#5 Moldova Agriculture Bulletin, BFC

10/2016

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5 M o l d ova Agriculture Bulletin Government Extended Deadline for Subsidy Application Submission USAID Launches Application Process for Wine and Rural Tourism Project Farmer Associations Concerned with Financial Assistance Distribution Plan Free Trade Agreement with Turkey Set to Begin in November

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Contents State Initiatives ........................................................................................................... 2 1) 2) 3) 4) 5)

AIC Begins Training Program for Consultant Candidates ................................................................ 2 Resolution Drafted to Support Plantations Hurt by Low Temperatures ......................................... 2 Current State of Swine Flu in Moldova ............................................................................................ 2 Moldova Proposes Russia Establish Rosselkhoznadzor Branch in Moldova ................................... 3 Government Extended Deadline for Subsidy Application Submission ............................................ 3

Foreign Aid ................................................................................................................. 3 6) 7) 8) 9) 10) 11)

USAID Launches Application Process for Wine and Rural Tourism Project .................................... 3 More than 3,500 Moldovan Farmers have Benefited from the 2KR Project .................................. 4 Agricultural Competitiveness Project in Moldova Set to Begin Second Phase ............................... 4 FAO to Implement New Agricultural Program in Moldova ............................................................. 4 Moldovan‐Italian Business Forum Held in Chisinau ........................................................................ 5 EUR 1 Million Project to Help Moldovan Enterprises Enter EU Markets ........................................ 5

Private Sector .............................................................................................................. 5 12) 13) 14) 15) 16) 17) 18)

Farmer Associations Concerned with Financial Assistance Distribution Plan ................................. 5 Moldovan Agricultural Output Showing Robust Growth in 2016 ................................................... 6 Free Trade Agreement with Turkey Set to Begin in November ...................................................... 6 Moldova Ranks Twentieth in Total Wine Production ...................................................................... 6 Wine and Spirits Exports to the European Union Up Nearly 50% ................................................... 6 Moldovan‐Russian Turnover Increases 21% in 2016 ....................................................................... 7 Moldova’s Economic Growth at an Estimated 2.2% in 2016 .......................................................... 7

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)

AIC Begins Training Program for Consultant Candidates

November 1st, 2016, http://www.maia.gov.md/ro/comunicate‐de‐presa/consultanta‐pentru‐fermieri‐valorificarea‐proiectelor‐ de‐finantare

The top ten candidates for the Financial Advisor for Agriculture and Rural Development position are being trained in raising funds to increase the competitiveness of local products and help develop villages. The training, which commenced on October 31, 2016, was developed by Deputy Agriculture Minister Iurie Usurelu with Andrei Timus, director of the Agricultural Information Center (AIC). If selected for the consultant position, the candidates will be hired through 2017. Following the evaluation of training courses in this first phase, consultants who will meet the minimum score required will be hired. In the first two months, they will receive a fixed salary from AIC funds; following this period, their remuneration will be dependent on the number, value and quality of the services they provide.

Deputy Minister Iurie Usurelu said that the tasks of Consulting Division they will work for will be to: identify funding opportunities of modern agriculture and rural development; determine farmer‐to‐ finance specific activity; assist in determining the eligibility of a beneficiary in various programs; offer consultations on and help prepare documents provided to financial institutions which support the food sector and rural development; and review the financial progress of programs.

2)

Resolution Drafted to Support Plantations Hurt by Low Temperatures

October 25th, 2016, http://www.noi.md/md/news_id/93064

The Ministry of Agriculture has drafted a resolution and the appropriate regulations for distributing MDL 45 million in funds to support farmers whose plantations were damaged by low temperatures this spring. Low temperatures in late April 2016 damaged 30‐100% of orchards in the Briceni, Donduseni, Drochia, Glodeni, Ocnita, Riscani and Soroca districts. Rough estimates calculate the damages at MDL 207.9 million over 6.4 thousand hectares.

The draft resolution outlines the key criteria that beneficiaries should meet and sets out the procedure for fund distribution. The document has been offered for public hearing until November 10, 2016 and is available at http://particip.gov.md/proiectview.php?l=ro\u0026idd=3591.

3)

Current State of Swine Flu in Moldova

October 20th, 2016, http://en.publika.md/fighting‐swine‐fever‐in‐moldova‐food‐safety‐agency‐chief‐inspects‐farms‐in‐ south_2629575.html

The hazard of swine flu is larger in the south of Moldova than in other parts of the country due to pig farms there being closer to Ukraine, a place where 100 instances of the disease have already been recorded. Moldovan farmers are doing their best to undertake all precautionary measures to prevent the disease from spreading and to protect the more than 700,000 pigs in Moldova. The National Food Safety Agency will maintain regular check‐ups on the farms for the next two months. After that time, officials feel that Moldova will be swine flu free and that they will be able to lift restrictions.

