09/2016
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4 M o l d ova Agriculture Bulletin Romania to Ban Animal Products from Moldova and Ukraine Moldova to Receive USD 10 Million Loan for Agricultural Development New Committee Formed to Increase Agricultural Insurance Efficacy 15th Annual National Wine Festival Held in Chisinau
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Contents State Initiatives ........................................................................................................... 2 1) 2) 3) 4) 5) 6)
Romania to Ban Animal Products from Moldova and Ukraine ....................................................... 2 New Bill Proposed for Refunding Excise Duties on Diesel Used by Farmers ................................... 2 Moldova Looks to Increase Trade with Belarus .............................................................................. 2 Minister Grama Meets with Qatari Ambassador ............................................................................ 2 Minister Grama Meets with Chinese Investors ............................................................................... 3 Moldova and Jordan Sign Memorandum of Understanding ........................................................... 3
Foreign Aid ................................................................................................................. 4 7) 8) 9)
Moldova to Receive USD 10 Million Loan for Agricultural Development ....................................... 4 Six More Grants Approved under the Competitive Enhancement Project ..................................... 4 Ministry of Agriculture and World Bank Launch Grant Program .................................................... 4
Private Sector .............................................................................................................. 5 10) 11) 12) 13) 14) 15) 16)
Farmers Unhappy with MDL 200 Million Reduction in Subsidy Funds ........................................... 5 Animals in Moldova being Tested for African Swine Flu ................................................................. 5 New Committee Formed to Increase Agricultural Insurance Efficacy............................................. 5 Exports to CIS Countries on the Rise ............................................................................................... 6 15th Annual National Wine Festival Held in Chisinau ..................................................................... 6 Exports of Domestically Produced Goods Down in 2016 ................................................................ 6 Moldovan Grape Harvest Under Way ............................................................................................. 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)
Romania to Ban Animal Products from Moldova and Ukraine
September 30th, 2016, http://radiochisinau.md/romania‐va‐interzice‐importurile‐de‐produse‐animaliere‐din‐r‐moldova‐‐‐ 38411.html
The import of products of animal origin from the Republic of Moldova and Ukraine will be prohibited in Romania. The measure, announced September 30 by Romanian Agriculture Minister Irimescu, is being taken to prevent the spread of African swine flu. Minister Irimescu, citing recent problems in Poland, stated that if African swine flu enters the territory of Romania, it could lead to the slaughter of all pigs in the border areas and massive losses for Romanian farmers.
2)
New Bill Proposed for Refunding Excise Duties on Diesel Used by Farmers
September 26th, 2016, http://www.timpul.md/articol/guvernul‐cauta‐peste‐320‐de‐milioane‐lei‐pentru‐agricultori‐‐98234.html
The Ministry of Agriculture and Food Industry has proposed a bill that will give farmers a refund of excise duties on diesel used for agricultural works. The bill, if approved, would amend Article 125 of the Tax Code and is estimated to require about MDL 24 million. Under the bill, the refund will be executed within 45 days of the date of application and will offset any unpaid tax obligations first and then be credited to the farmer’s bank account. To obtain a refund, farmers must present a series of documents which confirm that the land is used for agriculture, a tax bill for the purchase of the diesel, confirmation of payment for the diesel and papers certifying that the diesel was used for agricultural purposes.
3)
Moldova Looks to Increase Trade with Belarus
September 16th, 2016, http://www.noi.md/md/news_id/91009
Moldovan Prime Minister Pavel Filip met with Belarusian President Alexander Lukashenko at a meeting of the Council of Heads of CIS member states to discuss joint ventures in infrastructure development which would lead to an increase of Moldovan exports, including fruit, vegetables and wine, to Belarus and Eurasian Economic Union states. The two sides also discusses other prospects for deepening Moldovan‐Belarusian relations with both leaders expressing a desire to see the countries’ friendship and mutual respect continue to give prosperity to both. At the end of the meeting, Prime Minister Filip invited President Lukashenko to an official visit to Moldova in early October. Belarus is one of the main economic partners of Moldova. In 2015, Moldovan companies exported more than USD 130 million to Belarus while Belarusian imports into Moldova amounted to USD 84 million. In the first six months of 2016, bilateral trade between the two countries had already reached USD 100 million.
