value chain assessment and selection

This is publication was produced for review by the United States Agency for International

Development. It was prepared by Chemonics International.

VALUE CHAIN

ASSESSMENT AND

SELECTION

MOLDOVA HIGH VALUE

AGRICULTURE ACTIVITY

Re-Submitted: March 17, 2017

(Initial submission was February 19, 2017)

Prime Contractor: Chemonics International Inc.

http://www.chemonics.com/

Contract No.AID-117-C-17-00001

http://www.chemonics.com/

HVAA VALUE CHAIN ASSESSMENT AND SELECTON REPORT

CONTENTS ACRONYMS ______________________________________________________ 4

EXECUTIVE SUMMARY ____________________________________________ 5

INTRODUCTION __________________________________________________ 6 Project overview and approach to achieve sustainability________________________ 6

VALUE CHAIN SELECTION METHODOLOGY _________________________ 8 Selection of value chains for assessment _____________________________________ 8

Value chain selection criteria ______________________________________________ 8

Weighting and scoring the selection criteria ________________________________ 10

Data collection and sector analyses ________________________________________ 11

Final selection process __________________________________________________ 11

SECTOR ANALYSES _______________________________________________12 Nuts _________________________________________________________________ 12

Production ___________________________________________________________ 12

Markets _____________________________________________________________ 16

Social inclusion ________________________________________________________ 19

Institutional support _____________________________________________________ 20

Environmental issues ____________________________________________________ 21

Challenges and potential HVAA interventions __________________________________ 21

Beekeeping/Honey _____________________________________________________ 23

Production ___________________________________________________________ 23

Markets _____________________________________________________________ 25





Open field vegetables (for processing) _____________________________________ 34

Production ___________________________________________________________ 34

Markets _____________________________________________________________ 42





Medicinal and Aromatic Plants (MAPs)_____________________________________ 51

HVAA VALUE CHAIN ASSESSMENT AND SELECTON REPORT

Production ___________________________________________________________ 51

Markets _____________________________________________________________ 54





Berries _______________________________________________________________ 59

Production ___________________________________________________________ 59

Markets _____________________________________________________________ 61





VALUE CHAIN SELECTION ________________________________________68 Prioritizing value chain support ___________________________________________ 70

ANNEX 1 - SECTOR ANALYSIS GUIDE _______________________________73

HVAA VALUE CHAIN ASSESSMENT AND SELECTION REPORT – 4

ACRONYMS

AIPA Moldovan Agency for Interventions and Payment for Agriculture

ACSA National Agency for Rural Development

AITTF Agricultural Innovation and Technology Transfer Fund

Apimondia International Beekeepers Association

BSP Business Service Provider

CIS Commonwealth of Independent States OR Centralized Irrigation System

EPOPA Export Promotion of Organic Products from Africa

EU European Union

FAO Food and Agriculture Organization

GAP Good Agricultural Practice

GHG Greenhouse gases

GIZ Deutsche Gesellschaft für Internationale Zusammenarbeit

HVA High Value Agriculture

HVAA High Value Agriculture Activity

IFAD International Fund for Agricultural Development

IPM Integrated Pest Management

IQF Individually Quick Frozen

ITC International Trade Center

LGBTI lesbian, gay, bisexual, trans, and/or intersex

MAP Medicinal and Aromatic Plants

MAFI Ministry of Agriculture and Food Industry

MCC Millennium Challenge Corporation

NABRM National Association of Beekeepers of the Republic of Moldova

NGO Non-governmental Organization

SME Small and Medium Enterprise

TOT Training of Trainers

UN United Nations

UNECE United Nations Economic Commission for Europe

USAID United States Agency for International Development

USD United States Dollar

VC Value Chain

WUA Water Users Association


EXECUTIVE SUMMARY The purpose of this assessment is to analyze and select the value chains or sectors where the USAID

High Value Agriculture Activity (HVAA) can have the greatest impact through interventions that aim

to achieve the project objectives.

This report summarizes assessments of the following value chains/sectors:

1. Honey/beekeeping

2. Nut sector (walnuts, almonds, hazelnuts)

3. Open field vegetable production, primarily for processing

4. Medicinal and Aromatic Plants (MAPs) and essential oils

5. Berry sector (strawberry, raspberry, other berries and currants)

The HVAA assessment approach was based on proven methodologies that provide structure, rigor

and objectivity in the analysis of potential value chains in order to compare and prioritize project

interventions.

Sector assessments were based on the analysis of data pertinent for initial value chain selection and

are not intended to be in-depth analysis of value chains. More detailed studies, including end-market

studies, may be required for value chains that HVAA recommends for inclusion in project activities.

The methodology adhered to the “quadruple bottom line” discipline to systematically address the

four prongs of sustainability — economic, social, environmental, and institutional — that will support

long-term competitiveness and equitable economic growth.

Local partner, AGROinform supported this assessment.

HVAA utilized information collected though sector analyses to assign a score for each value chain

crop using the five-point Likert scale. The outcome of this process is presented in Table 23. The top

ranked value chain is walnuts, which is perhaps not surprising as Moldova has a long tradition

producing and exporting this product. This is followed by strawberries, honey, raspberries and

tomatoes for processing. Berries and field vegetables can benefit strongly from irrigation investments

made by the MCC Compact.

HVAA’s assessment of value chains helped provide an affirmation of sector/value chain potential,

which HVAA can utilize to prioritize rather than eliminate value chains. Prioritization of value chain

support will inform the type and level of support to value chain development (where to intervene in

the chain and what resources to expend), and determination of which interventions will have the

largest development impact (i.e. focusing on addressing areas where sectors/value chains have scored

poorly).

HVAA will continuously assess and review where its interventions are having the greatest impact and

take advantage of opportunities that will provide access to new markets, increase profitability of

agricultural operations, provide rural employment especially for women and youth, and, more

generally, integrate the multidimensional concepts of sustainability and value added along the four

dimensions: economic, social, environmental, and institutional.


INTRODUCTION

The USAID High Value Agriculture Activity (HVAA) in Moldova was created to build upon the

success and momentum of USAID’s previous work with the goal to further stimulate the

transformation of the Moldovan high-value agricultural (HVA) sector into an engine of economic

growth for the country leading to improved competitiveness and higher living standards for rural

Moldovans in the long term.

USAID designed HVAA to develop and deliver interventions that expand trade and strengthen

export linkages to domestic, regional and international markets with a primary focus on value chains

assisted by past USAID activities (these value chains include apples, table grapes, stone fruit, and to a

lesser extent extended seasonal vegetables in greenhouses). In addition to these previously identified

value chains, the contractor was instructed to conduct sector analyses to identify a minimum of two

additional value chains for initial project focus. These analyses were performed in cooperation with

and under the direction of USAID staff and are analytical, robust, strategic and grounded in the

agricultural and economic sciences.

HVAA will implement a set of interventions based on the potential to realize systemic changes and

accelerate the growth of the HVA sector. This initial assessment and selection will serve to inform

the prioritization and tailoring of project interventions to the Moldovan development context as well

as the maturity of the targeted value chains.

Project overview and approach to achieve sustainability

HVAA is a five year, 21 million USD agricultural and agribusiness development program, which has

the following overarching objectives:

1. Expand trade and strengthen linkages to domestic, regional and international markets for

targeted value chains;

2. Improve productivity, post-harvest handling and private sector capacity to comply with

European and international standards in targeted value chains;

3. Increase capacities of member-based groups (producer groups, Water User Associations

(WUAs) and industry associations) to serve their members in targeted value chains;

4. Improve the enabling environment leading to increased investments and an improved

workforce in key value chains.

The project’s 5.7 million USD Agriculture Innovation and Technology Transfer Fund (AITTF) will use

grants to catalyze private and public investments across all project objectives.

HVAA’s approach to enhance the competitiveness of firms within the selected value chains adheres

to the “quadruple bottom line” ( Figure 1) – the prongs of sustainability that guide the overall HVAA strategy.


Figure 1. Quadruple-bottom line approach

Economic sustainability. By linking buyers to producers, producer organizations and/or member-based

associations to meet their requirements, HVAA aims to bolster HVA actors’ capacity to address

inefficiencies, improve product quality, and execute sales transactions. Assisted producers and firms

will gain practical experience engaging buyers in target markets. This will expand the flow of

information across target value chains of buyer purchase criteria and price points and help ensure

that our approach is competitiveness-driven. By using a market-led value chain approach to forging

deals and addressing the bottlenecks that inhibit them, HVAA will enhance HVA producers’ and

firms’ flexibility to respond to new opportunities and changing conditions and ensure interventions

are private sector-driven and private sector-owned.

Institutional sustainability. To avoid crowding out local actors, the approach relies on facilitation rather

than direct provision of development services. In this regard, HVAA is working through existing

(although in some cases nascent) Moldovan member-based organizations and commercial,

nongovernmental, and public institutions to implement activities. For example, HVAA will work

through local business service providers (BSPs) to provide technical assistance in food safety and

certifications, business plan development, branding and marketing, and market information. Where

local services are weak, HVAA intends to facilitate their emergence. HVAA will use AITTF grants and

facilitated partnerships to foster lasting vertical and horizontal linkages among local actors, which will

avail new resources and technologies, and support key infrastructure investments.

Social sustainability. All activities are expected to integrate local context and priorities, including

mainstreaming considerations related to gender, youth, persons with disabilities, LGBTI persons, and

vulnerable communities. HVAA intends to scale up successful initiatives, such as the Women’s

Agriculture Networks currently supported by AGROinform, to strengthen networking and

mentoring among female producers and business owners. HVAA will also leverage initiatives by other

donors to help create youth employment opportunities by ensuring that workforce programs

provide training in the latest technologies and marketable skills demanded by industry.


Environmental sustainability. HVAA approach intends to prioritize green opportunities, including

climate-smart agricultural practices, energy efficient greenhouses, energy and water efficient irrigation

systems, good agricultural practices to improve environmental management, minimize potential

environmental degradation and adverse effects on population health.

VALUE CHAIN SELECTION METHODOLOGY The value chain assessment and selection methodology was approved by USAID on December 21,

2016. This methodology combines best practices from USAID and others (i.e. GIZ) to provide rapid

and meaningful analysis of value chains. Furthermore, to support long-term competitiveness and

equitable economic growth, the methodology adheres to the “quadruple bottom line” discipline

discussed above to systematically address the four prongs of sustainability — economic, social,

environmental, and institutional considerations.

Selection of value chains for assessment

In compliance with our prime contract, the HVAA project will continue working in four existing

value chains, including apples, table grapes, stone fruits, and off-season vegetables in greenhouses (to

a lesser extent). In addition, the following value chains were suggested for further consideration

under the HVAA prime contract:

Nut value chain (Hazelnuts, almonds and walnuts - taking into consideration restrictions

imposed on walnuts under the Bumpers Amendment)

Beekeeping/Honey value chain

Open field vegetables (peppers, cucumbers, tomatoes – particularly for processing)

Medicinal and Aromatic Plants (MAP) and essential oils value chain

Berry value chain (strawberries, raspberries, other berries and currants)

The contract also suggested the organic and nursery and root stock value chains as potential new

sectors for project focus. HVAA has not considered these separately as organic production methods

may apply across value chains while nursery and root stock are critical inputs and support existing or

potential value chains.

Note: HVAA included open field vegetables in this report as initial findings from the assessment

process suggested that this type of production could be very relevant for areas under irrigation.

Value chain selection criteria

During project start-up, three issues which influence the selection of additional value chains have

been reinforced:

1. The first of the Government of Moldova’s key priorities for the country’s HVA sector, as laid out

in the National Strategy is, “Increase access to irrigation and improve on-farm water management

practices.” The US government, through the Millennium Challenge Compact (MCC), has made

significant investments to increase farmers’ access to irrigation by establishing Centralized

Irrigation Systems (CIS) in ten regions that are now managed by respective Water User

Associations (WUAs). To date, this extremely valuable resource – a key input for successful

HVA production - has been severely underutilized.

To maximize the utilization of irrigation resources in WUA regions, HVAA will vigilantly seek

market opportunities in value chains that encourage and justify farmers’ transition to HVA

activities. HVAA intends to provide technical assistance - through the WUAs, to their farmer

members to meet the requirements of identified markets (buyers). Sustainability of the WUAs


will vastly increase when their members are receiving relevant, practical technical assistance and

services which improve their livelihoods and profitability.

2. Additional value chains (when fully justified based on market opportunities) will increase the

desired results for the project, including:

Increased exports of assisted enterprises/producer groups (more products to export);

Increased sales of assisted enterprises/producer groups (more potential for sales)

New high-export and revenue-generating value chains assessed, identified and assisted;

New international export market contacts established (buyer interest in one value chain

can lead to even more opportunities being identified);

Export market linkages established for at least 3 new markets;

Industry Quality Seal programs developed and successfully piloted (this will be simpler

with a smaller volume value chain);

Increased awareness/knowledge among international buyers about Moldovan value chains

(again, buyer interest in one value chain can generate even more opportunities).

3. Remaining flexible to add value chains increases potential opportunities for women, youth,

persons with disabilities, LGBTI persons, and other vulnerable communities.

Each criterion under the “quadruple bottom line” approach (economic, social, environmental, and

institutional) examines data for 13 sub-criteria: six under economic criteria, three under social

criteria, two under institutional criteria, and two under environmental criteria. The criteria are listed

and defined in Table 1.

Table 1. Value Chain Selection Criteria and Sub-Criteria

Economic (45%)

Market size: The size of the world market (global imports) based on the UN COMTRADE data.

Market growth: Annualized growth rate (2011-2015) in quantity imported based on UN

COMTRADE data as an indicator of potential future demand.

Moldova's market share in the world: Current Moldova's positioning in the world market

(percent of total exports in quantity) according to UN COMTRADE data.

Current exports: Current value of Moldova's exports as per UN COMTRADE data.

Current imports: Current value of Moldova's imports as per UN COMTRADE data.

Current production: Current production in Moldova (value).

Social (25%)

Scalability: Potential exists to intensify or expand production (which has been shown to be

efficacious on a small scale in a similar setting) with technologies, including irrigation, to benefit a

significant proportion of the targeted population - at an acceptable cost and economic return. The

targeted population may include producers, rural households and other value chain actors - including

disadvantaged groups such as minorities (such as Gagauz and Roma), LGBTI people, and people with

disabilities.

Engagement of women: Opportunities exist to engage women as change and support agents or

to improve gender equity over control of productive resources and use of income.

Youth Engagement: Opportunities exist to engage youth to offer employment and income

generation opportunities. We considered questions such as: would youth be especially attracted to

such production; and are there incentives for youth to enter such production?


Institutional (15%)

Private sector/government and/or donor investment: There is positive interest from the

private sector, government, or donors, and existing programs can provide synergies and

complementary activities including irrigation areas rehabilitated under the MCC Compact.

Institutional capacity to sustainably support value chain development: Local skills and

processes have the potential to match the needs of the value chain.

Environmental (15%)

Impact of the value chain on the environment: Activity has a neutral impact on the

environment or it is possible to mitigate potential adverse environmental impacts (soils, water, air,

biodiversity, human heath) easily by implementing good agricultural and best environmental practices.

We considered environmental issues associated with production and post-production.

Impact of the environment, including climate change, on the value chain: Extent to which

surrounding physical and human environment, as well as anticipated impacts of climate change, have

an impact on the value chain.

Weighting and scoring the selection criteria

HVAA identified quantitative and qualitative sources of data for use in value chain scoring.

Quantitative data were applied for the economic portion of the analysis to assess the potential for

long-term competitiveness and increased sales (exports and domestic market). The sub-criteria were

also weighted reflecting our judgment and the relative importance noted in the contract. As shown

below (Table 2), 45 percent of the weight was placed on economic criteria (long-term export

potential and import substitution) which can drive growth for individual value chains. Another 25

percent of the weight was allocated to social criteria to take scalability into account so production

utilizing new technologies, including irrigation, can be scaled up to benefit a large number of

producers, rural households and other value chain actors, as well as engaging women and youth.

Weighting for environmental and institutional criteria are at 15 percent each.

Table 2. Methodology for Weighting and Scoring of Selection Criteria

Criteria Data

Source Weight

Scoring

1 2 3 4 5

Economic (45%)

Market size (USD) (2015) ITC Trade Map

10% <$100 million

$100 million to

$1 billion

$1 billion to $3

billion

$3 billion to $6

billion

>$6 billion

Market growth - Annual growth in quantity (2011-2015)

ITC Trade Map

10% Less than

1% 1% to 5% 5% to 10%

10% to 15%

15% and over

Moldova's market share in the world (percent of total exports in quantity)

ITC Trade Map

5% 0% to

0.10$% 0.1% to 0.2

% 0.2% to 0.3

% 0.3% to 0.4

% >0.4%

Current exports from Moldova ITC Trade Map

5% Low, <$1

million

$1 million to $2 million



> $10 million

Current imports to Moldova ITC Trade

Map 5%

Low, <$1

million




> $10

million

Current production Databases 10% Low, <$1

million

$1 million to $2

million

$2 million to $5

million

$5 million to $10

million

> $10

million


Social (25%)

Scalability Reports & interviews

10% < 20

producers 20 - 100

producers 100 - 200 producers

200 - 500 producers

500 + producers

Engagement of women Reports & interviews

10% < 10% women

10 to 20% 20-30% 30-40% women 40% >

Engagement of youth Reports &

interviews 5%

< 10%

youth 10 to 20% 20-30% 30-40%

youth 40%

>

Institutional (15%)

Private sector, government, or donors investment

Reports, interviews

10% Small Medium Large

Institutional capacity exists to support the value chain

Reports, interviews

5% Small Medium Large

Environmental (15%)

Impact of the value chain on the environment

Reports & interviews

10% Large Medium Small

Impact of the environment, including climate change, on the

value chain

Reports & interviews

5% Large Medium Small

Data collection and sector analyses

The HVAA team, which included one consultant engaged through AGROinform, conducted sector

analyses for each of the value chains to collect both quantitative and qualitative data pertinent to

value chain assessment and selection (See Annex 1). For quantitative data, we relied on United

Nations (UN) COMTRADE data available through the International Trade Center (ITC), detailed

Food and Agriculture Organization (FAO) assessments of Moldovan value chains from 2014, and

other relevant reports. In addition, we met with numerous key stakeholders throughout Moldova,

including representatives of industry associations, processors, farmer organizations, non-

governmental organizations (NGOs), government, and donors or donor-funded projects to collect

information about and assess the potential of value chains.

Final selection process

Utilizing all the available information, each product was assigned a score for each sub-criterion using

the five-point Likert scale with large/strongly positive scored (as 5), moderate or neutral (as 3), or

small or limited value or non-positive (as 1). A value chain selection session was organized with

HVAA staff to seek input and concurrence on scoring against criteria (particularly qualitative

determinations). A discussion of the final outcome, and potential project interventions can be found

at the end of this report.


SECTOR ANALYSES

Nuts

Production

Moldova grows three species of nuts: walnuts, almonds,

and hazelnuts. The country has a long tradition growing

walnuts, which dates back to the Soviet period when

walnut trees were planted as windbreaks rather than to

harvest walnuts. However, Moldovan climatic and soil

conditions are ideal. Only seven percent of the area in

the world is suitable for the cultivation of walnuts and

yet 100 percent of the Moldovan territory is part of this

seven percent. This fact, coupled with the strong

demand for walnuts, strongly encourages the harvesting of walnuts planted as windbreaks as well as

the planting of new walnut groves. Moldovans have also started to establish almond and hazelnut

plantations in recent years.

According to official statistics1, nut plantations have grown from about 6,700 ha in 2008 to 25,200 ha

in 2015 (see

Figure 2). The official statistics do not disaggregate data between different nuts. However, based on

estimates provided by the Nut Growers Association of Republic of Moldova, it is estimated that of

the 25,200 ha of nuts, walnut plantations occupy around 23,000 ha (approx. 91% of the total area),

almond plantations occupy around 2,000 ha (approx. 8% of the total area), and hazelnuts occupy

around 200 ha (less than 1% of the total area). Wild hazelnut (“alun” in Romanian language) can also

be found, in rare instances, growing in Moldovan forests. Additional comparative information for the

nuts is provided in Figure 2.

