Introduction
The impact of transition and structure of property rights
The impact of agriculture on the environment
The influence of society on the agricultural environment
Conclusions
References
Annex 1
Annex 2
 
 

The purpose of this study is to emphasize the relationship between agriculture and environment and related policy/institutional issues, mainly the government/NGOs role and the effectiveness of their current attempt to address the environmental issues.
Agriculture may have damaging as well as beneficial effects on the environment. Both aspects have to be considered in order to understand the shortcomings but also the potential of farming activities vis-à-vis the environment. The environment conditions agriculture both by providing the indispensable natural resources and by influencing the quantity and quality of its products.
The promotion of sustainable development should be a major objective of the environmental policy that will require enhanced political support. Improvement of institutional structures and management, both at central and local level, should enable achieving an integrated approach to the environmental issues, establishing and implementing environment management plans. Environmental NGOs have been perceived, recently, as the most dynamic field in the Romanian civil society.
The remainder of this study is organized as follows. In Chapter 2, we introduce the impact of transition and structure of property rights. In Chapter 3, we present the relationship between agriculture and the environment. Chapter 4, gives a description of the institutional change within environmental policy, environmental policy related to agriculture and the importance of national environmental associations and organizations. Finally, Chapter 5 presents the conclusions.

The economic reform programmes address macroeconomic issues (determining international trade, the national budget situation, private investments, wage policies, income distribution, etc.) and major sectoral issues (e.g. agricultural productivity, industrial development, energetic consumption, etc.). In the majority of the cases, the reform programmes do not specify how these economic policies affect the environment. Still, there is a strong link that should be considered in the decision-making process. The positive impact of economic reform on the environment creates the premises for its development on the same bases. The possible negative effects should be analysed, monitored and neutralized. While in some cases the trend of environmental effects is predictable, at other times it is more complex¹.
Price liberalization and the elimination of economic constraints contribute to both economic growth and environmental protection. The land reform (through clarification of land property rights) and development of better access to financial and social services create premises not only for agricultural growth and better living standards in rural areas, but also for establishing a motivational framework favourable to the environment. Macrostabilization measures include environmental policies, while economic instability affects the sustainable use of natural resources. A low inflation rate leads to reliable price forecasting and determines economic agents to invest in. These premises are essential for encouraging sustainable economic development with favourable environmental impacts. Increasing economic efficiency, reduction of waste and the correct evaluation of natural resources lead to decreasing negative environmental effects.

With 20 percent of GDP and 35 percent of employment, generated by agriculture Romanian agriculture is relatively more important than in any other country in Central and Eastern Europe. Romania is not strongly urbanized and almost half of the population lives in rural areas. Romanian agriculture is undergoing a process of structural transformation meant to overcome the crisis originated before 1989, a crisis mainly related to: the underuse of the production potential, preservation of uncompetitive agrarian structures (a high level of labour force employed in agriculture, a high fragmentation of land property, a low level of working capital), a weak growth of markets and market institutions, and the managerial crisis. One of the main objectives of the reform process during transition was to decollectivize agriculture and to re-establish private property rights. The movement of state-owned properties into private hands ("privatization") provides an important opportunity to transform Romania's environmental objectives into reality in a direct way. Romania should consider the environmental measures to be taken into account in the privatization process and in the subsequent sale of properties between private parties. An environmental audit at the time of selling an enterprise would be considered essential by foreign investors and by potential local stockholders (e.g. the likely costs required to make the enterprise saleable in an environmentally-acceptable form).
With the disorder in production, the Romanian environment is cleaner in the 1990s than it was in the 1980s. Some major polluting sources have been forced to decrease production by between 30-50 percent and, as a result, there has been a dramatic decline in the formation of industrial waste and energy consumption. Emissions are directly proportional to production. With further closures of inefficient production lines (or of some entire plants), and with the increasing pressure to become more efficient and competitive, we can expect a further reduction of pollutant emissions. The Government policies that now oblige producers to compete in open markets should lead in time to restructuring away from heavy industries and towards generally less-polluting lighter industries and services.

The basis of the rural economy is agriculture. Half of the rural population is over 60 years old due mainly to rural-urban migration before 1989. There are significant differences between the rural communities placed within the eight macroregions of Romania. Over half of the Romanian communes (covering 70 percent of the rural population and 65 percent of the rural area) present a medium economic level. One fifth of the communes are characterized by a good or medium economic situation and have resources for a diversified rural economy. The remaining 30 percent present a weak economic situation and have predominantly agricultural potential.
Strategic objectives regarding the restructuring of rural areas address different issues. The environmental issue should be one of the most important ones. Environmental problems in the rural areas are generally of a more diffuse, long-term nature than those that occur in urban areas. With the exception of the most intensively affected spots, the main environmental task in the rural areas is different from urban-industrial zones - namely, to conserve or restore existing natural and agricultural areas, rather than to protect public health. Since Romania has a large agricultural sector, this also means the conservation of a large segment of its economic base and of the countryside that provides food and support to cities.

