The attack of the economic function of agribusiness in the new European context, implies understanding into a new vision of the mechanism of operation of this complex system of activities that do non cut down himself merely to the agricultural production and to the agrofood industry, by and large, but they have major deductions for the employment, to the usage of natural potency of each economic system, particularly in determining the rural society, which has continued to keep a important portion in European economic systems. This paper aims to analyse some facets in the development of the CAP to the Community degree and influences that it has on Rumanian agribusiness.

Cardinal words: CAP, agricultural development, direct intercession, SPUS

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In conditions of market economic system, sustainable and competitory, the analysis of the function and the topographic point of agribusiness in the macroeconomic systems ensemble are considered as a “ Sine qua non ” status for all those provinces who try to happen ways for superior development of their economic potency. Common Agricultural Policy harmonizes, at the European degree, the agricultural involvements of the provinces members, in determining an efficient mechanism to capitalise the natural potency and to guarantee nutrient security through an of import and varied agricultural production. The capitalisation of agricultural potency through CAP has non offered important consequences for increasing the competitivity in this sector, the significantly interventionism of this policy holding as consequences a system who depends more on the fiscal support than on the capitalisation of the possible. Mentioning to this aspect Luca ( 2009 ) says “ the cardinal interventionist nature of CAP has made that the initial purposes and the large ends to be often forgotten in the context of ageless deals inter-governmental ” . The job with a to the full incorporate European policy is that each state tends to be considered as a common stack from they need to catch every bit much. Is a signifier of captive ‘s quandary that the decision-making procedure of the CAP has ne’er escaped ” . Besides do non necessitate be ruled out direct intercession, for the consideration of an overdone liberalism, at least in the instance of agribusiness, the economic efficiency standards should be, someplace fined. Even in the instance of CAP, the tools for back uping the agricultural production system through direct steps to back up monetary values, constitution of production quotas or the granting refunds, are still applied, we are witnessing now to a new political orientation of the community policy particularly to the rural development country. Once with economic integrating in the EU, Romania, as portion of the operating mechanism the CAP has to determine and accommodate their national agricultural policy, of class, in conformity with the community pattern, but sing the national specificities. It owns a important portion of agribusiness in the national economic system by mobilising both natural resources but particularly of the human resources impose an betterment of the national agricultural potency. In this context the addressing of the function and deductions of agribusiness on the national economic systems requires rethinking the full operating mechanism. The stairss to reform the CAP and of its transmutation into a modern policy accounted for the European decidents a turning point in harmonisation of intercommunity dealingss, particularly as the fiscal sizes of the PAC keep a important portion in the EU budget and a new attack of the agricultural policy was more than necessary. So “ Over the past 15 old ages, the Common Agricultural Policy ( CAP ) has changed radically in response to force per unit areas from European society and its germinating economic system. The reforms from 2003-2004 has marked a new phase in this procedure, presenting the separation of direct payments via the Single Payment Scheme ( SPS ) in most sectors of the first pillar of the CAP and beef uping rural development policy, the 2nd pillar of them. ( European Commission COM ( 2007 ) 722 concluding ) .

Common Agricultural Policy ( CAP ) , the size and function it has in the European policies is a tool with major deductions in determining the European determinations infinite. The high grade of involvement shown towards the execution of funding mechanisms and operation of the CAP resides from the complex character of European building from 60s. Subsidizing the agricultural activity in the Community infinite was the chief lever in raising the grade of coherency at the degree of national agricultural communities of the Member States and for variegation of agricultural production. The Community intercession in agricultural field has been achieved but non on an economic demands rigorous standards, but instead for back uping the rural population in the first case, for which the agribusiness represent and the chief signifier of income. Application of about six decennaries of a unitary agricultural policy at the degree of full Community infinite outlined the happening of an agricultural theoretical account, EU particular. We can therefore state that the CAP is an built-in portion, inextricably linked to the communitarian agricultural theoretical account.

