FAO GLOBAL INFORMATION AND EARLY WARNING SYSTEM ON FOOD AND AGRICULTURE
After suffering the worst drought in decades, Romania's cereal crop output in 2000 has been significantly reduced, well beyond the decline already evident in the past decade. Official data on rainfall and temperature indicate that drought conditions affected over 90 percent of the agricultural land surface to a variable extent from May until at least the end of August 2000. In many parts dry conditions continued through September and October. In most of the main arable areas, the drought effects were compounded by a heat wave at the height of summer.
Of the cereal crops, the worst affected was maize, which is spring planted and had generally inadequate access to moisture throughout its whole growing period. Wheat, being winter-sown, fared somewhat better with the benefit of moisture from the autumn and winter. Apart from cereals however, the drought also had significant impact on the sunflower crop, which has a similar growing season to maize, and affected other food and fodder crops.
As a result of the decline in cereal output, a tight supply situation is in prospect in the coming months and significant imports could be required before the end of the current 2000/01 (July/June) marketing year, in stark contrast to previous years when the country has been a net cereal exporter.
In Romania, wheat is normally planted in September-October (see Figure 1), the exact timing being dictated by autumn rainfall which is required to provide suitable conditions for primary cultivation, i.e. ploughing. The optimum date for planting is around mid-October and the latest (but not recommended) is around mid-November. Should farmers be unable to meet this critical period, they will normally abandon the wheat crop in favour of spring maize planting. The wheat crop remains dormant during the winter period and starts growing in April. Flowering takes place in late May, with grain filling in June/July, the two critical periods for adequate rainfall, when moisture stress has a significant effect on yields.
The maize crop planted in April-May (see Figure 2), using mostly local hybrid material, matures in 90-150 days. The critical periods of growth, and thus also for adequate moisture, are tillering, flowering and seed filling which occur during June, July and August. Harvesting is usually by end-August/early September or end-October for late-maturing types. As for wheat, should moisture stress occur during these periods there will be a significant effect on yield.
The 1999-2000 rainfall distribution of ten representative sites compared to the long-term average is presented in Chart 1. The data clearly show an extremely serious drought situation which affected all critical periods of wheat and maize growth.
Apart from soil moisture, air temperature also had a profound effect on crop growth. Above-average summer (June-August) temperatures were reported throughout the country, with air temperatures reaching 36-40°C, and soil surface temperature 50°C in August. The critical "wilting point" for the maize crop was reached at that time in many of the cereal growing areas.
Source: USDA Joint Agriculture Weather Facility (JAWF)
Source: USDA Joint Agriculture Weather Facility (JAWF)
Largely as a result of these adverse weather conditions, aggregate cereal production in 2000 is estimated to have fallen to about 9.5-10 million tonnes, one of the lowest crops on record. Latest official reports estimate the final wheat output at about 4.4 million tonnes, 7 percent below the previous year's already reduced crop, in spite of an estimated 15 percent increase in area sown, and some 20 percent below the average of the past 5 years. Regarding maize, the other major cereal crop, a much larger reduction is expected. It is reported that in many areas crops were completely wiped out and, as of early November, it was forecast that, at best, the crop may reach about 4 million tonnes, compared to average volume of about 10 million tonnes.
Output of most other agricultural sub-sectors is also reported to be markedly reduced as the drought has also affected production of oilseeds, vegetables, fruit and grapes. Pasture and fodder crop production is also affected, which will likely necessitate a reduction in animal numbers during the year.
As of early November, it was officially reported that winter wheat planting for next year's harvest had been completed on about 1.7 million hectares. However, the season has got off to a generally poor start because of continuing poor moisture conditions in many parts and a tighter than normal finance situation at the farm level resulting from the partial crop failure in the 1999/2000 season.
The excessive dryness of the soils made autumn cultivation difficult, if not impossible, in many parts and more expensive. Apart from increasing the time required to accomplish the autumn fieldwork, and thus many crops being sown later than the optimum date, the condition of seedbeds was generally reported to be poor, which will lead to poor crop establishment and increased weed populations. Additionally, it is reported that the quality of seeds used this year was generally poorer than normal.
As winter dormancy approaches, many of the wheat crop stands are likely to be poorer than the average over the past few years, and thus more susceptible to winter perils. This early outlook already makes a major recovery in the domestic wheat supply situation next year look unlikely and the situation will need to be monitored closely in the coming months.
After a reduced wheat harvest also in the previous year (1999: 4.7 million tonnes), wheat stocks at the beginning of the 2000/01 marketing year are estimated to be somewhat smaller than in most of the recent years at about 700 000 tonnes. Several sources indicate that current state reserve levels of wheat are about 200 000 tonnes. A conservative estimate for the combined stocks of traders, millers and private farmers at the beginning of the year is about 500 000 tonnes. Although a tight wheat supply situation was reported throughout the second half of the previous year, no outright shortage of working stocks was reported.
