#15 Moldova Agriculture Bulletin, BFC

08/2017

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15 M o l d ova Agriculture Bulletin MDL 6.5 million in grants awarded 20 Moldovan farmers Agricultural lease financing available under new project Moldovan wheat harvest amounts to 1.16 million tons Moldovan agricultural exports increasing

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Contents State Initiatives ........................................................................................................... 2 1) 2) 3)

MDL 6.5 million in grants awarded 20 Moldovan farmers .............................................................. 2 Ministry of Agriculture announced subsidy criteria ........................................................................ 2 Farmers to receive compensation for April 2016 frosts .................................................................. 2

Foreign Aid ................................................................................................................. 3 4) 5) 6) 7)

Agricultural lease financing available under new project ............................................................... 3 Moldovan beekeepers to receive honey containers ....................................................................... 3 New round of grants available under World Bank project.............................................................. 3 IFAD’s Rural Resilience Project to begin .......................................................................................... 4

Private Sector.............................................................................................................. 4 8) 9) 10) 11) 12)

Moldova moving away from agriculture ......................................................................................... 4 Moldovan companies to attend ‘Riga Food 2017’ .......................................................................... 5 Moldovan wheat harvest amounts to 1.16 million tons ................................................................. 5 Agricultural seminar on protection technologies held .................................................................... 5 Moldovan agricultural exports increasing ....................................................................................... 6

Note: The Agriculture Bulletin presents a monthly roundup of headlines and news stories related to Moldova’s agricultural sector.

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BFC Agriculture Bulletin

State Initiatives 1)

MDL 6.5 million in grants awarded 20 Moldovan farmers

September 5th, 2017, http://www.capmu.md/2017/09/rezultatele-apelului-6-cadrul-programului-de-granturi-destinate-mdt/

The ‘Competitive Agriculture Project in Moldova’ (CAP-M) has announced the results of its sixth round of calls for applications to its ‘Sustainable Land Management’ post-investment grant program. More than MDL 6.5 million will be awarded to 20 Moldovan farmers. The farmers will receive compensation in the amount of 50% (but not more than USD 20,000) for investments made in the no-till sowing machines, sprinklers and shredders necessary for the implementation of conservative agricultural systems and the application of sustainable land management.

So far, the program has supported 165 (out of 213) applications through its six calls for applications, including 15.7% being female beneficiaries. The MDL 38 million (USD 1.9 million) has helped the farmers procure 201 pieces of equipment as well as apply sustainable land management techniques. The average value per grant is MDL 232,800 (approximately USD 13,100).

The ‘Sustainable Land Management’ post-investment grant program was launched in 2014 and is funded by the World Bank, the government of Sweden, the Global Environment Facility and the government of Moldova.

2)

Ministry of Agriculture announced subsidy criteria

August 25th, 2017, http://radiochisinau.md/ministerul-agriculturii-anunta-criteriile-de-acordare-a-subventiilor---55255.html

The Ministry of Agriculture has stipulated 10 criteria for evaluating subsidy requests, which have been published in the Official Journal. The following will be included among the criteria and weighed against other applications: length of return on investment, total investment amount, presence of international standard certificates, amount of own funds used, amount of export sales, number of jobs created and age and gender of the applicant. Subsidy funding will be granted based on an accumulated overall score, as determined by a special committee set up by the Agency for Interventions and Payments in Agriculture (AIPA). Requests for subsidies can be submitted until October 31, 2017.

The budget of the National Fund for Agriculture and Rural Development this year is MDL 900 million, MDL 231 million of which is support from the ‘Support for Agriculture and Rural Development in Moldova’ project of the European Neighborhood Program for Agriculture and Rural Development (ENPARD). It should be noted, however, that MDL 335 million has already been allocated for the payment of approved subsidies for agricultural producers from 2016.

3)

Farmers to receive compensation for April 2016 frosts

August 20th, 2017, http://www.trm.md/en/economic/agricultorii-afecta-tii-de-ingheturile-din-aprilie-2016-vor-primi-in-curandcompensatiile/

Farmers whose crops were affected by the 2016 frosts will soon receive compensation for losses from the state. Thousands of hectares of apples, plums, cherries, sugar beet and soybeans were affected, especially in the Briceni, Donduseni, Edinet, Ocnita and Riscani regions. The value of the financial support was calculated according to the affected area, the degree of damage and the price of the agricultural products from the previous year. On average, it is expected that MDL 4,000-5,000 will be

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allocated per affected hectare, with a total budget of MDL 12 million expected to cover all requests for compensation from agricultural producers.

Compensation will be granted from the Subsidy Fund for 2017, which has a budget of MDL 900 million.

