First comes knowledge, then comes producing

[IPN economic analysis] Obtaining bigger volumes of agricultural production must concern the farmers only after a distribution network of these products will be developed, especially after the export to the EU member countries will be increased (EU), considers the secretary of the Republican Union of Agricultural Producers Associations “Uniagroprotect”, Alexandru Slusari. According to him, increasing the volume of production is not of first importance for agriculture, as long as it can not be sold. At the same time, the farmers must give up to some products which give small profits, in favor of the products with high value. “We must lay stress upon the strategic areas – viticulture, fruit and vegetable growing. It does not mean that we must forget the other areas (wheat, sunflower etc) which bring low incomes, but also do not imply high expenses”, states Slusari. In the list of strategic cultures, the expert affirms, can be included also sugar beet, but only in the Northern part of Moldova. In order to protect and develop the agricultural sector, the only solution mentioned by Alexandru Slusari and supported by “Uniagroprotect” is to subsidize the farmers, mechanism used frequently in the European Union. In the last year, in Moldova, for each hectare of cultivated land, the farmers received 10 liters of diesel fuel. The state allocated for this around 120 million lei. “We hope that the central public authorities will acknowledge the importance of offering subventions and will increase them from 10 liters to at least 20 liters of diesel oil per hectare. “Uniagroprotect” proposes to create a special fund of each, the farmers would be annually subsidized with sums of money allowing them to purchase 10 liters in spring and other 10 liters in autumn” mentions Slusari. According to him, the farmers must not be subsidized as a result of the increase in price of the petroleum products, but as a part of the support policy for the agricultural area of Moldova. At the same time, both the representatives of the farmers and of the petroleum products importers are opposing the idea of setting a lower price comparing to the market price for the diesel oil destined to the agricultural sector. “It is hard to monitor the direction of the diesel fuel. So it is not excluded that the oil imported at lower prices for the agricultural area to be sold at higher prices in others areas of the economy” states the representative of “Uniagroprotect”. According to him, different prices for diesel oil can be applied only in the countries where the crude oil is processed, because as a result of this process the agricultural diesel oil is obtained, which has a different color and to which lower taxes are applied. The Executive Director of the Union of petroleum products importers “Importcompetrol”, Victor Ghitu, considers that applying lower prices at the commercialization of diesel oil in the agricultural area might generate corruption. Besides, the quoted source added, the legislation in force is not allowing a differentiated price policy. At the same time, Ghitu proposes another protection mechanism for the agricultural area. “Central authorities must apply lower taxes for the import of diesel oil in the period of spring and autumn works. Namely in this period around 190-200 thousand tones of diesel oil are imported”, specified the quoted source. If speaking about the possibility to create petroleum products reserves which could be used in diminishing the quick price increases, Gutu said that importers have sufficient stocking capacities, but not enough financial resources. “It is almost impossible for the importers to make reserves if they can not take credits from banks, because the interests are to high, and the oil distilleries do not give oil products on lend”, explained the expert. Annually, 420-450 thousand tones of diesel fuel are imported.