Foreign Investor Interest In Farming Land Set to Boost Prices In Romania

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Foreign Investor Interest In Farming Land Set to Boost Prices In Romania

A hectare of agricultural land could sell for up to 6,000 euros within the next five years, which is close to the European average. At present, agricultural land sells for 1,500-2,000 euros per hectare. Experts say more and more foreign investors, in particular from Italy and Germany, are coming to Romania to develop agricultural businesses, local Ziarul Financiar reports.

"The foreign companies find the conditions in Romania attractive. We are number two in Europe, after France, in terms of agricultural land mass, and a favourable microclimate places us in the top three in terms of agricultural potential," stated Viorel Matei, chairman of the National Federation of Farmers in Romania.

Romania has 9.7 million hectares of agricultural land, of which only one third has been exploited to its fullest extent. "Peasants have no money to work their land, which is why a lot of it has now turned into fallow. We are only working three million hectares of the total area of agricultural land. However, within five or six years, we will see a Romania where every single bit of land is farmed in line with European standards," believes Adrian Porumboiu, owner of the Racova Agro Pan Group in Vaslui.

The drought has led to global price increases for agricultural products, which is why many foreign companies have chosen Romania as their destination to develop agricultural businesses. The lack of large plots of farming land in most European countries is forcing investors to buy land in Romania, where they can expand their production.

For example, Danish company FirstFarms has already bought 3,000 hectares of land in Romania and will begin farming and raising livestock domestically. "We chose Romania for our investments because it is a new European Union member and offers a great deal of opportunities to extensively develop agricultural production.

Romania imports a large amount of agricultural products, which is why we want to direct our production to the Romanian market, where we soon expect an improvement in purchasing power," stated Frank Lorentsen, FirstFarms' country manager in Romania.

However, the company officials revealed they would not stop here. "We have invested in two different regions so far, and we are still looking for locations where the infrastructure is good," said Lorentsen.

Although the average price at which the company bought farming land was 2,700 euros per hectare, the representatives of FirstFarms believe prices can be influenced over the next few years by "demand, location, and the quality of land".

Moreover, the price of land in Romania differs greatly from the price of large amounts of land in most European countries.

"It's not worth buying land in the West because it is very expensive. Foreigners come here where prices are three, four or even five times lower," explained Mihai Anghel, general manager of Cerealcom Dolj. Businessman Adrian Porumboiu echoes the same sentiments: "It's much more profitable to work your own land than someone else's."

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