricultural specialists, policy makers and the society. But, the
organic markets are small and quite disorganized. In many countries a large part of organic
food stuffs are sold through conventional channels at conventional prices, fact that might
discourages producers and organic operators.
Organic farming has an increasing importance in the agricultural sector of many countries,
regardless of their stage of development. In the developed countries, organic farming has
come to represent a significant part of the agricultural sector: 19,7% in Austria, 15,5% in
Sweden, 12% in Switzerland. Some of the emerging countries of the European Union hold
also a growing sector of organic farming: 15,3% in Estonia, 11,5% in Czech Republic,
10,8% in Latvia.
Finally, we suggest some recommendations for developing the organic market in Romania,
such as:
Increase the organically cultivated areas through promoting national and European
supporting policies
Promote public policies to be directed towards both the production and the
consumption of organic products
Extend the research, communication and educational programmes dedicated to the
agro-ecology and organic farming practices. These would contribute to food
sovereignty & safety, resulting in a better and more efficient and effective energy and
resources use and conservation.
393

Co-operate with delivery companies in order to provide these products all over the
country
Applying better marketing strategies for the organic products by highlighting the
potential benefits of organic farming on human health and environmental protection. It
will be helpful to create and develop specialized marketing departments in order to
increase the awareness regarding organic products
Develop a well designed strategy in order to expand on the external markets (export of
organic goods).

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396

CORRELATIONS BETWEEN LIFESTYLE AND ISCHEMIC HEART DISEASE

IN YOUNG PATIENTS
Raluca IANULA
Medical School "Carol Davila", Bucharest, Romania, e-mail: [email protected]
Bulevardul Eroii Sanitari 8, Bucuresti, Romania
Abstract
Myocardial infarction in young adults, an important public health issue, is a controversial
topic with many issues left unknown. Although its prevalence is low, its consequences are
disastrous, as it affects apparently healthy subjects who afterwards suffer important
lifestyle changes with profound social, professional and medical implications. In this
perspective, the thesis aims to analyze epidemiologic aspects regarding incidence,
morbidity of myocardial infarction in young people (patients under 45 years) and
correlation with traditional cardiovascular risk factors: tobacco use, effort, diet,
dyslipidemia, obesity, hypertension, diabetes mellitus.The present study is descriptive,
longitudinal, ambispective: retrospective until 2004 and prospective for next 10 years,
including all of the 122 patients consecutively admitted to the Cardiology Department of
Bagdasar-Arseni Hospital, aged under 45 and diagnosed with AMI. These represented 9%
of all patients with this diagnosis. Considering the time evolution, we can notice an
alarming increase in incidence, statistically significant, (p<0,05), for the second half of the
analysed time interval.The most common cardiovascular risk factors are: smoking,
dyslipidemia, obesity. Diabetes mellitus and hypertension remain risk factors specific for
patients over 45 years. A significant number of young patients fulfilled the diagnostic
criteria of metabolic syndrome.Cigarette smoking is the dominant risk factor found in 88 %
of patients. An increase in the incidence of smoking during the study is noticed.
Dyslipidemia and obesity show a linear increase in the last decade. A statistically
significant association between obesity - dyslipidemia - HTN- diabetes among young men
with AMI is described. In correlation with these data, 70 % of patients enrolled in the study
presented a high-calorie diet in the moment of enrollment, respectively, over 3000 kcal/day,
and 63% of the patients did not practice physical exercise (including walking, cycling,
dancing, gardening) (R. Ianula, 2012).In conclusion, a worrying increase in young patients
with AMI is noticed in recent years. The apparent causes are similar to those described in
an elderly population, but their distribution is different. The main characteristic is an
unhealthy lifestyle among youth: the overwhelming majority are smokers, sedentary and
have a high-calorie diet, with a significant percentage meeting the criteria of metabolic
syndrome.Therefore, programs focusing on primary and secondary prevention should be a
priority in Romania, since they could reshape the cardiovascular disease spectrum.
Keywords
epidemiology of cardiovascular disease in Romania, traditional cardiovascular risk factors
(diet, obesity, dyslipidemia, hypertension, diabetes, inactivity, smoking), myocardial
infarction in young people.
Introduction
Cardiovascular disease is the most frequently encountered mortality reason, being
responsible for approximately half of the total number of deceases. There are 4,35 million
decease cases annually in Europe and 1,9 million patients are diagnosed with a
397

cardiovascular disease that induces disability and a decrease in life quality. (WHO 2013,
ESC 2012; P Buckley 2013; Naska 2014)
While, in Northern and Western Europe, mortality and cardiovascular disease incidence is
decreasing, the situation is different in Central and Eastern European countries, where an
increase in incidence is reported. Moreover, it has been noticed that economic progress is
inversely proportional with the age of diagnosis, as the most productive population
segments are affected.(Santulli 2013)
Even if there is no precise epidemiological information about Romanian cardiovascular
disease incidence, we can estimate it considering the number of deaths caused by MI,
which is increased comparing to other European countries: while Romania is registering an
obvious MI incidence increase, in West European countries there is a 50 % decrease at the
culmination time. (RO-STEMI, 2009)
The correlation between cardiovascular diseases and a number of risk factors like arterial
hypertension, dyslipidemia, diabetes, obesity, smoking, sedentarity, stress, eating behavior
and genetic factors is well-known. Furthermore, the control of these factors before the
occurrence of the disease (by primary prevention) and after the occurrence of the disease
(by secondary prevention) is capable of reducing the incidence, prevalence, complications
and mortality due to cardiovascular diseases, using simple and inexpensive methods.
According to WHO recommendations, in countries with an increasing incidence of
cardiovascular disease a high interest should be taken in discovering the real frequency of
these disease, the prevalence of the associated risk factors and local factors, specific for the
country, which will allow a better use of the resources of the health system for programs
focusing on prevention. (Buckley, 2014)
Myocardial infarction in young adults, an important public health issue, is a controversial
topic with many issues left unknown. Although its prevalence is low, its consequences are
disastrous, as it affects apparently healthy subjects who afterwards suffer important lifestyle
changes with profound social, professional and medical implications
As far as we know, there is no unified and systematic approach of this subject in Romania.
Objectives: From this point of view, the study aims to analyze the correlation between the
traditional cardiovascular risk factors and the occurrence of myocardial infarction in young
people and to argue the beneficial role of the primary and secondary prevention programs.
The methods and techniques of the study: The present study is descriptive, longitudinal,
ambispective: retrospective until 2004 and prospective for next 10 years, including all of
the 122 patients consecutively admitted to the Cardiology Department of Bagdasar-Arseni
Hospital, aged under 45 and diagnosed with AMI.44 patients were retrospectively analyzed
and 78 were prospectively analyzed. Information was collected from anamnesis, from the
observation sheets, as well as questionnaires regarding to the lifestyle of the patient. The
study group consisted of 1195 patients aged over 45, fulfilling the same diagnostic criteria.
In order to make a more accurate longitudinal investigation in order to characterize the
dynamics of the studied phenomena, we divided the research time interval into years,
starting from January 2000 and ending in July 2010.
A research sheet containing the following information was prepared:
Demographic data: age, sex, area of origin
Living and working conditions: profession, workplace
Classical cardiovascular risk factors: family history, smoking, arterial hypertension,
diabetes, dyslipidemia, obesity, leisure activities, diet.
For analysis and data collection of patients we have developed a tracking sheet in Excel.
Data were collected from patient history, observation of records and data on morbidity and
mortality retrospective, from scheduled visits or telephone interviews.
398