Figure 2. Nut Plantations (walnuts, almonds, hazelnuts) in Moldova, 2008 - 2015. Source:

National Bureau of Statistics of the Republic of Moldova.

1 www.statistica.md


Table 3. Characteristics of Nut Production in Moldova

Walnuts Almonds Hazelnuts

Planted area (ha) (status in

2015)

23,000 ha

2,000 ha

200 ha

Total production (tons) in

2015

12,870 tons

(approx. 2,000 tons is

imported and shelled

in Moldova).

1,080 tons

50 tons

Approximate number of

producers

There are about 1,500 nut growers, most of whom grow walnuts.

There are about 15 large hazelnuts growers. Four hazelnut orchards account

for about 66 percent of the total area under hazelnuts. An additional 10

orchards are all under 10 ha.

Geographic distribution

Throughout Moldova.

Frost often injures

plantations in the

north. High pH and

calcareous soils and

low precipitation in

the south, limited

their productivity.

Southern, southeast

part, partially central part

of Moldova as almonds

are not suitable for

growing in areas that

experience frosts in early

spring.

Throughout Moldova

where it is possible to

irrigate.

Estimated area of new

plantation planted between

2014 and 2015

1,000 ha

100 ha

10 ha

Age of plantations

Old, traditional

plantations were for

windbreaks. Some

plantations are over

50 years old. New

plantations have been

planted, particularly in

recent years.

Young. None are more

than 15 years old.

Young. Majority are

under 10 years old. One

plantation (37 ha) was

planted in 1980 on state

property.

Average yields

From 0.5 tons to 2

tons shell per hectare

in industrial orchards.

Approx. from 2 to 5

kg in shell per tree

planted as windbreaks.

Production from

intensive plantations In

Moldova is still not

fully known as the

oldest plantation is six

years old.

From 2 to 6 tons per

hectare depending on the

plant variety and type of

plantation.

Old variety: 800 kg per

ha, small fruit size;

Trapezund variety: 3 tons

per ha, large fruit size.



Production of planting

material (average per

annum)

There are about five

walnut nurseries that

produce certified

grafted walnut trees.

Annual output is about

800,000 seedlings

(Usually 2 years old,

less), approx. 60% of

which are exported.

90,000 seedlings annually,

which is insufficient to

meet demand.

Very small production

using old Moldovan and

Ukrainian varieties even

though they are not

registered.

Irrigation

Moldovan, Ukraine

and Romanian

varieties do not need

irrigation at all

(needed only during

planting). For these

varieties, irrigation is

not economical.

Plantations are rarely

irrigated, however, yields

are higher under

irrigation.

Irrigation is required

under Moldovan climatic

conditions.

Organic production

(including conversion)

Some orchards have

organic certification

and as a result can

achieve higher prices

in the EU market.

60 ha

None

Low labor costs make Moldova price-competitive in the market for whole kernels for confectionary

production. However, overall yields are low, due to:

1. The poor condition of the old walnuts trees, especially those planted along roads, due to lack

of, or inappropriately timed, maintenance (pruning, spraying);

2. Poorly chosen varieties of pollinators in modern industrial orchards that have been planted in

the last 10 years;

3. Poorly chosen foreign varieties (such as those from France), which have been planted in the

last 10 years, that show poor adaptability to Moldovan climatic conditions (winter cold and

spring frosts).

There is a strong interest to plant new plantations of all three nuts and total production is expected

to increase over time. However, farmers are interested in new, high yielding varieties with bigger

fruit size and better crack properties, which can be grown under Moldovan climatic conditions.

In order to receive a much shorter payback period of new industrial walnut orchards planted in

Moldova with traditional Moldovan, Ukrainian, and Romanian varieties (plantation scheme 10 m x

14m or 12m x 14m), it is very important to use (in the first 10 years after plantation) other crops

between the rows with walnuts, such as plum, peach, hazelnut, black currant, strawberries, or

different vegetable crops (carrots, potatoes, onion, garlic). These crops will start to give harvest and

sales from year 1 (for vegetables) and from year 3 or 4 for stone fruits (plum, peach, others). On the

other hand, walnut orchards with traditional Moldovan, Ukrainian, and Romanian varieties will enter

into full harvest only from year 9. The above-mentioned "mixed walnut orchards" model was also

replicated in Ukraine and Romania in the last two years as result of the successes in Moldova.

Processing in Moldova

There is strong competition among processors in Moldova to obtain locally produced nuts (walnuts,

almonds, hazelnuts). There are six main processing companies that purchase nuts: Prometeu-T SRL,

Monicol SRL, Maestro-Nut SRL, Nova-Nut SRL, Irida SRL and A.M.G. Kernel SRL. All these 6

companies have the same technological process:

(1) collect nuts from nut producers and small - medium collectors or/and use nuts they grew

themselves;

(2) dry nuts (if it is necessary);

(3) crack;


(4) sort and clean;

(5) pack; and

(6) export (in kernels or shells; in vacuumed polyethylene sacs or in polyethylene sacs and

cardboard boxes).

Investments by these same firms have allowed Moldovan exports to meet internationally recognized

CODEX and United Nations Economic Commission for Europe (UNECE) standards that, while not

legally binding, are nevertheless required by European buyers. These advances have helped cement

ties with the European buyers, and enabled Moldovan firms to capitalize on other strengths, such as

low domestic labor costs, in order to establish themselves as a leading hub for walnut post-harvest

processing, whose activities have represented anywhere from 70% to 90% of the total value of

Moldova’s annual walnut exports.

All of the above companies, with the exception of Monicol

SRL, are specialized in exporting nuts in bulk to the EU

and/or the Middle East. The fact that Moldova has

substantive experience in selling walnuts has helped to find

markets for almonds and hazelnuts as well. One company,

Monicol SRL, apart from exporting nuts in bulk, also has

nearly a decade of experience in selling nuts as well as dried

fruits in retail packages in Moldova though different retail

chains. The company has identified the German retail chain

Kaufland in Romania as a potential buyer. The company aims to increase the sale of nuts in retail

packages from today's 5 percent to 30 to 40 percent in 2-3 years.

Several of the above processing companies have their own walnut plantations and many are

interested to establish almond and hazelnut plantations as well.

Global production2

In the 2015/16 season, world production of walnuts reached more than 720,000 metric tons (kernel

basis), an increase of 11 percent from the previous season, and 87 percent higher than in 2005, which

confirms the upward trend over the last decade. The United States and China clearly led global

production, accounting for 67 percent of world production.

In season 2015/16, global production of almonds reached almost 1,110,000 metric tons (kernel basis),

a 4 percent increase compared to the previous season and a 93 percent increase compared with

2005, which confirms the upward trend in recent years. The US with 856,000 metric tons (MT),

Australia with 80,500 MT and Spain with 64,500 MT remain the major producers of almonds,

accounting for 90 percent of the world’s almond production in 2015/16.

Global production of hazelnuts in 2015 reached 488,110 metric tons (kernel basis), up 37 percent

from the previous season and 19 percent higher than in 2005. Turkey clearly led hazelnut production

with a crop of 342,500 metric tons (kernel basis) in 2015, which represented 70 percent of

worldwide total production. Italy, with a crop of 58,500 MT (12 percent of total), was the second

largest producer.

2 Information in this section is sourced from Nuts & Dried Fruit, Global Statistical Review 2015-2016,

http://www.nutfruit.org/wp-continguts/uploads/2016/05/Global-Statistical-Review-2015-2016.pdf


Markets

The world market for nuts

According to UN COMTRADE data, the global market for nuts is measured in the billions USD

(Table 4 and Figure 3). The largest market is for the shelled/kernel category. The market for almonds

(shelled/kernel basis) is the largest, valued at nearly 6 billion USD. However, it is only experiencing

growth in value (not volume). Moldova's market share in the global market is insignificant for

almonds and hazelnuts but is significant for walnuts at 5.55% of global exports in quantity. Moldova is

the fourth largest exporter of walnuts in the world.

Table 4. Snapshot of key global trade data for nuts shelled/kernel basis


Global market size (2015) 1.78 billion USD 6 billion USD 2.33 billion USD

Global market growth (annual

growth in quantity 2011-2015)

5 percent

1 percent

0 percent

Global market growth (annual

growth in value 2011-2015)

10 percent

20 percent

12 percent

Moldova's market share in the

world (percent of total exports

in quantity)

4.6 percent

0.003 percent

0.003 percent

Exports from Moldova (2015)

(USD)

98.8 million USD 92,000 USD 90,000 USD

Moldova's imports (2015)

(USD)

6.4 million USD 194,000 USD 188,000 USD

Figure 3. Global trade (imports) of shelled (kernel basis) and in-shell nuts in 2015.

Source: UN COMTRADE data.


Germany is a leading importer of walnuts,

almonds and hazelnuts from around the

world but a large proportion of these nuts

are processed and re-exported (see Table

5). As also seen in see Table 5, the world's

main consumers of nuts (per capita) are

primarily countries in the Middle East and

the Mediterranean, reflecting diet preferences.

Table 5. Top 5 importers and consumers of nuts (shelled/kernel basis)3,4

Top 5 importers

of nuts from

anywhere in the

world (by

quantity) in 2015

Top 5 importers of

nuts from Moldova

(by quantity) in

2015

Top five

consumers of nuts

in 2014

Top 5 consumers

of nuts (consumed

kg per person) in

2014

Walnuts 1. Germany

2. Japan

3. South Korea

4. Spain

5. USA

1. France

2. Germany

3. UK

4. Austria

5. Turkey (also no.1

destination for in-shell

walnuts)

1. China

2. USA

3. Iran

4. Turkey

5. France

1. Iran

2. Chile

3. Australia

4. Israel

5. Turkey

Almonds 1. Germany

2. Spain

3. UAE

4. France

5. Italy

1. Lebanon

2. Egypt

3. Romania

4. Greece

5. Libya

(Italy is the main

destination for in-shell

almonds)

1. USA

2. Spain

3. Germany

4. India

5. China

1. Spain

2. Tunisia

3. Australia

4. USA

5. Germany

Hazelnuts 1. Germany

2. Italy

3. France

4. Belgium

5. Canada

1. Netherlands

2. Denmark

3. Romania

1. Italy

2. Turkey

3. Germany

4. France

5. USA

1. Italy

2. Switzerland

3. Turkey

4. Belgium

5. France

As seen in Error! Not a valid bookmark self-reference., globally there has been much faster and

consistent growth in the export of shelled nuts as compared with unshelled nuts. Export of unshelled

(in-shell) nuts exhibited a flatter trend over the years with minor oscillations (up and down) between

years.

3 Data on imports of nuts obtained from UN COMTRADE 4 Data on nut consumption is sourced from Nuts & Dried Fruit, Global Statistical Review 2015-2016,

http://www.nutfruit.org/wp-continguts/uploads/2016/05/Global-Statistical-Review-2015-2016.pdf


Figure 4. World nuts (walnut, almond, hazelnut) in-shell and shelled export in last five

years (in million USD)

Moldova's nut trade

As seen in Figure 5, Moldova is a significant net exporter of shelled walnuts. Imported in-shell

walnuts are primarily used as raw material to produce shelled walnuts that are subsequently

exported as kernels. France is the main supplier of in-shell walnuts to Moldova and is also the main

importer of shelled walnuts from Moldova representing more than 31 percent of total Moldova's

exports of shelled walnuts in 2015. The remaining shelled walnuts are exported mainly to other EU

states: Germany (11.3 percent), Austria (7.1 percent), and the United Kingdom (6.8 percent).

Figure 5. Moldova's trade in walnuts (tons)

Unlike walnuts, Moldova is a net importer (by value) of shelled almonds (see Figure 6). The majority

of almonds are imported from the Unites States (76 percent of total imports in 2015). Total imports

peaked at close to 250,000 USD in 2013. However, imports have declined since then as local

plantations started to produce nuts. Exports also started in 2014. Moldova's main export destination

for shelled almonds is not the EU but rather Egypt and Lebanon, accounting for over 70 percent of

total exports in 2015. Romania and Greece are the next two main destinations. Almost all of the

unshelled almonds are exported to Italy and Iraq, accounting for 77 percent and 23 percent of total

exports, respectively, from Moldova in 2015.


Figure 6. Trade with almonds in Moldova between 2011 and 2015 (by value in USD).

Moldova is also a net importer of hazelnuts (see Figure 7). Georgia was the main supplier of

hazelnuts to Moldova in 2011 and 2012; since then, Turkey has become the main exporter of shelled

hazelnuts to Moldova. In 2011 and 2012, Moldova exported significant quantities of hazelnuts and

close to 100 percent went to Russia. The data suggest that Moldova re-exported most of the

hazelnuts it imported in those years. Imports dramatically fell in 2013 and 2014, with exports being

close to non-existent. In 2015, Moldova exported 90,000 USD worth of shelled hazelnuts primarily

to the Netherlands and Denmark; none went to Russia.

Figure 7. Trade with hazelnuts in Moldova between 2011 and 2015 (by value in USD)

Social inclusion This sector engages about 1,500 farmers in Moldova. In addition, there are seasonal employment

opportunities for manual harvesting during the harvesting period. Walnut orchards require about 30

people per 100 ha during the harvesting period; almond and hazelnut orchards require double that

number. Some orchards do use mechanical shakers but nuts are predominately picked manually.

Furthermore, processing facilities also provide employment opportunities, particularly for women. In


addition, many rural families are involved in the collection of walnuts from walnut trees planted as

windbreaks. This is a tradition in Moldova which engages up to 10 percent of the population in

villages where walnuts have been planted.

Gender

Nut production is dominated by men. Out of 130 members

of the Republican Union of Nut Growers Associations, only

20 are women. Women are mostly employed in processing

facilities (estimated 90 percent of employees in processing

facilities are female), while there is about equal participation

of men and women during the harvesting period. However,

much of this work is low pay and over a short time frame.

Youth

The sector is dominated by older and traditional farmers in Moldova. However, some younger

farmers are also involved in the sector, bringing new ideas and investments.

Institutional support

Private sector/government and/or donor investment

There is a state subsidy which supports nut producers to establish new plantations. The Moldovan

Agency for Interventions and Payment for Agriculture (AIPA) administers the subsidy fund on behalf

of the Moldovan Ministry of Agriculture and Food Industry (MAFI). The majority of government

subsidies have supported the establishment of walnut plantations (940 ha in 2015). In addition, the

2015 subsidy fund supported the establishment of 75 ha of hazelnut plantations and 24 ha of almond

plantations. The subsidy fund also provides support to post-harvest infrastructure or processing (e.g.

drying). Donors are not currently active in this sector.

Institutional capacity to sustainably support value chain development

Growers associations, which are usually important organizations for extension and advocacy efforts,

are relatively recent creations in Moldova and do not as yet have the capabilities to support their

members as needed. The Republican Union of Nut Growers Associations of the Republic of

Moldova5 was established in 2006. The main goals of the Union of Associations are to:

1. preserve and improve the existing heritage of nut cultivars;

2. extend the orchard plantations with advanced material, increasing the productive potential;

and

3. inform the farmers about all legislative changes, new technologies, and more.

The Union of Associations is currently working to develop a more functional website and is looking

to identify and support the financing of extension advisers. The lack of well-trained nut extension

advisors is a critical issue for nut growers. The Union of Associations is also considering to start a

Moldovan Nut Cultures journal.

5 http://asociatianuciferilor.com/en/


Environmental issues


Nuts in Moldova were generally not planted under intensive agricultural methods. Walnuts, in

particular, were traditionally planted and treated as windbreaks rather than a commercial crop. Even

recent nut plantations are generally not intensive, and rely on lower use of fertilizers and pesticides

than other horticultural crops. Furthermore, only a small number of recent plantations are irrigated.

This contrasts to a more intensive style of farming in other countries - especially California in the

United States - where almonds are significant users of water. In Moldova, irrigation is particularly

important for hazelnuts.

Nut cultivation also has some environmental benefits: nut plantations thrive with minimal

maintenance and a very low amount of input after the initial establishment period. Nuts can be

grown on hilly, sloping or marginal soils that may not be able to support other crops.

Impact of the environment and climate change on the value chain

Massive root systems allow traditional Moldovan, Ukraine and Romanian varieties of walnuts to avoid

short term droughts that would adversely affect annual crops. If irrigation is needed (first of all for

hazelnuts, intensive walnut orchards with US (Chandler, others) or France (Lara, Fernor, Tulare,

others) varieties and almonds), drip or trickle irrigation can be used with nuts to greatly increase the

efficiency of water use, conserving this vital resource.

Green opportunities

Integrating the cultivation of nuts with other crop systems can help provide environmental benefits

such as erosion control, slope stabilization, and increased carbon sequestration. Compared to annual

crops, the extensive root systems of perennial crops help build and increases organic soil matter,

sequestering more carbon from the atmosphere each year.

Challenges and potential HVAA interventions

The major challenges and bottlenecks in the nut sector appear to be related to the lack of access to

high quality, high yielding, virus free plant materials. Support is needed to test new plant varieties

with an aim to register these varieties in the State Catalogue of Plant Varieties. Potential support

could be provided to the Moldovan State Institute of Horticulture for new clones of existing local

varieties or to create new varieties in order to receive new local varieties with bigger size of fruit

(+30%) and better crack properties ( first of all with kernel output percentage – minimum 52%).

Producers need technical support to apply modern production and post-harvest handling

technologies to ensure (1) proper selection of varieties of pollinators and their numbers in the new-

planned walnut orchards, (2) as such the right tree planting, (3) right forming of the trees in first

three years after plantation, (4) high yields and high quality. An inefficient export processing and

certification process adds additional inefficiencies and costs that further hinder trade

competitiveness. The best way that farmers can adopt new technologies is by seeing successful

orchards in Moldova; and such good examples do exist in Moldova.

The lack of an adequate and qualified supply of field labor in Moldova is another constraint, although

the more modern producers and processors are adopting labor saving technologies to address this

issue.

A summary of constraints, challenges, needs and potential HVAA intervention in the Moldovan nut

sector is presented below (Table 6).


Table 6. Constraints, challenges, needs and potential HVAA interventions in the

Moldovan nut sector

Production Processing Agricultural

Finance

Enabling

Environment

Marketing

Co

nst

rain

ts a

nd

ch

allen

ges

Lack of consultants

specialized in the nut

production technology

Nut growers do not

apply modern

production techniques

Productivity is low or

very low due to poor

selection of varieties

Irrigation is rarely used

even though yields

would be higher in the

case of hazelnut

plantations and walnut

plantations with foreign

varieties

Insufficient knowledge

on the determination of

timing for harvesting

Insufficient knowledge on

post-harvest handling and

processing, which affects

the product quality

Lack of almond drying

machines

Lack of sufficient

long-term finance

(up to 10 years)

with small

percentage rate

(2% - 3% per

year)

Low capacities of the

Republican Union of Nut

Growers Association.

Lack of dedicated focus

to almonds by

Associations and other

institutions

Lack of pesticides

registered for use on nuts

Lack of an association of

almond producers

Lack of new productive

varieties of especially,

hazelnuts and almonds

Inefficient export

processing and

certification process

Insufficient certification

Insufficient value adding

Need

s an

d p

ote

nti

al H

VA

A in

terv

en

tio

ns

Support the

establishment of

dedicated nut advisory

assistance (in

cooperation with the

Republican Union of

Nut Growers

Association)

Use established

hazelnut and almonds

orchards as

demonstration farms

for farmers

Promote the

production of virus free

planting material; using

new varieties

Develop GAPs and nut

production guidelines

Support processing

companies to package

produce in attractive small

retail packages

Support processing

companies to develop new

valued added products such

as oils

Support

producers and

producer group in

business planning

and credit/grant

application

Support the Republican

Union of Nut Growers

Association to develop an

informative website and

extension activities

Test new varieties of

hazelnuts and almonds

(from USA, France, Italy)

Support processing

companies to develop

attractive retail packaging

for nuts to add value to

Moldovan nut exports

Improve knowledge of

market requirements in

new markets

Ensure compliance with

UNECE and Codex

requirements

Support organic

certification to access

higher paying EU market


Beekeeping/Honey

Production

Honeybee colonies are essential for

agriculture and the overall health of the

environment, ensuring plant reproduction by

pollination, while beekeeping contributes to

the development of rural areas. Beekeeping in

Moldova is providing on average 3,000 tons of honey every year in addition to other commercial

byproducts such as wax, pollen, royal jelly, propolis and bee venom. Total world production is

estimated at 1.7 million tons, with China and the EU being the world's leading producers of honey.

