1. Young farmers – a chance for development of commercial medium size farm in Romania
Lucian Luca
Institute of Agricultural Economics, Bucharest
Romanian Academy
The project has received funding from the European Union.

2. Structure of the presentation
The challenge of family farm development
Two opposite sectors of Romanian agriculture
Three questions trying to identify a Romanian position on CAP reform debate
CAP subsidies and land concentration
Large farms and family farm
Productivist vision vs. rural development
What chance for generation change?
Current structure and the need for young farmers
Improving age structure of farmers using CAP and national instruments
A 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 EU
Romanian Center for European Policy (CRPE)
Recommendations:
Reorientation towards supporting middle-scale agriculture
Incentive to gather small land into middle-scale farms
Limiting subsidies that could be received by very large farms
Development of Pillar 2 (rural development)

4. Romania’s two agricultures

5. Agricultural holdings of at least 1 ESU
22% of the total recorded holdings
holdings, out of recorded
9.4 million ha of utilized agricultural area
11 ha per holding, on average
965 thou. annual work units
1932 thou. persons, out of 6467 thou. persons
392 thou. holders with at least 65 years

6. Middle level agriculture is underdeveloped

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 agriculture
For 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 income
CRPE 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 resources
CRPE 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 years
45.9% of sole holders of farms >1ESU are over 65 years
For all recorded farms (6.39 million persons working in agriculture)
0.76 million persons are under 35 years
2.19 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 Development
Measure 112: Setting up of young farmers
Complemented 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” program
Life annuity program

15. Measure 112: Setting up of young farmers
Financial allocation : 337 million Euro
Status at January
Two application sessions:
Dec 08- Mar 09: 661conform applications, 512 selected, 507 contracted
Sep- Nov 09: 2702 conform applications
Committed 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 interventions
Gains in productivity
The key action: a better functioning of agricultural market
Prices, contracts, storage facilities
Modernization of rural area
Transport, social and market infrastructure
A benefic complement: a new industrialization program at national level