Land Grabbing: a Review of Extent and Possible Consequences in Romania

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Land Use Policy 62 (2017) 143–150

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Land grabbing: A review of extent and possible consequences in Romania

a a b,∗

Ciutacu Constantin , Chivu Luminit¸a , Andrei Jean Vasile

National Institute for Economic Research ‘Costin C. Kiritescu’, Romanian Academy, Casa Academiei, Calea 13 Septembrie nr. 13, Sector 5, Bucharest,

050711, Romania

Petroleum- Gas University of Ploiesti, B-dul Bucuresti, No. 39, 100680 Ploiesti, Prahova, Romania

a r t i c l e i n f o a b s t r a c t

Article history: Land grabbing represents a fundamental problem in the transitional and post-transitional economies.

Received 25 September 2016

The transfer of land property rights impose a dramatically change of agricultural production structure,

Received in revised form

including affecting the food safety and security. The main aim of this article is the analysis of the possible

28 November 2016

effects and transformation imposed by the transfer of land property in a post-transitional agricultural

Accepted 1 January 2017

economy and to identify possible solution in valuing the lands as main production factors. Also in the

study are taking into consideration the effects of Common Agricultural Policy ﬁnancing mechanism in

Keywords:

supporting land transfers.

Land grabbing

Property rights

CAP license (http://creativecommons.org/licenses/by-nc-nd/4.0/).

Land transfer Privatization

Economic transition

1. Introduction Romanian agriculture is heavily concentrated and polarized in big

industrial farm holdings and small substance farms. This concen-

In modern economies agriculture, despite the evolution of tech- tration land concentration and exploitation presumed a log process

nologies and society, continues to play key roles and become major of land grabbing.

instrument in designing the economic growth and assuring the Land garbing has become a major discussion topic both in lit-

social wellbeing. Despite the recent trends of sectorial evolution erature and in public debates. The numerous aspects raised during

and transformations of the economic structures, as (Andrei and the process involves social, juridical, political and historical argues,

Darvasi, 2012; Baker et al., 1991; Ciutacu et al., 2015; Done et al., because land it is more than an agricultural asset and it is connected

2012; Ciutacu and Chivu, 2002; Vasile et al., 2016) remark, agricul- to the evolution of the modern state paradigm and the suzerainty

ture mobilize important human, ﬁnancial and material resources tightly connected to the ownership aspects. In this study it was not

both at national and rural level. In this context the main agri- considered the effects of the ﬁscal policy or ﬁnancial investments in

cultural resource, respectively, the land resources, has attracted shaping the property rights, both in industry and agriculture. As it

numerous interests both from investors, national and international is remarked in different studies (Done and Ungureanu, 2007; Voica

which made a trend in land acquisition transitions and the rural and Mirela, 2014), ﬁscal policy and investments has direct effects

population deeply dependent of these resources. Land become the in shaping the evolution of the economy on large scale, directing

most determinant agricultural asset both in transitional economies the ﬁnancial ﬂows.

and well developed ones and it still remains a difference fac- Land grabbing goes back a long time in history, starting from

tor in drafting the inland productivity. Romanian agriculture has the pre-colonial inter-tribal conﬂicts for possession of land, and

experienced signiﬁcant transformations during the reform process; coming down to our times in the speciﬁc forms of globalization and

both form the agricultural property rights perspectives, includ- economic integration. The trend of laying hands on territories, of

ing the relocation of the investments and land exploitation and gaining control over landed properties and over the soil and subsoil

also from the structure and dimensions of the agricultural hold- riches associated therewith has acquired new dimensions and has

ings. As (Popescu and Andrei, 2011; Brad et al., 2015) has shown, found new modes of operation, in the European Union.

As (Ciutacu and Chivu, 2002, 2014; Leonardo and Mihai, 2008)

argues land represents a basic resource with a highly impact,

∗ both on evolution of the state taxonomy and structure, with

Corresponding author.

E-mail address: andrei [email protected] (A.J. Vasile). political determinants among communities, shaping the adminis-

http://dx.doi.org/10.1016/j.landusepol.2017.01.001

144 C. Constantin et al. / Land Use Policy 62 (2017) 143–150

trative organization and the fundamental factor in assuring food of corporate structures, which may bear nefarious consequences

security and safety for rural communities. From this perspective on the poor rural communities that lack the resources to manage

governmental and local authorities have tried during the years to the land.

consolidate the land ownership structure with direct implication The imbalance and inequality between the power and size of

in regulating and buying lands. the national and international capital has widened the gap. The

As (Ciutacu and Chivu, 2002, 2014) argues, despite the agricul- phenomenon has generated a topic widely debated in all its com-

ture deﬁnes an economic sector with great implications on creating ponents: philosophical, sociological, economic, legal, moral and

gross value added and job vacancies, and (Kuemmerle et al., 2009) political, due to the its disruptive effects on local cultures, on the

reviles that massive land acquisitions were promoted in order social and demographic evolution of communities, by displacement

to consolidate agricultural farmland and intensive agriculture as and destruction of long-standing local economies, all of which may

effect on dealing with food insecurity and food prices instability. jeopardize the state, social and national identity of a country.

