Moldova Agriculture Sector Reviewdocuments.worldbank.org/curated/en/551981468774295374/... · 2016....

Report No. 12581-MD

MoldovaAgriculture Sector ReviewFebruary 21, 1995

Natural Resources Management DivisionCountry Department IVEurope and Central Asia Region

FOR OFFICIAL USE ONLY

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Document of the World Bank

This document has as restricted distribution and may be used by recipientsonly in the performance of their official duties. Its contents may not otherwisebe disclosed without World Bank authorization

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CURRENCY EQUIVALENTS

Currency unit = Russian Ruble, abbr. Rbl.US$1 = 950 Rbl. (as of June 1993)

Currency unit = LeuUS$1 = 4.26 Leu (as of December 1994)

WEIGHTS AND MEASURES

ha HectareKwh Kilowatt hourq Quintalst Tons (metric)

ABBREVIATIONS

Al - Artificial InseminationCIS Confederation of Independent StatesCPI Consumer Price IndexDFI Development Finance InstitutionsEBRD European Bank for Reconstruction and DevelopmentEU European UnionFSU Former Soviet UnionIAS International Accounting Standards

FOR OFFICIAL USE ONLY

CONTENTS

PREFACE.

EXECUTIVE SUMMARY.iii

PART I: MAIN REPORT

1. INTRODUCTION: BACKGROUND TO THE SECTOR . .A. GENERAL BACKGROUND .1B. NATURAL RESOURCE BASE. 3C. CROP SECTOR. 6D. LIVESTOCK ......................................... 9E. HORTICULTURE AND VITICULTURE ...................... 11

2. THE CURRENT STATUS OF REFORM .13

3. A FRAMEWORK FOR SOLUTIONS .. 19A. GENERAL FRAMEWORK .............................. 19B. SOLUTIONS IN SPECIFIC AREAS ......................... 21C. ACTION PLAN AND PRIORITIES ......................... 30

PART II: TECHNICAL ANNEXES

TECHNICAL ANNEX 1: LAND REFORM AND RESTRUCTURING OF FARMS .. 35A. Historic Background .................................... 35B. Land Reform Legislation .................................. 35C. Shareholder Structures . ................................. 38D. Private Farming ...................................... 39

TECHNICAL ANNEX 2: ANNUAL CROP PRODUCTION . . 41A. Highlights Of The Crop Sector ............................. 41B. Current Status . ....................................... 43C. Major Constraints . ..................................... 47D. Recommendations . ..................................... 48

TECHNICAL ANNEX 3: LIVESTOCK SECTOR ....................... 51A. Current Sector Status .......... ......................... 51B. Recommendations . ..................................... 54

This document has a restricted distribution and may be used by recipients only in the perforwmace of thieir lofficial duties. Its contents may not otherwise be disclosed without World Bank authorization. l

TECHNICAL ANNEX 4: VINI-VITICULTURE ........ .. .............. 57A. Grape Production . ..................................... 57B. Wine Production . ..................................... 58C. Wine Marketing ...................................... 59D. Domestic Manufacturing Of Equipment ........................ 59E. Strategy For The Future ................................. 60

TECHNICAL ANNEX 5: THE PROCESSING INDUSTRY:FRUITS AND VEGETABLES .............. ................. 61A. Production And Processing ............................... 61B. Conclusions .......................................... 64

PART III: STATISTICAL ANNEX ................................ 67( A List of Statistical Tables is provided in the Annex)

FIGURES:1.1 Gross Value of Agricultural Output ......................... 11.2 Arable Land ....................................... 51.3 Soil Erosion ..................... 51.4 Land Use ..................... 61.5 Average Yields of Main Field Crops. 81.6 Irrigation and Drainage .9A2.1 Total Grain Areas .............................. 44A2.2 Share of Grain Production by Crop ........................ 45A2.3 Sunflower Production .............................. 46A2.4 Tobacco Production .............................. 47A3.1 Changes in Output of Agriculture ....... .................. 51

TABLES:1.1 Changes in Consumption of Basic Food Products ................. 21.2 Agroclimatic Zones .41.3 Main Annual Crops. 73.1 Recommended Actions ................................ 31Al. 1 Moldovan Legislation on Land Reform and Farm Restructuring ... .... 36A3.1 Production of Major Livestock Products ..................... 53

MAP: IBRD #24285

PREFACE

i. This report is based on the findings of World Bank missions' that visited Moldova inFebruary, March, and May of 1993. A draft version was discussed with the Government in April 1994.After discussions, the draft report was revised to incorporate comments and to reflect changes in policyintroduced up to mid 1994. The report was finalized in November 1994. The work was supported bythe EBRD. Field work was coordinated by the Ministry of Agriculture and Food. Statistical support wasprovided by the Institute for Agrarian Economy under the Ministry of Agriculture and Food, and by theDepartment of Statistics.

ii. The report consists of an executive summary, main report, technical annexes, and astatistical annex. The report includes an assessment of the strengths and problems of the agriculturalsector, a summary strategy for building on strengths and addressing problems, and recommendations forimplementing the strategy.

iii. Preparation of the report has been aided throughout by the substantive and logisticalassistance of the Moldovan Ministry of Agriculture and Food, and by other Ministries and Departmentswithin the Government, by numerous managers of enterprises, representatives of local government, andfarm employees. For this assistance the World Bank is very grateful.

i The missions were led by K. Brooks, and included B. Gardner (Economist), J. Yaron (Finance), Z.Lerman (Economist, Land and Farm Restructuring), 0. Honisch (Agronomist), T. Schillhorn van Veen(Livestock), 0. Bernabe (Viticulture), N. Grimas (Oenology), L. Garoyan (Horticultural Processing), and R.Judson (Statistics).

EXECUTIVE SUMMARY

Objectives

I. The objectives of the Agricultural Sector Review are twofold:

a. to assist the Government in preparing a strategy for recovery of Moldovan agricultureas an internationally competitive sector with well-functioning markets; and

b. to provide a foundation for formulating Bank lending operations in support of Moldova'sagricultural reform.

II. Elements of the strategy have already been incorporated in the early stages of theGovernment's reform program, and have been supported by the World Bank's Emergency AssistanceCredit and Rehabilitation Loan.

Assessment

III. Since Independence in August 1991, Moldovan agriculture and food industries have faceda series of shocks, including: a large unfavorable adjustment in terms of trade; civil unrest; severedroughts in 1992 and in 1994; and the economic disruption associated with the break-up of the USSR.Agricultural output is estimated to have declined 33 % between 1989 and 1993. Output fell an additional26% in 1994, due in part to severe drought and other natural disasters. Moldovan GDP fell by over 50%between 1990 and 1993, and the additional decline in 1994 is estimated at 30%. Agriculture and foodprocessing make up more than half of the Moldovan economy. The extreme decline in the Moldovanaggregate economy accentuates the urgency of measures to initiate agricultural recovery.

IV. Moldova has followed a tight monetary policy since late 1993, supported by an IMFstand-by arrangement. The program brought inflation down to a 2.5% monthly rate in mid 1994, butsevere problems of inter-enterprise arrears and illiquidity continue to constrain agricultural production,processing, and marketing. Land reform and restructuring of farms are proceeding. By early 1994,approximately 15% of Moldovan agricultural land was privately managed (13% in expanded householdplots and 2 % in private farms). The remainder of agricultural land was managed by collective and statefarms, new producer cooperatives, joint stock companies, and other forms of shareholding farms. In July1994, approximately 10,000 private farns were registered, occupying less than 1% of agricultural land,with an average size of one to two hectares. Approximately 30,000 additional private farms werereported to be functioning, but not yet registered. The estimated 2 % of agricultural land in private farmsincludes both registered farms and those for which registration is pending.

V. Privatization of processing and marketing is proceeding slowly. Restructuring andprivatization of the parastatal monopolies in agricultural chemicals, machinery, and grain are underpreparation, and privatization will be undertaken in the 1995/96 reform program of the MoldovanGovernment. Trade policy is largely liberalized. However, export quotas amounting to an effective banon exports remain in effect for grain and hides. Producer and consumer prices are unregulated andcontrols on marketing margins are scheduled to be removed in two stages in early 1995. The state nolonger requires mandatory deliveries under procurement quotas. The state remains a significant purchaserof agricultural products, primarily in order to meet export commitments under bilateral tradingagreements.

iv Executive

A Strategy for Sectoral Recovery

VI. If normal weather patterns prevail in 1995, agricultural production can be expected toexceed the very low levels of 1994, and the domestic market will be able to absorb the increase. Long-tern growth and sustained recovery, however, will depend on export markets. The small Moldovandomestic market cannot absorb growth from an agricultural sector employing approximately one third ofthe labor force. Sectoral recovery will depend on the success and the speed with which Moldovaredevelops traditional markets in the formner Soviet Union, and opens new markets.

VII. Growth led by agricultural exports will not be easily achieved, since financial and physicalimpediments to trade within the former Soviet Union remain high, and Moldovan products are still quitenew in European, Middle Eastern, and North African markets. Because export expansion is bothnecessary and difficult, Moldovan policy and institutional reformns in agriculture should accord highpriority to this objective.

VIII. The international experience with agricultural development for export markets suggests severallessons of relevance to Moldova. Agriculture should not be discriminated against in price and tax policy,and neither should it be subsidized. Discrimninatory price and tax policies reduce incentives forproducers. Subsidies, on the other hand, encourage producers to retain high costs of production and toproduce products that can be exported only with additional subsidies. Moldova should therefore avoidcostly programs of price support or market intervention, and instead allow domestic prices to reflectchanges in border prices. Financial policy should be consistent with price policy; that is, debts shouldbe paid without arrears and the bankruptcy law should be enforced. Experience with agrarian reformelsewhere in the world suggests that small and medium family-based farms are best able to contain costsand respond flexibly to changes in prices and market opportunities. Large farms, on the other hand, tendto be more capital intensive, less responsive to changes in market conditions, and more dependent onsubsidies. The Moldovan strategy for land reform and farm restructuring should therefore provideworkable mechanisms for family-based private farms to emerge from the collective and state farms,and to operate independently or in association with each other. Remaining large farms, like otherbusiness entities, should be subject to strict financial discipline and should undertake restructuringin response to the change in ownership of their assets. Since most Moldovan products are exportedin processed form, the strategy for recovery depends critically on improvements in agroprocessing tocreate the quality of products and packaging demanded by consumers. Privatization of food processing,improved management, and increased investment in agro-industry will be needed for sustained recoveryof primary production. Privatization of food processing should accelerate. Tariffs on agriculturalproducts should be low and uniform so that the food processing industry can be competitive inexport markets. The competitiveness of Moldovan products will depend on price as well as quality, andthe price in foreign markets reflects the exchange rate. The exchange rate should not be allowed tobecome significantly overvalued relative to the currencies of major trading partners.

Specific Recommendations

IX. Moldova has introduced important improvements in the regulatory environment foragriculture since 1991, including pricing, marketing, and trade policies. There has been less success inchanges in ownership and behavior of enterprises. A number of institutions needed for successfulfunctioning of markets for factors of production and output are not yet in place or are operating poorly,

Summary v

such as land markets and financial markets. A number of specific measures which should be pursuedare listed in the following paragraphs.

Price, Trade, and Tax Policy

X. Export Licenses and Ouotas. The prohibition (through licensing and quotas) on exportof grain, skins, and hides is a costly distortion. While the prohibition is in effect, the Moldovan livestockindustry is forced to sell skins and hides domestically. Markets should be allowed to determine whetherthe value of skins and hides is greater internally or on foreign markets, and agriculture should not berequired to subsidize light industry by providing raw materials at less than world market prices. Nowthat the leu is a strong and convertible currency, it is unlikely that Moldovan grain producers would findit advantageous to seek out foreign markets, given the recent shortfall in domestic production relative toutilization. Grain producers should, nonetheless, have the opportunity to export if it is in their economicinterest. The option of selling outside the country or to traders who will place shipments abroad givesproducers the market power needed to enforce timely payments for domestic deliveries, or to counterpotentially monopsonistic practices on the part of domestic buyers.

XI. Tariffs. A fully competitive processing industry will need to source agricultural rawmaterials at the lowest cost and with full quality selection. The current tariff structure offers domesticproducers protection against imports of raw agricultural products and processed goods from outside theCommonwealth of Independent States (CIS) or Romania. Since most trade at present is with the CIS andRomania, the overall level of protection is still relatively low despite this tariff structure. Protectionagainst imported raw commodities from outside the CIS and Romania can nonetheless substantiallydepress the competitiveness of a modern sophisticated processing industry. The industry would be at acompetitive disadvantage in switching among sources to satisfy quality considerations, and also in theevent of regional drought encompassing Moldova, Ukraine, and Romania. Just as competitive primaryproducers need full access to export markets without regulatory barriers, competitive processors needaccess to imports of raw materials without high tariffs. Moldova's agricultural growth will come fromboth primary production and processing, and a liberal trading regime will promote growth. Remainingexport barriers should be removed and import tariffs reduced.

XII. Tax Policy. A number of changes in the administration of the value added tax should beconsidered to increase the profitability of exporting. After consultation with other members of the CIS,it would be desirable to make exports to CIS countries zero-rated for VAT, and to apply VAT to imports.A VAT refund system should be considered for exports to non-CIS countries, since the current systemof crediting exporters for VAT taxes involves lengthy delays.

Privatization and Enterprise Restructuring

XIII. Privatization of Food Processing and Marketing. Progress under the first round ofprivatization of food processing (1993/94) was slower than expected, initially due to lack of consensuson special procedures for privatization of processing plants, and later because implementation of the entireprogram was delayed until well into 1994. The special procedures include distribution of a portion ofshares to past suppliers of raw materials, with additional portions to employees and the general publicagainst vouchers. There was no provision for foreign participation in the initial round of privatizationunder these procedures. Experience in Central Europe has shown that potential foreign investors oftenseek majority ownership prior to investing. The initial Moldovan approach to privatization of foodprocessing may thus have discouraged direct foreign investment. The slow pace of privatization has also

vi Executive

left enterprises in uncertain status longer than desirable, with a likely negative impact on managerialdecisions and stewardship of assets. Privatization of enterprises on the list for 1993/94 should becompleted, and shares of these companies should trade on secondary markets. Procedures forprivatization under the 1995/96 round should be allowed to include provision for direct foreignparticipation. This round should be implemented without waiting for completion of the prior round.

XIV. A number of agricultural enterprises exempted from the first round of privatization shouldbe included in the 1995/96 program. Specialized livestock complexes were not included in either thefarm restructuring program or the privatization program. A number of complexes have been closedbecause they ceased to be financially viable. Those that remain should be privatized. The parastatalfirms supplying agricultural chemicals (Fertilitatea), machinery (Arca Moldova), and concentrate feed(Cereale) should be prepared for privatization under the current program, and be privatized in units thatpromote competition. The financial weakness of these firms has left farms without key services, suchas timely delivery of inputs at competitive prices, and suppliers' credits for input supply.

XV. Moldcoop, the consumer cooperative, presents a special set of problems. Theorganization cannot be privatized, since it is formally owned by shareholders, and hence already private.It is overextended, however, and financially weak, and its internal rules of operation are not consistentwith Western style cooperatives. Moldcoop should be assisted in designing a program of financialrestructuring acceptable to its creditors and in bringing its operating rules into conformity with those ofWestern style cooperatives. It should also be subject to all anti-monopoly laws.

XVI. Land Reform and Restructuring of Farms. The program of land reform, suspended inlate 1994, should be resumed. The distribution of entitlement certificates to land shares under the secondstage of land reform should continue to completion. Those who wish to exit from large farms with theirland and asset shares should be provided additional options besides individual exit as a private farmer.Some shareholders may wish to exit in small groups with contiguous land shares. Others may wish toswap land or asset shares and exit with a business unit other than an individual farm. No minimum farmsize should be established. Mechanisms through which people can voluntarily pool their shares if theyso desire should be devised, and the public should be informed of these alternative options, in additionto the more common options to remain within the large unit or exit individually. Procedures forregistration of private farmers should be simplified and registration accelerated. Private producers whochoose to work in associations of private farmers or to form Western style service cooperatives shouldhave their right to do so legally protected.

XVII. Land markets are essential for agricultural finance in a market economy, and forcontinued changes in farm structure to retain competitiveness over time. The prohibition on purchaseand sale of land before 2001 should be repealed so that land markets can function. Land should bevalued by markets, and not by administrative decrees. No minimum value of land should be setadministratively, nor should maximum or minimum rental rates be set. Administrative valuation may leadto excessively high values relative to those that the market would establish, and high costs of land willreduce competitiveness of Moldovan agricultural products. Distribution of land titles should continue andland ownership should be registered, in order to provide a strong legal basis for transactions.

Regulation and the Role of the Ministry

XVIII. Product Oualitv Standards. The Government should revise standards for food safety andproduct quality, and provide internationally accepted quality testing and certification. If the Government

Summary vii

provides certification directly, this should be done on a basis of cost recovery. Although certificationaccording to standards of the European Union is at present not mandatory in all markets, it is nonethelessdesirable for competition in segmented markets, as well as for sales to the European Union. Moldovanconsumers and those elsewhere in the CIS may not require that products meet the particular standardsof the EU, but they will nonetheless increasingly seek assurance of acceptable quality and informationabout the contents of processed products.

XIX. Re-organization of the Ministry of Agriculture and Food. The Ministry of Agricultureand Food should be organized to fulfill key functions. The structure of the Ministry should reflect itsfunctions, important among which should be design and implementation of reforms, monitoringperformance of the sector, providing economic information on domestic and foreign markets, andenforcing standards for food safety and the safety of the agricultural work force. The Ministry shouldprovide advisory services for farms to assist in adjusting to the new environment. These services shouldbe offered on a basis of partial cost recovery, and private consulting firms can be expected over time tocomplement the governmental advisory services, and substitute for some.

Investment and Finance

XX. Investment, both public and private, is vital to the strategy of recovery. Substantialprogress on privatization and land reform, development of functioning land markets, continuedstrengthening of the banking system, and continued control of inflation are critical first steps towardincreasing private investment in primary production and processing. Private savings of rural householdsin Moldova are likely to be a source of investment, since rural savings in most low and middle incomecountries have been a substantial source of agricultural investment. These savings provide credit toagricultural borrowers through small rural financial intermediaries, such as credit unions or savingscooperatives. Programs of directed lending or subsidized credit offered through the large banks reducethe opportunity for small rural financial intermediaries to develop. The policy in Moldova not to offersubsidized credit for targeted borrowers should therefore be retained. Public investments should beconcentrated on public functions in the sector, such as provision of market information, maintenance ofcore activities in agricultural research, and education and training.

XXI. The severe decline in output in 1994 has made it difficult to maintain momentum on anagenda of reform, since immediate problems of disaster relief have necessarily absorbed attention. Thedecline in 1994, however, makes recovery even more imperative, and sustainable recovery necessitatescontinued commitment to reform and to exports. Moldovan agriculture has begun to change. Moldovanwines have been well received in small quantities in European markets, offering encouragement thatcontinued efforts to export into this very competitive market can succeed. The significant successes,howe%er, must be viewed against the overall contraction of the sector by approximately one half in thefive years since 1990. The difficulties of 1994 are likely to lead to renewed calls for protection, support,and intervention, on the grounds that the partial reforms implemented over the past four years have notled to recovery. The experience of developed market economies has shown that agricultural support isvery expensive and is not consistent export competitiveness without subsidies. Moldova's greatest successin the overall reform program to date has been the high degree of macroeconomic stabilization achieved,as evidenced by the reduction in inflation and the stable leu. Expensive agricultural programs wouldjeopardize these early gains. It is therefore in the interests of the agricultural sector and the economy asa whole to continue to pursue a program of market reforms oriented toward export expansion, with fullerinstead of partial implementation of the reforms.

viii Executive

MAIN REPORT

CHAPTER 1

INTRODUCTION: BACKGROUND TO THE SECTOR

A. GENERAL BACKGROUND

1.1 Moldova is a small, densely settled country that is primarily agricultural. Agricultureproduces about 40% of Moldova's net material product and employs one third of the labor force. Inaddition, the processing of agricultural products accounts for 40% of industrial output and 20% ofindustrial employment. Moldova's land area is the second smallest (after Armenia) of the fifteen formerrepublics of the Soviet Union (FSU). With a population of 4.4 million, Moldova has 130 people persquare kilometer. This is the highest population density of the former republics and it is about the sameas that found in Denmark. Notwithstanding the dense settlement, 52.5% of the population is rural,according to data from 1990. The average for all FSU republics is only 34% rural population.

1.2 Moldova's small size and agricultural specialization imply an important role foragricultural exports. Agricultural and food products accounted for over half of Moldova's exports in1987-90. Agriculture has traditionally been a large net exporter. In 1990, prior to the reforms,agriculture and the food industry had a net positive trade balance of about 2500 million rubles, when theaggregate national trade balance was negative by 285 million rubles. Yet Moldova has essentially noproduction capacity for inorganic fertilizers, pesticides, mineral or vitamin feed additives, veterinarymedicines, or petroleum fuels. It must rely on imports of these inputs. By necessity, then, the economymust be relatively open. Because of the importance of trade in Moldova's agriculture, the recent rise inprices of imported inputs relativeto output prices has required alarge adjustment in this sector.

1.3 S i n c eindependence in August 1991, Gross Va I ue of Agr I cu I tura I Output

1683 Cwotnstt 68eTarence Prlc4

Moldova has experienced a 1 n c

series of shocks: a large, 2

unfavorable adjustment in itsterms of trade; civil unrest;severe droughts in 1992 and1994; and economic disruptionassociated with the break-up ofthe USSR. The effects upon theagricultural sector have been 40

serious. The gross value of 30

agricultural production (in 2

c o n s t a n t p r i c e s ) fell l_approximately 33 % between1989 and 1993 (Figure 1.1). I 1 11 9

From 1990-1993, MoldovanGDP in aggregate fell by morethan 50%.

Figure 1.1: Moldova: Gross Value of Agricultural Output

2 Chapter ]

1.4 Food supplies toconsumers have been reduced withlower agricultural output, but sufficient Table 1.1: Changes in Consumption of Basic Food Productsfood remains readily available in stores (annual per capita consumption in kilograms)and farm markets. Since 1990, theMoldovan diet has changed in response 1990 1992 1993to falling incomes and rising relative (estimated)

prices, but it remains adequate Meat and meat 58 46 34nutritionally, on average (Table 1.1). products

Most families have strong rural links Milk and milk 303 198 172and rely heavily on their own products

production to reduce food costs. Eggs (pieces) 203 166 110According to data provided officially tothe statistical committee of the Fish and fish 12 2.3 1.3

Commonwealth of Independent States products

(CIS), the share of the family budget Sugar 49 31 30

spent on food in Moldova rose from Vegetable oil 14 9 7.8

37% of all expenditures in 1991 to 46%in 1993. This is about the same Potatoes 69 67 80

proportion of expenditures as in Russia, Vegetables 112 95 91

and less than in other countries of theCIS. Consumption of meat in Moldova Fruits and berries 79 63 80fell in the same period from 55 kg percapita to 35 kg, which is lower than Bread and bread 171 170 173

meat consumption in Ukraine, Russia, productsand Belarus. Meat consumption tends Source: Ekonomika SNG v. 1993, Kratkii Spravochnik,to be highly correlated with income, Moscow, 1994, p. 30

although dietary traditions and local tastes also influence consumption patterns. Meat consumption inMoldova, at 35 kilograms per capita, is within the range observed in middle income countries.

1.5 The economic and natural shocks to Moldova's agriculture since 1990 have been extreme,and the conditions that have prevailed during the transition are not those that can be expected tocharacterize the sectoral environment in the longer run. Regular trading relations with neighbors and newpartners are being established, the domestic economy will be more stable than in 1992 and 1993, anddrought is not likely to recur every second year. The events of the last four years, however, illustratein severe form the new economic realities for Moldovan agriculture, and these realities will shape thetransition. Among the realities are the greater impact of drought when it does occur and increasedcompetition for Moldova's traditional markets.

1.6 Much of Moldova is in a zone of low precipitation and high risk of drought. Althoughthe severity and frequency of the droughts of 1992 and 1994 were unusual, longer term precipitationpatterns show risk of drought. In the Soviet period, particularly during the last three decades of theperiod, the variability of Moldovan output was absorbed into the larger Soviet market, and the impactof variability in Moldova was reduced. When local feed was scarce, additional grain was allocated toMoldova at the low domestic price of Soviet internal trade. When local feed was abundant, feed importswere reduced, although Moldova was a consistent net importer of grain for its large livestock sector. Atpresent and in the future, Moldovan producers and consumers will bear the cost of drought. Variability

Introduction: Background to the Sector 3

of output will make the sector somewhat less competitive than it would be if production were stable,although agricultural exports are likely to remain important. Trade policy, marketing institutions, newinvestment, and irrigation policy can reduce the costs of drought, but public policy in a small openeconomy cannot eliminate the full impact of drought at acceptable cost.

1.7 Free trade is an important instrument for management of drought. Under a free tradepolicy, agricultural raw materials are imported in years of poor domestic production, and raw andprocessed products are freely exported in good years. The variability of domestic prices will be lesswhen trade is free than if trade barriers are in place. New institutions in marketing, such as futurescontracts, assist in management of variability of output. When futures contracting is developed,variability of prices is spread over time as markets absorb information on the size of the domestic cropand movements in world prices. Through futures contracts producers can shift price risks to othereconomic agents more willing to absorb them. Management of price risk will require that Moldovantrading firms participate in regional commodity exchanges, and make use of futures contracting as theseinstitutions develop. Irrigation reduces the variability in output. When the costs of variability are bornedomestically, the importance of using existing irrigation capacity efficiently increases. Pricing for waterand irrigation services is important, and the economic return to maintenance of existing irrigation is highwhere drought is frequent. Investment in irrigation, like all investment, must be subject to rigorous testsfor economic and financial rates of return, and users of irrigation services should expect to pay most orall costs of construction and operation.

1.8 In addition to requiring new approaches to management of drought, the break up of theSoviet Union removed Moldova's privileged access to the highly protected internal Soviet market. In thepast Moldova was one of the southern-most points in a large and protected northern market. Moldovanproducers now face greater competition from other exporters at the same latitude, many of whom havesuperior infrastructure for processing and greater capacity to finance and subsidize exports. Markets inthe FSU remain very important for Moldovan exports, comprising approximately 80% of total Moldovanexports in January - May 1994.

1.9 Increased competition, reduced profitability for traditional products, and greater variabilityof earnings are enduring features of the new economic environment for Moldovan agriculture. Althoughthese features create obvious difficulties, the sector has strengths to adapt to the new realities. Theseinclude the fertile soil, a well educated agricultural labor force, and high recognition of products withinmarkets of the former Soviet Union. In addition, Moldovan exporters have begun to market agriculturalproducts in new markets in Western Europe. Moldovan exports to Germany and Italy, for example,totalled over $5 million in the first quarter of 1994 (about 20% of non-FSU trade in this period), andmuch of this was in agricultural products.

B. NATURAL RESOURCE BASE

1.10 The dominance of agriculture in Moldova's economy derives from its resource base,moderate climate and excellent soils. Chernozems, among the most fertile soils in the world, characterize80% of the land area. Important products include fruits and berries for processing, tobacco, wine grapes,winter wheat, maize, and grain-intensive livestock (hogs and poultry). The product mix reflectsMoldova's labor-intensive resource base as well as its fertile soils.

4 Chapter I

Topography and Climate

1 .11 Natural conditions in Moldova are typified by a substantial variation in topography, soils,climate, flora, and water resources. The countryside is predominantly rolling hills. The mean altitudeof the country is 147 m and the highest point is 430 m. The topographic relief has an important influenceon the microclimate and determines to a significant degree the specialization of agriculture.

1.12 Total land area of Moldova comprises 3.4 million hectares. In 1991, about 2.3 millionhectares was agricultural land, of which 1.5 million hectares was arable land, and about 370 thousandhectares were forested. The republic is not rich in natural surface water sources which occupy only about15,000 ha and store a volume of some 210 million m3 . Manmade lakes and canals cover about 25,000ha and hold some 800 million m3 .

1.13 The abundance of sunshine and warm temperatures are the most positive factors ofMoldova's climate. The warm period extends from about 160 to 190 days. Very variable weather,particularly in the spring, and frequent dry spells during the growing season are the most negativeelements of the weather pattern. The average annual rainfall is around 380-550 mm. It decreases acrossthe country in the general direction from northwest to southeast. Rainfall distribution is skewed, with 75-80% of the precipitation occurring during the summer months. Lengthy breaks in rainfall coupled withhigh air temperatures and hot winds (sukhovei) in the second half of summer can cause a rapid decreasein air humidity, often below 30%. This can result in serious drought conditions in the soil. The averagenumber of days with sukhovei in the period March-October generally increases from north to south, butin the extreme south it decreases again with proximity of the Black Sea. The mean number of days withsukhovei in the northern-most rayon (district) of Britchany is 12.3, in Chisinau it is 28.7, while in thesouthern-most rayon of Vulcanesti it is 16.3.

.14 The republic's territory is subdivided into three agroclimatic zones, based on temperatureand precipitation -- the Northern, Central and Southern Zones. These zones are sometimes also calledthe Northern forest-steppe, the Central forest zone, and the Southern steppe. Additionally, the Northernand Central Zones each have one subzone where topography, temperature, humidity and precipitationdiffer from the surrounding region. The characteristics of the three main agroclimatic zones are givenin the Table 1.2 below.

Table 1.2: Agroclimatic Zones

Agroclimatic Length of Frost- Temperature Sum Mean Precipitation (mm) duringZones free Period during Vegetation

Period (°C) Year Vegetative Period

North 165-180 2750-3000 450-550 285-300

Center 175-190 3000-3200 400-525 265-315

South 175-195 3200-3400 380-500 235-275

Introduction. Background to the Sector 5

SoilsMOLDOVA

1.15 Moldova's main Arable Land on Slopes (%)natural wealth is its fertile soil. Thereare fifteen major soil types on itsterritory, belonging to three largegeneric groups: (a) chernozems (black 1///////soils) of various subtypes, and closelyrelated meadow-chernozems andhumus-carbonate soils, occupying i-//degrees/-

80% of the territory (2.5 mil ha); (b) 6-15 degrees

brown and gray forest soilsrepresented on 11.5% of the surface; - ere

and (c) alluvial meadow soils, 5- degrees

sometimes saline and swampy,occupying 8.5% of the land. Thepredominant chernozems are amongthe most fertile soils in the world. See: daoRoschlIattut

They are usually found below 260 mof altitude. Above this level occurforest soils, representing about 0.5million ha.

1.16 Due to the rolling nature of the countryside, about 80% of the arable land is on slopes.Only 20% of arable land is on flat ground, 61% is on slopes from 1-5°, 15% is on inclines of 5-8°, andover 4% is on gradients from 8-15° and definitely should not be under annual cultivation (Figure 1.2).While wind erosion is not considered a problem, the extent and potential for water erosion is seriousbecause of the hilly terrain andoccasional torrential rains during thesummer months. MOLDOVA

Progression of Soil Erosion1.17 The Institute of SoilScience estimates that in 1992 eroded 00O ha

land comprised about 740,000 ha, oralmost half of all arable land, of Boo .which some 410,000 ha are 7 0

considered eroded to a medium to 700 . - . ....

high degree. Figure 1.3 gives the 5oo .estimated progression of erosion overthe past 20 years. 5 the past 20 years. ~ ~~~ ~~~~~~~~~~~~~500 _.........................................................................................................................

1.18 Research further 400 l l l

indicates that soil erosion increased 1970 197S 1980 1985 1990 1993

with the introduction of agriculture -Eroded Lnd

based on weed control with herbicidesin the last decades of the Soviet s l.Ataitet f B!oil St..o.

period. Experimental results have Figure 1.3: Soil Erosion

6 Chapter I

shown that on slopes of 3-5° a rainfall of 64 mr caused a soil run-off of 98-218 m3/ha. When mechanicalinterrow cultivation was replaced with herbicides, researchers observed that the intensity of soil erosionincreased 8-10 times in fields planted with maize and 4-5 times in vineyards. The reason advanced forthis phenomenon is increased topsoil compaction and decreased water infiltration when using herbicidetechnology.

C. THE CROP SECTOR

Land Use

1.19 At the outset of the transition, in 1989 and 1990, about 60% of the gross value ofMoldovan agricultural output originated in the crop sector, and about 40% in the livestock sector. Withthe change in relative prices within the sector (livestock prices are now lower relative to crop prices thanin 1990), and the fall in output of meat and milk, the relative weight of the crop sector has increased.Livestock production remains important, but Moldova is, now even more than in the past, a producer ofhigh value crops for export and grain for domestic markets.

1.20 Of total land area (about 3.4 million ha), approximately 76% is agricultural land. Halfof the total land area (1.7 million ha) is arable, and farmed relatively intensively (Figure 1.4). Perennialhigh value crops consisting of fruit trees, vineyards, nuts, and berries were grown on about 14% (0.4million ha) of all land. About 10% of all land is used for pastures and meadows.

Land Use Cin %)Tot.I . L_d Ar8 = _ 4 A I I ron ha

PasturQ (10 0d)

N ngarrcult ral land (24.D%)

Orchards and Vlneyards (14 D>)

Arable C52, 05

Figure 1.4: Land Use in 1993


1.21 In an average year, the country grows grain crops on almost half of its arable land.Industrial crops (oil seeds, sugar beets, and tobacco) are grown on another 15-17%. About 7% is undercultivation of potatoes and vegetables, and the remaining arable land is occupied by forage crops. Table1.3 gives a detailed breakdown of area under crops in 1992.

