Assessing the Economic Vulnerability of Romanian Tomato Growers to Extreme Weather Events

Abstract

Vegetable cultivation plays an essential role in the agricultural economy. However, amid increasingly pressing economic and climatic factors that significantly influence the sustainability of this sector, vegetable production in Romania has a downward trend. Similarly to other field crops, open-field tomato production is exposed to climate risks, such as extreme temperatures and drought, factors that have significantly impacted Romanian agriculture during the 2024–2025 period. This study aims to analyze the risk exposure of tomato cultivation under unfavorable climatic conditions and to emphasize the importance of financial support in protecting farmers’ incomes. By using a detailed income and expenditure budget, the study evaluates the financial vulnerability of the production process and analyzes the effects of crop losses on farm profitability. The results indicate substantial income losses for farmers in the event of crop damage, with estimated losses of 5280 EUR/ha for a 30% damage level and 10,912 EUR/ha for 50% damage. These findings highlight the importance of financial support provided through national public policies (SP PAC 2023–2027), along with the proposal of crop insurance as an effective tool for risk management and financial protection of farmers. This measure could contribute to mitigating the economic impact on farmers affected by climatic factors.

1. Introduction

Agriculture is deeply affected by the intensification of climate risks, as temperature variations, humidity and precipitation are becoming key drivers of economic instability in this sector [1,2,3]. Extreme weather events, such as spring frost, floods, hailstorms, heatwaves and drought, influence production decisions. They also reduce the efficiency of input use and negatively affect farmers’ incomes [2,4]. In the case of tomatoes, spring frost is particularly damaging during the seedling and flowering stages. Heatwaves and drought during fruit set and ripening can also cause substantial yield losses and affect fruit quality.

In regions where agriculture is exposed to frequent droughts, floods, or temperature extremes, such events cause direct production losses. They also increase costs related to replanting, disease and pest control, and the restoration of agricultural infrastructure [3,5,6]. Climatic analyses indicate an increasing frequency and severity of adverse phenomena, particularly frost events, with significant impacts on agriculture in the Mediterranean and Southeastern European regions, as evidenced by historical data (1957–1981) and recent observations (2011–2022) [7].

Romania, situated within this climatic zone, has experienced the direct effects of climate change. The year 2024 was characterized by extreme weather events, including prolonged drought, episodes of flooding and significant temperature fluctuations, all of which had a substantial impact on field crop production [4,8]. In this context, Romanian farmers, particularly those operating small farms, are confronted with multiple challenges. These include limited access to efficient irrigation systems, high volatility in prices of agricultural inputs and services, and restricted availability of financial protection instruments such as insurance schemes or mutual funds [9,10].

Agricultural insurance provides protection against losses caused by biotic and abiotic risks, helping to stabilize farm income and cash flow, which in turn supports the continuity of subsequent production cycles [11]. Previous studies reported in the scientific literature have suggested that the introduction of these instruments among smallholder farmers can enhance the resilience of agricultural systems [12].

In this context, agricultural insurance based on meteorological indices has been examined and further developed as an effective mechanism for managing climate risks, contributing to the reduction in agricultural income vulnerability in the face of extreme weather events [13]. These insurance products rely on the correlation between climatic parameters (such as precipitation, temperature, vegetation indices) and estimated crop losses. They are further refined through statistical modeling and the rigorous selection of indices, with the aim of minimizing basis risk and enhancing compensatory efficiency [13]. At the same time, these mechanisms are recognized internationally as essential solutions for stabilizing agricultural incomes [14]. They are particularly relevant for open-field tomato production in Romania, where multiple and successive climatic phenomena increasingly affect production efficiency.

The dynamics of tomato cultivation in Romania and in Buzău County, a traditional vegetable-growing region, provide important context for assessing the crop’s exposure to climate risks. Data from the National Institute of Statistics (INS) show that the cultivated area decreased from over 50,000 hectares in 2005–2006 to around 33,800 hectares in 2023, a reduction of almost 35%. Yields initially followed an upward trajectory and exceeded 21 tons per hectare in 2020–2021 but then dropped sharply to around 14 tons per hectare in 2023. This decrease reflects the severe drought conditions that marked recent seasons. At county level, Buzău County recorded a cultivated area ranging from 559 hectares in 2006 to 1830 hectares in 2023. Yields in this area generally exceeded the national average, with a maximum of 24 tons per hectare in 2021 and approximately 15 tons per hectare in 2023 [15].

Tomatoes are among the crops most affected by climate imbalances, due to their high-water requirements and heightened sensitivity to thermal and water stress [16,17,18]. In Romania, field tomato production is important, ensuring domestic consumption from spring to autumn, while climatic variations significantly influence both their availability and market price [6,18].

Given the increasingly unpredictable nature of weather conditions and the increased pressure on the agricultural sector, it becomes imperative to develop integrated solutions. These should include both financial protection mechanisms through compensation and agricultural adaptation strategies at the farm level. This paper aims to analyze an area with a tradition in vegetable growing in Romania, Buzău County, by integrating an economic model that simulates the impact of climate losses and the effectiveness of compensation measures.

Several international studies have analyzed farmers’ vulnerability to climate change, underlining the role of insurance schemes and policy instruments as essential measures for mitigating risks [19,20]. In Romania, research has mainly addressed farmers’ perceptions of climate change and their adaptation strategies [21], as well as broader challenges such as irrigation infrastructure and sustainable food security [22]. Even so, studies that integrate economic vulnerability assessments with policy mechanisms—particularly the combined effect of public subsidies and agricultural insurance—for open-field tomato growers in Romania under extreme weather events remain scarce. This paper contributes to filling this gap by examining Buzău County, a region with a long-standing tradition in vegetable cultivation.

