Improving life standards in rural areas and the diversification of the

rural economy in Romania

Dr. Cosmin SALASANBanat’s University of Agriculture and Veterinary Medicine Timisoara &

Romanian Academy – Research Centre for Sustainable Rural Development of Romania

Current situation• second largest new member state (6% of the EU territory) • GDP represents less than 1% of the total EU GDP• rural area represent 87,1% of the national territory

(compared to 80% at EU level) • 45,1% of the population living in rural area • 32% of the active population is employed in agriculture and

forestry• sector produces 12,1% of the GDP and 13,6% of the total GVA • productivity is very low (labour/land ration equals 63

AWU/100 ha) • agri-food trade balance is still negative and widening (1,3

billion euro in 2005)

Current situationFarming in Romania has two main (and relatively

opposite) dimensions: • few (agricultural) legal entities, mostly large

commercial farms, (18,263 averaging 269 ha, accounting for 34.5% of UAA),

• an impressive number of individual farms, mostly subsistence and semi-subsistence holdings (4,121,247, average size 2.15 ha, accounting for 65.5% of UAA)

Around 3 million of the holdings covering approximately 30% of agricultural land are considered as subsistence only

Graphical presentation of the farm number, average area and share of total UAA

18.263 farms18.263 farms

4.121.247 farms4.121.247 farms

269 ha average size269 ha average size

2,15 ha average size2,15 ha average size

34,5% UAA34,5% UAA

65,5% UAA65,5% UAA

Current situation

30% of the national territory is represented by mountains

Less Favored Areas represent 12% of the territory giving a total of 42% of LFA accounting 34,5% of UAA.

Natural and semi-natural ecosystems cover around 47% of the national territory.

Approximately 2.4 million ha of the country's semi-natural grassland is classified as of High Nature Value (HNV).

CAP rural diversification opportunities

Creation and the development of micro-enterprises in rural area aims to support by 2013 almost 10.000 enterprises, creating ~30.000 jobs

Impacting in approximately 2% employment growth rate in secondary and tertiary sectors in rural area only by this type of support

CAP rural diversification opportunities

Encouragement of the tourism activities aims to add 2,52% employment growth rate by creating another ~40.000 jobs for more than 7,5 million tourist visits expected

Projected tourism activities have a breakdown by type, including:

• agro-tourism, • rural tourism and • leisure tourism

Village renewal

Over 5 million rural inhabitants from more than 1.000 communes are to benefit of the impact of actions and projects undertaken by this measure, accounting 50% of the target population

In physical terms this means more than 3.000 km of roads, more than 6.000 km of pipelines for water supply and 5.000 km of sewage pipelines. It also estimates over 4.000 jobs created

Recent developmentsThe first projects’ call organized between the 3rd

and the 28th of March gathered 918 projects amounting more than 700 million euro (728,71 million euro) for all the three opened measures:

• 708 projects requesting 291,26 million euro for farm investments

• 194 projects requesting 405,98 million euro for village renewal, and

• 16 projects requesting 31,45 million euro for increasing the added value

Number of projects submitted in March 2008 under NRDP in Romania

Requested value of projects submitted in March 2008 under NRDP in Romania

Recent developments

The initial expectations regarding the monthly financial allocations, 194,31 million euro were from far over passed by the first round of projects submitted, 728,71 million euro, almost 4 times more (factor 3,75)