In recent studies (Sima and Gheorghe, 2015) evidence some of the The agricultural economists have not been able to provide a def-

changings in consumption patterns in green economy. inition of wide and satisfactory recognition for the concept of ‘land

Different aspects as land grabbing, land reforms and agricultural grabbing. The evolution of the concept highlights not only the

land ownership transformation, agricultural economy and rural massive transformations of the inland agricultural sector under the

communities in post – communist countries have represented the globalization pressure, but also it shows the dynamical approach of

main themes in numerous studies as: (Baumann et al., 2011) in theoretical argue regarding the land garbing tendencies and neces-

case of farmland abandonment in Western Ukraine, (Borras et al., sity as is presented in studies as Hartvigsen (2014) or ECVC (2013).

2012) in case of land grabbing in Latin America or general studies as Some of literature related to “land grabbing” is often affected

(Swinnen, 1999; Swinnen and Vranken, 2009; Borras and Franco, by emotional approach due to the association of their authors with

2010). organizations and coalitions of small farmers in various countries,

In the recent period it is remarked an increased attention of or with the interests of multinational corporations and invest-

the foreign citizen, companies and other actors in buying land. ment funds. The multinationals has determinant role in deﬁning

The sale and long rental of agricultural land has attracted mas- the global political environment as (Popescu, 2016; Nica and Ioan,

sive social, political and numerous local communities argues in 2016) and impose including an environmental and energy use

ﬁeld. As (Gugushvili, 2016) notice there is a lack of research stud- behavior (Popescu, 2015a,b; Nica et al., 2016) As main aspects of

ies in investigating the public attitude towards land selling to the the current deﬁnition and the actions regarding landed property,

foreigners. the authors note (Ciutacu and Chivu, 2014; Prosterman and Rolfes,

As Amanor (2012) argues the land acquisition process is father 2000; Vidican, 2009):

more complicated than the simple land grabbing phenomenon,

being an effect of power consolidation over the trans-regional value - the illegitimate switch of property rights and control over land;

chain in the mission to control food and biofuel production and - the exclusion of the initial owners (without including here

supply chains. On the other hand (Azadi et al., 2013) land acqui- takeovers by the national governments for the purpose of a fairer

sitions may represent a more proactive instrument via inclusive distribution of national resources);

−

deals which could have as outcome a win win situation both for - the concentration, through the new land grabbing trend, of

community and land salesmen. thousands and tens of thousands of hectares; infringement of

A realistic approach of the magnitude of land grabbing is not transparency and accountability rules (such as appropriation

easy due to lack of accurate information, the absence from records without the due consent of the initial owner);

of some of the transactions between legal entities, which often act - the subsequent change of use of the acquired landed estate;

through their subsidiaries or partner companies. - all with the total disregard for a prior assessment of the social and

In Europe, land grabbing occurs mostly in the Eastern and Cen- environmental consequences;

tral countries, particularly in Hungary and Romania, because they - fraudulent transactions.

possess some of the best agricultural lands, with extremely fer-

tile soil and water sources for irrigation in the Danube plain. This However, it is not always easy to determine if a takeover was

is mainly due to ﬁrst Pillar of Common Agricultural Policy (CAP) legitimate, due to the certain degree of bias of the parties to the

permits concentration of subsidies, thus favoring a capital surplus transaction. This aspect is controversial especially in the transi-

in the old EU member states, enabling their farmers to purchase tional and post-transitional economies where the property rights

more land and also by the considerably lower level of the of support are slightly and uncertain.

money made available through the CAP mechanisms, instruments

and incentives, coupled with a lower quality of infrastructure, and

2. The theoretical, scientiﬁc and ideological arguments of

with the speciﬁc features of the business environment, of the social,

land grabbing

institutional, and legal background in the new EU-28 member

states, that have kept the price of land at base line, compared to

The concept of the free movement of goods, services, labor and

the price of land in the old member states.

capital, as a basis of development, did not include, at the beginning,

One of the axioms of the new European ediﬁce was the free

the theoretical and ideological instruments to tackle the issue of

circulation of goods, services, capital and persons. This principle

landed property. In the history of mankind, the prime constitutive

included the right of EU-28 citizens of the EU-28 member states

to acquire land in any of the member states. Under the accession

treaties, the sale and purchase of land was permitted with effect 1

Some of the most recent contributions to the topic are the surveys conducted

from 1st January 2014. In this context, land grabbing has dramati-

by the Transnational Institute, under the generic title “L’accaparement des ter-

cally increased in the new UE-28 member states in the last years, res” – a signal of alarm for Europe; ‘Opinion of the European Economic and Social

due a large manifestation of agricultural completion and inland Committee on Land grabbing – a warning for Europe and a threat to family farm-

ing (own-initiative opinion)’, Rapporteur Kaul Nurm, NAT/632, Land grabbing in

agricultural policy transformations.