Simplifying the CAP represent both for the EU but particularly so for Member States, where agribusiness has a important function in the all facets of economic activity, a necessity jumping from nonsubjective worlds, particularly since the application of this policy necessitate a bearish administrative mechanism and really immune to alter. All these steps have as consequence bettering the working CAP to the European degree, but failed to cut down the divisions between member provinces sing the hereafter of this policy in the EU infinite, particularly when it comes to funding them. Thus one of the first activities was aimed chiefly the remotion from the legal and the administrative community infinite of those paperss considered to be disused in the application of the agricultural dimension of European policies. This stairss continued with the drafting of a new and alone ordinance of organisation for the organisation of the agricultural market called CMO Regulation ( Regulation ( EC ) no. 1234/2007 set uping a common organisation of agricultural markets and on specific commissariats for certain agricultural merchandises ( OJ L 299, 16.11.2007, p. 1 ) which brought together all the 21 specific ordinances in merely one papers much more flexible and easy to use. Therefore, as specified in one of a European Commission Communication to the European Parliament: “ By and large talking, the acceptance of the individual CMO significantly reduced the figure of regulative Acts of the Apostless of the CAP, which is henceforth regulated by merely four legal paperss, viz. Regulation on direct payments, the individual CMO Regulation, the Regulation on Rural Development and the Regulation on CAP funding ” . ( European Commission, COM ( 2009 ) 128 concluding ) .

Single payments system was besides simplified and improved, particularly following the acceptance of the study on cross-compliance which envisages conformity with certain criterions of environmental sustainability and environment regard of the agricultural manufacturer who is thereby stimulated to bring forth environmental friendly.

Rumanian agribusiness in the CAP

In this context the analysis of the function and topographic point of the Rumanian agribusiness in the community agricultural infinite can be made in footings of two parametric quantities that describe the ability of this subdivision to bring forth income and GVA. Harmonizing to the methodological analysis used by Eurostat in finding the index A corresponds to the deflated ( existent ) cyberspace value added at factor cost of agribusiness, per entire one-year work unit and the inexplicit monetary value index of GDP deflator is used as in this procedure. In graph no.1 are presented the development of this A index for the period 2000-2009 at the degree of EU-27 and in the instance of the most powerful economic systems ( Germany, France, UK ) , including its development in the instance of Rumanian agribusiness. As you can see the development of this index describes a lessening in the value of this index for most presented economic systems. The last three-year period ( 2007-2009 ) describes a prostration in the value of this index. If we consider that the development of this index for the twelvemonth 2007 coincides with a new budget and funding CAP period, when the European provinces were forced to give up the funding strategy on the surface, we can state that this state of affairs is one of a cause of the tendency index A.

Beginning: ain computation based on EUROSTAT datasets, available at: hypertext transfer protocol: //epp.eurostat.ec.europa.eu/ , retrieve on: 27.09.2010 and Europe in figures – Eurostat yearbook 2010

The development of the index A is particularly of import for understanding the capableness of agribusiness to bring forth income. As can be seen from the development tendency of this index, described in the chart no. at the degree of EU-27 and of the three most performer economic system at European degree, recorded lessenings in the degree of this index. In footings of its development in the instance of Rumanian agribusiness describes the same inclination at European degree, but with a more marked diminution than in the other economic systems. The development of this index in the instance of France, known as “ the chief donee of the CAP funding ” records values more than 100 % and superior to the European norm, but still in diminution, and high spots important differences after the entry into force of the new CAP. If in instance of Romania in 2000 this index was 66.9 % , nine old ages subsequently it reached at 91.8 % , values lower than those recorded in the period 2001 to 2004 when its value exceeded the threshold of 100 and are appreciating that the Rumanian agribusiness is capable to regenerate them in the general economic context marked by the prostration of industrial activities. One twelvemonth after EU accession this index reached a value of 112.3, and would subsequently go on their downward tendency. This accounts shaped for the 2008-2009 period convergences to the EU-27 tendency.

As seen in Table no.1 the Direct AIDSs clasp important portion in entire budgetary allotments over the period 2008-2010, representing the chief lever of intercession in the agricultural community. In Table 1 are presented the chief finishs in funding this.