The honeybee contributes considerably to agricultural production as a result of pollinating more than

150 farm crops (sunflower, buckwheat, rape, fruit-trees, forage crops and seed crops) which are

being grown throughout Moldova. For instance, pollination of apple orchards is estimated to increase

productivity of apple orchards by 20 to 50 percent.

During the last 20 years, the number of bee colonies in Moldova has reduced considerably.

Compared to 1989, when Moldova had around 400,000 beehives (colonies), FAO6 estimated that

Moldova had approximately 115,900 colonies in 2014 (which is an increase from 101,464 in 2010). In

the last two decades, the production reached its lowest point in 2000 when total production was

2,020 MT according to FAOSTAT data.7 Since 2000, production has been steadily increasing to reach

3,896 tons in 2014 (See

Figure 8).

Figure 8. Production of honey in Moldova (tons) between 1994 and 2014. Source: UN

FAOSTAT.

Approximately 95% of beehives are kept by individual beekeepers (estimated to be between 5,000

and 7,000 households in Moldova) and the rest is managed by corporate structures. One beehive

(colony) produces about 22 kg of honey on average, which compares unfavorably to Slovenia, which

6 FAO Statistics. http://teca.fao.org/sites/default/files/FAO%20stats%20data%20on%20beekeeping_5.xlsx 7 FAOSTAT statistics: http://www.fao.org/faostat/en/

Snapshot of key indicators in Moldova

Current production of honey

(2014)

3,896 tons

Number of beekeepers 5,000 - 7,000


produces approximately 43 kg of honey per hive and is less than half of that which is produced by

Finland (43 kg/hive) and Sweden (51 kg/hive).8

On average, one beekeeper in Moldova manages around 23 hives, although many beekeepers have

only 10 to 15 hives. This type of operation is more of a hobby, and thus the beekeepers have a high

expectation of price per kg of honey. At the same time, there are beekeepers with more than 250

hives, which they manage, more or less full time. There are beekeeping operations with 400 hives,

separated in 4 remote locations with a local hired beekeeper to oversee the hives.

In every district in Moldova there is a local Beekeepers’ Association, which unites beekeepers

geographically. In these associations, beekeepers meet and discuss or receive trainings once a month

or every 2 months.

Traditionally, honey is considered the main apicultural

product. Moldovan beekeepers collect several types of

honey including May honey, acacia honey, linden honey

and mixed flower honey. In addition, there are

beekeepers who produce individual crop-specific types

of honey such as buckwheat and sunflower.

With increasing knowledge about beekeeping and an

awareness of the beneficial aspects of many bee

products, the use and demand for other products, such

a pollen and propolis, is also increasing. The inclusion

of "natural" bee products in cosmetics, medicines and

foods has improved consumer appeal. While such

appeal is not always based on scientific evidence, more

and more studies confirm at least some of the

traditionally claimed benefits of primary bee products.

Added value products can be developed and marketed,

in order to increase local consumption of honey. Many

recipes exist of

different

complexity and destination described, which offer various

alternatives to sugar use in food products. Many of the primary

beekeeping products do not have a market until they are added

to more commonly used, value added products. Even the value of

the primary products may increase if good use is made of them

in other products, thereby increasing the profitability of many

beekeeping operations.9

8 Overview of the apiculture sector. Evaluation of the CAP measures related to apiculture Agriculture and Rural

Development DG- Final Report http://ec.europa.eu/agriculture/sites/agriculture/files/evaluation/market-and-

income-reports/2013/apiculture/chap3_en.pdf 9 UN FAO. Value added products from beekeeping. http://www.fao.org/docrep/w0076e/w0076e00.htm

Apicultural Products

Pollen grains are small, male reproduction units (gametophytes) formed in the anthers of the higher flowering plants. Propolis, or bee glue, is a mixture of beeswax and resins collected from leaf bugs and twigs. It is used to line nest cavities and brood combs, seal cracks and reduce the size of the hive entrance. Propolis has antibacterial and antifungal properties. Royal jelly is a protein rich substance that is fed to larvae. More is given to the queen larva, causing her to grow larger than the other bees. It is made from digested pollen and honey and contains sugars, fats, amino acids, vitamins, minerals and proteins. Venom used in the bee sting is made up of a complex mixture of proteins. It is used in therapy to treat various human ailments.

http://www.fao.org/docrep/w0076e/w0076e00.htm


Markets

The world market for honey

According to UN COMTRADE, total

worldwide imports of honey in 2015

were 648,084 tons, valued at over 2.3

billion USD. The world's major importers

of honey are the United States and the

EU member states (see

Table 7 below). Worldwide demand for

honey is growing strongly, with the

worldwide annual growth rate valued between 2011 and 2015 at 9 percent and the annual growth in

quantity over the same period at 7 percent.

Table 7. Top ten importers of honey (by value).10

Rank Country Value imported in

2015 (USD '000)

1 USA 605,325

2 Germany 325,011

3 UK 131,231

4 France 128,473

5 Japan 117,643

6 Belgium 89,855

7 Italy 84,534

8 China 74,740

9 Spain 72,746

10 Saudi Arabia 56,230

Despite being the world's second largest honey producer, the EU is a net importer of honey as

domestic production only covers around 60% of consumption. Its contribution to imports in 2015

was 39.5% of the total imports (197,545 tons of natural honey). The imports of honey to the EU

have exceeded exports thus the commercial balance on honey is negative. Honey consumption in

Europe is around 0.7 kg/year per person, 40% of consumed honey is imported.11 As can be seen in

Table 8, the main supplier of honey imported into the EU is China, followed by Mexico, Ukraine, and

countries in Latin America. Due to recent developments in relations between Ukraine and Russia,

the European Union quadrupled imports of Ukrainian honey between 2011 and 2015. To strengthen

trade relations with Ukraine, the European Union currently allows importers to source 5,000 tons of

honey on a duty-free basis. Because of geographical proximity, Ukrainian exports are largely directed to countries such as Poland, Romania, and Bulgaria.

10 UN COMTRADE - http://www.trademap.org/ 11 European Union's Neighborhood Program for Moldova. GFA report. Foreign market sector brief - honey in

France. http://miepo.md/sites/default/files/Honey-France-Market-Study_en.pdf

Snapshot of key indicators

Global market size (2015) 2.3 billion USD

Global market growth (annual growth in

quantity 2011-2015)

7 percent


value 2011-2015)

9 percent

Moldova's market share in the world 0.19 percent

Exports from Moldova (2015) 9.5 million USD

Moldova's imports (2015) 205,000 USD


Table 8. EU Imports of Honey by Origin (in Tons)12 (Ranked by value of imports in

2015)

Many of the key importing countries are also significant exporters. For example, Germany, although

it imported 325 million USD worth of honey in 2015 (mainly from Mexico, Chile, Ukraine, Romania

and Hungary), also exported over 142 million USD worth of honey in the same year - with key

export destinations being France, Netherlands, Saudi Arabia, Switzerland, Austria, and Denmark.

Theoretically, Germany may well mix and re-package imported honey to new export destinations,

which could potentially offer an opportunity for Moldovan producers to access markets such as the

Middle East and Scandinavia directly.

Exports of honey from Moldova

Moldova exported 9.5 million USD worth of honey in 2015. Moldova is ranked 45th in global honey

exporters and its share in global honey exports is 0.19% by value. Exports have grown by a factor of

11 over the last 10 years - from 245 tons in 2006 to 2,867 tons in 2016 (see Table 9). Honey is the

only product of animal origin that is exported to the EU, as it meets EU third country import

requirements for products of animal origin. To achieve this, it is necessary to show that the nation

has a ‘Residue Monitoring Scheme’ established for the analysis of honey for residues of antibiotics,

sulphonamides, pesticides, and heavy metals as defined in Decision 2001/159/EC and modified in

2001/487/EC.

Table 9. Honey exports by Moldova and countries in the region (tons)13

2006 2007 2008 2009 2010 2011 2012 2013 2014 2015

Ukraine 6561 3516 3264 7363 7048 9874 13338 21674 36336 36013

Hungary 19181 20887 24156 14239 13848 12415 14513 19426 17193 17570

Romania 9606 6255 7087 10654 11017 9899 11460 12649 11116 10863

Poland 371 564 663 1303 2684 4638 6236 11206 13719 10498

Bulgaria 4681 3814 3331 6116 8540 6853 9314 12649 10133 9785

Turkey 1916 398 397 900 1265 1103 1263 3564 4969 7192

Austria 1907 1211 1040 1135 1605 2154 2667 2634 2185 3045

Moldova 245 367 310 274 429 345 733 1002 2696 2867

Greece 476 540 622 662 840 802 1346 1744 1546 2129

Serbia 159 390 638 913 1916 1108 2966 3368 1804 2045

12 European Commission. Honey Market Presentation.

https://ec.europa.eu/agriculture/sites/agriculture/files/honey/presentation-honey-2015_en.pdf 13 UN COMTRADE data

2012 2013 2014 2015 Jan-Jun 2016

China 64,019 75,457 82,553 97,700 44,921

Mexico 21,249 21,142 22,267 25,979 7,964

Ukraine 8,949 16,648 20,694 20,691 18,897

Argentina 22,594 13,963 7,809 9,838 9,690

Chile 5,942 7,504 6,750 9,600 3,789

Cuba 5,914 5,058 5,935 5,626 2,871

Brazil 4,367 3,252 3,309 4,817 1,623

Thailand 3,893 5,387 6,858 4,286 822

Others 12,414 17,102 19,915 19,007 8,051

Total 149,340 165,512 176,090 197,545 98,629


In 2015, the total value of exported honey from Moldova was 9.5 million USD, with strong export

growth experienced between 2013 and 2014 (see Figure 9). The export price has been relatively

stable - in the range of 3.3 - 3.7 USD/kg. However, in 2015 and 2016 Ukraine has exported large

volumes of honey to the EU at lower prices than Moldova, hence Moldova's traditional buyers turned

to the new supply source placing downward pressure on the price of Moldovan honey.

Figure 9. Value of Moldovan honey exports (USD thousand)14

The EU is currently the main market for Moldovan honey, with Italy, Germany, France and Slovakia

being the key destination markets in 2015 (see Table 10). Outside of the EU, the only significant

markets are Macedonia and Belarus. In 2016, honey was also exported to new destinations such as

Denmark, Austria, and Oman.

Table 10. Value of exported honey from Moldova, during 2013-2016 (first half of the

year)

2013, USD ('000) 2014, USD ('000) 2015, USD ('000) 2016, first half, USD

('000)

Germany 869.5 France 2834.8 Italy 2126.6 Italy 1049.9

France 756.5 Germany 2199.6 Germany 1718.6 Germany 910.9

Romania 476.9 Romania 1276.4 France 1402.3 France 615.5

Slovakia 345.0 Italy 899.1 Slovakia 1352.0 Romania 609.2

Belarus 263.5 Poland 853.8 Poland 724.2 Slovakia 405.9

Czech

Republic

231.9 Slovakia 778.0 Romania 694.9 Austria 202.2

UK 131.7 Belarus 295.3 Macedonia 592.3 Macedonia 166.2

USA 60.8 Spain 171.6 Denmark 213.7 Denmark 140.4

Canada 50.4 USA 83.9 Belarus 168.8 Belgium 95.3

Russia 48.9 Denmark 79.5 Belgium 149.2 Oman 67.2

Azerbaijan 10.2 Norway 65.1 Czech Republic 122.7 Ukraine 44.8

UAE 3.9 UK 54.9 Norway 108.1 Canada 23.6

The price formation for honey is quite competitive due to the presence of a relatively large number

of exporting companies. The primary Moldovan producer of raw honey receives around 1.5-2.0 USD

per kg at the farm-gate.

14 UN COMTRADE data


Ukraine is more price competitive compared to Moldova, however the EU has a set a quota of

10,000 tons for the export of honey from Ukraine to the EU, after which an import tax of 16.7

percent is imposed. Moldovan honey is seen to be superior to that of Ukraine and comparable to

that of Argentina, based on its average fructose/glucose ratio of 1.2 on average, compared to 1 for

Ukrainian honey. Monoflower honey of acacia, linden or May honey is of higher quality. Moldova's

major competitors in this segment are Hungary, Romania, and Bulgaria, who set the price. Moldova

benefits from this, as the price is relatively high.

Honey is exported from Moldova in bulk, in 300 kg barrels. The processing or added value honey is

lacking, and only small initiatives are being undertaken to purchase even small scale packing

equipment. Small-scale jar fillers exist in several companies but these are far from professional

operations. There are some small attempts by some packers to offer labeled honey, but the quality of

the honey itself still needs improvements, and the respective honey is mainly designed for the Russian

speaking audience from different countries. Labeling for the European and Middle East market needs

to be explored further.

EU - a Market Opportunity?

Declining bee colonies in the EU, as a result of bee diseases and the intensive use of chemicals in

agriculture, has led to a drop in EU honey production - particularly in Germany and Spain in

2013. As a major global consumer of honey, the EU countries have increased imports of honey to

meet the increasing demand (See Error! Reference source not found.). This creates new

opportunities for suppliers from outside the EU (i.e. Third Countries). Germany, the U.K., Belgium

and Spain are currently the main importers of honey from Third Countries. Honey imports are

expected to increase in the future in order to compensate for the continuous decline of European

production. Since 2013, the number of colonies has stabilized. However, the threat of declining bee

populations is still a major concern as intensification of agriculture and use of pesticides continues.15

Figure 10. EU Member States' Share of Imports from Third Countries (in Tons).16

15 CBI website - what is the demand for honey in Europe? https://www.cbi.eu/market-information/honey-

sweeteners/trade-statistics/ 16 European Commission. Honey Market Presentation.

https://ec.europa.eu/agriculture/sites/agriculture/files/honey/presentation-honey-2015_en.pdf


Honey imported into the EU is rarely sold to the market in its original condition. European

importers blend different types of honey together to produce the right quantities at a consistent

quality. This allows them to be flexible with their sources and switch between suppliers if necessary.

China is Europe’s main supplier of low-priced honey for industrial use and blends that are targeted at

the mainstream market. However, quality issues have worsened the position of Chinese honey in the

global honey market, making the EU more cautious about buying honey from China. Until a decade

ago, Argentina was Europe’s main honey supplier. However, a heavy loss of bee colonies and bee

forage has severely affected Argentinean honey supplies. On top of that, a ruling of the European

Court of Justice that honey must be labeled to indicate that it contains pollen, and that

manufacturers must demonstrate that this pollen does not come from genetically modified crops, put

further pressure on imports of Argentinean honey.

There is less competition in niche markets. For example, monofloral honeys are very popular among

European consumers but it is difficult to ensure the required stable supplies. Organic industrial honey

is another interesting niche market. The demand for organic industrial honey is increasing, but there

are only few areas in Europe where it is possible to practice organic beekeeping. One of the

conditions for organic honey production - the absence of chemical contamination within a 3km

radius from the beehives - is increasingly hard to meet. Moreover, Brazil, the largest supplier of

organic honeys, is unable to offer the low prices that industrial users require. Consequently, honey

importers are looking for new sources of these honeys. This substantially increases the bargaining

power of honey suppliers that can meet the relevant requirements in this niche market.

Average import and export price in the EU have been continually on the rise over the last 10 years

(See Table 11). However, prices have dropped in 2016 due to a combination of an increased supply

from traditional honey producers, good harvests worldwide and strong stock positions, which have

resulted in a balance shift between demand and supply. As a result of the decreasing prices, honey

stocks in South America became quite high as importers stopped buying in anticipation of further

price drops and an increase of supply options. Furthermore, the depreciation of the Euro against the

US dollar, and USD-pegged currencies, is decreasing the purchasing power of EU importers. As a

result, the EU market is becoming increasingly price-sensitive. Hence, suppliers who can offer

competitive prices will have a solid negotiating position.

Table 11. Average Import and Export Prices in the EU, EUR/kg17

Average 200

6

200

7

200

8

200

9

201

0

201

1

201

2

201

3

201

4

201

5

Jan-Jun,

2016

Import

Price

1.31 1.37 1.69 1.93 2.05 2.08 2.08 2.04 2.14 2.52 2.21

Export

Price

3.47 3.65 3.92 4.46 4.53 5.04 5.13 5.41 5.30 5.77 5.48

Emerging markets

According to the National Association of Beekeepers of Republic of Moldova, apart from the EU,

there are also potential opportunities to export Moldovan premium honey, packaged in jars, to Gulf

States and Singapore. There is strong and growing demand for honey in the United Arab Emirates,

Singapore, Qatar, Oman and Bahrain (Figure 11. The Association is currently exploring these

markets and have already participated in a fair in Dubai.

17 European Commission. Honey Market Presentation.

https://ec.europa.eu/agriculture/sites/agriculture/files/honey/presentation-honey-2015_en.pdf


Figure 11. Imports of honey from Gulf States and Singapore

Imports to Moldova

The imports of honey to Moldova for the last 10 years were very low compared to the total

production and exports. In 2015, only 62 tons of honey valued at 205,000 USD were imported. Most

probably, these imports have ended in supermarkets as high value packed goods.

Social inclusion

Beekeeping is an important activity that helps rural communities raise additional income and improve

their livelihoods. It is estimated that there are between 5,000 and 7,000 beekeepers in Moldova.

Beekeeping as an enterprise fits in very well with small-scale farmers’ livelihoods. It is not invasive;

bees work along the natural patterns of local agro-ecological zones and provide positive impact to

the agro and natural ecosystems. Beekeeping can provide employment, income, and economic

security for the farm family and others in rural areas.18

Gender

Beekeeping is primarily a family business in Moldova - but usually led by men. Men and women tend

to perform different roles and have different responsibilities. For example, men usually take the lead

in apiary construction, while women help the men in day-to-day work and in the honey packaging.

Men tend to make most management decisions. The share of female beekeepers (i.e. taking a leading

role) in beekeeping in Moldova is less than 20 percent.

Beekeeping can be quite generous in offering women an opportunity to develop their businesses

since it involves less physically demanding work and more management thinking, observations, and

decision-making. The skillset necessary for beekeeping is gender neutral. Modern beekeeping

technology and involvement of development agencies, apiary roles performed by women are

increasingly changing to resemble those of men in the previously male dominated enterprise.

Beekeeping generates a product with high market potential, while being more easily adapted to the

constraints of low credit and limited land access than other agricultural activities. The major barrier

for a woman to join beekeeping would be investment resources and lack of practical knowledge, if

she had not performed such an activity in the past.

18 UN FAO (2011). Beekeeping and sustainable livelihoods. Second edition. http://www.fao.org/3/a-i2462e.pdf

http://www.fao.org/3/a-i2462e.pdf


Youth

According to the estimates of The National Association of Beekeepers of the Republic of Moldova,

80 percent of beekeepers are 60 years and older. The older beekeepers tend to use outdated

technologies that are not very efficient, although some dedicated beekeepers have reached very good

results in beekeeping and can share their knowledge with young, aspiring beekeepers.

Due to the aging of existing beekeepers, there is now an opportunity for the younger generation to

take over the formed niche. Participation of youth in beekeeping activities provides unique

opportunities for youth to contribute to their livelihoods because the returns on investment are

almost immediate (especially as compared with long-term investments such as vineyard or orchard

plantations). Attracting young people to beekeeping would achieve multiple benefits: job creation,

and pollination of fruit flowers. The value of pollination is probably higher than the value of honey.

There are two major barriers to enter the beekeeping business– technical and financial (investments).

