Agriculture is a fundamental link in ensuring food safety and, due to an increased demand for agricultural raw materials in partner countries, it also has a high export potential. One peculiarity of the agricultural sector is the fact that difficulties related to the pandemic have been eclipsed by those caused by drought. The low level of soil moisture after the winter months and the April-May drought have compromised the harvest of cereals (-75% compared to 2019) and fruits (-50% in cherries, -40% in plums, -50% in apricots, -10% in apples). In the first months of the pandemic, agricultural production sales have not been adversely affected, given that in these months the remaining stocks of the previous year’s harvest have been put on the market. The consumption of agricultural production in the HORECA sector had a negative impact, which, however, was offset by better sales in the retail networks.

Drought has uncovered an inherent problem of the agricultural sector, namely, the supply of water for irrigation. The agricultural development strategy provides for the rehabilitation of water supply systems, allowing the irrigation of 122 thousand hectares and the construction of new systems for an area of 116 thousand hectares. In relation to these goals, in practical terms, only 10 irrigation systems have been rehabilitated from the funds of the COMPACT program, covering an area of 115 thousand hectares. Connecting agricultural producers to water supply systems remains a major challenge. Limited access to water is the main constraint for investments in performance based agriculture. According to World Bank estimates, the monetary value of annual climate related losses in the Republic of Moldova are about 700 million USD.

Another critical aspect for the development of agriculture is access to financial resources. According to the representatives of the sector, the National Fund for Agriculture and Rural Area Development in the amount of 1 billion lei is insufficient, and it is necessary to increase it up to 3-5 billion lei, so that agricultural producers can compete on fairer terms with regional producers, who benefit from economies of scale and greater subsidies.

Not least, it is necessary to launch a program dedicated to small processing enterprises (in villages). At present, raw materials with low added value predominate in the structure of agricultural production exports. The creation of small processing enterprises would widen the range of buyers of agricultural raw materials on the local market and allow the development of semi-manufactured production for export with higher added value. In addition, processed production is not so perishable and reduces the vulnerability of farmers to price fluctuations.

* This information is collected during the discussions conducted by the experts who elaborate the Impact Study of the COVID-19 pandemic on the sectors of the economy. The data can be taken from the website www.consecon.gov.md only with the obligatory mention of the source “Economic Council under the Prime Minister of the Republic of Moldova” and the specification that “The impact study of the COVID-19 pandemic on the economic sectors is carried out by The Economic Council jointly with the Ministry of Economy and Infrastructure, with the support of the European Bank for Reconstruction and Development and the United Kingdom Government Fund for Good Governance. ”

The Secretariat of the Economic Council to the Prime Minister is supported by the European Bank for Reconstruction and Development, funded by the UK Government’s Good Governance Fund, and the International Finance Corporation’s Investment Climate Reform Project funded by the Government of Sweden’s International Development Agency.

The Secretariat of the Economic Council to the Prime Minister is supported by the European Bank for Reconstruction and Development, funded by the UK Government’s Good Governance Fund.