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The Moldovan fruit farmers’ paradox – anybody can produce but only few chosen can sell

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The Republic of Moldova is an agrarian country. The most important agricultural activities in Moldova – the production of walnuts, grapes and some other fruits is, though, squeezed between the political interests and the weak regulations regarding export monopolies establishment and preference of imported products on the internal market. The small Moldovan farms remain outside the big business, being marginalized, misinformed and discriminated when it comes to selling their products inside or outside the Republic of Moldova.

The official data

During a press release of the National Office of Vine and Wine in Moldova, it was communicated that the 2017-2018 season recorded the earliest grapes harvest in the last 40 years. At the same time, the grapes production was 15% higher compared to the average of the last 8 years. According to the National Bureau of Statistics (NBS), in the period January-June 2018, the grape exports from the Republic of Moldova increased by 32.1% compared to the same period of 2017. Moldova exported grapes to Romania – 51.9% of the total export, the Russian Federation – 35% and Belarus – 3.7%.

The National Agency for Food Safety (NAFS) announced a raise in 2018 of  the production and export of Moldovan fruits such as apples, plums, peaches, apricots and cherries.  According to the provided data, 70.6 thousand tons of apples from 2018 year’s harvest were exported, that being three times more than in the same period of 2017. A significant increase was also recorded in the export of plums – 31 thousand tons of plums have reached the foreign markets. The NAFS talked about the export of fruits to the usual for Moldova international markets, such as the Russian market, and discovering new markets such as Iraq and Bangladesh.

The European Business Association reported a quantity of 10 thousand tons of walnuts, exported by 30 companies entitled to do the exports to France Germany or Austria. There are 29,000 hectares of walnut trees in the Republic of Moldova. In 2017, the walnuts production was 18.7 thousand tons. The main countries where the Moldovan walnuts are exported are the EU countries, Ukraine, Turkey and Russia.

Behind the curtain

Several journalistic investigations performed by few independent media institutions from Moldova, such as Ziarul de Gardă and Jurnal TV, have uncovered the ties between certain family members of the former Prime Minister of Moldova – Pavel Filip, and several companies that have an important role on the walnuts and dried fruits markets. The investigations were launched after the allegations of existing a personal interest of the former Prime Minister in maintaining a monopolistic situation on the walnuts market. While checking  the reason of a dramatic decrease of walnuts selling price on the market, the journalists have found a scheme of collecting and centralizing of walnut production by few collector firms that transported them afterwards to “Monicol” SRL – a company owned by father of the Filip’s daughter-in-law. The company has a market share of about 20% and the government’s protection in their activity. The allegations were denied by Pavel Filip, but no financial information regarding the company’s activity was made public.

Svetlana Lungu, the Head of Plant Protection and Health Directorate of NAFS, explained that the process of obtaining the necessary papers for exporting walnuts is not so hard. “In the EU, the requirements are minimal. Namely, it is necessary to obtain the phytosanitary certificate for the export of products of plant origin. The registration of the exporter and the producer is required by NAFS, as well as owning or renting a storage space by the exporter and signing a contract with the producer,” declared Lungu. Therefore, as long as the process is standardized, why the Moldovan walnuts are officially exported by only 30 companies and a monopoly is established on the market unofficially? Maybe because there are some political and personal interests of ‘filtering’ the companies authorized to export.

Walnuts exporting is a profitable business in Moldova. According to TV8, one kilogram of Moldovan walnuts costs 23.94 euro on the Belgian store shelves (about 462 lei). In Moldova, one kilogram of walnuts could reach 150/200 lei on the market, but from producers it is bought for 60/80 lei per kilogram.

The situation for the grapes and fruits producers is not much better. Few weeks ago, a campaign was initiated by a grapes’ producer, Diana Crudu, that advised people not to buy flowers for the International Women’s Day, but a box of grapes or apples.

“There are over 7 thousand tons of grapes in the  Moldovan warehouses. If they are not sold in the next two or three weeks, these grapes will have to be thrown away. The wine factories do not have the capacity to process and storage such a large quantity of grapes. This is the most dramatic situation faced by table grape manufacturers in the last 15 years,” said Diana in an interview for RFE/RL.

The producers are forced to sell the grapes on the local market for 3 to 6 lei per kilogram. At the same time, consumers are offered the possibility to buy imported grapes for 80 lei per kilogram in the Moldovan supermarkets.

The Ministry of Agriculture representative, Iurie Mudrea, declared that no compensation for unsold products can be provided. “The business always involves risk. Calculate, my dear, solve the problem, think about it at the beginning of year, put some efforts. Even Russia no longer accepts low quality, we need high quality for all products. Here we have to start: big volumes, high level of quality and a lot of effort,” declared Mudrea for TV8.