The main objective of this paper is to assess the economic vulnerability of tomato growers in Buzău County in the context of climate change and increasingly frequent extreme meteorological phenomena, as well as to evaluate the efficiency of possible financial support mechanisms in reducing economic vulnerability.

To achieve this objective, the research aims to answer the following questions:

Q1. What is the financial impact of extreme weather events on the profitability of tomato cultivation in Buzău County?

Q2. What are the levels of the profitability threshold and the security index under various risk scenarios?

Q3. What is the economic efficiency of agricultural insurance policies in reducing farmers’ vulnerability to climate risks?

In this study, the profitability threshold is understood as the minimum production level required to cover total costs, while the security index expresses the degree of economic risk by relating actual production to the break-even point. Detailed definitions and calculation formulas are provided in Section 2.2.

2. Materials and Methods

2.1. Context of the Study and Methodological Approach

Our study focuses on the economic risk analysis of tomato cultivation in Buzău County (Figure 1). Recent studies indicate that the South-Eastern region of Romania shows a decreasing trend in annual precipitation and a predominance of circulation patterns that favor drought conditions, confirming a regional aridification process [23,24,25]. This situation may lead to an increase in the risk of long-term water deficit associated with field crops.

In this sense, the recent variability of the rainfall regime in Southern Romania has been strongly correlated with atmospheric circulation patterns, which are responsible for the occurrence of drought or excessive precipitation episodes. Regional climatological studies have identified specific types of circulation that favor extreme events, occurring with increasing frequency in the context of global warming [23]. In particular, the comparative analysis of atmospheric circulation at different geopotential levels highlighted a pronounced trend towards the predominance of patterns favorable to drought in the Southern regions of the country, including Buzău County [24]. These atmospheric developments contribute to the instability of agrometeorological systems, amplifying the risks of agricultural drought. In parallel, anthropogenic influences—such as changes in land use or interventions in the hydrographic network—have been shown to exert an additional impact on the water regime. Thus, the cumulative effect of climatic and human pressures accentuates regional hydrological vulnerability, underlining the need for adaptive and sustainable agricultural strategies [25].

Buzău County was selected as a case study due to its location in an intensively exploited agricultural region, which is directly exposed to the aforementioned climatic risks. In addition, tomatoes constitute one of the crops with the largest area under cultivation in the county, which makes the analysis of economic risks essential to ensure the sustainability of production.

The region’s climate is temperate–continental, characterized by hot, dry summers and cold winters, with more frequent snowfall in the higher regions [26]. The soils are varied, with fertile chernozems found in the lowland areas, which are ideal for field agriculture, including tomato cultivation [27].

From a socio-economic point of view, Buzău County reflects the Romanian agricultural structure, which is dominated by small and fragmented holdings. In 2023, approximately 90% of agricultural farms in Romania were under 5 hectares, limiting farmers’ ability to invest in technologies and infrastructure essential for adapting to climate risks [28]. In addition to this fragmentation, the low use of irrigation infrastructure remains a major constraint. Nationally, only 2% of the utilized agricultural area (UAA) was actually irrigated in 2021 [29]. In a 2024 agricultural campaign, the area operational for irrigation in Buzău County increased to 89,411 hectares. However, only 31,396 hectares were contracted for irrigation, indicating a usage rate of approximately 35% [30]. This suboptimal use reflects farmers’ difficulties in accessing water resources, especially in the context of increasing frequency of drought episodes, which particularly affect water-sensitive crops such as tomatoes. Thus, it is necessary to modernize and expand irrigation systems to enhance the resilience of local agriculture to climate change.

In this study, a standard crop production technology adapted to the agro-climatic specifics of the region was used, and the economic estimates were made for the agricultural year 2024–2025. The analytical model applied is of the explanatory-comparative type, based on the construction of a technical-economic budget for tomato cultivation, on an area of one hectare. The technological sheet used reflects a standard agro-technical model, frequently cited in specialized literature and in studies on the economy of vegetable production in Romania, including all technological stages and related costs [31,32,33,34]. It is important to note that the model is hypothetical, developed for analytical purposes, but based on real data regarding technological costs and market prices. The analysis refers to one hectare of open-field tomatoes in Buzău County, using production and cost data for the 2024–2025 agricultural season. Prices and costs are expressed in constant euros, and the scenarios do not account for substitution effects, such as changes in technology, thus reflecting a standard crop production technology commonly applied in the region. The scenarios presented do not stem from an individual case study but offer an estimated projection of the economic impact of production losses caused by climate risks. Thus, the model contributes to a better understanding of the vulnerability of tomato cultivation in the field and of potential adaptation measures available to farmers in Buzău County.

The estimated average production for the year 2025 was calculated using the Forecast Sheet option in Microsoft Excel, applied to a time series of statistical data extracted from the database of the National Institute of Statistics (INS) for the period 2005–2023.

To assess the impact of climate vulnerability, three production loss scenarios (10%, 30%, and 50%) were created, correlated with data from the Ministry of Agriculture and Rural Development (MADR) and the National Institute of Statistics (INS) on the effects of drought and extreme weather phenomena in recent years.

2.2. Technical and Economic Indicators for Production Evaluation and Cost–Benefit Analysis

To assess economic performance and vulnerability, relevant indicators were used, such as production value, net income, break-even point, production cost, income rate, and security index. These indicators allow for a detailed estimation of the economic impact of losses, as well as the assessment of the efficiency of financial interventions [35,36].

• The main production value (Vp) was determined by multiplying the predictable market price by the average yield of production [32,37].

