Extreme Drought Hits Moldova
Agriculture Policies Change in Response to Grain and Water Shortages
The 2007 drought in Moldova has affected 80% of the country. In response to the grain and water shortages, the government has altered policies and sought foreign aid.
Central and southeastern Europe have been hit hard by a drought that continues throughout the summer of 2007. The drought has severely compromised grain production in The Republic of Moldova, a small ex-Soviet republic heavily dependent on agriculture.
Moldova, like other southern European countries this summer, has experienced an extended period of extraordinarily high temperatures (up to 105 Fahrenheit). Lack of rain has compounded the problem. The country has only received 50-75% of its normal rainfall since September 2006, and only 6-50% of expected rains in the last three months. The Moldovan Agriculture Ministry has announced that losses in the country's farming sector already exceeds $80 million US and is still climbing.
This year, only 400,000 metric tons of gain have been harvested, well short of the planned yield of 750,000 tons. Attempting to replace losses in the supply chain, wheat has already been acquired and distributed from state reserves. The government has also announced that they will be seeking foreign aid in the near future. Trying to ease public concerns over consumer costs, President Vladimir Voronin has guaranteed that bread prices will not increase.
Moldova Policy Changes
To avoid further depletion of the diminished State Grain Reserve, the Moldovan government has implemented several new policies:
- A promise to purchase 50,000 tons of wheat from local farmers. To subsidize farmers for their monetary losses, purchase prices will be approximately 67% higher than those paid by the government last year.
- A temporary ban has been placed on further cereal product exports.
The massive loss of home-grown grains has forced the Moldovan government to take drastic steps to cope with this disaster:
- Moldova will purchase between 230,000 - 260,000 tons of foreign wheat in 2007, which is over half the country's 450,000 ton annual consumption.
- Parliament has lifted the 5.1% import duty on wheat, barley, and flour.
- Parliament has suspended the 20% value added tax (VAT) on cereals and flour.
These measures are meant to reduce effects of the drought and to compensate for increasing wheat product prices on the international market. The cancellation of import duties and VAT will remain in effect until July 1, 2008.
Past History of Moldovan Droughts
In 2003, a similar drought plagued the country, with crop yields falling 75%. Unlike President Voronin's promise this year, in 2003 bread prices rose by 30-60%.
Sixty years ago, during the drought of 1945-47, the government of the Moldovian Soviet Socialist Republic instituted a policy requiring that large amounts of agricultural products be held off the market. This policy forced collectivization of the agricultural sector, but also induced a famine with between 200,000 to 300,000 victims.
References
"Drought compels Moldova to ask foreign countries for assistance." ITAR-TASS. July 22, 2007
"Moldova Postwar Reestablishment of Soviet Control." The Library of Congress Country Studies. JUne 1995.
"Severe drought threatens 80% of Moldova." RIA Novosti. July 23, 2007