All the determinations were made using similar techniques. Statistical data were systemized
in the form of synoptic charts (groups), their graphic representation achieved being made in
the form of pie-charts, columns and curves of incidence. In order to classify and process,
we used Microsoft Access and Excel databases. For statistical analysis we used the usual
statistical tests in Microsoft Excel version 2010 and SPSS version 19. We made Pearson
correlation statistics and statistical tests like chi2, Fisher, etc. The results were presented as
proportions, mean standard deviation and medians. We used the "t-test" for comparing
mean values and "chi" square test for comparing proportions.
1. Literature Review:
Mortality due to cardiovascular diseases has recorded in the last 20 years a decreasing
tendency in Western and Central Europe, reaching to 3-5 to 1000 people in 2003; in
Romania the tendency was diametrically opposite, reaching to almost 8 to 1000 people in
the same year. This tendency has been exceeded only by Bulgaria, Ukraine and especially
the countries of the former Soviet Union (P Buckley 2013; Naska 2014; Santulli 2013).
Furthermore, it is estimated that by 2030 the number of people who died of a heart attack or
stroke will reach 23.3 million (P Buckley 2014). In Europe, a significant percentage of
these deaths occur in young population, with a current number of 800,000 deaths from
cardiovascular disease among young people, ischemic heart disease itself being cited as the
cause of 330,000 of these deaths. Romania does not deviate from these troubling numbers,
with cardiovascular disease representing the leading cause of mortality in population aged
<65 years. (WHO 2013, ESC 2012, Mathers CD 2005)
The cost derived from cardiovascular diseases in the EU economy is estimated at 186
billion / year. Of the total cost, 54% is medical costs, productivity losses 24%, 22%
informal care of people with ischemic heart disease. Romania and the entire Eastern
European area recorded the highest costs. (ESC 2012)
In this epidemiologic context the prevention strategies aimed to control the cardiovascular
risk factors and the adherence of the population to a healthy lifestyle (diet, physical activity,
smoking cessation active or passive) are a priority, their application is anticipating
significant decrease in morbidity/cardiovascular mortality. (Naska 2014)
A lifestyle analysis carried out over an extensive period of time (1970-2007) reveals
serious food deficiencies in the Romanian population. Although it almost doubled its value
(83 g fruit / day / person in 1970 to 1974 in 159 g fruit / day / person in 2007) fruit
consumption stands at the end of the list in comparison to the developed countries of
Europe. The same situation is found in vegetable consumption (289 g vegetables / day /
person in 1970 to 1974, with a peak in 2003-2004 - 545 g vegetables / day / person, with
progressive decrease until 2007-413 g vegetables / day / person).Similar tendencies are
observed across the entire Eastern European region, apparently explained by the status of
developing countries and by socio-cultural habits. (ESC 2012)
As well as this, the proportion of dietary calories of lipid origin had an upward slope (23%
in the period 1970-1974, 28% in 2005-2007) as well as the total number of calories. (ESC
2012)
Moreover, epidemiological studies draw an alarm on the increasing frequency of
cardiovascular disease among young people, as well as on the fact that increased incidence
of ischemic heart disease in young population is expected in the next years.
However, recently published studies (M Bertoia 2014; Huang 2014; Yusuf 2004) show that
the adherence to a healthy lifestyle or a Mediterranean diet, along with regular exercise and
smoking cessation is associated with a significant decrease in mortality due to
cardiovascular disease, hospitalizations, having a convenient cost-benefit ratio.
399

In EU, standardized prevention programs are stipulated in national programs, the cardiac
rehabilitation programs being integrated in the mandatory post infarction therapy. In
Romania, these are only at a pioneering stage.
The achievements of some EU countries shows that the methods can be successful, but
active cooperation of both of the involved groups is required (that means doctors,
physiotherapists, dieticians, government, financial specialists, medical insurance, food
industry, media) (WHO 2013; ESC 2012).
In 2009, the Romanian Society of Cardiology released a Cardiovascular Disease Prevention
Program that will be reflected in the future years so as to meet the objective outlined in the
European Health Charter: "Every newborn child is entitled to live up at least until the age of
65 years without suffering from a cardiovascular disease that can be prevented. Within the
results obtained from the completion of this project, we hope to help achieve this goal. (C
Ginghina 2010)
Demographic Data
Young patients with Acute Myocardial Infarction (AMI) represent 9.26% of all hospitalized
patients, according to literature data showing the frequency between 4% and 10%. The ROSTEMI registry, whose data were subsequently published outlining our results, 8% of
patients were younger than 45 years (Ro-STEMI 2009; R. Ianula 2012; McManus 2011).