Vp = Pm × Ppi/1000

where

-

Pm—average production per hectare (kg/ha);

-

Ppi—predictable domestic market price (EUR/kg).

2.

The subsidies represent the financial aid proposed to be granted to vegetable producers for the year 2025 through the National Strategic Plan (NSP) 2023–2027 for Romania (developed within the Common Agricultural Policy) [38].

3.

Total expenses (TC) were determined by summing variable and fixed expenses [26,31].

TC = VC + FC

where

• VC—variable expenses;
• FC—fixed expenses.

4.

Variable expenses (VC) were calculated by adding up the costs of raw materials, mechanization, irrigation, supply of raw materials and supplies from external sources, and insurance. These expenses may vary depending on production changes [37].

VC = ∑ (Raw material expenses + Mechanization expenses + Irrigation expenses + Supply expenses + Insurance expenses)

5.

Fixed expenses (FC) were calculated by adding up the costs of permanent labor, general and management expenses, interest for the establishment of the crop, as well as depreciation expense for buildings and utilities [37].

Permanent labor expenses were calculated directly from the technological sheet of the crop. General and management expenses were set at 2.5% of the sum of raw material, mechanization, irrigation, supply, and permanent labor expenses. Interest expenses were calculated at 2% of the direct expenses resulting from the technological sheet. Depreciation for buildings was considered at 2% per year, using the straight-line method.

FC = ∑ (Permanent labor expenses + General and management expenses + Interest expenses + Depreciation expenses)

6.

Taxable income (TI) was calculated by the difference between the value of the main production (Vp) and the total expenses for obtaining the estimated main production (TC) [32,37].

TI = Vp − TC

7.

Income taxes and fees have been calculated by applying the rate of 10% to taxable income [32,37].

8.

Net income (NI) was calculated by the difference between taxable income and taxes and fees [32,37].

NI = TI − taxes and fees

9.

Rate of taxable income (%) (RTI) was calculated by relating the taxable income (TI) to the total expenses for the main production (TC) [32,37].

RTI = TI/TC × 100

10.

Net income rate (%) (RNI) was calculated by relating net income (NI) to total expenses (TC) [32,37].

(RNI) = NI/TC × 100

11.

The production cost (Pc) was calculated by relating the total expenses for the main production (TC) to the average production (Pm). For any crop to be profitable, the production intended for sale must be valued at a price higher than the cost of production [32,37].

Pc = TC/Pm

12.

Break-Even Point (BEP) represents the minimum production level of production required to cover total expenses, without generating a profit. If production falls below the BEP, the activity becomes unprofitable [35].

BEP = FC/(PPi − VC_u)

where

-

FC = Fixed expenses;

-

PPi = predictable domestic market price;

-

VC_u = variable costs per ton.

13.

Operating risk ratio (RRE), which expresses the sensitivity of the operating result to changes in the value of production [36].

RRE = BEP/Vp

14.

The security index (Is) shows how close the farm is to the break-even point [36].

Is = (1 − BEP/Vp)

These indicators allow for a detailed analysis of the economic impact generated by production losses and the effectiveness of financial interventions [32,37,38,39].

2.3. Risk Scenarios

To assess the economic vulnerability of tomato producers, three distinct scenarios were defined, corresponding to different levels of production loss: 10%, 30%, and 50%. The selection of these values was based on official data provided by the Ministry of Agriculture and Rural Development (MADR) and the National Institute of Statistics (INS) for recent years, during which losses caused by drought and extreme weather events ranged between 9% and 70%. The most affected areas include the southeastern region of Romania.

-

Scenario 1 (10% loss) is associated with mild weather conditions (short-term heavy rains, temperature variations, temporary drought). Statistical data indicate an average production decrease of approximately 9% due to drought.

-

Scenario 2 (30% loss) corresponds to moderate intensity climatic phenomena (localized hail, medium-level drought).

-

Scenario 3 (50% loss) reflects extreme climatic events (prolonged drought, severe storms), which can cause significant losses or even total crop failure. In the counties Buzău, Brăila, Călărași, and Constanța, agricultural production losses have ranged between 35% and 70% [40].

To strengthen the scientific foundation of the scenarios, the selected values were also correlated with climate projections for Romania. EURO-CORDEX simulations show that, for 2021–2050, heatwave frequency in southern Romania may increase by 50–60% under RCP4.5 and by 60–80% under RCP8.5, with similar increases in duration [41]. For the end of the century (2071–2100), studies focusing on the Bărăgan Plain in southeastern Romania highlight an increasing variability of precipitation patterns and a heightened risk of spring–summer droughts, consistent with observed warming and drying trends [42]. Multi-temporal analyzes of drought indices (DSI, SPEI, SMA) demonstrate that drought severity and spatial extent have intensified in Romania, with the south, southeast, and east most affected, particularly during August and September [43]. Furthermore, analyses of precipitation extremes reveal a decrease in moderate-rainfall days and an increase in heavy-rainfall events, reflecting higher climatic variability [44]. These findings confirm the increasing probability of mild, moderate, and extreme climatic events, thereby reinforcing the plausibility of the three proposed scenarios.

Each scenario is applied to the income and expenditure budget model to assess the impact on production value, profitability and risk indicators (operational risk rate—RRE, security index—Is). In this way, the farm’s capacity to withstand economic losses is simulated and the effectiveness of financial support policies is evaluated.

2.4. Methodological Limitations

The economic model used in this study is based on average prices and production level, which may vary significantly from one season to another, from one producer to another, as well as depending on the geographical area and local climatic conditions. This reliance on average values may underestimate the risks faced by individual farms, where variability is higher. Future research should incorporate farm-level data to better capture heterogeneity in vulnerability. The analysis does not account for social risks (such as labor shortages), market risks (such as demand volatility), or other unforeseen costs, including input price fluctuations or logistical disruptions.

