Five Myths about Moldovan Agriculture

After two years of being here, I still can't say I'm an expert in anything.  However, I can say that I have become much more informed, especially when it comes to agricultural development.  Below, I give five myths followed by truths and sample cases, which will help shed some light on the Moldovan agricultural situation.

1.       Money is the problem.  "If only I had $xxxxx to invest, I could really make money."

Truth: A lack of money is rarely the problem in the end.  Sure, money is absolutely necessary in reaching a certain economy of scale that will be able to capture some profit, and it takes time to make enough money to do that.  However, the real challenges are the critical steps that occur from the time of investing the money to turning a profit.  The biggest problem I have seen over and over again through this process revolves around the failures of human resources to do the job, whatever it may be, correctly.  That and the lack of insurance against inclimate bad weather. Investors are looking but they need some assurance that their money won't be wasted and that farmers are willing to meet their product demands.  That also requires farmers to be open and focused on meeting the demands of new customers (which could mean growing different crops or using different methods).
Case in point: Black Sea Seeds Company in Moldova produces organic seeds for the Dutch market.  Under the direction of the owner of the company here, they have invested time and money in finding the land, working with farmers, purchasing equipment, and  following through on both the production side and complicated business side of exporting products (let alone organic seeds!) to Holland.  A lot of money is needed for this venture, but that was never the problem.  It's the hard work in getting from point A to point B without too many detours that is the most challenging.  Imagine all the work between these two points:

• Point A:  No registered business. No land. No contracted farmers. No managers or consultants. Little know-how on navigating Moldovan complicated business laws.   

• Point B: Up and running business.  Organically certified land under contract.  Capable farmers, workers, managers, and accountants hired and doing their job correctly.  Technical knowledge of farming, business practices, and export processes acquired. 

Black Sea Seeds CEO Diana Hoorn on her farm.

2.       Moldovan farmers have no new market opportunities. They are confined to domestic markets.

Truth: Moldovan farmers may not be able to tap into markets due to broken links in value chains, the farmers' own lack of will or education, or their lack of cooperation amongst each other. However, I am not alone in believing that plenty of markets are available (such as organic commodities, salad greens, grassfed beef, year-round fresh fruit and vegetables through greenhouse use, and other niche markets).  International investors are interested in the Moldova agricultural sector, but they need to find the right people, those willing to do the dirty work.  The paper work, management, educational side for growers, accounting, and production need to be done by mostly local people who care about little details and focus on quality work.
Case in point: Currently, I've been consulting with an American organic sunflower oil company, who wants to diversify their supply of sunflowers (mostly away from Ukraine).  This could pose a great opportunity for some Moldovan farmers, who could receive a premium price for their sunflowers and have a forward contract at a high volume.  As I am in discussions with different stakeholders, there's just one missing link: who will convince farmers to agree to this opportunity and to train them in organic farming processes?!  I haven't heard of one person who can locate a strong contingent of local farmers who are open and serious about this idea.  I'm also not talking about small landholders of 3 hectares but bigger farmers who have already shown some capacity for commercial farming.

The traditional method of travel, a horse and cart, in rural Moldova seen here carrying hay.