Fig. 1 Patients distribution included in the study (R. Ianula 2012)

Fig. 2 The evolution of the incidence of AMI in young people (2000-2010)

(R. Ianula 2012)
400

The average age in the study group was 39 years and 5 months, with a median of 41 years
(age limit: 19-45 years). In the control group the average age was 66 years and 9 months,
with a median of 68 years. In the RO- STEMI registry, the average age of patients was
63.39 +/- 12 years with a median of 63 years, similar data with registers of Euro Heart
Survey. A very interesting aspect pointed by the RO-STEMI registry the directly
proportional relationship between the age of onset of ACS and the GDP per capita. (Hasdai,
2002, Ro-STEMI 2009)
Temporary Distribution
Following the time evolution of the incidence of patients with AMI in the period 2000 2010 we notice a worrying increase statistically significant (p < 0.05) of it in the second
half of the analyzed period.
2.2 Traditional cardiovascular risk factors
Table 1 Traditional cardiovascular risk factors in the study group (9)
Essential Diabetes
Family
Smoking
Dyslipidemia Obesity
hypertension mellitus
history
Risk factors
in young
107
39
21
75
48
34
adults
Percentage
87,70%
31,97%
17,21%
61,48% 39,34% 47,89%
Table 2: Traditional cardiovascular risk factors in the control group (R. Ianula 2012)
Essential
Diabetes
Family
Smoking
Dyslipidemia Obesity
hypertension
mellitus
history
Risk factors
in elderly
483
705
392
555
387
252
population
Percentage
44,15%
64,44%
35,83%
50,73% 35,37% 23,03%

With AMI (R.Ianula 2012)

Fig.3 Incidence of smoking in young
patients

Fig.4 The temporal frequency of smoking

The incidence of smoking in groups of young patients with AMI differs with statistical
significance (p < 0.0001) than that found in the elderly patients(88 % vs 44 %). These data
401

suggest not only the paramount role of smoking in the initiation of early atherosclerosis, but
also the destabilization of atherosclerotic plaque in the initiation of intracoronary
thrombosis. (McManus, 2011; Yater, 2010; Khawaja, 2011)
In contrast to European and American data records showing the decreased incidence of
smoking in the last decade, in the study group we notice an increase in the number of
smokers during the study, although not statistically significant (Figure 4). These results are
however consistent with current epidemiological data showing a worrying increase in
smoking among young people, but also young girls in Romania (ESC 2012; Buckley, 2014;
Santulli, 2013; Ianula, 2012)
In the observational study group 75 (61.48 %) patients were diagnosed with dyslipidemia
(figure 5).
We notice a slight increase in patients with dyslipidemia during the study (Figure 6), but
with a very high statistical significance (r = 0.447, p < 0.0001), consistent with current
epidemiological data showing an alarming increase dyslipidemia among young people in
Romania, in conjunction with a low adherence to a healthy lifestyle (ESC 2012; Buckley;
and Ginghina, 2010; Ianula, 2012).

with AMI (R. Ianula 2012)

Fig.5 Frequency of dyslipidemia in young
patients

studied group (Ianula 2012).

Fig.6 Evolution of dyslipidemia in recemt

with AMI (R. Ianula 2012)

studied group (Ianula 2012).
Fig.7 The frequency of obesity in young
Fig.8 Frequency of obesity during the
patients
study
In the observational study group 48 patients (39.34 %) were obese, all of them were men,
probably for cultural reasons figure 7).
402

We see an uneven distribution of this risk factor during the study, with a linear increase
statistically significant (r = 0.398, p = 0.006) (figure 8). This aspect can be explained by
lifestyle modification of the patients (fast food diet, excessive alcohol consumption,
sedentary).
The statistical analysis of survey data shows that in patients with AMI, the association
between obesity and dyslipidemia was highly significant in all study periods analyzed (r =
0.3538, p <0.0001). (R. Ianula 2012)
High blood pressure and diabetes remain specific risk factors age related > 45 years (fig. 9
and 10).

with AMI (R. Ianula 2012)

Fig.9 The frequency of hypertension in
young patients
Figure 9:
Figure 10:

studied group (Ianula 2012).

Fig.8 Frequency of diabetes in young
patients

In correlation with these data, 70% of these patients at the beginning of the study were in
a high-calorie diet, respectively, over 3000 kcal / day, and 63% of the patients did not
practice any physical exercise (including walking, cycling, dancing, gardening)
Regarding adherence to the treatment in the first year post-MI, we found that 80% of
patients had good compliance, especially in drug therapy, patients have stopped smoking,
meets diet regimen, regular physical activity, however, still remains a problem, lack of
physical exercise persisted as a cardiovascular risk factor in many patients. After one year,
however, less than 40%) follow the recommended regimen, 10% had resumed smoking,
45% remain or become obese, 7% have abandoned any form of treatment and 99% of
patients did not attend rehabilitation programs supervised cardiovascular (R. Ianula 2012).
Conclusions
Numerous epidemiological studies indicate alarming prevalence of risk factors for coronary
heart disease, leading to an increased incidence of coronary heart disease among young
people. Romania seems to align with the global trends, the presented study results being
indicative of this.
Although the incidence and prevalence of MI in young patients is small, it is associated
with significant morbidity, with a strong psychological impact, and not least with
significant costs. To our knowledge, in Romania there are few studies dedicated to this
topic.
The most common cardiovascular risk factors are: smoking, dyslipidemia, obesity. Diabetes
mellitus and hypertension remain risk factors specific for patients over 45 years. A
significant number of young patients fulfilled the diagnostic criteria of metabolic syndrome.
403

Cigarette smoking is the dominant risk factor found in 88 % of patients. An increase in the
incidence of smoking during the study is noticed. Dyslipidemia and obesity show a linear
increase in the last decade. A statistically significant association between obesity dyslipidemia - HTN- diabetes among young men with AMI is described. In correlation with
these data, 70 % of patients enrolled in the study presented a high-calorie diet in the
moment of enrollment, respectively, over 3000 kcal / day, and 63 % of the patients did not
practice physical exercise (including walking, cycling, dancing, gardening).
In conclusion, a worrying increase in young patients with AMI is noticed in recent years.
The apparent causes are similar to those described in an elderly population, but their
distribution is different. The main characteristic is an unhealthy lifestyle among youth: the
overwhelming majority are smokers, sedentary and have a high-calorie diet, with a
significant percentage meeting the criteria of metabolic syndrome.
Given the fact that 80% of young patients with AMI have coronary atherosclerosis, there is
an obvious need to understand the impact of cardiovascular risk factors in the young
population and to refine methods of screening and primary prevention throughout which
90% of events can be prevented, especially if they are correctly applied since childhood.
(Yusuf S 2004;)
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405

