Informational and decisional effort made by state organisations to overcome drought effect is beyond any criticism - Info-Prim Neo interview with economic analyst Viorel Chivriga

[ - What are the consequences of the 2007 drought?] The productivity of most of the agricultural crops has decreased drastically compared with the previous years. For instance, the average productivity of winter wheat was 15.2 quintals per hectare, of sunflower seeds – 7.3 quintals per hectare, of soybean – 12.1 quintals per hectare, of sugar beet – 188 quintals per hectare, of tobacco – 10.7 quintals per hectare, of potatoes – 64.2 quintals per hectare and of corn - only 7.9 quintals per hectare. Following several years of recession, the fields sowed with winter wheat and corn have considerably increased in area. At the start of last year, these two crops occupied 786,300 hectares or 40% of the agricultural land. Given that a large part of the fields with autumn and spring crops have been damaged, the forced increase in areas sowed in spring and summer was partly justified and improved relatively the alarming situation in the vegetal sector. But the cereal yield at the end of the harvesting period was only 1/3 of the 2006 harvest. At the same time, the prices of almost all agricultural products increased considerably. For example, the wheat, corn, corn cereals and sunflower seeds on the country’s agri-food markets in September 2007 were sold for an average price of 5.64 lei, 5.91 lei, 7.51 lei and, respectively, 11.07 lei pr kilogram. These prices are threefold higher than in 2006. The high prices of agricultural products had a double effect – advantaged the farmers that had good crops, especially those from northern Moldova, and disadvantaged the socially vulnerable groups of people, especially the peasants for which the agricultural year 2007 was a failure. A large part of the birds and animals in the animal breeding sector have been culled mainly due to the lack of fodder. Until autumn, the number of animals in the sector decreased significantly. The number of swine fell by 48,000 and of horned cattle by 24,000, including 13,000 cows. Besides, the short-term prospects are also dull as the production of fodder dropped by about 50% and the price of fodder doubled. The animal production between January and September 2007 fell insignificantly compared with the corresponding period last year, making up 99.5% of the 2006 figure. The level of animal production was maintained mainly due to the 4% rise in the sales of cows and birds. But the slow decrease in production witnessed in 2007 already (8% in the first three months of the year and 5% in the first half of 2007) will expand in the near future and will have negative values in the first six months of 2008. On the other hand, the prices of horned cattle and swine in the first half of 2007 decreased by 13% and, respectively, 15% compared with the same period of 2006. The decrease in prices followed the culling of animals in summer and the massive imports of animal products. Imports rose from 42.579 million USD in January-October 2006 to 45.128 million USD in the corresponding period of 2007, despite the measures taken by the Government at yearend 2006 to decrease imports of animal products. [ - What do you think about the steps taken by the Government to overcome the consequences of the drought?] Among the positive measures taken by the Government to alleviate the impact of the drought are the allocation of additional resources to support the agricultural sector, the attraction of foreign resources for this sector and, particularly, the elimination of the panic that became more evident in summer and autumn. The panic could have severely hit the categories of people that were seriously affected by the natural disasters of 2006. But a negative aspect is the fact that the events of 2003 did not teach lessons. No efficient mechanism for preventing crisis was in place in 2007. In addition, the agricultural sector is incapable of resisting and replying to the repeated natural disasters. The informational and decisional effort made by state organisations was beyond any criticism: the farmers were informed about the measures that must be taken to reduce the effect of the drought in great delay and not much was done to improve the insurance process in agriculture (five insurance contracts per 1.278 million land owners in 2005, 167 in 2006 and about 300 in 2007). Also, the deplorable situation of the irrigation systems, the lack of adequate agricultural machinery and of sorts of crops resistant to drought, the selective implementation of modern technologies of growing crops have contributed to larger losses in agriculture. As regards the additional resources allocated by the state for overcoming the consequences of the drought, I must say that the state increased the agriculture subsidisation fund by 84 million lei. The money went to work the land, sow the autumn crops and compensate partly for the losses sustained as a result of hail. According to the regulations approved by the Government, the farmers got by 100 lei subsidies for a hectare of land. [ - Did the Moldovan authorities effectively distribute the resources provided by foreign donors to alleviate the impact of the drought?] A number of states and international organisations immediately answered Moldova’s request for assistance. A reserve fund was set up to distribute the humanitarian aid. The authorities approved the regulations concerning the constitution and administration of the given fund. Under the regulations, the beneficiaries of the fund can be a large number of disfavoured groups of people and organisations, including public movements, pacifist and human rights organisations, organisations of veterans, invalids, youth and children, scientific organisations, creation unions and others. There are institutions empowered with inspection functions. Transparency is a simple solution for removing any suspicions about the inefficiency in administering the resources allocated to reduce the effect of the natural disasters of 2007. The Agency for Material Reserves, Public Acquisitions and Humanitarian Aid can make public the list of all the beneficiaries of humanitarian aid by indicating their place of residence, the size of the aid and the primary source of the aid. [ - What should we do in spring in order to avoid the situation of 2007?] Firstly, the state should help the farmers carry out the spring agricultural works qualitatively and in due time. It is very important to restore the number of animals in the animal breeding sector. There are serious problems regarding the provision of the agricultural sector with seeds. In November 2007, the agricultural sector had only 59.3% of the necessary volumes of seeds for the 2008 spring agricultural campaign. The stores of seeds of spring crops are as follows: spring barley – 84.4%, spring wheat – 45.0%, oat – 59.2%, peas– 48.8%, beans – 33.1%, corn for grain – 37.1, sunflower – 103.2%, sugar beet – 43.9%, soybean – 57.3%, corn for fodder – 62.5%,alfalfa – 57.6%, esparcet– 53.3%, vegetables – 27.9%, pumpkin – 17.9% and potatoes – 6% of the necessary quantity. Even if large volumes of seeds are planned to be imported to supplement the existent stores, the prices will be much larger than in 2007. On the other hand, the fact that the imports have been planned does not necessarily mean that the given volumes will be imported. Therefore, in order to really support the farmers the state should plan additional resources to partly cover the costs of purchasing seeds and planting material from licensed economic entities, incurred by peasants. In such a way, the state will directly stimulate the peasants to use qualitative inputs and to carry out the spring agricultural works in optimal terms. Additionally, it will indirectly encourage the enterprises that produce seeds and planting material as well as the economic entities that provide the agricultural sector with inputs. Secondly, the authorities should implement the measures that had not been carried out between 2003 and 2007. They should create an efficient system for preventing the crises generated by natural disasters, enlarge the irrigated areas at least up to the level of the 80s of the last century (about 240,000 hectares), demonopolise the insurance market in agriculture, inform the framers and provide the sector with qualitative loans.