The agriculture's sustainable development is a demand of the Community's Agricultural Policy in Romania. The objective can't be reached without competitive agricultural holdings, which work on the basis of high economic performance criteria. This is why agricultural holdings must take into account a series of strategic development directions, such as: the technical capital's optimum dimensioning and management, perfecting the human capital, perfecting the rural structures, the exploitation's optimum dimensioning, improving sales.sustainable development, agricultural holdings, development strategy, technical capital, human capital, rural structures

Burja Vasile

English

Research Papers in Economics

  586 
SUSTAINABLE DEVELOPMENT STRATEGIC DIRECTIONS FOR 
AGRICULTURAL HOLDINGS  
Burja Vasile 
“ 1 Decembrie 1918” University Alba Iulia, Faculty of Sciences, Alba Iulia, Str.Nicolae Iorga, nr.11-13, Tel: 
0258/811512 Email: vasileburja@yahoo.com 
  
Abstract 
The agriculture’s sustainable development is a demand of the Community’s Agricultural Policy in Romania. The 
objective can’t be reached without competitive agricultural holdings, which work on the basis of high economic 
performance criteria. This is why agricultural holdings must take into account a series of strategic development 
directions, such as: the technical capital’s optimum dimensioning and management, perfecting the human capital, 
perfecting the rural structures, the exploitation’s optimum dimensioning, improving sales.   
    
Keywords:  sustainable  development,  agricultural  holdings,  development  strategy,  technical  capital,  human 
capital, rural structures 
 