CONSIDERATIONS UPON THE ROMANIAN HEALTH CARE SYSTEM

REFORM BASED ON OTHER EUROPEAN EXPERIENCES
Mihaela Cristina DRGOI, Ramona Iulia ARAVULEA (DIEACONESCU)
The Bucharest University of Economic Studies, Romania, email:
[email protected]; Piata Romana nr. 6, Sector 1, Bucharest, Romania
Abstract
The Romanian health care system has been changed and reformed over the past decades
with the declared objective of providing quality services for all citizens. However, the
results have been more than modest and health indicators for Romanian population place
among the last in the European Union. This papers summarizes the evolution of some of the
best health care systems in Europe and in the world and emphasizes how some of the most
simple and feasible actions that Romanian policymakers could have implemented as a
lesson learned from these countries turned out to be just some random changes in the
system which did not generate the expected results (lower expenditure on health, more
income for the health sector, less unnecessary use of public health services, better coverage
for the population), but only added more disorder and dissatisfaction to the system.
Keywords
health care system, management reform, policy decision
Introduction
Europe does not have a single model for a health care system, and searching for such a
model to answer the particular requirements of each country is not feasible, as much as we
do not have knowledge to transition a bankrupt health system to a performing one without
human and financial costs. Each state is presently at liberty to configure its own health care
system, contingent to its needs and particularities, yet founded on the fundamental
principles for ensuring universal health.
Despite structural and ideological differences, health care systems across the world have the
same interests and face the same challenges, primarily ensuring high standards of health for
the entire population with minimal costs. All health care systems have their limitations and
are in a state of permanent reform, its necessity further increased by the current global
crisis; facing issues of financing, cost control, ineffective organizational structure, all are
nevertheless bound to search for new ways to increase the quality of health care services.
Several European states have ranked among first according to the World Health
Organization (WHO) and have provided valuable lessons for other health care systems in
transition. Some of their successes are described in this paper with the purpose of
emphasizing means of improving the Romanian health care system. The main question that
arises is why cannot these good practices be adjusted to national level in order to achieve
efficient reforms instead of just copy/pasting them without a thorough analysis of the cost
and benefits they may generate? As shown below, for a highly effective and competitive
health care system, a few steps must be completed: evaluation of the national current health
situation (including population health, system funding needs, resources etc.), analysis of
other health care models, identification of opportune measures that can be implemented
deriving from these and adjusted implementation in national health care system.

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Thus, the main scope of this paper is to emphasize some good practices from other
countries health systems and how their superficial implementation in Romania did not
generate positive outcome for the health systems reform.
1. Literature review
Health care systems, defined as the collection of human, material, financial and
informational resources capable of delivering services with the purpose of maintaining and
improving health state, are essentially dynamic entities, requiring continuous management,
adequate tweaking and tuning, and effective control. The structure and functioning of a
national health system seems easy to understand on the basis of its theoretical definition: an
open system with known objectives and socially unstable (Minc, 2005). The system can be
thus generically componentized inputs, processing, outputs, feedback loops, and external
inter-dependencies (including the operational diagram of control and system management
levers). The input-processing-output model is dependent on feedback loops to achieve the
administrative and educational changes required to achieve objectives. Inputs of work
(personnel time), money, information and assets are processed into outputs. The processes
involved are the whole of required activities and their sequence needed to deliver the
output, which is then exchanged in order to obtain profit. In health care, the output can be
measured as reduction in mortality and morbidity, improvement in health state, increase in
the number of cured patients, patient satisfaction with the medical services provided.
Continuous monitoring, feedback loops, evaluation and change in response to new
demands, are required to ensure that individual and community health needs are
satisfyingly met.
The specifics of health care systems have provoked analysts to consider them as complex
architectures with several sub-systems, each with its own purpose and objectives,
organization, management and internal information systems; these sub-systems have to be
in permanent communication between themselves, external organizations (professional
bodies) and the health system as a whole.
A national health system can be economically analyzed and classified considering its
financial flows, the role of the state and financing sources.
On the criterion of financing sources, three different models are used in Europe:
the Beveridge model of a National Health System (NHS);
the Bismarck model of Social Insurance Health System (SIS);
the Semako Centralized State System (CSS).
The NHS model introduced in UK by William Beveridge, following the Report on Social
Insurance and Associated Services (1941), consecrated a view of the future in which a
prosperous state provides universal health care and has health as a national political
priority. This model is now used in Denmark, Finland, Ireland, Norway, Sweden, Greece,
Italy, Portugal, Spain and the United Kingdom. The system is financed from general taxes,
is controlled by public authorities, works on a state budget, and has a private component.
Access is free for all citizens, with universal coverage, under state management. Medical
staff is either employed on a wage or paid a per capita fee for registered patients; some
services involve co-payment.
The SIS model is the most used national program for health insurance, founded on a
collection of social security and health insurance elements, implemented in Germany,
Austria, Belgium, Switzerland, France, Luxembourg and Netherlands, with various national
specificities. The system is financed through the mandatory contribution of employers and
employees, according to income or/and as general taxes the social insurance introduced
by Otto von Bismarck. There is extended but not complete coverage, with several
407

population segments without access. The funds are allotted and managed by state bodies or
agencies. These insurance funds contract hospitals and general practitioners for the
services offered to the insured. General Practitioners contracts are based on a service fee,
while hospital contracts are agreed on budgets, usually global.
The CSS model was characteristic to the former communist countries of Central and
Eastern Europe and is now being transformed. It was financed by the state budget and
managed by the state through central planning. The state had a complete monopoly over
health services (no possibility for private practice), owned all the assets and resources, and
fully employed all medical personnel. The system offered complete and universal health
services. It made excessive use of medical personnel, hospital beds and clinics, favoring
quantity over quality and hospital care over ambulatory care, with population-wide medical
analysis programs as the main method of preventive care. The system lacked any
mechanism for economic or epidemiologic analysis and was not treated as a social priority.
Each model has advantages and disadvantages, and a quick review of reforms in European
countries shows convergence towards mixed systems, with state control and regulation and
a controlled market (table 1).