1.22 Crop rotations appear to be welldeveloped and based on past research and Table 1.3: Main Annual Crops in 1992scientific recommendations. They are carried outin a relatively rigid fashion. There is clearlyjustification for more flexible rotation in order to ('000 ha) %facilitate soil conservation (erosion control)measures, and to increase area and frequency of All grains 745 48more profitable crops in the rotation. The crop Winter wheat 281 18

rotations practiced in Moldova are generally much Maize 258 17longer than in western agriculture; it is not rare to Winter barley 86 6find rotations six to ten years long. Spring barley 37 2

Oats 3 <1

1.23 Although Moldova had some of Grain legumes 71 5of which:

the highest crop yields of the FSU, yields could Peas 53 4be improved with better management and Beans 18 1economically appropriate use of inputs. Figure Sunflower 131 81.5 shows average yields of major crops in Soybeans 17 1Moldova from 1985-1992. Sugarbeet 83 5

Tobacco 28 2Forage crops 546 35

1.24 A high yielding crop sector is of which:economically justifiable in Moldova because of Silage maize 203 13the high quality soil and abundance of low cost Root crops 29 2labor. In recent years, the lack of key imported Perenn./ann. grasses 314 20

inputs, their high prices relative to product prices,

shortcomings in management, and recurrentdrought have depressed yields. In the longer run, Moldova's strategy should emphasize yieldenhancement, through public investment in seed research, free trade in agricultural inputs, rapidrestructuring and privatization of input marketing, and price and trade policies that give efficient accessto domestic and foreign markets. The key constraints to higher yields at present are poor service of theparastatal input suppliers, and lack of financing for high quality inputs.

Irrigation

1.25 Because of the low level of precipitation in much of the country and its annual variability,irrigation is important in Moldova. Annual water consumption in Moldova is distributed as follows:

Agriculture: 63%(53 % of this used for irrigation)

Drinking, public utilities 15%Industry 14%Construction, transportation 8%

100%

8 Chapter I

Average Yields of Main Field CropsTone per hectare

17

1i

15

14

13

12

11

10

9 _

2

7_

I-~~ 4

Wlnter Wheat Tobacco GropQsCorn Vegetab Ie

rop

1985 - 1989 Averaoe

m 199 - 1992 AvQrdgQ

Figure 1.5: Average Yields of Main Field CropsSource: Republica Moldova, Informatie Privind Problemele si Organizarea Activitatii de Protectie a MediuluiInconjurator

1.26 Although agriculture is a major user of water, only a small area is irrigated, and waterresources for additional irrigation are not abundant. Irrigation development started in Moldova in the1930s. The oldest system in existence is on the Nistru river and serves an area of about 50,000 ha. Moresystematic and intensive development began in the early 1960s. During the 20-year period 1965-85, morethan 200,000 ha were developed. Total irrigated area to date is 308,200 ha, or 12% of agricultural land.Figure 1.6 presents the evolution of irrigation and drainage development since 1960. The major irrigatedareas are divided into 48 major sub-regions, which total some 220,000 ha and range in size from about1,300 ha to 20,000 ha.

1.27 The irrigation strategy was based on construction of retention dams along the Nistru andPrut rivers. A secondary objective of the dam strategy was to maintain a year-round flow of smallerstreams which are not naturally perennial. The largest dam, Novonistrovskaya, is on the Ukrainian borderin the rayon Oknitsa; it holds 4.5 billion m3 and supplies water for 170,000 ha. On the upper Prut atKosteshte-Stenka there is another major dam holding 1.1 billion m3 and supplying 70,000 ha. In the farsouth, plans to utilize water from the Danube have been drawn up but not implemented.

1.28 About 50,000 ha have been drained from flood areas in the vicinity of major rivers,mainly along the southern parts of Nistru and Prut. The total length of areas drained along the rivers is


about 1,500 km. The upland drainageproblem is not considered to be as MOLDOVAcritical, and drainage of upland areas Irrigation and Drainage Development

has been limited to a number of small Thousend he

areas totaling 10,000 ha.

1.29 Irrigation in Moldova Z 50 . .is of a 'stabilization" or 200 /complementary nature. Precipitationvaries between 550 mm in the north J59.. .and 400 mm in the south. About half 190 . ..the time, moisture is less than 50

adequate in the north. In the south,more serious dry spells occur during 19o 1985 1970 1975 19BO 198 198a 1987 1988 1989 1990 t99l 1992

six to seven years out of ten. About98% of water is delivered to crops -Irigtion : Dreinage

through various sprinkler systems S. AKVA -d Mix.of A4-.

supplied through buried pipes. Dripirrigation, which would be ideal for Figure 1.6: Irrigation and Drainage -1960-1992 (OOOs ha)

many of the high-value crops inMoldova, has been tried but was not successful. The main reason for the failure was the high organicmaterial content of the water, leading to frequent blockage of nozzles. More efficient water filteringsystems would have to be introduced in order to permit drip irrigation.

1.30 Although yields under irrigation should be high and stable, Moldovan irrigated crops stillshow quite variable yields and do not exhibit the expected average yield differential over unirrigatedcrops. Improved varieties and better water management could increase effectiveness of land underirrigation.

1.31 The parastatal AKVA Moldova is in charge of water management in agriculture. AKVAemploys about 18,000 people. It is comprised of 18 inter-rayon operation and repair units, 25 irrigationconstruction units, a factory in Bendery producing ferro-concrete pipes, an enterprise for polyethylenepipes, a research institute for water management and amelioration, a engineering projection institute"Akvaprojekt", an information gathering center and various other support units.

1.32 Farms do not at present pay for water. AKVA and its organizations are financed throughthe government's budget, and funds are inadequate for maintenance and operation. Major overhauls ofpumping stations, canals, buried pipes, roads and other infrastructure are overdue, and the decliningphysical infrastructure is reducing area irrigated. Introduction of user fees to pay for water andmaintenance of the irrigation system will be necessary to secure an adequate financial base for continuedoperation of the irrigation system.

D. LIVESTOCK

1.33 The prominence of livestock products in Moldova's agriculture at the beginning of thetransition (about 40% of the gross value of output) reflected a significant expansion of the Moldovanlivestock sector between 1965 and 1990. In 1971, Moldova had 1% of the cattle and 2% of the pigs in

10 Chapter 1

the USSR. By 1990, when both cattle and pig numbers in the USSR had increased substantially,Moldova's share of cattle remained at 1 %, but the share of pigs had increased to 3 % of the Soviet total.Between 1966 and 1990 the number of cattle in Moldova increased 22 % and the number of pigs by 67%.The number of poultry more than doubled.

1.34 Meat production and exports expanded substantially in the 1980s, and by 1991 about 20%of domestic production was exported. Since 1991, the loss of export markets in the FSU, high feedprices, and reduced domestic demand have squeezed the livestock sector severely. Meat production fell40% between 1991 and 1993. Milk production fell by 30% between 1991 and 1993, and egg productionby 46%. A continued decline is expected in 1994 as the drought worsens feed shortages.

1.35 Although production of meat, milk, and eggs has fallen substantially since 1990, reductionin animal numbers has been proportionately less. For example, reduction in animal numbers on January1, 1994 relative to January 1, 1991 was 17% for cattle and 40% for hogs, even though the decline inmeat production exceeded these rates. Animal inventories in collective and state farms, joint stockcompanies, and state complexes are falling faster than the total, and inventories in the household andprivate sectors are increasing. Numbers of cows, sheep, and goats in the household and private sectorsare rising the most, a phenomenon often observed as incomes fall and families turn to production of dairyproducts for home consumption.

1.36 Despite the fall in animal numbers, productivity per animal has not risen, but on thecontrary, it has declined. Milk yield per cow exceeded 3000 kg annually in Moldova prior to thetransition and declined by 30% since then. This decline is remarkable because the culling of cows shouldhave removed the less productive ones and thus increased average yields. The fall in milk yields willaccelerate with drought-induced feed shortages in 1994 and is symptomatic of continued serious problemsin the livestock sector.

1.37 Moldova's livestock production takes place in three organizational settings: (a) the largeproduction complexes that are similar to feed lots; (b) the integrated crop and livestock systems oncollective and state farms; and (c) the private household sector. The livestock complexes presentparticularly difficult problems. In 1990, there were 42 cattle complexes, 40 hog complexes, and 38poultry complexes in Moldova. These are specialized, capital intensive, enterprises dependent onpurchased feed. The average cattle complex in 190 had about 5500 head. Hog complexes had onaverage 30,000 heads, and poultry complexes about 350,000 birds. By early 1993, the complexes werereported to be working at less than 20% of capacity, but few had been closed. Efficiency has fallensignificantly. The amount of feed required to produce a kilo of meat has increased by 40%. At the sametime, the cost of concentrate feed itself has increased.

1.38 In January 1993, complexes held 17% of cattle outside the household and private sector,70% of the hogs outside the household and private sectors, and 70% of poultry. The role of thecomplexes in the livestock economy decreased in the first half of 1994 through herd reduction and closureof some complexes. The livestock complexes have not to date been included in the privatization program,and remain either state enterprises, or inter farm enterprises managed as state enterprises.


E. HORTICULTURE AND VITICULTURE

1.39 Moldova's processed fruits, vegetables, and wines are the country's major exports, andmodernization of these sectors will be an important part of agricultural recovery. Historically mostexports have been to Russia, Ukraine, and other countries of the former Soviet Union. Qualitycharacteristics and packaging have developed with these traditional markets in mind. Products at the highend of the range of quality, such as pure apple juice concentrate and some wines, were sold in the pastin European markets. Placing larger volumes of processed products in Western markets will requireimprovement in product quality and packaging. With the increase in transportation costs to traditionalmarkets within the former Soviet Union, improved quality will be desirable for these markets, as well,since it is often uneconomical to transport low quality products over long distances. Moreover, increasedcompetition in Russia and the growth of a high income market there suggests that quality improvementswill be needed to retain and develop even traditional markets.

1.40 Potential areas of improvement encompass the full range of activities in horticulture andviticulture, from choice of variety, management of the crop, handling and sorting of raw products, andprocessing and packaging of finished products.

1.41 Land in orchards, vineyards, and vegetable crops occupies approximately 21% ofagricultural land. Tomatoes and green peas occupy the largest area among the vegetable crops, andapples and plums are among the most important fruit products. Performance of horticultural crops inrecent years has been variable. Vegetable production in 1993 was 39% of production in 1986, and thedecline is attributable to reduced area and lower yields. Yields have fluctuated widely along a downwardtrend. Reasons for the decline in yields include reduction in input use, particularly fertilizer, plantprotection agents, and fuel. Not all vegetable crops are irrigated, and the crop is thus vulnerable todrought. Available irrigation may not be used effectively, however, since irrigated yields have notexceeded unirrigated by the expected margin. A number of organizational and managerial problems alsoappear to contribute to low yields in horticulture.

1.42 Moldova is well known for production of wine and champagne. The industry can beimproved through increasing grape yields (by improving varieties, better access to high quality inputs,and changes in management), improved processing (consistently good filtration, reduction in the ageingperiod), and adoption of standardized packaging (bottles, corks, and labels).

12 Chapter 1

CHAPTER 2

THE CURRENT STATUS OF REFORM

2.1 Moldova's fertile land and abundant labor can support an agricultural sector specializingin high yielding labor intensive crops for export markets. In order for the sector to continue to developin this direction, reforms must be pursued to create an open and competitive sector based on privateownership. Agricultural reforms are part of a larger reform program encompassing macroeconomicstabilization, privatization, and reforms in pricing, trade, and the financial sector.

Macroeconomnic Program

2.2 Since late 1993, Moldova has been following a tight monetary policy supported by anIMF Stand-by arrangement. The program includes market allocation of most credit, substantial declinesin the rate of expansion in net domestic assets, and an estimated reduction in the overall fiscal deficitfrom 23% of GDP in 1992 to 7.5% of GDP in 1994. Strict ceilings have been placed on credit toGovernment from the National Bank of Moldova and the banking system. The program includes anincrease in government expenditure on the social sectors, as well as large savings in subsidies, togetherwith increases in tax revenue.

2.3 The macroeconomic program resulted in a reduction in inflation and in nominal interestrates in the first half of 1994. In response to the rapid fall in inflation from a monthly average of 20.5 %in 1993 to 3.0% in the sec.ond quarter of 1994, nominal average interest rates set at refinancing auctionsdecreased from a peak of 377% in March of 1994 to 79% in July, 1994. Real interest rates are high,and short term lending predominates.

2.4 Transfers from the budget to enterprises were cut to about 1 % of public expenditure in1993, and the consumer subsidies on bread and milk were eliminated in May, 1994. Authorities haveintroduced new taxes, removed some exemptions, and extended the scope of excise taxes. Payroll taxesin agriculture are now the same as in other sectors. Tax exemptions remain a source of distortions andrevenue foregone, however.

2.5 Success in maintaining fiscal discipline has been impeded by mounting arrears throughoutthe economy, between and among enterprises, and to, and by, the governmental budget. Tax arrears hadreached 150 million lei by March 1994. Overdue loans to the enterprises with government guaranteeshave been transferred to the budget, and arrears among enterprises and to employees are large.Enterprises are shifting to barter deals to avoid taxes and debt servicing. Thus although monetary policyhas succeeded in sharply reducing inflation, the combination of monetary policy, fiscal policy andadministration, and enterprise behavior is not yet balanced adequately to provide strong support forsustained stabilization of the real economy.

Land Reform and Farm Restructuring

2.6 Moldovan agriculture traditionally consisted of various forms of collective and statefarms, supplemented by production on household plots of farm employees. The collective enterprise

14 Chapter 2

remains the predominant type of farm. The policy on farm restructuring permits but does not requirestate and collective farms to reorganize and register as new types of firms. Of about 2800 state andcollective farms and interfarm enterprises in 1991, by January, 1994, 160 new types of farms had beenformed. Among these were 39 agricultural joint stock companies, 53 limited liability partnerships, 62agricultural cooperatives, and 6 associations of private farmers. By July 1994, the number of joint stockcompanies had increased to 63.

2.7 Land reform is linked with farm restructuring, and is proceeding in two stages. The firststage is substantially complete, although title documents have not yet been distributed to all new owners.In this stage, the household plots of members and employees of state and collective farms and gardenplots of rural residents and some urban families were augmented up to a maximum of 0.75 hectares perfamily. Average plot size after augmentation is 0.30 hectares per family. Tenurial status of this landwas changed from use right to private ownership, although land cannot be bought and sold until 2001under current law. The first stage of land reform encompassed approximately 325,000 hectares, or 10%of the total land area and 13% of agricultural land of the country. Most of this land was in householdplots prior to the land reform, but its tenure status was changed.

2.8 Of the remaining 3.0 million hectares of Moldovan territory, 1.9 million have beendesignated as subject to privatization, and 1. 1 million designated for the state land fund. The state fundincludes land of research and educational institutions, nature preserves, roads and bodies of water, andmunicipalities. Agricultural land subject to privatization is to be transferred in the second stage of landreform, which began slowly in late 1992, but accelerated in the summer of 1993, and continues atpresent. Agricultural land area subject to privatization in each local rural jurisdiction (primeria) isinventoried, and a list of eligible participants is drawn up. Each participant is entitled to a parcel ofaverage size and quality for that primeria, and receives the entitlement as a paper certificate. As ofFebruary, 1994, 312,000 people, or 35% of eligible recipients, had received land certificates.

2.9 Those who want to exchange certificates for actual identified pieces of land must registerintent to leave the collective or joint-stock farm, after which boundaries of a parcel will be determined.Intent to exit can be filed between November and April of any year, after fall crops are harvested andbefore spring planting. In Moldova, where land is extremely scarce, exit with land is the mainmechanism for creation of private farms. This differs from Russia and Ukraine, for example, wherecollective and state farms were required at an early stage to contribute tracts of land to a redistributionfund, which served as the source of land for almost all private farmers currently operating. There is noredistribution fund in Moldova, and holdings of private farms must be carved directly out of the collectiveand state farms, and joint-stock companies, within the primeria.

2.10 Data on numbers of private farms vary considerably according to source of reporting, anddefinition of private farm. The CIS statistical yearbook, compiled from officially reported statistics, lists3100 registered private farms in January 1994. In February 1994, an official of the Ministry ofAgriculture drawing on official statistics reported 7262 private farms formally constituted and registered,with average holdings of 1.2 hectares each. An additional 33,500 private farms were reported to befunctioning, but had not yet been formally registered, and hence were not yet legal entities. The landin registered private farms and in process of registration therefore constituted in early 1994 approximately50,000 hectares, or 2% of Moldovan agricultural land. By early 1994, approximately 15% of Moldovanagricultural land was privately managed, either on household plots or on private farms. A smallerproportion of land was formally titled in private ownership.

The Current Status of Reform 15

Privatization of Marketing and Processing

2.11 In 1993, with Parliamentary approval, the government started a mass privatizationprogram under which the population uses vouchers to buy public assets at auctions. Implementation ofthe program has been delayed for both political and technical reasons. The privatization of medium tolarge enterprises started in June 1994 with a pilot auction, followed by an auction of ten enterprises onJuly 27, 1994. The 1993/94 program includes 1,000 medium and large enterprises, some of which areengaged in food processing.

2.12 Although food processors are included in the voucher privatization program, specialprocedures apply for many of these firms. During preparation for privatization, 50% of the shares areset aside to be distributed to farms that provided raw materials in the past, in proportion to the volumeof supply. An additional 20% of shares are distributed to employees of the processing firms, and theremaining 30% of shares are offered at auction for vouchers. The intent of this provision is to encourageagricultural producers to become majority owners of food processing firms.

2.13 The privatization of food processing enterprises has several features that may slow theemergence of a more efficient and internationally competitive processing industry. The decision to grant50% of shares to suppliers of raw materials in proportion to past supply complicates the preparation forprivatization. The records of past supply must be examined, and shares calculated. Some of thesuppliers (state and collective farms) are themselves in the process of reorganization and privatization,and may have split into several units. Moreover, the initial privatization of these firms provides noopportunity for participation of foreign firms, which may wish to purchase large blocs of shares prior toundertaking substantial investment in modernization. The experience in food processing in Eastern andCentral Europe has shown that foreign investors generally seek majority ownership, and are unwillingto undertake substantial investment in its absence. A foreign firm seeking ownership of shares inMoldovan food processing enterprises would have to wait until completion of the initial round ofprivatization, after which the distributed shares become tradable to outsiders.

2.14 A number of firms engaged in food processing and marketing of inputs and output werenot included in the 1000 firms intended for privatization under the 1993/94 program. Among the firmsscheduled for the 1995/96 round of privatization are the large parastatal firms Fertilitatea, Arca Moldova,and Cereale that dominate marketing of agricultural chemicals, machinery, and grain, respectively. Theconsumer cooperative Moldcoop is not owned by the state, but has operated much like a state enterprisewith the instruction to manage rural retail trade. The parastatals do not hold juridical monopolies, butfew competing firms have entered the spheres of activity in which they dominate. These firms haveexperienced severe problems servicing debt and retaining liquidity. Their deteriorating performanceimpedes provision of essential services for agricultural producers and rural residents. Early restructuringand privatization of these firms, as scheduled in the 1995/96 privatization program, will make asubstantial contribution to agricultural recovery.

Price Policy

2.15 Under the Soviet price policy prior to the transition, the state set producer prices withquotas (state orders) for planned delivery, and offered price bonuses for deliveries above quota. Retailprices were set administratively, as were all prices at the level of processing and wholesaling. Thissystem was discontinued in January 1992. After this date the state no longer set all prices directly.

16 Chapter 2

Direct price controls were retained for bread and milk and several other foods until May 1994. Stateorders were retained for a number of products through 1993, but the volume of quotas was reduced.Procurement prices were mandatory for quantities purchased under state orders, and becamerecommended or "orienting" prices for deliveries above or outside state orders. Processors were subjectto controlled profit margins, and these controlled margins influenced the prices at which processedproducts were sold into wholesale and retail trade. Traders were subject to controlled marketing marginsthat varied by commodity, and set upper bounds on the prices an individual retailer could chargeconsumers. Thus although the state ceased to directly set food prices in January, 1992, a high degreeof indirect regulation was maintained through procurement prices, controlled profit margins, andcontrolled marketing margins. The state intervened directly in pricing of bread and milk by setting retailprices and providing subsidies to processors (flour) and producers (milk) until May 1994.

2.16 The system of regulated food pricing has undergone a number of changes since January1992. In July 1993, the government raised the procurement price for grain, replacing the former policyof indirect taxation of grain producers. The procurement price for wheat was set at 120,000 rubles($120) per ton. Although the procurement price was raised, it remained a controlled price. Whether thisprice actually was the border price for Moldovan wheat is unknown, since grain is not exported due toa de facto ban implemented through mandatory licensing of grain exports. Since Moldovan grain is notexported commercially, there are no current observations on actual prices received for grain of variousqualities in international trade. It is likely that $120 per ton was somewhat higher than the border pricewould have been for Moldovan wheat in 1993. The 1994 procurement prices are set at 400 lei/ton ($100)for wheat, 310 lei/ton ($77.50) for barley, 500 lei per ton ($125) for maize, and 700 lei/ton ($175) forsunflower. On world markets maize prices are lower than wheat by about 15%. Moldovan domesticprices in 1994 were therefore distorted when compared to relative prices on world markets. Thisdistortion provides inappropriate signals to economic agents.

2.17 Until early 1994 the controlled marketing margins imposed a substantial indirect tax ontraders, reducing liquidity and profitability. The marketing margins were set for most products atbetween 10% and 15%, and were applied to the nominal price at which the trader purchased the good.With inflation averaging 21% per month in 1993, the controlled marketing margins meant that mostgoods entering trade and held in inventory for half a month were resold at a loss. The distortion causedby the controlled marketing margins was reduced in late 1993 by increasing the allowable margin to 30%for most products and by the reduction in inflation to approximately 3% per month in mid 1994.Remaining margin controls are scheduled for removal in two steps, one in November 1994, and the otherin early 1995. In 1994 state orders were discontinued and a new mechanism of state procurement,purchase orders for state needs, was introduced. Purchase orders for state needs covered productsexchanged under bilateral trading agreements (see following section on trade policy).

2.18 In May 1994, price ceilings and subsidies for bread and milk were discontinued, and poorconsumers were offered cash payments to assist in purchase of bread and milk at the higher retail prices.The retail price of flour in Chisinau in September 1994 was reported to be 1.0 lei per kilo ($240/ton).If, as announced, the procurement price wheat is 400 lei (about $100, or somewhat more for millingquality), the relatively high flour price suggests that substantial gains may be achievable through increasedefficiency of the milling industry. The restructuring and privatization of Cereale, currently in the earlystages are important first steps in this regard.

2.19 Among prices reported for the capital cities of member countries of the CIS in September1994, flour was more expensive than in Chisinau in all cities except Dushanbe, but bread is more

The Current Status of Reform 17

expensive only in Moscow. Other cities retained price subsidies for bread, although flour prices appearhigh throughout the CIS. Moldova is thus among the early adopters of liberalized bread prices.

2.20 Direct administration and indirect regulation of agricultural prices in Moldova have beensubstantial in the past three years, although the extent of regulatory control declined in 1994. The roleof markets and market transactions in agriculture is still limited by several factors. Increased arrears inpayment between enterprises and uncertainty as to which debts will actually be paid reduce the relevanceof prices in economic transactions. Price competition is accordingly less important than in economiesin which terms of contracts are fully honored. Moldovan markets, like those throughout the CIS, are notyet fully linked with neighboring countries and with world trade, and the small domestic economy cannotprovide efficient price determination for tradable goods. The institutions that will eventually linkMoldovan producers with domestic and foreign markets, such as commodity exchanges and brokers, arenot yet developed. These institutions are needed in order to increase the commercial character ofMoldovan agriculture. Due to illiquidity and interruptions in trade links, the importance of transactionsin kind in agriculture has increased as producers seek to bypass financing constraints and to avoid taxes.Products that in the past were sold to commercial processors are now in part processed on commissionin kind and returned to the farms, where a portion is distributed to the work force in lieu of wages andbartered for inputs. As the role of monetary transactions increases in the future, the importance of priceswill similarly increase. Simultaneous progress on remonetization, increased financial discipline at theenterprise level, and growth of market institutions will be needed for prices to play a substantial role inthe Moldovan agricultural economy.

Trade Policy

2.21 A number of significant changes in the trade and exchange regime were implemented in1993 and the first half of 1994. Export controls have been lifted, with the notable exceptions of the defacto ban on export of grain, hides, and skins. The exchange rate is determined in a competitive market,and most current account transactions are free of restrictions. Changes in the import tariff initially tendedtoward reduction in rates and increased uniformity. In early 1994, however, protectionist pressuresurged, and tariffs on imports from outside the CIS or Romania were increased substantially, especiallyon foodstuffs. Under the tariff schedule of mid 1994 (which applies to imports from outside the CIS andRomania) most livestock products have tariffs of 30%, fruits and vegetables 50%, and tobacco andalcoholic beverages 100% or higher. Agricultural inputs, such as fertilizer, antibiotics, and feeds areexempt from tariffs.

2.22 Moldova retains bilateral trading agreements with countries of the former Soviet Union.The agreements establish lists of goods to be exchanged on a barter basis. Agricultural products dominateMoldova's exports under the agreements, and energy products dominate the imports. The Moldovangovernment procures products under purchase orders for state needs. These are similar to state orders,but the compulsion implied by state orders is softened. In 1994 purchase orders were used to procuremeat products, vegetable oil, sugar, tobacco products, wines, canned fruits and vegetables, as well asseveral nonagricultural products. In the present environment state procurement for trade under bilateralagreements often represents an opportunity to market rather than a requirement to do so, although thegovernment and its agents are not always able to pay in full and on time for products procured. Liketrade under bilateral agreements, direct international trade between enterprises is also subject to risks ofdelayed payment or nonpayment, in addition to risks of transport.

18 Chapter 2

2.23 On April 15, 1994, the Moldovan Parliament ratified the CIS Treaty and Economic UnionAgreement. Under the Agreement, trade among members of the Union is exempt from tariffs. Thetariff exemption of imports from the CIS implies a low level of aggregate protection, since imports fromthe CIS comprised 70% of all imports in January - May 1994.

Agricultural Finance

2.24 In response to the rapid fall in inflation from a monthly average of 20.5% in 1993 to3.0% in the second quarter of 1994, nominal average interest rates set at refinancing auctions havedecreased from a peak of 377% in March 1994 to 79% in July, or a monthly simple interest rate of6.6%. Interest rates were high in real terms during the first half of 1994.

2.25 In mid 1993 preferential credit with subsidized interest rates for agriculture wasdiscontinued, and agricultural borrowers thereafter borrowed at commercial interest rates. Directedcredit, some of which is for agriculture, comprised 20% of central bank refinancing in mid 1994.According to reports of the national Bank of Moldova, 96.6% of the 100 million lei of credit issued bythe NBM in the first half of 1994 was short term credit. Half (54%) of the credit of the NBM in the firsthalf of 1994 was reportedly extended to the agricultural sector through the credit auctions and directedlending, including primary production, procurement, and processing. Although this appears to be a highlevel of lending to agriculture, much of the credit is tied up in arrears among processors, and little canbe used to finance working capital for primary production. The main lender to agriculture isAgroindbank, which is also the largest bank in Moldova. An audit of Agroindbank was undertaken inlate 1994.

CHAPTER 3

A FRAMEWORK FOR SOLUTIONS

A. GENERAL FRAMEWORK

3.1 The long-term potential for improvement in Moldovan agriculture is very substantial.Because Moldova is densely settled and the land inherently fertile, a high-yielding labor intensiveagriculture is economically optimal, in contrast to other parts of the FSU, where the natural resource baseis inferior and density of settlement lower.

3.2 Improved management and exports from the crop sector, horticulture, and viticulture arelikely to be the foundation of recovery. The livestock sector will probably stabilize at a smaller size thanprior to the transition, and savings of feed and energy will be required to retain competitiveness ondomestic markets. The incentive system, must be allowed to reflect the advantages of the crop,horticulture, and viticulture sectors, pulling resources into these activities. This will happen naturally ifworld trading prices are transmitted into the domestic price structure, since opportunities to sell theseproducts on world markets are better than opportunities to sell livestock products. At present demandfor livestock products in Moldova's traditional markets is depressed, and quality problems in Moldovanprocessing technology make it difficult to sell meat on major markets outside the former Soviet Union.

3.3 In order for producers to respond to incentives and shift into more profitable activities,farms must not be allowed to accumulate indebtedness. If arrears are tolerated, price signals will losetheir operative impact.

3.4 The price of land should be allowed to reflect its scarcity and inherent fertility, as wouldhappen if land markets were allowed to function. The price of labor is likely to be relatively low ifdomestic labor markets are allowed to reflect the abundance of labor.

3.5 In the medium to long run, when quality-enhancing investments in food processing arein place, Moldova should be able to export processed products to hard currency markets. Already in1993 and 1994, exports of Moldovan apple products and wine to Western Europe increased. Moreover,incomes can be expected to recover within the FSU, improving the attractiveness of this market. In orderto take full advantage of opportunities to expand into new markets and to retain traditional markets,private investment in food processing will be needed. Accelerated privatization of food processing willtherefore enhance the market opportunities for the entire sector.

3.6 The government cannot directly engineer recovery and growth of the kind needed inMoldovan agriculture, even it if were to have at its disposal more ample resources than are currentlyavailable. The government can provide an enabling environment, and permit economic decision makersto generate growth themselves. Key elements of this environment are continued progress onmacroeconomic stabilization, adequate numbers of private firms, and a regulatory environment thatpromotes gainful activities and provides appropriate economic incentives.

3.7 Macroeconomic policy is discussed in separate reports, and recommendations in this areawill not be part of the agricultural sector review. The impact of macroeconomic policy on agriculture,through the exchange rate, the interest rate, and inflation is important. Moldova's macroeconomicprogram since the introduction of the leu in November, 1993, has achieved notable success in reducing

20 Chapter 3

inflation and instilling confidence in the new currency. The real economy continues to contract, however,and the monetary stability is fragile. Demand for credit is augmented by borrowing on the part ofenterprises that do not expect to repay, and this additional demand pushes up interest rates for allborrowers. Deficient screening of potential borrowers may appear to assist agriculture when agriculturalproducers are the borrowers, but in fact it does not assist agriculture. Lax screening and accumulatingarrears allow activities with low or negative returns to continue to absorb resources that could be moreproductively employed. Therefore continued effort to strengthen the implementation of themacroeconomic program by addressing the problem of enterprise arrears is important for continuedadjustment of agriculture.

3.8 Moldova has enacted programs of privatization and farm restructuring, including theopportunity to exit collectives and joint stock companies, but does not yet have a critical mass of agentsand enterprises responding entrepreneurially to the new environment. The slow pace of enterprise reformis due in part to weak financial discipline and lack of bankruptcy enforcement; state owned enterpriseshave been allowed to accumulate arrears and bid for credit that is unlikely to be repaid. In addition,implementation of privatization has been slow.

3.9 Privatization accelerated in mid-1994, with the first pilot privatizationof a large enterpriseat Orhei. The delay in privatization and simultaneous accumulation of arrears has resulted in a need toliquidate some enterprises previously scheduled for privatization. Liquidation and public sale of assetsmay result in greater mobility of assets and creation of new private firms.

3.10 Under the current system of regulations, the agricultural sector is granted preferentialtreatment in some areas, such as taxation, but penalized in others, such as trade policy (ban on exportsof grain and leather). Agriculture, as the strongest sector in Moldova's economy, cannot be penalizedif the country is to recover. Since agriculture is the dominant sector, however, it cannot be favored withspecial treatment when the need for fiscal revenues is so great. More importantly, Moldovan agricultureshould not need special treatment and protection to be competitive. Regulations to protect propertyrights, safeguard public health, assure quality standards commensurate with those of the EuropeanCommunity, and establish and protect the integrity of the financial system are of greater value toagriculture than are tax breaks and special treatment.

3.11 Supplying the missing components needed for recovery; that is, stability, entrepreneurialprivate agents, and regulatory reform presents administrative and political challenges more complex thanthe traditional management of the economy by directive. This approach is less costly in cash, however,than an effort by the government to finance recovery directly, through stimulatory subsidies and massivestate investment programs. More importantly, it is more likely to succeed than is the old approach ofsubsidies, targeted investment, and campaigns. The international community is already assisting infinancing the implementation of a viable reform program. The resources of the international communitywill of necessity be constrained, however, and policies that mobilize domestic savings and investment willbe of great importance, particularly for small-scale rural enterprises.

3.12 Short-run problems notwithstanding, Moldova cannot postpone introduction of the policiesand institutions that will make producers and traders maximally responsive to external and internaleconomic opportunities. There are several areas in which continued progress will be especially important.These areas include:

A Framework for Solutions 21

* continued progress in reform of price and trade policy and removal of marginregulations;

* further progress in privatization (including food processing, distribution, agriculturalservices, and input supply);

* affirmation of individual ownership of land, confirmed by titles. Land can be managedcollectively through leaseholds if owners so choose. Individual ownership is superior tocollective ownership of land, since it facilitates private investment in production.Collective ownership of land will impede mortgage finance, and will hence retard neededinvestment in the sector.

* Farm restructuring, including continued creation of new individual private farms, servicecompanies, and private farms formed by voluntary combination of individual shares.

3.13 The recurrence of drought in 1994 and concem about aggregate supply may make reformsmore difficult to implement. The dangers of delay, however, are readily apparent and are already havingan adverse impact, such as the high financial and physical losses in 1993 associated with problems inmarketing and processing. A constructively cautious approach to reform is one that moves forwardexpeditiously with implementation of programs already passed, particularly privatization and land reform,supplemented by needed changes in policy and deregulation, for example, in price policy, trade policy,and credit.

