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
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
Social inclusion ________________________________________________________ 30
Institutional support _____________________________________________________ 31
Environmental issues ____________________________________________________ 32
Challenges and potential HVAA interventions __________________________________ 33
Open field vegetables (for processing) _____________________________________ 34
Production ___________________________________________________________ 34
Markets _____________________________________________________________ 42
Social inclusion ________________________________________________________ 46
Institutional support _____________________________________________________ 47
Environmental issues ____________________________________________________ 48
Challenges and potential HVAA interventions __________________________________ 49
Medicinal and Aromatic Plants (MAPs)_____________________________________ 51
HVAA VALUE CHAIN ASSESSMENT AND SELECTON REPORT
Production ___________________________________________________________ 51
Markets _____________________________________________________________ 54
Social inclusion ________________________________________________________ 56
Institutional support _____________________________________________________ 56
Environmental issues ____________________________________________________ 57
Challenges and potential HVAA interventions __________________________________ 57
Berries _______________________________________________________________ 59
Production ___________________________________________________________ 59
Markets _____________________________________________________________ 61
Social inclusion ________________________________________________________ 64
Institutional support _____________________________________________________ 65
Environmental issues ____________________________________________________ 65
Challenges and potential HVAA interventions __________________________________ 67
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
HVAA VALUE CHAIN ASSESSMENT AND SELECTION REPORT – 5
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.
HVAA VALUE CHAIN ASSESSMENT AND SELECTION REPORT – 6
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.
HVAA VALUE CHAIN ASSESSMENT AND SELECTION REPORT – 7
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.
HVAA VALUE CHAIN ASSESSMENT AND SELECTION REPORT – 8
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
HVAA VALUE CHAIN ASSESSMENT AND SELECTION REPORT – 9
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?
HVAA VALUE CHAIN ASSESSMENT AND SELECTION REPORT – 10
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
$2 million to $5 million
$5 million to $10 million
> $10 million
Current imports to Moldova ITC Trade
Map 5%
Low, <$1
million
$1 million to $2 million
$2 million to $5 million
$5 million to $10 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
HVAA VALUE CHAIN ASSESSMENT AND SELECTION REPORT – 11
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.
HVAA VALUE CHAIN ASSESSMENT AND SELECTION REPORT – 12
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
HVAA VALUE CHAIN ASSESSMENT AND SELECTION REPORT – 13
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.
HVAA VALUE CHAIN ASSESSMENT AND SELECTION REPORT – 14
Walnuts Almonds Hazelnuts
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;
HVAA VALUE CHAIN ASSESSMENT AND SELECTION REPORT – 15
(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
HVAA VALUE CHAIN ASSESSMENT AND SELECTION REPORT – 16
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
Walnuts Almonds Hazelnuts
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.
HVAA VALUE CHAIN ASSESSMENT AND SELECTION REPORT – 17
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
HVAA VALUE CHAIN ASSESSMENT AND SELECTION REPORT – 18
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.
HVAA VALUE CHAIN ASSESSMENT AND SELECTION REPORT – 19
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
HVAA VALUE CHAIN ASSESSMENT AND SELECTION REPORT – 20
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/
HVAA VALUE CHAIN ASSESSMENT AND SELECTION REPORT – 21
Environmental issues
Impact of the value chain on the environment
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).
HVAA VALUE CHAIN ASSESSMENT AND SELECTION REPORT – 22
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
HVAA VALUE CHAIN ASSESSMENT AND SELECTION REPORT – 23
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
HVAA VALUE CHAIN ASSESSMENT AND SELECTION REPORT – 24
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.
HVAA VALUE CHAIN ASSESSMENT AND SELECTION REPORT – 25
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
Global market growth (annual growth in
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
HVAA VALUE CHAIN ASSESSMENT AND SELECTION REPORT – 26
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
HVAA VALUE CHAIN ASSESSMENT AND SELECTION REPORT – 27
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
HVAA VALUE CHAIN ASSESSMENT AND SELECTION REPORT – 28
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
HVAA VALUE CHAIN ASSESSMENT AND SELECTION REPORT – 29
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
HVAA VALUE CHAIN ASSESSMENT AND SELECTION REPORT – 30
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
HVAA VALUE CHAIN ASSESSMENT AND SELECTION REPORT – 31
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.
Institutional support
Private sector/government and/or donor investment
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.
Institutional capacity to sustainably support value chain development
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
HVAA VALUE CHAIN ASSESSMENT AND SELECTION REPORT – 32
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.
Environmental issues
Impact of the value chain on the environment
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.
Impact of the environment and climate change on the value chain
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/
HVAA VALUE CHAIN ASSESSMENT AND SELECTION REPORT – 33
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
Challenges and potential HVAA interventions
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
HVAA VALUE CHAIN ASSESSMENT AND SELECTION REPORT – 34
Table 12. Constraints, challenges, needs and potential HVAA interventions in the
Moldovan beekeeping sector
Production Processing Agricultural
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-
HVAA VALUE CHAIN ASSESSMENT AND SELECTION REPORT – 35
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
HVAA VALUE CHAIN ASSESSMENT AND SELECTION REPORT – 36
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/).
HVAA VALUE CHAIN ASSESSMENT AND SELECTION REPORT – 37
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.
There are also thousands
of small-holder farmers
producing for the
themselves and the local
market.