Country

Table 1: Main types of health care system by country7

Type
of
Country
Type of System
System

Austria

Bismarck

Hungary

Mixed

Belgium

Bismarck

Ireland

Beveridge

Switzerland

Mixed

Italy

Beveridge

Czech Republic

Bismarck

Luxembourg

Bismarck

Germany

Bismarck

Netherland

Mixed

Denmark

Beveridge

Norway

Mixed

Estonia

Mixed

Poland

Mixed

Spain

Beveridge

Portugal

Beveridge

Finland

Mixed

Sweden

Beveridge

France

Bismarck

Slovenia

Bismarck

UK

Beveridge

Slovakia

Bismarck

Greece

Beveridge

Ukraine

Beveridge

Source: Citoni G. 2009. Satisfaction of European citizens with their health care: some
correlates, Dipartimento di Medicina Sperimentale, Universit La Sapienza, Roma,
available at: http://w3.uniroma1.it/citonig/

Even though Romania is not part of this table, it is the authors opinion that its health system is a
mixed one as well although this mixture is still uncertain. However, in a former CSS model, the
reforms after 1989 introduced elements of both the Bismarck and the Beveridge models.
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For further analysis of the main characteristics of some health care models, we have chosen
some of the best ranked countries in the world, according to the World Health Organization
statistics (World Health Organization, 2014), with emphasis on the most efficient health
measures that have determined them among world leaders in terms of health.
2. Main characteristics of some relevant European health systems
2.1 United Kingdom
The United Kingdom is one of the few European states where the national health system is
decentralized at local administration levels. This unique model of health care, financed
from public sources, has a major influence on other national health systems. It is extremely
popular and has managed to achieve its initial objectives, continuously reformed ever since
its beginnings in 1948 while surviving numerous changes of government and dominant
ideologies.
The National Health Service was built over several decades, on a historical foundation of
social reform the Poverty Laws of the 18th and 19th century, the National Medical
Insurance of 1891 for workers and their families; the turning points that led to its creation
were the National Exceptional Health Service during the second World War and the
Beveridge Report of 1942. (Dobson, 1999)
By improving efficiency in primary health care, the NHS has expenses below the EU
average, allowing increased investment, development and savings, i.e. continuous
economic development. Since its launch more than sixty years ago, the NHS has become
the largest publicly financed health care system in the world, while at the same time being
one of the most efficient, equalitarian and comprehensive. The principle of universal access
regardless of wealth and income, stood at its core since the beginning and remains so today.
Undergoing a major reform during each decade, the system has accumulated precious
experience in satisfying the populations health needs while adapting to changing economic
conditions. It continues to provide health services to all the population, even if it failed the
attempt to equalize health state across social segments.
We consider most telling of the NHSs identity Kleins statement (1993) that it is the policy
sector most appreciated by the population, the true Crown Jewels of the British Welfare
State. The reality behind this metaphor is further proven by the fact that, during the radical
reduction in welfare provisioning and state expenses of the Conservative 80s and 90s, the
NHS was the least affected. Even today, the WHO ranking reinforces that this is a very
good NHS, despite the fact that it has such a low level of funding relative to other countries.
2.2 Germany
Germany is a federal state with a long tradition of social security policies. The German
National Health Insurance System, based on Otto von Bismarcks policy for the medical
insurance of low income workers, is built on mixing elements of social security and health
insurance. It is primarily financed by the social security system, whose budget is made of
equal contributions by employers and employees.
The weight of health as percent of GDP in Germany increased from 9.2% in 1986 to 10.6%
in 1996, making the country second in the world after the United States in terms of
allocated financial resources (Baggott, Forster, 2008). In 2011, total health expenditure as a
percent of GDP was 11.3%; the current distribution of funding sources in Germany shows
the Government contributing 19% to total medical expenses, employers and employees
covering 61%, patients direct payments 12% and private health insurance with 8% (World
Health Organization, 2014).
The SIS specifically provides for the highest quality of health care, putting Germany among
the first places on a global ranking. On the other hand, Health Funds dont yet have health
409

improvement as a primary responsibility, an increasingly frequent topic of debate

considering the reforms required in keeping up with the EUs and WHOs objectives on
health state.
However, the investments made by the German government offer patients and practitioners
top health facilities to be treated or work in, fully equipped with the latest medical
technology. It is one of the main reasons for which Germany stands as one of the top health
tourism destinations in Europe, being visited annually by numerous non-German patients.
2.3 Sweden
The current structure of the Swedish health system is the result of a prolonged institutional
and regulatory accumulation of experience in the sector. The Swedish model for health
insurance was developed over several decades, becoming mandatory in 1955 and covering
all public and private expenses for hospital and ambulatory care. Health care services are
mainly state-funded, with additional input from employers and patients, the latter as direct
co-payment. Health expenses were 7.5% of GDP in 1972, 9.6% in 1982 and 7.6% in 1994
(UNESCO, 2006). The primary administrative responsibility for health care management
rests with regional and municipal authorities.
The Law of Medical and Health Care Services was adopted in 1982, aiming for equitable
access to health services and equal health state for all citizens. This law, applied on the
basis of three principles (human dignity, need and solidarity and cost-efficiency),
provided a new vision on a health care services provisioning system.
Current reforms are focused on improving primary health care and reducing the number of
hospital beds. Application of this policy made Sweden one of the few countries in the world
that actually reduced health expenses as a percent of GDP without diminishing the high
quality of services provided and without slowing down the pace of national health
indicators improvement.
The recent reforms in Sweden have allowed the contracting of public health services,
providing to the primary health care providers the best services in terms of cost efficiency.
The hospitals in Sweden operate as separate business units, balancing income and
expenditure under the new conditions of market economy, being in constant competition for
the flow of patients. The public medical and sanitary services are competing with the
private ones and, in some cases, the services are supplied by private sector. As a result, the
waiting times for surgeries were reduced and those hospitals that provided an inefficient or
unacceptable level of care went bankruptcy (Drgoi, 2010).
As a country led by social democratic governments, long before and after the Second World
War, Sweden is, together with other Northern countries, one of the global public health
leaders. Sweden is the country which has succeeded in continuous growth of performance
standard of health services in terms of significantly reducing their costs. Sweden is also the
"pioneer of prevention" as it is the country for which the principle "it is better to prevent
than to cure" was translated into reality (WHO, 2008). Prevention programs have started in
the '80s, and the results are visible today, Sweden making prove of some of the best health
indicators in the world.
2.4 Italy
Italys health care system is a regionally based national health service (Servizio Sanitario
Nazionale (SSN)) that provides universal coverage free of charge at the point of service.
The financing of the system is public, as a combination between general taxation and health
insurance. Unlike the British model, the SSN is highly decentralized: the national level is
responsible for the minimum package of services that must be guaranteed throughout the
country, while the implementation, planning, financing and control of the health system fall
into the responsibility of the regional governments through a network of population-based
410

