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Development of agricultural and non-agricultural services in Moldova

Moldova was 107th on the Human Development Index 2014 raking of UNDP, which annually monitors the socio-economic development of all the countries of the world. Moldova is characterised by low national income and other development indicators; it is one of the poorest countries in Europe and heavily dependent on foreign aid. Moldova’s economy is heavily dependent on the agricultural sector, which is its primary economic contributor and provides around 60 per cent of the country’s export revenues, more than 40 per cent of direct employment for its working population and substantially more than 50 per cent of employment when we include the working population who derive their income from agriculture-related sources.

According to the available sources, vast areas of Moldova, especially its rural areas, are affected by poverty and see some of the lowest wages, the highest labour emigration metrics and the greatest percentage of population at risk of social exclusion. The huge amount of economic emigration is a direct result of this situation. Due to very high unemployment rates in Moldova’s rural areas (according to some statistics, as much as 70 per cent of the working population), measures aimed at enterprise development are particularly important for the development of those areas.

In addition to supporting agricultural activity as such, it is also very important to create broader job opportunities in the agricultural and non-agricultural services sectors. Such measures facilitate access to the services market in rural areas and diversify the labour market there, and thus keep in check the processes of farm fragmentation and labour emigration.

Development of agricultural and non-agricultural services in Moldova

The project was prepared by the East Foundation in partnership with the National Rural Development Agency in Moldova (NRDA).

The project supports the diversification of the labour market in the rural areas of Moldova; its implementation was planned for the years 2017-2019 and was divided into three annual modules (stages). The direct aim for 2017 was to lend effective support to providers of rural agricultural and non-agricultural services by establishing a base for their future growth. The action plan for 2018 provides for further dynamic expansion of operators’ capacities, while the plan for 2019 aims to assist service providers in reaching their full service provision capacity and in creating stable conditions for their further sustainable development.

As part of the task of developing agricultural services in the first stage of the project, its participants received support in the construction, equipping and/or incorporation of innovative technologies in three modern cold stores, four fruit drying and processing plants, a groats milling plant and a rural mill. The task of developing non-agricultural services provided for the modernisation of rural carpentry and tailoring shops (in three villages), repairs of large machinery and transport vehicles, construction of a guesthouse and support for a direct regional foodstuffs retailing system.

Upon completion, the project will have enabled the creation of 81 new jobs and the generation in 2019 of combined sales revenues in the amount of around EUR 1,345,000. The innovative providers of agricultural and non-agricultural services will also serve as model facilities for the NRDA advisory network to use to provide education about and promotion of rural enterprise development in Moldova.

The project is supra-regional and will be rolled out over the respective years in 17 villages across 12 regions of Moldova. It obtained recommendations from the Ministry of Agriculture of Moldova and is consistent with the National Development Strategy of Moldova.

Development of agricultural and non-agricultural services in Moldova

Upon completion of the first stage of the project:

- foundation and structural work; sandwich panel walls were built for: five cold storage rooms in the village of Coşcodeni, four such rooms in the village of Ruseştii, and a sorting and packing plant in the village of Pepeni;

- four fruit drying and processing plants were modernised in the villages of Jora de Mijloc, Corjova, Isacova, Hîrtop and Ustia; as a result, seven jobs were created;

- a new groats plant was built and equipped in the village of Bulboaca, and a mill was refurbished in the village of Sălcuţa; by the end of 2017, this should generate sales of about EUR 75,000; as a result, three new jobs were created;

- a new tailoring service shop was established in the village of Peresecina; the shop was able to employ three additional people and is expected to generate sales revenue of around EUR 80,000 by the end of 2017;

- equipment was acquired for a large machinery repair facility in the village of Mitoc; the investment is expected to allow the shop to generate annual revenues of around EUR 65,000 and to hire one more employee;

- foundation and structural work; the walls of a joinery shop, with a total area of 900 m2, were built in the village of Ciorescu; as a result, the workshop increased its sales to EUR 60,000 and employed two additional people;

- roof structure and roofing as well as indoor installations were replaced and plastering work was done in the guesthouse building in the village of Tomai;

- a study visit to Poland (three people over three days) and a workshop in Moldova (20 participants and two trainers) were completed, in keeping with the adopted schedule, programme and budget;

- upon the creation of 16 new service sector jobs in 2017, the economic and social standing of the beneficiaries at the project locations improved.