Area Handbook for Romania Part 32

The real income of farmers was scheduled to rise by 20 to 25 percent during the 1966-70 period; the official announcement of the plan results, however, merely noted an increase in income, without citing any figure--a clear indication that the target was missed by a wide margin.

The negative effects of the disparity in incomes on the collective farmers' sense of responsibility and, hence, on agricultural production were officially recognized. This recognition led to a revision of the system of compensation for collective farm work and to a reduction of farm taxes in early 1971 but did not significantly alter the position of agriculture within the economy (see Organization, this ch.). The possibility of alleviating the situation by raising farm incomes through a general increase in farm prices was rejected on the grounds that such an increase, without a corresponding rise in productivity per worker and per acre, would const.i.tute a redistribution of national income incompatible with the best interests of the economy.

Crop Production and Yields

Production of major crops and of fruits was larger during the 1960s than it had been in the preceding decade. The greatest advances were made in the output of industrial and fodder crops, and the smallest were in potato and vegetable production (see table 10). In large measure, the rise in output was achieved through greater yields per acre, owing to an increased use of fertilizers; the introduction of improved varieties; and some improvement in crop production methods, particularly on state farms. Crop yields, nevertheless, remained among the lowest in Eastern Europe.

Livestock and Livestock Products

Livestock numbers increased slowly from 1961 to 1970 but, except for poultry, were generally lower at the end of that period than the peak levels reached for the different types between 1965 and 1968. From 1961 to 1965 the number of cows declined but increased steadily thereafter, without, however, fully regaining the level of 1961.

Development of the livestock economy has been hampered by an inadequate feed base, poor quality of livestock and livestock breeding, and inefficient production methods. Significant improvements in the livestock sector are planned for the 1971-75 period and beyond to 1980.

Although livestock production failed to increase as a proportion of the total farm output, the volume of livestock products, nevertheless, rose significantly during the 1960s (see table 11). Compared with the average annual outputs of individual products attained in the 1962-65 period, increases in average annual production for the years 1966 through 1969 ranged from 18 percent for wool to 24 percent for meat.

_Table 10. Production of Major Crops in Romania, Selected Years, 1960-69_ (in thousand metric tons)

------------------------------------------------------------------- Crop 1960 1963 1966 1967 1968 1969 ------------------------------------------------------------------- Grain[1]

Wheat 3,450 3,799 5,065 5,820 4,848 4,349 Corn 5,531 6,023 8,022 6,858 7,105 7,676 Other 845 614 812 834 817 799 ----- ------ ------ ------ ------ ------ Total 9,826 10,436 13,899 13,512 12,770 12,824 Oilseeds Sunflower 522 506 671 720 730 747 Other 93 54 63 61 41 59 ----- ----- ----- ----- ----- ----- Total 615 560 734 781 771 806 Sugar beets 3,399 2,298 4,368 3,830 3,936 3,783 Tobacco 16 40 40 35 33 24 Potatoes 3,009 2,692 3,352 3,096 3,707 2,165 Vegetables 1,831 1,702 2,177 2,000 2,296 1,963 Fodder Crops Hay 2,105 1,872 3,182 3,223 2,472 3,268 Green feed 1,222 2,922 4,749 4,380 3,995 3,885 Silage[2] 4,601 5,296 3,538 2,830 3,728 3,491 Root crops 276 293 371 269 302 420 ----- ------ ------ ------ ------ ------ Total 8,204 10,383 11,840 10,702 10,497 11,064 Fruits 829 1,048 1,390 1,206 1,054 1,677 Grapes 874 937 954 910 1,167 1,189 -------------------------------------------------------------------- 1. Grain production in 1971 was unofficially reported to have reached about 14.5 million metric tons.

2. Roughly 90 percent corn.

Source: Adapted from _Anuarul Statistic al Republicii Socialiste Romania, 1970_ (Statistical Yearbook of the Socialist Republic of Romania, 1970), Bucharest, 1970, pp. 312 315.

_Table 11. Output of Livestock Products in Romania, Selected Years 1960-69_

------------------------------------------------------ Meat[1] Milk[2] Eggs[3] Wool[4]

------------------------------------------------------ 1960 969 856,472 2,355 21,850 1965 1,116 859,061 2,630 25,410 1966 1,265 987,531 2,814 26,072 1967 1,356 1,089,320 3,011 28,626 1968 1,297 1,012,628 3,113 30,583 1969 1,271 992,762 3,315 30,752 ----------------------------------------------------- 1: Thousand metric tons live weight.

2: Cow, goat, and buffalo in thousand gallons.

3: In millions.

4: In metric tons.

Source: Adapted from _Anuarul Statistic al Republicii Socialiste Romania, 1970_ (Statistical Yearbook of the Socialist Republic of Romania, 1970), Bucharest, 1970, pp. 430 431.

