Agricultural Policy at a Crossroads: Will Radical Action Follow?

The Farmers’ Power Association, after a meeting with the government, has once again demanded a state of emergency in agriculture. The industry is doomed without urgent measures

For years, the authorities have been teetering on the brink of mass protests of agricultural producers. The government has managed to rein them only due to unending promises, recurrent “handouts” and the unwillingness of the key association, actively supporting the pro-European vector, to provoke a clash with Maia Sandu’s regime, which is closely supported from Brussels. Last week, a “play off” between government officials and representatives of the Farmers’ Power, which has ousted rival agrarian organizations and has become the main lobbyist for the interests of the agrarian sector, ended in failure. Even the March appointment of one of the association’s leaders, Alexandru Badarau, as an advisor to Prime Minister Dorin Recean did not help. Farmers concluded that the authorities offered no solutions and limited themselves to rhetoric. Meanwhile, the association demanded a state of emergency in agriculture and proposed a number of urgent measures: - to request the EU financial aid; - to ensure VAT refunds in accordance with the law; - to pay off subsidy debts from last year; - reduce taxes or, at least, organize so-called “tax holidays”; - to simplify the mechanism of compensation of excise taxes on fuel. The situation of the country’s agricultural sector is indeed increasingly worrying. In 2024, the volume of agricultural production decreased by 15% and was at a level lower than in 2014. For Moldova, given the share of agriculture in GDP (14% last year) and total exports (up to 45%), such trends are quite critical. Last year, 31 thousand people lost their jobs, or up to 20% of all workers in the sector, due to crop failure, drought, unavailability of credit, and dumping from the Ukrainian market. Moldova is experiencing fuel shortages, irrigated areas are constantly shrinking (10 times since the USSR), and the vehicle fleet is becoming obsolete. Last year, Alexandru Stoianoglo said that Moldova imports twice as much agriculture-food products as it sells abroad, which is rather weird for an agricultural country. We have become a net importer of meat, milk, even vegetables and fruits, exporting mainly raw materials - wheat, corn and barley. Moreover, the prices for them have not grown considerably in the last 5 years. At the same time, diesel fuel has gone up 2.5 times, seeds - 2-3 times, and Russian fertilizers and phytosanitary products are virtually unavailable on the Moldovan market due to sanctions (alternatives produced in the European Union or China can cost 5 times more). According to the International Organization of Vine and Wine, the area of vineyards in the country has noticeably decreased. Wine production in 2024 has collapsed by 40% (23% over the five-year cycle). Moldova cannot withstand competition with French, Spanish, Italian, German and American producers, and full market liberalization for the EU is to create problems in sales even within the country. The African swine fever epidemic this spring has been a real disaster, resulting in the loss of 20-25% of the livestock and the virtual destruction of several of the largest farms. Localized outbreaks persist in a number of districts, and the government has yet to introduce a compensation mechanism, while promising that prices and food security will not be affected (even last year Moldova was a net importer of pork). The costs of herd extermination and related quarantine measures are estimated in the tens of millions of lei and may seriously hinder the payment of compensation. Against this background, the state is clearly failing to find a common language with farmers. The young Minister of Agriculture and Food Industry Ludmila Catlabuga is equally criticized as her predecessor in office. The announced support measures are not due to come into effect until July, which directly hints at their electoral meaning. However, according to Farmers’ Power, they will be extremely late. Due to natural disasters, primarily drought for three years and inept state regulation, the situation is critical - agricultural producers are demanding subsidies, VAT refunds, fuel excise duties and preferential lending in short order. Record low temperatures in early April may also lead to a decrease in production for a number of crops. According to agrarians’ forecasts, apricots, peaches, almonds, some varieties of cherries and grapes are under the threat of complete loss. Rape plant and sugar beet, as well as winter wheat may suffer. The enormous credit funds of the European Union, which Brussels has yet to attract for Moldova on foreign markets, are not intended to fully support the agricultural sector. Romania is busy with the election campaign and is not even considering the idea of additional supplies of diesel fuel to Moldova. Thus, the government will have to find internal (budgetary) resources to support the agricultural sector, which is specifically difficult when the authorities cannot and do not want to negotiate with banks on preferential lending and reduction of the key rate. It is entirely possible that in the near future agriculture will find itself in approximately the same situation as the railway and road passenger haulers. Then, apparently, farmers will have to look for solutions to their own problems. At the same time, the protest activity in the summer period, if allowed by the West, may become a doom on the PAS regime.