Meat processors accuse Government of creating meat deficit on Moldovan market. Analysis by Info-Prim Neo

The meat processors in Moldova criticize the creation of a meat deficit on the domestic market after the Government imposed restrictions on the import of meat early this year. Owing to this year’s drought that made many peasant farmsteads cull the animals and halved the total grain harvest, the meat produced in Moldova cannot satisfy the demands of the processors and consumers. The Moldovan meat processors seek a simpler mechanism for importing meat, but the governors are afraid that such a mechanism will lead to massive imports of meat to the detriment of the national producers. The state wants the national producers to feel at ease at least on the domestic market. The largest meat processors such as Carmez and Basarabia Nord also encounter difficulties. Experts say that Moldova produces only 100,000 tons of the necessary about 300,000 tons. The rest is imported. Igor Gutan, expert of the working group of the State Commission for Regulating Entrepreneurial Activity, said at the group’s meeting that the meat market is confronted by a real crisis following the implementation of the Government Decision regarding the way of issuing authorizations for the import of meat, by-products and meat products, milk and dairy products, which took effect early this year. According to Gutan, the commission empowered to issue import authorizations did not fulfil its duties and did not present, during half a year, the information about the number of applications submitted and accepted. He says that the commission rejected in fact the largest number of applications filed by the meat processors. As a result, the economic agents sustained enormous losses and could not honour their contracts with foreign suppliers and national distributors. [The Government’s decision contravenes international rules] Another serious problem, Gutan says, is the fact that this decision contravenes the rules of the World Trade Organization (WTO), the Central European Free Trade Agreement (CEFTA) and of the free trade agreements with the Commonwealth of Independents States (CIS). According to the expert, in all these cases Moldova committed itself to not instituting licences, but the respective authorization can be regarded as a licence under the WTO rules. There is a special procedure in such cases through which the member states of the WTO are informed about the intentions to reduce the imports, but the unilateral institution of restrictions is not admitted. Moreover, when Moldova joined the WTO in 2001, it pledged to remove all the existing licences within five years. [Possible reactions from the international community] The Government says that these measures are designed to protect the national producers. Experts reply that there is a risk that the partner countries in turn will ban the import of certain Moldovan goods. In the near future, the local producer will not be able to compete with a producer from an EU member country, who is subsidized by the state. Moldova does not pay such subsidies at the moment. [Processors say the decision should be abrogated] The processors seek the abrogation of the decision. The barriers to imports should be removed at least if such a solution is not accepted. They also ask that the commission that issues authorizations is reorganized or even liquidated. According to them, only the Veterinary Medicine Division of the Ministry of Agriculture and Food Industry should be empowered to issue such documents. Currently, the respective commission is composed of representatives of the Centre for Combating Corruption and Economic Crime, the Standardization and Metrology Service, the State Main Fiscal Inspectorate, which have nothing to do with the meat and agriculture. The processors also demand that the conditions on the import of meat are modified. They consider that these conditions are sooner designed to promote someone’s interests or to limit importers’ access to the market. The compulsoriness of providing information about the lack of debts to the national public budget by annexing the document signed by the fiscal body that provides services for the importing company is regarded as a restrictive measure. Gutan says that such documents cannot be compulsory when importing meat because it is the duty of the fiscal body to sanction the bad payers and not of the commission. In addition, the fiscal amnesty came into force. The Centre for Combating Corruption and Economic Crime is empowered with the right to punish any company for every minor offence. The compulsoriness of presenting a written declaration about the lack of economic crimes derives from this. The requirement to present declarations with data covering a period of three years is absolutely illegal, because the Code of Administrative Contraventions stipulates that the contravention is effaced a year after imposing the sanction. In fact, the respective Government decision flagrantly violates the stipulations of the Code and legalises an illegality. The requirement that this kind of activity must be included in the company’s status is also considered as illegal. According to experts, the Civil Code allows the economic agents to carry out any economic activity, even if the import of meat is indicated or not in the status. The authorization is issued on condition that the processors possess a frigorific room for storing the meat with a minimum capacity of 150 tons. The processors consider such a capacity relatively large, the quoted source says. The procedure for issuing authorizations for only two months is considered as bureaucratic stratagems with shadowy subtext. When the respective authorization expires, the processors must again go through the same procedure and present the obligatory documents to be issued with a new authorization. The authorization is issued for each economic agent apart and for each batch of merchandise that does not exceed 110 tons of meat, 110 tons of meat by-products, 25 tons of meat products, 20 tons of milk and dairy products and 20 tons of butter and cheese. [The Government is not disposed to modify much its decision] The Government last week discussed amendments to the mentioned decision, but no final decision was made. The amendments were submitted to be discussed with the importers. Prime Minister Vasile Tarlev said that it looks as if the import mechanisms would be facilitated to the detriment of the national producers. ‘We must revitalize the animal breeding complex, produce animal products in the country in the minimum quantities necessary for internal production, and promote exports. We have potential in the country,” the Premier said. Tarlev instructed the relevant bodies to cooperate efficiently with the importers of meat so as not to harm the national interests and to protect the national producers. Minister of Economy and Trade Igor Dodon said that the corresponding decision was opportune when it was adopted because the Moldovan market at the end of last year was glutted with meat. “Now the situation is a little different,” specifying “a little different is the least to say”. He stressed that it is extremely important to find a compromise solution so as not to harm the interests of the consumers, national meat producers and meat processors. Igor Dodon promised that the central authorities will submit relevant proposals in the near future. At the beginning of this week, the importers carried out discussions with the central authorities during two days to reach a compromise.