ROMANIA’S NEW state-owned supermarket, the Unirea Agro-Food Trade House, looks like a nod to the communist past. The first two stores, which opened in October, are bare-bones, their shelves stocked with mono-branded staples like pear jam and pork in lard. But this is not a food bank supplying cheap calories to the poor; prices are similar to those at private competitors. Rather, it is an effort to get Romanian agriculture, now largely off the books, to enter the formal economy—and start taxing it.
After the fall of communism, Romania divided its agricultural land between former collective farms (transformed into private companies) and the people who had worked on them. Many of those smallholders have since left the countryside or grown old. Some lease their land to big farming outfits, including foreign ones. But usually they let their neighbours farm it, in exchange for a portion of the harvest.
As a result, Romania has a huge number of farmers (one in three farms in the European Union is Romanian) but an unproductive agricultural sector. The big farms are patchy, and thus difficult to industrialise. The rest are mostly smaller than two football pitches. Farmers…
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