Beekeeping deals with dynamic, living organisms, which have daily care needs. Without knowing the

intrinsic mechanisms, it would be difficult to run a large operation and generate an income. Aspiring

beekeepers, without the necessary skills, need to complete a primary training course in the field -

either at a specialized school or a field training program. The National Beekeepers’ Association has

also developed a business plan model for beekeeping with the latest technological equipment, but

further support is needed to conduct training to beekeepers. In the north, a regional center was

established which organizes training but also collects and stores honey. There are also young

beekeepers who worked in exchange programs in the US and have adopted the modern technologies

that have yielded notable results, working several hundred hives. There is also the idea to develop a

guarantee fund based on 'future honey' which will enable beekeepers to access loans.



A dedicated financing program for the sector does not exist. However, the state subsidies support

to almost every aspect of beekeeping production – equipment, centrifuges, homogenizers, melting

equipment, including laboratory, at a level of up to 40 percent in the prior to 2017. In 2017, this

increased to 50 percent, with higher subsidies if women and youth are engaged. Authorities have

prioritized honey production, due to the fact that honey is the only product of animal origin allowed

to be exported to the EU. The national program for beekeeping development lists a series of

activities addressing extension, investment, laboratory, queen breeding and research, legislation, and

marketing. The programs provide support in training and upgrading the knowledge of the

beekeepers.

The World Bank project supports the beekeeping sector by facilitating the creation of producer

groups for marketing and supporting the acquisition of post-harvest and processing equipment. The

International Fund for Agricultural Development (IFAD) has also helped several groups of

beekeepers to organize themselves and strengthen their marketing abilities.


The National Association of Beekeepers of the Republic of Moldova (NABRM) represents the

interests of about 5,000 to 7,000 beekeeper members at the national level. NABRM is a state-wide

umbrella association, which includes 30 district associations. The Association is also a member of the

International Beekeepers Association - Apimondia.

Moldova has significant experience and a strong tradition of beekeeping, which developed during the

Soviet period. There are skilled professors at the Agrarian University as well as skilled specialists


among beekeepers. Hence, there is strong local capacity to provide high level training. However, this

training capacity is generally untapped due in part to a lack of networking between the trainers and

nascent beekeepers. There are a wide range of companies and individual consultants who can offer

services at a respectable level. When not available locally, Moldovan beekeepers can also source

trainers from Romania.

There are no regulatory or physical barriers encountered by producers, and legislation regarding

beekeeping is well developed. Key issues include the lack of up to date knowledge and stable

quantities with consistently high quality honey. Access to the EU market depends on compliance with

EU standards including residue testing as per Directive 96/23/EC. The 2016 EU Food and Veterinary

Office audit report noted issues with residues in honey produced in Moldova, with two detections of

chloramphenicol and tetracycline. Compliance to EU standards will need to remain a priority, as the

EU is currently the main export market for Moldovan honey.



Approximately 90 percent of all flowering plant species are specialized for pollination by animals,

mostly insects.19 The negative impact of the loss of pollinators is strongly felt in agricultural

biodiversity. Without pollination, many interconnected species and processes functioning within an

ecosystem would collapse.20 The role of pollinators is, among other things, to ensure reproduction,

fruit set development and dispersal in plants, both in agroecosystems and natural ecosystems. In turn,

plants need to exist, in order for pollinators to be able to feed. Improving pollinator density and

diversity directly and positively impacts crop yields. Pollinators such as bees also provide food and

additional income for rural families, in the form of honey and other by-products. Thus, declining

pollinator populations negatively impact the sustainable livelihoods of rural families as well as plant

biodiversity.

There are very limited instances when honey bees may have an adverse impact on the environment.

The key adverse impact of honey bees may be on other pollinator populations. However, this may

only be an issue if the nectar source is a limiting factor. In commercial beekeeping, honey bees are

moved to harvest excess honey flows. Hence, such adverse impact is not considered a significant

adverse environmental impact, especially considering the many benefits of honey bees on the

agroecosystem and the natural environment. Overall, beekeeping is seen to have a positive impact

on the environment.


Honeybees are the most famous of the pollinators, a group of species whose members fly, hop, and

crawl over flowers to allow plants - including those that account for over a third of global food crop

production - to reproduce. Yet despite their critical role, globally we are experiencing declines in

honey bee populations by increasingly exposing bees to ever-more numerous hazards including land-

use change, pesticide use, monoculture agriculture, and climate change, which can disrupt flowering

seasons.

There has not been any comprehensive research conducted to evaluate the impact of pesticide use

on the dynamics of bee populations in Moldova. There are is only anecdotal evidence from

beekeepers who report losses as a result of spraying and lack of warning to beekeepers. Farmers

19 FAO's Global Action on Pollination Services for Sustainable Agriculture, website:

http://www.fao.org/pollination/background/en/ 20 FAO's Global Action on Pollination Services for Sustainable Agriculture, website:

http://www.fao.org/pollination/background/en/


should inform nearby beekeepers when spraying is expected to take place so that the beekeeper can

relocate the apiary.

Climate change has the potential to severely impact ecosystem processes such as pollination.21

Climate change, accompanied by extreme climate events, can have detrimental effects on both

pollinator populations and crop plants and land use. High temperatures, long periods of heavy rain

and late frost may affect pollinator activity either by reducing population sizes or by affecting insect

activity patterns. With changes in the spatial distribution of crops and livestock, and in the growth

rates of pests and weeds, there may also be an increasing need for chemical control. Warming may

also favor weeds in comparison to crops and increase the abundance, growth rate, and geographic

range of many crop-attacking insect pests. Crop species experiencing drought stress may also

produce lower seed weight and seed number, resulting in reduced yield. Yield reduction under

drought may also result from a decrease in pollen viability along with an increase in seed abortion

rates, which have been identified as the most important factors affecting seed set.

Green opportunities

The National Association of Beekeepers of Republic of Moldova has been actively trying to establish

a closer relationship between fruit producers and beekeepers over the last two years, including

efforts to convince fruit growers to order pollination services from honey producers. Honey bees

make a very large contribution to pollination in orchards and there are several measures that can be

adopted to improve the performance of the bee colony, thus resulting in greater pollination services

per hive - for the benefit of both fruit growers and beekeepers. Examples of such measures have

been described by the UN FAO in the case of apple orchards.22


The major challenges facing honey production in Moldova include ageing of beekeepers, old school

hives with low output indicators, low technological skills, and isolation and fragmentation, which

hinders flow of up to date knowledge. There are opportunities to optimize the costs and operations,

professionalize beekeeping by increasing the number of hives per beekeeper to over 150 hives per

beekeeper, applying advanced production techniques, training, and inviting young people to join the

beekeeping business. Relatively low local consumption of honey produced in Moldova is another

challenge and need to be addressed respectively through campaigns of comparative benefits of honey.

In the honey business, significant added benefit is obtained by selling packaged honey. China supplies

the lowest-priced honey, Argentina takes a middle position, and honey from Mexico and Australia

receives the highest prices in international trade (source: Export Promotion of Organic Products

from Africa (EPOPA 2006).

Light honey receives a higher price because the general preference is for clear honey with a mild

taste. In recent years, monofloral types, such as Acacia, have become more popular. Another

possibility to trade honey at higher price would be the organic market or the fair trade market but

both these options are difficult to arrange due to higher costs of certification per production unit

since Moldovan beekeepers have small operations. Thus, Moldova should concentrate more on

accessing new markets (such as Gulf States, Scandinavia, Singapore) by improving quality, consistency,

and packaging as well as development of specialty flavored niche varieties.

Summary of constraints, challenges, needs and potential HVAA intervention in the Moldovan

apicultural sector is presented below (

Table 12).

21 UN FAO (2011). Potential effects of climate change on crop pollination. http://www.fao.org/3/a-i2242e.pdf 22 UN FAO (2016). A Manual on Apple Pollination. http://www.fao.org/3/a-i5527e.pdf



Moldovan beekeeping sector


Finance

Enabling

Environment

Marketing

Co

nst

rain

ts a

nd

ch

allen

ges

Traditional production

methods are used, such as

old models of beehives -

Russian style long hive

design, which are labor

intensive.

The use of antibiotics in

bee treatment.

Beekeepers are mostly

retired or close to

retirement age. There is,

however, a government

subsidy program which

gives incentives for youth

to start with beekeeping.

Lack of honey collection,

storage and packing

facilities. Assortment of

package range is very small;

almost all honey is

exported in bulk. Packaging

is very poor - usually 1 kg

jars, without a label.

Difficult to access

loans from

commercial

banks; however,

there are other

sources such as

IFAD and other

grant

opportunities.

Evidence-based policy-

making is lacking. Policies

and subsidies are often

the result of lobbying

activities rather than

strategic planning.

National Association of

Beekeepers of Republic

of Moldova represents

the interest of about

5,000 beekeepers. The

association is an umbrella

association, which

includes 30 district

associations.

Export mainly in bulk to the

EU, thus prices are very low

price (about €2 per

kilogram). Poor packaging

overall.

Access to the EU market

depends on compliance with

EU standards including

residue testing as per

Directive 96/23/EC. 2016 EU

Food and Veterinary Office

audit report noted issues

with residues in honey as two

detections of

chloramphenicol and

tetracycline.

Need

s an

d p

ote

nti

al H

VA

A in

terv

en

tio

ns Organize trainings for

beekeepers on Good

Beekeeping Practices, bee

disease prevention, modern

beekeeping, prepare

education materials.

Attract young people into

beekeeping.

Increase the number of

collection and storage

facilities that meet EU

standards.

Potentially increase the

range of products.

Develop new types of

packaging for honey and

honey products.

Link Transnistrian

beekeepers with

consolidators on the Right

Bank.

Support producer

groups in business

planning and

credit/grant

application.

Support the National

Association of

Beekeepers of Republic

of Moldova to build

analytical and advocacy

capacity to advocate for

reforms based on

evidence.

Inform producers about

specific EU requirements with

respect to residues, to

ensure compliance with EU

standards.

Develop new types of small

packaging for honey and

apicultural products for

domestic and international

retail markets as well as

restaurants.

Conduct end-market studies,

B2Bs, and promotional events

in new markets for honey in

retail packaging such as the

Middle East and Singapore.

Open field vegetables (for processing) Vegetable production remains one of the main branches of the horticultural sector of the Republic of

Moldova, which provides fresh vegetables to consumers and raw material to the canning industry,

Individually Quick Frozen (IQF) industry, and drying industry. Relatively favorable climatic conditions

of the country, traditions, and experience allows the cultivation of over 60 species of vegetable

crops, obtaining relatively high yields and good profit of most vegetable crops. Vegetable production

was particularly strong during the 1970s, 1980s, and 1990s but has declined considerably since then,

most recently as a result of trade restrictions with Russia. It appears that the production fall has hit

the bottom and an industry recovery is possible. Today canneries have an interest in a number of

vegetables including tomato, gherkins (length less than 9 cm) and cucumbers (length over 9 cm; up to

12 cm), sweet peppers and squash, as raw materials for processing. With this market demand on the

one hand, and underutilized land and water resources (rehabilitated irrigation systems) on the other

hand, there may be an opportunity to further develop this sector.

Production

According to official figures, the production of tomatoes and cucumbers in 2015 reached 54,000 tons

and 9,000 tons respectively. Production of sweet peppers (data for 2014) reached 13,000 tons. As

seen in Figure 12, the production of tomatoes and sweet peppers is substantially lower in the 2012-


2015 period compared to 2008-2011 period; a reflection of lost access to the Russian market, as a

result of a Russia-imposed trade ban. Production of gherkins and cucumbers has been a bit more

stable, averaging around 22,000 tons annually.

Figure 12. Production of tomatoes, gherkins and cucumbers, and sweet peppers

(greenhouse and open field) between 2008 and 2015 (thousand MT).

Data Source: Moldovan National Bureau of Statistics


Briceni, Soroca, and Stefan Voda are the primary regions for the production of vegetables; details on

production of vegetables are presented in Figure 13, and a summary of characteristics of tomato,

sweet pepper, and cucumber production is presented in Table 13 below.

Figure 13. Production of vegetables in Moldova counties. Includes all production (open

field and greenhouses) for all vegetables (does not include potatoes). Map developed by

HVAA using statistical data provided by the Moldovan National Bureau of Statistics.23

23 Data source: Moldovan National Bureau of Statistics (http://www.statistica.md/).


Table 13. Characteristics of tomato, sweet pepper, and cucumber production in

Moldova

Tomatoes Sweet peppers Cucumbers

Planted area (ha) in

2015

5,000 1,000 2,000

Total production (tons)

in 2015*

54,000 9,000 (in 2015) 13,000

Approximate number

of producers

Approx. 300 commercial

farmers producing for

processors.

There are also thousands

of small-holder farmers

producing for the

themselves and the local

market.

Approx. 1,000 but only

about 5 percent are

producing for processors.



producing for the


market.

Approx. 300 commercial

farmers producing for

processors.



producing for the


market.

Geographic distribution Grown primarily in

northern and central

Moldova. Very limited

production in southeast

Moldova.

Production throughout

Moldova.

Production is

concentrated in northern

part of Moldova.

Moderate production in

Central part. Very limited

production in south and

south east.

Average yields 11.4 t/ha (official figures)

100 t/ha are realized by

some producers applying

modern agricultural

techniques.

7.1 t/ha (official figures)

20-40 t/ha are realized by

some producers applying

modern agricultural

techniques using modern

hybrids.

7.9 t/ha

30-40 t/ha (for gherkins)

are realized by some

producers applying

modern agricultural

techniques.

50+ t/ha (for cucumbers)

are realized by some

producers applying

modern agricultural

techniques.

Price paid to farmers 1.5 to 1.7 lei per kg for

tomatoes destined for

tomato paste/juice. 3.0 to

3.5 lei per kg for tomatoes

destined for

marinated/canned

tomatoes in glass jars.

Paid on farm (includes 8%

VAT).

10 to 12 lei per kg on

farm (includes 8% VAT)

Similar price for fresh or

processing.

6.0 to 6.5 lei per kg paid

on farm (includes 8%

VAT) for gherkins up to

9 cm long, for processing.

2.5 to 3.0 lei per kg for

cucumbers longer than 9

cm up to 12 cm.

Irrigation Irrigated Irrigated Most areas irrigated

*According to HVA experts, the official production figures, especially for cucumbers, appear excessive.

Tomatoes

Tomatoes grown for processing can be divided into two main categories: (1) tomatoes for

production of tomato paste, tomato juice, different tomato sauces (these tomatoes are named by

“processors” as tomatoes for processing), and (2) tomatoes for canning to produce whole marinated

(in vinegar) tomatoes in glass jars or canned whole tomatoes in own juice also in glass jars. While the

production technology used for the above-mentioned group of tomatoes is generally the same, Table

14 (below) illustrates the slight differences.


Table 14. Production of tomatoes for processing

Final product Production technology

Tomato paste, juice, sauces

Processors have named these tomatoes as tomatoes for

processing

Using seeds that give a large harvest of up

to 120 tons per ha, with fruits weighing

between 50 and 150 grams

Tomatoes for canning of whole tomatoes

Whole marinated (in vinegar) tomatoes in glass jars

(0.72 L, 0.9 L, 1 L, 3 L)

Canned whole tomatoes in own juice in glass jars

(0.72 L, 0.9 L, 3 L)

Using seeds that give moderate harvest of

up to 60 tons per ha with fruits weighing

between 50 and 70 grams.

The tomatoes for processing are cultivated by sowing in the open field mainly between May 7 and 20.

There is a large number of seed varieties on the market including major world brands (Semenis,

Nunhems, Heinz, others). The assortment of varieties is sufficient; there is no problem for the

farmer to find the right variety targeting the fresh or processing market. Some producers use the

latest technologies including high number of seeds sowed per hectare, mulch, drip irrigation,

fertigation. The average yield obtained in Moldova under drip irrigation is 40 tons per ha for

tomatoes for processing and 10-15 tons per ha for tomatoes for processing under sprinkler irrigation.

In Moldova, the tomatoes for processing are cultivated on areas between 5 and 100 hectares, but the

average is around 10-20 hectares. The biggest tomato producer is Servest-Agro SRL (Briceni county,

Corjeuti village). Each year, Servest-Agro cultivates about 100 hectares of tomatoes for processing,

mainly for tomato paste and juice, and some for tomatoes marinated in vinegar in glass jars. In 2016,

Servest-Agro cultivated 104 hectares of tomatoes and harvested 7,000 tones of tomatoes, which were processed at their own processing facility in Corjeuti village.

The harvesting season takes place between July 20 and September 20, with up to 60 days of

harvesting. Many farmers harvest up to 40 days. The second part of August and September are the

main period of harvesting of tomatoes from the open field for processing. Harvesting is generally performed manually using plastic reusable crates of 15-20 kg.

In 2016 one tomato producer (in Riscani county) started harvesting tomatoes (from 40 ha)

mechanically using self-propelled harvester (second-hand). In 2016, this farmer (on contract bases)

supplied these tomatoes to two Moldovan processors: Orhei-Vit SA and Natur Bravo SA. The

production is profitable if production exceeds 30 tons per ha for tomatoes for processing (for

tomato paste and juice), which is possible to achieve under drip and sprinkler irrigation. The transfer

from manual harvesting to mechanical harvesting is the one of the most important steps for the

development of value chain of tomatoes for processing as it addresses the issue of lack of seasonal

labor. Tomato harvesters can be two types: (1) self-propelled harvesters, which is more expensive

and needs bigger areas of tomatoes production, and (2) harvester trailed to the tractor, which are

less expensive than the self-propelled harvesters and can be efficiently used at midsized farms (10-50 ha).

Gherkins (3 - 9 cm) and cucumbers (9 - 12 cm)

The gherkins and cucumbers for processing are cultivated by sowing in the open field mainly between

May 6-20 when the probability of frosts is very low. There are a large number of seeds on the

market including major world brands (RijkZwaan, Semenis, Bejo, Nunhems, Claus, others). The

assortment of varieties is sufficient; there is no problem for the farmer to find the right variety

targeting the fresh or processing market. Some producers use the latest technologies including the


appropriate number of seeds per hectare (40,000 - 53,000 seeds per hectare), mulch, drip irrigation,

fertigation (only in cases where hybrid seeds are used). The production is profitable if production

exceeds 12 tons of gherkins (up to 9.0 cm) per ha. The average yield obtained in Moldova under the

irrigation is 40 tons per ha for cucumbers and 20 to 35 tons per hectare for gherkins. The best

performing producers in Moldova can exceed yields of 50 tons per hectare for cucumbers and 40

tons per hectare for gherkins.

The harvesting season of gherkins and cucumbers in open field occurs between June 20 and August

20, with up to 60 days of harvesting. Many farmers harvest up to 30-40 days. July is the main period

of harvesting of gherkins and cucumbers from the open field. Harvesting is performed manually using

plastic reusable crates of 15-20 kg. Self-propped harvesters do not exist. However, one producer

(Servest-Agro LLC), as the largest gherkins growers (20-25 ha of land) has its own harvester

equipment (GurkenFliegerPlatfrom). Farmers do not have their own calibration machines and even

some processors (including large ones) do not have calibration machines, and thus calibration is

done manually. This is a problem as the final product is not standard, which can cause issues with the

final buyers. For example, buyers in Russia and other CIS countries demand canned gherkins not to

exceed 9 cm in length hence producers need to strictly comply with the dimensions specified on the

jars.

Sweet peppers

Sweet pepper producers can access a range of varieties of sweet peppers, including hybrid seeds.

Some producers also use seeds they produced on their own. The main varieties used for production

are presented below:

Leading farmers use innovative technologies including modern hybrid seeds, mulch, drip irrigation,

fertigation (only in case of producers using hybrid seeds). The production is profitable if production

exceeds 11 tons per ha. The average yield obtained in Moldova under the irrigation is 50 tons per ha

for 50,000 seedling per ha using hybrid seeds varieties. Those producers that are using non-hybrids

varieties of seeds plant 70,000 seeds per ha and then obtain a similar yield (40 - 50 tons per ha).

Harvesting usually starts from the middle of August when producers can obtain 15 lei per kg and

continue until early October when prices are lower at around 10 lei per kg. Green sweet peppers

that appear in July are not preferred by consumers because they prefer yellow, orange or red, which

are perceived to be sweeter. Harvesting is performed manually using baskets. Precooling is not used.

Sweet peppers are usually packed in 20 kg and 10 kg bags or into banana boxes.

