Agricultural sector affected by crisis and drought

The situation in the agricultural sector is difficult and this is not just due to the effects of the financial crisis and the economic recession, but also because of the drought, said the newly appointed Minister of Agriculture and Food Industry, Valeriu Cosarciuc. Cosarciuc estimated that the gross agricultural output this year will drop by 25 percent to 12 million lei, from 16 million lei in 2008. The worst affected is plant production, especially sugar beet, as some autumn agricultural works are delayed by the long period of low rainfall. The animal production sector is still greatly damaged following the 2007 drought, but there are some positive signals that it will recover. The food processing industry is not thriving either. A big problem are the overfilled stockpiles and the impossibility to refresh them with this year's production because of financial problems. Talking about the wine-making sector, Cosarciuc said that approximately 45 percent of the grapes have been harvested so far. But the wineries are reluctant to buy grapes from households, whom they still owe 90 million lei since 2006-2008. Other problems concern the agricultural subsidies. The minister said that some 60 million lei of the total 313 million lei intended to be disbursed for subsidies hasn't reached the recipients, as the government still has obligations valued at 96 million lei in VAT refund. The minister says that many farmers' accounts are arrested by the Tax Inspectorate, while producers get fined for underpricing their products. Cosarciuc announced that all the restrictions on the export of grapes and non-bottled wine have been already lifted, and similar measures are being considered for spirits. He also informed that the diesel oil donated by Gazprom will be soon distributed to farmers, and not sold to pay land taxes as planned before.