health management organizations (azienda sanitaria locale, local health enterprises

(ASLs)) and public and private accredited hospitals (Corte dei Conti, 2007).
The financing of the Italian health system is mostly public, with approx. 41% coming from
health insurance contribution and 37% from general taxation. The need to ensure more
income to the system generated the introduction of user co-payment, which covers up most
of the rest of the health system expenditure.
The main challenges that the reforms of the Italian health care system face are providing
universal coverage while reducing the discrepancies between the Northern and the Southern
regions.
Therefore, the reforms that took place in the 90s and 2000s tried to set clearer
delimitations among health responsibilities and better use of allocated funds, since the
previous increase in health expenditure did not generate improvement of the health status of
the population (Ferrera, 1995). However, even with some administrative difficulties, the
health indicators of the Italian population are considered to be one of the highest in Europe
(Lo Scalzo et al., 2009).
As we can see, the decentralization of the health care system has been a key issue in the
development of the SSN since its inception in 1978, and especially during the last decade.
This process provided the regional health departments with more autonomy in policymaking, health care administration and management, resource allocation and control.
3. Romania evolution of the health system and measures taken as reform
The year 1989 found Romania in a deep economic, social and implicitly health crisis. The
populations health was below average, health care services under-financed, staff
motivation totally lacking, and overall low system efficiency. The political change of
December 1989 had as its first reaction the rejection of all communist institutions,
including state property and, health-wise, the principles and organization of the health
system according to the Semako model. The primary force for change was the doctors,
asking for a Bismarck type model and the development of a health private sector or private
practice.
Frequent changes of government, the absence of clear strategies and properly defined
objectives followed independently of political changes, all delayed and slowed down health
care reform after 1990; Romania barely adopted a system of social health insurance in
1997.
After more than 15 years of reform, the Romanian health care system is still in crisis. Many
of the great reform ideas designed to radically change the quality of the medical system are
yet to be implemented. These include: the need to increase the volume of system resources,
the need to increase transparency, to revitalize the primary health care, to recover the
personnel deficit in all major specializations, to eliminate corruption, to correlate the
activities of the system in order to eliminate the time-consuming nature of service delivery,
the need for national programs to reduce the high incidence of some infectious and chronic
diseases etc. Restructuring of the system under a massive shortage of economic resources
and also the lack of vision of its social impact, has deepened the crisis already installed
since the 80s (Puna (coord.), 2006).
The most acute problems arising in primary care are: deficiency in ordering the family
physicians throughout the national territory, infrastructure deficit, lack of trained personnel,
lack of preventive programs and shortage of qualified personnel to assist at home.
As a response to these matters, actions for reformation have been taken chaotically,
following (without taking into consideration the macroeconomic and microeconomic
situation of the country) either the Bismarck model or the Beveridge system. Results have
proven that introducing elements from other types of system organization without adapting
them to national conjuncture does not offer the desirable outcome, but become an even
411

