*4.2. Characteristics and Examples of Land Grabbing in Romania*

In almost all studies referring to land grabbing in Europe, Romania is presented as the country where the phenomenon manifests itself with maximum intensity. Data on the size of this has generated conflicting opinions, as the land cadaster, which records the ownership of land in Romania and the ways in which land has been acquired, is far from complete.

According to the data provided by the Ministry of Agriculture and Rural Development (MARD), out of a total of 9.57 million ha of agricultural land subject to Agency for Payment and Intervention in Agriculture (APIA) grants, only 3.87 million ha (40%) are included in the integrated land registration system. No subsidies are granted for 2 million ha of arable land in Romania because they are abandoned or not eligible to get support, with the plots of land being too small (less than 0.3 ha).

According to the MARD data, the area of agricultural land used by foreign individuals and legal entities was 422,000 ha at the end of 2018 (4% of the UAA). The press information presents another reality, stating that 40% of agricultural land is now in the hands of investors from outside the EU, with a further 20%–30% being controlled by investors from the EU [12]. This information refers only to agricultural lands controlled by foreigners, some of whom control vast areas (the Lebanese company "Lebanese Farm" has 65,000 ha). However, some Romanian investors control large areas of arable land, such as the Romanian agri-food company "Transavia", which cultivates around 12,000 ha of cereals (this is a leased land located in the surroundings of Cluj [29]).

A way to control land is through the agricultural market, which in Romania operates as an oligopsony market. Small farmers do not have a grain storage capacity, but some companies have acquired or built huge storages.

Based on agricultural contracts, these companies influence agricultural production and prices. An example in this regard, provided by Eco Ruralis, is the Cargill Incorporated case, which, through the 18 silos owned by the company in Romania, controls 250,000 ha of agricultural land.

The reasons Romania attracts investments in agricultural land vary. There are large areas of land with pedoclimatic conditions that are favorable to agriculture, where the existing European subsidies and government support large-scale investors, and the rural population is ageing and often has no capital to finance agricultural activities. Of course, the low price of land in Romania (as compared with Western European countries) also attracts foreign investors.

The data presented in Table 1 show that Romania has the lowest price of land in the EU. In the Netherlands, the cost of land is 30 times higher. In Poland, which has agricultural characteristics similar to Romania, the price of a property is five times higher.


**Table 1.** Price of land (Euro/ha).

Source: Eurostat, Agricultural land prices by region, [30].

At the same time, an increase in the price of land can be observed over the period analyzed, especially in the countries that joined the EU more recently (e.g., Hungary, Poland and Romania). Natural factors, as well as spatial and organizational factors, influence the prices of agricultural properties. Taking all these factors into account, the price of land in some parts of Romania is approaching the price of land in Western Europe. Even if the price of land is low in Romania, it is still high for the population living in rural areas, a fact that prevents its purchase by the inhabitants of those areas and favors land grabbing by foreigners.

Among the factors that have led to a recent increase in the price of land are a decrease in land supply and the direct subsidies granted per area—the former because many owners already sold their land before 2011, which makes land ownership profitable even if the owner does not work it directly. Land rent is higher than the yield of other investment categories. Research shows that there is a lag in cash rents before they match the level of land prices [31].

The manner in which land grabbing took place in Romania took place has, in many situations, the characteristics of "Accumulation by Dispossession" and the "primitive accumulation of capital". The transition period to a market economy in Romania involved structural reforms in the economy and a massive loss of employment from industry and state or cooperative agriculture. Restitution of land created a false alternative to available employment. Fragmentation of the land, and lack of capital, led to the formation of subsistence and non-competitive farms. In this situation, the agricultural land was sold at low prices or leased, and the old owners engaged in new capitalist farms or in other economic branches that were revived. Many rural residents migrated, or moved to urban areas that offered them better jobs.

#### *4.3. Economic Structures in Agriculture*

Land concentration is a process that has more recently accelerated in Europe. In the 2005–2016 period, the number of farms decreased in Europe by 4.2 million (about 25%), of which 85% were small farms of less than 5 ha. Significant reductions in the numbers of farms occurred mainly in Romania (0.8 million farms (i.e., 20%)), Poland (1.1 million farms (i.e., 44%)) and Italy (0.6 million farms (34%)), and reduced by almost two-thirds in Slovakia and Bulgaria [32]. The decreasing number of small farms occurred in parallel with an increase in the area of land owned by big farms, which shows that small farmers were losing control and power over their land.