Europe/family farming, Brussels, 21 January 2015; “Voluntary Guidelines on the

Grabbing and capturing of landed property is not a mere jour-

Responsible Governance of Tenure of Land, Fisheries and Forests in the Context of

nalistic catchword or a historically obsolete concept, it is a poignant

National Food Security”, FAO, 2012; Land Concentration and Land Grabbing, and

trend of our times, turned into a political and strategic instrument People’s Struggles in Europe – Via Campesina, 2013.

C. Constantin et al. / Land Use Policy 62 (2017) 143–150 145

element of any state was the territory in its possession, with the the land market and the ﬁnancial sector may generate speculative

land facilities and economic activities developed thereupon. Land bubbles.

has always been the determinant factor of production for the very

existence of a state.

The functioning of a state relied on the collection of fees, taxes,

royalties from landed estates, soil and subsoil resources, all of them 3. Do land sales in Romania qualify as ‘land grabbing’?

building up the funds to enable the state to secure the defense,

the safety and peace of its citizens; a state could not be functional According to (European Commission, 2013), in 2012, Romania

without such revenues; therefore the power of a state weakens and was ranking sixth among the EU 27, with 13.7 million hectares

collapses when such state is no longer able to control the rate of the of utilized agricultural surface (7.8%), of a total of 176.3 million

revenues due to its exchequer, or when such dues are determined hectares. The almost 14 million hectares were being cultivated by

by extraterritorial bodies and institutions. 3.7 million households/farms (31.7% of the total number of farms

The concept of ‘free economy’ has become, more and more, in the EU 27), which meant an average size of 3.7 ha per farmstead

equivalent to divesting the state’s revenues to the big corporations. (compared to the EU average of 15 ha).

The state started shrinking down to the size of a sub-system, acting According to Eurostat, Romania’s agriculture provides employ-

as an extension of, and ceding its power to, the global corporations. ment to 2.8 mill. persons (34.3% of all EU farm workers),

Such magic words like the ‘sovereign and inviolable autonomy of representing 30.6% of total national employment (EU average –

the state’, which lay at the roots of, and gave meaning to, the con- 5.2%); expressed in annual working units (AWUs), farm employ-

cept of ‘national economy’ are beginning to be obsolete (in Old ment in Romania accounted, in 2012, for some 15.7% of EU 27.

Greek, oekonomia used to mean the ‘rules of the household’). In 2012, when the worth of the average absorption of inputs per

The takeover of land without any ﬁght from those who are employed person was 7.3 times lower in Romania, the productivity

supposed to manage and defend it is argued as a means to give in agriculture (calculated as gross added value per employed per-

economic value to unused plots of land, and to create new jobs son) was approximately 6.3 times lower than the EU 27 average.

(and reference is made mainly to abandoned, degraded, unused, or (European Commission, 2013).

uninhabited parcels of land, which according to World Bank esti- A theory proven in literature reviles that developments in the

mates, amount to somewhere between 500 million and 1.7 billion countries with an advanced agriculture, shows that productivity

hectares). On the other hand, the sale and purchase for investment grows faster than the demand for foods, the consequence of which

purposes of such land, now that poverty, chronic famine, and lack is the drop in the demand for labor; this generates the need to

of ﬁnancial resources are the daily nightmare of millions of people, ﬁnd employment alternatives in other economic sectors, for the

is the right thing to do, others claim. redundant workforce.

Climatic changes, the ensuing degradation of land, the need to Global competition may bring about certain changes in the old

protect the environment, and alternative solutions to the energy truisms of political economy. One thing is sure: that global competi-

crisis are, also, arguments in favour of concentrating large tracts of tion plays in favour of the large farmsteads. Aggregation of landed

land in the hands of potent investors. Their contenders claim, with property may be encouraged through incentives for early retire-

arguments, that this trend will have adverse effects on employment ment, but also through tax incentives, and the liberalization of the

in the poor rural communities, where the already impoverished land market.

locals are deprived of the already scanty means of subsistence. Capitalization of public support leads to the rise of the price of

Another negative effect such concentration of land is caused to agricultural land, which, in turn, increases the costs for the new-

ecosystems and biodiversity. comers to farming, or for those who intend to expand their farms.

One of the questions raised by anti-land-grabbing activists In Romania, the history of agrarian economy during the period

is whether the exclusive mechanisms of a free market may be 1990–2015 was extremely dynamic and featured many, deep and

expected to work like magic with regard to ensuring the supply highly controversial transformations.

of food to all countries and populations of the world, without the The restoration of the peasants to their land ownership rights

involvement of national and local governments and authorities? caused the dissolution of the agricultural cooperatives land of the

There are voices maintaining that the extra-territorial control state farms that managed agricultural land of a magnitude between

over the acquired landed properties, under the pretext of allowing 2000 and 5000 ha. This land reforms was a legal and moral much

the market mechanisms to take care of everything, may give birth to awaited reparation, but its social and economic consequences were

monsters. It is also true that the agro fuels, which have been another tremendous and, in very many cases, less favorable than expected.

driver for the seizing of land, coupled with the shift of weight from Land ownership leaped back in time over 150 years (and wiped

vegetal to meaty diets in India and China, may lead to a rise in off ﬁve land reforms starting from Prince Alexandru Ioan Cuza’s

greenhouse emissions. reform of 1864, followed by the reform of 1921, after World War I,

