Overview
U.S. manufacturers and exporters of agricultural equipment have good prospects in Romania, in both the short and long term. However, there are several structural issues that affect demand for this equipment.
While Romania has an abundance of rich soil, the predominance of subsistence farming means that the country has a minimal amount of arable land per holding. Some small commercial farms are realizing that they can increase profitability by voluntarily forming associations to aggregate production and marketing. Relatively few large farms coexist with many small ones, which influences the competitiveness of Romanian agriculture.
Discounted land prices, good-quality soil, low labor costs, and the potential for increasing productivity gains are attractive opportunities for foreign investors. These offer opportunities for silos, agricultural machinery, irrigation equipment, clean energy (solar & wind farming technologies), greenhouses, and agricultural inputs such as fertilizers and feed supplements.
Leading Sub-Sectors
Irrigation Technology & Equipment
Romania is a top agricultural producer in the European Union (EU) exporting wheat, corn, sunflowers, and soybeans. Climate change has contributed to the most severe drought in the last 50 years. Further, Romania has one of the lowest agricultural productivity rates among EU members states including the region of Southeastern Europe, underscoring the need and opportunity for innovative water solutions in this market.
The State of Irrigation in Romania
Romania has a large national network of irrigation canals. However, this infrastructure has fallen into disrepair. At present, less than 20% of the 6,200 mile irrigation canal infrastructure is being utilized, irrigating approximately 10% of the 22 million acres of arable land in Romania.
The Ministry of Agriculture and Rural Development in Romania launched a 1.6 billion U.S. dollar program in 2022 to rehabilitate the primary irrigation canal networks. However, the allocated amount was insufficient to upgrade the entire canal system. Romania subsequently sought 0.5 billion USD in additional funds from the European Commission for the rehabilitation of secondary irrigation canals through the 2020-2027 Multiannual Financial Framework of EU’s Common Agricultural Policy.
Best Prospects for U.S. Exporters of Clean Energy and Digital Agribusiness Water Solutions
New tenders present a clear opportunity for U.S. suppliers of irrigation canal rebuilding technologies. These water solution technologies include pumping stations and irrigation systems utilizing clean energy as well as smart water management technologies supporting digital irrigation, software sensors and other technologies such as water monitoring, usage, conservation, filtration, purification, and de-salination.
U.S. manufacturers of integrated renewable energy technologies, efficient irrigation water management solutions and high-precision agricultural equipment will find strong demand in the Romanian market, from a limited, yet growing, number of buyers. Small and medium sized farms — “medium” defined as more than 250 acres — make up a very small proportion of Romania’s farms. However, large commercial farms (including EU’s largest farm: Braila Great Island of around 135,000 acres) are investing to increase productivity. They have also become more adept at using financing from EU’s Rural Development Funds and U.S. Export-Import Bank’s financing tools.
Romanian farming associations and foreign companies, including U.S. agribusinesses, authored a white paper identifying strong market prospects for manufacturers of digitalized clean energy and water distribution devices. Actors in the agricultural sector who would benefit consist of:
- Romania’s farmers, who for the first time would be able to receive on-demand water delivery services, enabling precise start time and duration for water deliveries at the flow rate they require, and at a lower cost of supply resulting from reduced energy inputs.
- Romanian authorities responsible for the monitoring and control of water consumption, who would receive a richness of real-time and historic data provided by digital collection and cloud storage with automatic processing.
- Local Romanian communities who require on-line contact with state agricultural authorities.
- Regional economies of the irrigation areas, benefiting from additional high value crop production stimulating secondary activities associated with harvesting, such as packaging and transporting; and efficient provision of environment-friendly fertilizers and associated factors of input and supporting services .
- Networks of U.S. and EU suppliers to transfer digital manufacturing technologies to the country to maintain, repair, provide spare parts and upgrade water management systems.
Reductions in energy consumption are critical to the sustainability of the Romanian economy. For agriculture, decreases to the carbon footprint for irrigation can be achieved through the import of innovative U.S. solar panels and wind turbines technologies to pump irrigation water to crops and support clean energy and smart water initiatives. Such efforts would enable Romania to reach the EU Green Energy Deal’s emissions reduction targets by 2030.
Improved access to smart irrigation water run by clean energy and agri-finance solutions are promising opportunities for farms to survive the soil erosion and desertification risks. They can benefit U.S. exporters of solar and wind farming technologies, irrigation water installations, agricultural machinery, and agri-food processing equipment seeking to do business in Romania’s agricultural sector as well as neighboring states interested in water supply, crop yields and agri-food security in the Black Sea Zone.
Opportunities
Trade Event Opportunities for U.S. Companies in Romania
October 26th – 30th, 2022: INDAGRA – Annual International Trade Fair of Equipment and Products in Agriculture, Horticulture, Viticulture and Animal Husbandry, 26th Edition, Romexpo Exhibition Center, Bucharest, Romania, INDAGRA
June 2023: Expo AgriPlanta–RomAgroTec: Open-Air Exhibition, Trial Fields & Machinery Demonstration, 9th Edition, Fundulea, Calarasi County, Romania, AgriPlanta–RomAgroTec
Contact Information
Gabriel Popescu