Area-Based Subsidies in Odorhei Region from Romania

Since Romania has joined the European Union (2007), new types of agricultural subsidies were targeted at reforming rural development policies, streamlining of grants, as well as to rationalization and diversification of agricultural systems.The Harghita micro-region differs significantly from the European Union (EU) average in many aspects of the agriculture. The share of agricultural land in the total land surface is about 1.5 times larger than the EU average; the workforce employed in agriculture is about five times larger, the mean size of a plot is one sixth of the size in the EU; and the contribution of agriculture to GDP is 3.5 times larger as compared to the average in the European Union. At the same time, 29% of the agricultural centres and 20% of the agricultural workers of the EU are located in Romania (Eurostat, 2008). Romania is thus a key player in shaping the future of agriculture in Europe.Country regions are facing multiple challenges. Some are demographic – low employment rate, low level of education, narrowing employment opportunities for women and youths; others are economic – low income, slow pace of development and a lack of skills both in areas of agriculture and food processing industries. The rapid improvement and modernization of agriculture in Europe will expectedly pose severe challenges for the poor regions. In the 15 original member states of the Union approximately two million full-time agricultural employees will leave their jobs by 2014. In the ten countries that joined the Union in 2004 the workforce expected to leave the industry is estimated at 1-2 million people, in addition to another 1-2 million in Bulgaria and Romania. Thus, about 5 million of expectedly unemployed people are hidden in the segment of agriculture. In predominantly rural areas the biggest challenge is to avoid unemployment resulting from the lack of transferable skills and from the low income rates. In such rural areas where agricultural employment is widely spread, the reform process design will profoundly impact the economic region’s development as an entity.This study aims at assessing the level and the ways of using local subsidies and grants available to farmers in Odorhei region from Romania. By contrasting the various settlements and micro-regions, I compare the size of farmland units and the number of farmers, to correlate them with the number and the amount of various regional subsidies that they have applied for and been granted.In addition, I propose to study the impact of these grants within the agricultural context of the region. Applications for regional grants have shown close ties to local idiosyncrasies. Among these important factors is the particular demography of a settlement, its employment structure, the ratio of active and inactive inhabitants, the distribution of active workforce among industry sectors, in addition to geographical characteristics: topography, soil quality, size of lots, number of livestock. Of all these aspects recent information is scant and unorganized. I believe that by providing a solid assessment of the background of applications for and use of regional subsidies, a better foundation for their usefulness can be laid.