Agri co-operatives ‘only way’ to help ailing small farms, says Romanian farm minister

Attitudes are slowly starting to change in the country and, with the help of European funds, the next few years could see a boom in agricultural cooperatives. [SHUTTERSTOCK]

This article is part of our special report Sustainable farming ambitions: between the CAP and the Green Deal.

Romanian farmers are naturally wary of cooperatives, which are often strongly associated with the country’s communist past and command economy. But thanks to young farmers and EU funding, more and more farmers are choosing to join forces. EURACTIV Romania reports.

For many villagers, the term ‘cooperative’ has a negative connotation, being heavily associated with the so-called ‘agricultural production cooperatives’ built on the model of the Soviet kolkhoz.

However, far from the classical cooperative model in which members decide, in these communist cooperatives farmers worked while top-down decisions were imposed by the state.

Farmers are therefore naturally wary of anything resembling this kind of structure.

However, attitudes are slowly starting to change in the country and, with the help of European funds, the next few years could see a boom in agricultural cooperatives.

“A large stimulus in the CAP, after 2022, will be for cooperatives,” says Ion Păunel, president of the Olt Agricultural Producers’ Union, referring to the EU’s farming subsidy programme, the Common Agricultural Policy.

Păunel is involved in setting up several cooperatives in Olt County in southern Romania.

“First of all, we help farmers get organised, we educate producers, we teach them how to run a cooperative and we help them in the application process for European funds,” he explained.

The farmers are able to apply for support from rural development funds, which includes several specific measures to offer farmers a helping hand in this area, according to Păunel.

Speaking during a debate on farmers’ co-operatives as a solution for greener agriculture, Romania’s agriculture minister, Adrian Oros, also promised there will be consistent support for farmers’ associations in the future.

Once the CAP reform is sealed by the EU legislators, member states will be expected to declare the environmental measures – the so-called eco-schemes – they intend to pursue in their national strategic plans, which the EU executive will ultimately have to approve.

“In our national strategic plan, we can include measures to encourage farmers to join cooperatives,” he said, stressing that there is “no other way” for small farmers to survive.

“We have looked everywhere in Europe and it is the only solution. We have had so far EU funding incentives, as the support in any measure would increase by 20% if the farmer joins the cooperative. We must maintain, or even increase this amount because we can only encourage them, we cannot force them,” he said.

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A quick development

If other farmers remain sceptical about the development of cooperatives, Păunel is optimistic.

While he acknowledged that small family farms are disadvantaged in relation to the authorities and in contracts with retailers, he said Romania has “functional and viable cooperatives and more and more young people are attracted by association.”

Statistical data also shows an accelerated pace of development in recent years.

In Romania, there are more than 1,500 agricultural cooperatives, more than 200 of which were established in 2019, according to the Romanian Center for European Policies (CRPE), a think tank.

The number of new cooperatives peaked in 2018, with 280 agricultural cooperatives established, while CRPE estimates that fewer than 200 cooperatives were set up last year due to the pandemic.

But there is more than enough room for growth.

Only 1% of Romanian farmers are currently in an associative structure, much lower than the EU average of 34%, according to research conducted for Renew Europe.

“I have been following the evolution of agricultural associations for eight years and I believe that this is the solution for healthy development in rural areas. There are projects that have worked but we need consistent support in the future,” said Cristian Ghinea, a former Renew MEP who is currently the Romanian minister for Investments and European Projects.

In the first eight months of 2020, 18 agricultural cooperatives drew funds of over 38 million lei (about €7.7 million) to expand their operations, storage or processing abilities, according to data from the Agency for Rural Investment Financing (AFIR), the agency in charge of rural development funds.

“Agricultural cooperatives are a viable alternative to get European funds, and more and more Romanians succeeded in recent years to overcome emotional barriers and mistrust and chose to partner to ensure their survival on the market,” said Gabriel Dan Ieremia, an EU funding consultant.

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Increasing interest for local products

In addition to financial aid, cooperatives also need consultancy help, especially in areas like marketing and processing.

“They don’t just need contracts with large retailers. One can also organise to sell at the gate, in their own stores or in local markets,” said Păunel, who is himself a vegetable farmer and supplier to stores of Mega Image, a chain owned by retail group Ahold Delhaize.

In fact, in recent years, more and more farmers are using social media to directly reach their consumers, and this trend intensified in the past year.

“The pandemic brought one good thing – Romanians consume more Romanian products, both in traditional markets and in chain stores,” Păunel said. Shortening supply chains is one of the key aims of the EU’s flagship food policy, the Farm to Fork strategy.

Those who have turned online to sell directly to consumers have reaped the rewards.

“Consumers appreciate local products, and the trend will be more evident with the support of European funds,” Păunel said, adding that the reform of the Common Agricultural Policy (CAP) aims to increase support for small farms.

In fact, Păunel grounds his optimism in EU support, saying that the transition funds alone hold the potential to help 2,500-3,000 young people to settle in rural areas.

Looking to the future, he hopes that a combination of generational change, the inflow of EU funds and know-how, shorter chains between producers and consumers and support for farmers will see a boost in both quality and quantity, which could in turn help to strengthen Romania’s position in world agri-food trade.
[Edited by Natasha Foote/Gerardo Fortuna]

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