4)
Minister Grama Meets with Qatari Ambassador
September 16th, 2016, http://www.maia.gov.md/ro/comunicate‐de‐presa/moldova‐si‐qatar‐vor‐colabora‐domeniul‐ agroindustrial
Agriculture Minister Eduard Grama met with Qatari Ambassador Mohammed Ali Bin Mohammed Al‐ Malki to discuss increasing cooperation between Moldova and Qatar, specifically in agribusiness. Page 2
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Minister Grama stressed the need for translating high‐level talks into tangible results and suggested that mutual visits of Moldovan and Qatari businessmen would allow for better knowledge sharing and facilitate the establishment of direct business contacts. For his part, the Qatari Ambassador promised to take all measures necessary to ensure a sustainable, consistent and productive relationship between the two countries and took particular note of the high quality of Moldovan food products. The priority areas of cooperation will begin by bolstering the agricultural relationships that already exist between the two countries, establishing new ones and looking into investment opportunities in Moldova’s infrastructure and agriculture.
5)
Minister Grama Meets with Chinese Investors
September 13th, 2016, http://www.maia.gov.md/ro/comunicate‐de‐presa/investitori‐chinezi‐sprijina‐dezvoltarea‐sectorului‐ agroindustrial‐al‐republicii
Minister of Agriculture and Food Industry Eduard Grama met with representatives from two Chinese companies (China Xinxing Corporation Group and China National Postal and Telecommunications Appliances Corporation) to discuss the possibility of Chinese investments in Moldova’s agriculture and food industry. During the meeting, Minister Grama noted that Moldova and China are currently in the midst of negotiating a free trade agreement, which would make this cooperation easier to accomplish. The Minister also suggested that potential areas for successful collaboration include the processing of food products, the production of organic products, agricultural infrastructure development, and a loan for technical assistance for the agro‐industrial sector of Moldova. The Chinese also expressed interest in the possibilities for renting agricultural land in Moldova. In 2015, the export of agricultural products from Moldova in China grew more than 10% to a total value of USD 6.3 million. The import of agricultural products from China in 2015 was valued at USD 8.0 million.
6)
Moldova and Jordan Sign Memorandum of Understanding
September 10th, 2016, http://www.maia.gov.md/ro/comunicate‐de‐presa/memorandum‐de‐intelegere‐intre‐maia‐si‐ ministerul‐agriculturii‐al‐iordaniei
Moldova and the Kingdom of Jordan signed a memorandum of understanding in early September. The agreement officially states that the two sides will cooperate in activities in the fields of agriculture, trade promotion and capacity building. Priorities will be given to food safety and food security, research and development, rural extension, irrigation and water management, livestock production, viticulture, climate change and agricultural trade and investment. Cooperation will be implemented through consultations, information exchanges, specialist visits and training programs and seminars. A working group will monitor cooperation and meet as necessary, with meetings being held alternatively in Moldova and Jordan. Exports of agricultural products from Moldova to Jordan reached USD 1.8 million over the first five months of 2016, a year‐on‐year increase of 5.7 times. Imports from Jordan into Moldova have also increased from USD 8,900 in the first five months of 2015 to USD 878,900 in 2016.
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BFC Agriculture Bulletin
Foreign Aid 7)
Moldova to Receive USD 10 Million Loan for Agricultural Development
September 23rd, 2016, http://www.timpul.md/articol/r‐‐moldova‐va‐primi‐10‐milioane‐de‐dolari‐pentru‐dezvoltarea‐ sectorului‐agroalimentar‐‐98167.html
The Moldovan Parliament has ratified a financing agreement between the country and the International Development Agency for the Competitive Agriculture in Moldova project, originally signed on July 8, 2016. The agreement provides for the allocation of a USD 10 million loan which will be used to help Moldovan farmers increase their competitiveness in the agricultural sector by strengthening food safety management and increasing land productivity via sustainable management. The agreement also specifically provides for increased support to apiculture and milk collection and processing.
