Moldova to receive financial assistance for mitigating 2012 drought consequences a year later

12:52 31.05.2013

Moldova will receive the US$10-million assistance that would help finance the costs associated with alleviating the emergency in the country’s agriculture sector, caused by the 2012 drought. This is envisaged in a financing agreement of the Emergency Agriculture Support Project, signed on May 29 in Chisinau between the Republic of Moldova and the International Development Association.

As already reported by Infotag, in March 2013, World Bank Board of Executive Directors approved a US$10 million credit to the Republic of Moldova. The Emergency Agriculture Support Project objective is to mitigate the negative effects of the 2012 drought by helping restore corn and wheat production and prevent livestock destocking in the most affected districts. The project will support the Government’s priorities of addressing the emergency situation, reducing the risk of escalation, and facilitating recovery from the drought.

To this end, farmers from Moldovan drought-hit districts will benefit from technical and financial support, for covering the expenses on sowing crops. The money will be transferred via post offices, on the basis of the lists compiled by the National Agency for Interventions and Payments in Agriculture.

The overall damage inflicted by the unprecedented 2012 drought is assessed at 2.5 billion lei. The Government promised to help farmers mitigate the consequences of this natural disaster, in particular by offering assistance for purchasing seed grains and fuels needed for the autumn sowing.   

Agriculture is one of the largest sectors of the Moldovan economy and in recent years it produced 12% of GDP, and employed 28% of the labor force. The prevailing share of agro-food exports stands at 45-50% of total exports. Despite the size and significance of the sector in the economy, rural areas exhibit highest poverty rates: while poverty in urban areas is around 10%, it triples to around 30% in rural areas.  

The credit is given for a period of 25 years, with a grace period of 5 years for the first payment.

Another two projects are carried out in Moldova’s agriculture sector, with the financial support of the World Bank - Agriculture Competitiveness Project, meant to enhance the competitiveness of the agro-food sector by supporting the modernization of the food safety management system, facilitating market access for farmers, and mainstreaming agro-environmental and sustainable land management practices; as well as the Disaster and Climate Risk Management Project, meant to strengthen the State Hydro meteorological Service’s ability to forecast severe weather and to improve Moldova’s capacity to prepare for and respond to natural disasters.    

Adapted from Infotag