Over the past five years, the rate of laying new perennial plantations in Moldova has dropped sharply: on average, from 4 000-5 000 to 1 500-2 000 ha annually. The planting of the main share of young orchards and vineyards is stimulated by the National Fund for the Development of Agriculture and Rural Areas. However, even subsidies for such investment projects are in less and less demand from agricultural producers. Thus, according to preliminary data from the Agency for Interventions and Payments in Agriculture AIPA, only 141 million MDL ($7.5 million) were requested for the establishment, modernization, and uprooting of perennial plantations last year, which is only about 11% of the subsidy fund 2022 budget, EastFruit reports. Experts from fruit-growing associations believe that the negative trend in the renewal and modernization of orchards and vineyards will continue in 2023.
Industry operators name at least three reasons for a pessimistic forecast. The first is the increased cost of credit money. One of the main donor projects in fruit growing, Livada Moldovei, announced in February this year a reduction in the interest rate of loans in Moldovan lei provided to fruit growers through commercial banks by 5% – from 17% to 12%. However, even this concessional financing is too expensive for many local farmers.
The second reason for delaying the renewal of orchards and vineyards is considered by many fruit growers to be the reduction in guaranteed sales channels for products, primarily access to traditional (Russian and Belarusian) markets. The third important reason not to rush into large investments is that the government has not yet adopted an updated regulation on the distribution of funds from the State Agricultural Development Fund for 2023. Unfortunately, the factor of the powerful psychological pressure of war near the borders of Moldova on business has not disappeared.
Nevertheless, some representatives of Moldovan fruit growers’ associations see modest optimism in the fact that many technologically advanced horticultural and viticultural enterprises, at least not yet decided to stop the investment projects for the modernization of their plantations, which began a year or two ago. With this in mind, investments in new orchards and vineyards are not expected to decrease much this year compared to 2022 – by about 15-25%.
For more information: east-fruit.com