Possible cumulative effects or synergies between multiple risks (e.g., drought and fuel price increases) were not considered, and the model does not include sensitivity analyses on the simultaneous variation in multiple factors.

Another limitation of the analysis is that the model does not make distinctions between small and large farms, even though farm size directly influences the degree of vulnerability to extreme weather events. In general, small farms have fewer financial resources, use less advanced technologies, and have limited access to stable markets, which makes them more exposed to losses and slows their capacity to adapt. Capturing these contrasts would require information collected directly from farms, which goes beyond the scope of this study but could be addressed in future research.

3. Results and Discussion

3.1. Analysis of Tomato Crop Profitability and Economic Risk

Tomatoes (Solanum lycopersicum L.) are among the most widely known and cultivated vegetables worldwide, with their production having tripled over the past four decades [45,46,47,48]. According to the World Processing Tomato Council, global production of tomatoes cultivated for processing averages around 39–40 million tons annually [49]. In Romania, in 2023, the area cultivated with tomatoes was 33,862 hectares, representing 18.84% of the total area cultivated with vegetables. In the South-East region, 6389 hectares were dedicated to tomato cultivation, of which 28% are located in Buzău County—an area with a longstanding tradition in vegetable growing [15].

To estimate the evolution of tomato cultivation, official statistical data provided by the National Institute of Statistics (INS) for the period 2005–2023 were used, focusing on production recorded in Buzău County. Based on these data, a forecast for the year 2025 was generated in Microsoft Excel using the Forecast Sheet option, which provides not only point estimates but also lower and upper forecast limits. This approach allows for a more realistic appreciation of the uncertainty associated with the 2025 estimate. The estimate indicated an average production of 22,393 kg/ha, within a context characterized by significant annual fluctuations but showing a general upward trend (Figure 2a). Additionally, the average valuation price was estimated at 1258 EUR/t, based on the data series available for the period 2005–2023 (Figure 2b).

Based on an average production of 22,393 kg/ha, a technological sheet was developed, serving as the basis for substantiating the income and expenditure budget (BVC), which reflected the economic structure of open-field tomato cultivation [34].

The production value of 28,160 EUR/ha was determined by multiplying the forecasted domestic market price (1258 EUR/t) by the estimated production. The taxable income of 4946 EUR/ha was calculated by deducting total expenses (23,214 EUR/ha) from the production value. After applying the 10% income tax (no additional local taxes were included), a net income of 4452 EUR/ha was obtained (

Table 1. Income and expenditure budget.

Indicators	Unit	Value (EUR)
PRODUCTION VALUE	EUR/ha	28,160
SUBSIDIES	EUR/ha	1875
TOTAL EXPENSES	EUR/ha	23,214
VARIABLE EXPENSES	EUR/ha	10,790
FIXED EXPENSES	EUR/ha	12,424
TAXABLE INCOME	EUR/ha	4946
TAXES AND FEES	EUR/ha	495
NET INCOME + SUBSIDIES	EUR/ha	6327
NET INCOME	EUR/ha	4452
PRODUCTION COST	EUR/t	1037
PREDICTABLE DOMESTIC MARKET PRICE	EUR/t	1258

Source: authors’ own calculations.

).

The subsidies (1875 EUR/ha), representing the financial aid proposed for vegetable producers in 2025 under the CAP Strategic Plan 2023–2027 for Romania (developed within the framework of the Common Agricultural Policy) [38], are composed of the following:

-

Basic support for income for the purpose of sustainability, in the planned unit amount of 99.27 EUR/ha [38].

-

PD-02-CRISS—Complementary redistributive support for income for the purpose of sustainability, in the planned unit amount of 52.08 EUR/ha [38].

-

PD-03-CIS-YF—Complementary income support for young farmers, in the planned unit amount of 48 EUR/ha [38].

-

PD-04-Eco-scheme—Beneficial practices for the environment applicable in arable land, in a planned unit amount of 56.28 EUR/ha [38].

-

ANT-1—Transitional National Aid. For the calendar year 2024, was estimated an amount of 10.69 EUR/ha, the same amount that was calculated by APIA (Agency for Payments and Interventions for Agriculture) by relating the established limits to the total number of eligible hectares for the year 2024 [50].

-

PD-17 Coupled support for income—Vegetables grown in the field for fresh consumption or intended for industrialization (tomatoes, cucumbers, peppers, eggplants) in a planned unit amount of 1609 EUR/ha [38].

Open-field tomato cultivation, under favorable conditions, proves to be profitable, generating a positive net income even in the absence of state financial support. By adding the subsidy of 1875 EUR/ha, the farmer’s income increases to 6327 EUR/ha (Table 1), highlighting that financial support accounts for approximately 30% of the total income obtained.

The analysis of the expense structure by category (Figure 3) highlights that the largest share is represented by fixed expenses, which account for 53.5% of the total. Among these, permanent labor costs are the highest, representing over 92% of this category.

Variable expenses, which represent 46.5% of the total, are dominated by the costs of raw materials and input required for production, accounting for approximately 68% of this category. Such a structure indicates a significant exposure of farmers to the volatility of input prices, particularly planting material, fertilizers, plant protection products, and fuel, which may affect the economic stability of the holding in the absence of protective measures.

Given the income structure and the influence of public support on economic performance, it is relevant to deepen the analysis using profitability and economic risk indicators. These indicators provide a perspective on the economic efficiency of tomato cultivation and its resilience under variable market and environmental conditions (

Table 2. Profitability and risk indicators.

