amounted to
only 18 percent of the funds invested in state farms. If the state
investment in agricultural mechanization enterprises is included as
investment for the benefit of the collective farms, the ratio of
collective to state farm investment per acre was still only 25 percent.

Collective farm statutes require the farms to devote from 18 to 25
percent of their annual gross income to investment. Some Romanian
economists consider net income to be a more equitable base; under such a
system more of the farms' income would remain for distribution to
members. In calculating gross income, amortization of fixed assets is
generally not included as an expense, which further raises the base used
for the computation of the compulsory investment fund. An official of
the Agricultural Bank reported that, in the last few years of the 1960s,
one-fourth of all collective farms set aside for investment up to 10
percent more than the maximum legal requirement.

Only partial information is available on the use of investment funds.
Roughly 40 percent of the investment in the 1962-69 period was devoted
to construction and assembly work, and 33 percent was used to increase
farm mechanization. It has not been made clear whether land improvement
and irrigation are included in construction, but it seems likely that
this is the case. Substantial funds were also invested in the expansion
of orchards, vineyards, and livestock. Although significant advances
were made in most of these areas, the level of farm mechanization and of
irrigation remained low. In 1969 the equivalent of one fifteen-horsepower
tractor was available for every 136 acres of arable land, and irrigated
acreage constituted 6 percent of the arable area. The use of fertilizers
lagged by comparison with other Eastern European countries.

Credit

Farm credit has been provided by the government through the Agricultural
Bank, which was reconstituted as the Bank for Agriculture and the Food
Industry in May 1971. Available information on the credit operations of
the bank is limited to a few summary data on credits to collective
farms. Information on the financing of state farms is lacking.

As expressed by the bank's president, long-term credits for investment
and short-term credits for production needs have been used by the state
as levers for the economic and organizational development and for the
consolidation of collective farms. Long-term credits granted during the
1962-6