The agricultural
farm lands have a price that go from 1800 a 3900 €/hectare (updated
to January 2008), according
to the typology of the farm land (hill or flat lands) and of their geographical
location in the country.
Generally the lands have never been worked intensively due to the shortage
of suitable agricultural tools and the not will of the past regime
to enhance the value of an efficient intensive agriculture, with the
result that many agricultural lands in Romania are uncultivated or
they have been cultivated mostly by small families of farmers. So they haven't
suffered the stressful treatments through fertilizers, herbicides and
anti parasitic treatments as many western european land intensely
cultivated have suffered .
On these farm lands are
possible cultivations as cereals (grain, barley, maize and others), sugar
beet, soya, rape, sunflower, vegetables, orchards, vineyards and breedings
of every type.
About the Cereals the possibilities of cultivations are
very good also thanks the climate very favorable. There's also to
notice many big italian and foreign firms of this sector are
present from some years in Romania so that they can assure a supply
chain from seeds producer to end user and that the sale of the product would be insured in Romania and in EU Countries.
The same thing is for the Vineyards. In fact there are already many rumenian famous and rated wines above
all from the zone of the
Murfatlar, in Dobrogea, in the Southeast of Romania, near the Black sea: many Italian entrepreneurs and above all French, both masters in the art of the wine, have purchased notable quantities of hectares believing in the potentiality of the wine made in Romania. It’s always to underline as the low cost of the farm land, united to the low cost of the local manpower, makes this investment extremely interesting in Romania.
As it regards the Breedings, there are good opportunities of business, already noticed above all from Dutch and Danish
people and companies, that have purchased in mass ex state’s owned agricultural firms to restructure
them especially in the zone of Timisoara and in Transylvania, where the production of meat and milk it is more traditionally consolidated than in the rest of Romania.
The zones we propose
Some example of agricultural farms lands we propose: click HERE if you want to see them.
Why to invest in farm agricultural lands in Romania
The prices of the agricultural farm lands, still low, are rising strongly: who has bought five years ago only,
he has already more than quintupled the value of the investment, and the borders of growth of the price of the land, are still today notable.
It’s an occasion onlier than rare to find farm lands so fertile and plain on the European soil to so tempting prices: this is due to the disastrous experience of fifty years of totalitarian regime that has occupied Romania and the rest of east Europe. A historical fact that won't repeat it.
Only following the evolution of the prices of the farm lands and other goods (as commercial properties, building lands etc...) in the near countries as Hungary, Slovakia and Czech Republic, now entered the European union,
is sufficient to observe that the value of the farm lands, will very probably have an enormous growth with the entry of Romania in the EU.
The ground of Romania is rich of Cernoziom/Chernozem , or the so called "black earth", that’s a type of very fertile farm land, proper for any type of cultivation, without stones, very beautiful to the sight and that it needs little water. Over that in Romania, this type of ground there is only in some zones of Europe as Ukraine, in Russia, in the North of China and in some parts in the United States of America.
They are sure ("The investment in the earth never betrays you" our grandparents said) investments, at a very strong speculative value, recommended from the greatest international banks and financial advisors institutions present in the Country. The output in relationship to the investment (ROI) is great.
Many italian and foreign investors have been purchasing farm lands for years in the whole Romania in virtue of its agricultural potential:
still from the beginning many entrepreneurs have outsourced in Romania, mainly to Timisoara, establishing productive firms in the
country and primarily in the industrial branch, but seeing the good present opportunities in the agricultural sector, they have purchased and they are still purchasing farm agricultural lands, breedings
and farm firms, because they believe in the goodness of the investment.
So many people and foreign firms can't have been wrong all togheter.
The Rumanian State stimulates the advent of foreign investors that acquiring quantity of piece of farm land of notable dimensions, they clearly increase the productivity and the profitability of the agriculture.
Guarantee of trading of farm/building lands or commercial properties through regular and sure
public notary acts as of use in other European countries.
Safety for the foreign investors guaranteed by the future accession in in the EU
scheduled by the European commission for the first January of 2007.
It has been already
anticipated for Romania the CAP (Common Agricultural Politics)
subsidies
as in use for a long time in the Western Countries UE: these agricultural
subsidies should be of a value of 25% of the entire CAP quote that
there is now for the western European countries and should growth
year after year at the same level for all EU countries.
How to invest in
agricultural farm lands in
Romania
The simpler way to operate in Romania is to setting-up a Limited firm in the country.
Investments&Services can do this for you through the constitution of a new Limited firm 100% owned and controlled by the foreign investor: the cost to open this kind of company is low and its financial management don’t go over two thousand Euro/year.
Consider Romania has a corporate flat tax of 16%.
Technical details and how to work the agricultural land
The structure of the commercial farms in Romania at year 2003, as
noticed by the statistics of the European, can be schematized in
this way:
As can be noticed by the graphs, almost the 94% of the owners of agricultural firms or better of farm lands in Romania, possess no more than 5 hectares and they count only instead for the 0,5 % those that possess more than 50 hectares.
