Moldova

Agriculture

Figure 20. Net Material Product (NMP) of Moldova by Sector, 1991

Source: Based on information from International Monetary Fund, Moldova, Washington, 1993, 31.

At the time of Moldova's independence, agriculture continued to play a major role in the country's economy, as it had during the Soviet period. In 1991 agriculture accounted for 42 percent of the net material product (NMP--see Glossary) and employed 36 percent of the labor force (see fig. 21).

The organizational backbone of independent Moldova's agriculture continues to be its system of former state and collective farms, one-quarter of which were transformed into joint-stock companies by 1994 and are now owned in shares by the people who work them. In 1993 Moldova's 600 collective farms covered 16.2 million hectares of land and employed 401,300 persons; in the same year, its 389 state farms encompassed 600,500 hectares of land and employed 168,200 persons. Agricultural output from private farms increased from 18 percent in 1990 to 38 percent in 1994.

Moldova possesses substantial agricultural resources; its climate and fertile soils (1.7 million hectares of arable land in 1991) support a wide range of crops. The country is an important regional producer of grapes and grape products, and its orchards produce significant amounts of fruit, including plums, apricots, cherries, and peaches. Fruit production is concentrated in the north, in the central region, and in the Nistru River area. Tobacco is also an important commercial crop. Sugar beets are grown throughout the republic and provide raw material for a substantial (although antiquated) sugar-refining industry, and sunflowers are grown for their oil. Cereal crops, including wheat, are grown widely (corn is the leading grain) and are used for domestic consumption, export, and animal feed.

Meat accounts for less than half of total agricultural production. In 1991 about half of total meat output was accounted for by pork (145,000 tons), followed by beef and veal (97,000 tons), chicken (56,000 tons), and lamb (5,000 tons). From 1990 to 1994, the amount of arable land used for livestock production decreased by some 25 percent; the number of livestock in 1994 was 400,000.

Probably the most widely known products of Moldova are its wines, sparkling wines, and brandies, which were recognized as among the finest in the former Soviet Union. In 1991 these accounted for 28 percent of the output of the food-processing sector, followed by meat processing with 22 percent of production and fruit and vegetable processing (including the production of canned fruits and vegetables, jams, jellies, and fruit juices) with 15 percent. Moldova also produces sugar and sugar products, perfume, vegetable oils, and dairy products.

Approximately half of Moldova's agricultural and food production is sold to former Soviet republics. Traditional markets are Russia, Ukraine, and Belarus.

Agricultural production has been in serious decline since the late 1980s, both in terms of overall production levels and in terms of per-hectare production of most crops (see table 12, Appendix A). Overall agricultural output in 1991 was at 1970 levels. A number of factors contributed to the decline, including difficulties in providing necessary inputs and agricultural machinery, disruption of the transportation system, failures in the incentive system, difficulties related to political instability in Transnistria, Gorbachev's anti-alcohol campaign, and, not the least, Moldova's variable weather. In 1990 a drought resulted in a serious decline in production. On the heels of the drought, 1991 saw a spring freeze, severe summer flooding, and then the worst drought in some fifty years. Overall agricultural output in 1993 was down 15 percent from the previous year; grain production, one-third less than in 1991, was particularly affected (especially corn, which was down over 50 percent on average). The trend continued into 1994 when drought and storms with hurricane-force winds caused agricultural output to decline 58 percent from 1993 levels. Although Moldova was traditionally a wheat exporter, it had to import 100,000 to 200,000 tons of wheat as a result of a 1994 harvest that was 800,000 tons less than the harvest of 1993.

In fiscal year (FY--see Glossary) 1992, Moldova participated in the United States Department of Agriculture's P.L. 480 Title I program, which provided US$7 million in long-term credit for government-to-government concessional sales, offered repayment terms of ten to thirty years (with grace periods of up to seven years), and provided low interest rates. Moldova's line of credit was scheduled to increase to US$10 million in 1993.

By the beginning of 1994, total United States assistance to Moldova included approximately US$12 million in technical assistance, in support of Moldova's transition to a market economy and democracy, and US$68 million in humanitarian assistance. In 1995 the United States was scheduled to provide US$22 million in technical assistance for economic restructuring and privatization. This amount brings total United States assistance to Moldova since 1992 to more than US$200 million.

Data as of June 1995

Moldova - TABLE OF CONTENTS