B. SOLUTIONS IN SPECIFIC AREAS

Macroeconomic and Trade Policy

3.14 The introduction of the leu in November 1993, and its subsequent strength and stabilitybrings producers closer to international suppliers of high yielding inputs, such as seeds, chemicals, feedadditives, and veterinary pharmaceuticals. Moreover, with the reduction of inflation, producers are ableto store earnings between harvest and purchase of new inputs. These are positive developments andshould be strengthened by requiring enterprises to settle arrears, and by continued progress toward fiscalbalance.

3.15 A number of additional changes in trade policy should be undertaken to facilitateagricultural exports and growth. Restrictions on exports of grain and leather should be removed toexpand exports and to require users of those products in Moldova to face world prices. Domestic usersof grain and hides will not have adequate incentives to improve efficiency if they buy these inputs atprices held low by trade barriers.

3.16 Tariff reduction for non-CIS imports is consistent with an outward-oriented sectoralreform program. Selective protection in specific instances of dumping or unfair trading practices can beintroduced if needed, but evidence of widespread dumping into Moldovan markets is not at presentstrong. The increase in early 1994 of protection against products from outside the CIS embodied in thenew import tariff structure should be changed to a regime closer to free trade. All import tariff rates inexcess of 20% should be progressively reduced to 20% within two years of the entry into force of the

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first tariff decree (i.e. by November 1995). Rates in excess of 50% should be immediately reduced to50% or less, and a schedule for further reductions should be established. The perpetuation of inefficiencythrough protection from competition can be extremely costly for the economy and for consumers. MFNrates should be applied to all countries of origin (except those where free trade agreements apply). Thiswill reduce distortion and will be required by GATT membership in the future. Duty exemptions forforeign investors and small businesses should be minimized, since they are difficult to administer and areunlikely to have much positive effect.

3.17 A number of changes in VAT and excise taxes should be introduced to facilitate exports.The application of VAT and excise taxes on a destination basis for CIS trade should be considered (afterdue consultation with other CIS members); that is, exports would be zero-rated and imports taxed. Thiscould increase the profitability of exporting. A VAT refund system should be considered for exports tonon-CIS countries, given the delays inherent in the current system of crediting such exporters for VATpaid.

3.18 Foreign exchange allocation should be further liberalized. Enterprises should be permittedto hold more than one foreign currency bank account, to stimulate competition amongst banks in theprovision of foreign exchange services. The portion of external credits that can be allocated by themarket should be increased. Where credit disbursement is in currency, it should be channeled throughChisinau Interbank Foreign Currency Exchange (CIFCE); where goods are supplied directly, they shouldbe auctioned. This will allow the benefits of such credits to be allocated to the most productive users.Explicit and implicit subsidies on imports financed by external credits should be eliminated, since theyare distorting prices, undermining domestic producers, and reducing budgetary revenues.

Price Reform and Competition Policy

3.19 Privatization, including continuing restructuring and privatization of the parastatalmarketing firms is essential for improved performance in marketing. Controls on trading margins shouldbe abolished, since they deter investment and may create shortages. The anti-monopoly legislation shouldbe reviewed to make it consistent with an open trading regime - monopolies will be few in number in asmall economy with free trade.

Reducing the Role of State Purchases

3.20 While bilateral trading agreements remain in effect, state procurement will be moresubstantial than subsequently, when trade contracts are negotiated directly between enterprises. Even inthis transitional period however, state procurement should be put on a competitive basis, with suppliersinvited to tender for fulfillment of the state's requirements. This will ensure that producers receivemarket prices. The state should endeavor to employ several procurement agents for each commodity,including private trading companies. This should improve the service that procurement agents provideto the state. Statutory rights enjoyed by state trading companies to be the sole purchaser or seller inMoldova of any given commodity should be removed, and competition should be encouraged by freeentry and privatization. Allowing free entry to trading will be critical to exposing the rest of the economyto prices determined in competitive markets. Traders and producers involved in centralized tradingthrough state purchases should be placed on an equal footing with their competitors. No preferences in

A Framewvork for Solutions 23

allocation of credit or inputs should be given. Such preferences reinforce the existing, inefficientstructure of production.

Privatization and Food Processing

3.21 Reorganization of Cereale, including separate privatization of units with differentfunctions, is currently in the design stage. The program should be finalized and implemented as soonas possible. Much of the capacity in storage and distribution of grains is held by Cereale. Privatizationof these facilities will be included in the reorganization of Cereale, and should be designed during 1994.Facilities for storage and distribution owned by the Ministry of Trade or by local governments shouldbe privatized under small-scale auction procedures.

3.22 There are many specific ways in which the food processing industry can be upgraded toproduce more competitive products. Some of these can be accomplished through technical assistance,or through improved management of the capital stock now in place. Most, however, require investment.Establishment of clear private ownership of the food processing industry is important because clearownership will encourage more foreign and domestic investors to invest. For enterprises included in the1993-94 privatization, it is desirable to move ahead to implement the existing program. For enterprisesnot included in the first round of privatization, it will be desirable to provide opportunities for foreigninvestors to participate directly in the privatization, rather than waiting until shares are distributed.Opportunities for foreign direct participation in investment are included in the design of the 1995/96privatization program.

3.23 Off-farm storage and distribution should be privatized, and competition in these activitiesshould be enhanced. Since such a large share of the national wealth is passing to members of collectiveand state farms through the privatization of land, farm assets, and processing, there is no economic reasonwhy storage and distribution facilities should be privatized in the same way, that is, to the farms that usethem. They could, therefore, be included in the general privatization scheme, and distributed againstvouchers. Alternatively, smaller facilities could be auctioned, either for vouchers or cash. The primaryobjective of privatization of these assets is to introduce better management and competitive behavior instorage and distribution.

Land Reform and Restructuring of Farm Enterprises

3.24 The goals of the agrarian reform, as stated in the Program of Agrarian Reform proposedby the government and approved by Parliament, are to improve productive efficiency by creating realownership of land and productive assets by individuals. The Moldovan program includes a detailedmethodology for allocating land rights, and this methodology is currently under implementation. Howto create new farm units once people receive rights to land and other assets is less well developed. Theoption of individual exit from a collective or joint stock company is straightforward, and some membershave exercised this option. Many people at this stage, however, do not choose to become individualprivate farmers for a number of reasons. Land shares are very small (from 1 to 2 hectares) and have tobe worked intensively to yield adequate income. Intensive production usually implies financing forpurchase of high yielding inputs. Financing is expensive, and many new individual farmers do not

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qualify. Land sales are prohibited until 2001, and input and product markets are poorly developed.Individual exit as private farmers at present is not attractive to many farm employees.

3.25 An alternative to exit as individuals is retention of the entire farm land, assets, and laborforce, re-organized and registered as a joint stock company or other collective enterprise. This is theoption initially encouraged by recommendations of the Ministry of Agriculture, although it is not the onlylegal alternative. The Moldovan authorities believed that this particular form of organization - one ofnine organizational forms recognized by the Law of Enterprises and Entrepreneurship - would allow thesmoothest transition from the existing farm enterprises with collective and state property to private farmsthrough the intermediate stage of collective management of privately owned land and assets. Althoughthe first farms to reorganize registered as joint stock companies, subsequently a number of limited liabilitypartnerships and agricultural cooperatives have registered. Many of these have involved a form ofcorporatization of the traditional farm intact, with little change in management or activity.

3.26 The expectation that joint stock companies and other corporate farming entities willperform better than the collective enterprises they replace rests on two critical misconceptions. The firstis that the current Moldovan joint stock farm resembles an American corporate farm. The second is thatcorporate farms dominate American agriculture. Most American corporate farms are family farmsincorporated for tax purposes, not companies with many shareholders. The Moldovan farm most likean American corporate farm would be a multi-family private farm with five or fewer families. Althoughjoint-stock companies in Moldova have some advantages over their predecessors, it would be prematureto consider reorganization complete once the joint stock company is formed. The reorganization is likelyto bring increased productivity when individuals have title to land and own real assets and make decisionsregarding their use. This can be accomplished within Moldovan farms if ownership of land (confirmedby title) passes to individuals rather than remaining with collectives. Individual ownership would notpreclude collective management of agricultural production through leasing of land to the collective ifpeople so chose. In this case, the farm would pay a competitive rental rate to landowners, competitivewages to laborers, and residual profits as dividends to owners of asset shares. At present, the joint stockcompanies formed in Moldova are much like collective or state farms. They do not pay members for useof land shares, and the return on the land is distributed in wages. Shareholders are employed on the farm(except pensioners) and their primary earnings are from wages and household plots. The joint stockcompany and similar collective forms of enterprise provide an organizational form that accommodatesthe new distribution of ownership, but does not bring new managerial strategies to the farm or create newbusiness structures.

3.27 In Moldova, as in other countries undergoing land reform, gains in efficiency will begreatest when new business entities, such as producer partnerships, associations, and small cooperativesare formed. The land reform mechanism does not prohibit consolidation of land and asset shares priorto exit, but neither does it promote consolidation by providing clear guidelines for the process.Administrators who wish to assist applicants for conjoined shares of land can do so, but moresophisticated consolidation and exchange of shares to create small businesses remains difficult. Inimplementation of the land reform in the coming season, it would be advisable to work with farmemployees and local authorities to ease the exit of employees who choose to leave in small groups, orwho wish to acquire a business unit in exchange for land and asset shares.

3.28 Many private farmers are not yet formally registered and this impedes their ability to havebank accounts and engage in transactions. Registration of private farmers who have already received landshould be accelerated. Advisory services for small farmers should be improved. This task should


initially be undertaken by the government, although eventually the private sector will provide serviceson a commercial basis.

3.29 A number of collective and state farms that have not yet reorganized are likely to do soin the future. Some may be forced to undertake quite fundamental restructuring if they cannot pay debtsand are not able to increase arrears. More detailed methodology for creation of new business units, suchas small firms selling machinery services, mid-sized farms, processing units, and transport companiesshould be developed. Internal auctions of physical assets for shares have served this purpose in somecountries undergoing farm restructuring.

3.30 As the distribution of physical pieces of land proceeds, work on registering and titlingof privately owned land should be expanded. At present, purchase and sale of land is prohibited until2001. The moratorium on transactions in land is harmful for several reasons. If land is to yield a highreturn there must be a working mechanism for reallocation of land from management under which returnsare low to better management. This can be accomplished either through sale or commercial leasing, butleasing is not reported to occur in Moldova enough to allow values to be observed. Leasing and purchaseare both features of well functioning land markets, and any legal obstacles to either kind of transactionin Moldova should be removed. As private ownership of land increases, it will be important that landmarkets begin to function for leasing, purchase, sale, and mortgage of land. The prohibition on sale ofprivate agricultural land until 2001 should be repealed. An analogous prohibition on sale of urban landhas already been repealed.

Demonopolization In Food Distribution

3.31 Privatization and farm reorganization can revitalize the agricultural economy only if thefarm input supply and product marketing sectors can function efficiently. Marketing and input supplyindustries should not be exempt from the general program of privatization. Nor should privatization ofmarketing and input supply be delayed beyond the time when substantial numbers of farms are privatized.

3.32 In 1993 production was good, but much of the crop could not be marketed due to liquidityproblems in the unrestructured processing and marketing firms. The experience of 1993 demonstratedthe harmful impact of delay in privatization of processing and marketing.

3.33 Large state monopolies (Cereale, Fertilitatea, ARCA Moldova) are undergoingrestructuring prior to privatization, and will be privatized in units that will act competitively, rather thanmonopolistically. A program to design the new units and implement privatization was designed in late1994 for implementation starting in early 1995, and this will include geographic and functionaldemonopolization. The government has requested technical assistance in preparing Cereale andFertilitatea for privatization. As plans are developed, it will be important to include opportunities forforeign participation in the privatization. Foreign presence on Moldovan internal markets for chemicals,grain, and machinery would improve services to producers. The experience with privatization of inputdistribution in Central and Eastern Europe has shown that where privatization is early and complete, asin Hungary, competitive markets begin to function early and well. Where privatization is delayed, as ithas been throughout the former Soviet Union, increasingly debilitated state firms serve producers poorlyand become a burden to the state budget.

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Rural Finance

3.34 The present rural finance system is very weak. Until mid-1993, credit was directed tospecific beneficiaries at subsidized interest rates. The subsidized interest rate is an inefficient device topromote agricultural growth in the long run. Interest rates that are lower than the inflation rate allowactivities that are unprofitable to remain in production, and also discourage domestic saving. Subsidizedcredit does not address the root problem of low or negative profitability, which is usually inappropriateprice policy, inappropriate technology, or poor management.

3.35 The reduction of inflation from 30-40% per month in late 1993 to 2.5% monthly in mid1994 has eased problems farms faced earlier in managing their finances in an inflationary environment.Nominal interest rates, however, remain much above the inflation rate, and real interest rates are high.Real rates are bid up by borrowers who may not intend to repay. Agricultural producers who borrowunder high real rates and do repay their loans do so by reducing or deferring wage payments. The highreal interest rates, along with growing inter-enterprise arrears, explain part of the growth in arrears inwage payments to farm employees.

3.36 In the first half of 1994 the National Bank of Moldova reported that 20% of its lendingwas targeted, and most of this was most probably agricultural. Virtually all lending is short term, andagricultural investment has largely stopped. Reduced use of credit for current inputs is leading to reducedcommnercialization of the sector and greater reliance on barter and payment in kind for internaltransactions.

3.37 Problems of high real interest rates can be addressed by further reforms in the bankingsystem, to increase loan repayment and reduce credit risk. Banks should evaluate and classify their loansaccording to the risk of the loans and set aside provision or risk funds to cover expected loan losses.Since August 1994, regulations requiring classification of loans have been in place. This precaution willhelp stabilize the system and force bankers to deal more quickly with bad loans. It is also necessary tostrengthen the capital adequacy positions of the banks.

3.38 At present, the large unrestructured state enterprises are absorbing a large share ofavailable credit, crowding out financing for potentially viable activities in agriculture and other sectors.Thus, accelerated measures to deal with credit demands of large risky borrowers will improve access ofother applicants for credit.

3.39 Although a stronger banking system will eventually serve agriculture better, theexperience of other transitional economies suggests that agricultural credit will remain problematic forsome time. Agricultural loans are risky, and banks seeking to strengthen their portfolios are reluctantto lend for primary agriculture. Moreover, until land markets function fully, agricultural producers canoffer little collateral to lenders who, in turn, want high collateral to counter perceived risk. The transferof Cereale's debt from Agroinbank to the budget in mid-1994 is an indicator that the agricultural creditsituation is far from settled.

3.40 As efforts to deal with the problems proceed, several simple measures may be of help.Applicants for funds should be required to produce a business plan demonstrating expected cash flowadequate to repay the loan and interest. New loans should be collateralized with a portion of the crop.New loans should not be issued to roll over bad debt of the past. For old debts that remain, the bank


and borrower should jointly devise a program of repayment. Liquidation of farms should be implementedif a program cannot be designed that is mutually agreeable.

3.41 Agroindbank is currently the main lender to the agricultural sector, and is likely to remainactive in the future. A number of new banks and financial intermediaries, such as credit unions, can beexpected to develop now that real interest rates for savers are positive. These organizations are oftenlocal and function by mobilizing deposits of savers and lending to loan applicants for housing, smallbusiness, and agriculture. Because Moldova's rural areas are so densely settled, the outlook for smallrural banks and credit unions is good.

Rural Communities

3.42 The density of Moldova's rural population presents a number of advantages, as well asthe obvious difficulties of pressure on land. Rural families are still somewhat larger than urban familiesand birth rates are higher than in urban areas, so the rural population is economically active and relativelyyoung. Eighty-five percent of the rural population lives in towns and villages of more than one thousandresidents, and 18% live in towns of more than 5000 people. Villages are close to each other and joinedby a road system better than most of the rest of the FSU. Unlike in more sparsely settled areas, the ruralpopulation constitutes a large potential market for goods and services that can be served at relatively lowcost.

3.43 This market provides opportunities for employment and earnings in rural small business.Assets currently employed in provision of rural services are owned either by the state (for example, storesunder the Ministry of Trade), the municipal government, the consumer cooperative, the collective andstate farms, or the joint stock companies. Schools, clinics, and hospitals within collective farms can beturned over to local governments during farm re-organization, at the decision of the farm, although littletransfer has taken place so far. The funding base for rural social services is not yet secure and will haveto be strengthened as farms transfer these obligations to municipal governments. Moldova's land tax issignificant, but in 1993, even at tax rates that were considered high, the revenue from this tax equalledabout one third of the cost of expenses for health and education in rural areas.

Agricultural Services: Marketing and Input Supply

3.44 Marketing at present constitutes a major constraint in Moldovan agriculture. Marketingof inputs is still dominated by the state owned monopolies Fertilitatea (chemicals) and Arca Moldova(machinery). The quality of service provided is low, largely because the firms are weak financially andhave not yet either restructured internally or adopted new managerial strategies. Input suppliers cannotat present offer supplier's credits, since they themselves are financially weak. Instead they requireprepayment.

3.45 Grain marketing is dominated by Cereale, another state owned monopoly. Marketing ofprocessed fruits and vegetables has traditionally been managed by the processing firms. These areindividual firms and many are included in the 1993-94 privatization program. Due to financialdifficulties, processors have increasingly withdrawn from participation in marketing and instead returnthe processed products to the farms for further disposition.

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3.46 Moldcoop, the consumer cooperative, dominates rural retail trade. Although not formallystate-owned, and thus not subject to privatization, Moldcoop is not a cooperative in the tradition ofwestern consumer or marketing cooperatives. Because of its importance to rural trade, Moldcoop in thepast was subject to a number of regulations. These served to decapitalize it (margin controls, requiredservice in remote areas). To keep rural trade functioning, Moldcoop was granted large amounts ofpreferential financing. As a consequence the organization is currently a major debtor and has anunwieldy structure and suboptimal geographic dispersion.

3.47 Privatization, restructuring, and divestiture of assets of the parastatal marketing firms andMoldcoop are needed to improve service, increase competition, and reduce the burden on the budget.Preparatory work is underway at present, and implementation of the privatization and restructuring shouldbegin in 1995.

Strengthening the Government's Supportive Role in Agriculture

3.48 The role of the Ministry of Agriculture in a market economy is to provide essential publicsupport services, such as extension, education, and research, to implement regulations in the areas ofphytosanitary controls, health and safety, and veterinary controls, to implement the government'sagricultural programs, and to evaluate sectoral performance and the impact of alternative policies. In itsrole as a provider of services, the Ministry will share the field with the private sector, since private firmscan be expected increasingly to be active in provision of advisory services and in agricultural research.

3.49 Sectoral recovery requires strong intellectual leadership and public education to articulatethe problems of agriculture and identify solutions consistent with the overall reform program. TheMinistry of Agriculture and Food should provide intellectual leadership for the debate on agriculturalissues within the more general dialogue about economic reform. This leadership should include a visionof a more prosperous agriculture constructively imbedded in a market economy.

3.50 A number of changes will be required in the structure and function of the Ministry ofAgriculture and Food and in the government's role in the sector. The diminished role of government ina market economy, and the fiscal constraints of the current period of crisis argue in favor of a smallerMinistry focused on the legitimate tasks of the public sector. Although the size of the Ministry hasdeclined since 1990, many of the functions of direct administration of production and processing havebeen retained. The Ministry is not yet sufficiently strong in analysis of policy or dissemination of marketinformation.

3.51 In order to facilitate reorganization of the Ministry better to serve its new functions, astudy leading to a design of a new structure should be undertaken and the new structure adopted.Implementation will require additional resources for training and equipping the new departments.

3.52 The scientific institutes merit special attention as organizations whose functions willremain useful, and indeed may gain in importance as Moldova becomes integrated with the global marketeconomy. These institutes vary substantially in vigor and quality. In 1993 they absorbed a small shareof the budgetary expenditures for agriculture (6%). Some of them also have substantial non-governmentalfunding.

A Frainework for Solutions 29

3.53 Some of these institutes have encountered special difficulties. Several were prestigiousAll-Union Institutes, formerly funded by the budget for the whole Soviet Union. Many of the institutesretain large numbers of scientists, typically over 100, and some have become successful commercially.The Corn and Sorghum Institute has become self-financing by supplying hybrid seeds to former Sovietrepublics, notably Ukraine and Russia, as the seed industries of these republics have been hard-hit bynatural and political disasters. The Wine-Grape Institute is said to be the most powerful currently, withabout 250 scientists, financed largely with industry funds. Overall, the institutes remain a large enterprisein comparison to analogous agricultural research organizations in industrial market economies. Moldovahas about 130 agricultural research scientists per 1 million population, while the United States has about20 publicly employed agricultural research scientists per I million population (plus an approximatelyequal number of privately employed agricultural scientists). Many of the commercial activities of theresearch institutes belong in the private sector, while core research activities of the institutes should beretained with adequate public funding.

3.54 The task of advising agricultural producers on new practices and technology is usuallyshared by the private and the public sectors in market economies. Private consulting firms sell advisoryservices, and public extension officers provide advice, either free of charge or with partial cost recovery.In Moldova parts of this function are now distributed between and among the Ministry of Agriculture andFood, parastatal input suppliers, the research institutes, and the specialists on the collective and statefarms.

3.55 The entire system of agricultural research, extension, and education will be revised in thecoming years. Linkage in education and research should be retained with Ukraine, Russia, Belarus, andRomania, and expanded with international professional associations. There is a clear need at present toprovide more public information on prices in relevant markets, on methods and implications of landreform and farm restructuring, and advice to small-scale producers.

3.56 Moldova's intensive agriculture will continue to require a high level of skill on the partof farm operators. Support for agricultural education and research is an essential service of government,and one that complements activities of the private sector. Curriculum reform, training, and re-equipmentof institutions of higher education is an area of high priority for public investment.

Environment and Natural Resources

3.57 Moldova's most valuable natural resource is its soils. However, erosion is worsening andis currently reported to be a significant problem on almost half of the arable land. The area of erodedland is estimated to have increased 45 % over the past 23 years.

3.58 The main reasons for the increase in soil loss appear to be: excessive large-scaleconversion of hilly pasture and meadow lands to annual crops, increased size of fields, little attention toerosion control and soil-loss management, and deterioration of erosion-control works. Some of thesecausative factors will be reduced as land reform proceeds, since the incentives that arise from privateownership of land will be more conducive to control of soil erosion than were the incentives under centralplanning. This will not happen automatically, however, and recipients of land will need increasededucation on soil management. Alternative rotations, minimum tillage techniques, improved contourplowing, and better management of slopes are among needed changes, and these should be addressedthrough education and extension.

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3.59 Because of the prevalence of soil erosion, and past heavy use of agricultural chemicals,it is likely that Moldova has problems of groundwater and surface water degradation. Higher prices foragricultural chemicals have already reduced use, and a switchover to environmentally safer chemicals thanthose traditionally manufactured in the FSU is already underway.

3.60 Improvements in water quality and soil conservation should be pursued throughestablishing ownership of land, proper pricing of chemicals, and education regarding land managementand chemical use. In the current circumstances, it is not recommended that costly public investments beundertaken in land reclamation, since funds in the budget are scarce and private landowners willundertake some of this activity, or should at least share in its cost. Problems should be monitored andmanagerial techniques that reduce problems or at least prevent their exacerbation should be part of theeducation and advisory program of agricultural extension.

3.61 Residual stocks of harmful chemicals on farms present an environmental and public healthproblem requiring attention. A program to inventory these stocks and devise measures either for disposalor safer storage should be included in the program of technical assistance for Moldova's agriculture.

C. ACTION PLAN AND PRIORITIES

3.62 A matrix illustrating objectives and recommended measures to achieve them follows atthe end of this section, in Table 3.1 and the accompanying matrix. The recommended actions are of threetypes: changes in the regulatory regime, structural changes of enterprises and markets, and introductionor augmentation of public investment.


Table 3.1: Recommended Actions

Measures to Assist Recovery of Moldovan Agriculture

Regulatory reform- repeal prohibition on export of grain, skins, and hides- repeal remaining controls on marketing margins- review, revise, and enforce phytosanitary and health controls consistent with those

of the European Union.- reduce tariffs on imports of agricultural products from outside the CIS and Romania, so

that agricultural protection is low and approximately equal to protection in other sectors.

2. Structural Reform- privatize Cereale, Fertilitatea, and Arca Moldova- restructure Moldcoop- prepare methodology for reorganization of state and collective farms into smaller

independent business units in primary production, processing, and services- privatize remaining livestock complexes- accelerate registration of private farmers- accelerate distribution of title documents- repeal prohibition on purchase and sale of land- design reorganization of Ministry of Agriculture and Food

3. Public Investment- provide domestic and international market information- maintain core agricultural research activities- reform agricultural education and provide stronger funding for it

Proposed Action Plan for Moldova's Agricltural Sector

RECOMMENDATIONSOBJECTIVES GENERAL MEASURES

APPROACH ALREADY TAKEN FIRST STEPS SUBSEQUENT ACTION

Improve efficiency of farm Land Reform and Farm - Legislation in place for land - Implement land reform and - Expand work on landenterprises Reorganization reform and farm reorganization farm restructuring according to cadastre, registering, and

existing law. Distribute , titling- A small number of private certificates of land shares byfarms have been established November 1994.

- Some reorganizations of - Design methodology forcollectives into 'joint-stock creation of independentcompanies' and other forms business units from state or

collective farms.- Households given ownership ofhousehold plots - Repeal moratorium on land

transactions to permit buying,selling and leasing of land.

Improve price incentives Develop private competitive - Direct administration of pricing - Reduce and then eliminate all - Disseminate marketfor producers product markets and allow by state modified to indirect mandatory state orders. information

these markets to determine administrationprices - The State should publicly bid

for needed quantities at marketprices

- Remove remaining barriers toexports of agriculturalproducts, such as prohibitionon export of grain, hides, andskins

Increase efficiency of input Restructure input supply - Design restructuring of - Disseminate marketsupply organizations and then parastatal input suppliers in information

privatize them 1994, privatize resulting unitsas soon as possible _

RECOMMENDATIONSOBJECTIVES GENERAL MEASURES

APPROACH ALREADY TAKEN FIRST STEPS SUBSEQUENT ACTION

Improve efficiency of Demonopolization and - Privatization program for much - Privatize plants of multiplant - Publish information on pricesmarketing and reduce privatization of food food processing adopted, and enterprises as independent in different consumer marketsproduct losses processing and distribution preparation for privatization units

underway - Maintain public investment in- Privatize small-scale roads, railroads, and

- Some restrictions on farm-to- transport, such as trucks communicationsretail markups repealed

- Repeal remaining restrictionson marketing margins

Improve financial services Institutional reform and - Audit of major banks - Enforce bankruptcyfor agriculture privatization in the banking completed legislation

system

Rural Community Restructure provision of - Legislation opens opportunity - Secure tax revenues for local - Maintain public investment inDevelopment social services and improve for farms to transfer social governments so that social roads and other needed

rural infrastructure services to municipal services can be moved off infrastructuregovernments accounts of farms

Promote private small - Privatize many rural servicesbusiness in rural areas

Improve environmental Public education, Switchover to safer agricultural - Inventory and devise strategy - Advise farms on improvedquality investment, and chemicals begun for disposal of stocks of rotation practices, erosion

environmental regulation harmful chemicals control measures, and chemicaluse as related to water quality

Strengthen property rightsin land and educate owners - Increase extension workin techniques of land increasing integration ofconservation livestock into cropping and

improve use of manure.

34 Chapter 3

TECHNICAL ANNEXES

TECHNICAL ANNEX 1

LAND REFORM AND RESTRUCTURING OF FARMS

A. HISTORIC BACKGROUND

Al. 1 The Soviet economic agricultural model began to be introduced in most of Moldova onlyafter 1944. In 1950, collective and state farms jointly cultivated 1,661,000 ha, or 89% of all sown land.The proportion of land cultivated by individuals dropped to 204,000 ha, or a mere 11 % of all sown land(Narkhoz Moldova). In ten years, between 1940 and 1950, the roles of individual and collectiveagriculture in Moldova completely reversed, with individual agriculture shrinking to the status ofsubsidiary household farms.

A1.2 With the completion of collectivization of agriculture in 1950, agricultural production inMoldova, similar to the rest of the Soviet Union, was organized in two types of centrally controlledlarge-scale socialized farms, the collective kolkhozes and the state-owned sovkhozes.

Al1.3 The kolkhoz/sovkhoz system was augmented by interfarm enterprises: these were largecooperative enterprises jointly owned by several farms, which constituted a particularly importantcomponent of the agricultural sector in Moldova. Interfarm enterprises in Moldova accounted for around15% of agricultural product in the 1980s. They include large-scale orchards of thousands of hectares, aswell as pig complexes, feedlot operations, and poultry factories. In the past, interfarm enterprisesprovided 80% of pork and 90% of eggs and poultry in Moldova. They have never been self-sufficientin terms of feed supply and Moldova traditionally imported 1-1.2 million tons of grain. The relativelyhigh weight of interfarm enterprises is a unique feature of Moldovan agriculture, as in the rest of theUSSR interfarm enterprises account for only 2%-3 % of agricultural product.

Al.4 In addition to these centrally organized sectors, an important part of agriculturalproduction in Moldova (around 18% of the total agricultural product between 1970-1990--lower than the25%-30% figure reported for Russia, Ukraine, and the USSR as a whole) has traditionally originated inindividual subsidiary farms, such as household plots of individual kolkhoz members and sovkhozemployees and garden plots assigned to city workers.

B. LAND REFORM LEGISLATION

A 1.5 Private ownership of land and production assets is the foundation of the radicaltransformation in agriculture. The first enabling Union-level legislation was passed by the USSRSupreme Soviet between November 1989 and March 1990 (the Law on Leasing, the Law on Property,and the Law on Land). These laws permitted individuals and families to hold long- term leases on landwithin and outside the collective and state farms and allowed the granting of individual proprietorship(vladenie) over land. Proprietorship gave lifetime inheritable rights to work the land, but not the rightto buy, sell or mortgage it. These laws also authorized local governmental bodies to grant land forindividual farms where the management of the collective or state farm was unwilling to do so. ThisUnion-level legislation delegated important powers to the republics to pass additional laws on thesesubjects to provide essential details and mechanisms for the legal process of establishing private landownership and private peasant farms.

36 Technical Annex I

Al.6 In July 1990, when Moldova was still part of the Soviet Union, Moldovan Parliament(then Supreme Soviet) adopted a resolution "On the Conception of Transition to Market Economy" whichacknowledged the market economy "as the model of economic activity and the main path toward therecovery of national economy." Today, Moldova can rely on an impressive set of laws which have beenpassed since 1991 (Table TA1.1). The basic legislation required for privatization and restructuring of theagricultural sector is largely in place and, contrary to the situation in some other former Soviet republics,the reform process is not hindered by lack of an adequate legal framework.

Table TALI.: Moldovan Legislation on Land Reform and Farm Restructuring

Law on Property January 22, 1991

Law on Priority Social Development of the Villageand the Agro-industrial Complex in National Economy February 15, 1991

Law on Privatization July 4, 1991

Presidential Decree on Reorganization of State Enterprisesinto Autonomous State Enterprises and CommercialJoin-Stock Societies December 9, 1991Land Code December 25, 1991

(effective Jan. 1, 1992)

Law on Peasant Farms January 3, 1992

Law on Entrepreneurship and Enterprises January 3, 1992

Law on Joint-Stock Societies January 3, 1992

Law on Bankruptcy January 3, 1992

Law on Leasing January 14, 1992

Law on Cooperation January 16, 1992

Government Resolution on Settling of Land Disputes March 5, 1992

Al .7 The conceptual basis for land reform and farm restructuring in Moldova is the so-called"Conception of Agrarian Reform and Socio- Economic Development of the Village" approved byParliament on February 15, 1991. This is a comprehensive document that sets out the goals and principlesof agrarian reform in Moldova, discusses property rights and formation of market relations, and examinesthe organizational forms within the agro-industrial complex. The conceptual document was accompaniedby an implementation program.

A1.8 In line with the Law on Property, the Land Code recognizes three forms of landownership; private land, state land, and collective land.

Land Reform and Restructuring of Farms 37

Al.9 Land may only be owned by Moldovan citizens: foreign ownership is not allowed.Moreover, the Land Code explicitly states that "There will be no restitution of land to former owners andtheir heirs. They are entitled to receive land plots in ownership under the provisions of the present Code. "This is the legal answer to a potentially complex issue in a country where most land was privately owneduntil 1944.

AL.10 In addition to defining the category of private land ownership, the Land Code sets outprocedures for allocation and distribution of agricultural land to private individuals and other owners. Themain group of individuals who are entitled to own farmland are the members and workers of kolkhozes,sovkhozes, and other agricultural enterprises, regardless of whether the are actively engaged in agricultureor not. This includes kolkhoz/sovkhoz pensioners, all administrative and professional staff, as well asworkers of the social sphere to the extent that they are kolkhoz/sovkhoz workers. Another category areformer landowners who "surrendered" (a euphemistic term used by the law) their land to collective farmswithout actually joining them and are now willing to resume active farming. They are not entitled torestitution of their former holdings, but are entitled to receive some farmland with all the rest. The thirdcategory includes individuals persecuted by the former regime and since rehabilitated.

Al.11 Each individual in these categories is entitled free to a share of farmland of standard equalsize, which is to be established allowing for land quality in each particular case ("land equivalents").Since all farmland in Moldova is cultivated by collective and state farms (kolkhozes and sovkhozes), theland shares are created by dividing the total farmland of these farm enterprises among the eligibleindividuals. The actual division of farm-enterprise land into individual shares is carried out by local landcommittees established jointly by local (village or district) government and the farm enterprises. Theownership rights to a share of land are certified by an official document. It should be stressed that theLand Code provides a procedure for allocation of "land shares" and not physical distribution of landplots.