Main varieties (shapes) used for production in Moldova :

a) long with hot

pepper shape

b) conic shape c) wide conic with 4 lobs d) round shape


Processing in Moldova

There are currently 18 canneries, processors of fruit and vegetables, in Moldova; four of which have

been inactive in 2016 due to impediments to export products to Russia, as a result of the selective

permissions for export and depreciated Russian rubble (see Figure 14). Figure 14 also indicates that

most of these canneries are located in relative proximity to irrigation areas rehabilitated by MCC

Compact, suggesting that theoretically such processors could procure products cultivated in these

areas.

Figure 14. Location of large canneries, processors of fruit and vegetables, as well as the

Water User Associations supported by MCC Compact

Cucumber and gherkins

Production and processing of vegetables is close to an all-time low, however there is unmet demand

in Russia. There is potential to export 5,000 tons of preserved cucumbers to Russia, for example.

However the offered price of 70 rubles (approx. 1.20 USD) per one kilogram of cucumbers up to 12

to 14 cm in length preserved in salt and packed in plastic barrels (70-200 kg each) paid upon delivery

in Moscow, is considered low by Moldovan producers. As such, Moldovan producers have focused

on exporting to Romania and the Baltic States where they can obtain higher prices.

The main processors of cucumbers in Moldova are Servest-Agro SRL, Alfa-Nistru SA, Natur Bravo

SA, Orhei-Vit SA, Conserv-Grup SRL, Covali&Co SRL, and Calarasi cannery, which collectively

processed about 1,500 - 2,000 tons of cucumbers in 2015. All of the large canneries, except Servest-

Agro SRL, focus on producing gherkins and cucumbers in glass jars (0.72 L, 0.9 L, 1.5 L) in vinegar or

salted and do not produce salted gherkins or cucumbers in plastic barrels (70-200 kg) or in retail


polyethylene vacuum package (0,5 kg) (see Figure 15). There are about 30 small and medium

processors in Moldova that produce cucumbers and gherkins preserved in salt in wholesale package

in plastic barrels. Collectively they procure and process at least two thousand tons of cucumbers per

year, which is more than the large canneries.

Figure 15.Cucumbers in polyethylene vacuum package (0.5 kg)

The biggest processor of gherkins and cucumbers in Moldova,

which produces gherkins and cucumbers preserved in salt, is

Servest-Agro SRL from Briceni county. Servest-Agro processes

each year between 900 and 1800 tons of gherkins and

cucumbers, as well as large quantities of tomatoes. About 60

percent of gherkins and cucumbers processed by Servest-Agro

(size from 6 cm to 14 cm) are preserved in salt and packed in

wholesale package (plastic barrels, 70-100 liters). The remaining

40 percent of gherkins and cucumbers (basically gherkins (3-9

cm) and less cucumbers (9-14 cm)) are preserved in vinegar and

packed in glass jars (0,72 liter; 1,0 liter; 3,0 liter). Servest-Agro

is also the biggest gherkin and cucumber grower in Moldova;

the company cultivates gherkins and cucumbers on about 20 ha

of land. In addition, Servest-Agro contracts local farmers from

its micro-zone for production of gherkins and cucumbers (total

cultivated areas is roughly 30-40 ha) in order to be procured

and processed in their cannery.

Canneries procure gherkins and cucumbers from farmers based on a contract farming scheme. In the

first couple of months of each calendar year, canneries sign supply contracts with farmers for the up-

coming production season. The contract includes (1) the volume of acquisition in tons, (2) sizes (3-6

cm, 6-9 cm, 9-12 cm), (3) period of delivering (as usual from middle of June till September), (4) price

(some canneries indicates fix price in the contract (procured in the field, supplied by the farmer to

the cannery), but some canneries write in the contract that the price will be fixed directly in the

acquisition season (in summer period)). Due to the shortage of gherkins and cucumbers on the

market for processing there is a large demand from processors hence they offer a reasonable price

and good payment terms (up to 10 days; compared to tomatoes, peaches, prunes or apples where

producers may wait between 10 and 120 days to be paid).

Tomatoes

The main processors of tomatoes in Moldova are Servest-Agro SRL, Orhei-Vit SA, Alfa-Nistru SA,

Natur Bravo SA (two production units) which collectively processed about 10,000 tons of tomatoes in 2016.

The above canneries produce a range of products such as: (1) tomato paste in bulk in aseptic sacs

packed in metal barrels for future own production of tomato juice in off-season period, (2) tomato

paste in glass jars (0.4 L and 0.72 L), (3) tomato juice in tetra-pack package (1L, 2L) and in glass jars

and bottles (1L and 3 L), (4) whole marinated tomatoes (also cherry-tomatoes) in vinegar in glass jars

(0.72 L, 0.9 L, 1.5L and 3 L), (5) whole tomatoes in own juice in glass jars (0.72 L, 0.9 L, 1.5L and 3 L).

Canneries procure tomatoes from the farmers based on a contract farming scheme. In the first

couple of months of each calendar year, canneries sign supply contracts with farmers for the up-

coming production season. The contract includes (1) the volume of acquisition in tons, (2) sizes,

color in detail, weight (for canned/marinated tomatoes and cherry tomatoes), (3) period of

delivering (usually from June 20 until the October 10), (4) price (some canneries have a fixed price in


the contract (procured in the field, supplied by the farmer to the cannery), but some canneries write in the contract that the price will be fixed during the acquisition season (in summer)).

It is important to note that that the larger canneries (Orhei-Vit SA, Alfa-Nistru, Natur Bravo, and

new cannery TB-Fruit) are interested in processing much larger volumes of tomatoes than they have

been processing in last five years; current capacities are underutilized. Some canneries are interested

to process about 30,000 tons for tomatoes on an annual basis in one production unit (which is about

three times as much as all canneries have processed together). Interviewed management in some

canneries stated that they would consider investing in additional tomato processing lines provided

they can procure much larger quantities of tomatoes than they have been able to source in previous years.

Sweet peppers

Several processors such as Alfa-Nistru SA and Natur Bravo SA procure sweet pepper for processing

as salads type lechio24 and mixed ragu25 canned peppers marinated in vinegar. Alfa Nistru SA, Rikardel

SRL, and Ecoprodrosmol SRL deep freeze vegetables while Alfa Nistru also cans them. Processors

use contracting farming methods to procure vegetables. Yellow and red varieties are preferred for

exports. On the domestic fresh markets, consumers prefer red peppers with thick pericarp.

Global production26

Pepper (Capsicum sp.) is one of the most varied and widely used foods in the world. Virtually every

country in the world produces pepper. Globally, pepper production exceeded 32.3 million MT in

201427. China was the leading producer of peppers in 2014 (16.1 million MT) accounting for about

50% of the world production. Mexico at 2.7 million MT, and Turkey at 2.1 million MT accounted for

8.5 and 6.6 percent of production respectively.

Worldwide production of cucumbers and gherkins reached 75 million MT in 2014. China was the

leading producer of cucumbers in 2014 (56.9 million MT) accounting for close to 76 percent of the

world production. Russia, Iran, and Turkey at about 1.8 million MT, each accounted for about 2.4

percent of the global production.

In 2014, the world production of tomatoes reached 170.8 million MT with China accounting for

nearly 30 percent of the world production (50.7 million MT). India at 18.7 million MT, USA at 14.5

million MT, and Turkey at 11.8 million MT accounted for 11 percent, 8.5 percent, and 7 percent of

the worldwide production respectively.

Markets

The world market for processed tomatoes, cucumbers and gherkins, and sweet

peppers.

According to UN COMTRADE data, the global market for processed tomatoes (preserved by

vinegar) was worth 4.4 billion USD in 2015; with an annualized growth between 2011 and 2015 at 1

percent (Table 15). The UK was the largest importer of this product, reaching close to 479 million

USD in 2015, which accounted for close to 11 percent of global imports. Germany, Japan, France, the

Netherland, and Italy were the next largest importers. The global market for preserved tomato

24http://www.naturbravo.md/ru/produktsiya/ovoschi/prochaya-konservirovannaya-produktsiya/lecho-0720.html 25http://www.naturbravo.md/ru/produktsiya/ovoschi/prochaya-konservirovannaya-produktsiya/ragu-ovoschnoe-

0430.html 26 Information in this section is sourced from Nuts & Dried Fruit, Global Statistical Review 2015-2016,

http://www.nutfruit.org/wp-continguts/uploads/2016/05/Global-Statistical-Review-2015-2016.pdf 27UN FAOSTAT data: http://www.fao.org/faostat/en


products has been growing very slowly (2 percent annualized growth by value between 2012 and

2015). Some of the faster growing markets include Mexico (61 percent growth between 2011 and

2015), Saudi Arabia (57 percent growth between 2012 and 2015), and the Netherlands (33 percent

growth between 2012 and 2015).

The global market for tomato ketchup and other tomato sauces was worth 1.8 billion USD in 2015.

The annualized change between 2011 and 2015 is negative 1 percent in quantity but annualize growth

in value over the same period has been 2 percent. The four most significant importers in 2015

include Canada (232 million USD, 12.5 percent share in global imports), France (207 million USD,

11.1 percent of global imports), United Kingdom (199 million USD, 10.7 percent of global imports),

and Germany (160 million USD, 8.6 percent of global imports). Of the four largest markets, only

Canada has been increasing imports (48 percent increase between 2011 and 2015). Saudi Arabia is a

another growing market having increased imports of tomato ketchup and tomatoes sauces from 30

million USD in 2011 to 52 million USD in 2015 (73 percent increase).

The global market for processed vegetables (HS 200599), which can utilize tomatoes, cucumbers, and

peppers, was worth 2.7 billion USD in 2015. The global market for processed vegetables has been

growing steadily averaging 6 percent annualized growth between 2011 and 2015. The U.S. was the

largest importer of this product, exceeding 488 million USD (18.2 percent of global imports). Japan,

Germany, France were the next largest importers, however these markets experienced a fall in

imports of this product between 2012 and 2015. On the other hand, exports increased to Canada

(44 percent growth between 2012 and 2015), Australia (34 percent growth between 2012 and 2015),

and Korea (16 percent growth between 2012 and 2015).

The global market for preserved cucumbers was worth 548 million USD in 2015. The largest market

for the product in 2015 was Canada (nearly 65 million USD) accounting for 11.8 percent of global

imports; closely followed by Germany (10.3 percent), the U.S. (9.8 percent), and the Netherlands

(7.7 percent). The annualized growth in imports between 2011 and 2015 has been only 1 percent.

Australia is one of the few countries experiencing strong growth in demand (nearly 33 percent

growth between 2012 and 2015). The largest exporter of preserved cucumbers in 2015 was

Germany with exports totaling close to 110 million USD, thus accounting for about a fifth of world

exports. India, Turkey, and the U.S. were the next largest exporters. Moldova is ranked 29 out of

113 countries that export this product.

There is not a specific HS code for processed sweet peppers that can be access through UN

COMTRADE data.

Table 15. Snapshot of key global trade data for processed vegetables

Tomatoes

(preserved)

(HS code: 2002)

Tomato ketchup

and other tomato

sauces

(HS code: 210320)

Processed

vegetables

(HS code: 200599)

Cucumbers

(preserved)

(HS code:

200110)

Global market size

(2015)

$4.4 billion USD $1.8 billion USD $2.7 billion USD $548 million USD

Global market growth

(annual growth in

quantity (2011-2015)

1 percent -1 percent 3 percent 1 percent

Global market growth

(annual growth in value

2011-2015)

2 percent 3 percent 6 percent 1 percent

Moldova's market share

in the world (percent of

total exports in value)

0.002 percent

0.001 percent

0.09 percent

0.24 percent

Exports from Moldova

(2015) (USD)

$106,000 USD $23,000 USD $2.3 million USD $1.15 million USD

Moldova's imports (2015)

(USD)

$933,000 USD $1.98 million USD $189,000 USD $105,000 USD


Export of fresh and processed tomatoes, cucumbers and gherkins, and sweet peppers

from Moldova

It is difficult to provide exact figures on exports and imports of processed tomatoes, cucumbers and

gherkins, and sweet peppers, as these can be found in a range of products where various ingredients

may be mixed to produce preserved produce. To provide a robust overview of Moldova's exports

and imports of these products, HVAA has obtained trade-related data for both fresh and processed

produce as described in Table 16. Some products, such as other processed vegetables (HS code

200599) do not have a clear correlation to a particular product (and likely include other crops not

included here) but are still relevant as they represent a range of processed goods that Moldova

trades.

Table 16. Harmonized System (HS) codes used for trade data for fresh and processed

tomatoes, cucumbers and gherkins, and sweet peppers

HS Code Product

702 Tomatoes, fresh or chilled

200599 Other processed vegetables

200110 Cucumbers and gherkins, preserved by vinegar or acetic acid

70960100 Sweet peppers, fresh or chilled

707 Cucumbers and gherkins, fresh or chilled

2002 Tomatoes preserved by vinegar or acetic acid

210320 Tomato ketchup and other tomato sauces

In 2015, Moldova exported $7.9 million USD worth of fresh and processed products (as per HS

Codes in Table 16 above). This is a significant fall since the peak of 2011 when Moldova exported

nearly $23.5 million USD of such products. The fall in exports of fresh and processed tomatoes has

been particularly severe (Figure 16 below ). The reason for the fall is almost exclusively due to the

loss of access to the Russian market due to the trade embargo. Moldova's producers and processors

have struggled to find alternative markets for their products. Exports have slightly increased to

Belarus, other CIS countries and Romania, but this is not even close to the value of exports that

went to Russia. The Russian import ban was partially canceled and since then some Moldovan

canneries (Alfa-Nistru SA, Natur Bravo SA) have been able to export to Russia, but other canneries,

such as Orhei-Vit SA, still cannot export. However, the dramatic depreciation of the Russian Ruble is

currently the main obstacle for increasing exports to Russia by Moldovan canneries, which are

permitted to export to Russia. There are some indications that the fall in exports has hit the bottom.

For example, Moldova increased exports of preserved cucumbers and gherkins from 854,000 USD to

$1.16 million USD between 2014 and 2015 which is a 35 percent increase, an increase from a low

base notwithstanding.

javascript:__doPostBack('ctl00$PageContent$MyGridView1$ctl03$LinkButton_Product_Code','')





Figure 16. Export of fresh and processed tomatoes, cucumbers and gherkins, sweet

peppers from Moldova between 2011-2015 (thousand USD).28

Imports of fresh and processed tomatoes, cucumbers and gherkins, and sweet peppers

from Moldova

As a large proportion of imported fresh produce was re-exported, there was a commensurate fall in

imports of various produce at the same time as exports stopped to Russia. This has been particularly

the case with fresh or chilled tomatoes which has seen a 400 percent fall in imports to Moldova

between 2011 and 2015 (from 12.6 million USD in 2011 to 3.1 million USD in 2015) (see

Figure 17). Still, however, imports of fresh tomatoes and tomato ketchup and sauces in high, and

there may be opportunities for import substitution. Imports of fresh peppers has increased over time

(from $1.8 million USD in 2011 to $2.6 million USD in 2015) primarily from Turkey and much of it

entering the retail sector, suggesting a potential opportunity for import substitution. Imports of

preserved cucumbers and gherkins are relatively stable between years but very low at $105,000 USD

worth of imports in 2015 (note that imports of fresh cucumbers have also been falling over the

years) suggesting that the domestic market is saturated, hence excess products must find a market

outside of Moldova.

From this data it is very clear that finding a buyer first must be a precondition before embarking on

any new production.

28 Data source: UN COMTRADE data though ITC Trademap: http://www.trademap.org


Figure 17. Imports of fresh and processed tomatoes, cucumbers and gherkins, sweet

peppers from Moldova between 2011 - 2015 (thousand USD).29

Social inclusion

There are hundreds of commercial farmers that supply vegetables to processors. In addition, there

are thousands of small holder farmers that produce vegetables for the local market or to meet family

needs.

Gender

Women are mostly engaged in the harvesting and to some extend in the production stage such as

seedling production, planting, manual combating of weeds (in case of smaller production area). Labor

costs are approximately 150 - 200 lei per day. Additional opportunities for women could be in

calibration and packaging but this production stage is not yet well developed in these value chains.

Introduction of irrigation can also increase the demand for women’s labor in channel maintenance,

water use control, and weeding. To help ensure a viable and sustainable irrigation scheme, it is,

therefore, necessary to take into account the potential increased demand for women’s labor in

irrigation and irrigated crop production. It is necessary to accommodate competing demands and

ease women’s time constraints. These measures can also help maintain production in other areas,

such as women’s production on non-irrigated land and livestock production.

Based on data from the 2015 subsidy fund, the share of women (compared to men) in receiving

subsidy funds is between 9 and 21 percent depending on the subsidized activity (See Table 17). The

share of women was the lowest (at 9 percent) for irrigation cost subsidies.

29 Data source: UN COMTRADE data though ITC Trademap: http://www.trademap.org


Table 17. The share of women receiving subsidies through the Moldovan subsidy fund in

2015.

Subsidized measure No. of women which

applied for subsidies

Share of women in

comparison to men

(%)

Production of vegetables on protected areas

winter greenhouses, solariums, tunnels

34 20

Setting up, modernization and deforestation of

multiannual plantations, including wine and fruit

plantations

108 21

Investment on procurement of agriculture

machinery and agricultural conventional

equipment

179 16

Investments on postharvest and processing

infrastructure development

48 19

Access facilitation to capital market and

production factors for agricultural producers,

including lending to agricultural producers by

commercial banks and financial institutions

194 17

Covering of the costs supported by agricultural

producers for irrigation

4 9

Youth

Open field vegetable production can be an opportunity for youth to start their agricultural farming

operation. The cost of starting vegetable production are generally lower than fruit orchards

(economic production of fruits requires a large land area) and returns can be expected the same

year, which is not the case with fruit and nut growing. However, the upfront investment required is

higher than for berries or entry into beekeeping. The Government of Moldova also provides added

incentives for young adults (those under 35) to work in agriculture though the subsidy fund, which

provides added incentives for young adults (Table 18).

Table 18. The share of youth (those aged under 35) receiving subsidies through the

Moldovan subsidy fund in 2015.

Subsidies measure No. of young applicants for

subsidies

Share of young producers

(%)

Production of vegetables on

protected areas winter

greenhouses, solariums,

tunnels

81 48

Setting up, modernization and

deforestation of multiannual

plantations, including wine and

fruit plantations

185 36

Investments on postharvest

and processing infrastructure

development

51 20



The Moldovan Agency for Interventions and Payment for Agriculture (AIPA) administers the subsidy

fund on behalf of the Moldovan Ministry of Agriculture and Food Industry. Subsidies are currently not

provided for open field vegetable production; subsidies only support the production of vegetables in

protected areas. However, all vegetable producers can receive subsidies for irrigation. The subsidy


program for irrigation can cover 50 percent of the cost of irrigation equipment without VAT 20%

under Measure 2.2 (not to exceed 1 million lei per beneficiary for drip irrigation set of equipment

and not exceed 800,000 lei for sprinkler and micro-sprinkler irrigation set of equipment) and to

cover part of the cost of water for irrigation (not to exceed 500,000 lei per beneficiary, with

exception of Water Users Association). In 2015, the total amount offered for Measure 2.2, for the

entire vegetable production, was close to 8.79 million lei.

The open field vegetable production can benefit substantially from irrigation. Rehabilitation of central

irrigation systems (CIS) was one of the objectives of the Compact Agreement signed in early 2010

between the Government of Moldova and the Millennium Challenge Corporation (MCC). To deliver

on this objective, the U.S. Government has invested about $80 million USD in the rehabilitation of 10

irrigation systems that can irrigate more than 15 thousand hectares of land farmed by about 9

thousand farmers. Moreover 10 Water Users’ Associations (WUAs) were established to manage the

rehabilitated irrigation systems. These irrigation systems are currently severely underutilized. Under

irrigation, open field vegetables are expected to produce higher yields and better quality products

and overall improve the competitiveness of this production. Coșnița and AcvaGrup are currently the

leading WUAs under open field vegetable production - both exceeding 200 ha.