Even today almost 85% of the land for agricultural use, is in the hands of private owners, mainly very smallholders farmers that from 1989 have seen to return to themselves their lands from the State their ownerships, confiscated during the past regime. This is still a work in progress that will continue for others 2-3 years.
About the occupational structure for sectors of Romania, the agriculture with more than the 35% of the work force and a 14% quota on the
GDP of the Country, it still has a remarkable and unknown quota in
comparison with the rest of the other Countries EU.
The mechanization is still today well back due the fact these smallholders farmers
not having the financial force to purchase new tools as new tractors and combines harvesters that would increase the efficiency of the agricultural sector, even if thanks to the come of foreign investors and an increasing market of leasing, the agricultural tools are slowly modernizing.
Concerning the infrastructures, during the years '70 and '80, have been made strong investments in the rural zones with the result that:
3,5 million hectares of land have served themselves from systems of irrigation
3,3 million hectares of land have been equipped themselves with systems of drain
2,2 million hectares of land have been included themselves in the control of monitoring regarding the erosion of the ground
The electricity also in the rural zones is present everywhere.
There is also to remember that the principal objective of the EU funds
named SAPARD is the reconstruction and the modernization of the agricultural environment in the Countries in pre accession in the European union, therefore the possibility to get these funds for the creation or restructuring of channels of irrigation, the purchase of new agricultural machineries, of hydraulic pumps etc... behind specifics and detailed projects (that we will explain more before),
is very probable.
A short but interesting statistic on the extension of the areas, the production and the productivity of the agriculture in Romania in its different cultivations, can be seen HERE.
Some date on the different attitudes of the various regions and zones of Romania concerning the agriculture, can be instead schematized in the following way:
The dates reported are of year 2000.
The possible methods of working of the farm lands are essentially three:
Through sharecroppers: usually ex state-workers agronomists-engineers in the past regime, that furnish and use their machineries for the workmanship of the land, buy the seeds, possible fertilizers and they sell the products to enterprises of the sector and
give to the owner of the ground a correspondent that has varied since 450 to the 650 Kg of wheat for hectare according to if the land is uncultivated or already worked. The availability of these figures varies from zone to zone.
Through Lenders of Services: they work your farm land for you through their machineries. The purchase of seeds, possible pesticides, fertilizers and the sale of the product are loaded on the owner
of the land.
Through Workmanship directed from the owner of the ground
with its own machineries and engaged workmen, paid from the Romanian
firm of the foreign owner/investor.
Evidently in the last two cases the income of the land is greater however it implicates a direct interest from the owner. The price of the wheat oscillates around the 12
€ for quintal.
Anyway is to notice that the most important aspect in terms of profitability of the investment, remains a sure increase of the prices of the farm lands grounds with consequent revaluation, as it has happened in the near Countries like Hungary for example.
SAPARD Founds
SAPARD or the "Special Accession Program for Agriculture & Rural Development" are the funds given from the European union to improve the conditions of the agricultural and rural world of the Countries in pre accession to enter to the EU.
It must immediately be clarified that it doesn't need to necessarily be Rumanian citizens to take advantage of these funds: it is enough in fact, in our case, to be owners of commercial farm or farm lands in Romania through a Limited Rumanian also 100% owned by the foreign investor.
The concession of the funds is not immediate and rigorous technical, bureaucratic and administrative steps run must be followed to show that the applicant owns the necessaries requisites for the obtainment of the funds.
More in deep for the obtainment of the SAPARD funds the applicant must
introduce:
A feasibility study of the project for which he demands the funds
A technical project that carefully describes the project
A business plan
The structuring of the SAPARD funds can be divided in this way:
Conditions of financing and limits of value
Beneficiaries
Areas that have the requested parameters
Measures of intervention
Generally speaking for some measures and typologies of interventions it can be reached financings that
can go from 50 to 75% at lost fund. Practical examples are the SAPARD funds for the purchase of agricultural machineries
as tractors, combine harvesters etc... or the renewal of systems and/or channels of irrigation.
For Romania, the European union has already allocated more than 100 million Euro per year and 50 million of
Euro per year are added from the Rumanian government.
Due the complexity, the delicacy and the elevated technical detail of the iter to obtain the SAPARD funds, that cannot be reassumed in few lines, we advice you to read carefully this official document taken by the European Union that lists in a way very detailed all the footsteps and who are the beneficiaries (also according to the type of cultivation and of the extension of the farm lands) to have access to these funds.
Investments & Services availing itself of excellent and experienced Rumanian collaborators will follow and will complete for the client the whole necessary technical-bureaucratic-administrative iter in the faster way.
The CAP subsidies
With the entry in the European union for the 1st of January 2007, Romania, together with Bulgaria, will benefit, as the rest of the European Countries, of the so called agricultural subsidies denominated CAP (Common Agricultural Policy).
The amount of the contributions PAC will be gradual: the first year will be versed a value corresponding to the 25% of that corresponded in the Countries of Western Europe, for then gradually to increase in the years up to identical values for all the European Countries.
For better and more detailed explanations and information not you hesitate to contact us.
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