Al .12 The Conception of Agrarian Reform, which provided the conceptual base for land reformlegislation in Moldova, recognizes the existence of subsidiary household plots as a distinct entity fromfarm-enterprise land. It accordingly envisages a two-tier land allocation process. The first stage (whichbecame known as "small privatization") focuses on the household plots and the second stage ("largeprivatization") proceeds with allocation and distribution of lands cultivated collectively by the farmenterprises.

Al.13 The process of "small privatization" itself is divided into two steps:

a) Transfer of household plots to private ownership: All individual plots of rural residentsnot exceeding 0.3 ha per family are transferred free to private ownership;kolkhozes/sovkhozes workers with less than 0.3 ha are entitled to receive additional landup to this minimum.

b) Augmentation of household plots: Rural families of more than three persons (the size ofan average rural family in Moldova is 3.5) receive free additional land based on amaximum of 0. 1 ha per person, but the total land area (including the currently existinghousehold plot) must not exceed 0.75 ha per family.

Al.14 During the second stage, or large privatization, the allocation of land shares and titledocuments to individuals does not stop or interrupt the functioning of existing farm enterprises (kolkhozes

38 Technical Annex I

and sovkhozes). They retain the status of a collective enterprise with collective land ownership, whichis created by pooling the individual land shares in accordance with the provisions of the Law on Property.Each individual, however, has the right to exit the farm enterprise, taking with him or her the share ofland in the form of a physically delineated plot as well as the share of non-land assets of the farmenterprise (calculated according to latest balance sheet values). The physical distribution of land and assetsto exiting individuals is handled by the local authorities and does not require any decision by the generalmeeting of the farm enterprise members or farm enterprise management. Individuals who exit thecollective enterprise with their share of land and non-land assets become "private producers", i.e., privatefarmers, who further have the right to form associations retaining their ownership of land and assets.

Al. 15 The Land Code allows leasing of land by "physical and legal bodies". Private land ownersmay lease their land to others, even though sale of land is restricted. Foreign nationals may lease land,although they are barred from owning land. The Land Code also provides for payment of land tax basedon quality and location. In 1993, the land tax was increased from 500 rubles per hectare to 6000 rublesto allow for inflation. The land tax revenues are shared by local authorities and the national budget.

Al. 16 The Land Code, in its December 1991 version, does not include explicit restrictions onland transactions (sale and leasing of land). It includes three very general provisions:

- privately owned land is inherited "in accordance with acting legislation";- ' "alienation of land in the life of the owners is allowed in strict compliance with acting

legislation";- the state has the right of first refusal to purchase land offered for sale.

Yet the Conception of Agrarian Reform, which provides the underlying principles and guidelines for allrelevant legislation, explicitly allows land transactions starting only January 1, 2001, i.e., after a ten-yearmoratorium. The list of land transactions subject to moratorium includes "buying and selling, mortgage,inheritance, giving as a gift, exchange, leasing, and other legal transactions".

Al. 17 Moldovan farm reorganization is proceeding slowly and with retention of much of theinherited structure. Farm enterprises are not faced with any deadlines for reorganization, such asdeadlines for asset valuation and share distribution.

C. SHAREHOLDER STRUCTURES

Al. 18 The 1991 Conception of Agrarian Reform in Moldova introduced the notion of divisionof land and assets into individual shares. These are basically "conditional shares" that represent the shareof each individual in the total assets of the farm, without attempting any physical division of land orassets. These shares are still nontradeable and can be used (e.g., exchanged or swapped) only within theexisting farm structure. Physical distribution of land and assets is performed only for individuals whodecide to leave the farm enterprise and establish a private farm. Typically only a few individuals leavethe collective taking physical possession of their land and asset shares.

Al.19 The distribution of land and asset shares, with their superficial and possibly misleadingsimilarity to common-stock certificates, has led in Moldova to the virtually universal endorsement of thejoint-stock society as the preferred structural form for the reorganizing kolkhozes and sovkhozes. The

Land Reform and Restructuring of Farms 39

joint-stock society is viewed in both academic and government circles as the best possible form that willenable the farm sector to combine the advantages of existing large-scale facilities with the efficiencies ofprivate ownership. The Moldovan conception treats the entire existing farm enterprise as a joint- stockcorporation, and this is probably its main weakness.

A1.20 On the narrow level of legal technicalities, a shareholder who decides to "leave" ajoint-stock corporation (i.e., disinvest) must find a buyer for his shares. The corporation itself cannotredeem the shareholder's share for cash or physical property. This is indeed the dry legal language ofthe Moldovan Law of Joint-Stock Societies. The Moldovan proposal that only the non-land asset sharesare invested while the land shares are leased to the corporation solves only the land half of the problem.The legal structure of joint-stock societies may seriously restrict the freedom of individuals to choosebetween remaining in the collective structure or leaving it to become an independent farmer, thusundermining the whole philosophy of transition to a market- oriented economy.

A1.21 On a more substantive level, the model of a joint-stock society derived from a collectivefarm enterprise is similar in concept to the labor-managed firms in Yugoslavia or to the companiesmanaged by so-called enterprise councils in Hungary. These labor-managed structures, once very popularoutside the agricultural sector, have largely failed in East European countries. While better than theSoviet administrative-command structure, the organization is inefficient in the long run because ofpervasive free riding and lack of a real feeling of ownership and involvement. Also, the short-runconsumption preferences of the worker-owners may prevail and long-run capital investments may beneglected. The decision processes in such organizations are diffuse, it is impossible to assign individualresponsibility, and the worker-owners continually press the "friendly" management for higher salaries andgreater social benefits without greater personal productivity.

A1.22 Even though some Moldovan farms have by now reorganized into subcooperatives,collections of private farms, and joint-stock societies, subfarm units continue to rely on the old kolkhozor sovkhoz for purchases of inputs and sales of outputs. This is unavoidable in the absence of functioningmarket channels for farm inputs and farm products. The issue of the monopoly of large-scale farms inpurchasing, marketing, finance, and other service areas is extremely important for understanding theattitudes of members of the existing kolkhozes and sovkhozes toward privatization and reform and forassessing whether the reforms to date have improved or will improve resource allocation and efficiency.The obvious way to "break" this monopoly is by ensuring that when the reforms occur, the propertyrights related to acquisition and sale of outputs are not bundled with the original farm structure.

D. PRIVATE FARMING

Al.23 The Conception of Agrarian Reform recognizes private farms as one of the componentsin the new diverse economic system for Moldova.

Al.24 While the activity of a peasant farm is based on family labor, hired labor is explicitlyallowed by the law "when necessary for production". A very important provision of the law ensurescontinuity of all social rights (state pension, social security, national insurance) of private farmers: theydo not lose any of their accumulated social rights on leaving the kolkhoz and the accumulation continuesduring their tenure as a private farmer.

40 Technical Annex 1

A 1.25 The creation of a new private farm includes the following stages:

- obtaining land in private ownership from the collective farm enterprise and/or leasingland from the farm enterprise or the local council;

- obtaining a share of assets from the collective farm enterprise;

- registering the private farm with a "corporate" name (usually the name of the head offarm);

- preparing stamp, letterhead, and other "corporate" paraphernalia;

- opening a bank account and establishing the right for financial transactions through thebank (this is a comparatively complicated bureaucratic procedure in Moldova).

Al.26 Administrative support for land reform and farm restructuring was relatively weakthroughout 1992 and explains in part the slow progress on the second stage of land reform and theemergence of private farmers. Support strengthened in Spring of 1993 with the appointment of a DeputyMinister for Agrarian Reform and a more active program of work with district level governments.

A1.27 The legal mechanisms of distribution of land and assets in the form of shares in theformer collective property are designed to make the individual person the owner. Many members ofcollective farm enterprises may choose at this stage not to become individual farmers by separating fromthe collective, because of uncertainty, lack of developed market structures, and because land shares areso small (one to two hectares). It is important, nonetheless, that individuals receive full title to landidentified within specific boundaries. Improvement in Moldova's vineyards and orchards will requireinvestment in improved varieties. In most cases, land will have to serve as security for these investments.Without individual title, a system of private lending secured by mortgage cannot develop. Future growthin the vineyard and orchard sector depends critically on the speed with which land reform is deepenedand individual holders of land shares become genuine owners of land.

A 1.28 Because individual title is granted only upon exit from collectives, and because individualprivate production is unattractive to many holders of land shares, the current approach to land reform andfarm restructuring may slow investment. It would be desirable to define a methodology for creation ofbusiness and production units intermediate between the full traditional collective and the individual farm.An administratively feasible approach would be to devise guidelines for partnerships and small groupsof producers to exit as groups with contiguous parcels held in individual title. The organizational formcould be either corporate or cooperative (depending on whether the firm or individuals owned the land).In either of the latter cases it would be relatively simple for a bank to secure a loan, either through pledgeof corporate land, or joint pledge of individual land. The latter alternative is likely to be feasible onlyfor small cooperatives.

TECHNICAL ANNEX 2

ANNUAL CROP PRODUCTION

A. HIGHLIGHTS OF THE CROP SECTOR

Annual Crops Production

A2.1 Moldova has good to excellent conditions for production of a great variety of crops,including a number of high value crops, such as fruits, grapes, aromatic and medicinal plants, as wellas industrial crops including sunflower, sugarbeet and tobacco. Although the country has some of thehighest yields of the former Soviet Union, the research establishment and even more importantly the bestkolkhozes and sovkhozes have demonstrated that in most crops the realistic yield potential is beingrealized only to 50-60%. In order fully to realize the promising crop production potential a moreconducive economic environment must be introduced. Modern technology, including high yieldinggenetic materials, agrochemicals, advanced mechanization, improved irrigation, post-harvest handling andstorage must be made available to farmers.

Seed Production

A2.2 Moldova has good to excellent agro-ecological conditions for production of high qualityseed and vegetative material, and has first class scientists who developed some of the best vegetativereproductive materials in the FSU. Consequently, seed production is an important component of theagricultural sector in Moldova, not only for domestic consumption but also for export. The past strengthof the seed industry does not imply that the industry can automatically compete under current and futurecircumstances, or that Moldovan producers are adequately served. Specialists on the World Bank missionobserved that the seed industry is strong, but that performance must be improved if the industry is to becompetitive.

A2.3 The main difficulties the seed industry faces include inadequate access of Moldovanbiological scientists and plant breeders to state-of-the-art germplasm, modern plant propagation technologyand breeding techniques, resulting in production of vegetative materials with a yield potential generally30-40 percent lower than in the world's most advanced countries. A lack of financial means, lack ofinformation and exchange of genetic materials, lack of personal contacts and exposure of Moldovanscientists to more advanced research establishments abroad are mainly responsible for this situation.

A2.4 Technical assistance, training, and scholarly exchange with western countries in seedproduction and processing would bring a high return to the country's agricultural sector.

Fertilizer

A2.5 Optimal use of fertilizer depends on a number of factors, including soil structures andprices of fertilizer relative to crops. Both fertilizer use and economically optimal yields will thus varywithin a range. Consistently low fertilizer use, however, can mean that continuous cultivation willgradually mine natural reserves of soil nutrients. This situation is likely to have taken place in Moldova


since 1992. Fertilizer application in 1993 is estimated to have been 10% of the level of 1989. It isimportant, therefore, to accelerate the increase in output prices to reach border levels so that producerswill have an economic interest in application of fertilizer. Improved delivery and financing of fertilizerpurchases will also be beneficial.

Pesticides

A2.6 Major problems exist in availability and quality of pesticides in Moldova. High qualitypesticides are imported from western countries, and due to high cost they normally represent only afraction of total pesticides used (usually less than 20%). In view of the environmentally dangerouspesticides produced in the FSU on which Moldova is still to a great degree dependent, the goal of thecrop protection strategy should be a speedy conversion to modern pesticides with high safety standards.

A2.7 The low quality of pesticides produced in the FSU, using in extreme cases up to 30 kg/haa.i. instead of several hundred grams per ha, as is now common in the west, explains why recent use ofchemicals has been on the order of 25,000 t per annum. It is estimated that if Moldova could get all itsannual needs in the form of state-of-the-art pesticides, the quantity could be reduced from the present25,000 tons to less than 6,000 tons. Increased competition in importation and domestic distribution ofagricultural chemicals will be important, as well as enhanced training of producers in pesticide applicationand management, including integrated pest management.

Agricultural Mechanization

A2.8 Moldova was in the past well supplied with tractors and agricultural machines. With therecent disruption in inter-republican trade and steep price increases of agricultural machines, procurementof new machines by farms slowed down considerably. However, thanks to the earlier more than adequatenumbers of machines, it is estimated that Moldovan farms can survive without major replacementsanother two years.

A2.9 The most immediate concern of farms is a critical lack of fuel and lubricants, which areestimated to be secured for 1993 only to about 30-40%. Another serious concern is a continuing lack ofspare parts, which is responsible for up to 30% of tractors and machines being out of operation.

A2. 10 Although Moldovan farms are in possession of a large fleet of tractors and equipment,a number of important machines are in short supply. Serious deficiencies exist in numbers and/or qualityof precision seeders, aggregates for multi-operation seedbed preparation, sugarbeet combines, maizecombines, grass mowers and hay presses, haylage machines, maize harvesters, pesticide sprayers, trailers,loaders, grain processing and storage equipment, milking machines, milk cooling equipment and a numberof other important pieces of machinery. Further, most machineries do not give full satisfaction to farmersin terms of performance, reliability, quality of work, maintenance and repair requirements, and cost ofoperation.

A2. 11 Another major deficiency is an almost total absence of suitable mechanization for smallerfarms. The Moldovan government took a Resolution to restructure the three domestic producers ofagricultural machines to fill this gap, but the program appears to be extremely ambitious, its economic

Annual Crop Production 43

justification is doubtful, the proposed time frame is too short, and in the mission's view it could at anyrate not be realized without massive outside technical and financial assistance.

Irrigation and Drainage

A2. 12 By 1992 irrigation has been developed on about 308,000 ha of land, and an area of about60,000 has been drained. Of the developed irrigated area about 80,000 ha is in urgent need ofrehabilitation (pumping station overhauls, major repairs of canals and other infrastructure). Another100,000 ha have been scheduled for modernization, consisting in essence of upgrading the existingsprinklers to equipment with wide working widths; a phased program ending in 2010 has been workedout for this purpose.

A2. 13 While drainage is considered as completed, Moldovan specialists believe that there is afurther potential of almost 0.5 million ha for additional irrigation development. They prepared a phasedprogram to bring a further 280,000 ha under irrigation in three different areas by the year 2010. Regularfeasibility studies for this program do not exist, although some more detailed planning work has beendone. The mission recommends that, when resources permit, a hydrological, engineering, agronomic,institutional and economic review of the subsector be undertaken in order to establish the realisticpotential for further irrigation development and assess the potential for investments.

Extension Services

A2. 14 Government's general extension service is organized by rayons (districts) and has a dualsubordination; administratively it falls under the rayon management and professionally directly under theMinistry of Agriculture and Food. This service is about 1,000 people strong and is reported to beunderfinanced and under-equipped for its function. Apart from government's general extension servicesthere are a number of specialized services financed by either agroprocessing plants (e.g.sugarbeetprocessing factories) or by commercial and service organizations (e.g.the parastatal FERTILITATEA,responsible for agrochemicals). The major weaknesses of the services appear to be that they are: (a)purely technically oriented and have little to say on farms' management and business orientation; and (b)have practically no messages for an emerging private farming sector. There is scope for strengtheningthe extension services, but this should be done in the framework of the whole agricultural informationsystem.

B. CURRENT STATUS

Crop Rotations

A2. 15 Crop rotations appear to be well developed and are based on past research work andscientific recommendations. The rotations, however, still seem to be carried out in a rather rigid fashion,probably as a survival from times of the central command system, when each kolkhoz and sovkhoz wasallocated a certain production target for each crop, and was obliged to cultivate annually a predetermined


number of hectares. There clearly seems to be justification for a more flexible view of the rotations,particularly with respect to facilitating soil conservation (erosion control) measures, and possibly a widerrepresentation in the rotation of selected other economically advantageous crops.

Crop Yields

A2.16 Although Moldova had some of the highest crop yields of the FSU, agriculturalprofessionals are convinced, and the mission cannot but agree with them, that there is still plenty of roomfor improvement. Not only the research establishment but also the republic's best collective farms andstate farms have demonstrated that in many crops the realistic production potential is being realized onlyto 50-60%. This holds true not only for annual field crops but also for vegetables, fruits and grapes.

Grain Crops

A2.17 Until recently government considered that the optimal grain requirement of the countryis in the region of about 3.8 million tons, of which some 800,000 tons were destined for humanconsumption, and the remaining 3 million tons for livestock feed. The country's grain requirementsmight, however, change with adjustment/reductions of livestock numbers. In an average year grainimports accounted for about I million tons and hence governrment was, and still is, endeavoring toproduce as much grain as possible domestically. The Government's target for the mid-90s is 3.3 milliontons. In view of past performance, when a peak 3.4 million tons were produced in 1989 on an area of818,000 ha, this target looks attainable. However, in the ultimate analysis market forces should determinearea and production.

A2.18 In addition, since yields have beenrather erratic and intensification of grain MOLDOVAproduction has not been forthcoming, government Total Grain Areas ('000 ha)

officials envisage an increase of grain area to _ __ __ __ __ __875,000 ha by 1995, which is an increase ofalmost 5% over the highest grain area sown so 90- ....... ...... I..... ...*...

far, which was 837,000 ha in 1991 (Figure A2.1shows past and future estimated grain area boo .development). The rationale behind this thinking 700 .

is that: (a) the present not very productive orchardarea of about 200,000 ha should be reduced to Boo . .. .. ....... . ................... ......

150,000 ha by rejuvenation with modern varietiesbetter adapted to present market demands, and b0p9oss to" sae sI s7 lose isg s 1991 1992 1919 19 9b

plantations should be concentrated in ecologically 1993 .. d 1990 5o._ .t p.oj).ti-

most suitable areas, while keeping production at . _ _ _ 4 r _about the current level; and (b) there is presently Figure A2.1

little scope for expansion of high value crop (forexample, vegetables and fruits) production because of low quality of produce, decreased market demand,and inadequate domestic processing capacity. Until production technology and quality of fruits andvegetables improves and market demand for processed fruits and vegetables recovers, expansion of grain


area appears economically advisable. Maintaining grain prices at world levels will stimulate an increasein grain area without explicit intervention from administrators.

A2.19 Winter wheat is one of the two most important grain crops in terms of economicimportance, area sown and quantities produced; it shares this place with maize, though maize productionis usually (though not always) somewhat higher due to better mean yields. A ten year mean yield forwheat (1983-1992) was 35.9 quintal/ha. (A quintal is 100 kilograms, or .1 tons). In comparison, themean yield during the same ten year period in Ukraine was 30.4 q/ha.

A2.20 Maize is of about equal importance to Moldova as wheat, though its main destination isfor the livestock industry, while wheat is more important for human consumption.

A2.21 Maize yields suffered from even greater fluctuations than wheat yields, with a highaverage national yield of 50.2 q/ha recorded in the favorable year of 1989, and a low 24.5 q/ha in thedisastrously dry year of 1992, during which the long season spring crops suffered much more from thelate summer drought than winter crops. The national average yield over the past decade was 37.8 q/ha,while during the same time it was 33.0 q/ha in Ukraine.

A2.22 Sorghum is moredrought tolerant than maize and MOLDOVAwould seem suitable to the Moldovan Share of Grain Production by Crop

agroclimate. In earlier days, thiscrop was grown on about 40,000 habut yields are reported to have beenvery low.

A2.23 The mission believesthat there is a potential for sorghum Others

cultivation, particularly in the drier xriain legumes

and warmer southern part of the Maize rley 143

country. Varieties are available with 1120 87

a growing period of 100 days or less, barleyand a total crop water requirement of 288

less the 4,000 m3. Researchers should Thousands tons

continue variety screening of droughttolerant, short season cultivars forboth grain and green mass Average (1QS-1092)

production. Figure A2.2

A2.24 Grain legumes are avaluable source of vegetable protein for human as well as animal consumption, and they are an excellentsoil fertility enhancing crop. In Moldova, they usually comprise only about 4.6% of arable area, and thegovernment projects little change even by 1995, perhaps underestimating the possible impact of marketforces. Over 80% of legume area is cultivated with Deas, as a result of expansion in area under peas inthe 1980s in a campaign to increase protein in feed rations. Mean yield is 20 q/ha (with extremes of 11and 31 q/ha); by comparison the 1987-89 mean yield in Hungary was 24.5 q/ha, in Romania 26.5 q/ha,in France 45.1 q/ha and in Austria 54.3 q/ha. These figures suggest that western countries have


substantially better genetic material and production technology, and that Moldovan research and extensionhas some way to go to reduce the gap. Vetches. luDines and lentils are grown only to a small extent; itis too warm and dry for the former two but interest in lentils, which should grow well in Moldova, seemsto be increasing.

Industrial Crops

A2.25 Under industrial crops (technical crops in Moldovan terminology) are generallyunderstood crops which require major agroprocessing after harvest. The main representatives in thisgroup are sugarbeet, sunflower and tobacco, which in 1992, occupied 5%, 8%, and 2% of arable land,respectively. Sugarbeet is an important crop to Moldova and although it has not done well lately in eitherarea, yield or production, it has a good development potential. The country has adequate processingcapacity, albeit in many cases outdated, to process annually over 3 million tons of beet.

A2.26 Apart from the variability of climate, the major problem in sugarbeet production isobsolete production technology, starting with unsatisfactory seed (four local hybrids are available but theydo not measure up to western seed), and continuing with poor drilling equipment, inappropriate pestcontrol, and harvesting losses which are estimated to reach up to 30%.

A2.27 Sunflowers are one ofMoldova's "pride" crops, much as MOLDOVAhybrid maize, in which a lot of Sunflower Production, Area and Yield

genetic and other research work has 0noumaud. ha Thouands t

been carried out over the past years.About 80-90% of the hybrid seed l1o ... .......- 250

supply of the FSU came from ... .........Moldova (Figure A2.3). 1B0; -- -o

............................... .............. ............................................... . .. . . .. ............150

A2.28 Despite this relative 14D 100

success story there is still considerable room for improvement 120 :0because the world's best hybrids are loo l_l _l_l__

nowadays yielding 1.5-1.8 t/ha of oil 1983 1304 1980 t19e 1987 1988 1989 1990 193t t992

(almost the weight equivalent of Yield, relate to YE

Moldova's seed yield) at an average - Area --- Production :* Yields (q/haxlO)

oil content in the seed of 46-51 %.Baourc. KI.i.fy of Arbultu.r.

A2.29 Tobacco is the last Figure A2.3

major industrial crop of greateconomic importance to Moldova. In fact, discussions with farm managers have revealed that tobacco isby far their most lucrative crop, giving substantially better returns than all the other high value crops,such as fruits, vegetables, grapes. Moldova is producing mainly Virginia and Burley types of tobacco.Tobacco and its products comprise a considerable foreign trade component. Nevertheless, tobaccounderwent a very tumultuous development over the past decade, seeing its area, as well as production,erode from the mid 1980s to the early 1990s by about two thirds. Yields were much more consistent


during the decade and showed actually an increase of about 25% by 1991, but dropped thereafter to thelowest figure of less than 15 q/ha in the dry year of 1992 (Figure A2.4).

A2.30 Hops are another high value crop for which particularly northern Moldova might havea good production potential. Hops are economically a very important crop. They are an essential rawmaterial for beer breweries, and are also used in the pharmaceutical and cosmetic industries. Since thecrop has very specific soil and climate requirements, it can be successfully grown only in very limitedareas of the world. The crop needs aunique and complex productiontechnology, and has high demands on MOLDOVAmanagement and labor. As a result Tobacco Area, Production and Yields

of the specific demands and complex 140

technology, dry cones of good hops 1 ub 140

fetch excellent prices on world IOD- 120

markets. Moldovan policy makers \and scientists would be well advised so.to inform producers of the potential .0 ., . ............ ; 80

of hops, including market prospects 60

and technology, since hops could 40 . .. . . .

serve for both import substitution and # =.1.7 1,9 14..20

export. 0

1984 I9go 1988 1990 1992A2.31 A r o m a t i c a n d Yids r to Yi

medicinal plants, such as roses, Production Yields ~q/ha)gladiolus, tulips, lavender, sage,camomile, also appear to have an Source: istry of ArIoulture

excellent development potential inMoldova. These crops have high gudemand on professional managementand labor, and are generally very lucrative. Since Moldova is blessed with conditions suitable for thishighly specialized production, export outlets should be explored.

C. MAJOR CONSTRAINTS

A2.32 Major constraints preventing a better performance of the crop production subsector areof institutional nature (prevalence of collective and state enterprise, general lack of motivation), economicnature (slow and difficult introduction of market based economy, lack of incentives), and of technical andtechnological nature. The paper concentrates here mainly on the latter problems. Major limitations tohigher productivity are to be found much more in serious deficiencies in infrastructure, technology, andupstream and downstream farm services, sometimes coupled with lax farm management, than in thequalification, expertise and experience of agricultural professionals. From the farmers' point of view,major inhibitions to better yields and production are perceived to be in the inadequate availability andquality of major inputs, and the increased relative price of inputs.

A2.33 The main problems on the input side include the:


(a) unsatisfactory access to seeds and planting materials of superior genetic potential of openpollinated varieties as well as hybrids, which would be well adapted and of high quality.Although seed is generally available, genetic traits are often grossly inferior to state-of-the-art materials (Note: In contrast to the observations of agronomists from the WorldBank, Moldovan specialists contend that local seeds are of high quality. This is an areathat warrants further investigation.)

(b) inadequate availability and quality of mineral fertilizer, which apparently has reached thelowest levels in the past decade in 1992;

(c) drastic lack of advanced formulation, low application rate, rapidly biodegradable plantprotection chemicals, notably herbicides, but also fungicides and insecticides;

(d) obsolete seeding, planting, fertilizer distributing, spraying and harvesting machinescausing high losses;

(e) lack of post-harvest handling and storage capacities for agricultural produce; lack ofstorage capacities for fertilizer and chemicals; and

(f) last but certainly not least, the critical lack of spare parts, fuel and lubricants.

A2.34 In short, technology available to Moldovan farmers is outdated and often obsolete.

A2.35 Under the price structure that prevailed in 1992, some farms reported that they could notafford some of the inputs any more even had they been freely available.

D. RECOMMENDATIONS

General

A2.36 High quality seed, a reduced number of field operations with the assistance of modernchemicals and machines, optimal rates of good quality fertilizer, and appropriate machines for seeding,crop protection and harvesting, are essential to improvements in crop production. However, theintroduction of modern technology will greatly depend on a conducive economic environment whichwould encourage foreign investment and technical assistance, and on the future farm structure and size.The dimensions of the elements of technology, notably of farm machinery and equipment, may have tobe adjusted to smaller production units than has been the case until now. With the anticipated progressin privatization of agriculture and increase in the number of smaller farms, parameters of new technologywill have to be adjusted to those new clients as well.

A2.37 The orchard area of some 200,000 ha is grossly underexploited by low productive,overaged plantations of obsolete varieties, non-conforming to market demands. Horticulture experts inMoldova estimate that the orchard area could be reduced to some 150,000 ha. With introduction ofmodern varieties and technology the level of production could be maintained and even increased, andmore attractive produce could be offered to the market. Before reinvestment in orchards and vineyards


can be undertaken, private owners who can take responsibility for borrowing will have to receive titleto these lands.

Crop Specific

A2.38 More detailed technical recommendations and considerations by crops are as follows:

(a) Through breeding work and variety screening of high yielding varieties of wheat and barlev,developed either in Moldova, Ukraine, or under similar agro-ecological conditions elsewhere,introduce genetic material with higher yield potential, to at least reach mean yields of 42 q/ha forwheat (already achieved in 1989), and 38 q/ha for barley (already achieved in 1990).

(b) Maize hybrids are being sown on 100% of cultivated area, but mean yields are low for hybridmaterial. Introduction of genetic traits into hybrid parents is recommended, similar to thosedeveloped and demonstrated in Ukraine by foremost western seed producers; further, to improveseed dressing and calibration in the seed processing plants. The aim should be to achieve at leasta sustainable mean yield of 45 q/ha (more than 50 q/ha were harvested in 1989).

(c) It is also recommended to do more research and adaptation work with dwarf, short season, highyielding sorghum varieties, which yield around 40-50 q/ha under somewhat comparableconditions in the mid-west of the US.

(d) In grain legumes, it is recommended to continue intensive variety screening supplemented by ownbreeding work, since Moldovan yields are only about 40% of those achieved in advanced westerncountries. It is also recommended to diversify from peas, currently comprising over 80% ofpulses, into high yielding, drought resistant varieties of beans and lentils. (Note: Moldovanspecialists doubt that beans and lentils will yield well. This point merits further investigation.)

(e) In soybeans, the presently available varieties appear to be badly adapted to prevailing agro-climatological conditions. It is recommended to intensify variety screening work, mainly withgenetic material from drier areas in Canada and the US, and to identify short season, droughttolerant, cold and disease resistant varieties with photoperiodicity adjusted to long days, whichcould be quickly adapted to Moldovan conditions.

(f) A possible scenario for sugarbeet production would be to achieve, on the area of 80,000 ha, asustainable production of around 3 million t of beets.

(g) In sunflower production, even more intensive variety screening, genetic work and hybrid seedproduction, coupled with the remaining elements of modern technology, are preconditions forbetter productivity. Moldova, with its excellent scientists working on sunflowers and thefavorable growing conditions, should be aiming for a sustainable mean yield of at least 22 q/ha,which is quite realistic considering that in recent years the national average yield exceeded 21q/ha.

(h) Hops appears to be a new crop with good potential.


(i) Aromatic and medicinal plants are another group of special crops that can be successfullyproduced in Moldova. There appears to be good potential for expansion of these crops, but anyfurther production increase should be guided by medium and long term market demands.

TECHNICAL ANNEX 3

LIVESTOCK SECTOR

A. CURRENT SECTOR STATUS

A3. 1 Until the 1960's, livestock production in Moldova was concentrated in the collective andstate farms, with some production, mainly for home consumption, in the households. In the earlyseventies, the government initiated a program to build large scale units for the production of pork andbeef. These production units, built in nearly each rayon, were to be supplied with fodder and feed grainsby the surrounding state and collective farms. The feed base in the country, however, was insufficientto provide these complexes with feed, and Moldova imported between 1 and 1.5 million tons of feedgrain from other parts of the FSU to meet rising demand for feedgrain. With the breakup of the FSU,imports of feed became more expensive and the external market for animal products contracted. Since1991 the Moldovan livestock industry has faced a sudden rise in costs (for fuel, feed, andpharmaceuticals) and drop in demand.

A3.2 The adjustment in the livestock industry since 1991 has been partly spontaneous and partlyadministered (Figure A3.1). Collective and state farms transferred animals from the collective herds tothe household sector, and livestock complexes reduced herd size. The government has introduced anumber of measures particularly for the livestock sector, for example, the 1993-94 Program to Alleviatethe Crisis in the Livestock Sector (September, 1993), including feed subsidies, subsidized credit,accelerated transfer of social service obligations from livestock complexes to municipal budgets, andadditional financialsupport for dairyfarms with herds inexcess of 500 cows. Out hi nion rubis (M pulos)In addition, a 4000specified list of largescale complexes wasassured priority _00 __

allocation of feed 17from state sources. L1

A3.3 Pork esproduction has been l1owgranted priority over *Inpoultry and dairy inallocation of feed. A 1000significant part of thepork and poultryproduction is carried 0out in large scale f All e upuo LW&WWMproduction systems(complexes). Thesecomplexescompletely Figure A3.1 Changes in output of agriculture and speciffcally the livestock sector, 1986-191.d e p e n d o n Source: Min. of Agriculture


manufactured feed and are as such vulnerable to feed shortage. They are capital intensive and appear tobe inefficient in use of labor, equipment, physical plant, and energy. The overall quality of thetechnology is lower than needed under current more competitive conditions. The complexes have amanure/waste disposal problem. They produce a pork higher in fat than is demanded on world markets,and compete mainly in the markets of the former Soviet Union.

A3.4 Feed. The major feed supplies for the livestock sector consist of forage (mainly lucerne,corn-silage, fodder beets and grasses) for ruminants and feed grain for swine and poultry.

A3.5 Most of the 370,000 ha of pasture land is used for communal grazing (around villages,in woods etc.). This land is mainly grazed or cut by hand for own use. The management and controlof the shared-use land has increasingly shifted to the village, depending on the division of authoritybetween the mayor (to become elected in 1993) and the leaders of the collective and state farms. Atpresent, communal land is not well managed; the increasing number of privately owned animals exertsconsiderable pressure on these lands.

A3.6 The feed shortages are complicated by the poor quality of the feed ration, especially theunderfeeding of protein and mineral/vitamin supplements. The lack of a balanced diet forces animals tocompensate by a higher intake of grain, leading to poor feed conversion rates. The feed conversion inthe intensive swine industry in 1993 was approximately 4.5-6 kg feed for kg growth, compared to 3 kgin western Europe; conversions in the poultry industry, which should be below 2 kg feed/kg gain, arebetween 2.5 and 3.5. The main reason for low feed efficiency is poorly balanced rations.

A3.7 Feed milling. The present feed mill capacity in the country is between 2.5 and 3 milliontons:

-Inter-enterprise feed mills: 0 .8 million tons,-Cereale: 1.5 million tons,-Small (on farms) mills: 0.4 million tons.

