INCOME, EXPENDITURES AND AGRIFOOD CONSUMPTION OF THE RURAL POPULATION IN ROMANIA – AN OVERVIEW OF THE LAST TWO DECADES Camelia Gavrilescu, Camelia Toma,

INCOME, EXPENDITURES AND AGRIFOOD CONSUMPTION OF THE RURAL POPULATION IN

ROMANIA – AN OVERVIEW OF THE LAST TWO DECADES

Camelia Gavrilescu, Camelia Toma, Crina Turtoi

Institute for Agricultural EconomicsRomanian Academy

“20 years of farming and rural transition in Eastern European countries: what have we learned?”

A conference Rural'Est-SFER, 20-21 october 2011, Agrosup Dijon, France

During the last 2 decades ...

Romania has made huge efforts to achieve several goals in its agrifood sector: to transform it from a centrally

planned to a market-driven one; to develop and modernise it; to adapt it to the requirements

imposed by the accession to the European Union

Rural area in Romania means …

45% of the total population (45.7% in 1990 44.9% in 2009)

Agricultural and industrial employment (‘000 persons)

0

500

1000

1500

2000

2500

3000

3500

4000

450019

9019

9119

9219

9319

9419

9519

9619

9719

9819

9920

0020

0120

0220

0320

0420

0520

0620

0720

0820

0920

10

'000

per

sons

Agriculture, forestry and f ishing Industry

Agricultural and industrial employment (% in total

employment)

0.0

5.0

10.0

15.0

20.0

25.0

30.0

35.0

40.0

45.019

9019

9119

9219

9319

9419

9519

9619

9719

9819

9920

0020

0120

0220

0320

0420

0520

0620

0720

0820

0920

10

% o

f to

tal e

mp

loym

ent

Agriculture, forestry and f ishing Industry

… generated a rather important part of the GDP

0.0

5.0

10.0

15.0

20.0

25.0

30.0

35.0

40.0

45.0

1990

1991

1992

1993

1994

1995

1996

1997

1998

1999

2000

2001

2002

2003

2004

2005

2006

2007

2008

2009

%

Agriculture, forestry and f ishery Industry

Factors influencing that trend…

Intrinsic to the agrifood sector: restructuring of land ownership and use; restructuring of the agrifood chains; Good / bad agricultural year

Extrinsic to the agrifood sector: restructuring in secondary and tertiary

economic sectors increasing urban unemployment lack non-agricultural unemployment Inflation exchange rate etc.

Average real salaries and pensions indices (1990=100)

0

20

40

60

80

100

120

140

1990

1991

1992

1993

1994

1995

1996

1997

1998

1999

2000

2001

2002

2003

2004

2005

2006

2007

2008

2009

%

Salaries Pensions

Average and minimum salary in the Romanian economy

(1990=100)

94117

147 142 141

328

417

460 444 440

229

296328 320 314

0

50

100

150

200

250

300

350

400

450

500

2006 2007 2008 2009 2010

EU

R/m

ont

h

Minimum wage Average wage Agriculture, forestry and f ishery

Income in the agricultural sector

Dynamics of household income is a reflection of: economic conditions constraints that have been increasingly

tougher Various types of reactions in the agrifood

sector: Occupational diversification:

Pluriactive households Decrease of full-time agricultural employment

Migration of labor (to urban areas / abroad) Investment and development

Income structure in agricultural households

(average 2002-2009)Salaries

8%Sales of agrifood products

14%

Other activities17%

Social services14%

On-farm agrifood

coonsumption47%

Income structure in agricultural households

High share of on-farm consumption (~50%)

Low share of agrifood product sales (14-20%)

Daily income per capita in rural households: 3-4 EUR

Income in farmer households are only 50-56% of those in urban households

Total income (average per family member – EUR/day)

2005 2006 2007 2008 2009 2010

All households 3.8 4.5 5.8 6.6 6.3 6.0

Rural households 3.1 3.6 4.7 5.3 5.0 5.0

Employees households 4.8 5.7 7.3 8.1 7.7 7.8

Farmers households 2.7 2.9 3.8 4.3 4.1 3.9

Structure of consumption expenditures (average 2002-2009)

Food45%

Non-food30%

Services25%

All households

Food54%

Non-food29%

Services17%

Rural households

Structure of consumption expenditures, by sources

0%

20%

40%

60%

80%

100%

Total households

Rural households

Agricultural households

85.674.2 65.1

Money expenditures Selfconsumption eq.

Crop products consumption trend

0

50

100

150

200

250

1990

1991

1992

1993

1994

1995

1996

1997

1998

1999

2000

2001

2002

2003

2004

2005

2006

2007

2008

2009

kg/c

apita

/yea

r

Cereals and cereal products (eq. grains) Potatoes

Vegetables and vegetable products (eq. f resh) Fruit and f ruit products (eq. f resh)

Main trends in food consumption (crop products)

high consumption of bread and cereal products, that represent the basic food items for all household types.

cereals provide 45% of calories in population’s diet (48% in the rural area) low food diversification;

increase of consumption in cereals, potatoes and vegetables until 2001-2002;

cereals potatoes fruit and vegetables decline of fruit consumption due to domestic

production decline and price increase

Animal products consumption trend

0

1

2

3

4

5

6

7

8

0

50

100

150

200

250

300

1990

1991

1992

1993

1994

1995

1996

1997

1998

1999

2000

2001

2002

2003

2004

2005

2006

2007

2008

2009

kg/capita/year

Milk and dairy products (eq. milk 3.5% fat) Eggs (pieces/capita/year)

Meat and meat products (eq. f resh meat) Fish and f ish products

Main trends in food consumption (animal products)

low consumption of meat and meat products, compared to the European average

pork and chicken = 75-80% of total fresh meat consumption

low preference for beef (<10-13%; 8-10% in rural areas)

very low preference for fish high share of consumption from household own

resources for certain products such as eggs and milk

Main trends in food consumption (animal products)

last 8 years (since 2002): fresh meat - increase of total quantity

(~20%) increase of chicken at expense of beef but

mostly of pork in rural areas, chicken is already half of total

fresh meat consumption increase of milk and dairy products

consumption, mainly due to domestic production increase

Beverages consumption trend

0

20

40

60

80

100

120

140

160

180

1990

1991

1992

1993

1994

1995

1996

1997

1998

1999

2000

2001

2002

2003

2004

2005

2006

2007

2008

2009

litre

s/ca

pita

/yea

r

Soft-drinks Beer Wine

Daily average food consumption per capita

0

500

1000

1500

2000

2500

3000

3500

4000

1990

1991

1992

1993

1994

1995

1996

1997

1998

1999

2000

2001

2004

2005

2006

2007

2008

2009

Calories - animal origin Calories - non-animal origin

Main trends in food consumption

high consumption of bread and cereal products, that represent the basic food items for all household types

cereals provide 45% of calories in population’s diet (48% in the rural area), which implies a low food diversification

Almost ¾ (72-76%) of the daily ratio is coming from non-animal calories

General conclusions

Romania has made huge efforts to develop its agrifood sector and rural areas

Still high agricultural employment Moderate efficiency (GDP per person employed

in agriculture) Lower labor prices as compared to other MS High level of on-farm consumption Food model shows low income and inadequate

nutritional ratios mostly in rural areas

Thank you for your attention!