Agricultural advisory services in vegetables production are relatively strong and are mainly provided

by ACSA consultants, particularly in the following regions: Anenii Noi county and Ungheni county.

Agricultural input suppliers such as Irrigata Crop Service LLC, Strimedit SRL, Agrodor-Succes SRL

and others vegetable seed dealers also offer advisory support to producers. However, based on

discussion with producers, there still remains insufficient knowledge on plant protection, fertigation,

and the use of hybrid seeds in production. The continuing education course for “Producer of

vegetable and fruits” used to be provided by ProCore NGO based on the MAFI licenses. But at the

moment this curricula is under revision and recertification. The NGO plans to start courses at the

Center in Excellence in Taul village. Currently there is a lack of a professional association of

vegetable producers, in the same time association of fruit and vegetable canneries exist in Moldova –

“Speranta-Con”.



Key environmental issues related to vegetable production, particularly highly intensive types of

production, are associated with the use of pesticides, artificial fertilizers, and use of irrigation.

Pesticides may eliminate beneficial insects, pollute surface and groundwater, accumulate in plant and

animal tissue and affect human health. Excess nutrients reduce soil and water quality and cause plant

toxicity. Additional issues include soil erosion, which is mainly an issue on steep terrain and areas

with little perennial cover; soil erosion is not a high risk in mildly undulating terrain which is common

in Moldova. Soil compaction can be an issue depending on farming methods. Use of rehabilitated CIS

for irrigation can affect environmental flows and reduce soil and water quality. During the vegetation

period, fields may be irrigated a dozen times; total volume of water use reaching 3500-4200 m3/ha

when sprinkler irrigation is uses and 700-800m3/ha in case of drip irrigation. Pesticide use can also

affect non-target organisms, including bees. Pesticides may be applied up to six times during the

vegetation period.


Moldova is considered highly vulnerable to climate variability and change. Impacts are expected to

intensify as changes in temperature and precipitation affect economic activity. The analysis of the air

annual average temperature during 2007–2010, as compared to the multiannual average, shows that

this period is characterized by significant thermal anomalies, especially in 2007, which is considered


to be among the hottest years in the last 120 years. Socioeconomic costs of climate-related natural

disasters such as droughts, floods and hailstorms are significant, and both the intensity and frequency

of such events are expected to further increase as a result of climate change. The impacts of climate

change on agriculture are of particular concern because agriculture is a major source of income and

employment. The severe droughts of 2007 and 2012 impacted on more than 80 per cent of the rural

population depending on agriculture. Floods in 2010 caused damage, primarily affecting rural and

agricultural regions of the country, which was estimated at approximately $42 million USD.

Green opportunities

To minimize cumulative environmental impacts there are opportunities to promote good agricultural

practices including climate-resilient agriculture (such as drip-irrigation) in primary production, and

cleaner production, energy efficiency and a culture of environmental compliance and governance in

agricultural processing. The procurement or use, promotion of or training in use of pesticides, can be

conducted within the framework of Integrated Pest Management (IPM) and following safe use

practices, thus minimizing potential adverse impact on the environment.


A key conclusion from the sector analysis is that the existing processing capacities are severely

underutilized. Processing companies are very interested to procure much larger quantities of

vegetables for processing from farmers, at a price which would enable them to produce a final

product that is competitively priced on the international market. Many farmers are reluctant or

unable to produce vegetables for processors as it requires a shift from traditional production

techniques to modern, intensive production techniques using irrigation and fertilizers, to make a

profit. However, it is indeed possible to make a solid profit from such production as shown through

examples of many commercial farmers in Moldova that are already selling vegetables grown on open

fields to processors. For HVAA, this is an opportunity to support this value chain by supporting

farmers to produce vegetables in open fields using modern production techniques including drip

irrigation utilizing CIS rehabilitated by MCC Compact; improving harvesting and post-harvest care;

and ensuring contractual relationship between farmers and processors as well as identifying and

securing end markets for the final product.

Summary of constraints, challenges, needs and potential HVAA intervention in the Moldovan Open

field vegetable sector is presented below (Table 19).


Table 19. Constraints, challenges, needs and potential HVAA interventions in the Open

field vegetable sector


Finance

Enabling

Environment

Marketing

Co

nst

rain

ts a

nd

ch

allen

ges Low yields

Contract farming

undermined by poor

repayment history and in

for some crops small prices

paid by processors

Lack of producer groups -

farmers aggregating to

produce the same crop for

a processor

Lack of seasonal workers

for manual harvesting

Lack of calibration

equipment

Insufficient

agricultural

finance

Lack of an association of

vegetable producers

Unstable Russian market

(selective trade bands,

depreciated currency)

Slow market growth (also

declining imports for some

products in some EU

countries)

Need

s an

d p

ote

nti

al H

VA

A in

terv

en

tio

ns

Promote modern

production technologies

through training in plant

protection, fertigation,

seedling production in

pallets, use of hybrid

varieties, water and soil

quality management

Promote utilization of CIS

in MCC Compact regions;

and linking these farmers to

processors.

In partnership with input

suppliers, establish

demonstration sites (in

areas with high

concentration of

production) to promote

innovations in the sector:

hybrid seeds, use of mulch,

fertigation, calibration,

refrigeration, packing.

Support the formation of

producer groups. Support

contract farming.

Support the procurement

of specialized harvesters

(for tomatoes and

cucumbers) and calibration

equipment for gherkins and

cucumbers

Promote IQF processing,

which may have better long

term prospects than

canning

Support producer

groups in business

planning and

credit/grant

application

Support design

and

implementation of

value chain

finance packages

led by processors

and their banks

Support the

establishment of an

association dedicated to

support vegetable

producers.

Support the creation of

vegetable producer

groups, especially in CIS

in MCC Compact regions

Promote vegetable

consumption and Moldovan

brands though marketing

campaigns

Identify and secure new end

markets for final products

Promote new product mixes


Medicinal and Aromatic Plants (MAPs) Medicinal and Aromatic Plants (MAPs) are

botanical raw materials, also known as

herbal drugs, that are primarily used for

therapeutic, aromatic and/or culinary

purposes as components of cosmetics,

medicinal products, health foods and

other natural health products. They are

also the starting materials for value-added

processed natural ingredients such as

essential oils, dry and liquid extracts, and

oleoresins. There is a clear industrial

demand for MAPs thanks to the increased

production of herbal health care formulations; herbal based cosmetic products and herbal nutritional

supplements. In addition, traditional health care practitioners, traditional healers and consumption at

the household level have all contributed to the demand for herbal medicinal products. Finished

products made from medicinal and aromatic plants are increasingly demanded by consumers. The

global market for botanical and plant-derived drugs is worth more than 30 billion USD31; while the

global market for essential oils was worth 4.5 billion USD in 2015, according to UN COMTRADE

data for HS Code 3301.

For the purpose of this analysis, the MAP sector will be considered to include cultivation, collection,

as well as processing of MAPs into value added products such as essential oils.

Production

The MAP sector was very developed in Moldova in the 1980s, when there were 38 state agriculture

companies (state farms and kolkhozes) cultivating about 22 thousand hectares of aromatic and

medicinal plants in addition to 12 large processing plants producing 180 to 200 tons of different types

of oils (lavender, rose, sage, etc.) annually. Currently there are only about 20-25 different size

businesses (including 6 large businesses) cultivating MAPs such as lavender, sage, hyssop, and fennel

on about 2,000 hectares; and five companies processing MAP products while three are focused on

exports. Total volume of produced essential oils is estimated at 20 tons per year. Processing

companies utilize both MAPs cultivated in the fields and collected from the wild. Approximately 45

MAP species are utilized in the MAP sector out of which about 20 species are collected from the

wild and about 25 are cultivated. Table 20 illustrates the most commonly utilized MAP species for

commercial purposes in Moldova.

30 Data obtained from UN COMTRADE ITC: http://www.trademap.org 31 http://www.intracen.org/itc/sectors/medicinal-plants/

Snapshot of key indicators (HS Code 3301)30

Planted area (ha) in 2015 2,000 ha

Total production (tons) in 2015 20 tons

Global market size (2015) $4.5 billion USD

Global market (annualized) growth in

exports 2011-2015 (quantity) 6 percent

Global market (annualized) growth in

exports 2011-2015 (value) 8 percent

Exports from Moldova (2015) -

essential oils

$1.98 million USD

Imports to Moldova (2015) $332,000 USD


Table 20. Main MAPs for Moldova

Latin name of the species Name of the species

in English

Plant source Use Direction/type of

final product

Lavandula officinalis Chaix ex

villars

lavender cultivation Perfumery/ oil

Salvia sclarea and salvia

officinalis

clary and sage cultivation Medicinal,

Perfumery/dried, oil

Hyssopus officinalis hyssop cultivation Medicinal, food/oil, dried

Foeniculum vulgare Mill. fennel cultivation Medicinal/ oil, other types

of processing

Anethum dill cultivation Medicinal/oil, dried

Origanum vulgare oregano cultivation and wild Perfumery, medicinal/oil,

dried

Rosa rose flower cultivation Perfumery,

confectionary/oil, dried

Calendula officinalis English marigold cultivation Medicinal/ dried, oil

Ocimum basilicum basil cultivation Medicinal, food/ dried,

fresh

Mentha incana Willd menthol mint cultivation Perfumery, medicinal,

food/ oil, dried, fresh

Tiliae cardama’ flores linden’ flowers Mainly wild, some

cultivation

Medicinal/Dried

Setthini’ flores acacia’ flowers flowers Mainly wild, some

cultivation

Medicinal/Dried

Rosa canina dog-rose/canker rose Mainly wild, some

cultivation

Medicinal, food/Dried

Urtica dioica nettle Wild Medicinal/dried

MAP cultivation

The largest area of MAPs under cultivation in Moldova are under lavender, sage, hyssop, fennel, dill

and oregano; however, the value of production is highest for sage, lavender, and rose flower (Table

21).

Table 21. MAP cultivation and production of final products. Source of data: HVAA

interviews with key producers/processors

MAP

species

Cultivated

area (ha)

Final product Annual

production

volume (tons)

Ex-Works

price, USD /

kg of oil

Approx.

value of

production,

USD

Lavender 550 oil 5 to 6 45-75 $450,000

Clary sage 350 essence mainly 3.5 to 4 115-125 $500,000

Hyssop 340 oil 0.7 to 0.8 70-80 $65,000

Fennel 290 oil 3 to 3.5 15 $55,000

Dill 250 oil 4 to 5 30 $150,000

Oregano 170 oil 2 to 2.5 70-120 $275,000

Rose flower 50 essence 0.02 - 0.05 10,000 $400,000

Total 2000 18 - 22 $1,895,000

In almost all cases, these are large plantations (>100 ha) integrated with processing units to obtain

essential oils, and concentrated absolutes. The major operations include:


Molsalvia Ltd, with plantations and processing units in Riscani and Causeni districts (recently

the ownership changed from Bruder Unterweger to Mane SA32, one of the largest French

flavor and fragrance houses);

Resendjer Ltd, a UK-Moldova joint venture in Rezina district;

Cioara Ltd in Hincesti;

Aroma CAP in Anenii Noi; and

Girlea Andrei Family Farm in Rezina district.

Several plantations are managed according to organic production principles, but only a few have local

or EU certifications.

The second type of plantations are those of medicinal plants, including based on contract farming

with medicinal plant processors (such as Medfarma Ltd, Doctor-Farma, and international buyers).

The main species are: calendula, menthol mint, melissa, and ordinary basil. The processors use the

raw material to produce:

dried, shredded and packed medicinal plants in small cardboard boxes (per 40,50, 100 grams)

for treatment of different illnesses sold through Moldovan drug-stores or exported;

teas and drinks;

phyto-balneology bags; and

essences from different medicinal plants (calendula, salvia officinalis, others) packed in small

bottles (50-200 ml) and sold through Moldovan drug-stores or exported.

Viorica Cosmetic Ltd, the largest Moldovan perfumery-cosmetic factory, has little interaction with

the sector.

MAP cultivation is profitable but requires significant investment. At current prices for inputs and final

product, a lavender plantation integrated with a distillation unit can provide returns of about $1,800

USD/ha, which is three times higher than field crops such wheat or maize, but lower than fresh fruit

orchards (5.000-25.000 USD/ha). Based on discussions with current producers, a new entrant in this

business should plant at least 250 ha of lavender fields, which requires an investment of around

$340,000 USD. Major production costs are fertilizers for cultivation, labor for harvesting, and fuel for

distillation. Cost for labor harvesting represent around 1/3 of production costs (150-300 workers

would be required for the 250 ha plantation), and Moldovan lavender production should be

competitive on world market based on cheaper labor availability. Some Moldovan farmers have trials

to mechanize at least a part of harvesting operations, but still there are no proven solutions that

would not adversely affect the quality of the final product.

Collection from the wild

About 20 species are commonly collected from the wild - mainly in forests and to a lesser extent

adjacent to cultivated fields. The majority of these plants are collected through the collection system

of Moldsilva State Forest Agency, by the employees of Moldsilva. The central administration of

Moldsilva each year (in January-March period) signs sale contracts with one or two buyers (usually a

foreign company) for selected wild-grown medicinal plants in forests managed by Moldsilva. For the

last three years Moldsilva had signed contracts with a Romanian company. Under the contract signed

for 2015, eighteen different species of MAPs were collected from the wild. Based on this contract,

the central administration of “Moldsilva” provides a collection plan to each Moldsilva’ territorial

branch, which provides instruction on the kind and quantities of MAP species to be collected from

the wild). Moldsilva’s employees collect MAPs, air dry them (natural ventilation under shade), pack in

big sacs and supply to the buyer.

32 www.mane.com

http://www.mane.com/


Global production

Leading suppliers of essential oils are depicted in Table 22.

Table 22. Global production of essential oil33

Product Volume

(tons)

Major suppliers

Coriander

oil

700 Russia, Ukraine, Egypt

Lavender oil 420 France, Bulgaria, Australia (Tasmania), China,

Moldova

Lavandin oil 1200 France

Dill seed oil 140 India

Fennel oil 120 China, Egypt, Greece

Clary sage

oil

50 Russia, USA, Spain, France

Basil oil 50 Reunion, Comoros, Madagascar, France, Egypt,

India

Chamomile

Oil

50 Eastern Europe, Egypt, Italy, France, Morocco

Hyssop unknown Bulgaria, other Europe

Rose oil 20 Bulgaria, Turkey, Morocco, France

Markets It is difficult to estimate the value of the sector as there is not a comprehensive and exhaustive listing

of harmonized tariff codes for MAPs and their extracts. Many countries are struggling with the lack of

specificity of their tariff schedules and are looking to add more specific 8- and 10-digit codes for their

most important botanical imports and exports.

Even where national schedules of tariff codes are referenced by an enterprise, these lack the

specificity to differentiate down to the botanical species level (using Latin binomials) and furthermore

to the various processed forms of a species. In addition, natural botanical ingredients are not

cohesively grouped within the current Harmonized System Tariff Codes. Medicinal and aromatic

plants and other botanical ingredients occur throughout chapters 06, 07, 08, 09, 12, 13, 15, 18, 21, 33

and 40. A botanical ingredient may be classified by some exporters within chapter 07 (as a dried root

or tuber), by others in chapter 09 (as a spice), or as chapter 33 (essential oils). In this report, we

primarily rely on HS Code 3301 to obtain data on trade in essential oils.

Essential oils

Global essential oil market demand was 178,000 tons in 2015. According to Grand View Research34,

the demand expanded to increase to 370,000 tons by 2014, which is an annualized growth rate of 8.4

percent.

The global market size for essential oils in 2015 was $4.5 billion USD. The annualized growth in the

value of exports between 2011 and 2015 was 8 percent.

The value of the essential oil market alone is expected to be $14 billion USD in 2024. Food &

beverages industry was the leading consumer of essential oil and accounted for 34.6 percent of total

33 Source: http://www.ffdcindia.org/pdf/global_scenario_19032015.pdf 34 http://www.grandviewresearch.com/press-release/global-essential-oil-market).

http://www.ffdcindia.org/pdf/global_scenario_19032015.pdf

http://www.grandviewresearch.com/press-release/global-essential-oil-market


market volume in 2015. It is also expected to witness the highest growth of 9.0 percent annualized

growth over the forecast period. Increasing demand for flavors & fragrances from various

applications including personal care, home care, food & beverages, aromatherapy, etc. has prompted

the essential oils demand as these oils are used as key ingredients in fragrances and flavors.

Numerous other advantageous product properties such as antiseptic, aphrodisiac, anti-inflammatory,

antidepressant, antispasmodic, diuretic, and tonic are expected to boost essential oil demand in

industrial, medicinal, and domestic applications.

Europe was the leading regional market and accounted for 43.5 percent of global demand in 2015.

High demand for food & beverages and natural personal care products has spurred the regional

market growth in upcoming years.

Asia-Pacific essential oil market is expected grow at an estimated 9.0 percent annualized growth rate

from 2016 to 2024 to emerge as the fastest growing regional market. Increasing interest and

awareness regarding essential oils and natural products are expected to foster the regional market.

Some leading companies operating in the global market include Biolandes, Sydney Essential Oils, HRF,

The Lebermuth Company, Young Living Essential Oils, doTerra, Essential Oils of New Zealand,

Sydella Laboratoire, Farotti Essenze, Moksha Lifestyle Products, West India Spices Inc., Falcon and

Ungerer Limited.

Key buyer requirements

The primary purchasing criteria for buyers in the sector are the chemical composition of the oil

(GC/MS analysis) and how the crop was cultivated with a very strong requirement for organic

cultivation, whether or not actually certified under a formal scheme. Chemical composition of an oil

is affected by a range of factors including:

Genetic identity of the plant material (species, sub-species, variety and chemotype, as

relevant).

Environment of production (climate, soils, etc). In addition to broad environmental

characteristics of the area of production, seasonal variations – excessive rains, droughts, etc.

– can have an important impact on composition.

Time of harvest. When in the life-cycle the harvest of the plant part to be distilled is made –

pre-flowering, early flowering, full flowering, etc. for annual crops; age of crop for some

perennial crops etc. These factors can have a major impact on chemical composition of any

distilled oil as composition of the oils changes dynamically seasonally and through a plants life.

Crop handling practices – whether harvested material is dried or distilled fresh; length of

storage before distillation and storage conditions, etc.

Distillation protocols. Distillation conditions – times, temperatures, pressures, type of steam

– and methods have a major impact on oil composition and the distillation protocol must be

standardized and kept to.

Storage conditions for the essential oil.

Moldova's market share in the world

France is a major European producer, trading hub, and exporter of essential oils; the value of its

exports in 2015 exceeded $355 million USD. Bulgaria and Turkey are major regional producers and

exporters of essential oils (exports in 2015 stood at $62 and $34 million USD, respectively), with

more dynamic growth of exports in comparison with France (

Figure 18). For both Bulgaria and Turkey, France is by far the main destination market (>50%),

followed by USA, Japan, Germany, and UK. During the last 20 years, the Moldovan exports of

essential oils peaked at $4 million USD in 2008, but exports have halved since then to reach $2

million USD in 2015 (

Figure 18). The main destination is Germany, which accounts for 90 percent of Moldovan exports.


Figure 18. Trends in the value of export of essential oils (2006=100%)

0%

50%

100%

150%

200%

250%

300%

350%

400%

450%

500%

2006 2007 2008 2009 2010 2011 2012 2013 2014 2015

Bulgaria

France

Rep. of Moldova

Turkey

Moldova is not a major importer of essential oils; however imports have increased from $104,000

USD in 2009 to $332,000 USD in 2015. Products were primarily imported from Russia, Germany

and France.

Social inclusion

This sector is dominated by a small number of firms and large producers. Significant land area is

required to start economically viable production.



The Government supports the MAP sector through the Agriculture Subsidy Fund as follows:

establishment of rose plantations – 6000 MDL/ha, lavender, hyssop, sage plantations – 4,000

MDL/ha (~25% of plantation costs);

development of processing infrastructure – 40 percent of investment costs;

partial reimbursement of the interest paid for loans; and

partial reimbursement of costs associated with organic certification.

