World Bank National Commission for Statistics

From RuralFrom RuralFrom RuralFrom RuralPoverty to RuralPoverty to RuralPoverty to RuralPoverty to Rural

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Administrator28998

Coordinated by

Constantin Chircă, Vice-President, NationalCommission for Statistics

andEmil Daniel Teşliuc, Economist, World Bank

1999

Report Coordinated by:

Constantin Chircă Vice President, National Commission for Statistics, RomaniaEmil Daniel Teşliuc Economist, World Bank Field Office, Romania

Authors:

Mariana Câmpeanu National Commission for StatisticsDoina Gheorghe National Commission for StatisticsRadu Halus National Commission for StatisticsFilofteia Panduru National Commission for StatisticsMarius Augustin Pop National Commission for StatisticsDumitru Sandu Bucharest UniversityEmil Daniel Teşliuc World Bank Field Office, Romania

With the contribution of Ms. Marina Liana, National Commission for Statistics

The authors would like to acknowledge their indebtedness to Mr. Henry Gordon (WorldBank), team leader of the World Bank rural development project, for the suggestions madewhich substantially improved the content of the report, and for the financial supportwithout which the printing of the report would have not been possible.

The team is thanking Mr. Victor Dinculescu, President of the National Commission forStatistics, for the very useful recommendations and for the support given to the wholeresearch team in the production of the report.

The content of the paper was substantially improved thanks to the recommendationsreceived from Messrs. Lucian Croitoru (National Bank of Romania), Farid Dhanji (WorldBank), Valentin Lazea (National Bank of Romania), Lucian Luca (Research Institute forAgricultural Economics), Maria Molnar (National Institute for Economic Research),Gheorghe Oprescu (Competition Council), Lucian Pop (Bucharest University), CornelTarhoacă (Academy for Economic Studies) and Luiza Toma (Research Institute forAgricultural Economics). To all of them, the authors wish to express their warm thanks.

The team of authors wants to thanks to all the participants at the seminars organized inJuly 7th and 9th, 1999, by the National Commission for Statistics and the World Bank inBucharest and Vaslui. Through their comments, suggestions and questions, theparticipants at the seminars helped the authors to improve the content of the report.

The findings, interpretations, and conclusions expressed in this paper are entirely those ofthe authors and should not be attributed in any manner to the World Bank, to its affiliatedorganizations, or National Commission for Statistics.

SUMMARY

Introduction.......................................................................................................................... i

1. Rural Development Resources...........................................................................................1

1.1.The Rural Human Capital ...................................................................................................5

1.1.1. Population.....................................................................................................................5

1.1.2. Labor .........................................................................................................................10

1.2. Physical Resources of Rural Households ...........................................................................16

1.2.1. Land ..........................................................................................................................16

1.2.2. Livestock ....................................................................................................................17

1.2.3. Productive Equipment ..................................................................................................18

1.3. Infrastructure in Rural Communities ...................................................................................18

1.3.1. Physical Infrastructure in Rural Areas ..............................................................................24

1.3.2. Human Capital Improvement Infrastructure......................................................................24

2. A Profile of Rural Poverty ................................................................................................26

2.1. Poverty Measurement .....................................................................................................27

2.2. Rural Poverty and Demographic Characteristics of the Household.........................................28

2.3. Rural Poverty and Household Resources...........................................................................29

2.3.1. Rural Pensioners .........................................................................................................32

2.3.2. Rural Employees .........................................................................................................33

2.3.3. Farmers, Access to Land and the Role of Agriculture ........................................................36

2.4. Robustness of the “Consumption” Poverty Measure ............................................................42

2.5. Regional Dimensions of Rural Poverty...............................................................................43

2.6. Summary and Conclusions ..............................................................................................44

3. Living Standards And Development Resources................................................................47

3.1. Factors Influencing Households Consumption ....................................................................47

3.2. Key Predictors Of Household Consumption........................................................................52

3.3. Predicting The Development Level Of Rural Communes ......................................................54

3.4. Summary And Conclusions..............................................................................................59

4. Findings and Policy Recommendations............................................................................61

4.1. From Agricultural Policies To Rural Development Policies ....................................................61

4.2. Characteristics Of Rural Poverty .......................................................................................65

4.3. From Rural Poverty To Rural Development ........................................................................68

4.3.1. Restructuring The Small-Farmer Sector ..........................................................................69

4.3.2. Diversification Of The Rural Economy .............................................................................71

4.3.3. Development Of Human Capital In Rural Area .................................................................73

4.4. The Regional Dimension Of Rural Development .................................................................73

Annex 1. Thematic Maps .....................................................................................................74

Annex 2. Statistical Tables...................................................................................................85

Annex 3. Methodology Used in the Measurement of Poverty............................................... 102

Annex 4.Communes Belonging to the Poorest Quintile ...................................................... 116

I

Introduction And Executive Summary

In 1999, four out of ten rural residents are poor. There are talks about rural development inBucharest, Brussels and Washington. And yet, the fact is the widening gap between the Romania’srural poor and the wishes of rulers, international donors or development agencies. How long is theway from rural poverty to rural development? What can we do to make it shorter? This is themajor question that the authors of the paper have asked.

While there are people who would do something, there are others who would rather step back andthink. The authors of this paper belong to the latter category, but they wrote the paper hoping thatthe people belonging to the former category would read it. So that they may do something about it– and do it right. Doers, those who «do something because something must be done», are strong-willed persons who do not think twice before acting. When things are simple, this is a behaviorthat may yield results. Unfortunately, the state of underdevelopment of rural Romania is a fact thatcannot be changed simply by a desire to do good. We have witnessed many well-intended actionsto take the Romanian countryside out of poverty failing miserably. Without exception, they haveall been cases of willful action.

The authors of this paper do not think that «everybody knows what agriculture, or ruraldevelopment is about». They tried to understand rural developments in recent years. They usedrich sources of information on rural living standards, on the root causes of poverty and on whatcould take rural Romania out of poverty. They used rich micro datasets to give weight to theiranalysis. First they gave a description of rural area. Then, they asked themselves why things arethe way they are: what disease does the Romanian rural area suffer from, what are the causes ofrural poverty? Finally, they asked the question of what should be done to change poverty today fordevelopment tomorrow. And what should be done to bring that tomorrow nearer to us.

The authors’ believe that Romanian countryside can be taken out from its current state ofunderdevelopment only if market mechanisms become stronger in rural area. The failures andcosts of etatist policies are documented in the paper, for fear that recent history may repeat itself.Furthermore, the agricultural reform measures initiated in 1997 are shown to be just a beginning,hardly enough to put the Romanian villages in orbit for rural development. However, the reformhad the merit of ending the agricultural policy bias to the state sector and against the small farmersector. It also diminished the macroeconomic instability sources traced to state agriculture. Andyet, while creating a level playing field for all rural entrepreneurs, the reforms that began in 1997could not break the vicious circle of poverty in rural area. Rural development concerns weresecondary in the reform package early in the process. They seem to be a top priority now, at theeve of a new millennium.

The paper points to the vicious circle that developed in the rural area, where poverty breedspoverty. Most farm households are poor, and poverty has taken them away from modern, forward-looking economy to primitive, subsistence farming. This obsolete mode of production that leadsnowhere cannot but perpetuate the poverty of those employed in this activity. It is difficult to takethe rural poor out of poverty, first of all because there are many of them, there are 4.2 million outof 10 million rural inhabitants. Because of poverty, rural markets are weak: there are few buyersof farm inputs required by modern farming, and there are few sellers of farm output. RuralRomania does not make the transition to a market economy: it remains frozen in a natural,subsistence economy. And because there are few buyers and sellers in rural area, the businesses inindustries, trade or services are likewise.

II

The farm-household sector has yet to recover from the dramatic structural effects of the landreform. Land ownership is highly scattered and there is a mismatch between access to land, laborand capital at household level. While old farmers do not have access to labor, young farmers donot have access to land. Besides, productive equipment is scarce, obsolete and inadequate forsmall-scale farming. And input and output marketing channels as well as extension and creditservices are not tailored to small farmer needs.

A rural development strategy is required to address these problems. First of all, part of the landowned by old farmers should be transferred, by various market mechanisms such as land lease,sale or sharecropping, to younger, more efficient farmers. Second, part of the farmers today shouldfind non-agricultural jobs in rural area, or retire. This would improve the labor-to-land ratio andwould increase the marginal productivity of farm labor, so that agriculture could generate higherincomes and provide for decent living standards for the peasantry.

Rural development policies are needed to break the vicious circle of poverty, by providingincentives for the villages to come out of isolation, as well as regulations for these policies to bepursued, institutions to implement them and money. Concerted action needs to be taken at everydecision-making level.

With the diagnosis provided in the paper as a basis, we suggest a rural development strategythe priorities of which are as follows:

1) Rapid structural adjustment of the small farmer sector by:

a) Measures that stimulate the land market and agricultural land consolidation;

b) Measures that stimulate farmer partnerships for input procurement and outputmarketing;

c) Promotion of activities in the nature of public goods for the benefit of householdfarmers.

2) Diversification of rural employment by providing support to non-agriculturaloccupations.

