Judging by all appearances, the government is in no hurry to solve the problems of the affected farmers, and seem to be hopeful that the issue will again be closed with the European money
The present government continue to get in the middle of one internal political scandal to another: the elections in Gagauzia, the constitutional ban on the Shor party, the endless scandals and struggle between anticorruption bodies. Right now, the agrarian crisis is at its peak, with no solution visible at all. We are talking, of course, of mass protests by farmers.
PAS cannot dismiss this problem in the usual style, as it is a very important sector for the country. The agricultural sector guarantees a huge number of workplaces (according to various estimates, from 20% to a third of the total), mostly in rural areas, and contributes about a quarter to the country’s gross domestic product. For instance, according to agricultural associations, the state budget annually receives at least 5 billion lei for the import of motor oil, fertilizers, phytosanitary products, spare parts and other resources necessary for agricultural production.
Agricultural sector has long suffered from pathological problems, and sometimes pines from congestion, especially in times of severe drought, such as in 2020. However, right now, experts consider the conflict in Ukraine and the related political decisions and deals the main cause of the acute crisis. These factors have opened the gateways for mass exports of Ukrainian agricultural products at prices that are impossible for other agricultural companies in Eastern Europe to compete.
As a result, this year a number of European countries (Poland, Hungary, Bulgaria, Slovakia and Romania) imposed bans on import and transit from Ukraine of certain product categories (wheat, corn, rapeseed and sunflower seeds) to protect interests of their own producers. Thereafter, during negotiations with the European Commission, blanket bans on the level of the EC replaced individual bans for the same list of countries; only transit restrictions were lifted. This move inevitably led to an even greater reduction in prices on the Moldovan market and in the competitiveness of our products.
A temporary ban on imports of crops from Ukraine, similar to other countries in the region, could be a way out of the situation. Moreover, this is exactly what the Moldovan farmers asked for earlier. Our authorities seemed to consider this option, but met with an aggressive rebuff from Kyiv that threatened to limit all Moldovan imports to Ukraine altogether. It is clear that such a conflict would not only hurt our feeble agricultural sector, but would also have had negative foreign policy and image consequences. In general, it would contradict all our earlier Ukraine-centered internal and foreign policy. Thus, once again we have witnessed a situation where political gains outweighed the interests of supporting our own residents.
Other negative factors that made the crisis unavoidable and severe were last year’s drought, the ban on imports to Russia, as well as the rising cost of fuel and lubricants and general detrimental economic trends. At the same time, the specialized movement “Farmers’ Power” started raising concerns about this back in February, during the meeting with the newly appointed Prime Minister Dorin Recean. The latter, however, proved unable to find a solution neither in February nor in June, resulting in a mass protest this month, which, according to Alexandru Slusari, head of the movement, will last until the end of the month. It has begun in the northern regions, and has recently “reached” the capital. Taking questions of journalists at the opening ceremony of the migration offices at the Leova-Bumbata border crossing point, Recean openly admitted that there is no money in the budget to help the agrarians. The same stance was also expressed by President Maia Sandu and Speaker Igor Grosu, who also talked to the protesting farmers (without much success, though).
The farmers’ demands can hardly be called excessive: to reduce VAT, to ban imports of grain from Ukraine, to gain access to European funds for the agricultural sector and to increase the National Fund for Agricultural Development. Nothing supernatural, as we can see, but the authorities are in no hurry to solve the problems and are stalling for time. Actually, it is already obvious that their only hope is to get help from the European Union. To that end, Minister of Agriculture Vladimir Bolea traveled to Brussels on June 20 to meet with Janusz Wojciechowski, European Commissioner for Agriculture and Rural Development. As far as we know, another 50 million euros to help the suffering industry were requested.
Curiously, it seems that the government initially told the farmers that the issue was almost solved with the help of the EU, but the meeting with Sandu made it clear that no guarantees from the European partners were given.
Here, by the way, we can also speculate about the degree to which the EU is interested in backing the Moldovan agricultural sector, and whether it would be more profitable to let it go bankrupt, taking into account the interests of European producers. Indeed, agricultural producers in the European Union receive weighty state support in the form of subsidies, incentives and other payments. Characteristically, the EC not only allowed Eastern European members to temporarily close the market from Ukrainian agricultural exports, as I have already said, but also allocated substantial subsidies to local producers.
Our government, however, is still rather skimpy on financial subsidies. For instance, Slusari complained in mid-May that “the government promised to give 100 million lei to farmers, although previously they talked about 600 million lei”, and recently Igor Grosu said that the amount was 200 million. All of these figures can still be considered hypothetical or even pulled out of the hat, especially given a billion lei arrears in subsidies of the government from last year, and it is not clear whether the money will ever be paid. Now the farmers are asking for at least 700 million lei, which is still not much compared with the projected losses of farmers of at least two billion.
It is obvious that the government will stall until the last moment, in order to share as little as possible with farmers, and ideally, to put the problem on the shoulders of Brussels. However, the government's tactics so far looks neither clever nor prudent, and all the talk about budget problems looks unconvincing against the background of wasteful ‘European integration’ measures, salary increases for ministers (for which almost 100 million lei were found) and all sorts of expensive military machinery. The farmer’s problem, once purely economic, and now already a political one, cannot be solved this way. So, if the agrarians display their principled stance, the ‘tractor rallies’ will persist for quite a long time.