Currently, pork imports are banned into the territory of Moldova.

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BFC Agriculture Bulletin

4)

Moldova Proposes Russia Establish Rosselkhoznadzor Branch in Moldova

October 17th, 2016, http://infomarket.md/en/agriculture/Moldova_proposed_Russia_to_create_in_our_country_a_branch_of_Rosselkhoznadzor_f or_the_control_of_agricultural_products_intended_for_export_to_the_Russian_Federation

Agriculture Minister Eduard Grama announced that Moldova has proposed that Russia create a branch of Rosselkhoznadzor, the Russian agency responsible for phyto‐veterinary certification and control, in Moldova. Minister Grama said that Moldova is prepared to fully cover the costs of establishing such a branch in Moldova since it would allow Moldovan exporters to obtain permits to export to Russia without having to wait for certification from another country.

The proposal is scheduled to be discussed by the two sides at a meeting in Sochi in late November.

5)

Government Extended Deadline for Subsidy Application Submission

October 13th, 2016, http://radiochisinau.md/plata‐cu‐intarziere‐a‐subventiilor‐strica‐socotelile‐agricultorilor‐care‐acumuleaza‐ tot‐mai‐multe‐datorii‐‐‐39099.html

The government extended the deadline for subsidy request applications through October 31, 2016 this year despite subsidy funds having been reduced from MDL 900 million to MDL 700 million earlier in the year. So far, farmers have been paid MDL 480 million from the fund this year; however, most of this sum was debts owed to farmers for claims from 2015. This leaves MDL 215 million available for applications submitted this year.

The procedure for examination and approval of applications is first come, first served. For the already 2,700 applications submitted this year (representing around MDL 415 million), this means that approximately 1,400 can be paid from this year’s remaining available funds. In addition, another MDL 100‐120 million in applications was expected to be received prior to the new deadline, meaning that MDL 300 million will already be owed from the 2017 fund. The estimated fund for 2017 is MDL 570‐600 million.

Foreign Aid 6)

USAID Launches Application Process for Wine and Rural Tourism Project

November 3rd, 2016, http://agrobiznes.md/usaid‐lanseaza‐apel‐de‐finantare‐a‐proiectelor‐in‐industriile‐vitivinicola‐turism‐ rural‐si‐vitivinicol.html

The USAID Competitive Moldova Project is accepting applications for grants to support micro, small and medium enterprises (SMEs), non‐governmental organizations and non‐commercial initiatives. The project will consider applications that contribute to the development of wine and rural tourism which also focus on innovation, systematic improvements to the industries and improved quality of production and processing. Other keys factors that will be taken into consideration are increasing competitiveness, sustainability and the opening of new markets.

The application process will consist of two stages: submission of an initial application (including the overall concept of the project and a budget) and, for applicants passing the first stage, a complete application and review by the selection committee.

Only registered, legal entities are eligible for financing. More information is available here.

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BFC Agriculture Bulletin

7)

More than 3,500 Moldovan Farmers have Benefited from the 2KR Project

October 31st, 2016, http://infomarket.md/en/agriculture/Over_the_last_15_years_more_than_3500_Moldovas_farmers_benefited_from_soft_cre dits_to_buy_7580_farm_machinery_units_under_2KR/

Over the last 15 years, more than 3,500 Moldovan farmers have benefited from soft credits as part of the food safety enhancement project 2KR. The credits have allowed farmers to purchase more than 7,500 farm machinery units which are now involved in production on 40% of Moldova’s arable lands.

The 2KR project is being implemented by Moldova’s Ministries of Agriculture and Trade with the support of the Japan International Cooperation Agency (JICA). The project aims to boost agriculture development and food production in Moldova through helping legal entities and individuals involved in the agricultural sector. 2KR allows farmers to buy agricultural equipment on credit for up to two years and with an initial instalment of 50% of the value, not including VAT.

8)

Agricultural Competitiveness Project in Moldova Set to Begin Second Phase

October 19th, 2016, http://infomarket.md/en/agriculture/Applications_for_the_second_phase_of_the_Agricultural_Competitiveness_Project_in_M oldova_MAC‐P_to_be_accepted_starting_November_2016__/

Nicolae Ciubuc, head of the Agency of Intervention and Payments for Agriculture (AIPA), announced that the documents necessary for the launch of the second phase of the Agricultural Competitiveness Project in Moldova (MAC‐P) are being finalized and that will be accepted starting in November 2016. The first round of applications will be open for two weeks and, following expert review and financing approval for those projects, will be followed by a second round. Grants will be given for projects related to enhancing market access potential and sustainable land management. They are available for groups of five or more farmers and will contribute up to USD 350,000 or 50% of the total amount invested. Under this second phase, farmers may also be eligible for up to USD 20,000 for the purchase of agricultural equipment.