Indicators	Unit	Value
TAXABLE INCOME RATE	%	21
NET INCOME RATE	%	19
NET INCOME RATE + SUBSIDIES	%	27
BREAK-EVEN POINT	t/ha	16
OPERATING RISK RATIO	%	71.5
SECURITY INDEX	-	0.3

Note: The security index is dimensionless. Source: Authors’ own calculations.

).

The analysis of profitability indicators highlighted that tomato cultivation has the capacity to generate positive income despite high costs and market volatility. The taxable income rate of 21%, indicates that after covering all expenses, 21% of the production value represents taxable income. The net income rate of 19% is close to that of taxable income, showing that the fiscal impact is approximately 2%.

However, subsidies contribute significantly to enhancing economic performance. The net income rate increases from 19% to 27% when public financial support is included, showing the significant contributions of subsidies to maintain satisfactory profitability levels.

On the other hand, economic risk indicators reflect the farm’s exposure to uncertainties and variations in external conditions, such as climate variability, price fluctuations, or the occurrence of diseases and pests. This is directly influenced by the cost structure, particularly the high share of fixed costs in total operating expenses [36]. In this case, the operating risk rate of 71.5% indicates a high level of exposure, implying a significant vulnerability to disruptive factors because a large share of expenses must be covered regardless of production volume.

Another essential indicator is the security index (Is), which measures the economic safety margin relative to the production value. The value of Is = 0.3, indicating that the achieved production is only 30% above the profitability threshold, set at 16 t/ha. This relatively narrow margin reflects a limited financial buffer, indicating that even moderate disruptions, such as yield reductions or input price increases, could push the enterprise into unprofitability.

To further illustrate the economic vulnerability of tomato cultivation, a sensitivity analysis was conducted based on the 2025 price forecast presented in Figure 2b. Two scenarios for the selling price of tomatoes were generated: a pessimistic scenario (lower confidence limit) and an optimistic scenario (upper confidence limit). These alternative price levels allow for a clearer assessment of how market volatility affects farm profitability and financial stability (

Table 3. Sensitivity analysis of tomato profitability under pessimistic (Scenario 1) and optimistic (Scenario 2) price forecasts (2025).

Indicators	Unit	Pessimistic (Scenario 1)	Optimistic (Scenario 2)
PRODUCTION VALUE	EUR/ha	22,736	33,603
NET INCOME + SUBSIDIES	EUR/ha	1397	11,226
NET INCOME	EUR/ha	−477	9351
PRODUCTION COST	EUR/t	1037	1037
PREDICTABLE DOMESTIC MARKET PRICE	EUR/t	1015	1501
NET INCOME RATE	%	−2	45
NET INCOME RATE + SUBSIDIES	%	6	48
BREAK-EVEN POINT	t/ha	23.3	12.2
OPERATING RISK RATIO	%	104	54.5
SECURITY INDEX	-	−0.04	0.5

Source: Authors’ own calculations.

).

In the pessimistic scenario, the forecasted price decreases to 1015 EUR per ton, leading to a negative net income without subsidies (–477 EUR/ha). Even with the inclusion of subsidies, the net income remains low (1397 EUR/ha). The operating risk ratio reaches 104%, and the security index becomes negative (–0.04), highlighting substantial economic vulnerability under unfavorable market conditions.

In the optimistic scenario, the price increases to 1501 EUR/t, generating a positive net income of 9351 EUR/ha, or 11,226 EUR/ha with subsidies included. The operating risk ratio decreases to 54.5%, and the security index increases to 0.50, indicating a comfortable economic position and reduced risk exposure.

Comparing the base scenario (price 1258 EUR/t, net income 4452 EUR/ha) with the sensitivity scenarios (Table 3), it is observed that the profitability of tomato cultivation is strongly dependent on the market price. Small percentage changes in price lead to significant proportional variations in net income: for example, if the price of 1258 EUR/t increases by 1% (approximately 12.6 EUR/t), the net income increases by approximately 282 EUR/ha, while a decrease of 1% reduces income by the same amount.

In conclusion, while subsidies play an important role in limiting losses, economic vulnerability remains high under unfavorable price conditions. This finding highlights the need for effective price-risk management instruments, such as agricultural insurance schemes or public support mechanisms adapted to market fluctuations.

3.2. Production Loss Scenarios

Under growing climatic and economic uncertainty, production loss simulations offer a practical means of assessing sectoral vulnerabilities and guiding strategies for sustainable development.

In Romania, where agriculture is strongly influenced by climatic variability, food security and population well-being are closely linked to farmers’ capacity to adapt to changing environmental conditions [27]. Statistical data from the period 2014–2023 indicate an increase in the average annual temperature by approximately 1.2 °C, rising from 10.4 °C in 2014 to 11.56 °C in 2023, with a significant anomaly in 2021, when the temperature dropped to 9.9 °C. During the same period, the average annual precipitation recorded a downward trend, reaching a minimum of 553.2 mm in 2022, compared to a maximum of 806.4 mm in 2014. This trend of decreasing precipitation has placed additional pressure on agricultural systems, highlighting the need for adaptive practices such as irrigation, the cultivation of drought-tolerant varieties, and efficient water conservation methods [51].

The agricultural years 2024 and 2025 have been marked by an increase in climate instability, manifested through the higher frequency and intensification of extreme weather events. Torrential rainfall, often accompanied by hailstorms, significantly affected agricultural crops, causing production losses [3]. In the southeastern regions, temperatures frequently reached 30 °C, with heatwaves exceeding 35 °C, causing severe heat stress in plants. These events were accompanied by prolonged drought and uneven precipitation distribution, further aggravated by an increase in the frequency and duration of heatwaves [52,53].