Table no.1

Development of Direct AIDSs in EU for the period 2008-2010*

-Million Euros-


Appropriations 2010

Appropriations 2009



Decoupled direct AIDSs


28 480. 0

27 239.0

28 233.8


4 497. 0

3 789.0

2 974. 3

Separate sugar payment


255. 0

206. 2

Separate fruit and veggies payment




ArticleA 05 03 01A -A Subtotal

33 272. 0

31 295.0

31 414.4

Other direct AIDSs

Crops country payments

1 445. 0

1 450. 0

1 432.2

Auxiliary assistance for durum wheat: traditional production zones

50. 0

54. 0

46. 1

Payments for specific types of agriculture and quality production


425. 0

422. 8

ArticleA 05 03 02A -A Subtotal

5 995. 0

5 922. 0

5 620.4

ArticleA 05 03 03A -A Subtotal

6. 0

562. 0


ChapterA 05 03A -A Entire

39 273. 0

37 779. 0

37 568.5

Note: * informations based on 2010 budget and non incorporating the whole budgetary categorization

Beginning: Writers own choice from DG Agriculture, based on Agriculture and Rural Development budget outgo, 2010 budget

Direct AIDSs analysis reveals a figure of of import issues in the country of engagement and involvement of the CAP, developed under this policy as a consequence of EU Member involvement. Fiscal allotments in the SPS ( individual payment strategy ) although they have remained changeless over the coverage period continue to keep the largest portion in direct AIDSs. So this type of funding is the chief lever to excite agricultural activities in the Member Community. If we consider and SAPS ( individual country payment strategy ) used to finance this budget allotment is 33.272 million, Internet Explorer. 84.8 % of entire budget allotments for Chapter 05 03.

Table no.2

Development of the fiscal allotments for the period 2009-2016 in instance of the national ceilings for Romania and some European economic systems









287 399

807 366

1 877 107

623 399

230 560


336 041

947 114

2 192 294

729 863

271 029


416 372

1 073 824

2 477 294

907 473

307 729


499 327

1 205 037

2 788 247

1 086 608

346 958


580 087

1 318 975

3 044 518

1 264 472

380 109


660 848

1 318 975

3 044 518

1 442 335

380 109


741 606

1 318 975

3 044 518

1 620 201

380 109

2016 and following old ages

814 295

1 318 975

3 044 518

1 780 406

380 109Source: Adapted from the Annex no VIII from Regulation ( CE ) NR. 73/2009 al Council JO L 30/76 blare 2009

As it can be seen from the day of the months presented in the above tabular array the funding of agricultural policy in Romania, under Article 40 of the Regulation on the constitution of direct support strategies for husbandmans, is tripled in 2009-2016, making a national cap in 2016 and after to the 1,780,406 1000 Euros, higher than that of Hungary, which represent merely 1,318,975 thousand EUR, but accounting merely 50 % of Polish ceiling. These rights for payment can stand for for Rumanian husbandmans a motive for increasing the utilizing grade of the agricultural land and for growing of the fiscal profitableness of a farm. As it is discussed in a recent survey, Salasan and Fritzsch ( 2009 ) shows that ” beef uping the Rumanian agricultural sector calls for conjunct policy actions that are finely targeted for different groups. Fostering the damages of land to former proprietors, developing a operation land gross revenues and rental market, and supplying entree to agricultural merchandise markets could advance the revival of a extremely productive group of commercial private husbandmans. Nonfarm occupation creative activity in rural countries could supply income chances for abundant agricultural labor force ” . Therefore, the function of agricultural sector is more complex than the basic activity in making nutrient for fork. It has a major impact for rural communities. Agribusiness, for passage economic systems, as it is the Rumanian supports going a topographic point for retreat for many societal classs as the industrial unemployed or for other classs seeking for a topographic point to work. In this context the direct support steps for agricultural activities become more necessary than of all time.


Addressing the Rumanian agribusiness in the new context of CAP transmutation requires the reconsideration of the topographic point and function of this sector in the overall national economic system. Reforming Community mechanisms represent an nonsubjective necessity generated by the planetary economic context, where agricultural issues must reply to the standards of fight, based on bing market and non on an order from province intercession. Even if the agribusiness has non been a sector with high fight and badly influenced by the action of external factors ( natural and upwind conditions ) she represent a by and large beginning of added value coevals for economic systems in passage, centered to these economic subdivision. Even if in the instance of Romania the agricultural issues is a really complex and varied job, in the context of accomplishing consistence with the Community Space, achieves a concentration on this country of action, in the new context of the frame of CAP. Acknowledging the function of agribusiness in the national economic system is necessary to follow some steps designed to increase the productiveness of this sector, in footings of increased planetary fight, where the market function is cardinal.