The World Bank launched MAC‐P in June 2013 and is supporting its second phase with USD 10 million.

The second phase is scheduled for completion in two years.

9)

FAO to Implement New Agricultural Program in Moldova

October 19th, 2016, http://moldpres.md/en/news/2016/10/19/16008275

At a seminar marking World Food Day, the United Nations Food and Agriculture Organization (FAO) unveiled a new program scheduled to run between 2016 and 2019 that will provide support to Moldova in developing policies on backing small‐ and medium‐sized farmers, promoting sustainable and innovative agriculture, reducing emissions of greenhouse gases, and ensuring food security. The new FAO program comes in the context of the signing of an agreement on climate changes in Paris, an accord Moldova is party to along with another 176 states, and fits into a global strategy of mitigating agriculture’s negative impact on the environment and helping agriculture to adapt to climate changes.

The program will help Moldovan agriculture reduce the emissions of greenhouse gases through stimulating the use of environmentally friendly technologies, including technologies of conservative agriculture.

One of the essential components within the comprehensive support for small and medium farms is the education of farmers through field schools – an FAO initiative implemented in the last two years which will be expanded for this program through the opening of 10‐15 more field schools around Moldova.

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BFC Agriculture Bulletin

10) Moldovan‐Italian Business Forum Held in Chisinau October 14th, 2016, http://www.trm.md/en/economic/la‐chi‐sinau‐se‐va‐desfa‐sura‐primul‐forum‐de‐afaceri‐moldo‐italian‐ agricultura‐2016/

The Moldovan‐Italian business forum Agriculture 2016 was held in Chisinau in October and brought together more than 100 entrepreneurs, representatives of public institutions and NGOs, and experts from both Moldova and Italy. At the forum, there were discussions about commercial‐economic cooperation between the two countries, opportunities for Moldovan farmers and business programs.

Participants were given the opportunity to establish partnerships with businessmen from Italy; foreign investors were also given information on investment opportunities.

The event was organized by the Italian Chamber of Commerce in Chisinau in partnership with the Chamber of Commerce on the left bank of the Nistru River and the Centre for Socio‐Economic Development and Innovational Entrepreneurship Support. It was funded by the European Union through the Support to Confidence Building Measures program.

11) EUR 1 Million Project to Help Moldovan Enterprises Enter EU Markets October 13th, 2016, http://ziarulnational.md/un‐milion‐de‐euro‐pentru‐intreprinderile‐mici‐si‐mijlocii‐din‐r‐moldova‐din‐partea‐ ue‐vor‐fi‐ajutate‐sa‐produca‐bunuri‐pentru‐export‐pe‐piata‐europeana/

Small‐ and medium‐sized enterprises in Moldova will benefit from assistance in developing their export capacity to the European market through the European Union project linking SMEs for Eastern Partnership Countries to the Global and Regional Value Chains. The program is set to begin in March 2017 and gives EUR 1 million to each partner country. In Moldova, the project will be implemented by experts from the Eastern Europe International Trade Center (ITC). ITC will provide assistance in producing value‐added goods which conform to European Union and International market requirements. They will also assist in improving sector‐specific services and supporting small‐ and medium‐sized enterprises in entering new markets.

Private Sector 12) Farmer Associations Concerned with Financial Assistance Distribution Plan October 28th, 2016, http://www.noi.md/md/news_id/93279

UniAgroProtect Association of Fruit Producers and Exporters, MoldovaFruct, the National Farmer Federation of Moldova, and the National Federation of Agricultural Producers AgroInform do not agree with the process of distributing financial assistance to farmers who suffered from late April frosts. The four organizations have sent a letter to the Ministry of Agriculture requesting a meeting to review the rules for distribution as they are concerned that the current process is overly bureaucratized and will actually delay resolution to the problem.

A commission visited farms in the districts affected by the April frosts and drew up a plan for assistance.

Based on that plan, farmers can apply directly to the Agency of Intervention and Payments for Agriculture (AIPA) to receive the aid, with the entire process taking 10‐14 days.

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BFC Agriculture Bulletin

13) Moldovan Agricultural Output Showing Robust Growth in 2016 October 26th, 2016, http://www.noi.md/md/news_id/93157

The production of Moldovan farmers has grown by 19% year‐on‐year through the first nine months of 2016. The growth is largely due to the increased production of vegetables and animal breeding. In particular, barley and corn production is up 43%, and the wheat output has grown 27% when compared to the same period of 2015. Sunflowers are showing a 25% increase; and grapes have shown a 10% increase. Egg production is up 9% while the potato harvest and animal output have both shown a 7% increase over last year. Milk production has grown a modest 0.3% so far this year.