Globalization and concentration of retail trade in hypermarkets the reform of 1945, after World War II, and the reform consisting in

are pushing the small farms into uncompetitive ventures, unable the establishment of agricultural cooperatives (collective farming),

to meet the demands for large quantities of standardized food; this which was completed in 1962); the Land Act of 1991 has caused the

has practically killed the sovereignty of subsistence and the land excessive fragmentation of farm land. The result was the issuance of

sovereignty, although history and practice have demonstrated that 4 million title deeds, which, as a rule, carry the names of all the heirs

these petty food producers have played important economic and to a landed estate. This means that any sale and purchase transac-

social inclusion roles, in addition to their being sustainable and tion requires the consent of all owners. The reform also resulted in

friendly to the environment. In other words, the mode of opera- the emergence of over 15 million parcels of land, half of which are

tion of corporate trade chains require the agglomeration of landed less than 2 ha.

property in large scale food production companies. On record, at present, are more than 4 million family farms,

These, too, turn into corporations that enjoy the support of of which only 1.2 million are equal in size to at least 1 economic

potent ﬁnancial and investment entities, all of which leads to what development unit (ESU), the rest of 70% being subsistence farms. In

analysts call ‘corporate land annexation’, under the excuse of ‘land addition to this, most of them have not been recorded in the Land

grabbing for ﬁnancial security.’ Such cooperation schemes between Register or in the Land Tax Inventory, which makes any sale and

purchase transaction very difﬁcult.

146 C. Constantin et al. / Land Use Policy 62 (2017) 143–150

80000 lyzing the land grabbing. In Fig. 1 is presented the evolution of

0.1 - 0.3 unutilized agricultural area in Romania, during 2002–2013.

70000

0.3 - 0.5 In recent years, a complicated process of land consolidation by

60000 0.5 - 1 way of sale and purchase is occurring, of land lease, and of associ-

ation of land owners. Farmsteads of less than 1 ha account for only

1 - 2

50000 5% of the agricultural land, but they are a source of employment 2 - 5

for over 45% of all employment in agriculture; middle-size farms

ha 40000

- 5 - 10 own a total of 57% of all land, and employ 54.8% of total farm labor;

30000 10 - 20 farms that manage more than 100 ha account for 38% of the farm

land, land and employ 0.2% of the agricultural workers.

20 - 30

20000 The fragmentation of land ownership explains the slow rate

30 - 50

of farm land sale, implicitly of land grabbing as a side-effect. The

10000

50 - 100 supportive measures provided by the Common Agricultural Pol-

0 over 100 icy (CAP) have worked as an incentive towards expanding landed

2002 2005 2007 2010 2013 property and consolidating parcels of land into competitive farms.

However, the worth of the CAP incentive package afforded to farm-

Fig. 1. Evolution of unutilized agricultural area in Romania (ha), during 2002–2013.

ers reveals major differences between EU members.

Source: authors based on INS, 2015.

Eurostat data on the direct payments made through the Euro-

pean Agricultural Guarantee Fund (EAGF) shows (Fig. 2) that, in

2011, while in the Czech Republic the average worth of direct pay-

ments to a farmer was 25,269 euro, and in France it stood at 21,503

According to Eurostat (2013), in the “Eurostat Farm Structure

euro, in Romania this was the lowest – and average 655 euro per

Survey” for 2010 gives the following distribution of farms in Roma- recipient.

nia, according to their economic value: 88.6% of them had revenues

The overall average worth of direct payment for the EU 27 was

under 4.000 euro; 11.1% earned between 4.000 and 50.000 euro,

5280 euro per recipient. The number of beneﬁciaries as a share

and only 0.3% had revenues over 50.000 euro; the same year, the

of the total number of farms or of total employment also varies

EU27 average ﬁgures were: 60.4% of farms earned under 4.000 euro;

signiﬁcantly among the EU 27 (Fig. 3 and Fig. 4).

30.4% earned between 4.000 and 50.000 euro, and 9.2% of the farms

In 2011, over 7.6 million farmers received direct payments in

had revenues of 50.000 or more euro. In Germany, these ratios were

EU-27, which means a share of 64.7% of all farmsteads, and, 65.8% of

2.7%, 45.7%, and, respectively 51.5%, in France – 14.8%, 36.6% and

all employment in agriculture. The lowest shares were received in

48.6%, and in Poland – 51.5%, 44.9% and 3.6%. (Eurostat, 2013).

Bulgaria (26.1%, and respectively 15.5%), and in Romania (29.9% and

Also in 2010 as year of reference, the distribution of farms by

39.5%). The distribution of direct payments recipients by member

their physical size was as follows: 93.1% of Romanian farms had a

countries indicates that, in 2011, Poland accounted for 18%, Italy

size of under 5 ha (EU average – 69.2%), 6.3% had a size of 5–50 ha

for 16.2%, Romania for 14.6%, Spain for 11.9%, and Greece for 9.7%;

(24.8% in EU27), and only 0.5% of them consisted of 50 or more

the other 22 member states accounted for a little less than 30% of

hectares (6% in EU27); farms of 50 or more hectares represented

the total number of 7.6 million beneﬁciaries

37.2% of total farmsteads in France; in the United Kingdom they

Of the total amount of direct payments made in 2011, the follow-

accounted for 38.7%, in Denmark for 33.3%, and in Germany for

ing 5 member states received 36.2%, distributed as follows: Spain

28.5%. (European Commission, 2013).