The Ministry of Agriculture claimed that apples could be purchased directly from producers and distributed free of charge in schools. At the same time, the “qualitative and nicely packed” apples could be sold in the country’s retail shops, and the fruit quality monitoring infrastructure could be developed. A lot of things could be done. But will they?

The real solution came from Moldovan people. An event organized by the Klumea Association encouraged Moldovan people to become  solidary with the grapes’ producers and come on Sunday, February 24th, at a bazaar in the city centre of Chisinau to buy a box of domestic grapes, with only 5 lei per kilogram.  The initiative has a suggestive name: ‘Take Moldova home’.

Source: Facebook

Featured photo: worldpulse.com

Economy

“A decision expected by 10,000 patents”. Deputies of ‘ACUM’ ask for an extension of patent activity to 2022

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Deputies of the opposition bloc ‘ACUM’ have today registered in Parliament’s secretariat a legislative initiative to extend small business activities based on entrepreneurial patents until 31 December 2022.

According to Deputy Alexandru Slusari, this decision is long awaited by about 10,000 patents, “who together with their families are now afraid of breasts” and “are hand-luggage.”

Reminder: In November 2018, the Parliament adopted a draft which indicated the term of the entrepreneur’s patent for retail trade to be extended until 31 December 2019.

The term of the patent was only extended to holders, which had patents for these activities on 31 December 2018. About 9400 patents in retail are currently valid.

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Economy

The IMF estimates an economic growth of 3.5% for the Republic of Moldova in 2019

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However, the report on global economic outlook “World Economic Outlook” shows that the Moldovan economy will grow more slowly than the previous forecast when the fund expected an increase of 3.8%, informs Moldpres.

According to the latest report of the Fund, the annual inflation rate will be 3.3% and the current account deficit of the Republic of Moldova will represent 7.7% of the GDP in 2019.

The IMF expects the economy of the Republic of Moldova to grow by 3.8% in 2020, and the same economic growth is projected by 2024.

The World Bank, too, recently revised the GDP growth forecast for Moldova in 2019 by 0.2 percentage points – from 3.8% to 3.6%. The World Bank forecasts inflation for this year at 4.7%.

How many years does RM need to reach the level of economic development of EU countries in 2018?

This economic growth rate of 3.5% is the lowest for the group of the poorest member states of the Commonwealth of Independent States (CIS), of which, according to IMF classification, the Republic of Moldova is part of. Accordingly, to reach the EU level in 2018, Moldova needs 34 years.

“The situation described above is not a short-term evolution of the national economy, but a long-lasting trait of economic changes in the Republic of Moldova,” said economist Viorel Gârbu.

According to the expert, taking into consideration the annual economic growth in the last 20 years (4%), the Republic of Moldova needs 14 years to reach the average level of development of economies in transition.

Approximately 27 years will be needed to reach the level of the CIS member state’s economic development in 2018 or 34 years – to reach the 2018 level of economic development in transition economies in Europe.

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Economy

A Swedish company would like to invest between 20 and 50 million euros in Moldova

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In the Republic of Moldova there are 32 enterprises with Swedish capital, the investments in social capital amounting to 74,154,000 lei. By value of the invested capital, Sweden ranks 17th among the major foreign investors.

A Swedish company would like to invest between 20 and 50 million euros in Moldova. The statement was made by Anders Jarlskog, the general manager of the Swedish company Euro Finans, during a meeting with Economy and Infrastructure Minister Chiril Gaburici.

According to a communique of the ministry, the management of Euro Finans has approved the investment for Moldova. However, they will have to be exposed to the Board of Directors of the company. In this respect, the Euro Finans management and the Management Board will hold a visit to Chisinau in order to discuss the facilities created for foreign investors, the strategic areas and sectors of the Republic of Moldova, the projects planned for this year, and so on. Following the visit, the Swedish delegation is to make the final decision on the investment.

Chiril Gaburici mentioned that Sweden is one of the main development partners and supporters of the so-called European path of our country, being among the top 5 donors of Moldova.

According to general manager Anders Jarlskog, Euro Finans’ entry to the Republic of Moldova will stimulate the economic development of the country thanks to its unique business model and product range.

“We appreciate the progress made by the Republic of Moldova in the reforms, as well as the facilities offered to the business environment, with the reduction of bureaucracy,” added the director of Euro Finans.

Euro Finans is a financial company specializing in B2B financing.

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