A recent study of the Investment Agency shows that milk producers in the Republic of Moldova are facing a long-term crisis, their production decreasing by 38 percent in the last ten years. The study aimed to carry out a thorough analysis of the dairy industry situation and to provide the necessary data for the development of an investment plan, which assesses the investments and actions to be taken to increase milk production.
In recent years the milk production registered a sharp decline, from 485 thousand tons in 2017 to 367 thousand tons in 2019 and an increase in imports by 22% annually, reaching approx. USD 58 million in 2019. As a confirmation of the dairy industry crisis, the livestock industry records the same negative trend, the number of cows decreasing from 154 thousand heads in 2011 to 81 thousand in 2020, while only 6% of milk used for processing , comes from agricultural enterprises.
Thus, the Investment Agency has developed an investment plan that estimates the investments needed to create a typical 400 cows farm . Subsequently, the estimated investments will be launched at national level to determine the global investment need in the country.
The investment plan includes the purchase of pregnant cows and fodder needed for their maintenance, technical equipment, agricultural machinery, construction of stables, but also the creation of a monitoring system. These actions will lead to the increasing of the number of cows from 4 thousand heads to 63 thousand in agricultural holdings and, respectively, to increasing milk production from these holdings to 317 thousand tons, increasing their total share from 6% to 60%. This plan needs an investment of 12979 million lei is needed.
Rodica Verbeniuc, General Director of the Moldovan Investment Agency: “The Agency's support is based on the consistency of the implemented support actions dedicated to domestic producers and exporters from various sectors of the country's economy, to help increase their skills and export capacity. The study reconfirms the development potential of the unexplored sector, and spots out practical solutions for renewing and boosting business in this field. The Investment Agency reconfirms its intention to financially and technically support the implementation of the following research items. "
According to the study's statistics, 94% of domestic milk is produced by households, and only 6% of milk used for processing, come from agricultural enterprises. At the same time, only 5% of the total number of cows belong to agricultural enterprises, which would mean that the Republic of Moldova does not have a well-defined livestock industry, the majority of cows being owned for family and not industrial use. Processors, in turn, are forced to collect milk from individual households, with low quality and productivity, excessive logistics costs, resulting in a domestic milk shortage as a raw material and an increase in milk imports, which reach annually 162 thousand tons and covers 33% of the processors need.
According to the same study, in 2019 the Republic of Moldova exported dairy products worth 5.8 million USD. Exports have registered a downward trend in the last 4 years, with an average annual decrease of -17%.
Industry representatives defined the financing access as the the best solution for milk producers to overcome the production crisis.
Oleg Leșcenco, President of Association of Milk and Dairy Producers and Development Director of Lapmol said:"First of all, the local producers must benefit from financing through credit resources guaranteed by the Government. This aid is needfull especially to novice farmers who want to develop in this area. Another solution would be granting subsidies per animal and per liter of milk, which would increase the number of animals and the volume of milk produced, "
Ana Pancart, President of the Farmers Association and Milk Producers of the Republic of Moldova, agrees:"The main problem local milk producers are faceing, both small ones, which have up to 50 heads for maintenance, and the large ones, which have over 100 heads, is the inaccessibility of financial resources. The high and expensive requirements, in addition to such a short repayment period, make it impossible for producers to develop. Another problem that endangers the livestock sector in the Republic of Moldova is the lack of skilled labor force. We are an agrarian country, but we lack of specialists. No veterinarians, no zootechnicians, no agronomists for growing fodder crops, which reprezents a drawback for our farmers and producers. When talking about high-performance equipment, automated feeding, automated milking, we notice, the Republic of Moldova is not ready in this regard. Equipment suppliers are not interested in our small market. Formerly we were 1500 farms, now we are up to 100 farms, only 40 of which being equipped. The best solution to overcome the crisis milk producers are faceing is to grant long-term preferential loans. This would motivate producers to work, to invest, to build large animals barns and to buy more animals. ”
NBS data show that the Republic of Moldova registers a negative dairy product Trade Balance with an average annual decrease of -28%. Imports exceeded exports by almost 52 million USD in 2019. In 2015 this indicator scored approx. $ 20 million. Respectively, the Trade Balance registered a negative trend of -161% in the last 5 years.
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