– 13%, Italy – 10.1%, Greece – 5.9%, Poland – 5.4%, and Romania –

Still the problem of land use in Romania describes a debate full

1.8%. In other words, 70% of the EU farmers received only 36% of

situation regarding the unutilized agricultural area which, despite

all direct payments, and 29.6% of the recipients in the other mem-

of the tendencies to decrease during the period of 2002–2013 it is

bers states beneﬁted from 64% of all direct payments. If we take

quite high in Romania and it should be attracted into the agricul-

into account the fact that the farmers in the old members countries

tural process. The unutilized agricultural area it could be considered

enjoyed direct payment and a lot of other forms of support for about

another aspect which should take into consideration when ana-

30000

25000

20000 - 15000 Euro - 10000

5000

0 Italy Spain EU 27 Malta Latvia France Cyprus Poland Ireland Greece Austria Finland Estonia Sweden Slovakia Bulgaria Slovenia Hungary Belgium Romania Portugal Denmark Germany Lithuania Czech Rep Netherlands Luxembourg

United Kingdom

Fig. 2. The average direct payment of EAGF in some EU-27 countries in 2011.

Source: authors’ own compilation of Eurostat data.

C. Constantin et al. / Land Use Policy 62 (2017) 143–150 147

140.0 cater for 90% of the market; in Finland, 3 supermarkets control 88%

of the market; in Germany, 4 companies hold 85%; in Austria, 3 com-

120.0

panies dominate 82%; in the United Kingdom, 4 companies cover

100.0 76%; and in Spain, 5 supermarkets hold 70% of the food market.

The considerably lower level of the of support money made

80.0

available through the CAP mechanisms, instruments and incen-

-%-

60.0 tives, coupled with a lower quality of infrastructure, and with the

speciﬁc features of the business environment, of the social, institu-

40.0

tional, and legal background in the new EU-28 member states, have

20.0 kept the price of land at base line, compared to the price of land in

the old member states.

0.0

The latest available Eurostat information indicate that in 2009,

while Dutch agricultural land sold for a market price of 34,969 euro

per hectare, and Danish land had a market price of 25,745 euro, in

Poland one hectare of land fetched a mere 848 euro, and in Romania,

in 2007, 879 euro. (European Environment Agency, 2010)

Fig. 3. Share of direct payments beneﬁciaries in the number of agricultural holdings,

in some EU-27 countries, in 2011. This discrepancy caused the slow-down of land sale and pur-

Source: authors’ own compilation of Eurostat data. chase, and made land extremely tempting for grabbing. The farmers

in the new member states ﬁrst lost their own internal market before

having the chance to compete on the common market, which wors-

40–50 years, at much more valuable rates than nowadays, and that

ened the imbalance between the agricultural producers in the two

such payments helped them invest in agricultural assets, we have

echelons of member states. This inequality is also the effect of the

a picture and an explanation of the tremendous gap between the

initial design of the CAP, which, when created in 1962, was meant to

countries in the “center” and those at the “periphery” of the Union,

serve the interests of the countries afﬁliated to the Common Market

in respect of their level of technical endowment and revenues.

of the time, namely to counteract the food shortage that followed

What appears as less understandable are the current major

the World War II.

differences between the support payments granted through the

In the meantime, the “Common Market” evolved towards the

CAP. They prevent the agriculture of the new member states from

Internal Market, dominated by the effects of intensive production

becoming competitive, which translates into a Union of social dif-

policies, but also invaded by agricultural produce from outside this

ferences, not into a Union of social cohesion. Upon accession to the

internal market due to the new rules issued by the World Trade

EU-28, the size of subsidies for agriculture was limited for all East

Organization. It is a new agrarian economic policy that bears its

European countries to some 25% of the amount of subsidies allo-

consequences on the 13 new entrants to the EU.

cated to the EU-15 (prior to the year 2004), with the promise of an

An array of additional factors have added as further reasons

annual increase of 5% by the year 2010, the amount of subsidies

to discourage the local rural population from its ancestral farm-

allocated to the new members states should equal the subsidies

ing occupations: the non-proﬁtable size of farmsteads, the lack of

granted to the old member states in 2016. In Romania, in 2008,

resources to work the land (such as ﬁxed assets, access to bank

0.9% of all farmers absorbed 51% of the subsidies (because for farms

loans, due to much higher rates of interest), meager ﬁnancial aid

below 1 ha, the subsidy management costs are higher than the ben-

from the government, all of which made it impossible for local

eﬁts, which make such farms ineligible for such subsidies).