greater burden to the health system. In order to emphasize this theory, we have chosen for
analysis two significant political decisions taken for the reformation of the Romanian health
care system: the introduction of co-payment and the reorganization of medical units
nationwide, within the process of decentralization.
Co-payment and merged hospitals
Co-payment was used in the NHS model, which as seen before was introduced in Great
Britain by William Beveridge, who through the Report of Social Insurance and Related
Services (1942) opened an opportunity of a wealthy state with an efficient national health
service, and set medical assistance as one of the national political priorities
(http://www.nhs.uk). Co-payment refers to patients contribution to the costs of health care
services and is meant to determine consumers not to ask for unnecessary medical services.
However, it is considered to create disadvantage to lower-income citizens, chronically ill
and high risk patients and discourage preventive care.
Co-payment would contribute to rationalizing health care spending and moderate the use of
the system, especially for services that have the least effect on patients health. However,
the experience of other countries shows that co-payment reduces the consumption of
medication and health care services, especially preventive appointments and less essential
services. This might lead to less use of both valuable and less valuable health care services.
The challenge is to design a system in which the services that people stop using as much are
those that are less vital to their health. Furthermore, an international comparison shows that
implementing co-payment only in primary care can prompt people to use emergency room
(ER) services more, a habit that could lead to an overall increase in health care costs (Mas,
Cirera, Violas, 2011).
Introduction of co-payment in Romania did not follow any specific rules. No cost savings
estimations were made, nor an evaluation of the impact co-payment would have on the use
of health care services. Regardless of the valuable lessons stated above, provided by other
countries, co-payment in Romania consists of a fixed sum applied at the end of the hospital
stay and it is not applied to ambulatory and ER care. The income deriving from co-payment
is of negligible amount and has not been thoroughly assessed and reinvested.
For a better cost reducing effect, we consider that the co-payment system should be more
complex: first, lower-income population should be protected with a preferential formula,
because even though the IMF and the government consider the co-payment to be a small
amount, for some of the elderly for example means a few days survival budget. Second, it
would be more efficient to apply a co-payment sum to ER visits than to primary care.
Third, economic estimations and calculations may lead to different co-payment fees,
according to the type of medical service provided no fee or a small fee for preventive
care.
Concerning the process of reorganization of the hospital system in Romania, a previous
study (Drgoi, 2011) shows that each county of Romania has either a deficit or a surplus of
hospital beds, but the merger or readjustment of hospitals did not take this issue into
consideration, thus generating an economically inefficient reform. Economic considerations
would determine a merger between a hospital with surplus of beds and one with a deficit,
medical aspects would lead to mergers to cover all medical specialties within one single
medical unit, demographical issues would take into consideration the distance between
populations establishments and medical units in order to ensure better access to health
care. The key motivation for this radical change in the public hospital system was the
hospitals inefficiency, but as other countries show, economic efficiency in public health
units derives from more than just a readjustment of their functioning, it is determined by the
efficient planning and operating of the health care system as a whole, doubled by
substantial financing and investments at national level.
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Conclusions and recommendations for improving the Romanian health care system
A very important conclusion is that regardless of the effectiveness of resource utilization,
countries providing health expenditure below 4% of the GDP have an underdeveloped
health care system. States that allocate 4-5% of the GDP (as is the case of Romania) may
lean towards a universal medical coverage, but which is often provided with low salaries
for the medical staff and old medical equipment. This is even more accentuated when
resources are concentrated in the urban areas, while a rather large part of the population
lives in the rural areas.
Developed countries that spend on health 6-14% of the GDP place the health of their
populations among national priorities. In these countries, the salaries of the doctors are high
and motivating, even in comparison with other professions.
Privatization can be a viable method for improvement, but no health care system can
function exclusively on market logic and mechanisms, without state intervention. This is
particularly the case in Romania, with a less developed private sector and immature capital
markets. As a general rule, privatization cannot be a purpose itself, and it can become
damaging if it fails to provide sufficient competition in the system. Introducing and
expanding market mechanisms in the sector requires and supports flexible health
management competencies and the addition of functional business knowledge and skills
(finance, marketing, law etc.).
A valuable lesson from the other European countries taken into analysis is that patients
rights must be fully respected and that universal coverage is not synonym with corruption
and discretionary attitudes towards patients. Therefore, in Italy for example, each medical
unit is obliged to have a Carta dei Servizi Sanitari, which offers the possibility of
suggestions and reclamations as well as information regarding the provided services, the
waiting duration etc. Also, the organizational charts of the hospital include a director in
charge of the public relation and an ethical committee. Moreover, there is a public
compensation fund for patients that have suffered permanent lesions after vaccination or
blood transfusion performed with infected medical instruments.
Sweden has shown that investments in prevention generate a long term wellbeing of the
population and a substantially decrease in system expenditure. The United Kingdom offered
one of the first methods of hospitals performance evaluation through and an aggregate
performance index which allows rigorous fund allocation and prioritizes decision taking.
Other key issues are ensuring the transparency of funds allocation and utilization as well as
diminishing excessive bureaucracy. Also, as previously seen, there is a high need of
medical units in the disadvantaged areas of the country, especially in the rural zones.
Refurbishment of the medical units can be achieved by introducing deductibles from
taxation on profit for investments made in the health sector.
Considering the correlation between the level of economic development of a country and
the quality of health care, the European average level of health expenses exerts upward
pressure in the Romanian health sector. Thus, the need to match available financing is
joined by the even more pressing need to improve efficiency in resource utilization, the
latter actually being the more complex challenge for health policy makers. Increasing
awareness of the need of efficient resource allocation based on accurate prioritization of
health care demand remains an issue of fundamental interest.
Acknowledgment
This paper was co-financed from the European Social Fund, through the Sectorial
Operational Programme Human Resources Development 2007-2013, project number
POSDRU/159/1.5/S/138907 "Excellence in scientific interdisciplinary research, doctoral
and postdoctoral, in the economic, social and medical fields -EXCELIS", coordinator The
Bucharest University of Economic Studies.
413

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Publishing House, Bucharest
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http://www.iese.edu/research/pdfs/DI-0939.pdf
11. Minc, D. G. 2005. Sntate Public i Management Sanitar, Carol Davila Academic
Publishing House, Bucharest
12. Puna, C. B. (coord.), Albu, L.-L., Stanciu, M., Vasile, V., Pavelescu, F. M. 2006.
Modelul Social European Implicaii pentru Romnia, Romanian European Institute,
Bucharest
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414

Book review
Gabriel POPESCU: COOPERATION IN AGRICULTURE FROM HISTORICAL
ARGUMENTS TO THE KNOWLEDGE TRANSFER
Simona BARA
Editing of this paper only after a year at the launch of the volume "Old problems, new
relations in agriculture" can be considered as a part of "the scientific programme" of the
author who bringing us original data and information about an area which could revive not
only agriculture but also the entire contemporary Romanian rural area offering also for
various categories of readers horizons which can give a meaning to their actions.
The basic idea of the volume "Cooperation in agriculture from historical arguments to the
transfer of knowledge " was mentioned by its author: "... to speed-up the development of
the cooperative sector in Romania, focusing on rural areas and agriculture, requires a
rethinking, in terms innovative, of the entire system, when the central objectives must be
agrifood market, doubled by the market knowledge transfer, which in time will be the
engine of entire agrifood system development (pg.244)... "
The paper "Cooperation in agriculture from historical arguments to the transfer of
knowledge" is a study targeted at processes and phenomena concerning cooperation and
association in agriculture with extension from the Romanian rural area to the whole
economy and to international events, which affected our country, during the recent 150-200
years.
In this paper were captured and analyzed specific processes and phenomena regarding
agricultural cooperatives in three major historical periods (1903-1950; 1950-1989; 1989 to
present). Demonstrating a strong capacity for synthesis Prof.Univ.Ph.D.Gabriel Popescu,
selected only those processes and phenomena that have marked profound structural changes
in agriculture - from the first land reform as the basis for building a Modern society - until
our days, when Romania is EU MS and it entered into the second period of the Community
programming (2014-2020).
In this context, the present paper is for researchers, academics and practitioners, as well as
for political people, from Romania and abroad, a valuable source of information and
inspiration on functional cooperative solutions for Romanian rural areas. Also, the volume
is a mirror about the current state of agricultural cooperatives. However, by the book
"Cooperation in agriculture from historical arguments to the transfer of knowledge", in fact
by the abundance and diversity of issues are clarified and structured most important factors
that acted in set-up and functioning of cooperatives from Romanian rural areas and, in
particular, from agriculture.
Processes and phenomena analyzed and synthesized in this paper are addressed with the
utmost seriousness and responsibility detaching at least three major axes/dimensions, as
follows:
i. The dimension of the association and cooperation treated as crucial institutional
structure of theoretical and practical knowledge in the development of agriculture and
rural area; the two entities are treated in their historical evolution pursuing the
intrinsic link with the market and "land ownership movement" (as the author calls the
latter). It should be noted that Prof.Univ.Ph.D.Gabriel Popescu treated the constitution
and functioning of specific institutional structures as some real "engines" for an
optimal use of resources in agriculture, for justification the results and for increase the
415