3) Development of human capital.

Many of these measures call for adequate policies, cooperation between public institutions,between central and local authorities, and between them and civil society along with the privatesector. Others require finance, hard to find at a time of economic decline when both the central andlocal budgets are under increasing constraints. Fortunately, scarce domestic resources can becomplemented by foreign loans or grants. Rural development and poverty alleviation are majorgoals for the attainment of which the international community is prepared to provide importantfinancial resources in grants or loans. The European Union has made significant allocations forthis purpose under its SAPARD program. Also the World Bank is ready to support theimplementation of a rural development strategy with attractive long-term loans. Wisely used,these funds can take rural Romania out of its current isolation and poverty. We hope this papercontributes to the effort.

1

1. Rural Development Resources

Administratively, the rural area is comprised of 2686 communes incorporating 13 thousand villages. Itis very different from urban area by economic activities, occupations and factors of production. It alsois very heterogeneous, with tiny human settlements and larger communities, densely populated areasand isolated villages and hamlets, rich communities and poor communities. However, the rural area isparticularly important to Romania - in both economic and social terms: it accounts for 45% of thecountry’s population, 47% of housing and 46% of the living space. In this respect, Romania is unlikeeither its neighbors or EU countries where only 23% of the total are rural population. In Romania,89% of the country’s surface area and 91% of its farmland area is under rural communityadministration. With 48 people per sq. km., the rural area is more sparsely populated than the urbanarea (where the figure is 480).

The rural area lags behindthe urban one - socially andeconomically. Primaryproductive activities prevailin rural area: farming,forestry and fishing. Bycontrast, secondary andtertiary production –manufacturing industries,trade and other services aredominant in urban area. Food

processing and extraction industry are the most common industrial activity in rural area. Thisdifference in economic activities also extends to occupations: most of the economically activepopulation in rural area are self-employed farmers, unlike in urban area where employees cut thebiggest share. It should, however, be said that while entrepreneurship measured by the proportion ofemployers in total economically active population is low in both areas, it is almost nil in the rural area,where less than one-fifth of all Romanian employers are located. These differences are apparent in

Table 1.1.

Differences in occupationalstatus are, in their turn, linked todifferent educationalachievements and skills in thetwo areas. The education levelin rural areas is lower than inurban areas (see Table 1.2.). Theworking population with noformal schooling or with justprimary education makes up27.6% in rural area, whichcontrasts with a low 2.6% inurban area. On the other hand,

Table 1.1. Differences In Occupational Status By Area Of Residence% of total, by area % of total, by category

Occupational status Urban Rural Urban Rural

Employee 91.0 32.7 72.5 27.5

Employer 2.3 0.4 85.8 14.2

Self-employed 4.7 34.7 11.3 88.7

Family worker 1.9 31.5 5.5 94.5

Member of agricultural company ornon-ag. cooperative

0.1 0.7 10.1 89.9

Total 100.0 100.0 48.7 51.3

Source: CNS - Labor Force Participation Survey, 1997

Table 1.2. Education Level Of Working Population By Area, 1997% of total by area % of line item total

Urban Rural Urban RuralTotal 100.0 100.0 48.7 51.3No formal schooling 0.3 3.3 8.0 92.0Primary school 2.3 24.3 8.4 91.6Lower secondary school 10.3 31.2 23.7 76.3Lower high school 5.1 8.2 37.0 63.0Vocational school 24.7 17.4 54.7 42.6Upper high school 34.0 12.8 71.7 28.3Specialty post-high school 8.0 1.3 85.3 14.7Long-course university 6.4 0.8 87.9 12.1Short-course university 8.9 0.7 92.9 7.1Source: CNS – Household Labor Survey - AMIGO,1997

2

higher school graduates are concentrated in the urban area where 90% of their total live.

Both economic activities and occupations are basically determined by resources in the two areas. Therural area makes intensive use of primary resources: land, forests and the subsoil. By land ownership,rural residents own some 80% of all farmland and operate an even higher percentage of agriculturallandholdings. Livestock ownership is almost 100% in rural area. By contrast, rural ownership ofproduction equipment, industrial construction, and infrastructure is far below the urban level.

The Romanian rural area is known to lag behind the urban area in the endowment with infrastructureand modern amenities (seeTable 1.3). While suchindicators as the number ofrooms or living space percapita do not differsignificantly between the twoareas, modern conveniencesare scarce in rural dwellings.Less than half of ruraldwellings are made from time-resistant building materials,compared to 90 percent of theurban ones. Heating, sewage,or in-house bathroom seemsare found in more than 80percent of urban dwellings, butonly 6 to 12 percent of therural dwellings have suchamenities. Rural householdsalso own fewer durables. Thehousehold endowment withhousing or durable isconsistent with the level of

welfare, proxied by current consumption. In 1997, the mean consumption per adult equivalent waslower by 11 percent in rural areas than in urban areas. In rural areas, the pattern of consumption isspecific for poorer areas: the share of household budget devoted to food is 66 percent in rural,compared to only 60 percent in urban areas.

There are similar differences in access to physical and social infrastructure between rural and urbanarea (see Table 1.4). The share of rural area in the total drinking water and gas distribution network issmaller than its share of total population. The shortfall is particularly wide for the sewage system: onlyas little as 6% of its total length is in rural area. As concerns social services, with the exception ofclassrooms, the rural area suffers from a chronic shortfall of health care infrastructure and personnel.The disparity is even wider in terms of quality, and for secondary – lower and upper – education andsecondary health care services. Access to communications, to telephone services in particular, is fourtimes more reduced in rural area.

Table 1.3. Household Welfare By Area Of Residence, 1997 M.U. Rural Urban Rural/Urban

Household Consumption∗

Total household consumption ‘000 ROLJan. 1995

97.4 109.3 0.89

Share of food consumption % 66.1 60.3 1.10

Housing Characteristics: Percent Of Dwellings With …

Made of concrete, bricks, or BCA % 45.4 91.1 0.50

Central heating unit, or gas pipeline % 8.5 81.5 0.10

Water supply inside the building % 12.6 86.6 0.15

With sewage system % 12.8 85.9 0.15

Bathroom inside the building % 10.3 81.0 0.13

Toilet inside the building % 6.6 80.8 0.08

Mean living space per person sq.m./pers. 15.5 14.7 1.05

Ownership Of Durable: Share Of Households Having …

Gas cylinder cook stove % 60.0 90.6 0.66

Refrigerator % 52.1 89.3 0.58

Washing machine % 24.9 60.4 0.41

TV set % 77.1 101.0 0.76

Passenger car % 11.3 25.6 0.44

Bedroom furniture % 50.3 79.3 0.63Source: LSMS (Living Standard Measurement Survey), 1997∗) monthly average per equivalent adult

3

The lower level of householdresources, social public services andinfrastructure in rural areas – both interms of size and quality—,correlates, as expected, with highermortality or infant mortality, indirectmeasures of living standard.

Poorer infrastructure or theprevalence of primary sectoractivities in rural as compared tourban area is widespread in theworld. This urban vs. rural disparityis, perhaps, a rule of the economicgrowth. The disparities persist evenin developed countries such asEuropean Union (EU), in spite ofgenerous EU member-financedregional and rural developmentpolicies.

On the other hand, the rural area isvery heterogeneous. Average figures,used to illustrate the rural-urban

disparity, tell nothing about this heterogeneity that has its roots in the wide diversity of economic,geographic and socio-cultural conditions in rural area. There are large rural communities comparablein size with towns, such as Voluntari in Ilfov county with a population of 27 thousand inhabitants, and

small communities with a little overone hundred inhabitants, such asBrebu Nou in Caras-Severin county(Table 1.5). Furthermore, thelandholdings managed by acommunity may vary within widelimits: Murighiol commune inConstanta county holds over 80thousand hectares of land whichcontrasts with the one thousandhectares held by Doicesti communein Dambovita county. And this widediversity of resources and livingstandards may grow wider if we takeour analysis further down to villages.