farmers to promote their produce on an increasingly standardized

As already shown above, in 2011, a number of 1.1 million farms

market that prefers to deal with large scale suppliers, and the fast

received direct payments, which represents approximately 35%

aging rate of the rural population when the free circulation of per-

of all farms. The distribution was the following: 961,000 farm-

sons on the internal market of the Union depleted rural settlements

ers, accounting for 86% of all beneﬁciaries, received an average of

of the young workers. This has caused the sale of many landed

198 euro; 104,500 farmers received 720 euro each; 44,600 farmers

properties, and deepened the depopulation of rural areas.

received an average of 6414 euro, and 1500 farmers collected an

The low price of land has made access to bank loans difﬁcult, as

average of more than 118,000 euro.

the low market value of land made it insufﬁcient as collateral. Many

Eurostat data indicate that in 2011, in Romania, 5000 farms

other problems have been generated by inheritance and ownership

(0.45% of the total number of beneﬁciaries) collected 286.4 million

right issues, by a poor stage of development of the rules regulating

euro in subsidies (39% of all direct payments).

the capital market. Therefore the sale of agricultural land is still far

The concentration of direct payments and of the food market in

from being conducted according to a well-developed land market.

some member countries seems, at a ﬁrst glance, to be interdepen-

In Fig. 5 is presented the evolution of cadaster and land registry

dent from one another. The distribution of direct payments in 2013

operations in Romania, 2005–2015.

shows that, in Romania, 1.1% of the beneﬁciaries received 51.7%

The price of land is at the crossroads between, on the one hand, a

of all direct payments, compared to 1.1% and, respectively 45.6%

poorly informed seller, who, by comparison to a gain that he could

in Bulgaria; 0.9% and 38.5% in Hungary; 2% and 28.5% in Poland;

hardly hope for until not long ago, ﬁnds the scanty price tempting,

1.2% and 28.4% in Germany; 0.8% and 26.3% in Italy; 1.3% and 23.4%

because he is also aware of his declining physical strength to work

in Spain; 0.9% and 14.4% in the United Kingdom; and 0.4% and 9%

2 the land, of the lack of means to do it in the new, harsh, competitive

in France. The 1st Pillar of CAP permits concentration of subsi-

environment, and, on top of everything, of the obligation to pay

dies, thus favoring a capital surplus in the old EU member states,

taxes and charges for everything, and, on the other, the demand

enabling their farmers to purchase more land.

of a buyer whose revenues accrue from his trading activities, the

A picture of the food market dominance in various member

government subsidies (which raises the value of the land by some

states is given by the following ﬁgures: in Portugal, 3 companies

15–40%), and the potential future gain deriving from an expected

growth of land value. So, the seller judges by criteria coming from

2 the past, and the buyer judges by the future.

Extent of land grabbing in the EU, Directorate General for Internal Policies, Policy

Considering the developments during the past decade

Department Structural and Cohesion Policies, Agriculture and Rural Development,

IP/B/AGRI/IC/2014-069, May 2015 (2005–2015), in other member states, but also examples from

148 C. Constantin et al. / Land Use Policy 62 (2017) 143–150

Fig. 4. Share of direct payments beneﬁciaries in the employed persons in agriculture (%) in some EU-27 countries, in 2011.

Source: authors’ own compilation of Eurostat data.

250.00% cultural land in EU (with 1% of them holding land totaling 20% of

all farm land), 17% of them controlling 35.5% of total farm land, and

200.00% a remaining 80% of agribusinesses holding just 14.5% of the entire

agricultural land of the EU.

150.00% Land grabbing occurs mostly in the Eastern and Central Euro-

pean countries, particularly in Hungary and Romania, because they

100.00% possess some of the best agricultural lands, with extremely fertile

soil and water sources for irrigation in the Danube plain.

50.00% The produce harvested is in most cases exported to the countries

of origin of the investors, and the pretext of grabbing land for food

0.00% security is, in actual fact, in reverse ratio to the areas cultivated,

2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 which has brought about an irreversible loss of jobs and of vital

resources in the areas controlled by such investors.

2005=100 2007=100

Family farms not only provide for the subsistence of their own-

ers, but also play important social and environmental functions,

Fig. 5. Evolution of cadaster and land registry operations in Romania, 2005–2015.

because they treasure and convey to the new generations knowl-

Source: authors based on (ANCDPI, 2016).

edge and skills that have developed in millennia of existence.