Romania is a country where pedoclimatic conditions are among the most favorable in the European Union. This aspect, along with its traditions, are prerequisites to excellent quality productions in significant quantities, which can satisfy the domestic demand and provide important export availabilities based on a comparative advantage.

The agricultural area used in Romania is over 12.5 million ha (sixth place in the EU). Still, its agrarian structure is inadequate and not in line with the agriculture of developed EU countries, being somewhat similar to the states of Latin America. The inadequate agricultural structure is the leading cause of the low performance of Romanian agriculture compared to the agriculture of the developed European countries.

Research on the relationship between farm size and economic performance has led to conflicting results. Some studies consider that there is a direct and positive connection [33], while others have demonstrated an inverse relationship [34]. Additionally, some research findings have supported the existence of a nonlinear relationship [35]. Our study confirms the presence of a connection between the size of farms and their sustainable performance, and proposes the transformation of subsistence farms into small- and medium-sized commercial farms [36].

Romania has an outstanding agricultural potential (Table 2). It owns 7.2% of the utilized agricultural area of the EU-28, being close to the agriculture of Germany (9.7%) and Poland (8.3%). The population employed in Romanian agriculture represents 20.1% of the farm labor force of EU-28. We see that Romania has an almost four-times-higher labor force in agriculture than Germany. Still, the figures must be interpreted with caution, because most of the population employed in Romanian agriculture as recorded in the formal statistics do not earn their primary income from agriculture, and have other occupations or have retired from work.


**Table 2.** Number of holdings, utilized agricultural area and farm labor force in 2016.

Source: Own calculations based on Reference [32].

According to information in the press, Romanian farmers often complain about the lack of a labor force in livestock farms.

Romania's agriculture has 32.7% the number of holdings in the EU. Still, a large number of small farms practice subsistence agriculture (86.39% are farming for self-consumption). Romania has the highest number of agricultural holdings in the EU, but they are inhomogeneous, with most of them being small or having a very small size, while some are very large. The restoration of land ownership in Romania after 1989 created this situation, which led to the excessive fragmentation of agricultural land and the establishment of a large number of agricultural holdings, followed by the property grabbing phenomenon that led to farms with extensive areas.

Land grabbing has produced significant changes in Romania's agrarian structure by reducing the number of small farms and through the emergence of farms that control vast areas of land. The number of tiny farms (having small areas of agricultural land) remains very high compared to other countries. The data in Table 3 show that 91.8% of the total numbers of farms in Romania are small farms that use less than 5 ha of agricultural land. However, they control only 28.7% of the utilized agricultural area in Romania. At the same time, large farms, which use areas of more than 100 ha, represent only 0.4% of the total number of farms, but they control 47.8% of the utilized agricultural sector. This agrarian structure is not compatible with the European model of agriculture practiced in Western European countries.


**Table 3.** Distribution of farms and utilized agricultural area, according to farm size, in 2016 (%).

Note: GE -Germany, FR –France, HU –Hungary, PL –Poland; RO –Romania. Source: Own calculations based on Reference [37].

One notices that the distribution of the utilized agricultural area and the number of farms in Germany and France are more uniform, and that the share of medium farms is higher.

#### *4.4. Disparities in the Sustainable Development of Agriculture*

The structure of land ownership raises questions about the possibility of achieving the sustainable development objectives of Romanian agriculture, and leads to profound disparities between Romania and other countries.

The data presented in Table 4 summarizes the sustainable performance of Romanian agriculture compared to the EU-28 and the individual countries analyzed. The value of total agricultural output is an indicator often used in international comparisons to express the performance of agriculture. Agricultural production per hectare in Romania is 53% of the EU-28 average, and almost three times lower than in Germany. Gross value added (GVA) synthetically expresses the creation of the value resulting from the use of production factors. GVA is considered an essential item in measuring productivity, and the value obtained in Romania's agriculture is 57% of the EU-28 average.


**Table 4.** Economic disparities in agriculture (Euro/ha) in 2017.

\* GVA (at basic price—in euros)/AWU, average 2014–2016, Source: Own calculations based on Reference [38].

Romania has favorable conditions for agricultural crop and livestock production. However, yields and labor productivity in agriculture are low. The crop yield (kg/ha) in Romania is below the EU-28 average, the milk yield (kg/cow) is less than half and labor productivity is less than a third.