Some private companies are also interested to expand their operations. The two largest Moldovan

oil producers are interested to work with other farmers in order to leverage their existing technical

and market knowledge. One company is interested to source sage from farmers while another is

interested to co-invest finance and provide and technical and market knowledge to establish a new

integrated plantation-processing operation, sourcing lavender that is cultivated on 250 ha, potentially

engaging 4-5 farmers in a radius of 20 km from the processing unit.

Most MAPs grown in Moldova are relatively drought-tolerant, and even produce higher quality oils

under a minor drought stress. Although all of them would benefit from supplemental irrigation in

years with severe droughts, the potential utilization of irrigation systems established by MCC

Compact is considered to be low for this sector.

There are no donors active in the MAP and essential oil sector. The few projects targeting the

organic agriculture had minimal interaction with the sector.



The Government supports the MAP sector through a specialized MAP Department at the Institute of

Genetics, Physiology and Plant Protection35 within the Academy of Sciences of Moldova. Local

researchers have developed a series of varieties adapted to Moldovan climatic conditions, including

relative drought and freezing-tolerance. The specialists of the Institute are providing technical

support to people interested to enter the MAP business, but they lack relevant marketing and

business management abilities to cover all needs. The institute also provides seedling material of

locally-bred varieties, but growers prefer to invest in own nurseries because the institute lacks means

to maintain adequate plant care.

A specialized MAP college36 is located in Riscani, close to the large operation of Molsavia, the largest

Moldovan MAP business, but it is not linked with the current business operations.



Most MAPs are cultivated following organic principles hence the impact of MAP cultivation on the

environment is relatively low compared to intensive horticulture production.

The MAP sector may contribute to deteriorating environmentally quality if it results in over-

harvesting from the wild. Over-harvesting of wild plants is the key environmental concern in this

sector. Excessive collection can endanger or cause extinction of species at the local, regional or even

national level. This issue is more important when plants or roots are being collected as opposed to

wild fruits. On a positive note, the fact that harvesting from the wild is managed and coordinated by

one organization, there is a strong opportunity to ensure sustainable collection of wild plants.



intensity as changes in temperature and precipitation affect economic activity. This sector is also

likely to be adversely affected, however, possibly not as much as other horticulture sectors that are

more sensitive to water related stresses.

Green opportunities

This sector can integrate well with the honey sector as MAP plantations can be a source of nectar

for honey bees.


Summary of constraints, challenges, needs and potential HVAA intervention in the Moldovan MAP is

presented in Table 23 (below).Table 23. Constraints, challenges, needs and potential HVAA

interventions in the Moldovan MAP sectorTable 23. Constraints, challenges, needs and

potential HVAA interventions in the Moldovan MAP sector

Production Processing Agricultural Enabling Marketing

35 http://igfpp.asm.md/en/node/52 36 http://colegiiagricole.md/colegiul-agroindustrial-din-riscani/specialitati/tehnologia-produselor-

cosmetice-si-medicinale.html

http://igfpp.asm.md/en/node/52

http://colegiiagricole.md/colegiul-agroindustrial-din-riscani/specialitati/tehnologia-produselor-cosmetice-si-medicinale.html

http://colegiiagricole.md/colegiul-agroindustrial-din-riscani/specialitati/tehnologia-produselor-cosmetice-si-medicinale.html


Finance Environment

Co

nst

rain

ts a

nd

ch

allen

ges

Lack of certified seedling

suppliers. The existing

nursery at the MAP

Institute is not adequate

Lack of finance to perform

trials of foreign varieties

Shortage of labor force for

manual harvesting

Unable to identify solutions

for mechanized harvesting

of MAPs. Currently it is

difficult to harvest MAPs

during the recommended

harvesting window

Distillation equipment is old

and Soviet style

Lack of drying equipment

for MAP after harvesting

lack of good storage

conditions for MAPs after

harvesting especially form smaller SMEs

Significant finance

is required to

start a large

plantation

Much of production

follows organic principles

to a large extent but

organic certification is

limited

Substantial price fluctuation

for aromatic oils each year

Need

s an

d p

ote

nti

al H

VA

A

inte

rven

tio

ns

Promote GAPs and modern

production techniques to

increase yields and improve

quality of product

Support the testing of new

varieties

Need to launch production

of modern distillation units,

including mobile units, by

local manufacturers. Local

manufacturers have already

produced such equipment

for French processors.

Procurement and use of

drying equipment for MAPs

and to improve storage

facilities

Support development of

joint businesses with

foreign companies (Poland,

France, Holland, others)

Support producer

groups in business

planning and

credit/grant

application.

Support organic

certification to access

new, higher paying

markets

Help identify new, more

stable and higher paying

markets

Support value adding in

Moldova


Berries Small fruit production (such as berries and currants), are an exceptionally high-value, labor-intensive

enterprise, which has the ability to provide sustainable family incomes on relatively small land plots.

Global production of berries is increasing due to a growing demand driven by a health-trend, which

has swept all over the globe. Berry markets are versatile; they not only involve fresh fruits, but also

deep frozen and dried products, semi-finished products such as purees and frozen products, and

products such as juices.

Moldova has several comparative advantages for the development of the berry sector. First, Moldova

is adjacent to the EU and CIS countries, which import berries. Second, Moldova has suitable climate

and soil which enables it to produce high quality fruits, including berries. Moldova has a high

reputation in the market due to excellent taste and color, which are very important for the

marketing and sales on the international market. Third, Moldova has the opportunity to improve the

existing cold chain and general post-harvest handling infrastructure, which would enable exports of

fresh, frozen or processed berries on the domestic and international market.

Production

Moldova currently produces mainly strawberries

and raspberries, and smaller quantities of red

and black currants as well as gooseberries.

Other berries and currants are also produced

but in very small quantities. The production of berries has risen in recent years, according to UN

FAOSTAT data (see Figure 19). Significant new investments were made in the berry sector since

2014, resulting in increased production. The biggest limiting factor for berry production is the quality

of locally produced planting materials. Imported planting materials if higher but so is the price.

Figure 19 Berry production in the Republic of Moldova 2010 – 2014 by type of berries

(ha). Source: UN FAOSTAT

There are about 1,000 berry producers with a plot greater than 0.1 ha. Berry producers can be

classified as: (i) berry production at an industrial scale (45-60 farmers who have land plots between 5

and 100 hectares); (ii) mid-sized farmers cultivating berries on 1-5 ha of land (125-150 farmers); and

(iii) small-scale farmers, producing on less than 1 ha of land (approx. 800 farmers). In Moldova,

berries are generally cultivated without irrigation, however, such production suffers from lower

yields and fruit quality. Farmer returns are much higher if fields are irrigated.

Snapshot of key indicators

Current berry production 2,439 ha

Number of berry farmers 1,000 +


A hectare of berries can provide a decent living for a family in a year, which is extremely important

for people in villages. Hence, farmers have increased their interest in berry production. Table 24

provides an overview of expected yields and investment recovery period for different berries

provided berry plantations are very well managed. Price to farmers at farm-gate varies on the time of

season and quality but can average around 20 lei per kg of strawberries and 30 lei per kg for other

berries.

Table 24. Comparative analysis of budgets and investment recovery period from shrubs

and strawberry cultivation (area - 1 hectare)

Berry type Production

years

Investment

recover

period after

planting

(years)

Yields

per

hectare

t / ha

The number

of plants per

ha

Required

investment,

lei/ha

Annual strawberry 2 0,99 30 51,020 231,611

Strawberry multiannual 4 3,08 23 51,020 294,904

Strawberry in protected

areas*

3 4,22 30 55,556 2,189,131

Raspberry seasonal 9 2,71 12 10,000 127,115

Raspberry remontant 9 2,51 14 10,000 134,968

Blackberry 14 3,16 13 2,667 221,224

Black currant 15 3,17 10 5,000 158,348

Red currant 20 3,15 13 4,000 139,043

Gooseberry 18 4,11 13 4,000 180,088

Black mountain ash

(aronia)

25 4,10 14 2,222 155,392

Sea buckthorn 26 4,02 11 2,286 162,692

brier 25 4,84 6 2,222 109,388

Berries are harvested at different times of the year (Table 25)

Table 25. Berry harvesting during the year

Crop May June July August September October

Strawberry + + + +

Raspberry + + +

Blackcurrant + +

Brambleberry + + + + +

Gooseberry + +

Cranberry + + +

Aronia + +

Sea buckthorn + + + +

Goji + + + +

Brier (Dog rose) + +

Cornelian cherry + +


Global production

More than 11 million tonnes of all types of berries were produced in 2013. China was the biggest

producer of berries in the world (3,056 MT in 2013), with a 27 percent share in the global

production. Strawberry is the key berry that China produces - accounting for about 98 percent of

total berry production in China in 2013. The US was the second largest berry producer in the world, followed by the Russian Federation.

Poland, far ahead of other EU countries, was in the fourth position for berry production in 2013.

Poland produced a range of products including black and red currants, strawberries, raspberries, and

blueberries.

In 2013, Moldova was in the 76th position in the list of global berries producers. Moldova produced

1,085 thousand tons of berries, which was 0,01% of the total global berries production in 2013.

Markets

The world market for berries

According to UN COMTRADE data, the global market for fresh strawberry was $2.2 billion USD in

2015, with annualized global market growth in exports being 3 percent in quantity and 1 percent in

value, between 2011 and 2015 (Table 26). Moldova's market share in the global market is 0.7

percent. The main exporter of fresh strawberries is Spain, with a 27.7 percent global market share

(Moldova is ranked no. 17).

The global market for fresh raspberries was $1.3 billion USD in 2015. Market growth is very strong:

13 percent annualized growth in quantity and 16 percent annualized growth in value (2011-2015).

The main exporters of fresh raspberries are the US, Spain, and Mexico. The global leader in the

export of frozen raspberries is Serbia followed by Chile and Poland.

Table 26. Snapshot of key global trade data for fresh berries

Fresh strawberry

(HS: 081010)

Fresh raspberry*

(HS: 081020)

Global market size (2015) $2.2 billion USD $1.3 billion USD


quantity 2011-2015)

3 percent 13 percent


value 2011-2015)

1 percent 16 percent

Moldova's market share in the world

(percent of total exports in quantity)

0.7 percent (this

includes re-export)

0.05 percent

Exports from Moldova (2015) (USD) $14.3 million USD

(includes re-exports)

$640,000 USD

Moldova's imports (2015) (USD) $9.9 million USD $6,000 USD

* includes fresh raspberries, blackberries, mulberries and loganberries

Moldova's trade with berries

Moldova exports two types of berries: strawberries and raspberries, and only as fresh produce.

Moldova exported $14.3 million USD worth of fresh strawberries in 2015, which is a significant

increase on the year before ($5.1 million USD in 2014) (

Figure 20). As seen in the figure, imports and exports are closely aligned, which indicates that the

majority of imported strawberries (mainly from Greece in 2014; mainly from Turkey in 2015) were

re-exported - primarily to Belarus and Russia. This re-export trade is due to the existence of special

free-trade agreements between Moldova and the EU and Moldova and the CIS.


Figure 20. Moldova's imports and exports of fresh strawberries. Source: UN COMTRADE.

According to UN COMTRADE data, Moldova exported $640,000 USD worth of fresh raspberries in

2015 (Figure 21). This is a substantially lower quantity than exports of fresh strawberries, however, it

is a significant increase from 2014 when exports reached $245,000 USD. The majority (83 percent)

of fresh raspberries were exported to Poland. Furthermore, unlike strawberries, Moldova has not re-

exported any berries. Imports were extremely low ($6,000 USD in 2015). The majority of exports is

done though one Moldovan company from Pokrovka village from the north part of Moldova.

Pokrovka village is the number one region for raspberry production and is currently the only example of a success story in berry production and exports, at present.

Figure 21. Moldova's imports and exports of fresh raspberries. Source: UN COMTRADE


Price of berries on the domestic wholesale market

It is important to note that berries are a super-perishable product. Hence, significant supply in a

particular day can dramatically lower the price. It is not uncommon for the price of berries to change

multiple times on the same day. A major issue is the lack of adequate post-harvest care - 90 percent

of berries in the wholesale market are sold from transport vehicles (mini-buses, pickups, cars), which

are not equipped with cold storage equipment. This means that produce must be sold quickly

otherwise the price falls dramatically during the day, especially during July and August when outside

temperature are high. Seasonal price variation of berries at the wholesale market in Chisinau is

depicted in Figure. 22.

Figure. 22 Price of berries on the open wholesale market in Chisinau (March, 5, 2015 to

September, 24, 2015)

Key value chain actors

Middlemen

At least 60 percent of berries produced in Moldova are sold at one of the three open wholesale

markets (two markets are in Chisinau and one market is in Balti town). The remaining berries are

supplied by farmers to middlemen or local agents to finally reach the Moldovan processing industry

(such as canneries), retail chains or exporting companies.

The middlemen collate berries from farms in a van for sale on the wholesale market. The middlemen

have their own transport vehicles - usually mini-bus with carrying capacity 1.5-2.5 tons, or pickups,

and less often small trucks (3-5 tons). The middle men: 1) find berries to purchase from farmers, 2)

procure boxed (new or second hand), 3) transport berries from farmers to the open wholesale

market, and 4) sell berries on the market. As berries are perishable, and significant money is required

to procure berries from the farmers, the intermediaries carry the risk that they will not be able to

sell berries at a margin expected. At the time of purchasing berries from the farmers, the middlemen

do not know what will be the final price on the market since the price depends on the overall market

supply and the number of competitors that may sell berries on the same day. The middlemen

generally aim to earn a 20 to 40 percent margin on the price of berries purchased from the farmer.


Relationship between the farmers and the middlemen is usually not very open and transparent (very

rarely will the middlemen inform the farmer about the earned net profit). Most middlemen are not

seeking to forge strong, long-term and mutually advantageous relations with farmers. Taking into

account that practically all sales of berries at open markets are done by middlemen informally, it is

clear that middlemen practically do not have relations with Moldovan legal authorities (tax service,

phytosanitary and hygiene services etc.). Open whole sale markets have their hygiene specialists.

Unfortunately, they are not carrying out the necessary analyses of berries (e.g. nitrate

concentration).

The main clients of the middleman are:

retail sellers;

buyers from small shops, retail chains of markets, super-markets, HORECA;

buyers from retail chains of markets, super-markets (their employees);

buyers (local agents) from processing companies (canneries); and

physical persons who come at open whole sale market to buy berries (1-3 boxes) for the

family (for consumption as fresh or to can/freeze at home). Minimum purchase at the

wholesale market is 1 box (usually 5 kg).

Traders/exporters and processors

Moldovan export and re-export companies are universal export-import companies which, due to

Moldovan favorable trading position in Europe and the CIS, trade with different products throughout

the year. For example, such companies import citrus fruits, strawberries, peaches, nectarines, plums,

table grapes from Greece and Turkey and then re-export to Russia or Belarus. The margin made by

such companies is between 6 and 22 percent. In 2013-2014, some Moldovan fruit export companies

tried to organize the export of Moldovan strawberries (in the middle of strawberries’ harvesting

season) but it failed because farmers (producers of the strawberries) did not agree to deliver

strawberries to the cold storage facilities without payment in advance (exporter promised to pay in 2

weeks), and due to the difficulties to rapidly collect and to cool the necessary volume of strawberries

for export (about 19 tons) in a couple of days.

In addition, berries may be sold to cold storage/processing units. There are about eight of such units

that process berries into juices, jams, dried berries, or frozen berries.

Retailers/supermarkets

It is estimated that at least 70 percent of fresh berries are sold through open retail markets and

unofficial open fruit and vegetable outlets that are located in Chisinau and other towns throughout

Moldova. Consumers tend to prefer to buy berries from such open markets, rather than large

supermarkets, as berries tend to be fresher and of better quality. In addition, open markets offer a

greater range of berries and can sell in larger quantities for a lower price.

Producers and middlemen prefer to sell in open markets as retail chains tend to buy only a low

volume of berries, payment is not immediate and may take several weeks, and retail chain prefer to

have berries delivered to each supermarket separately rather than a logistics center which is costly

and time-consuming for the middlemen.

Social inclusion There are approximately 1,000 berry farmers in Moldova. Berry production is particularly

appropriate for small farmers or family businesses as berries can be produced on a very small plot of

land. Production of berries (namely strawberries) in greenhouses, and using irrigation, can

significantly increase yields and improve product quality. Water is a limiting factor so irrigation is

generally considered compulsory. Since this is a labor intensive crop, there are significant

opportunities for job creation in areas where rural unemployment is high.


Gender

Both men and women are involved in berry production. Women dominate during the harvesting

period (70-80 percent of labor). Women are also increasingly involved in establishing and managing

berry plantations.

Youth

In general, young farmers find it easier to start berry production (as it requires less land) than

establish fruit or nut orchards. Donor projects including IFAD and others are supporting young

farmers to help reduce emigration from rural areas.



Since 2010, Moldovan Government has been supporting investments in new berry plantations.

Subsidies in 2010 were 20,000 lei per ha but this has been increased to 40,000 lei per ha in 2011-

2012 and 50,000 lei per ha in 2013-2014 to support the establishment of berry plantations. In 2015,

subsidies for establishing strawberry plantations ere 50,000 lei per ha while subsidies for other

berries and currants (including raspberries, blackberries, gooseberries, chokeberries, black and red

currant) were 40,000 lei per ha. Depending on the type of the berry, state subsidies can cover

anywhere between 15 to 45 percent of total investment costs associated with establishing a new

plantation.

With these subsidies as well as loans and grants from international donors, including IFAD, farmers

can obtain the necessary capital to start berry production. For those interested in farming for the

first time, it is still not easy to start the production as subsidies are only provided one to two years

after the plantation has already been established, and upon submission of subsidy application and

relevant documentation. A support program for first-time farmers (established by the government or

donors), targeting youth and women, would significantly boost the number of young farmers and

women involved in this production.

While there is currently a strong interest in berry production, and relatively strong donor and

government support to establish new plantations, there is a lack of adequate post-harvest cold chain

infrastructure. Furthermore, there is a lack of marketing cooperatives, nurseries that produce quality

planting materials as well as a lack of adequate credit risk insurance.

Institutional capacity to sustainably support value chain development Moldovan government devotes less attention to berries compared to other crops such as apples,

plums, table grapes, and sweet cherries. There are inadequate advisory services for berry production,

certification, and marketing. There is only a small berry department within the Moldovan horticulture

Institute. There are two berry associations but their capacity needs to be significantly increased to

enable them to provide a broader range of services to their members.



Key environmental issues related to berry production, particularly highly intensive type of

production, are associated with the use of pesticides, artificial fertilizers, and use of irrigation.

Pesticides may eliminate beneficial insects, pollute surface and groundwater, accumulate in plant and

animal tissue, and affect human health. Pesticide use under IPM can be significantly lower when

compared to other crops. Use of rehabilitated CIS for irrigation can affect environmental flows and

reduce soil and water quality.




intensity as changes in temperature and precipitation affect economic activity. The analysis of the air

annual average temperature during 2007–2010, as compared to the multiannual average, shows that

this period is characterized by significant thermal anomalies, especially in 2007, which is considered o

be one of the hottest years on record in the last 120 years. Socioeconomic costs of climate-related

natural disasters such as droughts, floods and hailstorms are significant, and both the intensity and

frequency of such events are expected to further increase, as a result of climate change. The impacts

of climate change on agriculture are of particular concern, because agriculture is a major source of

income and employment. Berries must be irrigated during droughts (which are becoming more

frequent; occurring every 2-3 years), and during summer months (July-August). Yield is significantly

lower without irrigation.

Green opportunities.

To minimize cumulative environmental impacts there are opportunities to promote good agricultural

practices including climate-resilient agriculture (such as drip-irrigation) in primary production, and

cleaner production, energy efficiency, and a culture of environmental compliance and governance in

agricultural processing. The procurement or use, promotion of, or training in use of pesticides can be

conducted within the framework of Integrated Pest Management (IPM) and following safe use

practices, thus minimizing potential adverse impact on the environment. Producing berries can also

be applied in organic systems, and products can be sold at prices that are 10 to 25 percent higher.



Summary of constraints, challenges, needs, and potential HVAA intervention in the Moldovan berry

sector is presented below (Table 27).