Starting February 1997, agricultural policy has had in view a gradual decrease of all kind of subsidies in favour of direct payment schemes (i.e. the voucher scheme). Prices of all agricultural products have been liberalized. Price reform and tariff reduction were meant to improve diversity and quality of local goods, to restore the profitability of the repressed export sector and to stimulate production among efficient import competitors. Agricultural exports have been totally liberalized, eliminating all trade barriers, aiming at the stimulation of production growth, increase of efficiency and competition among producers. Proper pricing and incentives offer the possibility of substantial resource conservation. Diversification of agricultural production and the creation of incentives for ecological production will also occur as foreign trade develops (exploration of new foreign markets and increased competition on the domestic market). The ecological product market is still in its early stages, but certainly there are premises for its development.

Land reform was initiated in 1991. Putting land and other farm assets into private ownership or private management led to a high degree of fragmentation of land ownership and farms. In reality, the structure of production is less fragmented than the structure of ownership. A limit of 10 hectares was set up per household, the average size of most farms being about 2.5-3.0 hectares. About 15 percent of privately-owned land was operated by formal farmers’ associations; 13 percent have represented family associations and the remaining 72 percent have represented small family farms. About a fifth of the farmland has been managed by state farms. At present almost 30 percent of the total surface managed by the state farms has been transferred as shares to private owners.
Due to its restrictive character (it banned rural land sales, gave pre-emption rights to a Rural Development Agency), the legislative framework was amended by some new measures (starting 1997) that modified and completed it (with regards to the increase of the land ownership limit).
The objectives regarding the land market that should be realized in the near future are completing land registration and the distribution of property titles and clarifying the issue regarding land managed by state farms. The current institutional and legislative framework for the land market does not firmly address the impact of private/state land ownership on the environment. Land privatization can provide dynamic incentives to improve land, but is also consistent with optimal resource degradation and the continued existence of externalities among owners.

Due to the high rate of inflation and an imprecise market information system, the price monitoring process has been raising methodological questions. Before price liberalization in 1997, Romania applied the minimum guaranteed price system for agricultural inputs and outputs. Following the drastic declines in real incomes since 1990, Romanians have spent on average 60 percent of their income on food. Due to this fact, the Government intervened extensively to control food prices (trying to keep consumer prices low and producer incentives high) as a form of social policy. In addition, high import (tariff) barriers sustained inefficient production and processing activities at a high cost to the budget and to consumers. The economic, environmental and budgetary costs of these interventions were ultimately unsustainable. Moreover, the policies did not succeed in protecting the consumer much, and resulted in large losses and continued inefficiency in agricultural enterprises. In order to maintain low agricultural prices, state-owned agricultural processors had their margins controlled. The low price farmers received for their output was a disincentive to produce and to buy the best quality seeds and fertilizers. Although they preferred to deliver to the free market, they were given no real choice since highly subsidized credit and subsidized inputs were channelled through state integrators.
Starting 1997, prices were liberalized and driven by the world price trend. After 1993, the ratio between Romanian and EU producer prices for most of the main agricultural outputs and inputs has shown an increasing trend. In 1997, the administered prices for fertilizers were eliminated and fertilizer companies have been allowed to sell at relevant parity prices. Input prices increased faster than output prices leading to lower farmers' income, decrease of the use of good quality inputs (e.g. consumption of certified seed decreased, since most small private farmers use seed from own production). In view of these developments, since 1997 the voucher scheme has been applied to supply farmers with an extra amount of inputs. The increasing gap between input and output prices should be counterbalanced by future liberalization of the land market and legislative reform in the rural financing system.

Agriculture may have damaging as well as beneficial effects on the environment. Both aspects have to be considered in order to understand the shortcomings but also the potential of farming activities vis-à-vis the environment. According to local conditions and to the way they are carried out, farming activities can, for example, favour or combat erosion, increase or reduce biodiversity.