Capacity utilization in feed milling was 90% as of 1989 but has declined to less than 30% by 1993.Recently some of the feed mills have been modernized (including Chisinau, Floresti, Bender, Yargara,Falesti). Present capacity for palette feed is 200,000 tons (most of it for poultry). The quality ofproduction is below standards used in the West, and plants are not energy-efficient.

A3.8 Dairy Production. The average yield per cow in Moldova was among the highest in theFSU, the result of a fairly sound fodder base and the rapid change in genetics from Russian Red toHolstein cattle. The overall average yield in 1989 was over 4000 kilograms per year but declined in 1993to less than 3000 kilograms, and has continued to decline in 1994.

A3.9 Dairy processing. Nearly all milk is processed in 20 state owned dairy plants. The sizeof the plants varies between 25 tons/shift to 350 tons/shift. The major products are fresh milk, butterand cheese. The major export products are butter (90% of export of dairy products) and some skimmedmilk powder. In 1992 the main exports were to Turkmenistan (for cash), Russia (for fuel) andAzerbaijan (for fuel).

A3. 10 The quality of the processing varies considerably. Major problems are (a) outdatedmilking machines (in many farms still the bucket type), (b) poor quality milking machines (poor qualityrubber parts, for example, lead to strained milking and the subsequent risk of mastitis), (c) long milk

Livestock Sector 53

lines which are difficult to clean (d) poor control of vacuum (again with the risk of mastitis); (e) poormilk cooling on the farm with the risk of more rapid deterioration of the milk quality. The poor coolingalso requires frequent pick-up of milk in summer; a costly venture with increasing energy prices. Qualitycontrol, implemented by the processing factory and in part carried out by the milk transporters, usesoutdated test systems and methodologies. Testing for antibiotic residues is uncommon, for example.

A3.11 Beef. Similarly to other FSU countries, beef production is basically a by-product of thedairy industry which supplies the young (male) animals for fattening. Beef breeds are virtually unknown.

A3.12 Pig. Swine production is concentrated in 38 complexes which house between 18,000 and36,000 pigs. In addition pork production takes place on state and collective farms, and in the householdsector. The average daily gain in the public sector farms declined from 433 gr./day in 1985 to 262gr./day in 1991, a reflection of the decreased quantity and quality of the feed provided to the animals,especially the shortage of protein and quality minerals/vitamins.

A3.13 Meat. Approximately40% of all meat is procured by the Table A3.1: Production of Major Livestock Productsstate, and slaughtered in 12 industrial (Meat and Milk in 1,000 tons; eggs in million)abattoirs; the rest is butchered insmaller slaughterhouses or by Product 1989 1990 1991 1992 1993households. In 1990 the government Dairy products 1242.9 1267.1 1228.7 1135.0 906.3initiated a program to build some Meat** 380.8 393.3 433.1 334.4 256.3smaller abattoirs (10 tons per day Eggs 871.4 827.3 1060.9 812.5 569.7with deep freeze storage facilities) inrural areas. The quality of both the * = Dairy products in milk equivalent.old and new abattoirs is mediocre. ** = live weightFundamental changes in design of Source: Ministry of Agriculture

plants as well as equipment would beneeded for Moldovan abattoirs tocomply with EU or US sanitary regulations. As they were planned before 1990, the energy efficiencyis low.

A3.14 Poultry. Poultry production is concentrated in 38 poultry complexes, of which 14 arebreeding farms and nine are incubation stations. The poultry industry has been hit hard by the lack offeed associated with economic adjustment, and rupture of trading links in the FSU as well as with thedrought of 1992. Broiler production has contracted steeply. The production in 1992 was 19.1 thousandtons, compared to 65.8 thousand tons in 1988.

A3.15 Animal Health. The animal health situation appears poor. Calculations of mortality rates(based on government data) show a high mortality especially among pigs. The mortality is especiallyhigh among young animals; in cattle, for example, calves contribute 80-90% to the mortality rate.

A3.16 Veterinary services are provided by the state, by the veterinarians and veterinarytechnicians employed by state and collective farms, and by individuals licensed to provide veterinaryservices. Most drugs and vaccines are imported from the FSU only a small volume of feed antibioticsand medicine are manufactured locally.


A3. 17 The state veterinary services in the rayon (as well as in some larger cities) also employspecialists in epizootic diseases, chemotherapy, sanitation, animal breeding as well as some generalservice veterinarians and a number who work in the rayon level diagnostic laboratory. The state servicein the city of Chisinau, for example, employs 23 veterinarians, eight veterinary technicians and 13laboratory assistants. The Director reports that there is a shortage of 700 veterinarians. This is basedon a guideline on the number of livestock unit per veterinarian; at present the number appears to be 850head of cattle equivalent per veterinarian, which seems high.

A3.18 No plans have been made regarding privatization of state veterinary services, apart fromthe introduction of payment, by farms and private owners, for drugs used the treatment of animals.Vaccinations are still provided free of charge. Several firms engaged in distribution of veterinary supplieshave been commercialized in preparation for privatization.

B. RECOMMENDATIONS

A3. 19 The livestock sector in Moldova is still in transition and is likely to require furtheradjustment. The size of the adjustment will depend on the development of internal and external markets.In the short term it depends on the feed base for livestock in the country. Present feed production(assuming a better utilization of industrial by-products) is just sufficient to satisfy domestic consumptionof livestock products, but not for excess production for an export market. Moldova is located betweentwo potential feed grain producers and this should have good access to additional feed and fodder.However, to compete on the international market Moldova's production system must prove competitivewith its neighbors. Whether this is indeed the case is by no means clear as availability of additional feedsources (industrial by-products such as sugar beet pulp, fruit pulp, bran and bone/meat meal) is limited,and minerals/vitamins have to be imported.

A3.20 The droughts of 1992 and 1994 clearly show the vulnerability of the current livestockproduction system, and the lessons learned from this experience should be carefully analyzed. It shouldlead to a reassessment of the objectives of the production system, which should concentrate in the shortrun on the domestic market. In this respect, realistic estimates of per capita demand should be made,and may be in the range of 35-40 kg per capita for meat (not much different from current consumption),10 kg fish and 300 kg milk. Such a consumption level can in normal years be satisfied by localproduction. With increased efficiency, local production may well exceed domestic use.

A3.21 Under present intensive agricultural land use most livestock production (except in thesouth) is likely to be based on permanently housed animals. Such a system is expensive and requires highproductivity and careful management. Improved productivity will require better availability of qualityfeed supplements such as minerals and vitamins, quality vaccines and animal drugs, better ventilatedhousing, better milking equipment etc.

A3.22 The country's livestock industry seems too small to support industries such as feedadditive production, milking equipment, animal drugs and vaccines. In the short term, the country willdepend on international markets for the supply of these inputs. The continued economic viability of thelivestock sector, like the crop sector, will depend on producers' ability to access international marketsfor critical inputs. A stable currency and liberal trading regime are crucial.

Livestock Sector 55

Short Term

A3.23 The short term agenda of the government should concentrate on facilitating contractionof the portion of the livestock industry that is no longer economically viable, and improving input supply,service, and marketing for the restructured remaining industry. The cessation of preferential credit willnecessitate liquidation procedures for enterprises that cannot continue to operate. Livestock complexesthat remain in operation should be privatized.

A3.24 Measures needed to improve animal health should be maintained on a basis of partial costrecovery until a program of public and private services in animal health is designed.

A3.25 The privatization (or leasing) of feed mills should continue. Those owned by Cerealeshould be included in the restructuring and privatization program for the large parastatals to be designedin 1994.

A3.26 The privatization of certain services can be planned irrespective of the outcome of farmprivatization. Included in this process should be:

a. Planning for the privatization of clinical veterinary services, including the privatizationof sale and distribution of animal drugs, vaccines and equipment;

b. Planning for the privatization of breeding service and sales and distribution of semen;

c. Planning for the privatization of farm services such as repair and servicing of milkingequipment, of farm buildings and equipment. There is a need for small multi-purposestores/repair shops at the village level which can be met in part by major changes in theconsumer cooperative system, scale of assets and stores, including removal of margincontrols and increased member representation in management. Additional retail servicescan be provided by privatization of state stores and transport.

Information/Extension/Education

A3.27 Rapidly changing conditions in which the livestock sector functions require rapid adoptionof new technologies and policies. The most urgent action of the government is to assure disseminationof information to the rural population. This information includes plans and ideas regarding privatization,new production technologies, proper environmental technologies, farm management, and national andinternational prices.

A3.28 It is equally urgent to update, modernize and improve the education of the future cadreof the livestock sector. In the short term improvement should be made by provision of literature,videotapes, and computer programs to the faculties of animal science and veterinary medicine, supportingvisits and training in other countries. Revision of curriculum, particularly introduction of managementcourses along with technical courses, should undertaken.


Technical Adjustment

A3.29 With respect to production, improvement in productivity can be achieved by:

a. Proper balancing of the feed diet. Most diets (whether cattle, pigs or poultry) aresomewhat deficient in protein and often severely deficient in minerals and vitamins. Highpriority should be given to the adequate provision of feed supplements, as this can leadto major savings in grain and other feed, and to better health.

b. Better quality control for vaccines and drugs. In the present financial crisis most drugsand vaccines are procured at the lowest price. Quality is not always acceptable and cancause considerable waste.

c. Improving ventilation in animal housing.

d. Improving the on-farm quality of the milking process and equipment through the use ofbetter-quality rubber parts, frequent control of vacuum, reducing the length of vacuumlines, improving design of milk lines to allow easy cleaning, and improving cooled milkstorage on the farm.

TECHNICAL ANNEX 4

VINI-VITICULTURE

A. GRAPE PRODUCTION

A4.1 One seventh of Moldova's cultivated land is planted to vineyards. Vineyards covered amaximum area of 256.4 thousand hectares in 1976, but in recent years area has varied between 170-180thousand hectares. Moldova has a continental climate, dry and cold in winter with temperatures rangingfrom -2.5° C to -5° C, and warm in summer, with average temperatures of 17.50C to 220C, andoccasionally reaching the 300C. The average rainfall is about 420 mm. This level of precipitation issomewhat low for viticulture. The climate of Moldova also has some negative elements. The countrysuffers from periodic hard frosts which damage vineyards locally approximately every ten years. Thereare also occasional heavy rains which create problems of rot, again locally. Vineyards have a relativelyshort expected life span of between 15 and 20 years.

A4.2 The climatic conditions of the central region are favorable to the growing of grapes andto the production of white table wines and basic wines for sparkling wines. In the warmer southernregion, the climatic conditions are very favorable to the growing of black grapes and grapes for liqueurwines. The White varieties include: Pinot, Chardonnay, Traminer, Aligote, Riesling, Sylvaner, MuscatOtonel, Sauvignon Blanc, Fetiaska, Rkatziteli, Victoria. The black grape varieties are: CabernetSauvignon, Merlot, Malbec, Pinot Noir Hybrids, Saperavi, Lidia, Isabella, Gamay Freo, Bastardo deMagaratch.

A4.3 The areas planted with sparkling grape varieties (Pinot, Chardonnay, Riesling of Rhine,Aligote, Cabernet Sauvignon, Traminer) cover approximately 60,000 hectares. This represents 46% ofall the wine grape varieties, indicating that there are sufficient raw materials for the production ofsparkling wines. Table grape varieties (that is, not for production of wine) are; Cardinal, Muscat ofHamburg, and the local variety, Moldova, as well as Saba Jewel, Irshan Oliver, Queen, Amber Muscat,Early Magaracha, and White Shasla. Moldovan growers began to grow European varieties (mainlyCabernet Sauvignon, Merlot, Malbec) about 35-40 years ago. The proportion of imported vines as ashare of domestic planting has always been small. The National Institute of Research in Viticulturecertifies domestically produced root stock as virus free.

A4.4 The plantation density is about 2200 to 2700 grape vines per hectare. In general,vineyards are grown on trellising with four wires of galvanized iron and posts made of concrete. Theplanting dates are March - April. Planting of new vines takes place three to five years after old vinesare uprooted. The soil receives up to sixty tons of organic fertilizers, and a normative does of mineralfertilizer is alsu recommended.

A4.5 Plant protection agents are imported and distributed by Fertilitatea, or in some cases, bywineries for their growers. Much of the equipment used in grape production is produced domestically,although imports are also important, particularly sprayers for application of pesticides. Equipmentcurrently used in grape production was designed for operations of 1,000 to 3,000 hectares.

A4.6 Vineyards are included in the land reform and farm restructuring. In the determinationof "equivalent shares", vineyards and crop land are made equivalent through a conversion coefficient.


Although the vineyards could in principle be managed either as small scale units or as large traditionalunits, little change in the traditional pattern is yet observable.

B. WINE PRODUCTION

A4.7 Moldovan wine production can be divided into the following categories:

Basic wines for sparkling wines and brandy bottled in part in Moldova, but for the mostpart in the other FSU Republics;

Fortified wines; and

Dry wines divided in two types:

-- dry wines of quality-- ordinary dry wines.

A4.8 Moldova has 150 wine-making enterprises. There are nine plants for wine bottling inMoldova, and 14 in cities of other FSU countries that traditionally bottled Moldovan wine. There arethree plants for the production of brandy (Beltsy, Tiraspol, Kishinev) and two plants (Krikov andMoldvinchampagnecombinat) for the production of sparkling wines.

A4.9 The annual wine production of Moldova is 3 to 4 million hectoliters, including 11 millionbottles of sparkling wines, 300,000 to 400,000 hectoliters of table dry wines, and 150,000 hectoliters ofbrandy. All the wineries produce the same types of wines, and most wineries were built approximately30 years ago on the same design.

A4. 10 The main characteristic of Moldovan wineries is their large production capacity. Mosthave the capacity for 10,000 tons per season, with the exception of four plants with capacity for 40,000tons of grapes per season.

A4.11 Most of Moldova's wineries will be privatized in the 1993-94 program. The winerieswhich are not on the list to be privatized are those producing brandy such as the Beltsi, Aroma andTiraspol plants, and those producing sparkling wines such as Krikova and Combinat Champagne MoldovaKishinev.

A4.12 Traditionally the Ministry of Agriculture and Food or agents of the government suppliedinputs through the system of distribution of material supply. However, due to the lack of foreigncurrency, this source of supply is now insufficient for the wineries. Some of the wineries go directly toneighboring countries for their purchases of inputs.

A4.13 Heavy equipment such as presses, vats, destemmers and drainers are in bad repair. Muchof the equipment is old and fully depreciated, and replacement will require large investments. Due tothe lack of grapes, fixed equipment is used at only partial capacity. The decline in production makes iteconomically advisable to retire rather than repair old equipment.

Vini-Viticulture 59

A4. 14 Due to the lack of credit and foreign currency, wineries cannot obtain sufficient suppliesfor bottles, corks, bottle caps, chemical products, and other inputs. In order to retain funds necessaryto run the winery, they typically delay payment for the grapes. Thus the producers are used as bankersproviding loans at negative real interest rates.

C. WINE MARKETING

A4. 15 In recent years 66% of the production was sold to the Government, which sold to otherFSU countries and to state stores in Moldova. Ten percent of the wine production was generally givenin bottles to the grape producers. The remaining 24% was sold by the winery on the local market andfor export. DACIA FENIX is the marketing office of the Government. DACIA FENIX centralizes allthe marketing operations and the creation of labels (which are often made outside Moldova, in Hungaryfor example) and advertising.

A4.16 In order to direct production towards export, which requires products of recognizedinternational quality (stabilized wines with no bacteria problem), a Moldovan laboratory must be certifiedand internationally recognized to provide reliable analysis and guarantee officially the quality of thefinished products.

A4. 17 Most Moldovan wines tasted during the mission were of average quality, and some weregood, especially red wines (Cabernet, Merlot, Malbec). Because of the presence of skilled people, goodsoils and favorable climate, the quality of wine can be improved with better grapes and better wine-making methods.

A4.18 The international market appreciates varietal wines, especially Cabernet Sauvignon,Merlot, Traminer, Riesling. These wines must be aromatic, cool, well balanced and without any physico-chemical problems. Packaging must conform to international standards: standard bottles of 0.75 liters,corks, caps of aluminum complex, conforming labels and back-labels, and cartons for 12 bottles.

A4. 19 The present packaging of Moldovan wine is typically: bottles of 0.70 liters, plastic corks,plastic caps, and non standard labels.

A4.20 The world market for wines has grown very competitive with the entry of a number ofnew players. Since Moldovan wines are not well known in the West, it is necessary to invest inmarketing. Increased export will require consistently good filtration. At present filtration presentsproblems with some wines, although there are also wines with excellent quality characteristics producedfor the domestic market and for export.

D. DOMESTIC MANUFACTURING OF EQUIPMENT

A4.21 From the grape hopper to the bottling line, much equipment is from Russia, but Moldovaalso produces wine making equipment. Moldova manufactures vertical presses (type VPG 30) forsparkling wine and also track-laying tractors for the vineyards.

A4.22 As new equipment is considered, it would be desirable to reduce the scale of equipment


from the current 20 ton capacity per hour to approximately three to five tons per hour. This wouldfacilitate quality control.

E. STRATEGY FOR THE FUTURE

A4.23 In order to use valuable land to best advantage, grape yields should be increased. Whennew vines are planted, they should be of varieties certified virus free.

A4.24 With investment in packaging and bottling, Moldovan wines will be easier to market inthe FSU and in hard currency markets. Privatization early in the 1993-94 program is the single mostimportant development that can attract investment. A domestic capability to produce acceptable bottles,including champagne bottles, will be important. With improved capacity to package a product accordingto specifications of export markets, improved quality control of the wine itself will be important.Improvements are needed in pressing, processing the musts before fermentation, fermentation, and inoperations after fermentation.

A4.25 The current time period for ageing, (two or three years), is too long and should beshortened. White wines should be aged for a maximum period of 6 to 8 months in order to keep theiraromatic potential, coolness and color. Red wines should be aged for 12 to 18 months to keep theirstructure, body, bouquet and power. The reduction of the ageing period would allow sales of severalyear's vintages that have been kept too long in vats or casks. This would bring the wineries badly neededrevenues.

A4.26 The Moldovan Government should accelerate the designation of supervised originappellations. Production areas can be delimited according to soil and climate.

TECHNICAL ANNEX 5

THE PROCESSING INDUSTRY: FRUITS AND VEGETABLES

A. PRODUCTION AND PROCESSING

A5.1 The processing industry of Moldova relies on raw products from Moldovan farms. Whilethe area devoted to vegetable production has remained fairly constant, and perhaps declined a little, thearea devoted to the production of irrigated vegetables has declined substantially. Irrigated vegetables in1980 represented 70% of area devoted to vegetables, and only 55% in 1990. Yields from irrigated areasaverage only about 20% more than from non-irrigated areas, so the marginal returns to irrigation maynot be profitable, except in years of severe drought. Irrigation should increase yields and improvetenderness and quality. The relatively low yields of irrigated vegetables raise questions about utilizationof irrigated area.

A5.2 Available statistics suggest that irrigation appears to be of doubtful value for fruitproduction. Again, the yield for irrigated orchards does not exceed nonirrigated orchards by much.These statistics suggest that factors other than soil moisture may be restricting yields of fruits.

A5.3 The area devoted to production of fruits and berries has steadily increased during theyears 1983-92. Yields show variability, and average 12.5 tons per hectare, but have varied about 30%around the average. In 1991 and 1992, yields declined to very low levels of 6.8 and 4.6 tons per hectare.At these yields, orchards were probably not profitable, and canneries suffered serious losses due to lowvolume and high fixed costs. Annual variations in farm output for vegetables and tree fruits has animpact on the volume and profitability of the canning industry.

A5.4 Vegetable production has substantially exceeded domestic consumption in recent yearsby about 150%. Fruit production has been four to five times domestic consumption in recent years.Processed fruits and vegetables are thus an important export industry.

A5.5 There are 23 major operating state-owned canneries in Moldova. The 23 canneriesprocess in excess of one million tons of agricultural products, of which vegetables comprise 630,000 tons.Of this quantity, tomatoes represent 535,000 tons. Fruits comprise 410,000 tons, of which apples are330,000 tons, stone fruits are 70,000 tons and other fruits and berries are 10,000 tons. Twenty of the23 canneries manufacture tomato paste. Three canneries purchase between 50,000 to 90,000 tons of freshtomatoes for processing. These are large by international comparison in terms of volume. Firms in thenext category, (30,000 to 49,000 tons of fresh tomatoes) might be considered marginal for tomato pasteplants by world standards, but large in terms of whole and crushed tomatoes.

A5.6 Tomato paste is a commodity with world-wide standards of quality. The technology forproducing tomato paste is fairly standardized throughout the world, and many developing countriesconsider this commodity a means to enter international trade. The tomato paste market is thus highlycompetitive and entry is difficult. There may be a profitable opportunities for smaller companies to canwhole and chopped tomatoes, and to investigate opportunities to can peeled whole tomatoes. Presently,it appears that whole tomatoes are processed with peel intact.

A5.7 Twenty one of the 23 tomato canneries make tomato juice. The largest are Grigoriopol,Anenii Noi, Varnitsa and May 1 (Tiraspol). They are in the size category of five to eight million


conditional cans. This range is from 937,500 to 1,500,000 U.S. gallons of single strength tomato juice.

A5.8 Apples are the main fruit processed in Moldova, and are processed in a variety of forms.Twenty two of the 23 canneries process one or more apple products. Concentrated apple juice is a majorproduct and is made at nine canneries.

A5.9 There is a fairly high degree of concentration of output among the canneries. May 1(Tiraspol), Varnitsa (Benderi) and Crasnoje are the three largest canneries measured by size of output.Measured in terms of fresh product utilized, Crasnoje and May 1 (Tiraspol) are the largest, with Varnitsadropping to the small category. The three largest processors of apple products are at Orhei, Ungheni,and Cupchina. Thus six large plants account for a large part of industry output. For both fruits andvegetables there is a large number of small companies. Visits to plants of various sizes did not show anyone size to have more modern processing techniques or equipment, buildings, or better product flowthrough the factories. In fact, one factory with the most modern (1988) concentrating equipment provideda very clear apple juice with a metallic flavor (from the can). Modern processing equipment does notguarantee the best finished product, but it may make it possible, if other factors are satisfactory.

A5. 10 The number of full-time workers in Moldovan canneries is very high in proportion toseasonal workers, especially when one considers canning to be a seasonal economic activity. For the fivecanneries visited, seasonal workers represent only 30% of the total peak work force, and permanentworkers represent 70%. This is about the reverse in most seasonal canneries in the U.S. As privatizationoccurs, increasingly competitive canning enterprises will have to reduce the retention of redundant laboroff season.

A5. 11 The plants visited are labor intensive. Jars and cans are stacked by hand, labels areinstalled individually by hand and many lines are approximately 50% mechanized. Product flows throughthe canneries are not always logical. Machinery is old, and much is technologically outdated. Electricmotors are not energy efficient. Floors are not even or of consistent construction, so that clean-up mustbe very difficult. A number of conditions were observed in each plant visited that would violate safetyregulations in most western countries. The canneries are not regulated or inspected for safety conditions.Finished product quality is checked by the state laboratory operated by the Department of Fruit andVegetable Growing and Processing of the Ministry of Agriculture and Food.

A5. 12 Moldovan canneries visited normally operate between 40 to 65 % of capacity. Aminimum of 65% prevails for most diversified canners in the U.S. Those operating at low levels ofcapacity have high fixed costs which make them non-competitive.

A5.13 Moldova engages in substantial export trade with its fruit and vegetable products, andwithin the former USSR, has enjoyed a good reputation as a supplier of these commodities. In additionto export of canned products, Moldova has traditionally exported processed fruits and vegetables in bulk.For example, in 1991 the value of exports of juices and extracts was almost 100 million rubles, comparedto a value of canned tomato exports of 117 million rubles. The value of canned fruit products in 1991was three times that of bulk concentrate juices. Bulk juices, however, have traditionally been betterestablished on hard currency export markets. Two-thirds of bulk juice exports in 1991 went to Austriaand Germany (see statistical appendix). Russia was the main customer for canned vegetables, tomatoes,and fruit in 1991. It accounted for 58, 35, and 72%, respectively, for canned product exports.

The Processing Industry. Fruits and Vegetables 63

A5. 14 According to current procedures of the privatization program, 50% of shares will bedistributed to past suppliers of raw materials; 20% to workers and 30% to the general public againstvouchers. If groups do not subscribe to their shares, these can be sold at public auction. This programwill be implemented in 1994.

A5.15 Under existing legislation it is possible, but very difficult, for a private foreign enterpriseto become licensed in Moldova. A joint venture expecting to sell part of its output in Moldova must belicensed. A joint venture where the foreign partner sells its products to outside markets does not requirea license from the Ministry of Agriculture and Food, but will require authorization from other agencies.

A5. 16 Under existing legislation, a canning enterprise cannot be purchased solely by its suppliersto be owned by the farmers and operated as a western-style cooperative, although under the privatizationprogram suppliers could in theory acquire 70% of shares. However, a group of farmers able to capitalizea new enterprise could organize a cooperative to process and market their farm products.

Priorities for the Canning Industry

A5. 17 There seems to be common understanding of governmental and industry priorities for thedevelopment of the fruit and vegetable canning industry. Priorities are based on the fact that Moldovahas the capability to produce canned and processed fruits and vegetables in excess of its domestic needs,and has developed a strong market reputation within the former USSR. Although Moldovan productsare well known and highly regarded throughout the former Soviet Union, Moldovan exporters will haveto pay careful attention to pricing and quality in order to retain this market.

A5.18 In order to improve the quality of final products there will be a need for new equipment,including production lines and packaging equipment, to raise quality, retain existing markets, and expandgeographically. In order better to meet consumer needs, container sizes will have to be reduced. Achange in the concept of producing for volume to producing for specific consumer preferences will alsoneed to be established. Consumers want more information on nutrition, and products with highernutritive content.

A5. 19 The use of re-sealable twist lids for glass jars will improve product quality in homes aftercontainers are opened. Use of tetra brik cartons could improve product life, and reduce costs due to lessbreakage and lower container weight, but tetra brik technology is not now in use and its economicadvantage has not been rigorously evaluated. The use of plastic tubs for jams and jellies could reducepackaging costs.

A5.20 These general objectives appear reasonable and should prove of value for the industry'sgrowth. Specific measures must be subjected to rigorous cost/benefit analysis. Privatization of foodprocessing must be accelerated, along with reforms in the financial sector. Once financial reform hasprogressed more and processors are privatized, loans and equity from international sources will be moreavailable for the processing industry.

A5.21 The Government and industry have developed specific proposals for investment topromote the objectives described above. Each of these proposals should be subjected to evaluation foreconomic rate of return and credit-worthiness of the borrower.


a. Renovation of 6 canneries:* Kupchin (pectin manufacturing)* Soroca (fruit puree for baby food)* Causheni (concentrated fruit juices)* Ungheni (juices; packaging line ((tetra brik)) for tomato paste)* Calarash (juices)* Anenii Noi (renovation of processing lines and equipment, tetra brik packaging)

b. Development of citric acid manufacturing capabilities from beet sugar wastes, mainly forexport.

c. Margarine manufacturing for domestic needs.

d. Sweeteners, such as corn sweeteners and molasses from sugar beet refining, primarilyfor export, but some potential use by the canning industry.

e. General improvement of packaging and containers used by the canning industry, such asre-sealable twist lids for glass jars, as replacement for the pry-off lids now used.

B. CONCLUSIONS

A5.22 The quality of processed fruit and vegetable products depends on several factors. Freshproducts must be delivered free of disease, rot, external blemishes, insect and mechanical injury.Factories must properly prepare and sort raw products, and cooking and cooling must be done at propertemperatures, and containers must be of acceptable quality.

A5.23 The site study for this report was made in May prior to the start of the canning season,which starts in early to mid June. Although this was the off-season, the state of disorganization in mostplants suggests the canneries will not receive complete refurbishment prior to season. Most productionlines and many cookers are old, which leads to improper controls, including cooking temperatures andtimes. Evidence of these problems comes from the appearance of canned fruits and color and tastes ofjams, preserves, and juices. Use of steel containers results in metallic tastes to juices in some plants.Storage conditions for empty jars and containers are inadequate, and often containers are exposed to theelements without protection or cover.

A5.24 Floors are uneven and concrete often cracked, so that sanitation and cleanliness may beinadequate. It is difficult to move products on such floors by fork lifts.

A5.25 Investments should be considered in terms of production lines or systems. When newsections are added, consideration should be given to new (steel) buildings, with proper re-enforced floors.

A5.26 Tomatoes are an important commodity for processing in Moldova. Some of theMoldovan plants are large enough to be internationally competitive if they produce quality products.Tomato paste is a major product from canneries in the country, but for various reasons, the quality ofthe final product does not adequately meet most western requirements. This is due mainly to moldcounts, but the quality is acceptable in markets in the FSU. Mold originates in the field, and often results

The Processing Industry: Fruits and Vegetables 65

from seasonal rains that decay the fruit. Better sorting at the harvest level can materially reduce moldson fruits delivered to the canneries, and if canneries in turn can process fruit shortly after delivery, theresulting paste will have fewer mold spores.

A5.27 Aseptic packaging can be helpful for the industry, particularly as processors shift to 200kg drum containers.

A5.28 Site inspections suggest that the industry will require a large-scale conversion to newertechnology, energy saving electric motors and boilers, and packaging equipment and supplies during thenext 10 years. If this does not occur, Moldova might easily be replaced by canners in other FSUcountries, and by countries such as Bulgaria, Romania, Hungary, and Poland.

STATISTICAL ANNEX

STATISTICAL ANNEXLIST OF TABLES

1. Basic Sectoral Indicators .......... . . .. . . .. . . .. . . .. . .. . . .. . . .. . . .. . . . 69A. National Income in Current and 1983 Prices, Million Rubles, 1980-1992B. Per-capita Consumption of Basic Foods, 1975-1993C. Basic Indicators for the Agricultural Sector, 1985-1993D. Per-capita Production of Basic Agricultural Goods, 1985-1992E. Total Area, Output, and Yields for Major Crops, 1983-1992F. Main Aggregates of Animal HusbandryG. Grain Balances, 1986-1990H. Debt Held By Agro-Industrial Complexes, End of Period, in Thousand Rubles1. Land Use in Thousand HectaresJ. Land Use by Crop and Sector, Thousand Hectares, 1980-1991

II. Agricultural Prices and Marketing ........ . . . . . . . . . 81A. Fuel Prices in Rubles, 1989-1993B. Farm Machinery Supply and Prices, 1989-1993C. Producer Prices Received and Volume Sold Through Various Marketing ChannelsD. Food Prices in State Stores, 1992E. Changes in Marketing Channels, 1990-1992

III. Animal Inventories and Productivity ........ . . . . . ........... . . . . . . . . . . . . 101A. Animal Inventories, Public Sector, Beginning of Year, 1985-1993B. Animal Inventories in Public Sector Farms, End of Year, (000) by RaionC. Animal Inventories in All Farms by Raion, 1992 and 1993D. Use of Feed for Milk and Meat, All Farms, 1982-1992 (In Standard Feed Units)E. Productivity of Livestock, 1985-1991, Public Sector and All Farms

IV. Input Availability and Use ......... . . .. . . . .. . . . .. . . . . .. . . . .. . . . . .. . . 112A. Value of Agricultural Inputs Used, 1990 and 1992 (Thousand Current Rubles)B. Use of Inputs in Agriculture, QuantitiesC. Agricultural Equipment Stocks, 1985-1991D. Normative Use of Inputs in the Crop SectorE. Normative Input Use Per Ton of Output in the Livestock Sector

V . Farm Structure . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 117A. Basic Data on Publicly Owned FarmsB. The Household Sector in Agriculture

VI. Food Processing . ............ . . .............. 119A. Production of Major Types of Processed Food, 1985-1991

VII. International Trade . . ........... . .............. 121A. Interrepublic and Foreign Trade, 1982-1991B. Trade by Branch of Activity, Million Rubles, 1982-1991C. Exports By Item in Natural Units and Value (Thousand Rubles), 1991D. Imports By Item in Natural Units and Value (Thousand Rubles), 1991

Table I A: National Income in Current and 1983 Prices, Million Rubles, 1980-1992

| Prices 11980 | 1981 1982 1983 1984 1985 | 1986 1987 | 1988 (1989 | 1990 | 1991 _|1992'

Total Actual 5910 6160 7104 7653 7698 6537 6969 7190 7361 8272 9443 18753 163710

Of which agriculture Actual 1771 1757 2309 2699 2705 2154 2700 2629 2730 3311 3934 7823 49972

Share of Agriculture (percentage) Actual 30.0 28.5 32.5 35.3 35.1 33.0 38.7 36.6 37.1 40.0 41.7 41.7 30.5

Total 1983 6075 6078 6988 7375 7617 6962 7513 7606 7735 8416 8232 6801 5352

Of which agriculture 1983 2688 2364 3119 3057 3168 2479 3076 2972 2988 3206 2570 1850 1647

Share of Agriculture (percentage) 1983 44.2 38.9 44.6 41.5 41.6 35.6 40.9 39.1 38.6 38.1 31.2 27.2 30.8

Source: Department of Statistics

Estimated

Statistics 69

Table I B: Per-capita Consumption of Basic Foods, 1970-1993

Product J Units [ 1970 | 1975 | 1980 | 1985 [ 1986 | 1987 1988 | 1989 1990 I 1991 | 1992 | 1993

Bread and grain products Kilograms 187.0 174.0 177.0 173.0 173.0 174.0 173.0 174.0 171.0 175.0 170.0 173.0

Potatoes Kilograms 75.0 75.0 75.0 79.0 81.0 79.0 67.0 74.0 69.0 69.0 66.5 80.0

Vegetables and squash Kilograms 84.0 113.0 115.0 129.0 134.0 125.0 129.0 107.0 112.0 113.0 95.0 91.0

Fruits,berries,grapes Kilograms 59.0 56.0 44.0 64.0 71.0 67.0 79.0 81.0 79.0 79.0 63.0

Sugar Kilograms 32.8 42.5 47.0 44.9 47.6 50.9 50.2 45.4 48.9 41.2 30.5

Vegetable oil Kilograms 10.8 9.7 10.0 12.3 11.8 12.1 13.0 13.0 14.1 11.6 8.5

Meat and meat products Kilograms 35.0 46.0 49.0 54.0 56.0 54.0 55.0 57.0 58.0 56.0 46.0 34.0

Fish and fish products Kilograms 12.4 13.7 13.9 13.4 14.4 14.1 14.3 12.6 12.0 6.7 2.3

Milk and milk products Kilograms 172.0 217.0 265.0 294.0 293.0 295.0 313.0 303.0 303.0 259.0 198.0 172.0

Eggs Number 128.0 140.0 183.0 209.0 214.0 212.0 219.0 211.0 203.0 195.0 166.0 110.0

Source: Ministry of Agriculture and Narodnoe Khoziaistvo Respubliki Moldova 1991, pp. 19-20; Respublika Moldova v tsifrakh 1992, pp. 67-68.