Data on the contribution of the different types of farms to the total farm output are lacking, but detailed figures are available for individual products. The most noteworthy aspect of these data is the light that they shed on the importance of the collective farmers'

personal plots and of the private sector in the production of the higher valued farm products. On their small personal plots, the collective farmers in 1969 produced roughly one-third of the wool, vegetables, and potatoes; two-fifths of the meat, milk, and fruit; and three-fifths of the eggs (see table 12). Together with the small number of private farms, they accounted for 35 to 80 percent of the output of these items.

Foreign observers have interpreted this phenomenon as clear evidence of the inadequacy of incentives for work on state and collective farms.

Exports

Substantial quant.i.ties of farm products have been exported in raw and processed form. In the 1965-69 period exports of grain, fruits, vegetables, and eggs ranged from 10 to 13 percent of output. Exports of wool reached almost two-thirds of the total production volume. A wide range of other vegetable and livestock products were also exported, including pulses; sugar; sunflower seeds and oil; live cattle; fresh, frozen, and canned meat; b.u.t.ter; wine; and tobacco (see ch. 14).

_Table 12. Crop Production and Livestock Products in Romania, by Type of Farm, 1969_ (in percent)

--------------------------------------------------------------------------- State Product Agricultural State Collective Personal Private Units Farms[1] Farms Plots Farms --------------------------------------------------------------------------- Grains 24.5 23.6 63.4 9.0 3.1 Fiber plants 5.2 4.7 92.1 0.6 2.1 Oilseeds 29.2 28.9 70.8 ---[2] ---[2]

Sugar beets 0.4 0.3 99.6 0 0 Tobacco 0.2 0 99.8 0 0 Potatoes 7.1 6.5 39.1 36.4 17.4 Vegetables 11.6 10.6 52.9 29.6 5.9 Perennials for hay 30.2 28.3 64.7 3.2 1.9 Annuals for hay 23.5 19.4 58.9 13.9 3.7 Annuals for green feed 38.0 35.6 60.1 1.6 0.3 Fodder roots 53.8 50.9 39.8 4.8 1.6 Silage crops 44.5 42.8 55.4 0.1 0 Fruits 11.7 9.9 19.3 40.9 28.1 Meat 27.0 24.2 21.2 39.3 12.5 Milk 16.7 16.0 28.2 38.2 16.9 Eggs 17.0 16.7 3.2 60.0 19.8 Wool 17.7 16.8 38.4 33.1 10.8 --------------------------------------------------------------------------- 1. Breakdown included within state agricultural units.

2. Less than 0.1 percent.

Source: Adapted from _Anuarul Statistic al Republicii Socialiste Romania, 1970_ (Statistical Yearbook of the Socialist Republic of Romania, 1970), Bucharest, 1970, pp. 329-345, 406, 430-431.

CHAPTER 16

INDUSTRY

Stimulated by a high rate of investment and an infusion of Western technology, industry has expanded at a rapid rate. A qualitatively inadequate labor force, poor organization, and insufficiently experienced management personnel, however, have not been able to attain levels of efficiency and quality acceptable to the Romanian Communist Party and the government. Lowering the cost of production and improving quality are considered to be essential prerequisites for expanding exports, which are needed to pay for imports of materials and equipment.

Various measures introduced since 1967 have not achieved the government's objectives. Economic plans for the 1971-75 period call for raising productivity through greater specialization of production and better utilization of plants and materials. To this end, several new economic laws were pa.s.sed in December 1971, the contents of which were not yet known in early 1972.

NATURAL RESOURCES

Though widely varied, the country's mineral and agricultural resources are generally inadequate to maintain the current and planned levels of industrial production and exports. Natural gas is a major exception.

Formerly plentiful supplies of crude oil are falling off, and the likelihood of discovering new deposits is considered poor by oil industry officials. The heavy dependence on outside sources of raw materials led the government to provide economic and technical a.s.sistance to several developing countries for the exploitation of their mineral resources in return for shipments of mined products. This dependence has also been a major determinant of the country's political relations with other members of the Council for Mutual Economic a.s.sistance (COMECON), particularly the Soviet Union, and with noncommunist industrial nations of the West (see ch. 10).

Minerals and Metals

Information on the extent of most mineral reserves is unavailable. A delegation of Western petroleum experts who surveyed the petroleum industry at the end of 1970 made a tentative estimate that oil reserves would be exhausted in roughly eleven years at the current annual production rate of about 13 million tons. With a view to ensuring long-term crude oil supplies for the planned expansion of the domestic petroleum refining and petrochemical industries, the government has entered into economic cooperation agreements with several small petroleum-producing countries. The government has also discussed the possibility for joint exploration of offsh.o.r.e petroleum deposits in the Black Sea and elsewhere in the world with oil interests of various countries. In the meantime the government has been importing crude oil from Iran, Saudi Arabia, and Libya in exchange for industrial machinery and equipment. Oil imports from these countries in 1970 amounted to 2.1 million tons.