Reduced use of certain factors with a direct influence on the growth of production determined disparities between Romania and the EU-28. The use of fertilizers and soil improvers by the farm holdings of Romania is 55% of the EU-28 average, and the consumption of plant protection products, herbicides, insecticides and pesticides represents only 35%. The mechanization of agriculture is still deficient in Romania. This situation is demonstrated by the fixed capital consumption (58.8% in Romania compared to the EU-28), as well as the low use of energy and lubricants.

Agricultural services are an essential component of intermediate consumption in agriculture, and contribute to an increased agricultural performance. It must be specified who will carry these specialized services out, as well as what specific investments are required. That is why farmers prefer to hire companies that specialize in providing agricultural services [39]. In Romania, purchased agricultural services are more than six times lower than the EU-28 average.

Agricultural credit is vital for agriculture both for financing production (the production cycle in agriculture is long) and investments, as well as for the personal financing share required by projects carried out with the help of agricultural structural funds. In Romania, the loans granted to agriculture by the banking system are below the EU-28 average, and the level of interest paid for capital loans is more than six times lower than the EU-28 average, even though the cost of borrowed capital is higher than in the other European countries.

The reduced possibilities of financing agriculture in Romania cause significant difficulties in financing investments for the purchase of land, buildings, machines, vehicles and other equipment. The gross fixed capital formation (GFCF) in Romania's agriculture is almost four times lower than in the EU-28.

Sustainable agriculture involves production processes that are able to protect the environment and human health. For this, the conversion of agricultural land and the implementation of organic farming practices represent a chance for Romania due to the reduced consumption of fertilizers and pesticides in recent years. However, the share of the total green crop area out of the total UAA is low in Romania compared to the other countries analyzed in this research. Emissions from agriculture (carbon dioxide (CO2), methane (CH4) and nitrous oxide (N2O) from agricultural soils), which are responsible for climate change and its effects on the environment and (implicitly) on agriculture, are lower in Romania compared to the other analyzed countries.

The agriculture of Romania is mostly dependent on climatic conditions. The agrarian structure of Romania does not favor investment in irrigation systems, ensuring safe and stable productions.

The influence of climatic conditions explains the variations in the cereal yield during the 2007–2017 period in Romania and Hungary. Figure 1 shows the significant differences in grain yields in the analyzed countries—differences that remained almost unchanged throughout the analysis interval.

**Figure 1.** Cereal yield, 2007–2017. Source: Eurostat; Crop products: areas and productions [38].

Ensuring the sustainable management of natural resources is a strategic objective that is necessary in order to achieve the sustainable development of agriculture. Quality of life and the future of new generations depend on achieving this goal. Land grabbing is a driver of environmental change [40]. Through promoting agriculture practices, this phenomenon affects air, soil and water quality, as well as the safety of ecosystems. An analysis based on agri-environmental indicators (Table 5) highlights substantial environmental disparities between Romania and the other countries analyzed.


**Table 5.** Environment disparities.

Source: Eurostat, agri-environmental indicators, [41].

The natural environment in Romania is "characterized by good preservation of natural resources of soil and water, variety of traditional landscapes and a remarkable biological diversity" [42]. The challenges of agriculture development and other economic branches can seriously affect the quality of the environment as a result of climate change, deterioration of natural balance, degradation and depletion of resources. Biodiversity is threatened by land grabbing due to the replacement of traditional agricultural practices based on existing technologies, with intensive technologies that lead to changes in the countryside and threaten the diversity of accompanying fauna and flora. Land grabbing contributes to the transformation of local farming environments through monocultures that are needed to cover the demand for biofuels, which affects ecosystems. To address this challenge, the European Union created the Natura 2000 instrument, which comprises a network of natural or semi-natural areas, so-called SCIs (Sites of Community Interest) and SPAs (Special Protection Areas), because vulnerable plant and animal species and natural habitats must be protected. This tool was based on the 1979 (amended in 2009) Birds Directive [43] and the 1992 Habitats Directive [44]. Romanian agricultural areas under Natura 2000 are in a proportion similar to the other countries analyzed.

Water is one of the critical resources necessary for the sustainable development of agriculture worldwide, and irrigation is an objective necessity [45]. Irrigation can provide the water necessary for plants to obtain optimum yields, high-quality harvested crops and sustainable agricultural production.

