Agriculture in the Republic of Moldova

Overview

Impact on economic growth – 38%Impact on economic growth – 38%Agricultural lands – 2498,0 thousands ha (73,8%)Agricultural lands – 2498,0 thousands ha (73,8%) including: including: arable land – 1810,5 thousand. haarable land – 1810,5 thousand. ha orchards – 134,5 thousands ha orchards – 134,5 thousands ha vineyards – 147,3 thousands ha vineyards – 147,3 thousands ha

Share in G.D.P. – Share in G.D.P. – 1166,,66%%Share in total exports – 40 %Share in total exports – 40 %Population involved in agriculturePopulation involved in agriculture– 27– 27,5,5%.%.

Strategic priorities for the development of agriculture2011 – 2015 (1)

• Food safety reform;

• Wine sector modernization;

• Modern market infrastructure development;

• Large scale use of smart agriculture (Minimum and No-Till);

• Milk and meat production sector development.

Strategic priorities for the development of agriculture2011 – 2015 (2)

• Renewable energy production from agricultural raw materials;

• Education and research in agriculture reform;

• An efficient agricultural subsidy system;

• E-agriculture – functional and efficient information systems;

• Development of the fruit and vegetables sector.

Key targets for the financial state support in agriculture

GeneralA facilitated access of the credits provided by commercial banks to farmers;Improved use of arable areas by land consolidation. Plant productionExtended production season (greenhouses and tunnels for growing vegetables)Increase the transfer of innovation and technologies in agricultureIncreased perennial plantations establishments for growing grapesImproved access to water through modern irrigation systemsDeveloped post –harvesting and marketing infrastructure Animal production Renovated technologies for animal farms Developed genetic fund for animal production

Structure of the Agricultural Production

Gross harvest of the main agricultural crops

Animal production

Thousand tons 2009 2010 2011

Meat (in slaughter weight) 90.8 110.9 117.9

beef and veal 11.1 10.2 9.7

pork 42.2 56.9 63.9

mutton 2.2 2.1 2.1

poultry 34.5 40.9 41.4

Milk 575 591 560 Eggs, mio. pcs 640 718 705

GRAPES AND WINE INDUSTRY

Sector structure

The total area of vineyards – 147,5 thousand hectares

including varieties of table grapes- 16.3 ha varieties of wine grapes - 131.2 thousand ha

Global grape production varieties for table grapes-70 .2 thousand tons varieties of wine grapes- 423.3 thousand tons

Structure plantations: 86% technical varieties (wine) 14% table grapes

The types of wineries: Primary Wineries - 66

Secondary Wineries - 23Mixed Wineries - 59

The number of individual grape producers - 50 000 The main grape varieties grown:

White

Aligote – 23% Rkaţiteli – 15% Sauvignon – 9%Feteasca albă – 7% Chardonnay – 4%Riesling Rhine – 3%Traminer – 2%

White

Aligote – 23% Rkaţiteli – 15% Sauvignon – 9%Feteasca albă – 7% Chardonnay – 4%Riesling Rhine – 3%Traminer – 2%

RedMerlot – 9%Cabernet –8%Pinot Noir– 7%

RedMerlot – 9%Cabernet –8%Pinot Noir– 7%

Market potential of the wine sector

Categories of the produced wine - dry and sweet natural wines (e.g. Chateau Vartely, Purcari); sparkling wine (e.g. Cricova); brandy from grapes (e.g. Aroma, Barza Alba)

Moldovan wineries produce about 21,2 million dal. of wine a year, out of which 904 thousand dal. of sparkling wines.

90% of the produced wine is being exported mainly to CIS and EU markets

Since 2008, Moldova has tariff quotas in the trade of wine with EU. Currently, Moldova is negotiating Free Trade Agreement with EU.

Export of alcoholic beverages 2011-2012

Export, thousand USD

Products 2011 2012 Dynamic, %Beer 116,80 294,90 152,5

Wine of fresh grapes 132 485,2 142 128,70 7,3Vermouth and other wine of fresh

grapes 404,3 548,80 35,7

Spirits, liqueurs and other spirituous beverages 42 749,0 64 931,40 51,9

Out of which

Wine distillates 36 101,8 52 165,10 44,5Vodka, liqueurs, gin and other spirits

beverages 6 647,5 12 766,10 92,0

Needed Investments in the wine sector

FRUIT AND VEGETABLES SECTOR

Market potential for fruit and vegetables

Moldova has all the natural conditions for intensive development of horticulture.

Occupying only 6-7% of the arable land of the country, fruit growing ensures constant cash income to around 20% of sales agricultural products

Fruits (2011)Production Area(fructiferous) - 88,3 thousands haAverage production - 4,1 tons / 1 haGlobal production - 362,9 th. tons

DistributionExport - 220.2 thousands tonsDomestic consumption - 75.4 th. tonsProcessing - 67,3 th. tons

Vegetables (2011)ProductionArea - 34.3 thousands haAverage production - 10.1 tons/1 haGlobal production - 361,6 th. tons DistributionExport - 55,2 th. tonsDomestic consumption - 278.4 th. tonsProcessing - 28,0 th. tons

Vegetables (2011)ProductionArea - 34.3 thousands haAverage production - 10.1 tons/1 haGlobal production - 361,6 th. tons DistributionExport - 55,2 th. tonsDomestic consumption - 278.4 th. tonsProcessing - 28,0 th. tons

Production of the main fruit categories

2008 2009 2010 2011 2012

Total production, thousand tones 371 308 322 377 376

Seed fruits 261 217 218 276 288

Stone fruits 95 79 88 85 78

Walnuts 14 10 12 15 9

Berries 2 3 2 1 1

Priorities for investment in the sector

Establishment of new orchards with high productive and resistant varieties

Strengthening post harvesting and marketing infrastructure

Stimulating the production in greenhouses for extending the production season of vegetables

Development and implementation of modern technologies for fruit and vegetables processing

The structure of the plant production

Export of the fruits and vegetablesin 2007-2012, mil. USD

Basic legal framework for foreign investors

Law on foreign investments

Law on investments in entrepreneurial activity

Law on free economic zones

Strategy on investments and export promotion

Bilateral agreements on promotion and mutual protection of investments with 35 countries