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BOZIENI, Romania (Reuters) - In the picturesque hilltop village of Bozieni in southern Romania, once home to 100 families, Ecaterina Serban is the last remaining resident.
Her once vibrant community was killed, she says, by a French wine company which bought up much of the surrounding land from her neighbors to create a large vineyard. For the past 10 years, she has lived alone.
"People sold their land to the French guys and left for the city, to send their kids to school, to get jobs and get rich," said Serban, 75, sneaking a grey hair lock under a flowered scarf tied around her head.
"I did not want to leave my village, because this is the life I've learned ... apartment blocks are too small, the air is dirty and I'm afraid of cars," Serban said.
Such dramas are occurring all over Romania, as one of the European Union's poorest and most backward members tries to modernize its antiquated agricultural sector.
Of almost 13,000 villages in Romania with an average of 800 inhabitants, 100 villages are completely empty and some 1,500 villages have under 100 people, according to the National Statistics Institute.
Some 40 percent of Romania's 22 million people still live in the countryside. It is common to see them working the fields with their hands or with wooden implements and driving horses and carts. Many villages still lack running water.
In areas like Maramures in the north of the country, residents still -- to the delight of tourists -- wear traditional embroidered peasant costumes and preserve a rich historical and cultural heritage.
Around one in five Romanians has a small farm of an average 2 hectares of land and one-third of the active population lives on subsistence farming, official data show.
"It will take at least a decade to solve such a huge structural issue, because Romania is a big country and there are too many people living from agriculture," said Nicolae Idu, head of the state-sponsored European Institute.
Economists may regard Serban as a dinosaur. But she knows no other life and is determined to remain in her deserted village 100 km east of Bucharest until the day she dies.
Still, change is happening. Investors, many from outside the country, are buying small land plots from peasants to merge them into profitable farms, forcing the rural population find jobs in emerging and workforce-needy cities.
"This is a consequence of farming transformation which signals Romania is finally redirecting its workforce to industry and services, the main drivers of modern economies," said Idu.
Romania, a traditional producer of wheat and maize, was the breadbasket of central Europe before World War Two.
Foreign investments could also change the structure of Romania's agriculture, as investors will focus more on cultivating sunflower, rapeseed and soy, which are in heavy demand on EU markets, rather than wheat and maize.
But official data show foreign companies own less than five percent of Romanian farmland of about 14 million hectares.
Big companies like global agribusiness and trading giant Cargill or Germany's Alfred C. Toepfer have already injected cash into Romanian farming.
But analysts expect the process of modernizing fragmented farms to be slow as conservative villagers like Serban would not give up their only source of living easily to try adapting to big, growing communities.
Legal problems stemming from restitution of land, taken away from farmers by the state during the communist rule, also obstruct investors as they cannot purchase a plot with unclear ownership.
"Once these problems are over, Romania has the chance to become an important exporter and a big player in EU markets, as it benefits from a very cheap farming land of a very good quality -- very attractive for foreigners," said Carmen Prodani, farming specialist for USAID in Romania.
Since World War Two, communist mismanagement and a drive by Nicolae Ceausescu to force farmers to work in mammoth industrial plants have drastically cut acreage.
Land reforms that followed the fall of communism in 1989 have also led to extensive fragmentation and subsistence farming.
"It all depends on the government, but its biggest issue is the lack of specialists in this sector to draft clear plans to drain EU funds," Prodani said.
Among the reforms the government has enforced so far, the most notable are subsidies for farming investments and a gradual state-payment plan, depending on the size of the farm, to encourage farmers to form associations and improve equipment.
Labor ministry officials hope farmers could plug workforce shortages which plague many industries in Romania due to emigration and high demand for workers from foreign investors.
Romania could benefit from some 11 billion euros ($15.03 billion) of EU farming aid, which it hopes to get by 2013.
But analysts expect small farms to gain little from EU aid because of their lack of experience in preparing projects and widespread corruption, which risks putting money into the wrong pockets.