The agriculture’s sustainable development is a concept integrated in the sustained economic growth and has a 
triple dimension: ecological, social and economic. The ecological and social aspects are demands formulated by 
the external environment for agricultural holdings, but their economic performance is tied to their reason to exist 
and to accomplish the entrepreneurs’ interests.  
In Romania practicing intensive socialist agriculture led to a diverse polluting phenomenon of the environment. At 
the same time, the structural reforms adopted in the transition period led to organizational changes with dramatic 
consequences  for  the  Romanian  agriculture.  The  privatization  process  and  especially  restoring  the  ownership 
rights over lands led to the shrinking of the agricultural holdings’ dimensions below the limits needed for an 
efficient functioning. This aspect, together with the destruction of the existent technical base, the shortage of 
capital and other aspects, led to practicing subsistence agriculture and to a low competitiveness of the Romanian 
agriculture in comparison to the countries from the European Union.   
The sustainable development of the Romanian agriculture in accordance to the Community’s Agricultural Policy is 
a  chance  and  a  complex  process  at  the  same  time,  which  targets:  practicing  an  ecological  agriculture, 
organizational reforms, mentality changes, the proper training of the farmers, important investments in the sector, 
etc.    
In order to have a sustainable activity the following demands must be met by the agricultural holding: 
−  to use ecological production technologies which will ensure the integrity of the natural environment 
and the consumers’ health protection; 
−  to adapt the activity to the soil and climate conditions of the area in order to achieve a high economic 
performance; 
−  to substantiate the produce offer to the demands of the market; 
−  to integrate itself in the natural environment by preserving the landscape’s biodiversity and beauty;  
−  to be profitable on long term, satisfying this way the interests of the agricultural entrepreneurs.  
The mentioned demands can’t be carried out without the existence of a development strategy for the agricultural 
holdings,  which  will  clearly  mention  the  objectives  and  will  efficiently  manage  the  necessary  resources  for 
reaching the objectives.  
Considering their limited character, the resources’ efficient management is one of the fundamental requirements 
for a sustainable agriculture.  
The  steps  taken  for  scientifically  substantiating  an  improvement  strategy  for  agricultural  holdings  have  as  a 
starting point the correct and efficient dimensioning of the used production factors.  
By ensuring the technical-production grounds for the agricultural holdings, dimensioning the technical capital in 
close relation with the level and characteristics of the operating processes, constitutes an indispensible condition   587 
for the activities’ efficient unfolding. The investments which are well substantiated technically and economically 
will  ensure  the  conditions  needed  for  the  growth  of  the  labor  productivity,  for  the  production’s  quality,  for 
preserving and protecting the environment.   
The  net  investments  in  Romania’s  agriculture  have  dropped  continuously  from  2002  to  2005,  when  they 
represented only 3.9% from the total net investments of the economy. The agricultural corporal fixed assets ratio 
from the economy’s total fixed assets was 1.5% in 2005. The arable area for a tractor was 85.2 ha in 2005, with an 
unfavorable discrepancy for our country in comparison to France (1:2.5), Italy (1:4) and The Netherlands (1:5). 
For other farm equipments the discrepancy is even higher. The area per tractor is almost double for commercial 
agricultural holdings than for individual agricultural farms.    
The  complex  of  measures  used  for  a  better  management  of  the  resources  also  targets  the  working  capital’s 
elements for the agricultural holdings. The direct and powerful determinism of the natural conditions (climate, the 
soil’s agro-pedological characteristics, etc) over the agricultural production, especially in the vegetal sector, leads 
to big consumptions of working capital elements, especially plant health protection substances.     
An element  which determines in a large  measure the  yield level per hectare and the  results obtained by the 
agricultural holdings is the level of used fertilizers: the substances used to fight diseases and insects, the quality of 
the  used  biological  product.  Between  1989  and  2005  to  use  of  chemical  and  natural  fertilizers  has  dropped 
dramatically.  In  2005  the  agricultural  holdings  used  with  85.2%  fewer  fertilizers  than  in  1989,  and  the 
consumption of organic fertilizers dropped with 68.2%. In recent years there was though a rise in the chemical and 
natural fertilizers consumption. The compatibility of the agricultural holdings’ activity at the Community’s level 
can be ensured by reducing the costs for plant’s health on the basis of rationalizing treatment schemes, by using 
fertilizing substances in accordance with the technological recommendations regarding the productivity growth per 
hectare,  by  using  high  productivity  (certificates)  breeds  and  hybrids,  but  also  by  implementing  alternative 
technologies in the production process.      
Perfecting the human capital management, from the quantitative point of view, but especially from the qualitative 
perspective,  will  improve  the  production  results  and  lead  to  a  better  use  of  the  natural  resources  and  of  the 
technical-material potential, with positive economic effects at the level of the whole agricultural holding.     
The migration’s evolution in the transition period of the Romanian employed population didn’t lead to creating an 
occupational  structure  that  corresponds  to  the  community’s  model,  which  is  orientated  towards  services  and 
economic diversification. Our country’s agriculture was confronted with a growth of the population employed in 
this sector, from 27.8% in 1989 to 40.8% in 2000 (the maximum  number of the population  who  worked in 
agriculture was 3.523.000 persons). Only in recent years there was a downward tendency, in 2006 the ratio of the 
population  employed  in  agriculture  was  29.6%  from  the  total  number.  The  discrepancy  from  the  other  EU 
members is still worrying (10:1). The low incomes earned by the rural population is one of the causes for the low 
standard of living in rural areas, it is also responsible for the lack of financial possibilities used for improving 
conditions or for investments, for the youth who is moving to more attractive sectors or is leaving the country. For 
the 2006-2013 period a reduction with 16% is estimated for the population employed in agriculture.    
The decrease in the employed rural population’s rate, a population who is currently working until old ages and 
practices subsistence as a main form of existence, is necessary and can be put in practice by promoting rural social 
protection programs.   
On  the  other  hand,  it’s  necessary  to  attract  young  labor  force  in  the  rural  environment  by  diversifying  the 
economic activities and thus accomplishing a growth of the incomes and the modernization of the rural area. 
Promoting  an  adequate  incentives  system  inside  agricultural  holdings  will  lead  to  a  better  motivation  of  the 
employees. The structural work reform in agriculture must also take into account the professional training of the 
agricultural producers and especially aim at attracting the youth in the rural area, a measure which will lead to a 
younger active population in the villages once the farmers who are at the retiring age will stop working.     
The structural changes in Romanian agriculture initiated by the Rural Capital Law no. 18/1991 try to close in to 
the community’s agricultural model and in order to do this the starting point for improving the structures of 
production, of financing-crediting, of management and control must be perfecting the rural structures.    