Of course, irrigable and irrigated agricultural areas vary significantly among countries. Romania poses a significant risk to climate change, which is reflected in changes in the temperature and rainfall regime over the past 40 years. An essential part of Romania's agricultural area is currently experiencing the harmful effects of drought, insufficient water supply and insufficient and poorly functioning irrigation facilities.

The irrigation system in Romania was built before 1990 and covered about 22% of Romania's arable surface, but was later left in ruins. Currently, more than 75% of irrigation facilities are not functional, and functional ones are inefficient in terms of water and energy consumption, resulting in high expenses for farmers [46]. We note that the share of irrigable and irrigated areas in utilized agricultural land is lower in Romania compared to most of the countries analyzed in this study. Land grabbing may constitute a significant obstacle to the expansion of irrigation systems because it involves substantial investments that farmers are often unwilling to make.

Organic agricultural development constitutes a priority for the Common Agricultural Policy, and represents an opportunity for Romanian agriculture [47]. In vast areas, organic farming involves traditional practices that are incompatible with extensive techniques. Land grabbing adversely affects the development of organic farming and is one of the leading reasons why the share of the agricultural

area under organic farming is lower in Romania than in the other countries analyzed, and well below the EU-28 average.

Ensuring that the necessary quantity and quality of water resources are available is essential to living conditions in general and for carrying out human activities. The role of water in environmental systems through economic and social activities shows that it is an indispensable resource in the lives of living people and organisms. Water resource management involves ensuring water of a sufficient quality in the necessary quantity.

Increasing demand for food is associated with increasing the pressure on freshwater resources. About 86% of freshwater resources support agricultural activities. The implications of land grabbing on water resources have previously been recognized [48]. Large-scale irrigation causes water stress and poor water quality. Intensive agricultural technologies have been responsible for the pollution of surface waters and groundwaters (through fertilizers, pesticides, nitrates and nitrites). In Romania, water resources remain of a relatively good quality, but nitrate pollution is higher than in Poland or Hungary (although it is lower than in France).

Soil erosion by water is one of the big problems contributing to soil degradation in Romania. This issue affects 7.31% of agricultural land, which is above the EU-28 average and higher than in all of the other countries analyzed. This phenomenon reduces farm viability, destroys vegetation and landscape architecture and affects water quality. The increased risk of erosion is due to many lands being abandoned in winter, and the frequent performance of short agrotechnical works. Forest grabbing in Romania [49] also contributes to soil erosion by water through the abusive logging of forests.

Global climate change affects genuinely sustainable development through negative consequences toward the environment, economic activities and (implicitly) quality of life. Among the factors influencing climate change in recent decades has been the increase in greenhouse gas (GHG) emissions. Agricultural production and implicit food security are deeply affected by climate change. At the same time, intensive agricultural practices contribute to the growth of greenhouse gas emissions such as methane (CH4), nitrous oxide emissions (N2O) and carbon dioxide (CO2). Land grabbing fosters climate change [50,51] by affecting ecosystems and increasing greenhouse gas emissions as a result of land-use change (deforestation for the expansion of arable land), large livestock farms and the widespread use of organic and inorganic fertilizers. In Romania, the share of agriculture contributing to emissions of greenhouse gases is below the EU-28 average, but higher than in most of the other countries analyzed except for France.

### *4.5. Recommendations Against land Grabbing*

The development of agriculture in Romania will require the adoption of a set of measures to eliminate the factors that generate the current disparities with the EU, and that will create premises for the development of sustainable agriculture. Of course, it is necessary to reduce the excessive fragmentation of the land, which is still maintained, but also to avoid excessive concentration via land grabbing.

In order to reduce land grabbing, we consider it necessary that these measures be in line with national and international agricultural policies, mainly the CAP, which can be converted into appropriate legal regulations and concrete actions by the government and local decision-makers. The principles of the new agrarian governance must guarantee property rights.

The single-dimensional approach of the formalization of property rights is not enough, because it does not consider the power imbalances between the actors involved and cannot be applied in all systems of traditional agricultural production [52]. A real guarantee of land ownership rights requires a multidimensional approach. The documents adopted by the European institutions [53,54] propose several measures to regulate the agricultural land market in order to prevent land grabbing and land concentration.