Statistics 70

Table I C: Basic Indicators for the Agricultural Sector, 1985-1993

[Indicator Units 1985 1986 1987 1988 1989 1990 1991 | 1992 1 1993

1. Output in 1983 prices l l

All farms, total Million rubles 4531.9 4990.5 4776.0 4806.0 5058.3 4408.4 3964.4 3312.0 3400.0

Crops, all farms Million rubles 2742.4 3211.3 2975.8 2887.1 3078.8 2536.7 2386.2 2051.0

Livestock, all farms Million rubles 1789.5 1779.2 1800.2 1918.9 1979.5 1871.7 1578.2 1261.0

Public sector, total Million rubles 3747.1 4181.7 3993.7 3956.3 4119.8 3607.4 3104.9 2438.0

Crops, public sector Million rubles 2401.9 2807.9 2608.7 2476.2 2613.4 2205.4 1983.4 1621.0

Livestock, public sector Million rubles 1345.2 1373.8 1385.0 1480.1 1506.4 1402.0 1121.5 817.0

Private sector, total Million rubles 784.8 808.8 782.3 849.7 938.5 801.0 859.5 874.0

Crops, private sector Million rubles 340.5 403.4 367.1 410.9 465.4 331.3 402.8 430.0

Livestock, private sector Million rubles 444.3 435.4 415.2 438.8 473.1 469.7 456.7 444.0

11. Agricultural area T

All farms Thousand hectares 2563.4 2563.2 2559.2 2551.9 2549.1 2545.8 2542.0 2537.2

Public sector Thousand hectares 2382.5 2381.2 2374.6 2356.2 2348.3 2332.1 2281.3 2174.0

Private sector Thousand hectares 180.9 182.0 184.6 195.7 200.8 213.7 ! 260.7 ! 363.2

[Ill. Work force, public sector Thousand people [ 653.3 602.2 574.5 532.5 [ 569.8 ] 562.9 T 546.0 507.7

[IV. Capital, public sector T Million rubles 6643.0 | 6841.0 | 7042.0 6767.0 [ 6981.0 | 7274.0 | 7393.0 [ NA

[ Source: Ministry of Agriculture from Statistical handbooks l

Statistics 71

Table I D: Per-capita Production of Basic Agricultural Goods, 1985-1992

Product J Unit 1 1985| 1989 1990 1991 1992

Grain Kilograms 575 786 602 734 483

Sunflowers Kilograms 59 65 58 39 45

Sugar beets Kilograms 573 831 544 518 454

PotatOes Kilograms 99 107 68 67 72

Vegetables Kilograms 303 277 270 227 131

Fnmits and berries Kilograms 242 269 206 160 118

apes Kilograms 158 239 215 178 190

Meat, slaughter weight Kilograms 73 82 84 70 54

Milk Kilograms 340 356 346 296 261

Eggs Number 260 265 259 243 187

Source: Ministry of Agriculture from Department of Statistics

Statistics

72

Table I E: Total Area, Output, and Yields for Major Crops, 1983-1993

1. Area planted, thousand hectares

[ ] 1983 1984 1985 1986 1987 1988 1989 1990 1991 1992 1993*

Grains 720.1 748.7 742.8 707.0 652.5 804.0 818.3 745.7 836.9 746.6

Of which winter wheat 218.4 239.2 257.2 227.4 228.7 271.0 282.0 286.7 302.6 281.7 348.6

Of which corn 311.0 314.0 298.8 278.7 216.9 305.4 314.3 258.0 310.1 259.4 342.5

Of which oats 2.3 2.1 2.1 2.0 2.3 2.9 3.2 2.1 2.9 2.5

Sunflowers 141.7 139.9 134.3 129.3 125.8 126.9 129.3 134.1 126.6 130.6

Sugar beets 100.7 97.4 93.8 96.3 92.1 88.7 86.1 81.5 80.0 82.6 83.0

Tobacco 76.6 74.8 77.1 68.7 61.8 42.4 35.6 32.1 31.5 28.2

Potatoes 47.5 45.2 44.2 42.9 43.2 42.7 42.0 41.2 47.1 55.5

Vegetables 79.9 82.5 86.4 79.5 80.6 79.1 75.8 71.1 77.6 73.4

Fruits and berries 194.5 201.5 201.8 207.7 213.5 218.9 224.3 233.5 241.7 241.8

Of which currently productive 115.8 120.3 123.7 123.9 130.3 136.3 142.7 149.0 154.6 159.5 162.0

Grapes 253.0 250.0 220.2 205.4 202.9 201.0 201.0 201.3 198.3 192.9

Of which currently productive 216.5 209.4 170.0 158.6 157.2 159.9 174.7 170.9 169.0 167.7 161.0

Statistics 73

Table I E: Total Area, Output, and Yields for Major Crops, 1983-1993, continued

2. Total production, thousand tons

1 1983 j 1984 ] 1985 J 1986 1 1987 1 1988 1989 1990 1991 ] 1992 1 1993*

Grains 2153.1 2927.4 2369.5 2036.2 2009.7 3047.2 3404.1 2617.4 3197.0 2194.5 3200.0


Of which corn 1160.0 1331.4 1102.6 905.8 748.3 1331.5 1577.8 882.4 1491.6 644.1 1325.0

Of which oats 3.4 5.8 5.1 3.6 5.6 8.0 7.8 4.1 4.6 6.8

Sunflowers 265.0 289.6 243.1 253.4 208.8 269.0 281.8 252.1 169.6 152.0 166.0

Sugar beets 2416.8 2970.7 2363.8 2417.1 2155.1 2270.7 3616.2 2371.7 2262.6 1784.0 2024.9

Tobacco 124.9 120.4 121.0 132.6 118.7 78.0 67.5 66.1 63.0 41.8

Potatoes 419.0 377.0 409.3 448.7 303.7 298.9 463.7 295.0 290.6 310.8

Vegetables 1204.1 1368.7 1207.0 1383.3 1233.2 1226.8 1154.4 1117.0 938.2 787.5 900.0

Fruits and berries 1182 719 999 1202 1074 865 1176 901 698 511 1038.0

Grapes 1357 1577 654 1222 1040 1122 1038 940 774 824 884

Statistics 74

Table I E: Total Area, Output, and Yields for Major Crops. 1983-1993, continued

3. Yields, tons per hectare |

1983 1984 1 1985 (1986 11987 1 1988 1 189 1990f 1991 1 1992 [ 1993*7Grains 3.0 3.9 3.2 2.9 3.1 3.8 4.2 3.5 3.8 2.9


Of which corn 3.7 4.2 3.7 3.3 3.5 4.4 5.0 3.4 4.8 2.4 3.9

Of which oats 1.5 2.8 2.4 1.8 2.4 2.8 2.4 1.9 1.6 2.7

Sunflowers 1.9 2.1 1.8 2.0 1.7 2.1 2.2 1.9 1.3 1.5

Sugar beets 24.0 30.5 25.2 25.1 23.4 25.6 42.0 29.1 28.3 23.9 24.4

Tobacco 1.6 1.6 1.6 1.9 1.9 1.8 1.9 2.1 2.0 1.5

Potatoes 8.8 8.3 9.3 10.5 7.0 7.0 11.0 7.2 6.2 5.6

Vegetables 15.1 16.6 14.0 17.4 15.3 15.5 15.2 15.7 12.1 10.2

Fruits and berries 9.9 5.8 7.9 9.3 8.0 6.2 8.0 5.9 4.4 3.1 6.4

Grapes 6.2 7.5 3.8 7.3 6.4 6.6 5.8 5.4 4.5 4.8 4.9

Source: Ministry of Agriculture

* Estimate

Statistics 75

Table I F: Main Aggregates of Animal Husbandry

1980 1 1985 1 1986 1987 1988 1989 .1990 1991 1992 1993 1994

Livestock inventory, thousand head (Jan. 1) l

Cattle 1176 1259 1214 1162 1131 1112 1061 1000 970 953 884

Of which Cows 435 445 431 415 412 402 395 397 403 395 405

Pigs 1971 1962 1892 1703 1871 2045 1850 1753 1487 1435 1104

Sheep and goats 1180 1253 1253 1258 1303 1338 1282 1279 1360 1345 1429

Horses 51 49 49 47 46 46 47 49 51

Livestock products = = = = = = __

Meat, thousand tons 275 303 328 331 339 356 366 304 234 179

Of which Beef 86 93 103 103 106 109 114 96 75

Of which Pork 139 146 156 160 162 172 177 145 114

Of which Lamb 4 5 5 5 5 5 7 5 4

Of which Poultry 44 55 60 58 63 67 66 56 39

Of which Other 2 4 4 5 3 3 2 2 2

Milk, thousand tons 1194 1402 1398 1421 1490 1548 1511 1292 1135 906

Eggs, million 874 1075 1118 1116 1169 1154 1129 1061 813 570

Wool, thousand tons 2616 2716 2762 2757 3007 3078 3043 2869 2616

Source: Department of Statistics*Slaughter weight

Statistics 76

Table I G: Grain Balances, 1986-1990

Availability Industrial Food Feed

Produc- Import |Export I Total Seed Beer Other Total Flour I Meal Total Waste Feed Concentratedj Vitamin | Total Total iCn stock

tion I11 I I I I l J Feed additives | Use

1986 2044.2 1042.7 109.3 2977.6 150.8 18.5 89.3 107.8 919.1 33.3 1952.4 235.5 349.9 1106.6 60.4 1516.9 2963.4 14.1

1987 2011.3 1251.4 113.6 3149.1 155.6 19.7 60.8 80.5 927.2 31.0 958.2 474.3 297.5 1095.0 63.1 1455.6 3124.2 24.9

1988 3051.7 1402.1 232.6 4221.2 164.3 24.4 58.7 83.1 879.7 24.5 904.2 351.6 596.6 1257.5 59.8 1913.9 3417.1 804.1

1989 1 3323.2 1526.8 253.3 4596.7 160.8 29.2 60.1 89.3 876.5 12.3 888.8 382.9 796.0 1369.1 61.0 2226.1 3747.9 848.8

1990 2538.6 1353.3 193.5 3698.4 163.6 30.5 61.4 91.9 875.4 115.8 1891.2 1292.5 1 1144.4 1 1195.6 40.7 2380.7 3819.9 -121.5

All quantities are in thousand tons.

Statistics 77

Table I H: Debt Held by Agro-Industrial Complexes, End of Period. Thousand Rubles

1989 1990 1991 10/1/92

Area Short Long Long! Short | Long I Long/ Short Long | Long/ Short | Long Long!

l J ____ [Total I Total Total T

Agricultural production 442929 543434 55.1 452728 416904 47.9 955200 347750 26.7 4843977 258223 5.1

Agricultural processing 747770 3775 0.5 820375 1585 0.2 1789090 137374 7.1 4940839 119796 2.4

Construction 6351 66150 91.2 34017 62287 64.7 29827 29907 50.1 443018 7707 1.7

Procurement 79576 110 0.1 246230 1759 0.7 418506 261 0.1 3599663 678 0.0

Retail trade 36964 137 0.4 52342 99 0.2 137934 712 0.5 1074358 46 0.0

Other 10507 3811 26.6 6411 2773 30.2 202217 1928 0.9 247258 1734 0.7

Note: Other includes technical services and other activity, including transport, supply, science, etc.


Statistics 78

Table I 1: Land Use in Thousand Hectares

Use | 1982 [ 1983 | 1984 1 1985 ] 1986 | 1987 1988 1 1989 I 1990 [ 1991

Area in farms 2914.0 2916.9 2916.7 2917.1 2917.5 2914.5 2913.7 2912.2 2909.4 2908.4

Agricultural area 2571.2 2569.1 2567.8 2563.4 2563.2 2559.2 2551.9 2549.1 2545.8 2544.9

Arable 1807.2 1795.2 1786.4 1800.9 1822.3 1816.7 1792.8 1744.8 1733.6 1729.6

Of which perennials 478.9 488.5 495.4 471.7 449.4 448.8 455.7 464.4 467.2 474.3

Of which hay 4.7 4.4 4.0 4.3 4.0 4.0 4.1 4.4 3.8 3.4

Of which pasture 280.4 281.0 282.0 286.5 287.5 289.7 299.3 335.3 341.2 340.6

Forest, thousand hectares'

Forest total 301.2 317.6

Of which public land 281.8 298.9

Cultivated forest 25.4 35.3

Of which public 24.9 34.5

Source: Ministry of Agriculture, from Zemel'nyi Kadastr and Narodnoe Khoziaistvo Respubliki Moldova 1991'Note: Forestry data are collected in inventories every five years, including January 1 1973, 1978, 1983, and 1988.

Statistics 79

Table I : Land Use by Crop and Sector, Thousand Heclares, 1980-1991

Area planted to major crops, thousand hectares 1980 J 1980 1985 1985 1990 1990 J 1991 1991

All | Public All | Public All Public All Public

Total crops 1839.3 1713.9 1789.8 1664.1 1733.1 1607.2 1717.4 1552.6

Grains 842.2 768.3 742.8 666.1 745.7 668.9 836.9 740.3

Of which winter wheat 339.7 339.8 257.3 257.3 286.7 286.7 302.6 302.6

Of which corn for grain 392.4 329.0 298.8 231.9 258.0 191.0 310.1 226.6

Legumes 35.9 0.0 80.9 0.0 72.6 0.0 77.3 0.0

Technical crops 372.7 371.2 338.9 337.7 295.3 294.1 277.3 276.2

Of which sugar beets 106.5 106.5 93.8 93.8 81.5 81.5 80.0 80.0

Of which sunflowers 169.6 168.1 134.3 133.1 134.1 132.9 126.6 125.5

Of which soy 11.2 11.2 11.2 11.2 26.5 26.5 20.0 20.0

Of which tobacco 65.1 65.1 77.1 77.1 32.1 32.1 31.5 31.5

Potatoes/root crops 124.9 78.6 146.5 101.5 131.8 86.8 140.9 81.6

Of which potatoes 40.1 5.3 44.2 9.8 41.2 6.8 47.1 6.2

Of which vegetables 72.2 61.3 86.2 75.8 71.1 60.7 77.6 59.3

Feed crops 499.5 495.4 561.6 558.8 560.3 557.4 462.3 454.5

Total fruit crops (includes berries and grapes) 178 152 202 175 234 207 242 215

Of which currently productive 113 91 124 101 149 126 155 132

Grapes 256 229 220 198 201 179 198 176

Of which currently productive 200 176 170 149 171 150 169 148

Of which table grapes 16.6 31.1 32

Newly planted 8.4 7.1 8

Newly uprooted 31 8.8 10.5


Statistics 80

Table 11 A: Fuel Prices in Rubles, 1989-1993

Fuel 1989 | 1 190 1991 I I I 1 1992 1993

Fuel 11989! 19 1991 Jan Feb March April May June J July Aug Sept Oct Nov Dec iJ | Fe

Procurement prices per ton (rubles)

B76(Low-octane) 1568 3285 8149 7675 7675 7675 9107 11821 11821 21278 27868 34744 50055 70830

B93(High-octane) 1969 4457 10822 10265 10265 10265 13740 13740 24732 31250 49219 53175 77920

D (Diesel) 1500 2760 7600 7035 7035 7035 7049 9311 9311 14678 24917 28248 45493 56700

Wholesale prices per (on at production (rubles) -

B76(Low-octane) 2607 4943 9380 9382 9382 9382 11204 14108 24227 J 35227 35454 39468 | 58103 80279

B93(High-octane) 3448 6455 12240 12154 12154 12154 16162 16162 | 27923 36577 61286 87511

D (Diesel) ___ 2515 4264 8792 8698 8698 8698 9002 11423 11423 17165 30444 32842 | 53450 65867

e prices per ton at gas stations for all users (rubles)

B76(Low-octane) 195 195 [195 2661 5192 12007 12007 12007 [12007 [14341 18159 18159 31010 44530 50518 73530 96340

B93(High-octane) 260 260 260 3203 6727 15557 15557 15557 15557 20687 20687 35740 46630 69417 75500 105009

D(Diesel) 66 156 I 156 2569 | 4503 11133 11133 11133 11133 11472 14276 14276 21971 38690 42037 66600 79040

Wholesale prices per ton for public sector farms (rubles)

B76(Low-octane) | [ J - 8722 T 7850 [ 7850 | _ _ 1 _ _ _ _ i

B93(High-octane) | 1 1 1 I 15557 15557 1 15557 |

D (Diesel) _ I _ I _ I |9477 | 8055 8055 1

Statistics 81

Table 11 A: Fuel Prices in Rubles, 1989-1993, continued

1992 1993

I:uel 1989 1 91'90 1991 __ _ __ __1 _ __ _ __ _ __ _ _ __ _ __ _ __ _ __ _ __ _ _|__ __ _ _1993___ _ __ _ _Jain Feb March April May June July Aug Sept Oct Nov |Dec Jan I Fcb

Wholesale prices per liter at gas stations for all users (rubles)

B76(Low-octane) 0.15 0.15 0.15 2.05 4.00 9.20 9.20 2 ) 2() 9.2( 11.() 14.00 14.00 24.0) 34.00 38.86 57.00 74.00

1B93(High-octanc) o020 0.20 0.20 2.47 5.17 12.00 12.0( 12.00 12.00 15.90 15.90 27 50 36.00 53.40 58,0( 81.00

D (Diesel) 2.27 3.97 9.80 9.8( 9.80 9.80 10.10 12.60 12.60 19.40 34.00 37.10 59.00 70.00

Whoiesale prices per liter for public sector fartns (rubles)

B76(Low-octane) 6.70 6.00 6.00

B93(High-octane) _ _ __|_| 12.00 12.00 12.00

D (Diesel) 8.40 7.10 7.10

Source: Ministry of Agriculture from ARKA-Moldova and the State Department for Oil Products

Statistics 82

Table 11 B: Farn Machinery Supply and Prices, 1989-1993

1989 1990 1991 1992 1993

Model Allo- | Deli- | Price, Allo- Deli- Price, Allo- Deli- Price, Allo- Deli- Price, Price, | Allo-cated | vered | Jan. I cated vered J Jan. I cated | vered Jan. I cated | vered Jan. I Jan. I cated

Tractors -

T-170,T-130 29 28 16000 30 28 16885 88 68000 60 850000 7300000 60

T-170B 4 4 16885 4 4 72000

T-150 600 462 11600 500 230 18797 284 6 371000 480

DT- 175 42 42 10700 70 60 12150 70 18 16700 380000

DT-75 1004 695 4800 839 627 5894 1200 708 10200 841 300000 1300000 840

T-70B 182 74 5900 124 124 6155 116 116 955 265000

T-70 C 400 394 5900 500 484 6226 440 426 17500 270000

TDT-55 6 4 20600 6 5 30 12000 6 8

T-130 MG-I 60 14500

T-150 K 7 410000

K-701 42 26 20600 49 52 20694 40 12 57000 28 597000 28

K-150 K 240 200 10700 480 438 10785 280 136 19786 10500000 320

MT3-80 538 446 4500 708 484 4685 764 472 8509 48 210000 908

MT3-82 202 205 4800 200 200 5486 188 177 10069 114 190000 1700000

luM3-6 585 158 4000 664 499 5360 510 354 858 240 286500 1800000 700

T-40 M 219 3100 944 658 3411 1051 565 9000 87 185200 3100000 1454

T-40 AM 964 750 3200 510 444 3600 534 351 9400 1035 195 195600 1300000

T-25 275 270 2400 660 562 2548 720 390 4875 692 18 97000 804000 720

T-16 M 575 289 2500 552 338 2694 400 214 5100 8 100000 1200000 560

T-16 MMCh 4 4 2500 5 3322 5

Statistics 83

Table 11 B: Farm Machinery Supply and Prices, 1989-1993, continued

1989 1990 1991 1992 1993

Model Allo- Deli- Price, Allo- 1 Deli- 1 Price, Allo- | Deli- Price, Allo- Deli- Price, Price, Allo-

_jcated j vered Jan. I cated | vered | Jan. I cated Jvered an. I cated vered Jan. I Jan. I | cated

Grain Seeders

SZ-3,6A 402 364 1500 342 342 1500 3700 90 90 80000 242000 200

SZU-3,6 54 18 1570 = __ __

SZP-3,6 30 30 1725 = = _=_ = __=

SZS-2 12 18 1100 I I

SZT-3,6 136 224 1700 184 184 1700 2760 400 400 39100 402

SZA-3,6 240 142 1300 ___ =

SUPN-8 300 398 1675 404 404 2562 = _ =

SPCh-6FS 640 640 2471 _

S3-3,6-04 30 30 170 3000 0 0 35400

S3-3,6-0,3 180 180 1300 2579 100 100 24300 1600

S3-3,6A 2760 246 246 33400 246

Plows _ I

PLN-8-40 60 1200 24 24 1200 2000 24 20150 549120 96

PLN-6-35 31 425 72 72 425 1.330 36 19456 36

PLN-5-35 200 1100 480 520 1100 1800 220 18000 211200 640

PLN-4-40 160 520 210 234 520 1400 144 14000 216

PLN-4-35 1000 307 1800 1610 307 563 1500 9750 153192 1500

PLN-3-35 560 420 560 420 420 438 430 9247 10560 1260

PIa-3-35 1320 484 1600 1600 484 1020 680 19712 1400

Statistics 84


Model 1989 1990 1991 _ 1992 1993Allo- Deli- Price, Allo- Deli- Price, Allo- | Deli- Price. Allo- | Deli- Price, Price, Allo-

cated vered Jan. I cated vered Jan. I cated vered Jan. I cated vered Jan. I Jan. I cated

Plows, continued

PPN-50 70 687 40 70 687 1236 60 12600 130

PPN40 266 520 114 114 520 850 114 8500 100

PLP-5-40 1000 64 64 1000 1800 0 0

PN-35 45 47 47 45

PPU-50 A 1124 60 30 1124 3300 20 20000 660

PG-25 37 182 182 37

Grain combines

SK-5 (s/kop) | 305 305 9760 348 348 9760 15875 50 487147 3500000 266

SK-5 (s/izm) | 190 | 190 10528 170 170 10528 17179 0 487147 160

DON-1500 24 24 40000 61356 0 1231300

Silage Combines |_-

KSK-100 A 30 30 25300 37950 58 480000 2680000 60

KSK-IOOA-1 32 32 25300 8 8 25900

KPI-2,4 380 192 6550 150 114 6550 9000 150 192000 1200000 300

KSS-2,6 700 273 5890 315 252 4870 9000 0 1100000 300

Beet Combines _

MKK-6-02 5O 55 14200 110 88 14200 [26500 73 129000 2260000 72

|KS-6B-02 48 48 21400 64 54 |21400 25000 r 30 448000 2304000 42

Statistics 85


_ 1989 1990 199 1 1992 1993

Allo- | Deli- Price, Allo- Dcli- Price, Allo- Deli- | Price, Allo- Deli- Price, Price, Allo-

cated vered Jan. I cated vered [ Jan. I cated J vered Jan. I cated J vered j Jan. I Jan. I cated

Trucks

UAZ-3303 233 3030 620 208 3030 229 6670 61 190000 1800000 100

GAZ-5312 426 3450 990 295 3450 220 10500 0 240000 800000 40

KAMAZ-5320 75 14750 110 50 14750 48 14700 20 650000 3000000 10

MAZ-5335 0 5800 15 0 7030 10 20000 2800000

MAZ-5434 0 8670 10 2 8700 6 21000 o 7900000

[Dump Trucks -fGAZ-3507 72 3500 620 700 3750 720 13950 212 278000 1200000

ZIL-MMZ-554M 139| 5450 | 500 | 132 6100 114 12000 150 J _ 350000 2500000 100

Trailers |

KAMAZ-5410 280 13810 300 290 13700 290 21700 172 700000 2500000 100

MAZ-64229 24 17840 40 20 19000 20 36800 11900000

MAZ-54323 0 16900 30 6 17000 6 28900 7904000

MMZ-4413 2 4710 5 2 47001 1 2 12200

Source: Ministry of Agriculture from ARKA-MoldovaAll Prices are in rubles.

Statistics 86

Table If C: Producer Prices Received and Volume Sold Through Different Marketing Channels

Marketing Channel

Total State Procurement Cooperatives Markets Of which,out- Restaurants,l l ~~~~~~~~~~~~~~~side Moldova cafeterias, etc.

Crop Year' & Quantity Price Quantity Price Quantity Price Quantity Price Quantity Quantity PriceQuarter Tons R/Ton Tons R/Ton Tons R/Ton Tons R/Ton Tons Tons R/Ton

Grain 1991QI 21101 191 137 423 482 442 13792 213 43 6690 123

Oilseeds 1991QI 589 465 45 400 18 389 423 504 8 103 350

Potatoes 1991Q1 325 283 61 361 264 265

Vegetables 1991QI 1516 3474 992 3629 64 3172 378 3704 165 82 780

Of which tomnatoes 1991QI 3 13000 3 13000

Of which cucumbers 1991Q1 1349 3776 927 3787 51 3902 340 3924 165 31 1613

Of which onions 1991Q1 65 754 16 1000 30 833 19 421

Of which cabbage 1991Q1 15 267 5 400 10 200

Of which carrots 1991QI 11 182 _11 182

Of which table beets 1991QI 22 136 12 167 10 100

Of which other 1991Q1 51 1490 49 1490 1 2000 1 1000

S fruits 1991QI 13317 841 12141 761 1 1000 1156 1695 237 19 474

| Gr4apes j 1991Q1 168 1 1809 | 1 l_l _lj 166 1825 | 2 500

|Other crops |1991Q1 1483 | 193 | 1483 | 193|lllllll

Prices are annual averages at the specified quarter.

Statisics 87

Table 11 C: Producer Prices Received and Volume Sold Through Different Marketing Channels, continued

Marketing Channel _Total State Procurement Cooperatives Markets Of which,out- Restaurants,

i , ~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~side Moldova cafetefias, etc.

Crop Year' & Quantity Price Quantity Price Quantity Price Quantity Price Quantity Quantity PriceQuarter Tons RITon Tons RITon Tons R/Ton Tons R/Ton Tons Tons R/Ton

Cattle 1991QI 31202 3840 26786 3981 1230 3390 1656 3339 38 1530 2265

Sheep and goats 1991QI 279 2068 42 3238 I 3000 91 1462 145 2103

Pigs 1991QI 26525 3686 22897 3744 1147 4912 1330 2883 32 1151 2246

Poultry 1991QI 10266 2466 9567 2475 20 2100 278 2899 401 1978

Other livestock 1991QI 70 2971 61 3016 4 2750 4 3000 1 1000

Milk, dairy products 1991QI 229511 512 222224 519 3290 325 389 373 3608 279

Eggs (thousand) 1991QI 140784 130 137062 129 261 149 2373 185 1088 132

Honey 1991QI 4 3250 4 3250

Breed stock 199 QI 845 4250 845 4250 l

Eggs for incubation 1991QI 24397 220 24397 220 l

Statistics 88


Marketing Channel

Total State Procurement Cooperatives Markets Of which,out- Reslaurants,side Moldova cafeterias, etc.

Crop Year' & Quantity Price Quantity Price Quantity Price Quantity Price Quantity Quantity 1 PriceQuarter Tons R/Ton Tons R/Ton Tons [ R/Ton Tons | R/Ton Tons Tons R/Ton

Potatoes 1991Q2 2616 306 5 600 36 1056 535 536 2040 232

Vegetables 1991Q2 16126 2105 11086 1941 741 2637 3599 2721 509 700 974

Of which tomatoes 1991Q2 1780 5617 1049 5889 127 4984 487 5979 181 117 2350


Of which onions 1991Q2 496 552 41 707 6 1000 320 594 129 380

Of which garlic 1991Q2 3 4000 3 4000

Of which cabbage 1991Q2 1504 1025 726 1125 112 1223 457 1000 209 622

Of which carrots 1991Q2 40 325 1 1000 11 364 28 286

Of which other 1991Q2 4674 646 4301 661 35 971 249 482 68 89 270

Stone fruits 1991 Q2 963 1501 654 1479 79 1747 192 1339 38 2184

Berries 1991 Q2 296 3595 153 3673 7 2857 125 3656 11 2273

Cattle 1991Q2 61046 3768 49927 3905 1163 3057 5707 3633 89 4249 2544

Sheep and goats 1991Q2 919 2638 203 4059 9 3667 304 2273 403 2174

Pigs 1991Q2 58390 3640 48954 3752 1651 4386 4695 2907 320 3090 2578

Poultry 1991Q2 25205 3255 22563 3182 | 286 3227 1506 4556 1 850 2889

Other livestock 1991Q2 332 3142 255 3110 1 3000 61 3230 15 3333

Milk, dairy products 1991Q2 475755 616 457323 623 7766 457 3020 440 7646 416

Eggs 1991Q2 | 301360 | 155 | 283884 151 1436 | 203 12433 228 | 27 | 3607 | 195

Statistics 89


Marketing Channel

Total State Procurement Cooperatives Markets Of which,out- Restaurants,side Moldova cafeterias, etc.