Thus, based on the above, and the afore-mentioned forecast for wheat output in 2000, total domestic wheat supply for 2000/01 as estimated at some 5 million tonnes, which would normally just cover the country's requirements for human consumption, animal feed and seed, after allowing for wastage.
With regard to maize, the major feed cereal but also an important food source for human consumption, as mentioned above, this year's production has been more sharply reduced. Thus, despite a good level of stocks (about 1 million tonnes) estimated to be carried over from the previous year, total domestic supplies, at just over 5 million tonnes, would be only about half of the average domestic utilization in the past five years.
However, in trying to estimate the likely cereal import requirements in the current year, there are several other factors which influence the availability of domestic cereals on the market and must be taken into consideration.
Firstly, one distinguishing feature of the Romanian agricultural sector in the past decade is the very significant small-scale subsistence farm sector, accounting for about 60 percent of the country's agricultural land and livestock herd. This sector, although producing a large share of the total output, is almost totally disconnected from the markets. The cereals produced are stored and largely consumed on-farm, both for human consumption and animal feed, and substitution between cereals is common. Stocks of cereals are often held for one year or more, where they can be prone to significant deterioration, but are nevertheless an important insurance for these families in the event of a bad crop year. In most cases only a small proportion of these farmers crops are commercialised, usually as payment for milling or harvesting services.
The bulk of the wheat and maize needed for the urban markets has traditionally been produced by the commercial sector of the economy, composed of state farms, private associations and commercial agricultural companies. Thus, in the case of wheat, although the level of the country's aggregate supplies may indicate that normal utilization needs could be met in the coming year, it cannot be assumed that all of the population has access to supplies. While the bulk of the rural families will likely be able to meet their own needs from this year's crop and by a drawing down home stocks if necessary, the surpluses from this sector flowing into the markets for the urban areas will be small in a reduced production year like this one. Any eventual deficit in the commercial sector vis-à-vis the needs of the urban areas will most likely have to be met from state reserve stocks or by imports.
Secondly, while the discussion so far has focused on the quantity of cereals available this year, it is also necessary to consider the quality of the crops. According to information from trade and milling sources, the drought adversely affected the quality of the wheat crop. This means that regardless of the eventual size of domestic market supplies, imports of higher-quality wheat will likely be needed for blending.
Thirdly, the acute shortage of animal feed in prospect this year, resulting not only from a reduced maize crop, but also due to smaller fodder harvests, is expected to result in significant substitution of wheat for other feeds in the small-farm sector. Again this would reduce the eventual surpluses from this sector available to the urban markets.
Lastly, the macro-economic situation of the country, and in particular the rate of inflation, which is forecast at about 40 percent by the end of the year, also encourages producers to withhold produce from the market. Farmers are expected to sell only the minimum amounts necessary as cash is needed. This behaviour of the producers exacerbates the effects of the drought and makes assessment of the drought's impact more difficult. In fact, earlier in the year, the wheat output was estimated by commercial sources to be far less than the latest estimate indicates because there was virtually no domestic wheat available to traders. Later as cash was needed for autumn fieldwork operations some increase in sales was noted.
Thus, although, the aggregate domestic supply of wheat in 2000/01 may appear to be just enough to cover normal utilization, it is likely that some imports of wheat will be needed during the year. This is expected to be necessary to compensate for the poorer-than-normal quality of the domestic crop, and to meet the shortfalls expected in the commercial sector supplying the urban markets.
For maize, even assuming a large draw down in stocks will occur during the year, a significant shortfall in supply, of about 4 million tonnes, would still exist when compared to the average level of domestic utilization over the past five years. Although, as mentioned above, increased use of wheat as feed may offset some of the shortfall, it is unlikely that commercial imports would make up for the remainder of the deficit and domestic utilization is expected to fall sharply. Relatively higher-priced imported feeds would be unattractive for many small to producers and livestock inventories are expected to be reduced during the year.
The Government has already introduced policy measures to alleviate some of the problems associated with this year's reduced cereal production. In an effort to encourage producers to release stocks of wheat to the market, the Government, in September, announced that a bonus of 300 000 lei per tonne (US$12.5 per tonne1) would be paid to producers for wheat sold to domestic millers and processors. However, as of late November 2000, the amount of wheat being offered for sale was still reported to be limited. In late October, the Government announced that it will allow a total of 500 000 tonnes of maize for animal feed purposes to be imported until 30 June 2001, exempt of customs taxes.
This report is prepared on the responsibility of the FAO Secretariat with information from official and unofficial sources. Since conditions may change rapidly, please contact Mr. Abdur Rashid, Chief, ESCG, FAO, (Telex 610181 FAO I; Fax: 0039-06-5705-4495, E-Mail (INTERNET): GIEWS1@FAO.ORG ) for further information if required.
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1 Assuming an end-September exchange rate of 24 000 lei per US$.