#19 Moldova Agriculture Bulletin, BFC

12/2017

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19 M o l d ova Agriculture Bulletin Agricultural subsidies for 2017 fully paid out EBRD investments in Moldova at EUR 130 million in 2017 Monitoring Committee of ENPARD Moldova program meets Moldovan fruit exports to the EU on the rise

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

Agricultural land lease lengths increased to 5 years ....................................................................... 2 Agricultural subsidies for 2017 fully paid out .................................................................................. 2 New cases of African swine flu discovered ..................................................................................... 2

Foreign Aid ................................................................................................................. 3 4) 5) 6) 7) 8) 9) 10) 11) 12)

EBRD investments in Moldova at EUR 130 million in 2017 ............................................................. 3 National conference on green economy held in Chisinau .............................................................. 3 Monitoring Committee of ENPARD Moldova program meets ........................................................ 3 Orhei-Vit obtains 7-year, EUR 7.2 million loan ................................................................................ 4 Romanian support helps upgrade Moldovan labs .......................................................................... 4 Romanian support helps upgrade Moldovan labs .......................................................................... 4 Kaufland, IFC to launch Global G.A.P program in Moldova ............................................................. 4 Moldovan SMEs to benefit from ‘Ready to Trade’ project ............................................................. 5 USAID launches call for grants for vertical beehives ....................................................................... 5

Private Sector.............................................................................................................. 5 13) Moldovan fruit exports to the EU on the rise ................................................................................. 5 14) More investments needed in post-harvest infrastructure .............................................................. 6

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

This bulletin is prepared by Business & Finance Consulting—a Swiss-based development finance consulting company with a long history of working in Eastern Europe, Central, South and South East Asia and North Africa. Read more »

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BFC Agriculture Bulletin

State Initiatives 1)

Agricultural land lease lengths increased to 5 years

December 26th, 2017, http://infomarket.md/en/agriculture/Moldova

Approved amendments to the Law on Lease in Agriculture stipulate that the term of the lease of land plots and other agricultural property will be increased from 3 years to 5 years and must be registered.

These changes are expected to bring greater stability to the agricultural sector and, in particular, to the relationship between the land owners and tenants. The rationale for increasing the length of the leases relates to the poor state of many agricultural land plots. Tenants must generally invest in 2-3 years of rehabilitation in the land before they can start receiving a profit from it due to lands often being untreated, strongly damaged by pests and overgrown with weeds. The increased lease term is expected to also help land owners, who frequently live and work abroad, by requiring less frequent registration.

2)

Agricultural subsidies for 2017 fully paid out

December 18th, 2017, http://www.madrm.gov.md/ro/content/rezultatele-subven%C8%9Bion%C4%83rii-pentru-anul-2017

The Agency for Interventions and Payments in Agriculture (AIPA) has transferred MDL 420 million into the accounts of 5,000 agricultural producers, with another MDL 100 million scheduled to be transferred by the end of the year. This means that all subsidy funds for farmers have been allocated for this year. In total this year, the funds have helped attract MDL 4.3 billion into the sector and create 3,900 jobs.

AIPA received a record number of applications for subsidies this year (7,800 applications for more than MDL 800 million). Most applications (28%) were submitted for financial assistance to purchase specialized equipment (MDL 237 million), followed by new planting (MDL 90 million), livestock sector development (MDL 57 million), vineyard support (MDL 10.8 million), irrigation systems (MDL 32 million) and hail and frost protection systems (MDL 4.2 million). MDL 200 million was allocated for the development of post-harvest infrastructure. About 82% of the applicants were from small- and mediumsized enterprises (SMEs), and 40% were from women. The largest number of applications came from farmers from the southern regions of the country.

In total, the 2017 budget for the subsidy fund was about MDL 520 million. Initially, the size was MDL 900 million; however, MDL 340 million was used to pay debts from the previous year, MDL 31 million was used for the National Fund for Vine and Wine and MDL 11 million was used for administrative expenses of the National Fund for Agricultural Development in Rural Areas.

3)

New cases of African swine flu discovered

December 8th, 2017, http://www.realitatea.md/ansa-a-depistat-un-nou-focar-de

The National Food Safety Agency has detected a case of African swine flu at a household in Carpineni (Hincesti region). The presence of the disease was also discovered among wild boars hunted in the Cimislia region. This adds to two previous cases discovered among wild boars in the Orhei and Cahul regions.

To combat the spread of the disease, a plan has been elaborated, and measures are being implemented at a regional level. Additionally, the National Food Safety Agency has developed comprehensive program of measures aimed at counteracting the disease, including the temporary restriction of transporting pigs and their by-products from the afflicted areas as well as a ban on the sale of pigs in agricultural markets.

