Overall agricultural production expected to grow by 5-7 percent annually next 10 years

The 2006-2015 agri-food development strategy stipulates a 5-7-percent annual rise of overall agricultural production, a 20-percent maximal growth of processed agricultural production, while the ecological production is expected to grow up to 10 percent and real revenues of farmers will grow by up to 85 percent compared with the average on economy by 2015. According to s recent statement of Minister of Agriculture and Food Industry Anatol Gorodenco, the subsidising mechanisms will be worked out accordingly to main branches of Moldovan agriculture. Thus, the sugar beet growing will be subsidised for the first time. Also, the state will subsidise the livestock sector. The fiscal policy stipulates the possibility to examine proposals on reduction of VAT. Foreign banks will be allowed to open representations in Moldova within the investment stimulation policy, in order to reduce interest rates on bank credits. According to the minister, the decapitalisation of agri-food sector has a negative influence on processes in this sector. The material assets privatised and rented by agricultural enterprises dropped from 13 billion lei down to 3.8 billion lei. Assets of owners of agricultural fields represent only 4.9 percent of all investments in fixed capital of national economy, though the rose 5-fold. The minister also indicated the low profitableness of agriculture: only 8-9 out of 15 groups of goods analysed within the statistics system are profitable, and only half of 11,800 enterprises of agricultural exploitations working in agri-food complex are lucrative. The medium profitableness of agricultural enterprises is only 2.7 percent. This situation is motivated including through unreasonable use of fields, Gorodenco said.

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