8)
Six More Grants Approved under the Competitive Enhancement Project
September 15th, 2016, http://mybusiness.md/ro/comunicate‐de‐pres/item/5095‐maturi‐miere‐fasole‐prune‐dar‐si‐filtre‐de‐ apa‐sau‐produse‐fashion‐diversifica‐oferta‐la‐export‐a‐r‐moldova‐cu‐sprijinul‐pac‐granturi
The implementation unit of the Competitive Enhancement Project has approved funding for six more grants in Moldova. The further development of agricultural products, as one of the priority areas of the Competitive Enhancement Project, is represented in two of the approved projects. Fruitmol Group, specialized in prune processing, plans on utilizing the grant funds to increase their export competitiveness by implementing international quality standards. Mocan‐Com, a company specializing in the collection and marketing of fruits, vegetables and beans, will use grant money to meet international quality standards, develop new packaging, conduct market research and launch a new online store for its products. The grant component of the Competitiveness Enhancement Project allocates its budget of USD 3 million to beneficiaries in amounts not exceeding MDL 200,000. The grants will cover up to 50% of the cost of consulting services that improve product competitiveness and increase accesses to new markets. So far, 35 applications have been approved and a further seven are currently being reviewed. The Competitive Enhancement Project has a total budget of USD 45 million and will be implemented through 2019. The overall goal of the project is to improve the business environment by supporting strategies aimed at creating favorable business environments and reducing the constraints and costs for businesses.
9)
Ministry of Agriculture and World Bank Launch Grant Program
September 13th, 2016, http://www.realitatea.md/banca‐mondiala‐si‐maia‐lanseaza‐cel‐de‐al‐5‐lea‐apel‐al‐programului‐de‐ granturi‐post‐‐‐investitionale‐pentru‐agricultori_45122.html
The Moldovan Ministry of Agriculture and Food Industry is working with the World Bank’s Competitive Agriculture in Moldova project to launch the 5th post‐investment grant program: Sustainable Land Management. The grants will reimburse 50% (up to USD 20,000) of the cost of adopting and applying sustainable management practices and technologies which ensure the health and productivity of soil. The grants are available to all farmers in Moldova except those in Chisinau and Balti. The program will reimburse farmers who have implemented sustainable land use practices after November 1, 2015 for equipment procured for the 2014 agricultural season or later.
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Private Sector 10) Farmers Unhappy with MDL 200 Million Reduction in Subsidy Funds October 4th, 2016, http://www.timpul.md/articol/agricultorii‐se‐arata‐nemulumii‐de‐micorarea‐fondului‐de‐subvenii‐ 98629.html
Farmer associations are unhappy with the announcement of a reduction in state subsidies for farmers and have announced that they will organize mass protests if the situation is not resolved immediately. Some farmers have reportedly been waiting for more than a year to receive promised subsidies. Others, who rely on this money for continuing to develop their businesses, have applied for subsidies but are uncertain if they will receive it in light of the announced reduction. The reduction in subsidies stems from the government stepping in an emergency capacity when three banks faced liquidation, cutting the amount available for farmer subsidies by MDL 200 million. In order to achieve this reduction, it was announced that farmers will not receive the full requested amounts and the number of applications that will be processed and approved is being reduced. This year, more than 4,000 farmers applied for subsidies from the program. The deadline for the submission of applications was September 27, 2016. Within ten days after the deadline, the Agency for Payments and Intervention in Agriculture will process all applications and allocate the funds to agricultural producers.
11) Animals in Moldova being Tested for African Swine Flu September 26th, 2016, http://www.realitatea.md/pesta‐porcina‐africana‐in‐republica‐moldova‐ansa‐examinam‐doua‐focare‐ ale‐acestei‐infec‐ii‐la‐nordul‐arii_45748.html
Gheorghe Gabari of the National Agency for Food Safety announced that animals from two households in Donduseni are suspected of being infected with African swine flu. Samples have been collected from the animals and have been sent for testing to confirm whether or not the disease has entered the territory of Moldova. The outbreak of Swine Flu has already infected several regions in neighboring Ukraine. African swine flu is a highly contagious viral disease which affects both domestic and wild pigs and is spreading globally. The disease is not transmissible to humans but can cause large‐scale losses for pig farmers. The disease can be transmitted over long distances through materials that have been in contact with sick animals or through infected meat products. Typical symptoms of the virus include consuming large quantities of water, immobility, refusing food, dark red spots appearing over the animal, constipation followed by diarrhea and slow‐moving muscle tremors.