Foreign Aid 4)

Agricultural lease financing available under new project

August 31st, 2017, http://www.ziarulnational.md/avantajos-agricultorii-din-r-moldova-pot-obtine-finantare-in-leasing-faragaj/

Moldovan agricultural business and related enterprises are eligible to benefit from lease financing provided by European Investment Bank (EIB) sources. Leasing offered within the ‘Moldova Orchard’ project can be obtained through Mobiasbanca and is more advantageous than traditional credit opportunities as it does not require farmers to provide pledged assets as collateral, has lower interest rates and offers more favorable maturities. The minimum funding amount under the project is EUR 5,000, and the interest rate is 5.5-6.5%. Beneficiaries can also take advantage of a flexible repayment schedule. Additionally, beneficiaries will be exempted from customs duties on imported goods and services.

The ‘Moldova Orchard’ project was created by the Moldovan government and EIB in order to solve structural vulnerabilities in Moldova’s agricultural sector. In particular, the project aims to promote agricultural production, processing, packaging and exports. It has a budget of EUR 120 million.

5)

Moldovan beekeepers to receive honey containers

August 17th, 2017, http://www.trm.md/en/economic/apicultorii-din-moldova-vor-beneficia-de-recipiente-pentru-colectareamierii/

Approximately 21,000 honey collection containers will be distributed to Moldovan beekeepers in order to help prevent the risk of honey being contaminated as well as to provide increased quality and safety for domestic and international consumers. The containers, purchased as part of the United States Agency for International Development’s (USAID) ‘Agricultural Product Development Grant Program in Moldova’, will reach about a thousand beekeepers and will be distributed through honey exporters. The first 6,720 containers have already arrived in Moldova.

Annually, around 4,000 tons of honey, including May honey, acacia honey, lime honey and honey from flowers, are collected in the Republic of Moldova.

6)

New round of grants available under World Bank project

August 15th, 2017, http://www.maia.gov.md/ro/comunicate-de-presa/proiectul-bancii-mondiale-agricultura-competitivamoldova-invita-grupurile-de

Producer groups operating in the agricultural sector may apply for grants of up to USD 350,000 for the procurement of technological and post-harvest equipment. The grants, available August 15-November 1, 2017, are being provided under the World Bank’s ‘Competitive Agriculture in Moldova’ project and will co-finance up to 50% of the total cost for the procurement of the equipment. To qualify for the grant, groups must consist of at least five members (legal entities and/or private individuals), each having at least 3 years of activity in the horticultural sector.

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This is the sixth round of grants under the project. Since the project’s launch in 2014, 30 groups have been funded, bringing together 161 farmers in the agricultural sector. The total amount of grant resources provided thus far is USD 7.5 million dollars, with co-financing provided by producer groups in the amount of approximately USD 8.6 million dollars.

7)

IFAD’s Rural Resilience Project to begin

August 10th, 2017, http://moldpres.md/en/news/2017/08/10/17006111

A law ratifying a financing agreement between Moldova and the International Fund for Agricultural Development (IFAD) was published in Moldova’s Official Journal on August 11, 2017. The law will establish IFAD’s ‘Rural Resilience Project’ in Moldova, which has the aim of providing an affordable, long-term source of funding to strengthen resilience to climate changes in agriculture. The budget of the project is USD 23.7 million, USD 5.5 million of which is a grant.

The project will provide for the construction of 24 water supply systems, which will provide irrigation for 75 agricultural producers, as well as the rehabilitation of 12 road segments, which will facilitate access to farming areas for 50 enterprises and benefit more than 1,200 families from 12 villages. About 420 farmers will receive grants for the implementation of measures to improve resilience to climate change and over 450 micro-entrepreneurs, 150 young entrepreneurs and at least 20 small- and medium-sized enterprises will benefit from preferential credits. Additionally, the project will finance the construction and rehabilitation of over 30 hectares of rainwater accumulation lakes, 200 hectares of forest strips and 200 hectares of grassland to combat soil erosion and the impact of climate change.

The project will be implemented over a six-year period and will be managed by the Consolidated Unit for the Implementation of IFAD Programs in Moldova.

Private Sector 8)

Moldova moving away from agriculture

September 4th, 2017, http://www.timpul.md/articol/incotro-moldovenii-nu-mai-vor-sa-faca-agricultura-117352.html

According to the National Bureau of Statistics, Moldova’s Gross Domestic Product (GDP) amounted to MDL 134 billion in 2016, up 4.1% as compared to 2015; however, agriculture, forestry and fishing made up only 12.2% of that. For comparison, the share of agriculture in 1990 under the Soviet Socialist Republic of Moldova was 36% of GDP. Moldova appears to be moving away from being agrarian-based towards other services and industries. This is evidenced not only in GDP but also in employment wages.

Employees in the sphere of agriculture are the worst-paid, averaging MDL 3,266 per month, compared to the national average of MDL 5,219.

One of the main issues affecting this decrease is the price of domestically produced products versus the price of imports. For example, Moldovan markets are filled with cheaper tomatoes from Turkey, and people buy based on their pocket as opposed to based on country of origin. This leaves many domestic products with little space to operate in. The higher cost of production is due to lower productivity (in general, 3-4 times lower than in Europe) as agriculture in Moldova is still comparatively primitive; moreover, problems related to logistics further drive up the price of agricultural products. If these problems are resolved, Moldovan agriculture is likely to continue to decrease in its importance for the country.

