Prospects for the agricultural income in Romania

The accession to EU represents a major economic and social opportunity for fundamental changes in micro and macro management and for reconsidering agriculture and rural areas in the process of sustainable development. Romania faces serious structural problems, such as the fragmentation of agricultural land and of production and the backward organization in most production units. They keep the low level of productivity, which was in 1994 (one of the best agricultural years) only 17.2 % of the average level of EU25. This productivity determines the low level of agricultural income. By having the option for subsistence agriculture, households in rural areas depend strongly on the income from agriculture, while the own consumption often masks rural unemployment. Common Agricultural Policy measures will have direct impact on agricultural income. Rural development gives the chance to income diversification of households and to the absorbtion of excess employment from agriculture.productivity, agricultural income, single payment scheme, rural policy

Rural Development - A Basic Condition For Narrowing Regional Disparities In Romania

Rural community development may be described as a territorial development approach. In Romania the territorial disparities have historical, cultural and economic roots. Also the industrialisation process in the period before 1989 and later the structural changes during the transition to market economy had a long run impact on the rural areas. The rural space covers over 87% of the territory and 45% of the population, these shares being significantly higher than in other EU countries. The high dependence of rural population on subsistence agriculture and the low level of income and living standards have made the regions dominated by rural areas less attractive. As a result, in the last decade, the emigration of the economically active population to urban areas and to EU countries has increased. The paper focuses on a multi-criteria analysis of rural-urban disparities in Romania and on the strategic role of multifunctional and sustainable rural development for the reduction of regional disparities and of labour force deficit.regional disparities, rural/urban disparities, poverty, development strategies

The Industry – a Vulnerable Source of Economic Recovery in Romania

In a globalized world the exogenous shocks and related instabilities of economic variables have negative effects on the economic growth of each country. Increased sensitivity to shocks shows higher economic vulnerability and the persistence of its factors and features reveal structural deficiencies of the economy. Industry is a category of resource with a decreasing share in GDP in the European Union in the past decades, but still gives the first signs of slowdown in activity before crisis. The industrial production in Romania had a fast recovery among the EU Member States in 2011 based on the increase of the external demand. The paper focuses on the exposure of the Romanian industry to further economic instability by using an empirical analysis of short-term statistics. Since a high share of the Romanian industrial exports are EU oriented, the commercial channel is an important factor that may affect the post-crisis economic growth if the structural vulnerability does not decrease

EFFECTS OF EMPLOYMENT STRUCTURE CHANGES ON REGIONAL PRODUCTIVITY DISPARITIES IN ROMANIA

The sustained economic growth in 2000-2008 in Romania was accompanied by a declining employment rate from 63.6% to 59% in the same period, which improved the overall labor productivity. The unprecedented reduction of labor force participation in some regions was strongly determined by the decline in agricultural employment, negative net migration, as well as increase of social protection. These combined processes were mainly induced by Romania´s integration to the EU allowing higher labor force mobility and by social policy measures. In addition, there are longer lasting structural influences, such as the demographic and educational composition of employment. The paper aims at measuring the cross-regional variation of age structure and education levels in Romania and their contribution to regional differences in productivity compared to the most developed region - Bucharest-Ilfov (NUTS2 level). The differences regarding these structures and their changes in the last decade explain partly the territorial polarization of development, which is expected to increase under the impact of the economic crisis.

EFFECTS OF EMPLOYMENT STRUCTURE CHANGES ON REGIONAL PRODUCTIVITY DISPARITIES IN ROMANIA

The sustained economic growth in 2000-2008 in Romania was accompanied by a declining employment rate from 63.6% to 59% in the same period, which improved the overall labor productivity. The unprecedented reduction of labor force participation in some regions was strongly determined by the decline in agricultural employment, negative net migration, as well as increase of social protection. These combined processes were mainly induced by Romania's integration to the EU allowing higher labor force mobility and by social policy measures. In addition, there are longer lasting structural influences, such as the demographic and educational composition of employment. The paper aims at measuring the cross-regional variation of age structure and education levels in Romania and their contribution to regional differences in productivity compared to the most developed region - Bucharest-Ilfov (NUTS2 level). The differences regarding these structures and their changes in the last decade explain partly the territorial polarization of development, which is expected to increase under the impact of the economic crisis