size and efficiency within of small farms, most often, subsistence ones, and of the
family households;
i. The dimension of association and cooperation within the agrifood market and
knowledge market; this dimension is defined axis and situated in the European and
national framework;
ii. The dimension on how Romanian public authorities managing the association and
cooperation issues.
Throughout the volume the author deepens analysis of the functionality of dimensions
mentioned above of the association and cooperation process because these axes
represent essential components for a better understanding of the historical truth and
the current and future processes and phenomena on:
i. The functionality and influence of land ownership on the dynamics of organizational
structures, focusing on association and cooperation structures from agriculture;
ii. The need to strengthen land tenure and agrifood markets, given the role and
importance of stimulating growth processes of association and cooperation in
agriculture, but also the need to intensify the transfer of knowledge and to develop its
specific markets;
iii. The need for a realistic support of contemporary peasant economy or of the various
forms of co-operatives from a rural area which is in the process of modernization and
absorption - in uneven rhythms and in varying degrees of completeness the
European values.
The author doesnt forget him quality and he try, almost every time, to combine the
theoretical presentation with its practical forms using a rich informational and statistical
material, which ensures to the whole approach genuine continuity and originality.
Analyzing the cooperative phenomenon from our country on shows that, in general, in
Romania, (i) it (cooperative phenomenon) requires a process of growth and consolidation,
and real absorption of European cooperative values and (ii) governmental actions, from the
last 24 years, followed, obstinately, productivity problems, neglecting, however, measures
and actions related to the revival and adaptation of institutional structures (cooperative also)
to the realities of the countryside, of agriculture, in particular. Also, (iii) the author notes
that a "relative inertia" in the initiation and putting in place of specific public policies,
especially ones referring to the institution building, and, also, their relative indifference
faced to legalize and to harmonize of the co-operatist system with the general socioeconomic context (national and European one) were due, at least, to the following causes:
The absence of an integrating vision about the role, complexity and functionality
of institutional structures from the branches of national economy;
The nature, most often, actions initiated sequentially, which were responding to
needs of the moment in the absence of future actions projections;
The lack of experience of public decision people in the field of institutional
building taking into account new requirements;
The absence at the level of decision-makers - both local, regional and central of
a priorities agenda for the medium and long term development and the weak
capacity, for some of them, to achieve continuous intermediate evaluation of the
effects of actions initiated in view to adjust (technical and legal) them, etc.;
Low level of education at the population from rural areas, poverty and them
favorite orientation for immediate action and the poor quality of communication
and information dissemination were some of the causes that have acted as a brake
to the development of cooperatives, which have been identified by the author of
this paper.
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In this approach to understand the meaning, place and importance of association in

agriculture the author treats in the way, very special, the cooperative - which is assimilates
with a "player" within the triangle industrialism - personal property - marketing. Also, the
author reveals the necessity to generate new attitudes and phenomena related to "...
economic ethics rather than blind fighting for efficiency and profit... (pg.191)". In this issue
was included the cooperative entities. This solution is described simple and concise, by the
author, who intends to mark this reality in the reader's memory, because it is reflected, also,
in specific documents regarding the cooperative structures.
The honesty of author faced to the subject matter, faced to public policy makers called to
speed-up their efforts to sustain the real cooperative phenomenon in Romania appears
strongly in the last chapter with the title: "Development of the co-operatist system an
issue unsolved yet". In this chapter the author realized a synthesis of some successful
international experiences in the field of the association and cooperation in order to transfer
to Romania the best international practices.
By the entire approach the author aims to contribute (i) to reconsider, on the one hand, the
public attitudes, especially of the peasant farmers, to the cooperatives, to the market and, on
the other hand, (ii) on attempts to explain and to put in evidence the deepen causes that
generated some of stagnation and failures of current public policies in the field. The author
is aware that at this point "... a specialized sociological study would still be required to
demonstrate with the power of scientific argument, how much truth or non-truth there in
this attitude...
The paper concludes with a summary of the main principles (20 principles) for future
architectures (institutional structure) necessary to establish and to operate in Romanian cooperatist agriculture. These 20 main principles are, in fact, a materialization of the
theoretical requirements, and an overview of the author contributions, of international
experiences.
* * *
After I closed the book, initially I compared it with a journal where the author refers to a
phenomenon using a rich and significant socio-economic literature regarding agricultural
cooperatives and its own analysis and oppinions on the realities from the Romanian village.
In the next moment, I found that the volume "Cooperation in agriculture from historical
arguments to the transfer of knowledge" is characterized by focusing of time and events significant on the subject matter, on the one hand and, and on the one hand on can discover
the author's own ideas and can understand plurivalent dimensions of this volume, such as: a
manual for students, practitioners and policy makers; a cooperative economics treaty; a
Journal of the cooperative movement with emphasis on Romanian realities... and on can
give it many other destinations it depending on the interest and training... but not least, I
appreciate that this volume could become a challenge to set-up a future Experimental
Program for a Training and Research Consortium on the Cooperation for the Faculty of
Agrofood and Environmental Economics, within Bucharest University of Economic
Studies. This Experimental Program would be developed in partnership with specialized
institutes of The Romanian Academy, The Academy of Agricultural and Forestry Sciences
and The University of Agricultural Sciences and Veterinary Medicine.
Dr. Simona BRA

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