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9)

Moldovan companies to attend ‘Riga Food 2017’

September 4th, 2017, http://www.allmoldova.com/ru/news/moldavskiie-frukty-otsieniat-na-krupnoi-vystavkie-v-righie

Three Moldovan manufacturing companies are set to take part at ‘Riga Food 2017’, the 22nd international trade fair for food, beverages, food processing technology, packaging and innovation, which will begin in Riga, Latvia on September 6, 2017. The Moldovan companies hope to establish business and commercial contacts with importers from different countries and regions with the high quality, range and originality of their products.

Chisinau-based exhibition company AXAR worked in coordination with the Embassy of Moldova in Latvia to organize the participation of Alfa-Nistru (producer of fruit and vegetable preserves and natural juices and nectars), Vastdial (natural honey producer) and Vitalcomus (producer of high-quality dried fruits).

‘Riga Food 2017’ is the largest annual food exhibition in the Baltic region. It attracts approximately 700 enterprises from 38 countries as well as 40,000 other visitors, including professionals, businessmen and representatives of trade networks.

10) Moldovan wheat harvest amounts to 1.16 million tons August 15th, 2017, http://agora.md/stiri/35926/agricultorii-moldoveni-au-obtinut-o-crestere-de-24-a-productiei-medii-la-grau

This year, spring and autumn wheat was harvested on an area of 303,000 hectares, a decrease of 68,000 hectares from 2016. A total volume of 1.16 million tons of wheat was harvested, meaning an average productivity of 3.87 tons/hectare (up 0.77 tons/hectare). Northern Moldova recorded the strongest wheat harvests: 5.0 tons/hectare in Ocnita from 3,850 hectares; 4.7 tons/hectare in Edinet from 6,820 hectares; 4.62 tons/hectare in Briceni from 6,500 hectares; 4.67 tons/hectare in Taraclia from 10,798 hectares and 4.42 tons/hectare in Leova from 5,366 hectares. In the southern regions, results were not as strong: 3.2 tons/hectare in Basarabeasca from 7,903 hectares; 3.1 tons/hectare in Sangerei from 11,000 hectares and 2.9 tons/hectare in Straseni from 794 hectares.

Additionally, 248,200 tons of spring and autumn barley was harvested from an area of 73,200 hectares, with an average productivity of 3.4 tons/hectare (0.4 tons/hectare more than in 2016). Maize was harvested from 18,800 hectares and amounted to 50,500 tons. This represented an average productivity of 2.68 tons/hectare (down 0.18 tons/hectare as compared to 2016). 73,700 tons of rapeseed was also harvested from 29,600 hectares, amounting to an average productivity of 2.5 tons/hectare (equal to the 2016 level).

No-till and minimum-till agricultural areas increased 5% in 2017 and constituted 200,000 hectares.

11) Agricultural seminar on protection technologies held August 7th, 2017, http://agora.md/stiri/35615/video--peste-170-de-antreprenori-si-agricultori-s-au-adunat-in-cadrul-unuiseminar-organizat-de-adama

More than 170 Moldovan agricultural entrepreneurs and farmers gathered in Malinovscoe (Riscani region) for the ‘Simpliculture: Pomiculture Protection Technologies’ seminar. At the seminar, organized

by ADAMA Agricultural Solutions, simple solutions for the protection and safety of fruit plantations, especially for apples, were presented. The information was presented in a simple way for farmers to easily understand and put into effect.

ADAMA is a leader in the phytosanitary products market and offers a portfolio of over 50 products and technology programs for key crops.

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12) Moldovan agricultural exports increasing August 7th, 2017, http://www.ziarulnational.md/r-moldova-exporta-in-ue-peste-63-din-marfurile-sale-in-csi-ajung-doar-21/

According to the National Bureau of Statistics, exports for the period of January-June 2017 (as compared to January-June 2016) increased for meat and meat products (by 1.9 times), natural minerals and fertilizers (by 1.7 times), raw and processed tobacco (by 31.5%), seeds and oleaginous fruits (by 19.1%), fruits and vegetables (by 13.8%), cereals and cereal preparations (by 8.9%) and alcoholic and nonalcoholic beverages (by 7.8%). Less sugar, honey, essential oils, live animals and processed rubber were exported than during the same period last year.

Total exports during the first half of this year reached a value of over USD 1 billion, a 13.6% increase year-on-year. Of that, the export of domestically produced goods amounted to USD 649.3 million (63.1% of total exports) while re-exports of foreign goods amounted to USD 378.9 million. Exports to the European Union (EU) amounted to USD 652.2 million, 13.7% more than during the same period in 2016 and accounting for 63.4% of total exports. At the same time, 21.1% of Moldova's exports went to the Commonwealth of Independent States (CIS) countries, amounting to USD 216.9 million and 15.6% more than in January-June 2016. Only USD 116.5 million worth of goods were exported to the Russian Federation during this period.

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