Family farms are viable enterprises that have an indispensable

other parts of the world, the European Economic and Social value per se, and are resilient in epochs of crisis. It may seem a

Committee (EESC) submitted, in January 2015, a report on “Land paradox the fact that the EU-28 has developed very tough rules

Grabbing – a Wake-up Call for Europe and an Imminent Threat to and regulations to ﬁght monopolies and the abuse of dominant

Family Farming”, which makes an inventory of factors that lead positions in the industrial and services sectors, and has put in

to and cause the expansion of this trend: globalization and the place the framework ensuring the protection of small and medium-

principle of free movement of capitals, the demographic growth, sized enterprises, while in agriculture, the CAP, for reasons of com-

fast urbanization; the growing demand for food and bioenergy; the petitiveness, favors and subsidizes land concentration and large

increasing need for natural resources; the negative aspects of the landed estates. Land grabbing in Romania expands at an alarming

agricultural and environmental policies; the threat of speculative pace, and the scarcity of acknowledged sources of information and

practices due to the growing price of farm land. (EESC, 2015) government stance on the issue make everything look even more

EESC (2015) describes the tendency of farm land concentration intriguing than the grabbing itself.

by non-farming investors and large corporations a serious threat The recent studies as Eco Ruralis, a no-government organization,

that is also beginning to affect certain regions of the EU-28. published, in 2015, six case studies on land grabbing aspects:

Massive concentration of agricultural land is in contradiction

to the European model of sustainable, multifunctional, and com-

petitive agriculture, mostly based on family farmsteads, and this - Bardeau Holding Gmbh, based in Austria, a company owned by

jeopardizes the effective application of Articles 39 and 191 of the Andreas von Bardeau, which has been operating in Romania since

Treaty for the Functioning of the European Union. As FAO, (2012) 2002, through 16 companies headquartered in Timis¸ oara, holds

remarks and it is presented in the report cautions that land is an 21,000 ha, and against whom 500 lawsuits were on record in

asset of ﬁnite magnitude, not an industrial commodity that may be 2012, brought against the company by peasants in the Caras¸ Sev-

replicated in large quantities, and that, therefore, land should not erin County, complaining of having been dispossessed of some

be governed by the typical market rules. In this context the authors 3000 ha of land.

make reference to the Voluntary Guidelines on Governance of Land

Tenure published by FAO in 2012.

A realistic approach of the magnitude of land grabbing is not The Austrian company has bought plots of land from 14,500

easy due to lack of accurate information, the absence from records petty landowners and leased other plots from another 1500 own-

of some of the transactions between legal entities, which often ers; it also leased 5800 ha from the State Domain Agency.

act through their subsidiaries or partner companies. And yet, the Similarly, Esterhazy Bardeau Silvicultura SRL acquired in 2007,

Report states that 3% of agricultural businesses hold 50% of all agri- 5000 ha of forested land in the Arges¸ County (for a price of

C. Constantin et al. / Land Use Policy 62 (2017) 143–150 149

2000–2500 euro per hectare). While operating in Romania, Bardeau the ﬁnancial support granted to the newcomers under the CAP was

accessed EU ﬁnancement through 7 SAPARD projects; sensibly smaller that the subsidies afforded to the farmers in the old

member states. Other factors came to deepen the gap: structural,

institutional, cultural, historic, legal, economic, and social differ-

- Holzindustrie Schweighofer, an Austrian corporation dealing in

ences between the old and the new member states, with the gap

wood processing, set foot in Romania in 2003, and, in 2014, it

still widening and causing an even higher imbalance.

was already holding 14.000 ha of forested land in eight counties

Although land grabbing is in full swing, and although the farm-

(Arges¸ , Buzau,˘ Covasna, Harghita, Hunedoara, Prahova, Suceava

ers, and citizens, at large, in the affected countries are expressing

and Vâlcea). In addition to this estate, Schweighofer beneﬁt-

their concern at the extent of this phenomenon, the media is giv-

ted from preferential contracts with Romsilva (The Romanian

ing scanty coverage to the topic, and, more surprisingly, neither

National Forests Corporation), pursuant to an emergency gov-

national nor European statistics provide data on it, at least out of

ernment ordinance that gave them the right to harvest, and for

respect for the elementary duty of transparent information and

a period of 10 years, 1 million cubic meters of wood per year.

consultation of the citizens.

They own in Romania ﬁve wood processing facilities, the newest

Agriculture, a sector on which the food security of a market

of them having been opened in February 2015, at Reci, Covasna

of more than 500 million consumers depends, despite its strate-

County, with an installed capacity of 800,000 cubic meters per

gic importance, has not been included in none of the directives

year. Over 85% of their production is exported to over 60 coun-

tries. regarding information and consultation of employees, applica-

ble whenever an economic sector undergoes changes pursuant to

mergers, acquisitions, or company ownership transfer, etc. As a

The Romanian press has repeatedly disclosed mass and illegal

matter of fact, the latest Eurostat data on the market price of land

deforestation practices that are also affecting the Retezat National

in the various EU member counties date back to 2009.