This wide diversity of resources inrural area that translates into adiversity of living conditions andconveniences in Romanian villages

Table 1.4. Indicators Of Physical And Social InfrastructureDifferences: Rural Vs. Urban Areas

Rural Urban

Population total – as of 07.01.1997 45% 55%

Physical Infrastructure - % By Rural/Urban Area

Length of drinking water distribution network – km 38% 62%

Length of gas distribution network –km 31% 69%

Length of sewage system – km 6% 94%

Social Infrastructure – In 1000 People

School units 2.1 0.7

Teaching staff 10.3 16.8

Classrooms and school laboratories 5.6 5.4

Hospital and dispensary beds 2.0 14.7

Medical staff (physicians and nurses) 2.5 12.1

Communications – In 1000 People

Radio and local radio subscribers 147.2 231.5

TV subscribers 116.4 233.5

Individual telephone units 40.8 161.3

Crude Birth and Crude Death Rate

Crude Birth Rate, per 1000 people 12.0 8.8

Crude Death Rate, per 1000 people 16.5 9.5

Infant Mortality Rate, per 1000 live births 25.6 18.5

Source: Territorial / Administrative Statistics 1996, NCS

Table 1.5. Differences Across Romania’s Rural CommunitiesMaximum Minimum

Population, total – as of Jul-1st 27006 119

Surface area, total – ha 80452 1098

Farmland area by use – ha 36611 150

Housing stock available – total – units 7762 40

Physical infrastructure

Length of drinking water distribution network - km. 133 0

Length of sewage system network– km 19.3 0

Length of gas distribution pipelines -km. 75.9 0

Social infrastructure

School units – total – numbers 27 1

Teaching staff, total – numbers 239 1

Physicians – numbers 68 1

Communications

Telephone, telegraph and post offices - total – numbers 14 1

Individual telephone subscribers – numbers 1498 1Source: Territorial / Administrative Statistics, NCS, 1996

4

will be dealt with in the next chapters. Thematic maps will be used herein to illustrate the key factors –the resources – with the strongest impact on rural welfare. However, it should be kept in mind that theanalysis in this paper does not go beyond the smallest local administrative unit – the commune, or“comuna” in Romanian – for which comparable statistics are available. Recent studiesi have indicatedsignificant differences in welfare and access to infrastructure within one and the same community: asa rule, there is better access to infrastructure in the community seat than in the rest of its constituentvillages.

This paper tests the following assumption: rural-urban differences in living standards and the widediversity of rural living standards are largely accounted for by variations in the endowment witheconomic resources or inputs – work force, land, livestock, physical assets, physical and socialinfrastructure – in terms of quantity and qualityii. In this chapter, we will document the size andquality of the resources available in the rural areas, while pointing to their regional heterogeneity.

5

1.1. The Rural Human Capital

1.1.1. Population

We will analyze herein the evolution of rural population and the changes in its structure by age, sex,education or community size. Commune-level maps would help illustrate the geographic diversity ofthe population dynamics, migration and current mean education level. This section will be followedby a more detailed analysis of rural work force.

Rural population is a potential resource of great importance to village development. The data on thesize and quality of human resources now and in future are decisive for rural development policy-making. Population size and dynamics, as well as its structure – across the rural area and bycommunity - are such data of interest to policy-makers. The economically active population gives usan idea of the size of labor force of a community, whereas the inactive population tells us somethingabout the population that is in need of assistance – be provided either by social security, socialassistance or by the households themselves. The age structure of the population supplies informationabout labor, the size of the population past its productive age, but also of the young population thatwill replace the currently working population in due time. Population structure, dependency ratio andother similar indicators supply such information. Rural population dynamics tells us what the workforce of rural communities can be expected in future, assuming the developments during the period oftime identified as relevant for forecasts will persist. In addition, quality indicators such as theeducation level of the population of a given community help estimate the human resources of thatcommunity.

At 1st of July 1998, the rural population which totaled 10,139 thousand lived in 2686 communescomprising some 13 thousand villages. The average population of a commune was put at 3775, withthat of a village at 780. However, the smallest commune had just 119 residents, the largest – over 27thousand. A typical commune, between the first and third quartile, averaged between 2400 and 4800residents.

Rural populationhas droppedcontinuously duringthe past twentyyears, as shown inTable 1.6. During

1977-1998,Romanian villages

have lost about one sixth of their population: from 12 million twenty years ago, the rural population iscurrently put at some 10 million. That happened against the background of an all-country populationrise until 1992, which was followed by a slight decrease. It was the outcome of the industrializationpolicies pursued by the socialist regime and persisted until 1997 as a result of the inertia characteristicof demographic phenomena. Overall, the share of the rural population has declined from 56.4% in1977 to 45% now (1998).

Table 1.6. Dynamics Of The Rural Population1977 1980 1985 1990 1995 1998

Population, thousand 12,164 12,030 11,355 10,598 10,234 10,139Population dynamics, 1977 = 100% 100.0 98.9 93.3 87.1 84.0 83.4Rural population , % of total 56.4 54.2 50.0 45.7 45.1 45.0Source: National Commission for StatisticsNote: data at the beginning of the year

6

There are demographic andadministrative factors behindthe rural population decline. Inthe first place, it was due to thecombined effect of migration –particularly of the young andbetter-educated people – to

urban areas and a negative natural rise after 1990. Table 1.7 illustrates this. Secondly, in the pasttwenty years (1977-97) twenty large rural communities had their status changed to town, with theirpopulation being currently recorded as urban.

The most important determinantof the decline of the ruralpopulation was migration, acomplex demographic, socialand economic phenomenon thatwas behind the change in thenumbers and structure of therural population. Of themigratory flows by areaiii –

rural-rural, rural-urban, urban-rural and urban-urban – the most significant by its size until 1994 wasthe rural-urban population movement (see Table 1.8). The village-to-city migratory flow was the mostsignificant until 1990. Early in 1990 when a legal ban on taking up residence in large cities waslifted, outmigration to city increased sharply. Beginning with 1991 which brought with it the landreform and industrial restructuring, rural outmigration declined with every passing year, as the urbanpopulation flow to rural area was growing. By 1997 the trend was reversed and the rural-urbanmigration balance turned positive – indicating an increase of the population which settled down inrural area through the combined effect of migratory flows – for the first time in thirty years.

In recent years migration within one and the same area has risen (to about 50%) against thebackground of a drop in village-to-city migration. Overall, however, migratory flows are fairlyconstant, indicating a constant population, hence work force, mobility.

The balance of rural migration is not the same across counties. While in 1991 the rural migrationbalance was negative in almost all the counties, by 1997 it was positive in 28 counties. The highestpercentages were posted by the counties of Arad, Timis and Constanta, with higher negative figuresfor Maramures and Bistrita. The highest percentage of communities within a county with positivemigration rates were recorded by Arad, Brasov, Braila, Constanta, Ilfov and Timis (between 70% and76%), whereas the counties with the highest proportion of communities whose population wasshrinking were Arges, Bistrita-Nasaud, Caras-Severin, Maramures and Suceava (some two-thirds ofall rural communities).

A second demographic factor with a major impact on the dynamics of the rural population and on thesize of the rural communities is the population growth rate, the difference between the crude birth rateand crude death rate. The dynamics of the rural population over 1977-97 (see Table 1.9) wascharacterized by a steady drop of the birth rate and increase of the death rate in both rural and urbanarea. The lower birth rate in rural area brought with it a decline of the young population – under 15

Table 1.8. Structure Of Migratory Flows By Area1990 1991 1992 1993 1994 1995 1996 1997

Migration – thou. persons 786.7 262.9 293.2 240.2 266.7 289.5 292.9 302.6

Rural-rural, % 8.5 19.4 22.8 25.0 25.5 28.0 24.5 25.6

Rural-urban, % 69.8 50.3 39.2 35.0 30.5 25.1 24.7 22.6

Urban-rural, % 3.5 10.1 13.7 14.6 18.4 20.8 23.4 26.8

Urban-urban, % 18.2 20.2 24.3 25.4 25.6 26.1 27.4 25.0

Rural-urban balance -66.3 -40.2 -25.5 -20.4 -12.1 -4.3 -1.3 +4.2

Table 1.7. Impact of the Demographic Factors On Rural PopulationPer 1000 people 1990 1991 1992 1993 1994 1995 1996 1997

Rural migration balance 47.3 -9.8 -7.2 -4.6 -3.1 -1.2 -0.4 1.2

Rural natural population growth 0.9 -1.0 -1.9 -2.2 -2.4 -3.1 -4.5 -3.5

Rural population decline -9.7 -18.5 -3.2 -6.6 -7.1 -3.3 -4.9 -2.0

7

years of age – to less than one-fifth of the total (19.6%) by 1997. The higher rural death rate was aresult of both the aging population structure in rural area and its higher death rates in every age group.It should be said that while the birth rate in rural area was at all times higher than in urban area, so wasthe death rate (about 1.7 times higher).

The crude death rate and the infant mortality rate are indirect measures of living standards. Over timethey were persistently higher in rural area, signaling a lower standard of living. The rising trend ofpopulation death rates in rural area was basically linked to causes of death commonly associated withold age such as circulatory diseases and tumors, but also to the higher incidence of diseases that areassociated with a lower standard of living such as respiratory diseases and diseases of the digestivetract. By contrast, infant mortality sent mixed signals, having improved slightly after 1990 when theban on abortions was lifted. However, the infant death rate is 1.3 times as high in rural as in urban area(25 infant deaths per 1000 live births in rural areas, compared with 19 in urban areas). The majorcause of infant deaths was pneumonia, associated with a low level of sanitary education of themothers, low hygiene standards and poorer heath care services in rural area.

The rural population decline has not been general. An analysis of population dynamics by communitysize shows that three tendencies are emerging. First, the smaller communities lost population to largercommunities (especially those of over 5,000 inhabitants). Second, the closer to a city, the bigger thepopulation loss of a rural community. And third, the rural population drop was more significant in thenortheastern and southern counties and in the region of Transylvania. In Moldova, the population riseoffset rural outmigration to keep the size of the rural population fairly constant. In Transylvania andBanat, migration of the young population, especially to Central and Western countries, was alsoimportant, especially after 1989. This phenomenon had both positive effects (transfer of money andbusiness ideas to their families), and negative effects as the persons who migrated were those with ahigher education and a more developed business initiative.