Climate projections indicate a continuation of these trends, with potential negative effects on agricultural yields and water availability. In this context, it becomes imperative to implement urgent adaptation measures. These include the modernization of irrigation systems, the promotion of climate-resilient agricultural practices, and the strengthening of monitoring and early warning mechanisms [54].

In this regard, in order to assess the economic impact of climate-induced production losses, three loss scenarios were developed for field-grown tomato cultivation: moderate (10%), high (30%), and extreme (50%)(

Table 4. Risk scenarios with tomato production losses of 10%, 30%, and 50%.

Risk Scenario	Production Loss (%)	Vp (EUR/ha)	BEP (tons/ha)	BEP (EUR/ha)	RRE (%)	Is	Interpretation
Scenario 1	10%	25,344	17	21,634	85	0.1	High risk, financially unstable position
Scenario 2	30%	19,712	22	27,448	139	−0.4	Very high risk, significant economic loss
Scenario 3	50%	14,080	42	53,163	378	−3	Extreme risk, severe loss, complete unprofitability

Note: Vp = production value; BEP = break-even point; RRE = operating risk ratio; Is = security index. Source: Authors’ own calculations.

). The results obtained highlight the direct effects of these losses on production value, break-even point (BEP), economic risk rate (RRE) and the security index (Is).

The findings showed that extreme weather events can severely affect the profitability of tomato cultivation in Buzău County, with reductions in production and a severe decrease in net income. In extreme loss scenario, tomato cultivation becomes economically unfeasible without external financial support or the implementation of climate adaptive technologies (Q1).

Scenario 1 reflects a moderate impact, corresponding to a production loss of 10% (2239 kg/ha), with an estimated production value of 25,344 EUR/ha. However, the safety margin is narrow, with a security index of only 0.1 (Is = 0.1). This indicates that any additional fluctuation would push the activity below the break-even point. To cover the total costs, the break-even point is estimated at 17 tons per hectare, and the economic risk ratio (ERR) of 85% suggests a high degree of vulnerability, placing the farmer in an unstable financial position.

Scenario 2 involves a production loss of 30% (6718 kg/ha), with an economic value of 19,712 EUR/ha. This reduction in production pushes the crop below the break-even point (22 t/ha), and the income obtained no longer covers production costs. The security index becomes negative (Is = −0.4), reflecting that the generated income cannot cover the costs involved in cultivation. The economic risk is very high, and the losses are significant, affecting the economic viability of the farm in the medium and long term in the absence of corrective measures, such as public compensation, private insurance or the implementation of climate adaptive technological solutions.

Scenario 3 corresponds to an extreme situation of 50% loss (11,196 kg/ha) in which field-grown tomato cultivation becomes economically unsustainable. The break-even point (BEP) increases considerably, reaching 42 t/ha, a level that is impossible to reach under the given conditions. The security index (Is= −3) highlights the complete absence of any financial or production buffer. In this situation, tomato cultivation becomes unsustainable without external interventions such as state aid, restructuring of the production system, or investments in crop protection technologies.

The simulations carried out highlight the high vulnerability of the vegetable sector to climate induced losses. The analysis of the indicators shows that, as production losses increase, the profitability threshold becomes increasingly difficult to reach, economic losses are accentuated, and the security index indicates a maximum exposure to risk. The level of this threshold is directly influenced by the severity of production losses, with the resulting damage leading to a significant increase in the minimum volume required to achieve profitability and, implicitly, to a decrease in crop sustainability (Q2).

In this context, it is essential that public policies support both adaptation measures implemented at the farm level—such as the use of efficient technologies, the adjustment of agricultural practices, or the selection of climate tolerant varieties—and the development of strategic agricultural infrastructure. Investments in the modernization of irrigation systems and in climate monitoring and early warning networks are fundamental to reducing the vulnerability of agriculture to climate risks and ensuring long-term resilience. Furthermore, integrating these technical measures with appropriate financial mechanisms, such as agricultural insurance tailored to local climatic conditions, can provide farmers a comprehensive protection against climate uncertainties. Therefore, a combined strategy that includes both technical investments and financial instruments, supported by coherent public policies, is essential for the sustainable and competitive development of climate-resilient agricultural sector.

Beyond the quantitative assessment, these findings also point to practical measures that can enhance farmers’ adaptive capacity. At the farm level, strategies such as diversifying crops, investing in irrigation and soil conservation technologies, and using drought-resistant varieties can significantly reduce vulnerability to climate variability. Combined with financial protection instruments, these measures provide a more robust framework for sustaining agricultural incomes under increasing climate risks.

3.3. Perspectives and Recommendations on Enhancing Resilience Through Agricultural Insurance Instruments

Given the intensification of climate risks and the increasing vulnerability of Romanian agriculture, simply adopting adaptive practices at the farm level is no longer sufficient. It is necessary to implement systemic measures to reduce risks and strengthen resilience to extreme weather events. In this regard, agricultural insurance systems can play a central role in risk management framework. Tomato cultivation, a horticultural crop with a high sensitivity, is a relevant example for evaluating the impact and effectiveness of these protection instruments.

However, while the analysis confirms the potential role of insurance schemes in reducing farmers’ economic vulnerability, real access to such instruments also depends on practical factors. These include the affordability of premiums, the level of trust in insurers, and the administrative complexity of accessing compensation. Such aspects were not directly addressed in the present study but represent important areas for future research, which could complement the economic modeling with qualitative insights into farmers’ perceptions and adoption barriers.

Interest in research and innovation related to climate change adaptation is growing, with an increasing focus on solutions with measurable impact. The effectiveness of these solutions can be enhanced through careful calibration, tailored to the typologies of climate risk, the socio-economic profile of farmers, and their specific needs, depending on their role within the agricultural system [55].

