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Volume of agricultural production decreases in 2009 after record rise the previous year

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28.01.2010   Imedia  1992 
CHIVRIGA Viorel
Gradul ştiinţific: Expert in economic policies, Coordinator of the Functioning market economy department

The volume of agricultural production in Moldova fell 9.9 percent in 2009 compared to last year, as a result of a dramatic decrease in vegetal production

(-17.4 percent), says the National Bureau of Statistics (NBS). On the other hand, the output of the husbandry branch went up 11.8 percent compared to 2008.

The drought in the middle of last year hurt the wheat, corn, sugar beet, and sunflower seed crop, farmers say. Wheat production plummeted by 42.9 percent in 2009, followed by a drop in the corn harvest (23.6 percent less than last year), sugar beet (65.1 percent less), and sunflower seeds (23.7 percent).

Agriculture as a whole had a lot to lose considering the fact that vegetal production makes up for about 68 percent of total agricultural production.

Statisticians say that this phenomenon "was generated by the decrease of land on which production was planted and by the decrease in the harvest of the main agricultural products. Average production per hectare went down 63.2 percent for beets, 38.4 percent for barley, 33.3 percent for wheat, 23.3 percent for sunflower seeds, 17.7 percent for corn, 11.8 percent for fruit and berries, and 8.9 percent for vegetables."

Commentary:

Alexandru Slusari: Farmers had to suffer twice as much in 2009 because both production and the market fell  

Alexandru Slusari, vice president of the Uniagroprotect Union of Agricultural Producers, says that farmers had to suffer twice as much in 2009 because both production and the market fell.
Mr. Slusari notes that "the production of sunflower seeds, corn, and especially sugar beets was compromised by the drought." He adds that "we have now been relegated to importing sugar, that's how bad it has gotten."

Farmer income has also gone down because prices for their products have fallen during the world economic crisis. Mr. Slusari notes that this happened both in 2008 and 2009.

"I'd like to mention other numbers, as well, which are just as interesting. The National Bureau of Statistics says that last year, 29 percent of the volume of global agricultural production was created in farming companies, 22 percent in individual farms, and 49 percent in individual land plots, which challenges the statements that farms are the main agricultural producers. Statistical data indicate other things," Mr. Slusari argues.

The Uniagroprotect vice president says that in 2010 "weather will be favorable" but that "in terms of policy, we are uncertain, since everything will depend on how the central public administration deals with the situation."

Viorel Chivriga: We have lower productivity than countries with advanced agricultural systems

Viorel Chivriga, an economic analyst, says that "previously, analysts from the Viitorul Institute of Development and Social Initiatives said in their trimester publication that, in the second half of 2009, agricultural output ended up in a different situation than expected based on what happened in the first half. After a modest increase of 3.7 percent and 2.6 percent in the first trimester and the first semester, which were considered to be ephemeral, a 10.2-percent decrease was registered in the first nine months of the year."

Agricultural output was low, Mr. Chivriga explains, because of the drought last year, as well as other factors like the unsuccessful adaptation of the structure of agricultural production to market demands, the large proportion of subsistence agriculture, and lower productivity than in countries with advanced agricultural systems. There is also the "decapitalization of agriculture and the inefficiency of state agricultural policies, which are confusing, weak, and tied to certain group interests."

Mr. Chivriga stresses that last year "we did not manage to get rid of the main challenges for agriculture: the slow access of products on the market and disadvantageous purchase prices for some products, especially for cereal, grapes, and milk." Arrears for the distribution of funds to subsidize farmers have increased, and so have financial assistance packages for planting vines. Processing companies owe a lot of money to raw goods providers.

"Viitorul experts predict a seven-percent rise in agricultural production in 2010," Mr. Chivriga explains. He adds, however, that "the main challenges for agriculture in 2010 will be the same ones we've had to face in 2009: the prevalence of populism in the application of agricultural policies, the lack of coherence in the actions of the state in rural areas, the slow access of products on markets, disadvantageous prices for some agricultural products, especially for cereal, grapes, and milk."

 Valeriu Prohnitchi: 2009 - a catastrophic recession in the agricultural field?

"Some journalists and economists have said that the numbers indicate a catastrophic recession in the agricultural field," says Valeriu Prohnitchi, head of the Expert Group Independent Analysis Center, in an analysis he published after the NBSreleased its data for agriculture in 2009.

Mr. Prohnitchi adds that "in reality, a careful analysis shows that nothing out of the ordinary happened in agriculture in 2009. The strong decreases last year occur after an unusually good harvest in 2008, which followed an unusually bad harvest in 2007. When it comes to the husbandry sector, it only recovered after the drought of 2007 midway through 2009. So the 9.9 percent decrease is fully part of the long-term tendencies noticed in the evolution of the agricultural sector."

"This is clearly not a healthy tendency, but it has more to do with an oscillation of Moldovan agriculture around some very low productivity indicators, which are not typical for some countries that have climate and pedological conditions similar to Moldova's. On the contrary, the performance of Moldovan agriculture is constantly lower than in countries with worse soil and climate," Mr. Prohnitchi concludes.

File:

NBS data show that Moldovan agriculture is very unstable and depends a lot on climate conditions considering the underdeveloped nature of the sector.

After 2000, the agricultural sector rose significantly for a period of time. Output went up 20.8 percent in 2004 and 32.1 percent in 2008, an all-time high in the previous 15 years. Considerable decreases were also registered. Output fell in 2007 (by 23.1 percent), reaching only 88.2 percent of the production achieved in 2000. In 2003, output decreased by 14.6 percent compared to the previous year. Normally, one or two years of high results are followed up by a bad year. In 2007, Moldova was affected by the worst drought in the last 50 years.

In 2009, just like in the previous years, farming companies produced most of the volumes of rapeseed (91 percent), sugar beets (88 percent), tobacco (87 percent), soybeans (69 percent), cereal, grains (with the exception of corn), and sunflower seeds (67 percent each).

At the same time, individual farmers and farm plots belonging to individual houses produced 89 percent of potatoes, 90 percent of corn, 85 percent of vegetables, 80 percent of grapes, 97 percent of milk, 75 percent of meat, and 61 percent of eggs.



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