 AGRICULTURE |
Romania was for years an agricultural country. However, the communist dictator Ceausescu decided give priority to the industrialization of the country, with a particular emphasis on the development of heavy industries. Agriculture was relegated to a secondary position. Hence, despite Romania's potential to become one of the agricultural motors of Europe (only second to France), agriculture is one of the most backward sectors of the Romanian economy, still bearing the scars of the past. During Communism all land was appropriated by the State. After 1989 the same land had to be either returned to its previous owners or sold, since the State could not efficiently take care of it. This has been probably the main issue pending to be solved by the Ministry of Agriculture. "Today 84% of the agricultural land in Romania is in the hands of private owners" explains Mr. Ian Muresan, Minister of Agriculture "but this property is very spread out, the average of one agricultural exploration is 2,3 Has." The average size in Europe is 17-18 Has. therefore facilitating its exploitation. For this reason Mr. Muresan will privatize the remaining 16% administered by Commercial State Societies. But before he can do that, the issue of property needs to be solved, since no buyer will purchase land that someone else could claim later.
Mr. Muresan's main concern is the modernization of the sector. "Romania needs new machinery and agricultural tools", says the Minister of Agriculture. "Presently Romania needs 360,000 tractors but has only 150,000, so this is the fist level of our needs for investment".
Then he adds, "another need is the acquisition of modern processing technologies of agricultural products as to process milk, meat and wine".
For this reason, the Rural Development Plan has been drafted and will be implemented during 2000. | The Plan already counts with the support of the EU (150 million Euro/year) and the WB (US$ 150 million). Actually, the development of agriculture is one of the most poignant topics during the talks for accession to the EU.
But not everything is so complicated in Romania's agricultural sector. There are companies that are reinventing themselves, and that seems to be paying off. Such is the case of Tutunul Romanesc. For almost 50 years, the National Company of Romanian Tobacco had virtual control of the tobacco and cigarette market, but then the market opened up to competition. "When the international companies started to produce inside the country, our administration 'woke up', albeit a bit late, and started worrying about it one and a half years later, when they realized that they started to lose the market" remarks Mr. Danut Cornea, General Director of Tutunul Romanesc.
Hence a deep restructuring program was started to regain market share and modernize the company. Tutunul Romanesc, both cultivates tobacco and manufactures cigarettes, two activities that are normally separated "a reminiscence of the old socialist vision" whispers Mr. Cornea. "Our main aim for the moment is to stabilize production and to stop regression". Tutunul products are very popular in the Romanian market, holding 45% of it. Annually Tutunul Romanesc produces 19,000 tons of cigarettes, but the market absorbs 42,000 tons/year. If Tutunul wants to supply according to the market demands while not being swallowed by multinationals, the best bet is to be privatized. "My personal opinion - says Mr. Cornea - is that wherever there is private property, that leads to the manufacturing of high quality goods". Their privatization process is well under way. "We would like to sell a big amount of shares to a strategic international investor who would help us to capitalize the company" finalizes saying the General Director of Tutunul. In the meantime, he is not wasting any time, in January 2000 a new high quality American style cigarette was launched: Millenium, a new product for a new era, as its name implies. |