Being exposed to both natural and market risks, farmers can utilize agricultural insurance systems, which serve as instruments for transferring, diversifying, or externalizing risks. These mechanisms contribute to reducing financial exposure and, in some cases, can even influence decision-making regarding cultivation practices [56]. By partially transferring risk to insurance companies, farmers can avoid significant financial losses in the event of extreme weather events. However, in Romania, the utilization of agricultural insurance instruments remains low, particularly among small-scale producers.

Compensation under agricultural insurance is established based on values declared by the insured and contractually agreed upon with the insurer. These values can be calculated either based on direct technological costs (according to the crop-specific technological sheets) or based on the estimated value of production, determined by multiplying the average production achieved by a preliminary capitalization price [57,58,59]. Agricultural insurance policies cover a wide range of climatic risks, including hail, storms, torrential rains, late or early frosts, landslides, and drought. Damage assessment is conducted based on the insured amount, which reflects direct technological expenses (such as costs of raw materials, mechanized and manual labor, irrigation, etc.) [57].

The amount of compensation is proportional to the degree of damage to the crop, and these amounts are not taxable according to Government Decision 451/2024 (

Table 5. Simulation of damage scenarios and economic evaluation of compensation (EUR/ha).

Indicators	10%	30%	50%
Production value	25,344	19,712	14,080
Subsidies	1875	1875	1875
Total expenses	24,992	24,992	24,992
Taxable income	352	x	x
Loss	x	−5280	−10,912
Compensation amount	2223	6668	11,114
Net income (with compensation and subsidies)	4415	3264	2078
Production cost	1240	1594	2232

Note: Compensation amounts are proportional to production loss; “x” indicates that no losses are recorded for the 10% scenario, and for the other scenarios, the losses are not taxable. Source: authors’ own calculations.

) [60]. According to insurance companies, the amount of partial damages is determined by multiplying the degree of damage (or degree of destruction) by the total technological expenses incurred up to the time of the insured event [57,61].

To assess the potential effectiveness of insurance policies in reducing farmers’ vulnerabilities, the integration of compensation proportional to the level of production losses was simulated. Crop insurance costs, based on information provided by insurance companies in Romania, were determined at 8% of the value of technological costs (baseline of 22,228 EUR/ha), resulting in a cost of 1778 EUR/ha.

Total expenses, including insurance costs, were assumed as constant across all three loss scenarios, while the production volume decreases proportionally to the degree of loss: 20.2 t/ha (10% loss), 15.7 t/ha (30% loss), and 11.2 t/ha (50% loss), respectively.

The market price was assumed to be constant, so the total value of production follows the same trend. In the case of a 10% loss, the value of production is 25,344 EUR/ha. For 30% damage, the value decreases to 19,712 EUR/ha, and in the most severe scenario, with a 50% reduction in production, it reaches 14,080 EUR/ha. At the same time, production costs increase with the severity of the damage, ranging from 1240 EUR/t to 2232 EUR/t.

The simulation results show that compensation can cover a significant portion of the costs incurred by farmers, ranging from 2223 EUR/ha for minor production losses (10%) to 11,114 EUR/ha for major production losses (50%). The subsidies granted under the Common Agricultural Policy (CAP)—Strategic Plan 2023–2027 provide stable financial support to farmers, contributing to income stability and resilience in the face of climate variability. However, they are not compensatory instruments and therefore cannot fully offset the economic consequences of climate-induced production losses. In this context, agricultural insurance becomes essential to stabilize farmers’ incomes and encourage investments, providing vital protection against the increasing frequency of extreme weather events.

Studies by Falco et al. (2014) and Cole and Xiong (2017) confirm the importance of agricultural insurance as an effective climate change adaptation strategy, highlighting its role in maintaining the stability of farmers’ incomes and in providing protection against natural risks [62,63]. Also, research by Cristea et al. (2006) and Teiușan et al. (2007) supports the effectiveness of insurance in managing natural risks in agriculture, highlighting its potential in covering losses caused by extreme events [64,65].

Analyzing Figure 4 it is found that net income is significantly affected by the level of damage, being sustainable only in the case of small losses (10%, +317 EUR/ha). For larger losses, of 30% and 50%, respectively, net income without interventions becomes negative (−5280 EUR/ha and −10,912 EUR/ha, respectively). Although subsidies contribute to mitigating these losses, income remains negative in scenarios with more severe damage (−3405 EUR/ha for 30% and −9037 EUR/ha for 50% loss). In contrast, compensations offered through compensation schemes ensure a more robust financial protection, maintaining positive incomes even in the case of severe damage (202 EUR/ha for 50% loss) (Q3).

The most effective form of financial protection for farmers is achieved by combining subsidies with compensation mechanisms, which leads to net incomes of +4415 EUR/ha in the 10% loss scenario, +3264 EUR/ha for 30% losses and +2078 EUR/ha in the case of 50% losses. This approach contributes significantly to mitigating economic losses caused by natural disasters and ensures greater financial stability in the agricultural sector.

Table 6. Profitability indicators under compensation for production losses.

Indicators	10%	30%	50%
TAXABLE INCOME RATE	1	−21	−44
NET INCOME RATE + COMPENSATION	10	6	1
NET INCOME RATE + COMPENSATION + SUBSIDIES	18	13	9

Source: authors’ own calculations.

highlights the evolution of the main profitability indicators across different production loss scenarios in tomato cultivation. The taxable income rate decreases significantly, from 1% under a mild loss scenario (10%), to −44% in the severe loss scenario (50%). This trend underscores the high financial vulnerability of farmers in the absence of adequate protection mechanisms.