Moldovan berry sector


Finance

Enabling

Environment

Marketing

Co

nst

rain

ts a

nd

ch

allen

ges

Insufficient advisory

services in berry

production and standards

for certification

(GlobalGAP, organic)

Poor quality of planting

material (including issues

with diseases)

Some varieties are used

but not officially

registered

Water is a limiting factor -

irrigation is required

Lack of adequate post-

harvest cold chain

infrastructure i.e. during

transport and storage and

processing

Lack of marketing

cooperatives for

storage/packaging of fresh

berries for the local

market

Lack of upfront

subsidies and grants

for establishing berry

plantations

Lack of credit risk

insurance

Limited range of

pesticides for berries

with short pre-

harvest interval

period


services for berries


services in marketing and

packaging

Lack of retail packaging

for berries (most locally

produced berries are sold

in green markets rather

than supermarkets while

supermarkets import

berries in retail packaging)

Need

s an

d p

ote

nti

al H

VA

A in

terv

en

tio

ns

Promote the production

of virus and disease free

planting material; using

new varieties

Develop GAPs and berry

production guidelines

Conduct ToTs to expand

the number and improve

the quality of agricultural

advisory services in berry

production methods

Assist berry producers implement GAP or

organic standards and to

obtain GlobalGAP and

organic certification to

help access new and/or

higher paying markets

Provide grants to improve

cold chain infrastructure -

from farm to

storage/processing

facilities

Support the establishment

of cooperatives and other

producer groups in the

berry sector to help

market berry products on

the domestic and

international market

Support cooperatives and other producer groups to

package produce in

attractive small retail

packages and in small scale

processing (e.g. jams,

juices)

Support producer

groups in business

planning and

credit/grant

application

Provide additional

support to farmers

to help them start

berry production on

farms

Support the Berry

Associations to build

analytical and

advocacy capacity to

advocate for reforms

based on evidence.

Expand the list of

approved pesticides

for berries based on

EU and international

best practices

Promote berry

consumption on the local

market

Improve packaging of

berries to access

domestic retail markets


VALUE CHAIN SELECTION

As noted earlier, HVAA utilized information collected though sector analyses to assign a score for

each value chain crop using the five-point Likert scale. The outcome of this process is presented in

Table 28. As shown in the table below, the top ranked value chain is walnuts, which is perhaps not

surprising as Moldova has a long tradition producing and exporting this product. This is followed by

strawberries, honey, raspberries, and tomatoes for processing. Berries and field vegetables can

benefit strongly from irrigation investments made by MCC Compact. The rationale for value chain

scoring is described in Table 29.

Table 28. Ranking of value chains

Value Chain

Selection criteria

Score

1. Economic Criteria 2. Social Criteria

3. Environmental

Criteria

4. Institutional

Criteria

Mar

ket

size

Mar

ket

grow

th (

annual

bas

is)

Mold

ova

's m

arket

shar

e

Curr

ent

export

s

Curr

ent

import

s

Curr

ent

pro

duct

ion

Sca

labili

ty -

enga

gem

ent

of

house

hold

s

Enga

gem

ent

of w

om

en

Enga

gem

ent

of yo

uth

Impac

t of th

e v

alue c

hai

n o

n t

he

envi

ronm

ent

Impac

t of th

e e

nvi

ronm

ent

on t

he

valu

e c

hai

n

Pri

vate

sect

or,

gove

rnm

ent

and/o

r

donor

inve

stm

ents

Inst

itutional

cap

acity

exis

ts t

o

support

the v

alue c

hai

n

Weight 10% 10% 5% 5% 5% 10% 10% 10% 5% 10% 5% 10% 5%

Walnuts 3 3 5 5 4 5 5 2 2 4 4 3 2 3.60

Strawberries 3 2 5 3 4 5 5 4 4 2 2 3 3 3.45

Honey 3 3 2 4 1 4 5 2 3 5 3 4 4 3.45

Raspberries 3 4 1 1 1 4 4 4 4 3 3 3 2 3.10

Tomatoes (prepared

or preserved) 5 1 1 1 3 4 4 3 3 2 2 4 3 2.95

Almonds 5 2 1 1 1 3 4 2 2 4 4 3 2 2.85

Sweet peppers

(prepared or preserved) 3 2 1 1 1 4 4 3 3 2 2 4 3 2.75

Cucumbers (prepared or preserved) 2 2 3 2 1 3 4 3 3 2 2 4 3 2.70

MAP - essential oils 3 3 2 2 1 2 2 3 2 4 4 2 3 2.60

Hazelnuts 3 1 1 1 1 1 2 2 2 4 3 3 2 2.10

Table 29. Rationale for Value Chain Scoring by Sub-sector

Fruit and Vegetables

Overall. Moldova has favorable agro-climatic conditions for cultivating fruits and vegetables, and there is strong potential to

benefit from MCC Compact investments in irrigation to substantially increase yields. There is very strong private, donor, and

government support for this sector — particularly HVA crops—and improve post harvest handling. Moldovan fruit and

vegetable products are eligible for export to the EU and other countries provided phytosanitary, quality, and food safety

standards are met. Export and distribution channels are still in the process of being shifted away from Russia toward the EU,

Middle East, and Asian markets, which will continue to present a challenge in the medium term as producers adjust production

to meet buyer requirements. There is potential to increase wage-earning opportunities for women involved in producing and

marketing fresh and processed fruit and vegetable products.

Nuts. Walnuts scored very high based on Moldova's strong history of production and exports. Almonds and hazelnuts are not

as attractive, according to HVAA scoring methodology. However, Moldova has an opportunity to build on its success with

walnuts to grow other nuts, particularly almonds (and, to a lesser extent, hazelnuts), where Moldova can take advantage of

market linkages created through the exports of walnuts. Gulf and Asian markets are not well explored. There is limited


institutional support to nut production, with low-quality extension services. There is an Association dedicated to support the

nut sector but additional strengthening of its advisory, advocacy, and promotional capacity is required. There is a lack of high-

quality planting materials and productive varieties. These are opportunities for HVAA to make modest but targeted

interventions that can have a wide sector impact. From an environmental point of view, these crops have a lower adverse

impact than other horticultural crops and also provide the benefit to other crops by acting as windbreaks.

Honey. Honey ranks very high, according to HVAA scoring methodology. Moldova is strongly competitive, market size and

growth is sold, Moldova's exports are strong and growing, and there are strong social and environmental benefits associated

with this sector. Honey is eligible for EU export and has been exported to several EU countries but only in bulk. Moldova is

price-competitive with honey sold in wholesale for €2 per kilogram and in local retail open air markets for €3 per kilogram.

There are opportunities to explore new markets for honey in retail packaging. For example, the Middle East and Singapore are

interesting untapped markets for Moldova. Wage-earning opportunities exist for youth and vulnerable groups through

involvement in beekeeping, honey processing, and marketing. Government subsidies offer greater incentives for youth to enter

this production. With around 7,000 beekeepers, project interventions could have a wide-reaching impact. The costs of entering

this production is less prohibitive than for some other agricultural sectors and the sector can be very complementary to other

horticultural production through pollination services; as well as the MAP sector where MAP species provide a source of nectar

for honey. Furthermore, support to the sector can help support the development of rural areas throughout Moldova (unlike

nuts or vegetable, which require specific climate and soil requirements).

Berries (strawberries and raspberries). Berries are strongly export-oriented, with demand— particularly for raspberries

and strawberries— on the rise in international markets. Export markets exist in the EU and potentially the Middle East, but

export and distribution channels need to be developed as the raspberry value chain is new in Moldova. There are opportunities

to access the local retail chain with improved post-harvest care and small packaging. Employment opportunities exist for men

and women, especially during the harvest period. Berry production enables farmers and producer groups to make good profits on small land plots. However, there is a lack of high-quality extension service particularly for raspberries and other berries and

currants. Very significant capacity building of the extension service will be required. To achieve the export potential, there is

also a need for very significant investment in primary production (including nurseries to produce disease free seedlings) and

post-harvest handling including cooling and packaging. Such investments could be catalyzed through AITTF and other lending

and grant programs.

Open field vegetables (tomatoes, cucumbers/gherkins, sweet peppers) for processing. Field vegetables and

products made from these products hold import substitution potential. There are opportunities to supply the local processing

industry (existing capacities and severely underutilized), provided that local producers can significantly increase yields under

irrigation and intensive production and to meet the quality requirements demanded by local processors. Many farmers are

reluctant or unable to produce vegetables for processors as it requires a shift from traditional production techniques to

modern, intensive production techniques using irrigation, to make a profit. However, it is indeed possible to make a solid profit

from such production as shown through examples of many commercial farmers in Moldova that are already selling vegetables

grown on open fields to processors. This sector has the potential to be the key sector benefiting from MCC Compact

investments in irrigation systems. The local processing industry is quite well-developed; however, all except one (Orheivit) are

struggling to diversify into new markets away from the CIS countries. This is the primary risk associated with this value chain -

end markets for processed products need to be further expanded. Support to this value chain will help provide employment

opportunities for men and women, both in production and in processing facilities. In addition, there is reasonable institutional

capacity to support the sector. From an environmental point of view, this sector has higher potential adverse impact on the

environment than most other sectors but there are also opportunities to mitigate these through the implementation of GAP

including IPM.

Medicinal and Aromatic Plants. MAPs and MAP-derived products are strongly export-oriented. MAP products, especially

essential oils from lavender and sage, are popular in international markets, however, prices fluctuate widely. MAP cultivation is

significantly lower than during the Soviet period, but existing plantations are still relatively large. Environmental impact through

cultivation is positive, as many MAPs require no pesticide or artificial fertilizer application and are perfectly suited to the local

environment. There is potential to engage women in cultivation, processing, and marketing of final products, and opportunities

to improve MAP market potential and trading. However, relatively few producers are involved in cultivation hence HVAA

should undertake only targeted interventions that can have a wide sector impact.


Based on our scoring data, HVAA also developed an ease and attractiveness matrix (Figure 23),

which considers the strength of the existing value chain (ease) and market and development opportunities

(attractiveness).

Figure 23. Ease and attractiveness matrix of HVAA value chains

Prioritizing value chain support

HVAA assessment of value chains, the scoring methodology, and the ease and attractiveness matrix,

helped provide an affirmation of sector/value chain potential, which HVAA can utilize to prioritize

rather than eliminate value chains. Prioritization of value chain support will inform the type and level

of support to value chain development (where to intervene in the chain and what resources to

expend), and determination of which interventions will have the largest development impact (i.e.

focusing on addressing areas where sectors/value chains have scored poorly).


Nuts

Level of support

Relatively modest overall but very targeted support to achieve sector wide impacts to benefit a large number

of existing producers.

Prioritizing interventions

To comply with Bumpers Amendment, HVAA will not support production, processing or marketing of

walnuts exported to the EU market but will provide limited export promotion support to facilitate

walnut producer involvement in international trade shows and missions specifically targeting the

Egyptian, Turkish, and the Gulf region as no significant impact on U.S. producers or exporters is

anticipated given Moldova's insignificant export to those markets.

For almonds and hazelnuts, HVAA should focus strongly only on activities that will have a catalytic

impact across the value chain/sector, to benefit a large number of existing producers and to achieve

long term sustainability of the sector. Examples of such interventions are: provision of support to test

new plant varieties, strengthening advisory capacity, technical assistance to increase value adding and

support to access new markets. Such activities will benefit the whole sector and not just one business.

Honey

Level of support

Significant support across the value chain.


HVAA should support the development of the whole value chain and, in particular, support to the

development of smaller retail packaging, development of specialty flavored niche varieties, branding

and marketing to help access new, higher paying markets such as the Gulf States, Scandinavia, and

others.

HVAA should also focus on supporting and encouraging young people to enter this production,

professionalizing beekeeping, and promoting complementarily with other sectors such as horticulture

and MAP production, all of which should help build long term sustainability of the sector.

Open field vegetables

Level of support

Significant support across the value chain, particularly in instances where support will result in increased

utilization of CIS rehabilitated by MCC Compact and the sustainability of WUAs (provided that there is an

accessible and profitable end market).


For HVAA, this is an opportunity to support this value chain by supporting existing and potential new

farmers to produce vegetables in open fields using modern production techniques including drip

irrigation utilizing CIS rehabilitated by MCC Compact; improving harvesting and post-harvest care;

helping to establish and strengthening producer groups; ensuring contractual relationship between

farmers and processors, as well as identifying and securing end markets for the final product. Most of

the on-farm technical support to farmers is expected to be provided through AGROinform, which will

help strengthen the organization and build a relationship between farmers and a local advisory service

provider that will remain in-country even after HVAA ends. This will help HVAA meet institutional

sustainability goals.

Strong focus should be placed on managing environmental issues through the promotion of GAPs,

including IPM and safe use practices.


Medicinal and Aromatic Plants

Level of support

Relatively modest overall but very targeted support to achieve sector wide impacts to benefit a large number

of existing producers.


HVAA should focus strongly only on activities that will have a catalytic impact across the value

chain/sector, to benefit a large number of producers and to achieve long term sustainability of the

sector. Examples of such interventions are: supporting Moldovan manufacturers to produce modern,

more efficient and effective distillation units; facilitating joint ventures with foreign companies. Such

activities will benefit the whole sector and not just one business.

HVAA should consider supporting the procurement and use of drying equipment and better storage

facilities only in instances where there is a strong development impact potential for example,

engagement of a large number of people, especially disadvantaged groups.

Berries

Level of support

Significant support across the value chain, particularly in instances where support will result in increased

utilization of CIS rehabilitated by MCC Compact and the sustainability of WUAs (provided that there is an

accessible and profitable end market).


For HVAA, this is an opportunity to support this value chain by supporting existing and potential new

farmers to produce berries using modern production techniques including drip irrigation utilizing CIS

rehabilitated by MCC Compact; improving post-harvest care cold chain infrastructure; helping to

establish and strengthening producer groups; supporting nurseries to produce quality, disease-free

plant materials; improving packaging for fresh berries; and securing end markets for the final product.

Most of the on-farm technical support to farmers is expected to be provided through AGROinform,

which will help strengthen the organization and build a relationship between farmers and a local

advisory service provider that will remain in-country even after HVAA ends. This will help HVAA

meet institutional sustainability goals.

Strong focus should be placed on building local advisory capacity in berry production, post-harvest

care and marketing through ToTs, to help ensure long term sustainability of the sector.

This approach recognizes the limitations of strategies that seek to address value chain constraints in

isolation without considering the larger system – in particular the input and finance provision, the

role of education, research and extension, the general business environment, and the interplay

between market system actors. HVAA assistance strategy should target not only the value chain

actors directly engaged in business transactions, but also work through and strengthen the capacity

of supporting organizations, such as producer groups, industry associations, government institutions,

and business service providers (BSPs).

HVAA will continuously assess and review where its interventions are having the greatest impact and

take advantage of opportunities that will provide access to new markets, increase profitability of

agricultural operations, provide rural employment especially for women and youth, and, more

generally, integrate the multidimensional concepts of sustainability and value added along the four

dimensions: economic, social, environmental, and institutional.


ANNEX 1 - SECTOR ANALYSIS GUIDE

The table below forms the sector analysis. It contains details of key data that needs to be collected as

well as guiding questions that can be used during desk research and field investigation.

Trade

1. Market size. What is the size of the world market for the key products in the sector? Utilize UN

COMTRADE data to obtain USD value.

2. Market growth. What are the prospects for market growth? Which (potential markets) are increasing

imports of berries? Check what was the annual growth rate (over the past 5 years) in trade based on UN

COMTRADE data to determine the average over the past 5 years. Is there unmet market demand? Are

traders/customers willing to buy more of the product? Which traders/customers/countries?

3. Moldova's market share in the world. What is currently Moldova's position in the world according to

UN COMTRADE data (i.e. % of all exports)?

4. Current exports. What is the current value of Moldova's exports as per UN COMTRADE data (or local

data if more reliable)? What are export trends over the past 5 years? Which countries are currently the

main importers of Moldovan produce? Can the Moldovan product be supplied to buyers/consumers at an

attractive price? How does the Moldovan product compare to competitors’ (in terms of price, quality,

standards, labeling, image, proximity to markets etc.? Based on current information (data, interviews with

value chain actors) can we expect exports to increase or decrease in the future?

5. Current imports to Moldova. What are the import trends over the past 5 years? What is the price and

quality of such products? Based on current information (data, interviews with value chain actors, Moldovan

buyers, etc.) can we expect imports to increase or decrease in the future? Are there opportunities for

import substitution - if yes, what are the key impediments to achieving this?

Production

1. What is the current production in Moldova? Try to present data by area, volume, value. What are

production trends over the past 5 years? Based on current information (data, interviews with value chain

actors, etc.) can we expect production to increase or decrease in the future? Are there opportunities / is

there an interest to grow this crop under Central Irrigation Systems (CIS) in Water User Association

(WUA) areas? If you can present a SIMPLE value chain map, please do (e.g. number of farmers in

production; number of processors and key players and types of markets).

2. Cost of production - If possible, provide data on the costs of production e.g. per hectare (irrigated vs

non-irrigated). How much does it cost to establish production on a farm for a farm family to earn a

reasonable income (e.g. equivalent to 10,000 lei per month salary - feel free to agree as a team on a more

realistic figure if needed - as long as it is consistently applied across sectors)?

3. Scalability - Is there potential to intensify to expand production with technologies that can be scaled up

to benefit a large number of people. Take into consideration the cost of such technologies and likelihood

of farmers to adopt it. Consider, as an important factor, the likelihood of growing such a crop under

irrigation in WUA region.

Social inclusion

1. Engagement of women - are women engaged in production (try to obtain data on the numbers and %

of total persons engaged)? In what way? Are there additional opportunities for women in this value chain?

If so, which function/role? What is the likelihood for women to take up such opportunities? Do they have

the necessary skills, and is greater inclusiveness feasible? What are the barriers to entry for women? What

are the causes?

2. Engagement of youth - are youth engaged in this production (try to obtain data on the numbers and %

of total persons engaged)? In what way? Are there additional opportunities for youth in this value chain? If

so, which function/role? What is the likelihood for youth to take up such opportunities? Do they have the

necessary skills, and is greater inclusiveness feasible? What are the barriers to entry for women? What are

the causes?


1. Private sector/government and/or donor investment. Do private sector, donors and/or

governments invest in the VC, or have realistic plans to do so? How? What are Government subsidy

levels? Are there donors supported programs in this value chain and how are they supporting the value

chain? Are donors willing to collaborate? Why or why not? What is the potential (win-win) for increased

cooperation between value chains actors and supporters?


2. Institutional capacity to sustainably support value chain development. Can existing local skills

and processes match the needs of the value chain - in other words, is the organizational capacity of actors

sufficient for the tasks ahead? Are business development services, extension services, and other support

services for the value chain sufficiently available and affordable (elaborate)? Do producers have (easy)

access to markets? Are there physical, regulatory or other obstacles to enter the market? Are there

conflicting donor/government intervention strategies, which may affect the impact of the program? If so,

which?


1. Impact of the value chain on the environment. Which environmental issues play a role in this value

chain and how? Does the value chain impact on the land and its future production potential? How so?

What impacts does the value chain have on water resources (consumption, pollution, quantity, quality)?

Does the value chain cause (high or low levels of) air pollution, GHG emissions, and waste? If so, which?

How does the value chain impact biodiversity? Does this value chain require more or less pesticides and

fertilizers than other crops?

2. Impact of the environment/climate change on the value chain. How vulnerable is this value chain

(or specific section of the value chain) to climate change and degraded environment? What is the impact of

extreme weather, rising temperatures, reduced rainfall (reliability)/water availability on the (performance)

of the value chain? Is this a good crop to be grown considering the impact of climate change in Moldova?

To what extent is the value chain able to cope with the negative impacts of climate change? Are the value

chain actors able to adapt themselves?

3. Green opportunities. Can this crop be grown utilizing good agricultural practices to minimize adverse

impact on the environment? What is the potential in the VC for products or services which are conducive

for a green economy? Are there climate-smart technologies available that can be applied? What is the

potential in the value chain for products or services that compensate for GHG emissions?

value chain assessment and selection

Documents