We measured thepopulation dynamicsof each communityover 1977-1997 andgrouped thecommunities by size(1997) and populationgains or losses. Theresults are shown inTable 1.10. This

Table 1.9. Natality, Mortality And Infant Mortality Rates In Rural Area1990 1991 1992 1993 1994 1995 1996 1997

No. of live births – thousand 157.8 139.9 136.4 132.7 132.3 126.9 123.1 126.9Crude birth rate per 1000 people 14.3 12.9 12.9 12.7 12.7 12.3 12.0 12.4No. of deaths – thousand 147.8 150.3 157.1 155.8 157.3 159.5 169.7 163.3Crude death rate per 1000 people 13.4 13.9 14.8 14.9 15.1 15.4 16.5 15.9Population growth rate per 1000 people 0.9 -1.0 -1.9 -2.2 -2.4 -3.1 -4.5 -3.5Infant mortality rate per 1000 live births 4,693 3,604 3,505 3,507 3,599 3,031 3,200 3,173Infant mortality rate per 1000 live births 29.7 25.8 25.7 26.4 27.2 23.9 25.6 25.0

Table 1.10. Population Dynamics By Community SizeCommunity size: Population rise/drop in communities over 1977 - 1997

Total Under 30% -20%-30% -10%-20% -1%-10% 0-29%Total 2686 437 700 762 496 291

Under 1000 52 43 3 2 2 2

1000-1999 residents 385 152 150 59 17 7

2000-4999 residents 1666 238 490 527 286 125

5000-9999 residents 550 4 57 167 182 140

Over 10000 residents 33 0 0 7 9 17

8

contingency table shows the linkage between rural population loss and the size of the community. Justlike the link between community size and death or birth rates, the larger the community, the higherthe birth rate and the lower the death rate.

The dynamics of the rural community population during the past twenty years is illustrated, at an evengreater level of detail, on Map No.1: Commune Population Dynamics , 1997 vs. 1977, Annex 1. Thepopulation drop was significant in the counties of Calarasi, Giurgiu, Teleorman, the southern part ofArges, Dolj, Mehedinti, and in Transylvania – Brasov, Sibiu, Alba, Cluj, Salaj, Satu Mare, Hunedoara,

Timis.

Another factor thatcontributed to the loss ofpopulation in the ruralarea was the aging of itspopulation (see Table1.11). In the short spanof twenty years, the

population over 60 has increased from 17 to 24 percent of the total, while the young segment (under15 years of age) has contracted from 27 to less than 20 percent. In absolute figures, the elderlyoutnumber the young, causing what population researchers refer to as an imbalanced rural populationstructure by age. Its causes are lower birth rates and selective outmigration with young peopleaccounting for a higher percentage of the migratory flows to urban area. This trend brings a change ofthe dependency ratio emphasizing the growing needs for social protection of the elderly in rural area.

Population aging is widespread in both rural and urban areas; however, its scope is wider in ruralareas. Three fifths of Romania’s elderly live in the rural areas. As expected, a higher percentage of therural elderly are women, group with a higher live expectancy than men.

As concerns the distribution of the aging population across the territory, a linkage emerges betweenthe percentage of aging population and community size. This can be seen in Table 1.12. Every ruralcommunity where the elderly account for over 40% of their residents is small, with a populationbelow 5000.

Behind population aging are demographic and socio-economic causes, foremost of which are: femalefertility, death rates (higher in rural area), a negative migration balance (mostly young or adult peoplemigrated to urban area), average life expectancy (shorter in rural area). The evolution of thesedemographic indicators in recent years differed across the country, leading to disparities in population

Table 1.11. Rural Population Structure By Age Group And Gender1977 1997

Age group (% of total): Total Male Female Total Male Female

Under 15 years 27.1 28.2 26.0 19.6 20.2 19.0

Between 15 and 59 years 56.2 56.6 55.8 56.4 58.7 54.2

Over 60 years 16.7 15.2 18.2 24.0 21.1 26.8

Dependency ratio 781 769 793 772 702 846

Table 1.12. Proportion Of Elderly (Over 60 Years) In Rural Population As Of Jul-1st, 1997Percentage of population aged 60 years and over

Under 15 15-19 25-29 30-39 Over 40Total 2686 135 440 786 652 549 124

Under 1000 residents 52 2 2 4 9 18 17

1000-1999 385 10 24 62 97 141 51

2000-4999 1666 62 225 504 460 359 56

5000-999 550 51 172 211 85 31 -

Over 10000 residents 33 10 17 5 1 - -

9

aging by county. The share of the elderly is above the average in 17 counties: in two of them(Teleorman and Dolj) it is over 30%. Counties with a comparatively young rural population (under20% of the total) are Constanta, Satu Mare, Maramures, Brasov, Sibiu. The population agingphenomenon is illustrated on Map No.2 – The elderly (60+) as a percentage of total, by commune, in1997 in Annex 1.

One particular phenomenon that caused the loss of rural population the outmigration of the young andeducated people. As already mentioned, the education levels are lower in rural areas (see Table 1.2).The population with no formal schooling or only primary schooling accounts for 27.6% in rural area,which contrasts with just 2.6% in urban area. On the other hand, higher school graduates are heavilyconcentrated in urban area, where over 90% of them reside. Lower schooling achievements mean alower educational level of human resources in rural area.

We illustrated the regional patterns in educational achievements of the adults in the rural areas in MapNo.3 People with primary education or less, in percentage of the population aged 12+ by commune,in 1992, presented in Annex 1. The data were taken from the 1992 population and housing census.The map classifies the rural communities in four groups, ranked by their percentage of less educatedpeople. It shows a concentration of rural communities with lower education levels in two largegeographic areas viz. Northeast, and the South. In Northeast, the counties with low educationalachievements are Botosani, Iasi, Vaslui and Galati. In the South of the country, a significantproportion of the population with lower educational achievements lives in the counties of Teleorman,Giurgiu, Calarasi, Ialomita, Dolj and Mehedinti.

Before passing on to rural work force, let us sum up the major characteristics of rural population: it isshrinking, aging and less educated than urban population. All these are more frequent phenomenadeterminants in small rural communities far away from urban areas. By geographic region, thepopulation drop is more significant in the south of the country and in western Transylvania, with agingaffecting roughly the same parts of the country. The counties with lower education levels areconcentrated in the Northeast and South border counties.

All these characteristics have direct rural development implications. We assume that the livingstandards are determined by:

Ø The quality of human resources ( approximated by education level);

Ø Opportunities for households to make good use of their factors of production ( approximated bylocation and distance to city);

Ø Other factors linked to rural community size.

By assumption, lower household living standards can be linked to lower educational achievements.Also, the living standard of a rural community can be linked to its size and proximity to large urbancommunities as essential prerequisites for households to make better use of their factors of productionwhich vary inversely proportional with transport costs and proportional with the size of local andurban market. Finally, the geographic regions with shrinking population, lower birth rates, and risingdeath rates and outmigration may be in this position precisely because of falling living standards andour measure may be a proxy for the lower welfare areas.

10

1.1.2. Labor

Laboriv is one of the key resources for rural development. In any causal model, the standard of livingwill be influenced by the available human resources, by the size and quality of labor. To know whatthe current development level of rural area is like we must know the size and structure of its laborresources, the range of rural occupations, by activity and education level, and labor distribution bygeographic region.

As shown in the preamble to this chapter, rural labor bears the mark of an almost mono occupationalrural economy where the primary sector prevails. Farming is the main occupation in rural area. Laboris largely comprised of farmers – with self-employed and non-paid family worker status, and has aneducation level that is, on average, lower than in urban area. In the prevailing socio-economicconditions, all these are factors associated with lower living standards.

The activity rate is higher and unemployment lower in rural area (Table 1.13). The activity rate inrural area in the three years surveyed was by some 10 percentage points higher than in urban area.Differences were even bigger with the labor force participation rate (14.6 per cent age points in 1997).The rural unemployment rate – as defined by ILO – trailed the urban rate by some 5 percentage pointsduring the same period of time.

By age groups, the working rate is farhigher in rural area for the young (15-24years) and the elderly (over 50). This issomething worth stressing. As can beseen in Figure 1.1, the proportion ofyoung people in work is 61.9% in ruralarea vs. 37.4% in urban area. Asconcerns the elderly, only 5.5% of thepeople of retirement age (65 years andover) in urban area are working, unlikein rural area where the working peoplein this group account for a high 52%.