Approx. 300 commercial
farmers producing for
processors.
There are also thousands
of small-holder farmers
producing for the
themselves and the local
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.
HVAA VALUE CHAIN ASSESSMENT AND SELECTION REPORT – 38
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
HVAA VALUE CHAIN ASSESSMENT AND SELECTION REPORT – 39
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
HVAA VALUE CHAIN ASSESSMENT AND SELECTION REPORT – 40
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
HVAA VALUE CHAIN ASSESSMENT AND SELECTION REPORT – 41
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
HVAA VALUE CHAIN ASSESSMENT AND SELECTION REPORT – 42
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
HVAA VALUE CHAIN ASSESSMENT AND SELECTION REPORT – 43
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
HVAA VALUE CHAIN ASSESSMENT AND SELECTION REPORT – 44
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.
HVAA VALUE CHAIN ASSESSMENT AND SELECTION REPORT – 45
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
HVAA VALUE CHAIN ASSESSMENT AND SELECTION REPORT – 46
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
HVAA VALUE CHAIN ASSESSMENT AND SELECTION REPORT – 47
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
Institutional support
Private sector/government and/or donor investment
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
HVAA VALUE CHAIN ASSESSMENT AND SELECTION REPORT – 48
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.
Institutional capacity to sustainably support value chain development
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”.
Environmental issues
Impact of the value chain on the environment
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.
Impact of the environment and climate change on the value chain
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
HVAA VALUE CHAIN ASSESSMENT AND SELECTION REPORT – 49
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.
Challenges and potential HVAA interventions
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).
HVAA VALUE CHAIN ASSESSMENT AND SELECTION REPORT – 50
Table 19. Constraints, challenges, needs and potential HVAA interventions in the Open
field vegetable sector
Production Processing Agricultural
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
HVAA VALUE CHAIN ASSESSMENT AND SELECTION REPORT – 51
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
HVAA VALUE CHAIN ASSESSMENT AND SELECTION REPORT – 52
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:
HVAA VALUE CHAIN ASSESSMENT AND SELECTION REPORT – 53
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
HVAA VALUE CHAIN ASSESSMENT AND SELECTION REPORT – 54
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).
HVAA VALUE CHAIN ASSESSMENT AND SELECTION REPORT – 55
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.
HVAA VALUE CHAIN ASSESSMENT AND SELECTION REPORT – 56
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.
Institutional support
Private sector/government and/or donor investment
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.
HVAA VALUE CHAIN ASSESSMENT AND SELECTION REPORT – 57
Institutional capacity to sustainably support value chain development
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.
Environmental issues
Impact of the value chain on the environment
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.
Impact of the environment and climate change on the value chain
Moldova is considered highly vulnerable to climate variability and change. Impacts are expected to
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.
Challenges and potential HVAA interventions
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
HVAA VALUE CHAIN ASSESSMENT AND SELECTION REPORT – 58
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
HVAA VALUE CHAIN ASSESSMENT AND SELECTION REPORT – 59
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 +
HVAA VALUE CHAIN ASSESSMENT AND SELECTION REPORT – 60
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 + +
HVAA VALUE CHAIN ASSESSMENT AND SELECTION REPORT – 61
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
Global market growth (annual growth in
quantity 2011-2015)
3 percent 13 percent
Global market growth (annual growth in
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.
HVAA VALUE CHAIN ASSESSMENT AND SELECTION REPORT – 62
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
HVAA VALUE CHAIN ASSESSMENT AND SELECTION REPORT – 63
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.
HVAA VALUE CHAIN ASSESSMENT AND SELECTION REPORT – 64
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.
HVAA VALUE CHAIN ASSESSMENT AND SELECTION REPORT – 65
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.
Institutional support
Private sector/government and/or donor investment
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.
Environmental issues
Impact of the value chain on the environment
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.
HVAA VALUE CHAIN ASSESSMENT AND SELECTION REPORT – 66
Impact of the environment and climate change on the value chain
Moldova is considered highly vulnerable to climate variability and change. Impacts are expected to
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.
HVAA VALUE CHAIN ASSESSMENT AND SELECTION REPORT – 67
Challenges and potential HVAA interventions
Summary of constraints, challenges, needs, and potential HVAA intervention in the Moldovan berry
sector is presented below (Table 27).
Table 27. Constraints, challenges, needs and potential HVAA interventions in the
Moldovan berry sector
Production Processing Agricultural
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
Insufficient advisory
services for berries
Insufficient advisory
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
HVAA VALUE CHAIN ASSESSMENT AND SELECTION REPORT – 68
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
HVAA VALUE CHAIN ASSESSMENT AND SELECTION REPORT – 69
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.
HVAA VALUE CHAIN ASSESSMENT AND SELECTION REPORT – 70
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).
HVAA VALUE CHAIN ASSESSMENT AND SELECTION REPORT – 71
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.
Prioritizing interventions
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).
Prioritizing interventions
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.
HVAA VALUE CHAIN ASSESSMENT AND SELECTION REPORT – 72
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.
Prioritizing interventions
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).
Prioritizing interventions
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.
HVAA VALUE CHAIN ASSESSMENT AND SELECTION REPORT – 73
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?
Institutional support
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?
HVAA VALUE CHAIN ASSESSMENT AND SELECTION REPORT – 74
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?
Environmental issues
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?