3.       Technology is outdated, and systems are broken. Moldovan agriculture has no ability to improve.  

Truth:  Indeed, barriers to accessing improved technologies at a reasonable cost to Moldovan farmers can be very challenging.  The challenges are not impossible to overcome, but farmers must be savvy enough and ambitious enough to want to learn about how to improve the way they do things.  I'm not so sure they all have quite the knowledge or the hunger to acquire it.  If it's not that, then some might also have a few barriers to accessing the appropriate technologies.
Case in point: I worked with one farmer, Ion, in a quest to acquire a corn picker that is specific to fresh sweet corn. One might think that Moldovan villages would have good manual labor to offer, but many able hands and bodies have left to work elsewhere.  Those that are left may not always be the most hardworking or trustworthy (a severe case of "Brain Drain" that can hardly be compared to the mild form of what we call Brain Drain in Nebraska).  This leaves farmers with a choice between an unstable harvest laborer cohort or a challenging upgrade in technology that could cause a cash flow problem.  With Ion, my main role was to be a translator for him so he could communicate with the one and only company selling the desired equipment in Europe (outside of Ukraine which was too unstable).  Translating from English to Romanian was practically essential to ensuring a successful transaction, as discussions of prices, taxes, equipment specifics, logistics and other things would not have made so much sense.  (Google translate can only go so far...)  I give this as an example that supports the hard truth that it can be very difficult to make technology upgrades, but it's not impossible.  If I wasn't here, Ion is still determined and scrappy enough to have done it himself.

A market in Causeni, selling the traditional products of the season

4.       A typical Moldovan farmer knows everything he needs to know.  He's pretty much a jack-of-all-trades, so there's no need to tell him how to improve his operation.

Truth: A great need for legitimate educational training for farmers exists. I have been disappointed by the lack of relevant trainings that help farmers improve their bottom line.  Local consultants in rural extension offices are surely a valuable link for quick technical knowledge, and these offices offer administrative support that otherwise would leave farmers hard pressed to finish all that voluminous paperwork they must complete in order to obtain any form of subsidy (such as financial assistance for new equipment, greenhouses, irrigation systems, and disaster relief). However, I still see a need for more engaging educational opportunities for farmers.  Rather than farmers being requested by local agents to come to seminars (and certainly to come to sign the paper that says they attended), farmers would freely come for reason of education and value.
Case in point: Culturally speaking, the Soviet way of doing things historically left no room for error. Even though of course everyone makes mistakes at some point, collective farm mistakes had to be hidden.  The Soviet Union as a centralized economy also made most decisions for collective farms.  If the government said a farm needs to produce 50 tons of x crop and the farm only produced 47 tons, the farm would still report 50 tons as requested.  These old habits of stretching the truth impacts today's Moldovan agricultural economy. Many farmers today don't want to admit that they may have failed at something at some point and struggle with calculating risk accurately in business decision making, as they haven't had the education or practice with it.

For farmers in Moldova today, they must admit to the things they don't know.  This means learning about the methods of agriculture and processes of business that can be improved such as implementing no-till practices; learning about improving soil fertility and crop yields with low-cost technologies; making and using budgets and business plans; and focusing on a long-term strategy for farm improvements.  Some farmers and agribusiness people in Moldova do focus on these things, and I am grateful for them!  I just wish I found them in greater numbers and with more honest tenacity for rural development success.

A long-time employee of Asconi Winery filtering wine in modernized tanks

5.       Moldovan wines are too unknown for them to be able to expand production and expand into new markets.

Truth: Moldova's got nothing as far as its representation for good wine like many other Old World wine countries (France, Italy, Spain, Germany, etc.), but they still have the ability to market themselves as European wine at perhaps a lower cost.  Besides creating a quality product, winemaking has much to do with marketing your wine to the right audience and in the right way.  Moldova has a competitive advantage here by its unique winemaking history and location and perhaps by the lower cost of production here as well. (Equipment is still very expensive!)
Case in point: One winery, Asconi, produces over a million bottles annually and exports almost all of it. Historically, their biggest customer was Russia as it was a safe, constant client for Moldovan wines. As the Russian market has become more and more unreliable in the last 10 years, wineries including Asconi have looked elsewhere to sell their wines.  Markets for Asconi currently include the Czech Republic, Poland, Nigeria, South Africa, Israel, Lithuania, and others.  Moldova also has an opportunity to reach the ever-growing mass of wine-drinking Asians as well.

This discussion about Moldovan agriculture is still quite basic.  I'm sure that each myth and truth would lead to much more commentary, but this provides a basic taste of some of the challenges and opportunities found in agriculture here that I have observed.  I am still so proud to know many farmers here that work so hard, and I applaud them for their efforts.