All other things being equal, a highworking rate and lower unemploymentrate would favor a higher living

Table 1.13. Activity Rate And Unemployment Rate By Area Of Residence

Activity Rate Labor Force Participation Unemployment Rate

Total Rural Urban Total Rural Urban Total Rural Urban1995 66.0 73.0 60.0 60.7 69.6 53.1 8.0 4.7 11.41996 64.8 69.9 60.5 60.4 66.9 55.0 6.7 4.3 9.21997 64.8 71.5 59.3 60.9 68.9 54.3 6.0 3.6 8.4

Figure 1.1. Activity Rate Of Adult Population, ByAge Group and Area of Residence in 1997

72

59 62

37

84 86 87 87

76

41

52

60

10

20

30

40

50

60

70

80

90

%

Total 15-24years

25-34years

35-49years

50-64years

65 yearsand over

Rural Urban

11

standard in rural area. However, the positive effect of these factors on rural household welfare cannotoffset other occupational factors that have an adverse effect on living standards such as the large shareof the population working in agriculture, seasonality and high underemployment. In the authors’opinion, the high rate of working population in rural area is a result of low farming technology, whichmakes rural people engage in low-productivity low income-generating activities. A large part of therural population has no choice but to engage in low-productivity subsistence activities.

In rural area agriculture is the major occupation. About 70% of all employed people were employed infarming throughout the survey period (1995-98). This is not a bad thing in itself. However, it is thesubsistence agriculture of household farms that makes farming an occupation predictably associatedwith lower living standards. The causes behind the low agricultural yields are beyond the scope of thissection, but we could remind here the restrictive land market policies (farmland could not be sold orbought until 1998) and excessive farm input and output market controls which prevented competitionand the emergence of a middle class of household farmers. Furthermore, low yields are associatedwith the new class of household farmers reinstated to land ownership in 1991, which have engaged insubsistence agriculture. This is so because the new class of landowners lacks the skills and knowledgerequired by modern farming. There is tremendous need for a new agricultural knowledge andextension system, but its development is still at an early stage.

The structure of the working population in Table 1.14 reflects the average for each area of residence.In Romania’s rural areas, there are wide disparities in the occupational structure from commune tocommune. There are communities where industry and the tertiary sector lack altogether, andagriculture accounts 100 percent of employment. Such communities are expected to add lower valueper labor unit, an assumption that would be tested in Chapter Three. The primary sector prevails in theEast and South-West (Table 1.15) In these regions, more than three quarters of the rural population is

working in agriculture, withindustry and servicesaccounting for a small shareonly (10%-12%).

Another Rural DevelopmentReport (UrbanProiect/PHARE, 1998)presents two maps that use theexistence or non-existence ofindustrial activities in ruralcommunities as a measure forrural occupational diversity.The firstv is a map of industrial

Table 1.15. Structure Of the Active Rural Population By Sector AndRegion In 1997

As % of total employedRegion Agriculture Industry and

ConstructionServices

North-East 78.9 10.8 10.3South-East 74.6 12.8 12.6South 64.4 21.2 14.4South-West 75.2 12.6 12.2West 67.9 14.0 18.1North-West 68.2 16.9 14.9Central 59.1 24.0 16.9Bucharest city, Ilfov 30.3 39.2 30.5

Table 1.14. Structure Of Active Population, By Sector And Area Of Residence1995 1996 1997

Rural Urban Rural Urban Rural Urban

Active population in: Thousand 5,900 5,252 5,546 5,390 5,673 5,377

agriculture % 69.8 7.2 68.4 6.7 69.8 6.5

industry % 16.7 47.1 17.0 46.4 16.1 45.7

services % 13.5 45.8 14.6 46.9 14.1 47.8

12

activities in rural area, which shows that more complex rural industrial activities are concentrated intwo counties, Suceava and Timis, and that some other industrial activities are located in a fewcommunities in the counties of Satu-Mare, Bihor, Mures, Brasov, Covasna, Harghita, Gorj, Olt,Arges, Dâmbovita, Constanta. Most of the units operated in these communities are in the mining andfood processing industries. The second map identifies the existence or non-existence of foodprocessing in rural communities. This industry is strongly represented in Suceava, Vaslui, Constanta,Arges, Dolj, Timis and Olt counties.

The concentration of rural activities in the primary sector is associated to a different occupationalstructure compared to the urban areas. While over 90% of working people are salaried in urban areas,in rural areas two thirds are self-employed or non-paid family workers, most of them performing farmactivities. The rural-urban occupational structure was stable in the past three years, as can be inferredfrom Table 1.16. Women account for 71.7% of non-paid family workers in rural area.

The structure of the working population by occupation and geographic area indicates that in themainly farming regions (North-East, South-East, South-West), the self-employed and non-paid familyworkers account for over 70% of the working population (Table 17). There is a direct correlationbetween the two determinants.

Rural employment is seasonal: it is lower in the first and last quarters of the year and highest in thesecond and third quarters. This pattern is largely due to the dominant farming activities – crop farmingin particular – for which labor requirements peak at planting and harvest time. In urban area, the

Table 1.17. Structure Of Employment By Occupational Status And Region In 1997As % regional total

Region Employees Employers Self-employed

Non-paidfamily labor

Members ofassociations

Rural of which by region:

32.7 0.4 34.7 31.5 0.7

North-East 23.0 0.2 40.6 35.0 1.2South-East 32.2 0.4 35.5 29.2 2.7South 38.7 0.3 34.9 25.5 0.6South-West 26.9 0.4 37.8 34.9 *West 39.4 0.7 23.4 36.4 0.1North-West 32.9 0.4 32.9 33.8 *Central 44.2 0.3 28.0 27.2 0.3Bucharest city, Ilfov 71.2 - 19.3 9.5 -

Table 1.16. Structure Of Working Population By Occupational Status And Area1995 1996 1997

Rural Urban Rural Urban Rural Urban

Working population, of which: Thousand 5900 5252 5546 5390 5673 5377

Salaried workers % 34.0 90.7 34.5 91.1 32.7 91.0

Self-employed % 38.2 4.6 34.5 4.6 34.7 4.7

Non-paid family workers % 25.9 1.9 29.8 1.9 31.5 1.9

Other (employers, coop) % 1.9 2.9 1.3 2.4 1.1 2.4

Working population of which:

Underemployed % 5.6 1.2 6.0 1.8 4.4 1.0

13

seasonallity of economic activities is almostabsent. Rural seasonallity is illustrated inFigure 1.2. It may adversely affect theexpected household income, showing thatlabor intensity is not the same all the yearround.

The lower education level of the ruralpopulation signaled in the previous section canbe extended to the rural work force as well.Primary or lower secondary school leaversaccount for 55.5% of the total workingpopulation in rural area, which contrasts withjust 12.6% in urban area. By geographic area,

the picture is brighter in West, North-West, Central and Ilfov where highly educated people employedin rural area makes up 2%-3% of all working population and vocational, high-school and post-highschool leavers account for over 40% (Table 1.18). In the East, more than 60% of the working

population have primary orlower secondary education. Theeducation level is higher forrural employees and for themale population than for boththe rural average and othercategories.

The distribution of the workingpopulation by age group andregion points to one majorcharacteristic of the rural workforce: it is aged. The proportionof the elderly in the workingpopulation in 1997 was 41.1%in rural area, three times as highas that in urban area (13.7%).Labor aging differs across thecountry (see Table 1.19). TheSouthwest region seems to be ina more difficult position in thisrespect: the elderly (aged 50years and over) who work inrural area make up some 48%,almost fourfold the youngpopulation in the 15-24 yeargroup. Also in the East, theelderly account for a high 41%of the working population.

Table 1.18. Rural Working Population, By Education Level And RegionIn 1997

Education Level As % of total rural and region’s total

University Vocational &post-highschool.

Lowersecondary

Primary (andno schooling)

North-East 0.8 35.8 30.5 32.9South-East 0.8 38.9 30.4 29.9South 1.4 43.3 27.0 28.3South-West 1.9 37.9 30.4 29.8West 2.8 40.0 36.0 21.2North-West 2.0 38.6 36.7 22.7Central 1.8 48.1 32.0 18.1Bucharest & Ilfov 2.8 54.7 26.4 16.0

Table 1.19 Working Population By Age Group And Rural-Urban AreaAnd Region In 1997

Area/Region As % of total or regional total

Region 15-24 year 25-34 year 35-49 year 50-64 year 65+

Urban 10.7 28.5 47.1 12.6 1.1

RuralOf which by region:

16.2 18.4 24.3 25.4 15.7

North-East 19.0 17.5 21.2 24.6 17.7

South-East 17.8 17.5 24.9 25.0 14.8

South 14.0 20.3 24.9 26.3 14.5

South-West 12.4 17.7 22.0 29.1 18.8

West 14.6 19.5 28.0 23.7 14.2

North-West 17.3 18.0 25.7 24.1 14.9

Central 17.1 21.2 27.5 21.8 12.4

Bucharest city, Ilfov 14.9 26.4 34.4 18.4 5.9

Figure 1.2. Activity Rate By Area of Residence

48

5454

5150

5354

51

49

6061

56

52

6061

57

48 4849

48 48 48 48 47

45

50

55

60

65

Tr. I -96

Tr. II -96

Tr. III -96

Tr. IV -96

Tr. I -97

Tr. II -97

Tr. III -97

Tr. IV -97

%

Total Rural Urban

14

The employment patternby private/public sectoris different in the twoareas. While in urbanarea, the public sectorstill contributes twothirds of employment, inrural area it onlyaccounts for one quarteror so. That was

persistently so during 1996-97 (see Table 1.20). Most of the rural population recorded as employed inthe private sector actually works in farm households. Accordingly, rural employment contributes73.2% to total private-sector employment, with farming population accounting for 68.8%.

