Moldovan cabinet to invest 120 million euros to restore horticultural sector

Chisinau, 13 November /MOLDPRES/ – The Government of Moldova will invest almost €120 million into rehabilitation of the horticultural sector in Moldova within project "Livada Moldovei" (The Orchard of Moldova). The money is a loan from the European Investment Bank (EIB) and the Ministry of Agriculture, Regional Development and the Environment (MADRM) will implement the project until 2022.

Deputy Minister of the MADRM, Vasile Luca, mentioned at a press conference today that the project has aimed at facilitating and creating favourable conditions for restructuring of the value chain of the horticultural sector.

According to the official, the money will be invested in the technology and mechanization of primary production processes in horticulture, endowment with irrigation and anti – hail systems, modernization of processing works and diversification of Moldovan fruit market.

At his turn, Project Executive Director, Iurie Brumarel, said investment loans would be given throughout four commercial banks.

The minimum amount of allocations, the source quoted said, is €5000, and the maximum amounts – up to €5 million. The credit term is up to ten years, with a grace period of four years. The interest rate is about 5 – 6 per cent for foreign currency loans. The project provides tax incentives, VAT zero – rate and import facilities by exempting customs and customs duties, excise duties and VAT on imports of equipment and services. The project started in 2016, and so far only 15 beneficiaries have received loans totalling €7 million.

Interviewed by the agency, why the loan contracting process is going so slow, Iurie Brumarel said that the potential beneficiaries had to have what pledges. In addition, own investment should account for 50 per cent of the loan, this being the condition of the EIB. He said that the International Development Fund (IDFA) for Agriculture (IDFA), the (EIB) and the Moldovan Government are planning to create a loan guarantee fund that could facilitate producers' access to loan.

Asked by the agency, Iurie Fala, Executive Director of Moldova’s Association of Fruits, said that some members of the association had already taken loans under the project. "The interest rate is about the same as in other banks, but in this project, the potential beneficiaries enjoy certain advantages, such as the longer grace period, the term of payment of the loan etc.", said Iurie Fala.

According to the statistical data, there are approximately 120 thousand hectares of orchards in Moldova, out of which 56 thousand ha of apple, 26 thousand ha of nutraceuticultural crops, 22,5 thousand ha of plums, 7,8 thousand ha of peach, 4, 25 thousand ha of cherries, 4 thousand ha of cherry and apricot, etc. The harvest for 2017 is 608 thousand tons of fruit, out of which 430 thousand tons of apples and 100 thousand tons of plums.

Iurie Fala specified that the market for fruit was diversified in 2017, especially of plums and grapes. Thus, according to data from 01 November 2017 out of 47 thousand tons of plums exported, 42 – 43 per cent reached the EU market. Grape exports of harvest in 2017 amounted to 28.6 thousand tons, out of which 61 per cent went to the Russian Federation, 24 per cent to the EU market and 12 per cent to Belarus. 78.3 thousand tons of apples were also exported, out of which 90 per cent on the CIS market and 3650 tons on the EU market. Out of the latter, 3500 tons of apples were exported to Romania. The horticultural sector provides 14 per cent of the revenues from exports, outpacing the other sectors.

(Reporter N. Roibu, editor A. Raileanu)