A reform is need of the CAP, which has favored an increase in agricultural holding sizes through the Single Payment Scheme (now becoming the Basic Payment Scheme). In this respect, the following measures may be adopted: the introduction of direct payment ceilings; the use of redistributive payments that favor small farmers; coupled payments, to strengthen sectors in difficulty; the implementation of new greening policies; and an increase support for young farmers and small farmers.

Land is not a "commodity" but rather a "finite transnational resource" that must be governed responsibly according to sustainable principles. The use of land for agriculture should be in line with environmental protection, and therefore food production should be prioritized over agri-fuel production.

The free movement of capital is a sovereign principle of the functioning of the market in the EU. However, in the case of land, regulations should be included, including higher limits on the purchase of agricultural land. Local agricultural communities must be involved in significant decisions on land destinations. Local and national authorities must have real information on ownership and land use, and permanently updating the cadaster is a priority.

Land grabbing issues cannot be solved only by European institutions or authorities of the Member States. It is necessary to consciously involve farmers who are associated in viable agricultural structures voluntarily. Agricultural cooperatives are an essential option for increasing the competitiveness of small farmers.

The involvement of civil society is also crucial for stopping the phenomenon of land grabbing. An example of this is the French citizens' initiative "Terre de Liens", which supports family farming, local food and agricultural production [12].

The realization of a complete agreement between the structure of land ownership, the use of the earth and the sustainable development of agriculture constitutes a current model for good land governance.

#### **5. Conclusions**

The agrarian structure characterized by the number and size of agricultural holdings has a significant influence on the sustainable development of agricultural holdings. In Romania, the agrarian structure is the result of economic policies implemented after 1989 that led to the excessive fragmentation of the land and favored the manifestation of the phenomenon of land grabbing.

The results of the present research show that land concentration and land grabbing pose a significant threat to the sustainable development of agricultural holdings and rural areas due to their adverse social effects, and their cultural and environmental impact. At the same time, excessive land fragmentation is undesirable because it goes against the principles of economic rationality. These considerations demonstrate the need to adopt adequate policies in order to realize a land ownership structure that enables the practice of sustainable, multifunctional and competitive agriculture in which family farms play an essential role.

In Romania, agricultural land is not always purchased for agricultural purposes. The increase in the price of agricultural land has led to speculation, which has benefited those with financial resources. The subsidies granted by the EU, represented by direct payments calculated per land area, have also led to an increased interest in agricultural lands. In Romania, legislation on land acquisition is more permissive than in other EU countries.

Land grabbing occurs at different intensities in each EU country. In Romania, the phenomenon has reached alarming proportions, and this—along with the excessive fragmentation of the land—has led to poor agricultural performance compared to other EU-28 countries. The technical and financial capital used in Romania's agriculture is lower than in other countries and, consequently, the yields obtained in crop and livestock production are also lower. One reason why organic farming, which is an essential component of sustainable agriculture development, is still poorly represented in Romania is land grabbing, which involves industrial-scale agriculture. The concentration of land in extensive agricultural holdings makes it difficult for the young generation to access agricultural land, and the ageing of the population employed by Romania's agriculture—although that population remains statistically numerous—threatens the viability of rural communities.

Land regarded not as a commodity, but rather as an essential resource for food security and safety, therefore, is an essential means of existence for today's and tomorrow's generations. In this manner, the policies for proper land use are essential for all countries based on the subsidiarity principle (where a decision, the effort and the responsibility belong to each country). At the same time, the principles on which the EU has been established, require appropriate changes within the CAP.

For Romania, the adoption of appropriate land policies that are able to protect property and limit land grabbing is an urgent national security issue [55], which is why there are concerns about modifying the legislative framework that regulates land sale. However, other economic and social measures accompanying this legislation should guarantee the use of the land based on principles of economic rationality and a high standard of living in rural areas.

**Author Contributions:** Conceptualization, V.B.; Formal analysis and Investigation, V.B., A.T.-S. and I.B.D.; Methodology, V.B. and A.T.-S.; Supervision, V.B. and I.B.D.; Validation V.B., A.T.-S. and I.B.D.; Writing—Original draft, V.B., A.T.-S. and I.B.D.; Writing—Review and editing, V.B., A.T.-S. and I.B.D. All authors have read and agreed to the published version of the manuscript.

**Funding:** This research received no external funding.

**Conflicts of Interest:** The authors declare no conflict of interest.