Another characteristics of the rural employment is the higher level of underemployment: its scope isgreater in rural than in urban area and adversely affects the expected household welfare. Over 1995-97, three to four times as many people were underemployed in rural than in urban area. In 1997,82.4% of all underemployed lived in rural area. Underemployment was higher in the young (15-24year) age bracket. Similar by its effect is part-time employment - people who have agreed to work ashorter week. Also this category is larger in rural area (87.5% of total) and comprises mostly womenand non-paid family workers (they make up 92.3% of total part-timers).

Work Force Household Survey data would suggest that the typical rural household is the farmerhousehold which consists of a self-employed and non-paid family worker – a woman, as a rule – withbelow average education level, affected by seasonality, employed part-time in farming, and with anabove-the national average adult member age as a result of its large percentage of the elderly. Thishousehold type is more vulnerable.

How widespread is this farmer household in rural area across the country? Which are the areas wherea large percentage of the population is employed in farming? Map No.4 The Share of RuralPopulation Employed in Agriculture in 1997 shows county variations. With the national average forrural area put at 70%, the counties where farming accounts for almost the only occupation are Vaslui(91.1%), Botosani (89.2%), Caras-Severin (85.9%), Teleorman (83.7%). Giurgiu (83.2%), Olt(83.9%). These counties are concentrated in the East and South of the country.

Before passing on to the next section, let us sum up the major characteristics of rural work force. Over70% of the working population has farming as an occupation, works on the household farm, has aneducation level which is lower than in urban area and its members of non-working age – the elderlyand the young - account for a larger proportion. By region, this is a more frequently recurrent patternin the East and South of the country.

All these characteristics have direct implications for the rural development analysis and policy. Wewill assume that household living standards are determined by:

Ø the quality of human resources that make up the active population (using the education level of theworking population as a proxy);

Table 1.20 Working Population By Type Of Employer And Area Of Residence1996 1997

Rural Urban Rural Urban

Working population (thousand persons)of which, by type of employer:

5546 5390 5673 5377

Public 1474 3733 1307 3445

Private 3945 1385 4202 1537

Other 127 272 164 395

15

Ø marginal productivity in the sector or subsector providing employment to the active population;and

Ø the labor market experience of the working population, using their age as a proxy.

By this assumption, the less educated the working members of a household, the lower its livingstandard. Employment outside agriculture increases the chances for a household living standard to behigher than for farmer households. Finally, age may link up to a higher labor market experience, henceto better chances for a household to fare better.

16

1.2. Physical Resources of Rural Households

1.2.1. Land

The Land Law restored a good number of households to their farmland ownership rights. In 1997,more than half of the households (52.7 per cent) owned farmland.

The distribution of agriculturalland ownership by area ofresidence (Table 1.21) showsthat 89.0 per cent of ruralhouseholds are landownerswhich compares with 13.7 percent urban households that ownsuch land. Predictably, mostfarm households (92.1 per cent)own farmland, but urbanhouseholds also account for afairly high percentage ofagricultural landowners.

Furthermore, pensioner households cut a large share (65.4 per cent overall and 94.0 per cent of thosein rural area): this is so since, in addition to agricultural pensioners who fall in this category, it was theelderly who were the foremost winners of land restitution.

By area, rural households are clearly in the lead. Rural households that own farmland range from 65.3per cent of employer households to 94.1 per cent of farmer households. In urban area, except forfarmer households, the proportion of farmland owners varies from 8.0 per cent of employeehouseholds to 21.0 per cent of pensioner households.

In 1997, over 95 per cent of households who owned farmland worked it on their own or in farmassociations (85 per cent of urban households) and only as little as 3 per cent (in both urban and ruralarea) leased it out. A distribution by land use shows that households own pre-eminently arable land(81.1 per cent), with pastures and hayfields making up 15.4 per cent of total, and vineyards andorchards 3.5 per cent.

Highly scattered land ownership has been a recurrent theme of this paper. Average landholdings percapita are illustrated on Map 5 in Annex 1. One may see that the averages are higher (about threehectares) in the West, North-West and Central part of the country, and lower (1.5 hectares or so) in theSouth and South-West, which makes quite a difference in poverty alleviation. As we are going toshow in Chapter 2, poverty risk decrease monotonically with farmland ownership: the thresholdbeyond which the poverty risk drop significantly is two hectares per adult.

However, the earnings of farmland operators depend not only on the size of the landholding, but alsoon its quality. We sought to measure farmland quality variations by region with the help of the landarea in arable equivalent-to-land area as such. The arable equivalent for vineyards, orchards, hayfieldsand pastures was built with the agricultural experts’ advice, the same that was used for the

Table 1.21. Percentage Of Farmland Ownership,

By Household Type And Area In 1997Households headed by: Total Rural Urban

Employee 30.1 78.0 8.0Employer 24.2 65.3 10.7Self-employed 35.0 76.8 11.8Farmer 92.1 94.1 80.7Unemployed 36.3 73.8 8.2Pensioner* 65.4 94.0 21.0Other 31.7 66.5 9.4Total 52.7 89.0 13.7

* Including agricultural pensioners

17

implementation of the land lawvi . The ratio was used to draw Map 6 The arable area equivalent ofone hundred hectares of farmland by commune in 1997, which is also presented in Annex 1. The mapillustrates the somewhat higher productive potential of the agricultural land in the Baragan Plain andRomanian Plain where the size of arable land is sensibly larger than that of pastures or hayfields.

1.2.2. Livestock

Livestock are another keydeterminant of the ruralproductive potential as amajor source of farmproduce – foods and non-foods – for on-farm use aswell as for profit (Table1.22). In 1997, on average100 households – rural andurban – owned 13 horses,47 heads of cattle, 154sheeps and goats, 78 pigs

and 965 tame birds. In rural area where animal farming is widespread, average per householdownership was put at 2 sheep and goats, 1.4 pigs and 17 poultry. Rural households also owned most ofthe horses and cattle (about one horse for every four households and two cattle for every threehouseholds).

Table 1.23 records the percentagevariations from the all-countryaverage livestock ownership perhousehold by geographic region.A first noteworthy case is that ofIlfov county where shortdistances to the capital city arebehind an average livestock headper household well below the all-country average. Variations rangefrom –35 per cent for poultry to –95.8 per cent for sheep and goats.

In the other regions, the picture is fairly balanced for horses, except in the West region, and for fowls– with the exception of Southwest where ownership is higher and of Central Romania where it islower. As concerns cattle ownership, it is higher in the Northwest region, but lower in the Southeastand South regions. Sheep and goats prevail in the Central, Northwest and West regions, with thesouthern regions posting below-average figures; more pigs are raised in West and Northwest than inSoutheast, South and Northeast.

However, livestock ownership of the average rural household is fairly low, equivalent to 2.2 largecattle units in both 1997 and 1998. Most rural households own livestock, in a quite diversifiedstructure that signals the lack of specialization in animal breeding. Map 7 in Annex 1 shows Livestockdistribution, in large cattle unit equivalent per capita. Livestock numbers are larger in West, North

Table 1.23. Variations From The All-Country Average Of The AnimalHead Per Rural Household By Geographic Region In 1997

- As Percentage-Horses Cattle Sheep & goats Pigs Poultry

North-East 3.3 7.9 8.4 -30 -1.9South-East 7.9 -46.4 -17.4 -35.3 3.8South 3.8 -18.4 -44.8 -12.8 -0.2South-West 6.3 4.8 -5.6 8.2 38.8West -18.4 1 30.7 56.9 6.4North-West 3.3 58.2 35.6 21.6 -25Central 2.5 12.5 59.5 6.1 -23.7City of Bucharest, Ilfov -90.4 -82.4 -95.8 -50 -35.6

Tabelul 1.22. Average Number Of Livestock (By Category) For100 Households, By Region, In 1997

Region Horses Cattle Sheep & goats Pigs Poultry

North-East 24,7 65,6 219,9 98,2 1633,8South-East 25,8 32,6 167,6 90,8 1727,9South 24,8 49,6 111,9 122,4 1662,0South-West 25,4 63,7 191,5 151,8 2310,8West 19,5 61,4 265,2 220,2 1771,7North-West 24,7 96,2 275,1 170,6 1248,2Central 24,5 68,4 323,7 148,9 1271,1City of Bucharest, Ilfov 2,3 10,7 8,6 70,2 1071,8

18

West and Central part of the country as well as in Dobrogea (2.6 units on average) and lower in Southand South East (1.8 units on average). This makes a great difference for rural poverty alleviation, aswe are going to show in Chapter 2.

1.2.3. Productive Equipment

Ownership of farm equipment andmachinery is key to higherhousehold productions. On thisitem, household ownership is fairlymodest, with low-technologyequipment (animal-driven ploughs,wagons and carts) outnumberingmechanical facilities (tractors andfarm machinery). Employerhouseholds are in a somewhatbetter position (3 tractors, 1 seeder,1 tractor-trailer for every 100

households), even though landowners in this category account for a fairly low percentage. Just likewith livestock, the distribution of farm equipment by area of residence clearly tips the balance to ruralhouseholds which own most of the farm equipment (see Table 1.24).

