Income from agricultural activities is low. Household income from agricultural activities has been decreasing over the years, and represents up to 45% in case of farmers and 50 to 60% for the employers in agriculture. Anyway the agriculture activities contribute up to 20% of the revenue of the rural area inhabitancies. At the same time, income from remittances represented 22.8% of household income in 2013. Encouragingly a recent study indicates that more than 10% of remittances are spent on investments on farms such as the acquisition of new land, farm buildings or farming machinery. Rural infrastructure remains in a dilapidated condition. Roads, energy and water for household and irrigation needs have the greatest negative impact on agricultural income. Moldova has always been known for its fertile lands and agriculture, the backbone of the economy. The black soils (chernozem) of Moldova are amongst the most fertile soils in the world. Arable land accounts for around 74% of total land area equal to 3384,6 thousand hectares, one of the highest percentage in Europe.

As a result of the land reform, the structure of agriculture land use has changed. After privatization in the 1990s, a large share of land remains as small individual plots. The privatization process has resulted in an average landholding of 1.4 ha, further sub-divided into separate plots based on land type (arable, orchard, vineyard), to around 1m title holders. In many cases it is not possible to use these small plots efficiently. Production of many traditional crops such as grain, sunflower or sugar beet is dependent on scale and mechanization, and therefore can be performed only on larger, field scale operations. In addition, the farmers / peasants lack the experience, technical skills and finance to develop such production successfully.

A land market is developing and agricultural land is being further consolidated, although at a rate and pace that is not described in any available analyses.

According to a study on poverty in Moldova conducted by the Ministry of Economy for 2013, poverty rate represent 12,7% in 2013(26.3% in 2009). The decline is based mainly due to increased remittances and higher agricultural prices. The proportion of extremely poor also decreased from 2.1% in 2009 to 0,3% in 2010. The reduction in poverty has mainly happened in rural areas where 84% of the poor live.

Poverty rates depending on the main income source of the household head showed the maintenance of the highest level in households with self-employed activities in agriculture and workers in agriculture, with a 2013 absolute poverty rate of 21,7% (36.5% in 2010) and 31,3% (44.9% in 2010), respectively – rates that exceed by far the national average.¹

According to the GAC 2011, over 1590000 persons, belong to the category of family labour, participated to agricultural activities on the holdings without juridical status, of which about 208300 worked at full time (8 hours/day). Permanently employed labour force on both types of holdings amounted at 60386 persons, while temporarily employed persons amounted at 314984 persons. With regard to the labour force resources in agricultural holdings without juridical status, the results of the GAC 2011 shows that almost 42% of the total numbers of holdings without juridical status have only one person (head of the holding) involved in farm work, almost 44% have two persons involved in farm work. Only 0.1% of the holdings have more than five persons involved in work on the farm.

The role of the family farms in agriculture production

The climatic conditions and high indigenous fertility of soils in Moldova are well suited to the growing of most temperate fruits and vegetables, potatoes, cereals and oilseeds. The State Statistical Service distinguishes between: (i) agricultural enterprises and large-scale farms (10ha and over), and; (ii) Households and small farms (under 10ha). In terms of volume households and small farms (less than 10Ha) account for 72% of total agricultural production, based on high average of the animal husbandry in households and small farms, and of horticulture production. 80% of all horticultural products, defined as high value agricultural products, categorised into three main groups:

(i)    Vegetables, including fresh/chilled, frozen and dried vegetables;
(ii)    Fruits and nuts, including fresh/chilled, frozen and dried fruits, and;
(iii)    Processed fruits and vegetable products, including juices and canned fruits and vegetables.

Statistics Yearbook 2011

In particular production of high-value crops, fruit and vegetables, offers the best potential for increased income. Weak and underdeveloped agricultural markets for inputs and outputs keep producer prices depressed, while input prices increase at a faster rate. On the supply side, the low and inconsistent quality of agricultural produce is responsible for the poor marketing opportunities presently available to Moldovan growers. Farmers in Moldova also lack institutional arrangements in the form of voluntary membership organizations to facilitate marketing and other services to better integrate them in vertically coordinated supply chains.

Issues

• Low competitiveness due to inefficient structure of production and processing with many small farms and unconsolidated land resources.
• Outdated production and processing equipment and technology
• Limited appropriate infrastructure in rural areas
• Lack of appropriate diversification in rural economy for non-agricultural activity
• Access to Credit, further constrained by a lack of collateral and high interest rates

^{1. mec.gov.md/ro/content/impactul-saraciei}

This text is kindly provided by the authorities of this country.