The data from the last General Agricultural Census (2002) indicated that approximately 97% of the agricultural 
lands are privately owned, 55.4% of the used rural area is exploited by individual households and the rest is 
managed by big units with legal status. The way the Rural Capital Law was written and applied generated the 
crumbling of the lands and led to an excessively big number of individual ownerships (over 4.4 million). Even 
though they exploit about 62% of the country’s plough land, they usually own (49.5% of the total area) lands 
smaller than 1 hectare which gives them a subsistence status because they produce for their own consumption and   588 
don’t have economic power. Ensuring a rational operating of the agricultural area, increasing and stabilizing the 
produce offer, meeting dead-lines and reducing the production costs, doing improvement  works, growing the 
agricultural  and  economic  profitability  are  desideratum  which  can  be  solved  only  by  creating  viable  rural 
structures based on private ownership whose dimensions allow to apply modern agricultural techniques.  
Among  the  diverse  improvement  possibilities  of  the  rural  structures  we  find  the  stimulation  of  the  lands’ 
agglomeration by promoting associative structures, which are important especially at microeconomic level. The 
grouping of small producers in associations will lead to overcoming the subsistence characteristic which is present 
in peasant households.     
The immediate consequence of the actions taken to improve the rural structures will be found in the actualization 
of the economic dimension of the agricultural holdings which makes possible the practicing of modern production 
technologies, a better use of the resources, and by concentrating the capital we practically create the premises for a 
viable and profitable operating structure.   
In the EU countries there is a dimensional variety of the agricultural holdings. They have between 4.3 ha in Greece 
and almost 70 ha in Great Britain, with a Community average of 18.4 ha per agricultural holding. Although some 
economists think there is no optimum dimension for agricultural exploitations, because this could only be achieved 
in the conditions of steady prices and with existence of an optimum allotment of the production factors (a difficult 
achievement in agriculture), Romania, with an average dimension of 1.63 ha per holding / individual farm, is at a 
considerable  distance  for  the  Community’s  agricultural  pattern.  The  legal,  organizational  and  institutional 
measures, the economic-financial levers used by the state and the actions taken in the next period must target the 
agricultural holdings’ growth and the shaping of commercial agricultural holdings orientated towards the market. 
The structural adjusting of the agricultural  holdings in Romania in order to increase their dimension is done 
through  different  methods:  the  stimulation  of  the  small  producers’  association;  the  development  of  the  rural 
market,  of  the  mortgage  credit  and  of  the  lands’  leasing;  the  production’s  restructuration  in  big  agricultural 
holdings (the average is 270 ha per unity with a legal status); building ecological farms; merging and organizing 
the agricultural holdings’ territory.       
Seen as a result of using all the production factors and with direct consequences over the economic-financial 
results,  perfecting  the  agricultural  production  is  a  key  element  of  the  development  strategy  for  agricultural 
holdings. In order to be aligned to the practice of the developed countries, the quality standards of the Romanian 
farm produce must be improved. Standardizing the farm produce according to qualitative performances is tied to 
reaching minimal technical conditions which must be met in order to face up to the competitive side of the market. 
Drawing up a registration plan of the Romanian products according to the example of the EU countries, would 
allow selecting the products in accordance with the ecological criteria, or better said, in accordance with the 
danger degree for man and environment because the consumers protection is an important section in the European 
Union legislation (R CEE  no. 2092/1991, regarding the  framework of the production, commercialization and 
support  of  the  ecological  production;  R  CEE  no.  2078/1992  regarding  the  production  methods  which  are 
compatible with the environment protection; R CEE 2092/1999 for the stipulation of the development measures 
regarding organic production, etc.).  
Practicing  ecological  agriculture  is  an  important  characteristic  of  the  developed  countries’  economy,  which 
includes important areas; at EU level 3.7 million ha (2.9% of the total agricultural area) were cultivated in 2001. 
Romania has recent accomplishments in this field (the year 2000), cultivating approximately 170.000 ha in an 
ecological system in 2006. Even if organic agriculture is just starting in Romania, our country is among the first 20 
exporters at world-wide level. We export nuts, wild fruits, mushrooms and cereals. In 2006, 95% of the vegetal 
organic products were exported and 20% were products of animal origins. The export of ecological products has 
grown from 600 tons in 2000 to 7200 tons in 2006.     
The method of calculating the agricultural production costs must also be aligned to international practices, so that 
the financial books, accounting records and costs’ calculus will be in accordance with the International Accounting 
Standard IAS 41 “Agriculture”. The careful monitoring of the production cost at the level of each agricultural 
holding  becomes  an  important  rationing  factor  of  the  resources’  allotment  and  consumption.  The  positive 
outcomes appear by influencing the farm produce’s prices and by growing the unitary profit.    
Considered one of the regression causes for the Romanian agriculture in the transition period, the shortage of 
capitals for production or investments brings to attention the problem of the financing sources which sustain the 
development  of  the  agricultural  producers.  The  structural  adaptations  imposed  in  order  to  be  aligned  to  the 
Community’s  Agricultural Policy can be  sustained only  through additional financial  flows to the agricultural 
holding’s  level,  by  accessing  structural  funds  destined  to  improve  the  production,  processing  and   589 
commercialization conditions, and especially by contracting technically and economically substantiated loans. The 
self-financing based on a good management of the treasury still remains the main source for financial resources 
which combined with external resources allow reaching the agricultural holdings’ economic objectives.      
Because  commercialization  is  the  last  phase  in  the  process  which  includes  obtaining,  processing  and  turning 
profitable the farm produce, it becomes important for one of the objectives formulated in the development strategy 
of  the  agricultural  holdings  to  refer  to  perfecting  the  selling  activities.  An  important  role  in  identifying  the 
characteristics of the farm produce’s market, the possibility to embrace some market segments, the capitalization 
channels and the necessary logistics, belongs to the market researchers. The market studies’ objective is to know 
and to estimate the consumer demand for farm produce and are materialized in marketing programs which are 
adequate to the conditions and to the real possibilities of the holdings. The marketing mixes include a specific 
combination for each agricultural holding between product strategies, price strategies, distribution policies and 
ways to promote production.      
Bibliography 
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perspective of sustainable development, The Third International Conference Rural Development, 2007, 
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ISSN1822-3230. 
2.  Burja V. - Promoting the associative structures – objectives of sustainable agriculture in Romania, The 
Oradea University Annals, tom XVI, vol I, 2007 
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