The number of agricultural co-operatives continues to grow in Romania, where 787 co-ops were set up in 2021 alone.
According to a report by Ziarul Financiar, the country is home to 4,041 agricultural co-operatives, more than in 1989 when 3,172 agricultural co-operatives covered a joint total of 8.9 million hectares, almost the country’s entire agricultural land.
Back then agricultural co-operatives were a product of forced collectivisation. Nowadays producers are free to choose whether they want to form co-operatives or not. Advantages include being able to achieve scale, invest in new technology and cut costs.
Another benefit is being able to access European funding for rural development. The Agency for Funding Rural Investments (Agentia pentru Finantarea Investitiilor Rurale) can fund up to 90% of a project submitted by a co-op or an association of producers, as opposed to 70% for usually allocated to other initiatives.
According to data released by the Agency for Funding Rural Investments (AFIR), in the first eight months of 2020, 18 agricultural co-ops attracted LEI 38m (£6.45m) in European funding for investments in expanding the business and processing or storage.
AFIR also encourages co-operation within the agri-food supply chain, both between two or more actual or potential competitors and between businesses operating at different levels of the production or distribution chain, including public authorities and institutions. In 2021 AFIR announced it was making €230m available for young farmers, small farmers and projects aimed at increasing co-operation within the sector, including projects involving co-operatives.
“I will say again and again that the association of producers is perhaps the only way in which they can increase their productivity and competitiveness in a world dominated by big producers, big processors and big business chains,” said Florentin Bercu, executive manager of the National Union of Vegetable Co-operatives (UNCSV). “And this is an indisputable truth. Therefore, before talking about the benefits [of setting up co-ops], I consider that the association is a necessity to resist in Romanian agriculture.”
He added: “The growing trend in the number of co-operatives is a natural one based on the efforts we have made and continue to make to guide farmers to join. We introduce the Romanian farmers to co-operative models from countries that have managed unquestionable performances in the development and capitalisation of co-operatives.
“I am referring here to countries like France, Austria, Italy, Denmark, Spain, England, countries from which we are constantly learning and with which we exchange experiences that allow our farmers to see that it is possible.”
UNCSV is a member of Copa-Cogeca, the European voice of farmers and agricultural co-ops, and has recently produced a guide to successful co-operatives through which it engages with co-operatives from other European countries.
“Our Guide to Successful Cooperatives was created to help newly established or up to three-year-old co-operatives that need mentoring to stabilise,” said Mr Bercu. He explained that while more co-operatives are being set up in Romania, their profitability and sustainability threshold is low, something his union is trying to address.
“Only 45% of these co-operatives are over five years old, almost 20% made a profit. Here, in fact, begins our mission to guide them to grow harmoniously,” he added.
In recent years a number of food retailers have set up co-ops to source food from local producers. In 2017 Carrefour, second biggest retailer in Romania, founded an agricultural co-operative in the village of Vărăşti, which now supplies it with local fruit and veg. The co-op enables farmers in the village to scale up production and have a single collection centre.
Similarly, in 2021, Kaufland Romania announced a partnership with the co-op Cooperativa Țara mea, under which it guarantees buying from the co-op as well as support it to diversify its range of products.
Romania is currently working on a National Strategic Plan for 2021-2027 within the framework of the EU’s Common Agricultural Policy. It is expected that the new plan place a strong emphasis on associative structures, including co-operatives.