Crop Year' & Quantity Price Quantity Price Quantity Price Quantity Price Quantity Quantity | PriceQuarter Tons R/Ton Tons R/Ton Tons R/Ton Tons R/Ton Tons l'ons R/TonGrain 1991Q3 524944 361 276167 452 3399 378 132567 308 224 112811 201Oilseeds 1991Q3 80753 581 76102 567 142 1028 2933 998 102 1576 452Potatoes 1991Q3 9866 1026 3601 1548 565 1598 2560 720 3140 573Vegetables 1991Q3 495094 729 416835 676 18847 946 50256 1108 6522 9156 642

Of which tomatoes 1991 Q3 317773 658 284605 616 6671 1017 23490 1049 4451 3007 768Of which cucumbers 1991 Q3 19697 1859 11259 1845 1892 1682 5768 2059 651 778 1012Of which onions 1991Q3 19584 1003 12214 1098 2096 1054 4127 825 266 1147 542Of which garlic 1991Q3 84 1786 36 1778 22 1909 23 1826 3 667Of which cabbage 1991Q3 22674 455 10508 448 3610 403 6186 536 146 2370 354Of which carrots 1991Q3 4115 521 3092 543 406 468 396 518 3 221 317Of which table beets 1991Q3 293 268 341 382 250Of which other 1991Q3 111167 751 95121 693 4150 971 10266 1204 1005 1630 803

Stone fruits 1991Q3 122953 1389 108079 1333 3138 1488 10778 1925 4190 958 1296Seed fruits 1991Q3 175509 1357 148629 1341 7360 1719 17355 1406 3468 2165 855Berries 1991Q3 864 3115 424 3083 83 3470 320 3106 4 37 2757Grapes 1991 Q3 124973 1781 117752 1805 955 1891 5255 1380 347 1011 1017Melons 1991Q3 8158 482 2355 531 403 568 4982 450 15 418 498

Statistics 90


Marketing Channel

Total State Procurcrncnt Cooperatives Markets Of which,out- Restaurants,

Crop | Year' & Quantity Price Quantity Price Quantity Price Quantity 1 Price Quantity Quantity PriceQuarter Tons R/Ton Tons R/Ton Tons R/Ton Tons R/Ton Tons Tons R/Ton

Cattle 1991Q3 95936 3933 77158 4116 2110 3959 9511 3592 89 7157 2416

Sheep and goats 1991 Q3 1920 2608 591 3506 9 3667 517 2360 803 2096

Pigs 1991 Q3 92504 3852 79038 3944 2161 5019 6455 3235 363 4850 2646

Poultry 199IQ3 37446 3112 33023 3113 361 3158 2172 3492 5 1890 2653



Eggs 1991Q3 460090 169 431425 168 6581 189 17310 196 117 4774 165

Statistics 91


Marketing Channel


Crop Year' & Quantity Price Quantity Pricc Quantity Price Quantity Price Quantity Quantity PriceQuarter Tons R/Ton Tons R/Ton Tons R/Ton Tons R/Ton Tons Tons R/Ton

Grain 1991 Q4 1241763 446 486403 717 8896 384 367698 327 1578 378766 216

Oilseeds 1991Q4 104725 789 92937 753 702 808 5783 1683 326 5303 456

Potatoes 1991 Q4 24429 993 3892 1563 1861 1590 9301 1025 49 9375 607

Vegetables 1991Q4 721253 711 545415 667 39617 802 109712 925 14994 26509 605

Of which tomatoes 1991 Q4 427324 629 371097 585 11908 792 36198 1002 7794 8121 701

Of which cucumbers 1991 Q4 21170 1959 10336 1922 2101 1825 7451 2168 918 1277 1280

Of which onions 199 1Q4 33740 1044 13697 1267 3516 1396 13625 806 1777 2902 677

Of which garlic 1991Q4 99 1616 47 1553 6 2667 40 1675 6 667

Of which cabbage 1991 Q4 74511 474 27344 513 11341 443 27068 471 1185 8758 400

Of which carrots 1991 Q4 12217 537 7771 565 1776 524 1836 509 19 834 368

Of which table beets 1991Q4 9447 364 5456 398 2052 339 1167 338 4 772 228

Of which other 1991 Q4 142745 855 109667 802 6917 1061 22322 1072 2397 3839 722

Stone fruits 1991 Q4 161758 1393 130200 1348 5571 1325 22699 1711 8000 3288 1102

Seed fruits 1991 Q4 377407 1367 269275 1328 18932 1722 67925 1568 17881 21275 896

Berries 1991Q4 1094 3324 509 3544 26 3769 494 3148 65 2769

Grapes 1991 Q4 553479 1988 489591 2078 8582 1707 36592 1325 686 18714 1060

Melons 199 1Q4 29769 404 7969 411 1356 553 16248 413 73 4196 311

Grains for comb.feed 1991 Q4 794578 198 768988 196 25590 272 l

Sunflowers 1991 Q4 104140 783 92819 749 634 828 5541 1651 323 5146 455

Seed potatoes 1991Q4 131 1573 124 1613 7 857 l

Sugar beets 1991 Q4 1892809 145 1892809 145 47

Statistics 92


Marketing Channel

Total State Procurement Cooperatives Markets Of which,out- Restaurants,

Crop 1 Year' & Quantity Price Quantity 1 Price Quantity Price Quantity Price Quantity Quantity | PriceQuarter Tons I R/Ton Tons R/Ton Tons R/Ton Tons R/Ton Tons Tons R/Ton

Tobacco ]199 1Q4[ 642441 12494[ 64230 ]12493_ 14 188571I_ __I

Cattle 1991 Q4 134008 4273 101169 4473 3095 3899 15996 4954 114 13748 2088

Sheep and goats 1991Q4 3484 3088 1371 3823 5 4400 981 2894 1 1127 2355

Pigs 1991Q4 126309 4617 104602 4696 1893 6860 12403 4433 543 7411 3240

Poultry 1991Q4 48145 3535 40222 3485 1277 5023 4732 3795 16 1914 2917

Other livestock 1991 Q4 1466 4509 448 2839 103 1447 810 5869 105 4143

Milk, dairy products 199 1Q4 904599 680 863483 686 13321 587 12179 626 15616 491

Eggs 1991 Q4 609778 190 569066 190 6647 197 22694 231 2630 11371 144

Wool 1991Q4 589 46762 110 31436 472 50790 6 17167 1 9000

Honey 1991Q4 121 13091 12 9583 83 15795 26 6000

Eggs for incubation 1991Q4 24582 394 16525 431 373 641 7684 303 1049

Karakul and shearling 1991Q4 94360 71 10022 71 67995 70 16046 77 287 84

Silk cocoons 1991Q4 III 45126 III 45126

Statistics 93


Marketing Channel

Total State Procuremcnt Cooperatives Markets Of which,out- Restaurants,side Moldova cafeterias, etc.

Crop f Year' & Quantity Price Quantity Price Quantity | Price Quantity | Price Quantity Quantity |PriceQuarter Tons IR/Ton Tons R/Ton Tons R/Ton Tons R/Ton Tons Tons |R/Ton

Potatoes 1992Q 1 601 1973 196 2148 405 1889

Vegetables 1992QI 1261 14724 578 18986 81 16222 417 14434 138 185 1405

Of which cucumbers 1992QI 946 19150 539 20219 77 17013 312 18689 138 18 4278

Of which onions 1992QI 67 2060 22 2773 45 1711

Of which cabbage 1992QI 89 1157 4 2500 2 1000 36 1361 47 894

Of which carrots 1992QI 60 1517 2 1000 27 2037 31 1097

Of which table beets 1992QI 85 882 29 1103 17 1059 39 641

Of which other 1992QI 14 3143 6 5667 3 1667 5 1000

Stone fruits 1992QI 1568 9926 994 9569 24 6500 506 11055 18 38 6474

Berries 1992Q I 354 17910 193 18052 53 17472 102 18216 6 12000

Cattle 1992Q1 35810 22484 25087 25475 1017 19936 5793 17606 16 3906 11190

Sheepandgoats 1992Q 1 824 12774 95 31063 1 20000 317 13035 411 8328

Pigs 1992Q 1 40796 28102 32301 31155 466 17345 5249 18940 2 2780 11737

Poultry 1992Q1 11810 23660 9589 22986 148 27838 | 1636 27160 437 | 23931



Eggs 1992Q1 110506 1015 102890 1020 | 1605 1290 4335 | 955 6 1510 543

Eggs for incubation 1992Q1 2578 | 3214 | 2125 3261 69 | 4377 | 384 2747

Statistics 94

Table If C: Producer Prices Received and Volume Sold Through Different Marketing Channels, continued

Marketing Channel


Crop Year' & Quantity Price Quantity Price Quantity | Price Quantity Price Quantity Quantity Price

Quarter Tons R/Ton Tons R/Ton Tons R/Ton Tons R/Ton Tons Tons R/Ton

Potatoes 1992Q2 1655 2653 I 1000 3 3000 583 3537 1068 2171

Vegetables 1992Q2 11437 12456 7060 11619 1253 14144 2359 17145 701 765 2954



Of which onions 1992Q2 245 3204 40 3650 15 5800 64 3844 126 2429

Of which cabbage 1992Q2 1413 6333 599 8015 91 6110 560 5580 25 163 2865

Of which carrots 1992Q2 145 2000 25 4920 30 1100 35 2000 55 1164

Of which table beets 1992Q2 181 1630 60 2550 1 2000 47 1213 73 1137

Of which other 1992Q2 3398 7908 3304 8013 9 3222 52 4308 33 4364

Cattle 1992Q2 17194 19352 12222 21750 496 20631 2560 15550 1909 8787

Sheep and goats 1992Q2 290 6755 5 6800 135 7156 150 6393

Pigs 1992Q2 18067 24269 14535 26962 201 15826 2193 14316 1138 10541

Poultry 1992Q2 7426 20856 6532 21227 57 34018 r 538 20245 299 1 11331



Eggs 1992Q2 236710 1057 224604 1058 12 667 8394 1147 433 3700 846

Statistics 95


Marketing Channel


Crop | Year' & Quantity Price Quant i rice Quantity Price Quantity Price Quantity Quantity PriceQuarter Tons R/Ton Tons R/Ton Tons R/Ton Tons R/Ton Tons Tons |R/Ton

Grain 1992Q3 503473 7089 244126 11963 2455 8398 97330 3086 208 159562 2074Oilseeds 1992Q3 70170 20608 66516 21419 20 1850 2001 8660 1633 2462

Potatoes 1992Q3 5630 6872 649 15639 273 14366 1789 7187 2898 3914Vegetables 1992Q3 257409 7226 191025 6853 13306 9106 41635 8529 6497 11266 6393


Of which cucumbers 1992Q3 17311 9540 9425 9762 2208 10114 4689 9497 1204 985 6348Of which onions 1992Q3 9786 14275 3971 16847 796 14829 3537 13020 234 1332 9334

Of which cabbage 1992Q3 14977 4244 4676 4796 1606 4373 6618 3872 119 2063 4102

Of which carrots 1992Q3 1541 5118 734 6075 193 4819 394 4584 8 220 3145Of which table beets 1992Q3 1051 3485 343 3732 224 3911 278 3482 6 205 2620

Of which other 1992Q3 41688 8507 30112 8043 1792 10706 8041 9719 1187 1742 8664Stone fruits 1992Q3 72328 10044 59894 9566 2085 11233 9274 12942 2055 1072 9380

Seed fruits 1992Q3 103360 12273 87359 12062 4090 14330 10855 13588 2075 1056 8197

Berries 1992Q3 554 18199 217 18544 29 18207 270 18444 2 38 14474

Grapes 1992Q3 303609 17524 291228 17740 1111 13780 8069 13927 68 3201 8288Melons 1992Q3 3099 5005 447 7555 125 6928 1724 4840 803 3639

Statistics 96

Table II C: Producer Prices Received and Volume Sold Through Different Marketing Channels, continued

Marketing Channel

Total State Procuremcut Cooperatives Markets Of which,out- Restaurants,side Moldova cafeterias, etc.

Crop Year' & Quantity Price Quantity Pricc Quantity Price Quantity Price Quantity Quantity PriceQuarter Tons [ R/Ton Tons R/Ton Tons R/Ton Tons R/Ton Tons Tons R/Ton

Cattle 1992Q3 50459 25172 35360 27959 1713 19592 7989 22219 25 5383 13020

Sheep and goats 1992Q3 1534 15599 389 25979 1 9000 461 14933 683 10146

Pigs 1992Q3 60552 31530 49458 34380 911 25908 6275 19475 54 3908 16127

Poultry 1992Q3 14463 26562 10676 26603 160 35638 2633 26913 994 23729

Other livestock 1992Q3 281 14769 56 12214 94 12691 95 18653 3 36 13917


Eggs 1992Q3 312289 1169 293030 1162 2361 1380 12804 1298 171 4094 1193

Statistics 97

Table II D: Food Prices in State Stores, Rubles per Kilogram, 1992

1/92 2/92 3/92 7 4/92 5/92 6/92 7/92 8/92 9/92 10/92 1 1/92 12/92 12/921

______ I 1__ 11L _1 1 I_ 1_1 1_ __''

Beef, Ist category 65.7 81.4 63.1 60.3 74.7 57.4 79.5 88.0 110.3 117.3 135.7 190.8 2.9

Sausage, boiled, Ist sort 61.5 56.0 57.5 53.7 55.8 59.3 47.1 61.3 64.7 77.3 132.5 161.8 2.6

Sausage, smoked, Ist sort 110.5 151.9 124.0 98.7 129.4 104.3 109.8 147.7 187.0 211.5 234.3 309.8 2.8

Butter 126.7 168.3 139.9 153.2 160.6 196.8 180.7 177.7 191.8 211.6 232.1 270.6 2.1

Sunflower oil 15.5 16.5 14.9 19.1 38.3 41.1 40.6 40.8 52.4 78.1 153.7 179.8 11.6

Whole milk 1.5 1.4 1.5 2.1 1.7 3.0 2.8 2.5 2.7 3.2 3.3 3.2 2.1

Sour cream, I kilogram 28.3 20.2 22.1 29.5 29.4 35.9 32.5 29.9 31.3 36.3 37.5 33.1 1.2

Hard cheese 68.8 80.8 90.6 95.0 101.8 124.7 126.0 126.5 130.9 137.9 184.0 253.0 3.7

Eggs (per 10 pieces) 15.9 10.1 10.7 10.4 10.1 9.1 9.1 11.3 13.9 32.4 113.1 123.9 7.8

Sugar 9.2 9.2 9.3 14.6 23.1 25.7 25.6 26.0 25.4 67.9 75.7 76.1 8.2

Rye bread 1.8 1.9 1.8 2.6 3.5 3.6 3.6 3.7 3.7 3.6 17.2 18.1 10.1

Whitebread 3.0 3.3 3.4 5.4 6.0 6.2 6.1 6.2 6.2 7.4 31.8 32.6 11.0

Cormneal 1.7 4.0 4.1 14.7 17.3 16.4 18.2 18.9 17.7 21.4 25.7 100.0 60.6

Pasta 12.2 17.0 17.0 17.1 20.1 27.1 25.1 32.2 46.6 53.7 61.1 69.6 5.7

Potatoes 5.1 6.5 6.3 6.2 8.1 7.8 14.4 19.8 26.9 27.1 30.2 30.8 6.1

Cabbage 3.6 6.6 7.2 5.1 13.2 14.9 3.0 6.7 9.5 13.6 30.9 30.2 8.5

Onions 4.6 6.0 7.4 7.3 7.2 6.7 5.7 11.2 27.1 28.5 28.9 27.9 6.1

Apples 6.6 7.6 11.5 11.2 11.6 0.0 10.4 10.9 18.8 20.3 42.8 43.7 6.6

Index: Food price growth by 389.3 107.6 97.3 112.6 106.5 101.4 93.3 T 103.3 110.3 118.2 147.4 118.6month l l l l l_l_l_l_ IIndex: Food prices,12/91=100 389.3 418.9 407.6 458.9 488.8 495.6 | 462.4 477.7 526.9 622.7 | 917.9 1088.7 2.80

Source: Department of Statistics -

Statistics 98

Table 11 E: Changes in Marketing Chiannels, 1990-1992

1990 1991 1992

Prodtict ~~~TotalI Public Ote TotalI PublicI Other Total Puhic I Other

Grains and Legumes 1712.3 325.8 1386.5 1914.8 475.4 1439.4 766.5 283.6 482.9

Sunflower 186.8 167.1 19.7 106.3 90.9 15.4 98.2 80,3 17.9

Soy 4.4 0.6 3.8 3.1 0.3 2.8

Potatoes 42.4 0.4 42.1 28.1 5.6 22.5 8.7 1.4 7.3

Sugar beets 2372.8 2311.1 61.7 2199. 2138.7 60.3 1615.9 1589.7 26.1

Tobacco 68.7 66.4 2.3 63.6 63.1 0.5 38.2 37.9 0.3

Field vegetables 1052.3 827.6 224.6 676.4 509.9 166.5 340.2 191.4 148.9

Greenhouse vegetables 15.8 10.2 5.3 14.4 9.1 0.0 5.6 0.0

Squash/melons 28.5 7.0 21.5 30.5 7.3 23.1

Seed and core fruits 773.4 567.3 206.1 557.0 399.6 157.3 293.6 213.0 80.6

Nuts, subtropical fruits, citrus, berries 1.4 0.4 1.0 1.2 0.5 0.7

Grapes 661.3 1 573.9 87.5 560.8 488.8 72.0 550.3 442.4 10.

Livestock Products - _ _ _ _ _ - _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _

Milk 1085.7 1016.1 69.7 870.6 663.2 207.4 622.0 590.9 31.1

Wool 1.2 1.2 0.0 0.9 0.9 0.1 0.8 0.7 0.0

Astrakhan wool 10.5 9.3 1.1 9.6 7.8 1.8

Eggs (million) 72.6 64.6 8.0 1 65.5 58.1 7.4 1 39.0 35.4 3.5

Honey 0.2 0.0 0.2 0.3 0.0 0.3

Freshwater fish 0.7 0.0 0.6 6.0 5.6 0.4

Statistics 99

Table If E: Changes in Marketing Channels, 1990-1992, continued

1990 1991 1992Product Total OPublic Other Total Public I Other Total | Public I Othcr

Meat/poultry:live weight 442.8 296.0 146.8 334,0 202.9 131.0

Of which sold for meat 390.0 291.9 98.1 293.7 200.8 92.9

Of which cattle 154.1 121.2 32.9 124.6 89.2 35.5 83.7 64.8 18.9

Of which pigs 169.0 146.8 22.2 119.1 93.5 25.6 86.8 64.8 22.0

Of which sheep and goats 5.5 2.9 2.5 3.0 1.3 1.7 2.1 0.8 1.3

Of which poultry 60.7 20.4 40.3 46.4 16.4 29.9 15.7 13.4 2.3

Of which horses 0.6 0.5 0.1 0.6 0.4 0.2

Of which sold for breeding and other purposes

Of which cattle 37.6 0.9 36.7 26.5 0.8 25.7

Of which pigs 11.5 3.1 8.3 11.0 1.2 9.8

Of which sheep and goats 0.7 0.1 0.6 0.6 0.1 0.5

Of which poultry, thousands 2.7 0.0 2.0 2.0 0.0 0.0 2.7

Of which day-old chicks 7.1 0.0 0.0 6.7 7.1 0.0 6.7

Of which horses 0.2 0.0 0.2 0.2 0.0 0.2

Note: All quantities are thousand tons. Data for 1992 do not include the Trans-Dniestr region.

Source: Ministry of Agriculture from Annual Farm Accounts and Department of Statistics

Statistics 100

Table Ill A: Animal Inventories in Public Sector Farms, Thousand Head, Beginning of Year, 1986-1993

Animal | 1986 | 1991 | 1992 1993 | 1994

Cattle 1026 868 772 649 456

Of which cows 331 296 276 249 183

Pigs 1772 1499 1358 851 572

Sheep and goats 528 460 401 436 350

Poultry 12808 13164 12304 7111 2529

Horses 48 40 37 NA

|Source: Ministry of Agriculture from Department of Statistics

Statistics 101

Table Ill B: Animal Inventories in Public Sector Farms by Raion, Thousand Head, End of Year, 1985-1992

Raion Animal 1985 1986 1987 ] 1988 I 1989 [ 1990 1991 1992

Anenii Noi Cattle 25.6 25.6 24.6 23.2 22.4 20.8 17.6 15 3

Of which cows 9.1 8.3 8.1 8.0 7.8 7.7 7.1 6.6

Pigs 79.6 75.9 67.6 74.6 70.6 37.9 51.8 44.3

Poultry 1649.8 1656.0 1885.0 1903.0 2333.0 2052.0 1709.0 800.5

Sheep and goats 4.4 5.1 5.3 5.5 5.4 4.9 4.2 3.6

Basarabiaska Cattle 13.6 12.6 11.6 11.8 11.4 9.9 8.1 7.5

Of which cows 3.7 3.8 3.8 3.8 3.7 3.4 3.1 2.8

Pigs 18.7 19.3 19.1 16.6 21.9 20.2 15.5 13.6

Poultry 199.4 275.8 210.3 213.7 205.0 199.0 162.8 105.9

Sheep and goats 15.0 17.0 16.9 16.4 16.4 12.9 11.4 10.7

Bricheni Cattle 34.9 34.0 32.4 30.8 29.9 27.0 24.0 24.2

Of which cows 11.1 11.0 10.7 10.6 10.2 9.9 9.3 8.7

Pigs 69.6 60.1 49.9 47.2 49.9 45.3 36.7 30.9

Poultry 172.1 174.2 161.8 177.0 181.8 179.2 174.3 80.8

Sheep and goats 12.3 13.2 13.5 13.0 12.1 | 10.8 10.0 9.4

Cahul Cattle 25.4 22.8 23.7 21.8 22.8 21.1 17.2 13.3

Of which cows 6.9 6.9 6.7 6.4 6.2 5.9 5.0 4.9

Pigs 52.3 54.7 48.0 42.5 47.1 41.6 40.5 38.2

Poultry 18.4 19.0 15.9 15.9 20.0 15.9 16.8 9.8

| Sheep and goats 33.1 33.2 31.7 31.8 33.3 21.6 19.3 20.4

Cainari Cattle 15.9 17.3 18.5 18.0 18.4 17.1 14.2 13.5

Of which cows 5.6 5.9 5.9 5.4 5.2 4.8 4.7 4.4

Pigs 23.5 24.6 19.9 21.4 25.5 19.4 15.9 13.2

Poultry 24.8 21.8 13.5 15.5 23.6 14.5 20.2 9.8

Sheep and goats 13.6 14.3 12.8 12.7 11.8 10.7 9.6 8.4

Calarashi Cattle 10.1 9.8 9.4 9.6 9.6 9.2 8.0 7.1

Of which cows 3.0 3.1 3.0 2.9 2.9 2.8 2.6 2.3

Pigs 6.2 5.0 4.9 6.3 8.0 5.7 4.0 3.3

Poultry 90.3 334.9 207.0 205.0 277.5 246.0 NA NA

| Sheep and goats 4.1 | 4.4 | 4.7 4.2 4.7 5.1 4.6 3.7

Camenka Cattle T 20.5 20.2 19.7 18.8 17.8 16.3 15.6 12.9

Of which cows 6.8 6.8 6.8 6.7 6.6 6.5 6.3 5.6

Pigs 41.5 42.7 42.7 42.8 45.2 41.1 40.6 27.3

Poultry | 40.6 29.0 26.7 36.9 45.5 51.4 18.6 10.4

Sheep and goats 7.2 8.0 7.8 7.9 8.2 8.5 7.6 7.3

Cantemir Cattle 20.6 20.2 19.1 18.6 18.6 15.6 14.7 12.3

Of which cows 6.5 6.6 6.3 6.3 6.3 5.7 5.2 4.5

Pigs 43.8 40.6 36.0 35.2 38.1 33.3 31.9 21.8

Poultry 24.0 11.1 9.7 5.6 9.9 10.6 12.8 7.8

|___________ |Sheep and goats 30.3 29.9 29.0 27.0 27.5 20.0 15.7 14.8

Statistics 102

Table IlI B: Animal Inventories in Public Sector Farms by Raion, Thousand Head, End of Year, 1985-1992, continued

Raion | Animal | 1985 I 1986 | 1987 1988 1 1989 | 1990 | 1991 | 1992

Causheni Cattle 30.5 30.0 29.1 27.7 26.9 25.6 23.4 18.8

Of which cows 9.7 9.7 9.5 9.6 9.3 8.9 8.4 6.8

Pigs 46.7 53.7 44.7 54.4 56.0 51.4 48.1 26.6

Poultry 52.0 38.3 19.2 27.8 23.5 17.6 31.1 10.6

Sheep and goats 2.6 2.9 2.8 2.9 3.4 2.7 2.3 2.5

Chimishlia Cattle 24.4 23.1 22.1 22.8 23.4 20.6 16.7 15.0

Of which cows 8.3 7.8 7.5 7.9 7.8 7.2 6.5 6.0

Pigs 38.2 36.5 35.6 33.1 35.2 33.9 26.9 23.8

Poultry 506.5 549.7 540.5 393.3 517.0 644.9 363.1 190.8

Sheep and goats 18.6 19.5 19.8 18.9 18.0 14.6 11.6 10.7

Ciadir-Lunga Cattle 23.2 23.8 23.5 22.4 22.6 20.7 19.3 17.4

Of which cows 7.2 7.3 7.3 7.3 7.1 6.5 6.4 5.8

Pigs 55.5 53.2 44.2 51.8 51.4 52.1 49.8 33.8

Poultry 310.9 301.3 252.2 266.8 NA NA 295.2 176.3

Sheep and goats 25.3 23.7 23.8 20.3 NA NA 18.4 17.1

Criuleni Cattle 26.2 26.1 24.6 23.9 23.4 22.1 20.0 17.5

Of which cows 8.5 8.7 8.5 8.1 7.7 7.5 6.8 6.0

Pigs 54.4 54.4 50.7 53.3 55.4 50.7 48.0 32.7

Poultry 773.2 813.3 805.8 766.9 914.3 715.5 763.6 406.0

__________ |Sheep and goats 1.7 2.1 2.2 1.7 2.5 2.5 2.2 1.9

Donduslheni Cattle 33.4 32.9 31.7 30.3 29.4 27.2 23.0 21.1

Of which cows 11.7 11.7 11.1 11.2 10.9 10.5 9.4 8 5

Pigs 43.8 43.7 35.8 38.2 32.8 39.0 33.7 20.8

Poultry 364.3 372.7 457.6 485.7 415.5 450.6 548.0 423.5

Sheep and goats 7.9 7.6 7.6 6.8 7.3 6.8 5.5 4.9

Drochia Cattle 33.4 33.7 33.1 32.0 29.8 28.1 25.7 24.4

Of which cows 11.4 11.2 11.1 10.9 11.0 10.8 9.9 9.(

Pigs 56.8 63.7 52.8 57.7 55.8 49.6 45.0 31.1

Poultry 91.3 88.6 96.1 56.6 71.5 71.6 65.4 5(0.6

____________ |Sheep and goats 10.7 12.5 12.2 12.0 12.4 11.4 10.0 8.9

Dubasari Cattle 20.0 19.9 19.1 18.7 19.5 19.2 17.4 13.9

Of which cows 6.7 6.6 6.7 6.7 6.4 6.1 5.8 5.0

Pigs 33.9 33.1 29.3 30.1 33.9 31.3 28.1 19.9

Poultry 775.0 812.0 773.5 807.1 758.0 570.6 732.8 385.7

___________ |Sheep and goats 3.8 4.6 4.7 4.6 5.5 5.6 5.1 4.2

Edinets Cattle 37.4 36.1 36.0 32.7 31.7 31.0 28.1 26.2

Of which cows 12.9 11.9 11.6 12.0 11.5 10.6 10.1 9.0

Pigs 52.8 49.6 46.3 51.3 50.1 51.9 30.5 19.1

Poultry 274.4 195.1 182.8 254.3 250.1 225.8 161.5 94.5

Sheep and goats 10.5 11.7 11.9 11.3 11.7 11.1 9.8 8.1

Statistics 103

Table III B: Animal Inventories in Public Sector Farms by Raion, Thousand Head, End of Year, 1985-1992, continued

Raion Animal | 1985 | 1986 1987 | 1988 | 1989 | 1990 199 1992

Faleshti Cattle 38.9 39.5 40.2 39.2 37.7 34.8 31.0 27.6

Of which cows 12.5 12.5 12.2 11.6 11.6 11.3 10.4 9.3

Pigs 70.4 69.2 60.7 63.6 65.8 64.1 52.4 35.9

Poultry 269.3 253.7 290.3 294.5 261.2 278.0 296.9 154.5

Sheep and goats 14.5 15.2 15.7 15.7 16.3 15.9 14.2 12.7

Floreshti Cattle 29.9 30.9 29.9 28.2 27.7 27.8 24.4 23.6

Of which cows 10.7 10.7 10.7 10.7 10.5 10.0 9.3 8.8

Pigs 82.9 81.2 72.9 66.8 76.3 77.9 72.9 64.7

Po iltry 43.5 17.9 18.7 25.2 46.7 21.5 16.0 16.0

Sheep and goats 12.1 12.8 12.8 12.3 12.9 14.7 11.9 10.9

Glodeni Cattle 25.6 26.9 27.2 26.4 26.2 24.5 22.5 22.1

Of which cows 7.9 8.0 8.0 7.9 7.9 7.6 7.2 6.7

Pigs 47.5 48.2 42.8 41.1 43.8 42.4 37.4 30.8

Poultry 32.9 17.5 16.6 20.7 32.5 27.3 28.6 15.3

_____________ Sheep and goats 9.2 ! 10.3 10.4 10.3 10.4 9.9 8.7 8.4

Grigoriopol Cattle 30.5 30.6 28.3 27.1 27.7 28.9 25.2 20.4

Of which cows 9.0 9.0 8.5 8.4 8.1 7.8 7.2 5.7

Pigs 55.5 49.9 42.1 40.8 45.6 31.5 40.1 33.8

Poultry 63.5 70.3 47.7 192.2 441.7 384.6 457.3 427.6

Sheep and goats 8.8 9.6 8.9 9.0 9.2 7.3 7.0 6.9

Hinchesti Cattle 28.4 26.4 25.7 23.4 23.0 20.3 16.2 13.5

Of which cows 8.0 7.6 7.6 8.0 7.7 6.5 5.6 5.3

Pigs 39.2 39.0 31.9 31.0 37.3 24.6 28.5 27.8

Poultry 688.9 809.3 712.5 596.3 687.7 740.8 415.4 281.8

Sheep and goats 18.3 19.0 18.0 18.0 19.1 18.3 15.0 13.6

laloveni Cattle 18.0 19.1 17.7 15.5 14.7 12.5 10.8 9.7

Of which cows 5.4 5.9 5.7 5.1 4.7 4.3 4.1 3.7

Pigs 20.2 22.7 21.6 19.2 21.3 18.7 13.9 13.8

Poultry 139.7 131.1 205.3 208.1 196.3 152.9 116.4 39.1

Sheep and goats 1.3 2.0 2.0 1.7 1.3 1.2 1.0 7.8

Comrat Cattle 21.2 21.2 19.3 19.1 19.9 17.5 16.5 13.0

Of which cows 6.8 6.8 6.8 6.8 6.7 5.8 5.6 4.6

Pigs 53.0 54.7 54.1 54.3 52.9 49.3 52.2 43.3

Poultry 198.8 199.1 199.4 194.5 179.0 200.6 153.6 155.3

Sheep and goats 34.0 33.5 31.9 32.9 33.5 29.1 25.8 25.3

Leova Cattle 16.7 16.6 16.4 16.0 15.4 13.6 11.1 9.5

Of which cows 5.8 5.7 5.6 5.5 5.4 5.2 4.7 4.6

Pigs 31.4 33.0 27.7 30.1 32.6 22.6 23.6 9.9

Poultry 145.7 187.7 235.7 249.4 182.2 193.2 189.4 34.8

Sheep and goats 21.5 20.0 19.4 16.2 17.5 15.5 11.1 10.5

Statistics 104

Table IIl B: Animal Inventories in Public Sector Farms by Raion, Thousand Head, End of Year, 1985-1992, continued

Raion | Animal | 1985 I 1986 | 1987 [ 1988 | 1989 | 1990 I 1991 1992

Nisporeni Cattle 13.1 12.7 12.2 12.2 11.8 11.9 10.1 8.0

Of which cows 4.2 4.2 4.0 4.0 3.9 3.6 3.4 3.2

Pigs 23.6 25.4 23.4 26.1 29.4 26.5 23.9 18.9

Poultry 177.6 126.2 272.1 200.6 193.2 304.8 196.1 85.6

Sheep and goats 5.2 5.2 5.5 6.0 6.1 6.6 6.0 5.2

Ocnitsa Cattle 24.9 23.3 24.1 23.7 23.5 19.4 17.5 16.0

Of which cows 7.9 8.7 8.5 7.6 7.3 7.3 6.8 5.9

Pigs 22.1 23.4 18.0 22.4 23.6 21.3 17.3 11.7

Poultry 21.3 51.3 41.1 33.3 36.9 41.4 32.2 13.1

Sheep and goats 5.2 6.1 6.0 6.1 6.3 5.9 5.0 4.1

Orhei Cattle 30.0 29.7 29.1 28.1 28.3 27.4 24.9 23.9

Of which cows 10.0 10.0 9.8 9.7 9.5 9.5 9.3 9.0

Pips 64.5 66.8 60.6 61.3 62.3 54.2 47.2 j 52.3

Poultry 395.8 285.2 337.6 339.0 377.9 446.1 288.5 | 114.8

Sheep and goats 9.2 9.7 9.8 8.9 9.0 7.9 6.0 T 5.3

Rezina Cattle 20.1 19.9 19.0 17.7 15.4 12.7 11.2 10.8

Of which cows 5.3 6.0 5.8 5.7 5.3 5.1 4.6 4.0

Pies 39.4 40.3 32.9 40.9 41.9 37.6 32.5 18.8

Poultry 105.8 88.6 12.4 38.6 40.9 68.8 42,5 39.8

j___________ |Sheep and goats 5.4 5.1 5.2 5.6 5.7 5.6 5.1 4.1

Ribnitsa Cattle 33.3 32.6 31.9 30.0 28.5 26.7 24.0 21.2

Of which cows 10.9 10.9 10.5 10.3 10.2 10.1 9. 8.3

Pigs 46.7 38.9 32.8 32.1 41.2 36.7 27.1 23.7

Poultry 971.3 959.9 929.2 1147.0 1221.0 1060.0 1009.0 855.9

Sheep and goats 8.0 8.1 8.5 8.1 8.3 8.1 7.3 6.1

Rishkani Cattle 36.6 36.3 36.4 36.5 38.0 36.3 32.1 29.2

Of which cows 12.7 12.6 12.2 12.0 11.8 11.6 10.7 9.5

Pigs 65.1 63.9 55.3 57.6 { 63.7 48.9 41.5 32.4

Poultry 584.2 435.7 453.5 544.1 565.9 386.2 561.0 386.3

____________ |Sheep and goats 13.3 14.3 14.4 14.4 | 15.1 13.3 11.2 10.0

Singerei Cattle 38.9 38.3 37.8 37.3 36.3 34.6 31.0 28.5

Of which cows 11.9 11.4 11.4 11.5 11.3 11.3 10.8 9.8

Pigs 61.6 51.6 53.3 56.6 60.4 56.0 48.1 45.4

Poultry 898.5 920.4 1025.0 964.0 951.6 926.6 875.2 53.5

Sheep and goats 18.1 19.0 19.0 19.3 19.0 18.0 14.9 13.2

Slohozia Cattle 35.0 33.8 32.7 33.0 32.2 31.3 28.7 24.2

Of which cows 11.2 11.1 10.9 10.8 10.2 10.2 9.9 8.9

Pigs 42.3 45.7 42.4 41.5 45.5 44.8 33.0 29.0

Poultry 74.3 46.9 50.1 52.3 53.9 50.0 27.2 15.0

Sheep and goats 3.1 3.1 2.4 2.3 2.3 0.9 0.8 0.7

Statistics 105

Table Ill B: Animal Inventories in Public Sector Farms by Raion, Thousand Head, End of Year, 1985-1992, continued

