Beginning farmers suffer failures because of inaccessibility of bank loans

In the absence of savings or other sources of incomes, the beginning farmers have to take out loans from banks in order to start a business. But most of the times the banks refuse to lend money to them because they do not have what to pledge and because the business is not sure to yield profit. Vasile Sarban, head of the Agriculture Ministry’s Horticulture Products Service, has told Info-Prim Neo that the bank loans are often inaccessible for starting a business in agriculture, where the costs amount to hundreds of thousands. In order to plant a hectare with apple trees, a farmer needs over 500,000 lei to set up irrigation systems, anti-hail systems and espaliers. The investments needed to plant cherry tree orchards are not so considerable, but there are not enough workers. “Even if we praise everywhere that we have cheap labor force, we do not have it in fact. It happens in the harvesting period, when the workers are employed for other works,” said Vasile Sarban. The chairman of the National Farmers Federation Vasile Myrzenko said the loans are the heaviest burden for the Moldovan entrepreneurs. It is very hard to start a business. “Many farmers want to start a business, but face many problems and give up. The foreign firms are not interested in doing business in concert with the beginning farmers as they do not have guarantees that these farmers will not go bankrupt,” he stated. The farmers in 2012 received subsidies of 400 million lei. About 165 million lei of the subsidies were allocated for purchasing agricultural equipment and machinery. A new register of sorts subsidized by the Agriculture Ministry will come into force this year. The farmers will receive money only for planting those crops that are resistant to the weather conditions in Moldova and that guarantee profit in the future.