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BFC Agriculture Bulletin

Foreign Aid 4)

EBRD investments in Moldova at EUR 130 million in 2017

December 21st, 2017, http://www.ebrd.com/news/2017/ebrds-2017-investment-in-moldova-hits-alltime-high-of-130million.html

The annual investment of the European Bank for Reconstruction and Development (EBRD) in Moldova hit an all-time record of EUR 130 million in 2017. Specifically in 2017, EBRD helped facilitate foreign investments into Victoriabank, co-financed Moldova’s electricity interconnections with Romania, supported Chisinau in financing energy efficiency improvements in public buildings, extended EUR 27.5 million to the state-owned railway company and continued financing private companies through Mobiasbanca.

Looking ahead, EBRD and its key partners will continue efforts aimed at enhancing the resilience of the banking sector by working with reputable investors to restore transparency and good governance in banks. EBRD will also continue lending, directly and through banks, to Moldovan companies with viable business models and will finance public infrastructure projects. In line with the priorities set out in the EBRD’s recently approved strategy for Moldova for 2017-2022, its engagement with the government will focus on improving the business climate and supporting reforms in the area of public procurement.

5)

National conference on green economy held in Chisinau

December 15th, 2017, http://www.madrm.gov.md/ro/content/conferin%C8%9Ba-na%C8%9Bional%C4%83-de-totalizareproiectului-ue-eap-green-%C3%AEn-republica-moldova

A national conference on the ‘Greening Economies in Eastern Partnership Countries’ project (EU EaP GREEN) was held in Chisinau and brought together development partners, beneficiaries and officials of implementing institutions. Speaking at the conference, Agriculture Minister Vasile Bitca spoke about the recent efforts made in the field of ecological agriculture, impact and strategic environmental assessment, regional development and planning and reducing gas emissions as well as how these efforts have added value for the country's economy, reduced the use of natural resources, protected the environment and created new jobs.

The project has also helped Moldova create the 2018-2020 ‘Program for a Green Economy’ strategy. The strategy provides a realistic vision for the promotion of a green economy in Moldova through concrete actions aimed at developing energy efficiency, the efficient use of natural resources and organic agriculture.

6)

Monitoring Committee of ENPARD Moldova program meets

December 15th, 2017, http://www.madrm.gov.md/ro/content/comitetului-de-supraveghere-implement%C4%83rii-programuluienpard-moldova-s-reunit-%C3%AEn-%C8%99edin%C8%9B%C4%83

Members of the Monitoring Committee for the implementation of the ENPARD Moldova program gathered to discuss the results of the last three years of the program. At the meeting, Deputy Agriculture Minister Iurie Usurelu spoke about the progress made and existing challenges for continued agricultural and rural development while also citing the importance of the ENPARD program in this domain. In particular, the Deputy Minister noted Moldova’s increased emphasis on agriculture as a priority sector as well as the efforts made to stabilize the regulatory framework that will support greater agricultural and rural development. The Deputy Minister also announced that, starting in 2018, the Ministry will: (1) initiate pre-investment subsidies based on the pre-investment principle and (2) develop rural development measures related to the diversification of economic activities in rural areas, improving infrastructure and introducing the LEADER approach.

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BFC Agriculture Bulletin

7)

Orhei-Vit obtains 7-year, EUR 7.2 million loan

December 15th, 2017, http://agrobiznes.md/cel-mai-mare-producator-de-sucuri-din-moldova-va-primi-un-imprumut-de-72mln-de-euro-de-la-bstdb.html

The Black Sea Trade and Development Bank (BSTDB) will provide Moldova's largest juice producer and exporter, Orhei-Vit, with a 7-year, EUR 7.2 million loan. The loan will help the company finance its capital expenditure program as well as refinance existing loans from other financial institutions. Funding will also improve production capacity and efficiency and will benefit Moldovan farmers and consumers in the larger Black Sea region.

8)

Romanian support helps upgrade Moldovan labs

December 12th, 2017, http://tvrmoldova.md/economic/proiecte-de-600-de-mii-de-euro-in-sprijinul-exporturilor-din-republicamoldova-pe-piata-ue-finantate-de-romania/

The quality standards of Moldovan products must be increased if Moldova is to export products into the EU. To this end, Romania has supported Moldova with EUR 600,000 in the form of two collaborative projects. The projects, involving food safety authorities in Romania and Moldova, have resulted in the Laboratory for Pesticide Residues being equipped with high-performance equipment and the Republican Veterinary Diagnostic Center being upgraded. Additionally, the Laboratory for Pesticide Residues has attained accreditation, and the Republican Veterinary Diagnostic Center is expected to obtain accreditation next year for the testing of avian influenza and Newcastle disease.