12) New Committee Formed to Increase Agricultural Insurance Efficacy September 24th, 2016, http://agora.md/stiri/22704/directorul‐aipa‐companiile‐de‐asigurari‐au‐un‐nivelul‐scazut‐de‐ credibilitate‐in‐randul‐producatorilor‐agricoli
The Agency of Payments and Intervention for Agriculture (APIA) held a meeting this month with several insurance companies that provide agricultural insurance. The purpose of the meeting was to identify the problems facing insurance companies in regards to the agricultural sector, impediments faced by the APIA and farmer subsidy risks. Each party identified the challenges that are impeding a more successful agricultural insurance and agricultural insurance subsidy environment and agreed to the forming of a joint committee made up of representatives from APIA and the insurance companies. The committee
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will work to make recommendations to increase the effectiveness and overall utility of agricultural insurance and propose amendments to the law on agricultural insurance subsidies.
13) Exports to CIS Countries on the Rise September 21st, 2016, http://pan.md/ekonomika/ekonomist‐eksport‐yablok‐v‐rossiyu‐vyiros‐bolee‐chem‐v‐2‐raza‐a‐v‐es‐‐‐upal‐ v‐10‐raz‐
Over the first six months of 2016, the export of Moldovan fruits to CIS countries has increased. The export of apples has seen a 20% increase while grape exports have gone up by 2.5 times to CIS countries. This is despite an embargo from the Russian Federation which has yet to be fully eliminated. On the other hand, apple exports to the European Union (EU) have declined by 10 times, and, while the export of grapes to the EU has increased 59%, nearly 99% of exported grapes have gone to neighboring Romania.
14) 15th Annual National Wine Festival Held in Chisinau September 20th, 2016, http://www.basarabia.md/peste‐40‐de‐companii‐vinicole‐vor‐participa‐la‐ziua‐nationala‐a‐vinului/
More than 40 wineries participated in the 15th annual National Wine Festival in Moldova at the beginning of October. The festival was held in the National Square of Chisinau and adopted the motto: “Man – The Soul of Wine.” The national festival seeks to strengthen Moldova’s image as a producer of high quality wines and help promote Moldovan wine producers both nationally and internationally. The festivities included winetasting of more than 400 types of wine, tours of local wineries and vineyards, seminars presented by experts and sommeliers on various topics related to wine, the preparation of traditional Moldovan foods, exhibitions of Moldovan art, and concerts. This year’s festival had a budget of MDL 2.3 million and was organized by the National Office for Vineyards and Wine and the Ministry of Agriculture and Food Industry along with support from Association of Wine Producers and the USAID Competitive Agriculture Project.
15) Exports of Domestically Produced Goods Down in 2016 September 15th, 2016, http://www.realitatea.md/exportam‐mai‐pu‐ine‐fructe‐i‐legume‐autohtone‐i‐importam‐mai‐multe‐ bauturi‐alcoolice‐si‐nealcoolice‐arata‐datele‐bns_45227.html
Data from the National Bureau of Statistics shows that the export of Moldovan products through the first seven months of 2016 has declined when compared to exports in the first seven months of 2015. Exports of fruits and vegetables have declined 36.3%; the export of vegetables fats and oils (both refined and crude) has declined 48.5%, oilseeds by 13.3%, honey by 25.3%, and cereals and cereal preparations by 7.5%. At the same time, the export of yarn, fabrics and textiles increased 1.7 times, and the export of livestock increased 1.3 times. In total, exports of domestically produced goods from Moldova were down 7.5% and amounted to USD 672.8 million from January through July 2016.
16) Moldovan Grape Harvest Under Way September 12th, 2016, http://jurnaltv.md/ro/news/2016/9/12/culesul‐strugurilor‐este‐in‐toi‐10241844/#4
The grape harvest is in full swing in Moldova. This year, growers expect a lighter harvest of seven tons per hectare due to this year’s lack of adequate rains. This is expected to impact the wine made this year with higher sugar contents and as much as a 20% increase in the price of wines produced in Moldova. Page 6
Prepared by Business & Finance Consulting (BFC) www.bfconsulting.com In this bulletin, BFC provides extracts from articles that have been published by others and as a result cannot be held responsible for such content. The articles do not necessarily reflect the opinions of BFC, its staff, its associates or its partners. Copyright of articles is retained by their authors.