Overview
Agriculture plays an integral and unique role in Romania’s economy. About 12 percent of Romanians are employed in agricultural-related activities, compared to the European Union (EU) member average of 4 percent. Romania’s 2.9 million agricultural landowners account for one-third of the EU’s agricultural holdings. Since the average farm size - 4.42 hectares (HA) - is considerably smaller than the EU average of 15 HA, many of these farms are subsistence and semi-subsistence farms producing for their family’s needs. U.S. manufacturers and exporters of agricultural equipment have good prospects in Romania, in both the short and long term. However, there are several structural issues that affect demand for this equipment. Unfortunately, statistics related to the agricultural machinery and equipment sold in the rural environment are impossible to be monitored by the local statistics institutions and agricultural agencies. There are major U.S. suppliers of agricultural equipment in Romania, such as tractors and combines (AGCO, John Deere and Case New Holland), grain storage bins (GSI and Scafco) and irrigation systems (Lindsay, Reinke, T-L and Valley). There is a foreign competition on the Romanian market of agricultural technologies represented by European suppliers from Austria, France, Germany and Italy that are competitors of the American suppliers of agricultural machinery and equipment in Romania. The market entry strategies developed by all foreign suppliers are through local dealers offering various financing alternatives for Romanian farmers to purchase U.S. advanced agricultural technologies with EU rural development grants, agricultural credits and/or financial leasing depending on the crop revenues and the financial solvability and the size of large, medium or small farms on the local market.
While Romania has an abundance of rich soil, the predominance of subsistence farming means that the country has a minimal amount of arable land per holding. Some small commercial farms are realizing that they can increase profitability by voluntarily forming associations to aggregate production and marketing. Relatively few large farms coexist with many small ones, which influences the competitiveness of Romanian agriculture.
Discounted land prices, good-quality soil, low labor costs, and the potential for increasing productivity gains are attractive opportunities for foreign investors. These offer opportunities for silos, agricultural machinery, irrigation equipment, clean energy (solar and wind farming technologies), greenhouses, and agricultural inputs such as fertilizers and feed supplements.
Irrigation
Irrigation Technology & Equipment
Romania is a top agricultural producer in the European Union (EU), exporting wheat, corn, sunflowers, and soybeans. Climate change has contributed to the most severe drought in the last 50 years. Further, despite its historic role as major provider of food to the EU, Romania has one of the lowest agricultural productivity rates among EU members states including the region of Southeastern Europe, underscoring the need and opportunity for innovative water solutions in this market.
The State of Irrigation in Romania
Romania has a large national network of irrigation canals. However, this infrastructure has fallen into disrepair. At present, less than 20% of the 6,200 mile irrigation canal infrastructure is being utilized, irrigating approximately 10% of the 22 million acres of arable land in Romania.
The Ministry of Agriculture and Rural Development in Romania launched a 1.6 billion U.S. dollar program for 2022 – 2027 to rehabilitate the primary irrigation canal networks. However, the allocated amount was insufficient to upgrade the entire canal system. Romania subsequently sought 0.5 billion USD in additional funds from the European Commission for the rehabilitation of secondary irrigation canals through the 2020-2027 Multiannual Financial Framework of EU’s Common Agricultural Policy.
Best Prospects for U.S. Exporters of Clean Energy and Digital Agribusiness Water Solutions
New tenders present a clear opportunity for U.S. suppliers of irrigation canal rebuilding technologies. These water solution technologies include pumping stations and irrigation systems utilizing clean energy as well as smart water management technologies supporting digital irrigation, software sensors and other technologies such as water monitoring, usage, conservation, filtration, purification, and de-salination.
U.S. manufacturers of integrated renewable energy technologies, efficient irrigation water management solutions and high-precision agricultural equipment will find strong demand in the Romanian market, from a limited, yet growing, number of buyers. Small and medium sized farms — “medium” defined as more than 250 acres — make up a very small proportion of Romania’s farms. However, large commercial farms (including EU’s largest farm: Braila Great Island of around 135,000 acres) are investing to increase productivity. They have also become more adept at using financing from EU’s Rural Development Funds and U.S. Export-Import Bank’s financing tools.
Romanian farming associations and foreign companies, including U.S. agribusinesses, authored a white paper identifying strong market prospects for manufacturers of digitalized clean energy and water distribution devices. Actors in the agricultural sector who would benefit consist of:
- Romania’s farmers, who for the first time would be able to receive on-demand water delivery services, enabling precise start time and duration for water deliveries at the flow rate they require, and at a lower cost of supply resulting from reduced energy inputs.
- Romanian authorities responsible for the monitoring and control of water consumption, who would receive a richness of real-time and historic data provided by digital collection and cloud storage with automatic processing.
- Local Romanian communities who require on-line contact with state agricultural authorities.
- Regional economies of the irrigation areas, benefiting from additional high value crop production stimulating secondary activities associated with harvesting, such as packaging and transporting; and efficient provision of environment-friendly fertilizers and associated factors of input and supporting services.
- Networks of U.S. and EU suppliers to transfer digital manufacturing technologies to the country to maintain, repair, provide spare parts and upgrade water management systems.
Reductions in energy consumption are critical to the sustainability of the Romanian economy. For agriculture, decreases to the carbon footprint for irrigation can be achieved through the import of innovative U.S. solar panels and wind turbines technologies to pump irrigation water to crops and support clean energy and smart water initiatives. Such efforts would enable Romania to reach the EU Green Energy Deal’s emissions reduction targets by 2030.
Improved access to smart irrigation water run by clean energy and agri-finance solutions provided by U.S. exporters are way for farms to survive the soil erosion and desertification risks. Solar and wind farming technologies, irrigation water installations, agricultural machinery, and agri-food processing equipment will accelerate development of Romania’s agricultural sector.
Trade Events
Trade Event Opportunities for U.S. Companies in Romania are the three major trade shows:
- INDAGRA – Annual International Trade Fair of Equipment and Products in Agriculture, Horticulture, Viticulture & Animal Husbandry, 27th Edition, Romexpo Exhibition Center, Bucharest
- April 18th – 21st, 2024: AGRARIA – International Trade Fair for Agriculture, Food Industry and Animal Husbandry, 28th Edition, Jucu, Cluj County
- May 2024: Expo AgriPlanta–RomAgroTec: Open-Air Exhibition, Trial Fields & Machinery Demonstration, 10th Edition, Fundulea, Calarasi County
Contact Information
Gabriel Popescu, Commercial Specialist