The agriculture may increase its profitability

The dynamic of the agricultural production will be stirred by the European funds and the investments in performant technologies. The steadiness of the relations between farmer and the processing industry, but mostly the independence regarding the weather are the main factors of development in a business from the agricultural domain.   
The profile specialists say that, if well administered, the “agricultural business” may bring profit growths even bigger than in the real estate domain.

Based on the studies realized by internationally acknowledged organizations, the specialists from Agricover group administration have declared us yesterday that the Romanian agriculture has an approximate 60-80% increase potential for the next three-four years. “The dynamic of the agricultural production will be stirred, first of all, due to the European financing, the modern equipments and the qualitative technologies” says Robert Arsene, the managing director of the company. He reminds us that the budget of the European Commission for the period 2007-2013 forecasts for agriculture and rural development for Romania a capital allocation of over 11 billiards Euro.

The advanced financing, essential in an agricultural business

At Agricover, the first among the successful solutions applied is that saying “we do not leave the business’ development to the weather’s latitude or to that of contradictory news regarding the market’s tendencies”. Also “by means of the consulting programs and the advanced financing packages offered to the farmers, we assure the stability of the relation to the processing industries and the technology providers”, continued Arsene.  Because of these methods, he declares himself “worried, but not alarmed” by the drought that already affects more and larger agricultural field surfaces. The financial assessments made for 2007 are realizable, in spite of the weather forecast that indicates a dry year.

“We are worried by the drought, but we do not think that it will affect us substantially.  We develop our activity in more counties and not all of them will be affected by the draught”, explained further Arsene. An advanced financing package is made up of the seeds and the necessary technologies, that are allotted when a crop is initiated and – sometimes- a sum of money that can reach 450 lei/ ha.

Agricover, the main local player on the Romanian agricultural market, was founded in the year 2000 by means of the fusion between Comcereal Buzau and Ulvex Buzau, offering nowadays integrated solution for the farmers. The company is structured on four divisions – distribution, cereals, bunkers and seeds production, respectively genetic material. Agricover is the leader on the seeds market of durum wheat and the second producer of pea and spring barley seeds, occupying the second place regarding the cereal ensilage capacity in Romania.

The unexplored potential: a quarter of the agricultural surface

Nowadays, Romania has almost 10 millions ha arable field, and the annual crop rises to 15-16 million tones of cereals and oleaginous.
The agricultural field in Romania presents, in the Agricover specialists’ opinion, an unexploited potential from the investments point of view, 25 % of the total surface remaining unexploited.
The weight of the population working in agriculture is, in Romania, among the highest in Europe, and the main compound – the soil – is situated at the highest productive grades in Europe.

The profile of a successful agricultural company

In order to enter a successful partnership with the great integrated systems from agriculture, according to the specialists from Agricover  , a farm should fulfill the following minimal conditions: a minimum of 300 ha (ideal would be 600 ha) arable surface; the availability of the owners to put literally into practice the techniques recommended by the financers; its own watering system; to be endowed with at least one tractor or other agricultural equipment; the capacity to attract European funds and other financial sources; the field and the production should be assured; be positioned in an agricultural basin where similar cultures are developed.

Strong points

High level of the soil fertility
High production potential
Favorable location (on the Danube – Black Sea axis)
Allotment of substantial European funds
The existence of qualitative technologies

Weak points

The crumble of properties
Non-competitive management
Low predictability
Non-functional watering systems
Unfinished initiatives

Source: The truth (Adevarul)