To ensure Moldova’s food security, the authorities are considering monitoring price formation closely. In the long run, storage and processing capacities will be subsidized in order to increase exports of value-added products, but also to demonopolize the market. Minister of Agriculture and Food Industry Viorel Gherciu made these statements during an IPN debate on the food crisis in the country and in the world.
Minister Gherciu emphasizes the key role of Russia’s war in Ukraine in fueling the food crisis (read more on this).
The Government’s first response to the crisis which deepened immediately after the war broke out, says the minister, was to increase the subsidy fund by about 200 million lei, in particular for partial compensations for excise duties on fuel. “I personally wish that all farmers could benefit from a full refund of the diesel excise duty. And the Prime Minister (Natalia Gavrilița) wants this, too. But considering our economic situation, this is all we can offer for the time being”, said the official, adding that, in the case of farmers working land up to 400 ha, the compensation will be one hundred percent under a draft amendment.
“The call for a diesel excise duty refund is an older issue that has been discussed for several years and this Government has been the first to do something about it. And, even though we are only talking about 30 percent for now, I think it is a good start. Once additional resources are identified, the available funds could be increased”, the minister promised, adding that the Government also relies on external support in this regard. Speaking of support, the official says that the Moldovan authorities have written to the European Commission about the tripled fertilizer prices, which increase the costs of agricultural goods, but without which the output would drop dramatically.
Asked whether Moldova experiences any deficit of important food products, the minister said that it is important to be able to ensure the availability of products and to monitor the dynamics of stocks. “Today there are enough supplies, we haven’t noticed any deficit of products on the shelves of retail chains. Indeed, all (the deficits) have been replaced”, the minister assured. As for the monitoring, Viorel Gherciu suggested that the current government has inherited an imperfect system that it has not yet been able to improve, but acknowledged that it is important to know which are the sensitive products, which are the national production capacities and which products need to be topped up with imports.
The Ministry has compiled a list of 14 socially important foods, including various grains, sugar, eggs and more, most of which can be fully supplied by the domestic market. As for livestock products, such as pork, chicken, or milk, there are deficits of 12-35% that need to be supplemented by imports. Here, Minister Gherciu sees opportunities for Moldovan farmers, while stressing that the livestock sector cannot be reformed overnight and without serious investment: “We have producers of raw materials, we have enough fodder, and enough processing capabilities”.
Regarding unjustified price increases, as was the case with cooking oil, Viorel Gherciu says that it is important to create a mechanism, a team of specialists to closely monitor the formation of prices. He also believes that it is important to reduce the number of intermediaries, with the authorities aiming to facilitate direct access for producers to the consumer, for example through regional markets. “(The Ministry also plans) a series of other measures that will directly lead to lower prices, price and surcharge capping, which will serve the interests of the consumer, while also ensuring that farmers have the opportunity to develop and make the necessary investments”, said the official.
Many such measures will be found in the new Food Security Strategy that the authorities are now working on, but also in the Strategy for the development of the agricultural and rural sector, which is also being polished off. The food security strategy is intended to be both an immediate response to the current crisis and a tool for ensuring long-term food security. One of the focuses, according to the minister, will be on processing and on value-added products for export, and less on exports of raw materials. “I just gave the example of corn, which Moldova exported in an amount of 1 million tons in a short period of time. Moreover, last year we exported 1 million tons of wheat. Much of this raw material could have been processed domestically. Meanwhile, we imported over 30,000 tons of wheat flour”, illustrated the minister.
“It is important that farmer show some creativity and also make those much needed investments, while the supplementation of the subsidy fund to 1.75 billion lei attests to the support provided by the Government and the Ministry of Agriculture”, said Viorel Gherciu.
Speaking further about the Food Security Strategy, Minister Gherciu said that one of the priority proposals is to provide support for investments in storage, conditioning and processing of grains and legumes. According to him, this will also lead to the demonopolization of the market. Storing products means that their sale can be postponed until the export price gets better. Minister Gherciu also stated that the government will take into account the suggestions of the specialists to increase the state grain reserves and the expansion of the list of products in the reserve.
The debate was the 252nd installment of the “Political Culture” Series, run by IPN with the support of the Hanns Seidel Foundation.
