Myths and truths about Association Agreement in evolution: farmers and European standards

In July 2014, IPN News Agency carried out an awareness raising campaign entitled “Myths and truths about the Association Agreement”, which tackled the main fears related to the process of signing and ratifying this accord. In almost three years, we decided to return to the same sources and the same subjects in order to see how things changed in evolution and if the expectations that existed before the signing of the Association Agreement with the EU were met.

“Moldovan farmers will not be able to cope with the introduction of EU sanitary and phytosanitary standards and will lose out.”

Chairman of the Union of Agricultural Producers Associations UniAgroProtect Alexandru Slusari said a large part of the farmers showed that they can comply with the European standards and can obtain internationally recognized certificates. The statements that the farmers in Moldova will not cope with the EU standards turned out to be a myth.

“It is not enough to meet the European standards and cope with the EU rigors. Being competitive is the most difficult thing, first of all in term of prices and promotion on the EU market, especially when it is about fruit. If we look at the dynamics of exports, we see that the apples and plums are the least exported. The grapes market was better penetrated and the whole quota was used, as the quota on sugar was. During three years, the poultry breeders managed to export eggs to the European market. Within two years, we expect the problem of Moldovan meat exports to the EU will be also solved,” stated Alexandru Slusari.

The problem of competitiveness is related to the access to financing. “We cannot be competitive when agriculture remains the Cinderella,” said Alexandru Slusari. He made reference to the agriculture subsidization fund, saying this is decreasing if we calculate the allocated amounts in foreign currency. In 2014, the agriculture subsidization fund was of about €35 million, while in 2016, if we take into account the depreciation of the national currency, it was of €33 million. Such a comparison in foreign currency is relevant as 90% of the inputs of farmers are imported. The investments are also calculated in foreign currency. “The sector was seriously affected by the banking fraud, besides the fact that there has been practically no agrarian policy for three years,” added the chairman of UniAgroProtect.

He noted that many farmers suffered losses because of the difference in exchange rates. The costs of resources rose by 30%-40%. On the other hand, the state didn’t do at least 20% of what should be done for agriculture to move to another level and become competitive.

“The speculations that Moldova’s exports were affected after the signing of the Association Agreement with the EU and that the domestic market was invaded by European products are aberrant. The accord must not be commented from political viewpoint. This specifies the goods the customs duties on which will remain unaffected for a rather long period of time. If we refer to fruit, this period is of five-ten years. For example, the customs duties on apple exports will remain unchanged for ten years,” said Alexandru Slusari.

He added that there is yet the problem of illegal re-export, but this is due to corruption. This problem existed before the Association Agreement was signed. Corrupt Moldovan functionaries betray the own agricultural producers and issue phytosanitary certificates or certificates of origin for the goods of competitors from other states.

“There was a case when 2,000 phytosanitary certificates were issued in Moldova for Polish apples. This is an act of betrayal and the re-export has nothing to do with the Association Agreement. It is the problem of the nonfunctional and corrupt state. Normally, we must discuss with representatives of the Russian Federation and see how we can make the penalties for illegal re-export harsher,” stated Alexandru Slusari. According to him, if nothing is done to fight corruption during the next few years, the national farmers will be destroyed.

As to the information that Moldova exported only 60 tonnes of apples to the EU and imported 1,200 tonnes of Polish apples, which was presented by President Igor Dodon, the chairman of UniAgroProtect said the explanation is that the Moldovan apple producers are not competitive on the EU market and cannot solve the problem of bank guarantees required for non-European goods. By invoking the import of the 1,200 tonnes of apples, they actually cheat as these apples were imported outside the season, in February-March, when there are no Moldovan apples already. The problem of abusive import is actually related to Ukraine, not to the EU. The Ukrainian companies invade the Moldovan market with meat and dairy products and the Moldovan food industry is seriously affected.

Alina Marin, IPN

The article on the same issue published in July 2014 is available here.

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