Sensitivity of gross margin for field crops

A major issue of agriculture in Romania is to achieve the level of profitability of farms which ensures their economic viability. In this respect farms seek profitability of each product. The gross margin is a measure of profitability, which for the field crops is determined by the producer price, yield per hectare and variable costs. Since some of the crops are not profitable every year, subsidies also play an important role in economic calculation. The paper aims to estimate the sensitivity of the gross margin to changes of these factors in the case of cereals, sunflower, soybean, potato and beet. The sensitivity analysis relies on estimated data regarding the crop in 2015/2016 and has the purpose to explore the impact of assumptions of changes in determinants on the results measured by gross margin. The sensitivity of gross margin is the highest and also similar in relation to the producer price and the yield per hectare

Effects of the economic crisis on rural household incomes in Romania

The rural area in Romania has experienced a transformation process in the last decade mainly due to overall economic growth and to the effects of EU integration. The agricultural activity is still dominant, even if the share of employment in this sector followed a strong decreasing trend. The economic crisis starting in 2008 produced structural changes in the use of labor force, with impact on the population's income. The paper presents an empirical analysis of the economy's evolution from macroeconomic perspective and focuses on the effects of the crisis on the rural area. The research uses the multiple linear regression to analyze the impact of economic growth and employment on investment in agriculture and on total income of rural households. The results show that investment in agriculture is connected to the variation of GDP and has a negative correlation with employment in agriculture. The household income has a high sensitivity to GDP changes, which have effects on salaries and social provisions in rural areas. However the subsistence component of the rural activities determines an important inertia of the total household income, which is very little influenced by investments in agriculture and is less reactive to the economic crisis compared to urban areas

Structural changes and productivity in the crisis period in Romania. The industry case

The present crisis is a new case study for the theories regarding economic fluctuations. The interpretation of this phenomenon varies from the acceptance of its character of rule in the history of capitalism, which brings corrections to excess in human behaviour, to the emphasis on its uniqueness determined by the effects of unprecedented globalization. The Romanian economy went through the crisis by having persistent structural problems which were partially masked by the expansion during the previous period of sustained economic growth. Considering that productivity is a significant parameter for the competitiveness of the national economy and that the healthy economic growth is a chance for diminishing the gap to other European countries, the paper aims at the identification of the economic activities which have contributed to economic growth until 2008 and of the potential sources of economic recovery in the next period. The research uses the empirical analysis in order to see the effects of the crisis, as well as to understand the signals given by the productivity trend regarding structural changes after the crisis started. Since the industry had a fast recovery in 2011 compared to other EU countries, the analysis is extended to the contribution of this activity to economic growth

THE CAPACITY OF URBAN CENTRES TO CONTRIBUTE TO THE RURAL DEVELOPMENT IN ROMANIA. AN INQUIRY FROM R&D AND INNOVATION PERSPECTIVE

Among the EU countries, Romania displays the highest share of rural population (45%), most of it employed in agriculture. Moreover, there is a significant variation between the eight NUTS 2 regions with regards to the urban distribution and dynamics, with important intra-regional differences between the constituent counties. This paper proposes an inquiry into the capacity of urban centres to contribute to rural development in Romania from R&D and innovation perspective. First, the rural-urban gap is discussed, pointing at the consequences of the delay in implementing the reform of the production system in agriculture in terms of employment and income. Then, the positive influence of towns and cities on raising the share of employment in non-agricultural activities in rural areas is demonstrated by means of the available statistical data. Further on, the analysis of the regional dimension of R&D and innovation shows an increasing polarisation both between and within the eight development regions. The main conclusion is that the regions or counties with predominantly agricultural activities developed in subsistence households are not enough prepared to access R&D and innovation results. This conclusion is also confirmed by a regression model that analyses the influence of rural areas on regional growth. The above findings are examined in correlation with the expected positive contribution of the current rural development programme as well as of the regional operational programme and competitiveness sectorial programme funded by the EU