Nature Reserve;

Similarly, no observatory has been established to collect and

reﬂect statistic data on agriculture, so as have been designed for a

- three other case studies relate to Italian investors: the Generali

number of other economic and social topics of national and Euro-

Insurance Group, which holds over 4600 ha through Geneagricola

pean interest, as for example, the European Foundation for the

Romania SRL, founded in 2001; Riso Scotti SPA, acting through a

Improvement of Working and Living Conditions, and others, which

local subsidiary – Riso Scotti Danubio SRL, established in 2001

are regularly issued and forwarded to the parties concerned.

and holding an area of 11,000 ha of rice ﬁelds (in four Southern

The scale of land grabbing in Romania may very well exceed the

counties of Romania), and Padova Agricultura SRL, that landed on

magnitude deriving from the scanty information available to us;

Romanian soil in 2004, and cultivates over 4800 ha of rice ﬁelds;

there are counties where 20%–50% of the land has been purchased

- a sixth case study is on Tornator, a Finnish company that arrived

by investors from other countries (such as the case of the counties of

in Romania in 2008, and is now ranking third among owners of

Timis¸ , Arad, etc.). If these obscure, non-transparent practices of con-

forested land in Finland, is no. 1 in Estonia, and among the top

centrating land in the hands of a few continue, if the deals escape

ﬁve forestland owners in Romania, with an estate of more than

the basic control of the national authorities, and are left uncovered

12,000 ha, which they plan to expand to 100,000 ha.

by national and European adequate legislation, the land grabbing

may become a major vulnerability for the East-European states, and

Another example of non-farming investors is in Romanian agri-

for the future of the European construction.

cultural land is the Dutch RaboBank, which has created its own

The free sale and purchase of land, like cars or other commodi-

investment fund RaboFarm, through which it has acquired over

ties, is the result of the disregard for some of the fundamental

21,000 ha of tillable land in over 50 villages in the South, East and

principles of the European Union, i.e. the principles of equal oppor-

West of Romania. This investor is now under the investigation of

tunities, non-discrimination, sustainable development, protection

anti-corruption prosecutors for forgery of documents, and fraud.

of biodiversity, multifunctional agriculture, and rural development,

Putting together information from the press, from the Transna-

etc. If in Romania the price of one hectare of farm land is 5–10 times

tional Institute based in Amsterdam, and from the EESC, one may

lower than in many of the old members states, and the annual aver-

clearly see that in Romania, at present, 10% of the farm land (over

age income (be it wage earnings, the annual subsistence revenues

1 million hectares) are held by foreign investors from outside

of a farmer or the GDP/capita) is 5–30 times lower in Romania, it

the EU (including the largest farm, of approximately 65,000 ha,

means that the chances for a Romanian farmer or any other Roma-

Maria Grup, held by Lebanese) and another 20–30% is held by

nian citizen to prosper and those citizens of an equal social standing

investors from EU-28 member states (Denmark, Austria, Italy,

in other EU countries are blatantly unequal.

France, Germany, Portugal, Finland, Netherlands, Luxembourg).

In our research, we have not discovered any piece of information

Other aspects regarding the effects of the CAP on Romanian agri-

about a Romanian citizen, of the ﬁve million of them working in

cultural sector in designing the future of this sector including the

Italy, Spain, United Kingdom, Greece, Germany, France, etc. who

land garbing is presented in (Knight, 2010).

has bought at least one hectare of land in any of these countries, in

order to set up a farm. The unrestrained capturing of Romanian land

4. Conclusions by foreign investors, and the growth of price of farm land from 100

euro/hectare to 3000–5000 euro per hectare in the past 10 years,

Land grabbing is a fast growing trend in the Central and East since Romania’s accession to the EU, which are forbidding prices for

European countries, which has gained speed particularly after these Romanian citizens, dim the prospects of young Romanian farmers

countries’ accession to the EU, and more prominently so since the who wish to develop a farm.

onset of the economic crisis in 2007–2008. There are a lot of other arguments, visible to the naked eye, that

The grabbing is not limited to tillable land; it goes further to require and sustain the need to pass – as a matter of urgency – new

capture forests, hunting and ﬁshing reserves, water sources, renew- regulations regarding the free sale of land in the EU member coun-

able sources of energy, subsoil riches. The sale of land started when tries, before some of them become a mere geographical indication

the legal legislation permitting foreign citizens to buy land every- on a map. For this purpose, all transactions must be monitored and

where in the EU-28 took effect, as a condition for the candidate recorded in a transparent manner; the areas that may be purchased

European countries to join the EU-28, and then accelerated when by foreign investors must be stipulated as a percentage of the total

150 C. Constantin et al. / Land Use Policy 62 (2017) 143–150

agricultural land of a country, and capped to a certain level for each European Commission Directorate-General for Agriculture and Rural

Development, 2013. Rural Development in the European Union – Statistical

foreign investor; a national reference price must be determined and

and Economic Information.

observed by all, such measures being the prerogative of each of the

European Environment Agency, 2010. Land in Europe: Prices, Taxes and Use

member states. In our opinion, the land market cannot be subject to Patterns, available at: http://www.eea.europa.eu/publications/land-in-europe,

(Accessed 02 April 2016).

the same rules that govern continuously growing scale production

Eurostat, 2013. Agricultural Census 2010 – Main Results, available at: http://ec.

of other goods, particularly in the countries where salaries are low,

europa.eu/eurost/statistics-explained/index.php/Agricultural census 2010 -

or commodities that will soon be manufactured with the aid of 3D main results, retrieve: [05.08.2016].

printers. FAO, 2012. Voluntary Guidelines on the Responsible Governance of Tenure of Land

Fisheries and Forests in the Context of National Food Security, available at:

http://www.fao.org/docrep/016/i2801e/i2801e.pdf. (Accessed 05 March 2016).

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