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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 mission of the International Monetary Fund led by Ruben Atoyan is coming to Moldova

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A mission of the International Monetary Fund (IMF) headed by Ruben Atoyan will be on an official visit to Chisinau from June 26 to July 10, 2019, writes ZdG.

According to an IMF press release, the mission will hold talks with the authorities in the context of the revision of the IMF-funded program under the Extended Fund Facility (ECF) and WFP arrangements. The mission will analyze recent economic developments and progress in program implementation, as well as update and assess the macroeconomic outlook and discuss with authorities about macroeconomic policies in the coming period.

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Economy

How many millionaires are there in the Republic of Moldova?

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1 760.

1760 citizens of the Republic of Moldova obtained revenues of over 1,000,000 lei in the year 2018. The total income earned by these people was 6.140,000,000 lei and the tax paid to the budget from this income is the amounted to 479.710,000 lei, the State Tax Service announced.

According to the quoted source, the highest amount of income earned by a natural person in 2018 was 83.250,000 lei.

Territorial, most millionaires are registered in Chisinau – 1384.

The youngest person in this category is 21 years old and the oldest – 90 years old.

Accordingly, the average income of a taxpayer is 49.700 lei in 2018 compared to 44.800 lei in 2017.

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Economy

The past and the future of Moldova’s energy sector security

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The energy sector is one of the vulnerable areas of the Republic of Moldova because it could not provide national security in case of exceptional situations.

The energy vulnerability of the Republic of Moldova is caused by the dependence on natural gas and electricity from the outside, obsolete infrastructure and tariffs inadequate to economic rigors. The accession of the Republic of Moldova to the European Energy Community could represent the solution to many problems existing in the energy sector, says the political analyst of the IIDIS Viitorul, Ion Tăbârţă via the Newsletter.

Achieving commitments under the European Energy Community could ultimately lead to diversification of energy supply, demonopolization and liberalization of the energy market, separation of energy activities, renovation and modernization of infrastructure, non-discriminatory tariffs for consumers.

With the signing of the Association Agreement with the EU, the Republic of Moldova started transposing and implementing the provisions of the Energy Package III, adopted by the European Union in 2009.

The Republic of Moldova has achieved good results in transposing the European directives into national legislation, adopting several laws in the energy field. However, the Republic of Moldova is experiencing some delays in adopting sectoral energy laws, such as the Oil Law.

The reforming and modernization of the Moldovan energy system will be realized only after the implementation of these laws, when their functionality will be ensured. The Government of the Republic of Moldova and ANRE are the main institutions responsible for the implementation of the regulatory framework.

The implementation has several dimensions:

  1. development and approval of secondary legislation
  2. liberalization of the energy market and institutional and organizational consolidation
  3. modernization of energy infrastructure.

To achieve these goals, the energy interconnection with the EU must be achieved, which can only be done through Romania. The Government of the Republic of Moldova concluded in 2015 a Memorandum of Understanding with that of Romania. This implied the realization of 5 large projects that would ensure the interconnection of the natural gas and electricity networks between the two states.

What should the Republic of Moldova do for a more secure energy sector?

The Republic of Moldova needs to modernize and restructure it in order to overcome the inherited vulnerabilities of the past. Contrary to expectations arising from the national interest of the Republic of Moldova, this process is much slower than expected.

We have delays in the adoption of legislation, especially the secondary one, and delays in the modernization of energy infrastructure. This is particularly evident in energy interconnections with Romania, which could be viable solutions to many of the existing energy problems in the Republic of Moldova. Under the conditions that there is external support from the outside, such an attitude means that things are “intentionally entangled” inside. Money is capacity, the rest is at the mercy of political will.

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