Much of Romania’s cultivable land has been developed for large-scale agriculture with huge areas under intensive arable cropping and irrigation. Virtually, the whole of the Danube Valley has been reclaimed for agriculture. In the mountainous areas of the Carpathians, the landscape turns to upland hill pasture and upland forest. Over half of the Romanian land area is classified as agricultural land and about 67 percent of this, or 10 million hectares, is cultivated annually (see Annex 1, Table 1).
The evaluation of agricultural soil quality consists of the identification and characterization of the factors limiting its productive capacity. Romanian soils can be classified in capability classes (the integration of soils in one capability class is done according to the ratio between the cost of land improvement and farming efficiency) (see Annex 1, Table 2).
Out of the total of 16 million hectares of agricultural land, 12 million hectares are affected by factors such as erosion, water and salt excess, compacting, acidification, chemical pollution with pesticides, heavy metals, fluoride, oil, etc. Only about 3.7 million hectares out of 10 million hectares of arable land are actually suitable for sustainable and efficient agriculture.
The most important problem refers to the erosion phenomenon that affects about 6.3 million hectares of agricultural land and shows an increasing trend. Wind erosion, phenomenon recorded on almost 380 000 hectares shows a propensity for extension due to deforestation. Investigations show that about 150 million tonnes of topsoil, which includes 1.5 million tonnes of humus, 0.4 to 0.5 million tonnes of nitrogen, phosphorus and potassium and large amounts of nutrient elements (calcium, manganese, zinc, molybdenum), are lost through erosion. Additionally, about 0.7 million hectares are affected by landslides. Investigations show that this very dangerous erosion process is increasing. While there is no measure of loss of productivity, research in Romania has shown yield improvements of six to eight times where soil conservation has been practized on severely eroded lands. Erosion also has an economic impact through siltation. Apart from a loss of aquatic life due to turbidity, at least 14 natural reservoirs have been wholly or partially silted up.
Soil compacting was recorded on 6.5 million hectares. Other aspects refer to the level of nitrogen (deficient on 4.8 million hectares), those of phosphorus (deficient on 6.2 million hectares), and also deficiency of other microelements (zinc, iron, calcium, magnesium). Strong and moderate acidification was recorded on 3.3 million hectares. About 220 thousand hectares are polluted by 300 million tonnes of solid waste. Oil and salty water affect other 50 thousand hectares. Chemical pollution affects 900 thousand hectares. Out of these, 200 thousand hectares are totally unproductive for agriculture. Very acid soils due to acid rain (sulphide oxides and nitrogen oxides) were found in the neighbourhood of chemical plants producing fertilizer (ammonium nitrate), sulphide acid or non-ferrous metals.
Irrigation is another factor that put agriculture in the position of aggressor of the environment. Soils can also be polluted during irrigation by water from very polluted rivers like the Olt, Arges, Mures, Siret, Prahova, and Trotus. This will be a major problem in the future. Although the area presently equipped with irrigation infrastructure covers 3.2 million hectares, less than 2 million hectares is actually irrigated because of system deterioration. It is unlikely that more than 70 percent of the former area will be restored because of high pumping costs. As a result, the negative impact of irrigation and particularly waterlogging is therefore likely to be somewhat reduced. In areas with irrigation systems and no drainage systems, soils get salty (about 1.2 million hectares). Soil fertility has been affected in this way on over 600 thousand hectares. Salinization is met especially in the steppe. Water evaporates and salts are concentrated on the ground. Irrigation in excess leads to changes in soil, meaning that the level of the groundwater rises and salt concentration in soil increases. Water losses from irrigation (about 40 percent of the total use of water for irrigation) lead to an excess of water in soil on large surfaces (about 5.5 million hectares).
Pesticides are significant sources of chemical pollution in soils. Pollution due to pesticides is a phenomenon whose intensity, although decreasing rapidly to 25 percent of the EU level, has still exceeded maximum allowable limits (0.1 ppm³) for some organochlorine insecticides, such as HCH in six counties and DDT in eighteen counties. Although herbicides have a much shorter persistence in the soil, their residues were found both in soil and groundwater near the manufacture plants regardless of their product. On the whole, while there is no comprehensive system to detect pesticide pollution, and packaging and instructions for use need to be improved, the use of pesticides does not appear to be a major environmental issue, at present; however, there is a need for pesticide application equipment and protective clothing to be available on the market. Among soil-polluting pesticides, organochlorine compounds are especially persistent. In many cases, concentration of organochlorines of about one ppm were found (this being a very high value). The problem should be no longer serious, since the use of HCH and DDT was forbidden years ago and we have had to cope with their persistent residues.
Animal farms are an important pollution source to all environmental factors. Removing animal residues from animal farms pollutes first the water and, if water is not decontaminated, it affects soils, too. Part of animal waste is used as natural fertilizer. Waste management had to deal with 11.3 million tonnes of manure from livestock farms. Residues from animal farms affect 900 hectares. About 76 percent of this amount was used by anaerobic fermentation, composting and administration of agricultural land. In 1994, due to decreasing use of pesticides, about 6 190 tonnes of pesticides expired, exceeding by 68 percent the quantities registered in 1992.
Currently, soil pollution is not monitored on a regular basis. The Ministry of Agriculture and the Academy of Agricultural and Forestry Sciences undertake a sampling as part of their normal operations, but their sampling is not particularly directed at detecting any measuring of polluting substances and the information that is gathered is not necessarily passed on to the Ministry of Water, Forests