The major natural gas deposits that were exploited in 1970 are located in the Transylvanian basin and outside the Carpathian arc (see ch. 3).

According to Romanian officials, the annual addition to reserves has been double the volume of annual production. Gas output has expanded steadily from about 365 billion cubic feet in 1960 to 845 billion cubic feet in 1969. Natural gas has been used for electric power production in thermal plants, for s.p.a.ce heating, and as a raw material for the chemical industry. Less than 1 percent has been exported through a pipeline to Hungary.

Western observers believe that imports of natural gas from the Soviet Union may be initiated in the early 1970s. This belief is based on information that a gas pipeline to be built from the Soviet Union to Bulgaria will pa.s.s through eastern Romania, fairly close to the major port of Constanta, which is far removed from domestic sources of gas.

Negotiations to this effect are not known to have taken place.

Deposits of coal are small and, with few exceptions, low grade. Known reserves in 1970 were reported to include less than 1 billion tons of bituminous and anthracite coal and 3.5 billion tons of lignite. Fields at Petrosani in the Jiu Valley of the southern Transylvania Alps contain 98 percent of the bituminous coal reserves; 90 percent of the lignite reserves are located in Oltenia, in the southwestern part of the country. Open pit mining is possible in much of the lignite area.

In order to conserve crude oil and natural gas, production of coal and lignite has been substantially increased and is scheduled to rise rapidly in the 1971-75 period. From 1950 to 1970 total coal output increased at an annual rate of 9.2 percent, including a growth of more than 15 percent per year in lignite output. By 1975 coal output is to reach from 37 million to 38.5 million tons, which corresponds to a planned annual increase of about 10.6 percent from the level of 22.8 million tons mined in 1970. The production of lignite is scheduled to advance more rapidly than that of bituminous and anthracite coal.

Two-thirds of the mined coal tonnage with 56 percent of its caloric content was used in 1970 to fuel electric power plants. Only 1.3 million tons were usable in the manufacture of c.o.ke, in large part as an admixture to imported c.o.king coals of superior quality. The severe and growing shortage of domestic c.o.ke supplies poses a major obstacle to the expansion of the iron and steel industry. In 1969 it was necessary to import 2.1 million tons of metallurgical c.o.ke and 633,000 tons of c.o.king coal.

Workable deposits of iron ore are situated in the vicinity of Resita and Hunedoara in the southwest. Other known deposits, particularly those at Ruschita and Lueta, have a low metal content and harmful radioactive admixtures. Suitable mining and processing methods to handle these ores have not been developed and are not believed to be economically feasible. Domestic mines provided about 32 percent of requirements in 1965 but only 17 percent in 1970; by 1975 the importance of native iron ores will have further declined. Imports of iron ores almost quadrupled in the 1960s and reached a volume of 3 million tons in 1969. Most of the imports came from the Soviet Union.

Information on basic nonferrous ore reserves is tenuous and, in part, conflicting. The tenor of published reports points to a scarcity of reserves, low metal content of ores, and difficulties in ore processing.

The great majority of existing mines are said to have only enough reserves left for a few years' production. Consideration has been given to the recovery of nonferrous metals from industrial wastes, such as blast furnace slag and metallurgical dross. For the time being, domestic reserves appear adequate to cover the needs of lead and zinc production and a portion of the requirements for smelting copper and aluminum. The bulk of bauxite and alumina and a substantial quant.i.ty of copper must be imported.

Romania is reported to be extracting small amounts of gold and silver.

It is also mining uranium ore, which has been exported to the Soviet Union in exchange for isotopes and enriched uranium for use in experimental nuclear installations.

Timber

The country's 6 million acres of forests const.i.tute a valuable source of raw material. Information on the volume of the annual tree harvests has not been published. Substantial quant.i.ties of lumber and, increasingly, of lumber products and furniture have been exported, although at the expense of domestic consumption.

In a program to conserve and rebuild this important resource, which was severely overexploited during World War II, a strict limitation was placed in the early 1950s on the annual volume of timber cut. A further reduction in the amount of timber felling was decreed for the 1971-75 period. Through a more efficient utilization of the timber and the expansion of wood processing, including the manufacture of plywood, chipboard, and furniture, the value of the output, nevertheless, increased substantially. Exports of lumber and wood products accounted for 13.4 percent of total exports in 1970, but this ratio is scheduled to decline to 6 percent in 1975, not because of a reduction in the volume of these exports but as a result of a planned expansion of other industrial and food product exports.