In contrast, the use of crop insurance instruments enables the maintenance of a minimum level of profitability. The net income rate (with compensation) remains positive across all scenarios, ranging from 10% in the mild damage scenario to 1% in the severe loss scenario (50%). This relative stability demonstrates the effectiveness of insurance in mitigating the economic impact of losses caused by extreme climatic events.

The integration of compensation with subsidies available under the CAP SP 2023–2027 amplifies financial protection. The combined net income rate (compensation and subsidies) increases to 18% for minor damage, remaining positive at 13% for moderate damage and 9% for significant losses.

Overall, the results highlight the essential role of agricultural insurance in maintaining the economic viability of farms. Without it, tomato cultivation becomes unprofitable, due to increased production costs and a significant reduction in yield, especially in the context of increasing extreme weather events (Q3).

In this context, the orientation of public policy towards active prevention becomes imperative. In addition to strengthening access to agricultural insurance instruments, investment in modern agricultural infrastructure and climate monitoring systems is essential. The modernization and expansion of irrigation networks, together with the installation of early warning systems for extreme weather phenomena and the digitalization of water resources management, represent effective measures to limit losses and reduce the burden of compensation. Such a proactive approach not only improves farmers’ resilience to increasingly unpredictable climate phenomena but also contributes to the sustainable and competitive growth of Romanian agriculture.

3.4. The International Context and Prospects for Romania

The increasing frequency and intensity of extreme climate events pose a major threat to agricultural production [66]. According to a study conducted by Bayer (2023), 71% of farmers interviewed reported significant effects of climate change on their farms, estimating income losses between 15% and 25% over the past two years [67]. In this context, agricultural insurance becomes essential tool for limiting financial losses and increasing the economic resilience of farms affected by extreme weather events.

A study by Tan et al. (2022) highlights the synergy between the adoption of advanced agricultural technologies and the use of agricultural insurance, demonstrating that farmers who implement both strategies achieve higher incomes due to risk reduction and increased production efficiency [68].

In Romania, insurance against natural disasters remains the primary mechanism used to manage risks in the agricultural sector. In recent years, 96% of agricultural compensation granted to farmers has been attributed to climatic risks, especially phenomena such as hail, storms, and torrential rains. However, the adoption rate of agricultural insurance remains low compared to other European countries, indicating significant potential for the development and consolidation of this financial protection mechanism [69,70].

This situation is also influenced by a series of economic, social, and psychological factors. A recent study identified key variables that influence the decision of Romanian farmers to purchase insurance, such as risk perception, level of information on insurance products, trust in insurance companies, type of crop, and size of the farm. Farmers who perceive a high level of risk and show greater trust in financial service providers are more likely to adopt such protection instruments. In addition, farmers who exploit sensitive crops or own large farms are more open to insurance solutions [71].

To increase the adoption rate of agricultural insurance, appropriate public policies are required, such as subsidizing insurance premiums—a measure that currently applies only to field crops like wheat, corn, and sunflowers. It is also essential to expand information campaigns and simplify access to insurance products, as many farmers face difficulty in meeting eligibility requirements or understanding existing offers.

An innovative solution that could also be adapted in Romania is weather index insurance (WII). This instrument involves the automatic granting of compensation when certain pre-established meteorological thresholds are reached (such as precipitation levels or extreme temperatures), without the need for on-site damage assessment. According to Dalhaus (2018), these types of policies contribute to a significant reduction in underlying risk and provide more efficient financial protection, especially for vulnerable crops, such as tomatoes. The advantages include rapid compensation disbursement, lower administrative costs, and greater transparency in the relationship between the insurer and the farmer [72].

4. Conclusions

The economic analysis shows that production losses exceeding 30% push the crop below the profitability threshold, while in the 50% loss scenario, tomato cultivation becomes unprofitable. The analysis of profitability and risk indicators for the study area confirmed that tomato cultivation, under the current production and cost structure, can generate positive economic returns. However, this study highlights the high vulnerability of tomato growers to external shocks such as climate variability leading to production disruptions.

Public financial interventions, such as subsidies, contribute to income stabilization but cannot fully offset the economic losses caused by extreme weather events. In this context, compensation provided through agricultural insurance becomes an essential tool for reducing vulnerability. However, its effectiveness decreases considerably in the case of major losses. These highlight the need to tackle resilience through technological adaptation and input optimization.

Beyond financial instruments, practical measures at the farm level are essential for strengthening adaptive capacity. Diversifying crops, investing in irrigation and soil conservation technologies, adopting drought-resistant varieties, and improving crop management practices provide concrete pathways for farmers to cope with climate variability. These strategies act as a complement to public support mechanisms and contribute directly to sustaining farm incomes under adverse conditions.

In this context, the study highlights the need to implement targeted interventions. These include support mechanisms that strengthen farm adaptation to uncertain agro-climate conditions. Combined with technological innovation and input optimization, this approach can significantly contribute to the sustainable development of the horticultural sector and to strengthening of food security in Romania.

For public policy, the findings show that stronger coordination between financial support schemes and agricultural insurance, at both national and local levels, is needed to reduce income volatility. With regard to farmers’ practices, participation in financial protection instruments may be encouraged through targeted incentives and advisory services, complementing adaptation already taking place on farms. Future studies may extend this work by using farm-level data and by including social and market risks, together with advanced forecasting methods, to give a fuller picture of the drivers of economic vulnerability.

Last but not least, this study proposes a model that can be applied to other crops or regions. Its potential to be extended to regional or national levels offers an opportunity to generate useful and relevant data for public policy development. Thus, it enables authorities to design better-targeted measures to support farmers in addressing increasingly frequent disruptions caused by climate change.