Raion Animal |1985 | 1986 1987| 1988 | 1989 1990[1991 1992

Sholdaneshti Cattle 18.7 18.0 18.0 17.4 16.6 16.1 14.6 13.9

Of which cows 5.7 5.4 5.5 5.5 5.4 5.4 5.1 4.8

Pigs 15.1 6.7 4.4 7.4 11.3 10.6 9.7 7.7

Poultry 72.3 52.4 49.6 61.5 40.2 54.7 44.3 16.6

Sheep and goats 6.2 7.1 7.7 7.3 7.7 8.7 7.7 6.8

Soroka Cattle 29.1 28.0 26.9 25.5 24.8 22.5 19.8 18.4

Of which cows 9.2 9.0 8.9 8.8 8.5 8.3 7.6 7.1

Pigs 46.3 46.6 46.0 50.7 49.9 44.1 46.2 28.5

Poultry 45.2 43.1 19.2 29.7 51.2 61.2 50.4 38.5

Sheep and goats 7.6 8.2 8.5 8.0 8.5 7.5 6.4 5.1

Shtefan-voda Cattle 31.1 30.4 28.8 27.2 26.5 24.3 23.7 20.0

Of which cows 10.0 9.6 9.6 9.2 8.8 8.6 8.0 6.9

Pigs 52.0 50.5 47.7 46.1 51.8 45.9 42.2 27.6

Poultry 823.7 448.4 547.5 667.3 703.6 581.7 814.0 159.0

Sheep and goats 14.2 13.6 14.3 13.4 14.2 12.2 10.2 5.9

Stresheni Cattle 12.3 12.6 12.1 11.0 11.0 10.3 8.2 6.9

Of which cows 4.1 4.2 4.0 3.7 3.5 3.4 3.2 2.7

Pigs 7.4 7.0 6.9 6.6 9.1 7.1 5.4 4.6

Poultry 316.0 382.1 376.5 382.7 445.8 457.8 434.9 41.9

Sheep and goats 0.3 0.3 0.3 0.3 0.3 0.2 NA NA

Taraklia Cattle 16.5 16.3 16.5 15.9 15.9 16.0 14.2 12.8

Of which cows 6.2 6.2 6.3 6.2 5.8 5.4 5.2 5.2

Pigs 35.1 34.2 33.5 31.0 35.1 29.6 23.4 13.4

Poultry 19.1 21.3 21.3 17.8 20.0 16.2 10.1 15.0

| Sheep and goats 35.7 35.9 34.4 33.3 33.2 24.7 26.0 26.2

Teleneshti Cattle 25.6 24.6 22.5 22.3 21.6 19.7 16.6 14.6

Of which cows 8.2 7.7 7.7 7.5 7.2 6.5 6.3 5.5

Pigs 34.4 34.3 33.0 40.1 41.7 18.5 21.7 15.1

Poultry 553.1 540.1 506.0 527.4 414.6 447.5 417.7 142.3

Sheep and goats 9.7 10.7 10.7 10.0 10.1 9.5 8.9 8.2

Ungeni Cattle 26.7 26.7 25.7 24.4 23.6 21.8 19.9 18.6

Of which cows 8.0 8.1 | 8.0 7.9 7.8 7.5 7.0 6.8

Pigs 38.0 38.6 34.2 37.8 43.8 35.3 30.9 24.7

Poultry 179.2 166.8 | 157.6 141.0 159.0 107.3 119.6 75.5

Sheep and goats 8.5 8.8_| 9.3 10.3 10.5 10.5 | 5.8 | 7 8 |

Statistics 106

Table III B: Animal Inventories in Public Sector Farms by Raion, Thousand Head, End of Year, 1985-1992, continued

[ Raion | Animal [ 1985 | 1986 | 1987 [ 1988 | 1989 | 1990 | 1991 | 1992

Vulcaneshti Cattle 22.9 22.0 21.6 21.1 21.6 20.4 19.4 18.0

Of which cows 7.9 7.9 7.7 6.9 7.0 6.4 5.6 5.5

Pigs 53.7 50.2 42.7 39.5 44.0 33.0 30.9 21.7

Poultry 620.9 446.6 546.3 651.8 381.0 422.2 586.4 179.8

Sheep and goats 57.1 57.5 53.9 54.0 53.6 38.0 35.6 34.6

| Source: Ministry of Agriculture

Statistics 107

Table III C: Animal Inventories in All Farms, By Raion, 1992 and 1993

Cattle Of , hich, cosis P I'igs - Sheep and goats

Raion [ 1992 | 1993 J 1992 1993 1992 1993 1992 [ 1993|

Anenii Noi 24214 23609 10035 105I1 63870 56330 11892 13301

Basarabiaska 9353 9169 3577 3625 18965 18020 42313 51358

Bricheni 32513 33547 14475 14694 53668 46773 32681 32314

Cahul 18509 15778 5555 6040 48767 49191 63897 72998

Camenka 20191 17579 8481 7792 50891 38102 13304 13042

Cantemir 17644 16665 6672 6809 39769 31400 69884 72433

Cainari 19123 19661 7212 7846 20699 19458 22782 23781

Calarashi 13374 13957 4888 5489 15905 15908 15628 15415

Causheni 27719 24271 10463 9686 54056 34242 19970 25783

Ciadir-lunga 19676 18197 6544 6195 53100 38831 53696 60011

Chimishlia 20889 20596 8729 9154 36930 35343 45786 49889

Comrat 18143 15374 6656 6195 56184 52671 68305 70973

Criuleni 26833 25946 10147 10477 57882 44279 7448 8478

Dondusheni 34429 33741 16151 16322 41503 29465 19921 22321

Drochia 38349 39479 16788 17953 55803 44156 25128 27038

Dubasari 20916 17334 7136 6279 37473 29602 6692 5872

Edinets 38812 38535 16278 16290 39510 30280 41092 40251

Faleshti 39569 38587 15216 15725 67796 52965 56918 55598

Floreshti 31606 32975 13338 13991 85514 77538 38528 38963

Glodeni 32106 33486 12333 12741 46359 41618 39374 41519

Grigoriopol 27793 23015 8683 7195 47788 41797 8200 5146

Hinchesti 23311 22944 9443 10364 43084 44975 59621 61077

Statistics 108

Table Ill C: Animal Inventories in All Farms, by Raion, 1992 and 1993, continued

Cattle [ Of which, cows Pigs | Sheep and goats l

Raion 1992 1 1993 [ 1992 [ 1993 1992 1993 [ 1992 19937

laloveni 14978 15586 5982 6618 23604 23418 6295 7020

Leova 15250 13513 6014 6510 29937 16655 47835 50585

Nisporeni 15117 15175 6651 6779 32771 30676 30818 30151

Ocnitsa 22680 22239 10112 9847 25471 21383 11018 11387

Orhei 35289 37268 14634 16059 63120 70734 24636 27003

Rezina 16468 17464 7276 7441 41543 28675 11098 11814

Ribnitsa 27929 25314 11340 10371 36162 35256 8990 7806

Rishkani 43829 41598 17387 17107 52262 43415 44060 42627

Singerei 39479 39088 15787 16477 59938 58065 46274 45702

Slobozia 30763 26239 10706 9727 47476 43493 1970 1874

Soroka 30404 30851 13536 14273 54738 38159 18903 19530

Stresheni 11883 11848 4825 4895 15784 15245 5094 5936

Sholdaneshti 19868 20638 7872 8373 21751 19001 17709 17619

Shtefan-voda 28232 26123 10165 10184 51190 36596 21194 21001

Taraklia 15053 14187 5496 5364 30467 20606 58940 63750

Teleneshti 24570 24583 10848 11032 35004 30106 33991 36147

Ungeni 26752 28029 10680 11799 42461 39342 44281 45976

Vulcaneshti 19749 18743 5696 5730 34946 28927 84955 94306

Statistics 109

I,Ihlc III ( .\nmd llcaltorem cs in AII Ij lrms . Riion. l91)2 atnld C01'1?nhlLiCd

Cattle O (%hich. eo s P Pigs| Siheep and got l

LRamn] 199 1993 1992 1993 1992 1993 199)193 1

Cities -

Chisinau 3006 3037 1414 1444 7122 6813 1322 1401

Bcitsi 1235 1365 (21 655 6525 3772 5734 3419

Bender 1903 1757 800 770 1052 1042 247 278

Tiraspol 859 706 429 344 2864 3097 299 299

Total 1000368 | 970096 [ 397071 403173 1751706 1487420 | 12288723 | 1357210


Statistics 110

Table Ill D: Use of Feed for Milk and Meat in All Farms, in Standard Feed Units, 1982-1992

_ 1982 1 1983 11984 1 1985 [1986 1987 1 1988 1989 1 1990 1 1991 1992 ! 1992aTotal feed (thousand tons) 5313 5595 5862 6061 5735 5590 6147 6493 6561 6193 5661 3844

Of which concentrates 2323 2358 2570 2710 2460 2484 2703 2857 2886 2725 2638 1790

Per standard head of cattle 25.7 26.4 27.1 27.7 26.8 27.6 30.0 31.5 31.5 31.0 30.1 32.3

Feed units per unit output:

Milk 1.5 1.5 1.4 1.4 1.3 1.3 1.2 1.2 1.3 1.4 1.6 1.6

Beef 13.5 13.4 12.6 12.2 11.1 10.8 10.9 11.4 12.4 13.2 15.3 17.9

Pork 7.9 7.8 7.7 7.4 7.2 6.7 7.0 6.6 7.3 7.7 9.1 10.4

Note: Feed is measured in "standard units" equivalent to a ton of oats.'Use of feed and productivity of feed in public sector onlySource: Ministry of Agriculture from Department of Statistics

Table III E: Productivity of Livestock, 1985-1992, Public Sector and All Farms

1 | 1985 1985 1989 1989 1990 1990 1991 1991 1992 1992I Unit 111

________________ _ I _All Public j All Public | All Public | All Public All | Public |

Average annual milk yield per cow Kilograms 3085 3424 3740 4022 3735 3975 3248 3394 2841 3026

Average annual wool yield per sheep Kilograms 2.2 2.3 2.4 2.4 2.3 2.3 2.3 2.1 2.1 2.1

Average daily weight gain, cattle Grams 531 546 515 427 348

Average daily weight gain, pigs Grams 433 328 304 262 165

Average egg production per chicken Number 197 210 207 195 | 152

Source: Ministry of Agriculture from Department of Statistics -

Statistics 111

Table IV A: Value of Agricultural Inputs Used, Thousand Current Rubles, 1990 and 1992

Item | 1990 1992

Material expenditures 1959553 3880112

Of which seeds and planting materials 171033 229411

Feed 693803 1102301

Of which feed commercially produced 329390 604618

Other agricultural production 213795 439294

Mineral fertilizers 87241 91463

Oil products 93681 196171

Electricity 26042 51207

Oil 22262 52513

Spare parts and materials for repairs 76846 204861

Payments for wages and services by other organizations 327874 1512793

Of which transport 29012 87610

Of which land improvement and other agronomic work 23585 46212

Of which repair of technology 23095 72488

Of which zoological and veterinary services 6569 16999


Statistics 112

Table IV B: Use of Inputs in Agriculture, Quantities

[Input | 1980 | 1985 1986 | 1987 | 1988 1990 | 1991 1992

Fertilizers

Minerals, Total, thousand tons 266.5 304.4 339.6 347.1 303.3 217.2 191.4 127.6

Nitrogen 109.6 136.0 152.6 144.5 126.4 87.8 182.7 61.8

Phosphorus 96.4 83.5 97.6 106.4 96.7 79.5 75.2 43.4

Potassium 60.5 84.9 89.4 96.2 80.2 49.9 33.5 22.4

Organic 7.9 9.8 10.4 11.6 10.8 9.7 8.6 5.3

Total per hectare, kilograms 156.0 184.0 201.0 202.0 180.0 136.0 124.0 86.0

Organic per hectare, tons 4.4 5.5 5.7 6.3 6.0 5.6 5.1 3.4

Fuels, thousand tons

Gasoline 246.0 377.2 192.4

Diesel 597.5 686.9 427.1

Oil 448.7 374.7

Natural gas 195.3 317.2 356.6

Electricity, million Kwh 3372.6 3076.9 2804.0

Of which for production 2007.0 1671.0 1580.0

Concentrated vitamins 120.0 120.1 69.4

Plant protection, thousand tons 21.4 19.6 14.0

Veterinary items, million rubles

Medicines 8.0 20.0 42.5

Hormones 4.0 8.2 28.0

Disinfectants 1.5 2.2 8.5

Instruments 2.3 5.2 10.3


Statistics 113

Table IV C: Agricultural Equipment Stocks, 1985-1991

[Equipment in all farms, thousands [ 1985 1986 1987 [ 1988 1989 1990 1991

Tractors 53.2 53.2 51.1 50.4 52.6 51. 1 51.5

Grain combines 4.4 4.3 4.2 4.6 4.5 4.5 4.4

Beet combines 0.9 1.0 11 1.1 11 11 1.0

Corn combines 4.5 3.3 3.8 3.9 3.8 3.7 3.6

Feed combines 4.3 4.4 4.4 4.1 4.1 4.1 4.0

Land per machine, in hectares

Tractors 41.6 42 44 44 42 42 42

Arable land per tractor 33 34 36 36 33 34 33

Grain combines 139 123 132 133 137 135 137

Beet combines 96 96 87 80 76 74 80

Corn combines 66 86 57 60 58 52 63

Feed combines 147 129 149 150 142 148 159

Equipment in public enterprises (sovkhoz,kolkhoz,mezhkhoz) at the end of the year, thousands

Tractors 52.4 53.2 51.1 50.4 52.6 511 50.8

Power, million horsepower 3.6 3.7 3.6 3.6 3.6 3.6 NA

Trucks 30.4 28.6 28.2 27.4 27.6 29.2 28.8

Capacity, thousand tons 122.2 117.1 117.5 114.2 116.4 119.2 NA

Grain combines 4.4 4.3 4.1 4.6 4.5 4.8 4.9

Plows 21.7 20.1 23.2 25.8 1 22.6 22.4 22.5

Seeders 16.9 16.7 16.2 16.2 16.0 16.3 16.0

Cultivators 19.2 19.6 19.9 21.2 22.2 23.5 23.1

Silage combines 4.3 4.4 4.4 4.1 4.0 3.6 3.9

Presses 2.1 2.0 1.7 1.5 1.6 1.7 1.8

Sprinklers 8.0 9.8 8.1 9.4 10.0 10.4 8.4

SNote: Number of tractors includes tractors equipped for land reclamationSource: Ministry of Agriculture from Department of Statistics

Statistics 114

Table IV D: Normative Use of Inputs in the Crop Sector

Note: These normatives reflect traditional guidelines, not actual practice.

Input per ton of output ] Units Winter wheat Grain corn m Sunflowers Sugar beets Alfalfa | Tomatoes J Apples

Seed Kilograms 62.0 4.0 1.8 0.3 0.5

Fuel Kilograms 17.0 85.0 20.0 4.8 2.9 21.2 43.0

Nitrogen fertilizer Kilograms 24.0 20.0 30.0 3.8 2.8 3.0 3.2

Phosphorus fertilizer Kilogramns 19.0 14.0 30.0 3.6 2.5 2.6 2.8

Potassium fertilizer Kilograms 10.0 10.0 29.0 3.9 1.2 1.0 1.3

Plant protection agents Kilograms 1.6 I.1 8.6 0.3 0.4 0.5 4.0

Herbicides Kilograms 0.3 2.8 4.2 0.2 0.1 0.1 0.6

Labor Man hour 4.9 4.2 3.3 2.5 0.6 53.4 36.9

Machine Shift 0.5 0.3 0.3 0.1 0.1 0.4 1.6

Assumed yields Tons/hectare 4.5 5.0 2.6 46.0 45.0 50.0 15.0

Note: For tomatoes, labor input is inclusive of cultivation of seedlings.Source: Ministry of Agriculture

Statistics 115

Table IV E: Normative Input Use per Ton of Output in the Livestock Sector

(Note: These data reflect traditional guidelines, not actual practice)

Inpu UnMeats l

I_nput Unit Beef I Pork Milk

Feed Tons 24.0 11.8 1.4

Of which concentrate Tons 5.0 8.9 0.4

Electricity Thousand kilowatt hours 6.3 9.5 0.8

Fuel Liters 80.0 380.0 24.0

Labor Man-hour 538.0 215.0 67.0

Assumed yields

Weight gain per day Grams per day 630 500

Milk per year Liters 3394

Average weight per head Kilograms 421 120

'Slaughter weightSource: Ministry of Agriculture, from technical materials

Statistics 116

Table V A: Basic Data on Publicly Owned Farms

Type | Series [Units | 1985 | 1986 [ 1987 1 1988 | 1989 | 1990 I 1991 [ 1992

Kolkhoz Number of farms(end of year) Number 368 369 372 375 453 534 574 618

Number of workers Thousand 313 333 326 308 350 378 337 358

Average monthly pay Rubles 142 158 157 166 197 252 464 3613

Profit from all activities Million Rubles 396 450 362 377 650 1015 1841 17311

Profit per 100 hectares of land Thousand Rubles 33 37 30 31 46 67 121 1099

Profitability' Percent 33 36 31 31 41 48 47 53

Sovkhoz Number of farms(end of year) Number 473 484 478 470 461 400 387 384



Profit from all activities Mill.Rub. 174 290 335 401 468 561 996 6663

Profit per 100 hect.of land Th.Rubles 20 33 39 47 62 83 169 1229

Profitability Percent 18 18 21 25 30 38 40 33

Mezhkhoz Number of farms(end of year) Number 186 153 163 164 166 116 184 169



Profit from all activities Mill.Rub. 121 150 136 147 164 173 239 1112

Profit per 100 hect.of land Th.Rubles 28 36 34 39 97 150 378 2134

| Profitability' Percent 17 27 24 25 35 38 29 1 17

Profitability is (Gross receipts - Variable costs) I Variable costs. These calculations are not adjusted for inflation.Source: Ministry of Agriculture

Statistics 117

Table V B: The Household Sector in Agriculture, 1985-1990 and 1991

| Units | 1985-1990 1 1991

Total land Thousand Hectares 193.5 263.6

Cultivated land Thousand Hectares 125.9 164.8

Cattle Thousand Head 191.0 228.0

Of which cows Thousand Head 99.0 121.0

Pigs Thousand Head 231.0 395.0

Sheep and goats Thousand Head 801.0 885.0

Grain produced Thousand Tons 284.0 437.6

Sunflowers produced Thousand Tons 2.5 2.4

Potatoes produced Thousand Tons 308.0 255.4

Vegetables produced Thousand Tons 113.2 207.5

Fruit produced Thousand Tons 171.4 139.6

Grapes produced Thousand Tons 219.5 191.6

Milk produced Thousand Tons 253.6 284.7

Meat, slaughter weight Thousand Tons 75.3 84.5

Eggs produced Million 306.0 314.7

Source: Ministry of Agriculture and Department of StatisticsStatistics 118

Statistics 118

Table VI A: Production of Major Types of Processed Food, 1985-1993

[Food | Unit f 1985 r 1989 1990 1991 I 1992 [ 19921

Sugar Thousand tons 414.2 446.1 435.8 236.9 208.1 195.0

Meat (slaughter wt) Thousand tons 302.9 355.6 365.9 303.5 233.5 NA

Of which processed meat Thousand tons 219.3 245.9 257.9 218.5 165.1 56.1

Sausage Thousand tons 39.1 47.5 50.0 45.1 30.4 12.8

Fish Thousand tons 8.3 8.6 9.5 5.2 6.5 NA

Butter Thousand tons 23.7 28.6 27.0 21.8 19.0 9.6

Whole milk products Thousand tons 411.9 458.0 454.8 382.6 249.9 191.7

Cheese and brinza Thousand tons 11.1 12.4 12.2 10.0 4.6 3.5

Vegetable oil Thousand tons 107.6 117.6 125.6 117.9 57.9 53.9

Conserves Million standard cans 1586.0 1747.6 1813.9 1446.3 1115.3 859.2

Of which Fruits and Vegetables Million standard cans 1447.5 1696.1 1765.1 1413.7 NA NA

Dried fruit Thousand tons 9.2 9.4 8.2 10.7 4.5 NA

Frozen vegetables Thousand tons 0.2 0.8 0.5 1.1 NA NA

Candy Thousand tons 62.1 71.4 70.2 58.5 32.6 NA

Pasta Thousand tons 20.1 22.8 25.1 26.8 16.0 NA

Non-alcoholic beverages Million dekaliters 7.6 12.3 13.1 8.6 2.9 NA

Canned meat Million standard cans 38.5 50.7 48.8 31.1 NA NA

Canned meat and vegetables Million standard cans 1.8 4.7 5.3 12.6 NA NA

Canned vegetables Million standard cans 233.7 285.8 254.4 235.6 NA NA

Canned tomatoes (inc.juice) Million standard cans 546.0 454.5 478.4 288.2 NA NA

Canned fruits Thousand tons 749.2 798.9 794.2 735.1 NA NA

Jam and compote Thousand tons 171.4 223.8 245.3 206.3 NA NA

Juice Thousand tons 386.0 551.9 504.7 479.6 NA NA

Statistics 119

Table VI A: Production of Major Types of Processed Food, 1985-1992, continued

Food |Unit | 1985 1989 1990| 1991 1992 1992|Vodka and liqueurs Thousand dekaliters 1481.0 413.0 559.0 556.0 NA NAGrape wine Million dekaliters 12.8 12.4 16.3 14.3 NA NASparkling wine Million bottles 10.8 10.4 10.1 10.4 NA NACognac Thousand dekaliters 828.0 1247.0 1394.0 1402.0 NA NABeer Million dekaliters 9.0 7.1 7.4 6.6 NA NACigarettes Million 8879.0 9452.0 9088.0 9164.0 NA NASource: Ministry of Agriculture

Statistics

120

Table VII A: Interrepublic and Foreign Trade, 1982-1991, Million Rubles

1982 1987 1 1988 1989 1990 1991

Exports=

Total 4239.7 5386.3 5057.5 5456.4 6176.7 8140.8

Foreign 162.2 227.6 257.2 270.0 323.4 331.8

Interrepublic 4077.5 5158.7 4800.3 5186.4 5853.3 7809.0

Imports |

Total 4800.6 5673.5 6080.4 6611.5 6461.4 8443.8

Foreign 973.2 1066.5 1093.9 1420.0 1469.8 1206.5

Interrepublic 3827.4 4607.0 4986.5 5191.5 4991.6 7237.3

Balance |

Total -560.9 -287.2 -1022.9 -1155.1 -284.7 -303.0

Foreign -811.0 -838.9 -836.7 -1150.0 -1146.4 -874.7

Interrepublic 250.1 551.7 -186.2 -5.1 861.7 571.7

GDP 9321 9433 9830 11218 12750 22252

Trade as a share of GDP .1Exports

Total 45.5 57.1 51.4 48.6 48.4 36.6

Foreign 1.7 2.4 2.6 2.4 2.5 1.5

Interrepublic 43.7 54.7 48.8 46.2 45.9 35.1

Imports =

Total 51.5 60.1 61.9 58.9 50.7 37.9

Foreign 10.4 11.3 11.1 12.7 11.5 5.4

Interrepublic 41.1 | 48.8 50.7 46.3 | 39.1 32.5

Balance

Total -6.0 -3.0 -10.4 -10.3 -2.2 -1.4

Foreign -8.7 -8.9 -8.5 -10.3 -9.0| -3.9

Interrepublic 2.7 -5.8 1.9 0.0 6.8 2.6

: Sore IM.rm-_____ |FSource: IMF from Moldovan Authorities and Narodnoe Khoziaistvo Respubliki Moldova 1992

Statistics 121

Table VII B: Trade by Branch of Activity, Million Rubles, 1982-1991

Exports

Exports 1 1982 1 1987 1988 f 1989 [ 1990 J 1991

Total 4239.7 5386.3 5057.5 5456.4 6176.7 8140.8

Industrial 3991.3 4976.9 4728.9 5089.5 5688.7

Electric power 142.7 121.5 104.9 114.2 80.5

Other energy products 0.1 0.0 0.0 0.0 0.0

Ferrous metallurgy 8.9 58.7 60.4 63.3 69.8

Nonferrous metallurgy 0.0 0.0 0.0 0.0 0.8

Chemical products 130.8 197.9 190.6 197.6 210.4

Machine building/metal working 622.1 971.7 963.2 1033.4 1045.1

Wood and paper products 81.7 103.0 105.5 112.6 84.4

Building materials 63.7 71.4 70.0 60.3 59.1

Light industry 838.7 1074.5 1087.7 1182.7 1207.3

Food industry 1957.6 2228.4 2008.4 2182.7 2732.8

Other industries 145.0 149.8 138.2 142.7 198.5

Agricultural products 243.0 401.9 320.8 322.0 449.1

Other 5.4 7.5 7.8 44.9 38.9

Imports

1982 1987 ] 1988 1989 [ 1990 1991 ]Total 4800.6 5673.5 6080.4 6611.5 6461.4 8443.8

Industrial 4619.5 5452.1 5840.2 6175.8 5966.5

Electric power 18.9 16.3 13.0 16.2 17.2

Other energy products 556.9 626.9 650.2 648.7 544.1

Ferrous metallurgy 259.0 301.1 318.8 322.1 307.6

Nonferrous metallurgy 110.2 158.4 179.5 181.3 151.5

Chemical products 544.2 655.7 680.6 711.2 731.4

Machine building/metal working 1025.3 1566.0 1796.2 1861.0 1861.1

Wood and paper products 264.2 253.6 261.9 261.5 224.1

Building materials 86.5 115.7 120.0 150.7 143.6

Light industry 1038.1 1169.3 1146.5 1274.4 1307.4

Food industry 595.4 454.0 537.5 604.0 461.1

Other industries 120.8 135.1 136.0 144.7 217.4


Other 12.3 22.8 24.3 219.1 224.1

Source: International Monetary Fund

Statistics 122

Table VII B: Trade by Branch of Activity, Million Rubles, 1982-1991, continued

Trade Balance

j_____________ 1 19821 19871 19881 1989 1990] 1991

Total -560.9 -287.2 -1022.9 -1155.1 -284.7 -103.0

Industrial -628.2 -475.2 -1111.3 -1086.3 -277.8

Electric power 123.8 105.2 91.9 98.0 63.3

Other energy products -556.8 -626.9 -650.2 -648.7 -544.1

Ferrous metallurgy -250.1 -242.4 -258.4 -258.8 -237.8

Nonferrous metallurgy -110.2 -158.4 -179.5 -181.3 -150.7

Chemical products -413.4 -457.8 -490.0 -513.6 -521.0

Machine building/metal working -403.2 -594.3 -833.0 -827.6 -816.0

Wood and paper products -182.5 -150.6 -156.4 -148.9 -139.7

Building materials -22.8 -44.3 -50.0 -90.4 -84.5

Light industry -199.4 -94.8 -58.8 -91.7 -100.1

Food industry 1362.2 1774.4 1470.9 1578.7 2271.7

Other industries 24.2 14.7 2.2 -2.0 -18.9


Other -6.9 -15.3 -16.5 -174.2 -185.2

FSource: International Monetary Fund |

Statistics 123

Table VII C: Exports by Item in Natural Units and Value (thousand rubles), 1991

Item I Unit T Quantity I Value

Exports, total Thousand rubles [ l 81408087

1. Livestock products . -

Live animals and animal products Head 14252 19474

Live birds Tons,live weight 46 444

Meat and meat products Tons 32274 192527

Fish and fish products Tons 3 40

Honey Tons 1074 10708

Eggs and egg products Thousand pieces 53576 10856

Dry milk Tons 4 6

Cheese Tons 4 19

Other animals and animal products Thousand rubles 569

II. Plant products [ Thousand rubles | [ 1162152

Potatoes Tons 66 221

Melons Tons 2094 1492

Fresh vegetables Tons 83175 127141

Fruits and berries Tons 160982 474388

Grapes Tons 16625 44893

Raisins Tons 5 58

Grain Tons 6257 9237

Flour Tons 43845 13112

Other flour Tons 8782 4340

Meal Tons 226 292

Oilseed cake and meal Tons 7481 1279

Seeds Tons 21191 120907

Concentrated feed and grain fodder Tons 11467 3774

Nuts, almonds Tons 601 2838

Plant materials,juices, and extracts Thousand rubles 96898

Other plant products Thousand rubles 254950

[11. Oils and fats Thousand rubles J 151221 l

Vegetable oil Tons 46309 117685

Edible tallow Tons 53 130

Butter Tons 2826 30903

Other oils and fats Thousand rubles 2504

Statistics 124

Table VII C: Exports by Item in Natural Units and Value (thousand rubles), 1991, continued

Item Unit J Quantity Value

IV. Food,drinks,tobacco Thousand rubles ] _ 23742427

Canned meat Thousand std. cans 7094 21765

Canned fish Thousand std. cans 3 10

Confectionery Tons 9274 32562

Sugar Tons 5258 7182

Treacle Tons 51959 27367

Bread products Tons 15 33

Macaroni Tons 124 174

Canned vegetables Thousand std. cans 188795 162928

Tomato products Thousand std. cans 95115 117349

Canned fruit Thousand std. cans 337133 300673

Mayonnaise Tons 189 1080

Yeast Tons 1 2

Grape wine Thousand dekaliters 12628 221451

Sparkling wine Thousand dekaliters 213 9783

Cognac Thousand dekaliters 435 171961

Vodka and liqueur Thousand dekaliters 411 71018

Beer Thousand dekaliters 66 199

Non-alcoholic drinks Thousand dekaliters 318 1631

Mineral water Thousand dekaliters 38 4

Tobacco Thousand rubles 517928

Wine materials Thousand dekaliters 12572 517355

Other manufactured food and drinks Thousand rubles 191788

V. Soap and toiletries l

Essential oils Kilograms 37271 17434 ]Perfume-cosmetics Thousand rubles 71578

Household soap Tons 69 124

VI. Fur and Leather goods Thousand rubles 136680

Raw leather Pieces 250982 1952

Leather products Thousand sq. meters 5057 828

Firm leather goods Thousand sq. meters 25985 7497

Synthetic leather Thousand sq. meters 3617 21699

Leather accessories Thousand rubles 9561

Fur/goods Thousand rubles 95090

Other Leather materials Thousand rubles 53

VII. Glass ]Glass containers Thousand pieces 53463 22319

Statistics 125

Table VII C: Exports by Item in Natural Units and Value (thousand rubles), 1991, continued

Item Unit Quantity Value

[ Vill. Paper and wood products l

Wooden packaging Cubic meters 78866 2062

Cardboard packaging (incl.corrugated) Thousand sq. meters 17320 3637

Cardboard packaging for transport Thousand sq. meters 25939 25596E IX. Textiles |

Silk fabrics Thousand sq. meters 22342 186921

Washed wool Tons 50 1934

Natural wool Tons 866 7829

Shearling Tons 2 49

Wool fabrics Thousand sq. meters 68 697

Wool yarn Tons 10 42

Cotton fiber for fabric Thousand std. units 0 0

Cotton fabric Thousand sq. meters 57925 280800

Synthetic fibers Tons 2052 18970

Textile accessories Thousand rubles 28466

Cotton yarn Tons 63 908

f Note: Values are in thousand rubles.Totals are not available for some categories.


Statistics 126

Table VII D: Imports By Item in Natural Units and Value (thousand rubles), 1991

Item ! Unit Quantity Value

1. Livestock products Thousand rubles l 79771

Fish and fish products Tons 19869 50420

Milk and milk products Tons 9097 11868

[II. Plant and crop products Thousand rubles [ 642580

Potatoes Tons 33161 53389

Tea Tons 1020 18220

Grain Tons 1264940 473995

Meal Tons 39405 42704

Plant materials,juices,extracts Thousand rubles 13534

Other plant products Thousand rubles 11762

III. Fats and oils [ Thousand rubles J 27752

Vegetable oil Tons J 5093 10515

Margarine Tons 1 2106 12597

IV. Food, drinks, and tobacco Thousand rubles 307828

Canned fish Thousand standard cans 22612 36294

Raw sugar Tons 63361 30934

Yeast Tons 14067 23902

Sparkling wine Thousand dekaliters 71 12232

Grain alcohol Thousand dekaliters 597 91703

Tobacco Thousand rubles 26253

Other food/drinks Thousand rubles 74852

V. Soap and toiletries Thousand rubles | 63105

Perfume/cosmetics Thousand rubles 62883

VI. Leather products Thousand rubles 293989

Fur & leather goods Thousand rubles 163258

Leather Thousand square meters 47982 116101

Fur goods Thousand rubles 27559

Other leather/fur goods Thousand rubles 26925

VIl. Glass

Glass containers Thousand pieces 135263 12650

Statistics 127

Table VII D: Imports By Item in Natural Units and Value (thousand rubles), 1991, continued

Item [ Unit | Quantity Value l

Vill. Paper and wood products [ Thousand rubles 106168

Wooden packaging Cubic meters 71588 15651

Paper Tons 18882 32576

Cardboard packaging Thousand square meters 221021 49515

[ix. Textiles Thousand rubles 1978274

Silk fabrics Thousand square meters 9277 78706

Washed wool Tons 1331 83136

Natural wool Tons 2608 159333

Shearling Tons 487 18330

Zavodskaia Tons 395 23698

Wool fabrics Thousand square meters 5442 278065

Wool yarn Tons 1034 49011

Cotton fibers Thousand standard units 30097 14501

Cotton fabric Thousand square meters 53174 237208

Flax and hemp bags Thousand pieces 4492 94208

Linen and hemp fabric Thousand meters 3183 26152

Synthetic thread Tons 5117 47636

Fake fibers Tons 1411 16582

Cotton fibers for fabric Tons 4067 47519

Cotton thread Tons 37787 239894

| Note: Values are in thousand rubles.Totals are not available for some categories.


Statistics 128

MAP SECTION

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JANUARY 1994

Moldova Agriculture Sector Reviewdocuments.worldbank.org/curated/en/551981468774295374/... · 2016....

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Transcript of Moldova Agriculture Sector Reviewdocuments.worldbank.org/curated/en/551981468774295374/... · 2016....