Access To Land

Policy Environment

Historically, Romania went through four major land reforms. The first one from 1864 sought to undo the feudal structure that had persisted after the unification of the Danubian Principalities. The second, more drastic reform from 1921, tried to resolve lingering peasant discontent and create social harmony after the upheaval of World War I and extensive territorial expansion. At the dawn of WWII came the third one in 1945, rather imposed by a mainly Communist government and did away with the remaining influence of the landed aristocracy but was itself soon undone by collectivization which the 1991 post-revolution reform then unraveled, leading to almost universal private ownership of land today.

Today Romanian agricultural and land policies remains largely in flux. A member of the European Union since 2007, Romanian farmers are still struggling to adapt to the new policy environment in which they find themselves.

Post-Communist land restitution

An important landmark is the 1991 land reform, which followed the Romanian Revolution of 1989. This came to privatize land resources that were in state hands during the Communist period. The goal was the restitution of land land from state cooperatives to its pre-collectivisation owners, with families that did not own land at the time also receiving small allotments. In addition to righting a perceived historical injustice, the reform also pleased Romanian farmers, who have a long tradition of working their own land and are tied to it not only for subsistence needs but also out of historical cultural ties.

The facts

  • Before the reform, 411 state farms and 3,776 cooperatives exploited almost all the country’s arable land resources; in 1991, about 65% of this land–belonging to cooperatives–was restored to former owners or their heirs.
  • About 3.7 million peasant households repossessed land, deciding to exploit it either individually or in associations. Peasants farms were small, subsistence-based units of 2 to 3 ha each; family association farms covered 100 ha, and agricultural companies’ farms were 500 ha in area.
  • Reform of state farms, tangled in politics, was slower: in 1997, 60% of the area was taken up by peasant farms, 10% by family associations and 14% by agricultural companies, but state farms still accounted for 16%.
  • By 2004, however, privatization was largely complete, with the private sector representing 97.3% of production value that year (97.4% of vegetable production and 98.9% of animal production); plans are in place to sell off the remainder of state-owned farmland.
  • Out of 2.387.600 ha initially held by the state, 1.704.200 were returned to former owners; 574.600 were leased; and 108,800 were in the process of being leased at the end of 2004.

Towards land concentration: before and after joining the EU

The European framework mainly benefits large-scale agri-businesses settled in Romania. From 2000 to 2006 the country benefited from the Special Accession Programme for Agriculture and Rural Development (SAPARD) fund, designed to help new members to prepare their rural economy for EU accession.

Romania then received €150 million of non-repayable subsidies to finance farmers’ modernisation projects, most of which was directed towards larger production units.
The first beneficiaries of SAPARD subsidies and Common Agricultural Policy (CAP) or European Agricultural Fund for Rural Development (EAFRD) funds for modernization and scale-up’ have been Romanians taking over old state farms and cooperatives.

In the first years of EU accession, Romanian law appeared to restrict the purchase of land by foreign companies (as permitted by the EU Accession Treaty). But the law had several loopholes. First, European companies could merge with a Romanian partner and thus invest their capital in land. In addition, if one partner decided to cease operations, withdrawing from the commercial registry, the remaining partners inherit the portfolio. Also, as long as companies, regardless of the source of the capital, are registered in the Romanian commercial registry there were no restrictions on their large scale purchase of agricultural and forest land.

As from 2014, when Romania lifted the moratorium on land sales according to the EU Accession Agreement, European companies are able to compete on the same conditions as nationals. The Romanian Ministry for Agriculture and Rural Development conceived a new law which came into force in the beginning of 2014, regulating land transactions.

Read more about the new Romanian land law

From Land Concentration to Land Grabbing

Land grabbing in Romania is increasingly conditioned by national and European political and legislative frameworks that focus on productivist agriculture and the liberalisation of the food trade – providing the apparatus for large-scale land investments.

Indeed, Romanian government policy is openly directed towards the development of productivist agro-export agriculture and the Treaty of Accession to the European Union (EU) required Romania’s land market to be open to multinational buyers.

Land grabbing is also nurtured through the massive subsidies directed towards large-scale agriculture by the government and the EU. Given the lack of support for peasant agriculture and coherent rural development, the socioeconomic context of rural areas is attractive for large investments. Rural exodus is intense, and when an agro-investor finds a vulnerable and uninformed population, the latter is generally receptive to the idea of renting out land in return for additional income.

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Policy Environment
Good Practices