14) Free Trade Agreement with Turkey Set to Begin in November October 25th, 2016, http://www.maia.gov.md/ro/comunicate‐de‐presa/acordul‐de‐comert‐liber‐dintre‐moldova‐si‐turcia‐ efecte‐pentru‐producatorii

The free trade agreement between Moldova and Turkey is set to come into force this month and is believed to provide numerous advantages to local businesses, especially farmers. The agreement includes provisions which allow unlimited access with no tariff restrictions on the import of some agricultural products into the Turkish market. Under the agreement, sour milk, butter, eggs, prunes, soybeans, rapeseed, baked goods, fruit juices, sparkling wine and wine distillates will be allowed into the market without duties; however, agricultural products such as barley, sunflower seeds, sunflower oil, and crude sunflower seed oil will be granted entrance only in the offseason.

For its part, Moldova will cancel duties on certain vegetables and fruits during the offseason, including tomatoes and both fresh and chilled pears, quinces, apricots, cherries, peaches, nectarines, plums, and strawberries.

The agreement hopes to promote the expansion of bilateral trade, remove barriers and restrictions to trade and create a level playing field in trade between Moldova and Turkey. The free trade agreement between Moldova and Turkey was signed on September 11, 2014 in Chisinau.

15) Moldova Ranks Twentieth in Total Wine Production October 24th, 2016, http://en.publika.md/what‐spot‐moldova‐is‐in‐world‐wine‐makers‐ranking_2629700.html

According to the International Vine and Wine Organization, Moldova ranks twentieth in the world in wine making. Moldova’s output of wine, 170 million liters, is approximately the same as their output last year, but was enough to move them up one spot, in front of Brazil and just behind Georgia. Italy remains the world’s largest producer of wines with 4.88 billion liters produced this year. France’s 4.19 billion liters comes in second, and Spain takes the third spot with 3.78 billion liters.

The International Organization of Vine and Wine has assessed that this year’s global production will be 20% less year‐on‐year due to unfavorable weather conditions.

16) Wine and Spirits Exports to the European Union Up Nearly 50% October 13th, 2016, http://radiochisinau.md/exportul‐de‐vin‐moldovenesc‐in‐uniunea‐europeana‐a‐crescut‐cu‐aproape‐50prc‐‐‐ ‐39105.html

The export of Moldovan wine products into the European Union (EU) increased during the first quarter of this year by 45.9% as compared to the same period last year. The EU share of total Moldovan wine Page 6

BFC Agriculture Bulletin

and cognac exports has also increased from 26.9% to 33.8%. Poland increased its purchase of Moldovan spirits from USD 3.35 million to USD 5.6 million while Germany increase purchases by 16% to a total of USD 1.74 million. The Czech Republic and Romania have both also increased their purchases of Moldova spirits to USD 4.19 million and USD 4.13 million, respectively.

17) Moldovan‐Russian Turnover Increases 21% in 2016 October 7th, 2016, http://infomarket.md/en/agriculture/In_2016_the_export_of_agri‐ foods_from_Moldova_to_Russia_increased_considerably_and_spurred_the_commodity_turnover_between_the_two_countries _

According to the Russian Ministry of Agriculture, the turnover of commodities between Russia and Moldova has increased 21% year‐on‐year. The export of apples, peaches, quinces, apricots, plums and cherries alone grew by more than 27%. The growth was made possible thanks to the efforts of controlling bodies in both countries. In announcing the increased growth at a meeting with Moldovan Agriculture Minister Eduard Grama, Russian Agriculture Minister Alexandr Tkachev expressed Russia’s willingness to further cooperate with Moldova in various segments of the agricultural sector and disclosed that a roadmap for Russia‐Moldova trade and economic relations in 2016‐2017, which would lay a solid foundation for mutually beneficial cooperation, is under development.

18) Moldova’s Economic Growth at an Estimated 2.2% in 2016 October 7th, 2016, http://eco.md/index.php/home/rss/item/4811‐agricultura‐salveaz%C4%83‐cre%C5%9Fterea‐ economic%C4%83

World Bank experts have estimated Moldova’s 2016 economic growth at 2.2%. The slight recovery from recession is largely credited to growth in the agricultural sector following last year’s drought. The recovery is, however, considered fragile as public finances in the country are still under pressure and Moldova is exposed to significant immediate challenges, especially against the backdrop of a prolonged recession in Russia and uncertainty in Europe.

Experts have estimated a 3% growth from 2017 to 2018 with an inflation rate within the target of around 5%. The level of poverty among the population is expected to dip to 40.4% in 2016 and could fall to as low as 33% in 2018. Read More »

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