Teren de Vanzare – Land for sale: Romanian peasants’ struggle against land grabbing
by CAROLINA MODENA ROMANIA
In Europe we tend to relegate the idea of land grabbing to the global South, yet it is happening much closer to home than we perhaps realize.
Most of the time, land appropriations in Europe are not characterised by violent actions, taking instead the form of foreign investment with the promise of economic development and employment. These promises are often not honoured, meaning that people of already meagre resources end up with even less. This “legal” situation is riddled with ethical holes: the strength of the negotiating positions, big corporations on one side, and an ageing, rural population of small-scale farmers on the other, is not even comparable. Farmers usually agree to lease or sell their land easily, sometimes without even reading the contract1. The consequences are not just economic, but also social and environmental: farmers with no land are forced to emigrate and the agro-industry investors that buy the land cause severe environmental damage.
There are misperceptions around the issue at the institutional level too: the European Union only acknowledged the existence of land problems in 2014, when the European Economic and Social Committee published its opinion on the matter: Land grabbing – a wake-up call for Europe and an imminent threat to family farming.
A particularly sad example of land grabbing in Europe can be found in Romania, a country where there were 3.8 million agricultural holdings registered in 2010 (the highest number of farms in any EU country). Moreover, 98% of the holdings are less than 10 hectares, with an average size of just 2.16 hectares2. This explains why land issues are so relevant in Romania, affecting one the largest rural populations in Europe.
The current, fragmented land structure has been shaped by the country’s history of continuing social and political changes: collectivisation during the communist regime, liberalization in the 1990s and joining the European Union in 2007. This has created a marked division between small-scale family farms on the one hand, and large-scale agro-industry on the other.
Romanian land market attracts investors from all over the world
Due to a lack of transparency in land acquisitions, it is very difficult to report precisely the phenomenon of land grabbing in the country: civil society organizations estimate that it may have already affected about 1 to 4 million hectares of Romanian farmland. A local peasants’ association, Eco Ruralis, has carried out several studies on the issue, identifying just a small part of these acquisitions, accounting for a total of around 550.000 hectares. The biggest investments, in terms of hectares owned by a single company, come from large American corporations, such as Cargill (250.000 hectares)3. Romanian investors are also involved in these practices: SC Transavia Grup SRL, an industrial poultry company, is currently cultivating 12,000 hectares of maize in the Cluj district4.
There are many different factors which make Romanian land so desirable: the high quality of the soil, the incredibly cheap prices (from as little as €120 per hectare of agricultural, unbuildable land) and weak legislation that facilitates land acquisitions by foreigners, setting no real restrictions. EU subsides under the Common Agricultural Policy also play a role, totalling around €20 billion from 2014 to 20205. This money attracts more and more foreign investors, as direct payments are granted on a per-hectare base, favouring large-scale farming.
The actors involved in land acquisitions are not just agri-business companies, as one may imagine. Banking institutions and private pension funds are big investors in Romania6, especially so since the financial crisis in 2008, when they were “forced” to seek out different real assets in order to diversify their investment portfolios7.
Italian companies also involved in land grabbing practices
The presence of Italian businessmen in Romania is well consolidated. It is so relevant that Timisoara (in the northwest of the country) has been nicknamed “the Venetian city”. From 2004 onwards, investors’ interest shifted to agricultural land: “Italians buy the land in a first phase for €350-60 per hectare and then sell it on for €1500-2000 per hectare. The tendency is to sell agricultural land between themselves in Timisoara. It has become an internal market”8.
One example regards Generali Group, which through its agro-industrial arm Genagricola, one of the biggest in Europe, started investing in the Romanian land market in 2001. With their entrance into the market, land prices rapidly increased, making it inaccessible for the local population.
A large part of the rural population in Romania was and is pushed to emigrate due to economic difficulties caused by the land situation, and Italy is a top destination country. Over a million Romanian nationals reside in Italy, and the immigrant community has often been subjected to prejudice and demonization in the right-wing media9, yet most Italians don’t realize that the bad practice of Italian companies are partly responsible for the influx.
Romania has an incredible agricultural tradition. Thanks to the rich soil and the deeply rooted peasant culture, the country does not need a complete restoration of its agricultural system, as is the case among many other countries in western Europe, but rather a continuous effort to protect its agricultural heritage.
The UE and the national governments must take action
The Romanian government, together with EU institutions and Member States, must start promoting serious policies to protect land from large-scale domestic and foreigners acquisitions and make land more accessible to farmers.
In the EU as a whole, just the largest 3.1 % of farms control 52.2 % of all farmland, while by contrast, the smallest 76.2 % of farms use only 11.2 % of farmland. In this context, the European Union has finally started dealing with land issues. In a recent vote, the European Parliament demanded that the Commission adopt a concrete land governance policy and establish a land observatory, in order to collect data on the level of farmland concentration, together with a task force to examine the impact of EU and Member State policies on land concentration. As underlined above, the Common Agricultural Policy, for example, has contributed to land-grabbing in Europe. Increasing transparency in land acquisitions, fixing a ceiling on permissible land transactions and implementing land reforms where there is a high level of land concentration are just a few of the provisions that would help in counteracting the land grabbing phenomena.
1 J. Bouniol, “Scramble for land in Romania: Iron fist in a velvet glove”, in Land concentration, land grabbing and people’s struggles in Europe, J.C. Franco and S.M. Borras Jr. (eds.), Transnational Institute, June 2013..
2Eurostat, Agricultural Census in Romania, at http://ec.europa.eu/eurostat/statistics- explained/index.php/Agricultural_census_in_Romania (11 August 2015).
3 Eco Ruralis, Land Grabbing in Romania, April 2015
4 Transavia’s annual revenue amounts at 150 million euros, with a production of 50.000 tons of meat and 30 million eggs per year.
5 European Union, Romania – Common Agricultural Policy, April 2014.
6 See Eco Ruralis, note 3.
7 HighQuest Partners, Private Financial Sector Investment in Farmland and Agricultural Infrastructure, OECD Food, Agriculture and Fisheries Working Papers, No. 33, OECD, United States, 2010.
8 Iordache, M., Romania: immobiliare, un mercato italiano, Osservatorio Balcani e Caucaso – Transeuropa, October 2004; available at http://www.balcanicaucaso.org/aree/Romania/Romania-immobiliare-un-mercato- italiano-2683
9 Iordache, M., La Romania in mezzo, Osservatorio Balcani e Caucaso – Transeuropa, November 2007, available at http://www.balcanicaucaso.org/aree/Romania/La-Romania-in-mezzo-39221.