The low farm technology is the explanation for a low productivity in rural area where the population ismainly involved in subsistence farming (and on-farm use of output) and only marginally concernedwith commercial activities. Major reasons for this type of agriculture are: land scattering following the1991 land restitution, the absence of a legal framework for a working land market, a shortage ofcapital and mistrust of the banking system even when concessional loans are provided.

1.3. Infrastructure in Rural Communities

1.3.1. Physical Infrastructure in Rural Areas

Physical infrastructure cannot be overlooked in rural development. A diagnosis of rural developmentincludes the rural housing stock, communications network and public utilities. This will be presentedherein where the stress falls on regional variations.

A. The Rural Housing Stock

By the end of 1997 there were in rural area close to 3.7 million dwellings, or 46.9 per cent ofRomania’s total. The past six years have seen a rise in the numbers and quality of rural housing.

Over 1991-97 the number of dwellings, the number of rooms to live in and the living area increasedmore than in urban area and exceeded the all-country average. As a result, housing and housebuildingindices improved. Housing numbers in thousand inhabitants had risen to 362 in 1997, 4 per cent up on1991 to better meet rural vs. urban demand. Also room numbers and living space per housing rose

Table 1.24. Farm Equipment Ownership By Area In 1997Equipment in 100 households Total Rural Urban

Tractor 1.3 2.1 0.4Tractor trailer 0.6 0.9 0.2Lorry 0.3 0.4 0.1Mechanical mower 0.2 0.4 0.0Plough 2.3 4.0 0.5Tractor-driven plough 0.6 0.9 0.2Cultivator 0.3 0.4 0.1Seeder 0.3 0.6 0.1Cart, wagon 9.0 16.5 0.8

19

during the interval. Themost relevant qualityindicator for housing –living space per capita –went up from 11.5 sqmper capita in 1991 to 12.3sqm per capita at end-1997 (Table 1.25).

Housebuilding was themain factor that helped

improve housing conditions in rural area. During 1992-97 105,302 new houses were built in rural areato account for 55.6 per cent of the country’s total and for 10.3 new dwellings in thousand inhabitants.The fact that rural housebuilding outnumbered urban housebuilding seems to suggest better ruralresources to improve living and housing conditions. It should also be noted that new housingaccounted for a higher percentage of the whole housing stock in larger communities with over fivethousand residents than in the communities with a population of under two thousand.

It should be said that while the living space of a dwelling in rural and urban area is roughly the same,urban dwellings have more rooms on average, hence the better living conditions enjoyed by ruralhouseholds.

What is indeed specific of rural housing are large variations in the size and physical characteristics ofhousing across the country (Table A 1.1 in Annex 2). First of all, in terms of dwellings in thousandinhabitants, 1997 marked an improvement in five counties Cluj, Hunedoara, Mehedinti, Salaj andValcea where the figure ranges from 403 to 440 in thousand inhabitants. There are, however, ninecounties with less than 340 dwellings in one thousand people in rural area: Bistrita-Nasaud, Constanta,Galati, Iasi, Ilfov, Maramures, Neamt, Satu Mare, Suceava - most of them lying in the North and Eastof the country. The lowest figures are in Bistrita-Nasaud (304 dwellings) and Constanta (306).

Since there are variations also in size in terms of average living space per dwelling – from 27.1 sqmper dwelling in Botosani county to 41.6 sqm per dwelling in Timis county and 41.4 sqm in Aradcounty, it can be concluded that the average living space per rural resident differs from county tocounty. This last indicator is also influenced by the size and density of the rural population of eachcounty. Therefore, the living space per rural resident varies from 9.3 sqm in Iasi county to 15.6 sqm inArad county and some 15 sqm in Salaj and Sibiu. Below the all-country average of 12.3 sqm per ruralresident are 19 counties – most of which are in the North, Northeast and South regions.

As concerns the distribution of the living space per inhabitant by community it should be said thatthere are communities – about one-fifth of the total – where per capita living space is under 10 sqm.By contrast, the living space per capita exceeds 14 sqm in one sixth of all communities.

The structure of ownership type is another feature that differentiate rural from urban housing. Unlikein urban area, almost all housing in rural area is privately owned, with public housing accounting foran insignificant percentage. At the end of 1997, 97.4 per cent of rural housing was in private hands.Percentage variations by county range from 91.2 per cent in Brasov and 91.4 per cent in Timis to99.0-99.7 per cent in Botosani, Dambovita, Giurgiu, Olt and Teleorman.

Table 1.25. Rural Housing Dynamics *1991 1994 1996 1997

Dwellings – thou. 3583 3618 3655.6 3673.4Rooms to live in – thou. 9170 9296 9422 9485Living space – thou.sqm 119853 121823 123880 124925Dwellings in ‘000 inhabitants 344 353 360 362Rooms to live in per housing unit 2.56 2.57 2.58 2.58Living area per dwelling – sqm 33.5 33.7 33.9 34.0Living area per capita –sqm 11.5 11.9 12.1 12.3

*At year’s end

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However, as concerns modern conveniences and amenities in the building (kitchen, bathroom, flushtoilets) and access to such services as safe water, sewage, electricity and even central heating usingpipelined gas) in rural area, the latest census data available – provided by the January 1992 housingand population census – make up a picture that is anything but satisfactory.

At the beginning of 1992, 81.8 per cent of all rural housing had a kitchen (a room which was onlyused to prepare food) but only a low 8 per cent had a bathroom (with or without a shower) and 5.8 percent had flush toilets (and an appropriate sanitation system). As concerns the main utilities, 11.4 percent had running water facilities (provided by a public system or by their own), 10 per cent wereequipped with a sewage system, and only 4.4 per cent had central heating facilities or access to thenatural gas distribution network. A high 93.6 per cent of rural housing had access to electricity.

In recent years, from 1992 to 1997, improvements were made to housing which increased access torunning water, sanitation or natural gas distribution systems. However, the small scale of thoseimprovements could hardly change the 1992 data, so that that rural housing has still a long way to gobefore it can provide conveniences comparable to those enjoyed in urban area. This is emphasized bythe available data on physical infrastructure for public utilities in rural area.

B. Physical Infrastructure of Housing

In defining the rural living standard one cannot leave out access to public utilities in rural area: safewater supply, sanitation, natural gas supply for heating and cooking, electricity. In this respect, the gapbetween rural and urban area is still wide, in spite of the obvious concern to narrow it lately: the smallinvestment effort as a result of low financial availabilities has achieved very little toward improvingrural housing amenities . The physical infrastructure for public utilities in rural communities will bedealt with below.

The running water system. The rural running water supply network measured 13,550 km at end-1997, or less than two-fifths (38.4 per cent) of the country’s total. The safe water supply system wasextended by just 1366.2 km, or a little over one-tenth (11.2 per cent) in the last two years. As concernssafe water supply, the 181.8 million cu.m. distributed to rural users account for just nine per cent ofthe total amount supplied to the country’s population.

At the end of 1997, the public safe water supply to rural domestic users accounted for nearly four-fifths of the total amount of water used in rural area which in turn made up just 11.1 per cent of thecountry’s domestic use of safe water.

In late 1997 access to the public safe water supply system was restricted to just 1287 ruralcommunities (out of 2686 across the country) and 2541 villages – or less than one-fifth (19.4 per cent)of all rural communities.

The rural safe water supplying facilities totaled 835.4 thousand cu.m. per day at the end of 1997(barely 8.1 per cent of the country’s capacity). Furthermore, not every rural household in thecommunities with a public water supply system did have access to it.

As a matter of fact, the 1287 rural communities with a public water supply system (which, however,did not extend to every village thereof) accounted for less than one-fourth of the country’s ruralpopulation. These findings are upheld by the population and housing census conducted in early 1992

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when as little as 11.7 per cent of rural households had access to safe water in the building (from apublic or own system).

A distribution of rural communities by population size and mileage of safe water supply system in late1997 is highly relevant. Table 1.26 shows that the larger the community (upwards of five thousand)the longer the supply network and conversely, smaller communities with up to two thousandinhabitants have lower access to water.

As a matter of fact, less than one-fifth of the communities with a population of up to 1000 had a watersupply system, which compared with three-fifths of the communities with a population from five toten thousand, and more than four-fifths of the communities with over ten thousand residents.

Only in about one-sixth of all rural communities with a water supply system did its length exceed 20km; in 15.5 per cent of these rural communities, the network was under 2 km long, supplying safewater to a few households only.

There are significant variations in the distribution of access to utility services by county (see TableA1.2 in Annex 2).

On the safe water supply network, it should be noted that it is longer in rural than in urban area in thecounties of Salaj, Maramures, Buzau, Tulcea and Dambovita (ranging from 62 to 72 per cent of itslength across the county).

Access to safe water supply systems by community varies widely: from 175 in Maramures county (or83.3 per cent of all villages in this county) to 138 in Salaj (50.5 per cent of its villages) down to 75communities in Dambovita (21.2 per cent of the total). Access to safe water is particularly low in Doljcounty (just 3.5 per cent of the county’s water supply system which is confined to three ruralcommunities) and in Bacau county (7.4 per cent of the all-county system’s length with only 20villages, or 4 per cent of their numbers, having access to this service).

