1. Association and value chain integration of agriculture producers in the Republic of Moldova Stratan A., Ignat A., Moroz V. NIER 26 February 2016Hotel “Jazz”

2. Country overview Area - 33846 km² Chisinau - 663,400 persons Landscape: hills and steppe Climate is moderately continental (20°C − 4°C) Annual rainfall: 600 mm (north) to 400 mm (south) The largest rivers – Nistru / Dniester and Prut Due to limited irrigation infrastructure, the bulk of agriculture is rain fed Forests cover 374.5 thou. ha (11% )

3. Population’s structure Population consists of the following ethnic groups: Moldovans - 75.8 %, Ukrainians - 8.4% Russians - 5.9% Gagauzi - 4.4% Bulgarian - 1.9% and other. Population is fairly divided between urban (41.4%) and rural areas (58.6%). Moldova’s labor force is bilingual Romanian – and Russian – speaking (Spanish, Italian, etc)

4. Role of agriculture Agriculture contributed with cca 12,6% of the country GDP in the year 2014 About 30,5% of the active population of the country was engaged in agriculture in the year 2015, and about 5% were employed in the food processing industry. Agriculture, including primary production and agro- processing has a multiplier role in the national economy, creating demand and stimulating the creation of added value in other branches of the national economy, such as trade, construction and financial services.

5. Structure of agricultural production by major sectors, 2005-2014, %

6. Structure of the agricultural production, 2014, %, comparable prices

7. Small size of the agricultural production Average size of an agricultural holding is 2.2 ha, including agricultural holdings with legal entity - 247.9 ha, and those with physical entity - 0.8 ha. According to the General Agricultural Census of 2011 lands of agricultural holdings are divided into 2.65 million plots. Each peasnt farm holds on average 2.9 plots of land. At national level the average size of parcels is 0.8 ha, including farms with legal entity - 25.8 ha, and those with physical entity - 0.4 ha. In many cases these parcels are located at a distance of 9-20 km from each other

8. Share of population households and peasant farms in vegetal production, 2006-2014, % 200620072008200920102011201220132014 Cereals and leguminous crops 65,351,754,962,762,660,552,147,649,6 Sugar beet (industrial) 19,714,89,612,113,68,610,86,36,5 Sunflower 38,933,531,833,230,231,930,017,025,6 Potatoes 96,188,690,788,983,484,683,085,284,8 Vegetables 83,480,178,984,583,984,082,584,883,6 Fruits and beeries 58,152,150,557,959,862,260,049,151,3 Grapes80,280,077,879,785,778,678,272,576,7

9. Share of peasant farms and households in livestock production

10. Milk production by type of farms

11. Caracteristichs of the small scale agricultural farms Small scale agricultural farms are poorly equipped and lack the experience necessary to penetrate the markets of the EU and other countries. A typical characteristic for this type of agricultural holdings is the small size of cultivated areas, and a large diversity between technological levels, varieties, quality and quantity of products, and access to markets

12. Disadvantages of the small scale extensive milk production Higher production costs and subsequently uncompetitive prices for milk as raw material for processing industry Considerable obstacles for compliance with Hygiene standards Animal nutrition norms Environmental protection rules

13. Forms of association Agricultural production cooperatives were initially seen as de jure and de facto heirs of former collective farms. Associations of peasant farms Associations of corporative farms Marketing cooperatives Other forms of association

14. Development of agricultural cooperatives in the Republic of Moldova, 1995-2014

15. Structure of the private agricultural land, 2014, %

16. Development of milk collection cooperatives Milk collection cooperative structures have experienced a considerable development in recent years. The milk production and collection cooperatives deliver on average about 9% of the total raw material for the dairy industry Milk collection cooperatives have become in recent years an attractive consumer for small scale milk producers

17. Case of cooperative Vita-Lact Established in 2001 by 12 farmers in the village Ignatei in order to strengthen their efforts and work together as single entity selling milk collected from village producers. Subsequently cooperative has expanded to over 400 at present and exceeded the boundaries of the village

18. Advantages of cooperation Creation of a local value chain, starting with input procurement, milk production, milk collection, milk cooling, processing, marketing. Better access to markets, financing sources, higher incomes, direct sales of dairy products tor final consumers Better quality of diary products

19. Problems of coops development Development of entrepreneurial and marketing cooperatives is jeopardized by elusive attitude of the administrative structures, negative reputation inherited from the previous political system, which as a matter of fact ignored the principles and values of the cooperation movement, and the lack of appropriate agricultural policies that would reflect the development of agricultural cooperatives and other types of agricultural and rural organizations and associations

20. Thank you for your attention!