9)

Romanian support helps upgrade Moldovan labs

December 12th, 2017, http://tvrmoldova.md/economic/proiecte-de-600-de-mii-de-euro-in-sprijinul-exporturilor-din-republicamoldova-pe-piata-ue-finantate-de-romania/

The quality standards of Moldovan products must be increased if Moldova is to export products into the EU. To this end, Romania has supported Moldova with EUR 600,000 in the form of two collaborative projects. The projects, involving food safety authorities in Romania and Moldova, have resulted in the Laboratory for Pesticide Residues being equipped with high-performance equipment and the Republican Veterinary Diagnostic Center being upgraded. Additionally, the Laboratory for Pesticide Residues has attained accreditation, and the Republican Veterinary Diagnostic Center is expected to obtain accreditation next year for the testing of avian influenza and Newcastle disease.

10) Kaufland, IFC to launch Global G.A.P program in Moldova December 11th, 2017, http://infomarket.md/en/agriculture/Kaufland_and_IFC_are_launching_the_Global_GAP_program_in_Moldova_aimed_to_issu e_one_of_the_most_prestigious_quality_certificates_to_fruit_and_vegetable_producers

Kaufland and the International Finance Corporation (IFC) are launching a Global G.A.P program in Moldova for Moldovan fruit and vegetable producers in 2018. The goal of the Kaufland/IFC program is to enable Moldovan producers to expand their sales markets, both locally and internationally. All costs for training, water and soil analyses and other necessary laboratory tests as well as individual consultations will be completely covered by Kaufland.

The Global G.A.P Certificate is one of the most prestigious international quality and safety certificates for food products. It allows fruit and vegetable producers to enter broader markets and export products anywhere in the world.

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BFC Agriculture Bulletin

11) Moldovan SMEs to benefit from ‘Ready to Trade’ project December 8th, 2017, http://curentul.md/stiri/imm-le-din-moldova-vor-fi-asistate-in-promovarea-comertului-pe-pieteleinternationale-de-catre-proiectul-ue-ready-to-trade.html

The EU4Business initiative will assist Moldovan small- and medium-sized enterprises (SMEs) with a new three-year project launched in September 2017. The ‘Ready to Trade’ project, launched within the framework of the Eastern Partnership, will make use of a EUR 6 million budget to increase the competitiveness of products and help local entrepreneurs develop their businesses on a larger scale.

The main objective of the project is to strengthen the international trade, especially with the European Union (EU), of SMEs from six Eastern Partnership countries (Moldova, Armenia, Azerbaijan, Belarus, Georgia and Ukraine).

Currently, the project is working to identify one or more prospective sectors as well as companies (about 20 in total) that will receive export promotion assistance. From the Moldovan side, the Ministry of Economy is providing the project with all the necessary support to research and analyze Moldovan companies that could be selected to participate in the project.

12) USAID launches call for grants for vertical beehives December 5th, 2017, http://www.trm.md/en/economic/granturi-pentru-apicultorii-care-vor-sa-implementeze-tehnologiastupilor-vertical/

The Agricultural Appraisal Project (APP) of the United States Agency for International Development (USAID) has launched a call for grant applications for the adoption and demonstration of the use of vertical beehives in Moldova. A workshop was organized by the South Regional Development Agency, during which eligible and interested applicants were given the opportunity to ask questions and receive guidance on how to fill out applications. In addition, representatives from the APP held an open door day for applicants needing help completing the application.

Private Sector 13) Moldovan fruit exports to the EU on the rise December 27th, 2017, http://www.trm.md/en/economic/republica-moldova-a-depasit-in-anul-curent-pentru-prima-datacotele-de-export-la-prune/

Three years into the Deep and Comprehensive Free Trade Area (DCFTA) agreement with the European Union (EU), Moldova was able to surpass its export quota for plums as well as begin cherry exports to the EU (both firsts for Moldova). According to the Ministry of Agriculture, fruit exports amounted to 200,000 tons. Additionally, the number of economic agents who export to the EU is on the rise, with fresh plums being exported by 53 sellers, food-grade grapes being exported by 38 sellers and fresh apples being exported by 9 sellers.

Investments in agriculture are also growing and reached MDL 1.5 billion in 2017. The number of applicants for state subsidies has also grown by 34%.

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BFC Agriculture Bulletin

14) More investments needed in post-harvest infrastructure December 16th, 2017, http://tvrmoldova.md/economic/capacitatea-republicii-moldova-de-depozitare-a-fructelor-si-legumeloreste-insuficienta/

The development of post-harvest infrastructure and the integration of value chains aim to add value to Moldovan produce and help farmers obtain a consistent and steady income throughout the year. To this end, the state has invested MDL 363.9 million in post-harvest infrastructure development, including cold storage facilities.

Moldova currently has 338 cold storage facilities in operation, enough to store 196,000 tons of produce.

This, however, is sufficient to store only 78.4% of current production levels (about 250,000 tons). With production volumes increasing annually, more work is needed if Moldovan producers are to maximize their potential.

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