We may therefore conclude that the public safe water supply network, the size of the facilities and theamount of safe water supplied to domestic users are far from meeting the needs of either ruralcommunities or rural households.

That being so, the rural population still lacks access to decent living conditions as it has to rely onunsafe water sources (wells, springs) with their effects on morbidity rates which are higher as a resultof infectious and parasitic diseases.

Table 1.26. Rural Communities By Population Size And Length Of Safe Water Supply Network In Late1997

Size in terms TOTAL Length of water supply network, km

of population No network Under2 km

2-9.9 km 10-19.9 km 20-29.9 km 30+ km

TOTAL 2686 1399 200 610 268 121 88Up to 1000 residents 52 42 6 3 1 11000-1999 385 226 17 94 39 4 52000-4999 1666 909 123 374 153 67 405000-9999 350 216 49 129 72 45 39Over 10000 33 6 5 10 3 5 4

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Sewage system. Also on this item rural population is worse off than urban population. Sewers inrural area accounted for 864.1 km, or 5.6 per cent of the country’s total length. Only 358 villages or2.8 per cent of all rural communities had access to sewage which averaged 2.4 km per village.

In terms of waste water treatment, in 1997 only as little as 1.1 per cent of the country’s total wastewaters were treated in rural area, or 13,377 thousand cu.m., which comes down to about 102 cu.m. perday for each one of the 358 villages with access to sewage. Only 14 per cent of the villages withaccess to safe water had access to sanitation, too. A shortage of appropriate sewage systems is, amongother things, an environmental liability.

The distribution of the rural sewage network by county varies significantly. In Ilfov county, 83.3 percent of the sewage system is in rural area viz. in 21 villages (or one-fifth of all). Rural access tosanitation is low in the counties of Cluj, Mures and Prahova where it is restricted to 25-30 villages, orjust 6-7 per cent of their total. Furthermore, in Harghita county no county has access to sewage, Albaand Ialomita counties have one village each with a sewage system, and Braila and Calarasi have twovillages each where this service is available.

Natural Gas Supply System. In late 1997, 5591 km of Romania’s natural gas distribution system,or 31 per cent of the total, was in rural area, supplying gas to 697 villages that made up 320communities; in 67 rural communities with a natural gas distribution network, natural gas was notsupplied to domestic users.In terms of volume, only 1465 million cu.m., or10.3 per cent of all naturalgas supplies, went to rural area, and as little as 7.9 per cent of the total was supplied to domesticusers. While natural gas supplied to rural domestic users accounted for less than one-third of allnatural gas supplies to rural communities, domestic users in 166 cities and towns across the countrymade up over two-fifths of the total (43.9 per cent).

To sum up, only 1318.5 thousand cubic meters of natural gas per day was supplied to ruralcommunities, to average 1892 cu.m. of natural gas per day per community. The natural gas supply torural area by county puts Mures on top: almost half of its villages (221 rural communities) have accessto natural gas. The rural natural gas distribution network of Mures county accounts for nearly three-quarters (73.5 per cent) of its total. A distinct position is that of Bistrita-Nasaud, Sibiu and Clujcounties where much of their natural gas distribution network covers the rural area, and yet theirvillages with access to natural gas account for lower percentages: 41.6 per cent of all villages in Sibiu,12.5 per cent of those in Bistrita-Nasaud and 10.2 per cent of those in Cluj county. The overall betteraccess to natural gas of these rural communities is above all due to reservoirs and drilling areas locatedin these counties. In absolute terms, however, the percentage of rural households with access to naturalgas for heating or cooking is not very high here, either.

In sharp contrast to the above, there are 11 counties - most of them in the South and East of thecountry - where pipelined natural gas for domestic use is still unavailable to rural communities. Thecounties are: Mehedinti, Teleorman, Tulcea, Vaslui and Vrancea.

Access to Electricity. Household access to electricity is a major living standard indicator. From thisangle, the rural population is in a better position as all 2686 rural communities are connected to thenational or local electricity system. According to the latest data, the overwhelming majority of ruralhouseholds (98.5 per cent or so) have access to electricity.

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A low percentage of rural households that still have no access to electricity are to be found in a smallnumber of villages that have yet to be connected to the national grid or are located in villages theelectricity network of which must be extended. However, rural household needs are not fully met aslong as frequency and voltage fluctuate widely as a result of inappropriate equipment and distributionsystems in rural area. It should also be stressed that while in 107 rural communities (4 per cent of thetotal) only 65-90 per cent of the households have access to electricity, in 1928 rural communities (orabout 72 per cent of the total) virtually every household has access to electricity.

Transport and Communications Infrastructure. The rural area also has to cope with a shortage ofpublic transport and communications infrastructure that would help the delivery of appropriateservices.

As far as transport is concerned, we would first refer to public roads – of county and communitysignificance – which measured 58,478 km and accounted for four-fifths of the country’s public roadsin mid-1997.

Of that total, just under one half (47 per cent) were county roads and 53 per cent were communityroads. A very low percentage – 7.7 per cent of county roads and 3.1 per cent of community roads –were rehabilitated with more than two-fifths being cobbled roads. We may add that nearly three-fifthsof community roads were cobbled, but there was still a quarter of them that were unpaved.

Inasmuch as rural access to national roads is concerned, it should be said that only about half of allrural communities (1462) – and about three-fifths of the rural population - had direct access to themain road network. The density of county and community roads in the territory was also low: at end-1997, there were 27.3 km of roads in 100 sq.km of rural area.

As concerns communications, post and telephone-telegraph offices in rural area fail to meet demand.

In 1997 there were 7214 rural post offices or 90 per cent of all Romanian Post offices. Adding to themwere 9805 mailboxes whose number dropped by 6.8 per cent in 1997, a drop which caused acompression of postal services in rural area. Postal offices are particularly few in five counties in theSouth.

Telephone and telegraph services in rural area were provided by 2182 offices, or some four-fifths ofall units delivering such services; their numbers also had dropped in the previous year by 50 units (2.2per cent).

Telephone units in rural area at the end of 1997 totaled 530 thousand, to account for 13.4 per cent ofthe country’s total but for just 52 units in 1000 rural people (the total includes telephone units ofpublic telephone offices and legal entities in addition to those of households). Only in 1160 ruralcommunities (or 43 per cent of their total) are telephone services available to every constituent village;in one-fifth of the rural communities less than one half of their constituent villages have access totelephone services. As concerns the distribution of telephone units by county, Map 8 TelephoneService Subscribers in ‘000 Inhabitants in Annex 1 shows that in the North- West region and part ofCentral Transylvania there is better access to telephone services.

Finally, access to radio and TV programs is not provided to rural households on a large scale (eventhough almost all rural communities have access to electricity).

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The rural rate of subscribers to radio programs (by households included) which does not reflect thetrue ownership of radio and TV sets is put at 15 million and accounts for just 36.7 per cent of all-country subscriptions or 148 radio service subscriptions in 1000 rural residents. The 1.23 million TVservice subscriptions make up 30.5 per cent of the all-country total and just 121 TV subscriptions inone thousand rural residents.

The lower access to radio and TV services of the rural population is an obstacle to its appropriateinformation and education.

1.3.2. Human Capital Improvement Infrastructure

Education and health are key to rural livelihood. They are the starting and the end point of majoreconomic, social and cultural problems in rural area. The mere fact that villagers depend far more onfarmwork for their living than urban residents cannot fully explain the low education level and poorhealth of rural population. Other factors also have a role. Their identification is important for ruraldevelopment and improvement of human resource policy-making.

What exactly is the shape of the education and health care infrastructure of poor rural communities?What is the social and population structure of poor or rich communities in terms of humaninfrastructurevii? The answers to these questions may give us better picture of the potential humancapital that makes the difference between rural communities (Table A 1.3 in Annex 2).

On average, there are six classrooms in 1000 residents, but there are wide case-on-case variationswhich range from 0 to 42 in ‘000 people. School infrastructure developed especially in thecommunities where high birth rates persisted over longer periods of time.

Demographic pressure alone could not account for a larger number of classrooms. Village isolationand social composition were also important. A better school infrastructure is reported in remotevillages. Proximity to cities appears to have eased the pressure on rural communities to develop aschool infrastructure of their own. The lower cost of transfer to city and better quality of urbaneducation made rural residents prefer commuting to city schools. On the other hand, the community’sown resources compel recognition – notwithstanding the egalitarian and etatist socialist ideology that

was in place for over fifty years: theregression analysis indicates thatschool infrastructure is better in thecommunities where a larger share ofits population is employed in non-agricultural sectors. The parents’salaried, basically non-agriculturaloccupations was a specific pressurefactor for school infrastructure growth.Even if the relevant distance-to-cityand population composition variablesare controlled, regional developmentper se seems to be a significantdeterminant of school infrastructure

Table 1.27. School Infrastructure In Rural Area, By HistoricalRegions, 1996

Historical Region Classrooms in 1000inhabitants

Teachers in 1000inhabi