Presentation on theme: "Lucian Luca Institute of Agricultural Economics, Bucharest"— Presentation transcript:
1 Young farmers – a chance for development of commercial medium size farm in Romania Lucian LucaInstitute of Agricultural Economics, BucharestRomanian AcademyThe project has received funding from the European Union.
2 Structure of the presentation The challenge of family farm developmentTwo opposite sectors of Romanian agricultureThree questions trying to identify a Romanian position on CAP reform debateCAP subsidies and land concentrationLarge farms and family farmProductivist vision vs. rural developmentWhat chance for generation change?Current structure and the need for young farmersImproving age structure of farmers using CAP and national instrumentsA new strategic approach for supporting young farmers?
3 The challenge of family farm development Two extremes don’t make one right. Romania and the Reform of the Common Agricultural Policy of the EURomanian Center for European Policy (CRPE)Recommendations:Reorientation towards supporting middle-scale agricultureIncentive to gather small land into middle-scale farmsLimiting subsidies that could be received by very large farmsDevelopment of Pillar 2 (rural development)
5 Agricultural holdings of at least 1 ESU 22% of the total recorded holdingsholdings, out of recorded9.4 million ha of utilized agricultural area11 ha per holding, on average965 thou. annual work units1932 thou. persons, out of 6467 thou. persons392 thou. holders with at least 65 years
7 Question nr.1 What effects have and could have CAP subsidies on land concentration? It is hard to imagine that very large farms, over 500 ha, will gradually incorporate the agricultural surface considering that a huge portion of rural population would remain without safety net of subsistence agricultureFor 30% of the population involved in agriculture the ideal situation would be that young and enterprising families to concentrate the land into the middle farms where several generations would make a decent incomeCRPE proposal: a long term vision favorable to middle farms, for both productivity and social reasons
8 Question nr.2 What is Romania’s position on large farms? We still should debate the question: will very large Romanian farms really need increased subsidies in the coming years?CRPE proposal: Romania ought to be a supporter of progressive modulation with large rates or even the application of an upper limit for direct payment to large farms
9 Question nr.3 Do we promote a productivist vision or do we prefer rural development? Romania was identified in 2009 more and more with a vision that places first the issue of support for production and somewhat down plays the growing trend of European level to direct CAP toward sustainable utilization of natural resourcesCRPE recommendation: Romania should move in the group of countries supporting the development of second Pillar
10 Current structure of labor force and the need for young farmers Farms >1ESU (855 thou. sole holder)2.9 % of sole holders are under 35 years45.9% of sole holders of farms >1ESU are over 65 yearsFor all recorded farms (6.39 million persons working in agriculture)0.76 million persons are under 35 years2.19 million persons are over 65 years
11 Holders over 65 years dominate the farm classes under 20 ha
12 Labour force under 35 years are important for farm classes over 20 ha
13 A traditional pattern of farm tenure, with old holder over represented
14 Improving age structure of farmers using CAP and national instruments National Program for Rural DevelopmentMeasure 112: Setting up of young farmersComplemented measures:Vocational training and diffusion of knowledge (111)Supporting semi-subsistence agricultural holdings (141)Modernization of agricultural holdings (121)Early retirement of farmers and farm workers (113)National instruments“Fermierul”/ “The farmer” programLife annuity program
15 Measure 112: Setting up of young farmers Financial allocation : 337 million EuroStatus at JanuaryTwo application sessions:Dec 08- Mar 09: 661conform applications, 512 selected, 507 contractedSep- Nov 09: 2702 conform applicationsCommitted funds: 3.0 %Absorption rate: 1.8 % (6 million Euro)
16 A new strategic approach for supporting young farmers? Supporting young farmers as part of a strategic program of farm consolidation that could integrate certain measures of NPRD and some national interventionsGains in productivityThe key action: a better functioning of agricultural marketPrices, contracts, storage facilitiesModernization of rural areaTransport, social and market infrastructureA benefic complement: a new industrialization program at national level