World Bank Helps Moldova Mitigate Drought Consequences in Agriculture

March 19, 2013

WASHINGTON D.C., March 19, 2013 - The World Bank Board of Executive Directors today approved a US$ 10 million credit to the Republic of Moldova for the Emergency Agriculture Support Project. The proposed credit would help finance the costs associated with alleviating the emergency in the country’s agriculture sector caused by the 2012 drought.

The project objective is to mitigate the negative effects of the 2012 drought by helping restore corn and wheat production and prevent livestock destocking in the most affected districts. The project will support the Government’s priorities of addressing the emergency situation, reducing the risk of escalation, and facilitating recovery from the drought.

Agriculture is one of the largest sectors of the Moldovan economy and in recent years it produced 12 percent of GDP, and employed 28 percent of the labor force. The prevailing share of agro-food exports stands at 45-50 percent of total exports. Despite the size and significance of the sector in the economy, rural areas exhibit highest poverty rates: while poverty in urban areas is around 10 percent, it triples to around 30 percent in rural areas.

“The Moldova Emergency Agriculture Support Project would mitigate the risk that the effects of the 2012 drought could be amplified in 2013,” said Abdoulaye Seck, World Bank Country Manager for Moldova. “The project would provide cash to farmers in the most affected districts for the 2012 winter wheat campaign and the 2013 spring corn campaign.”

The proposed emergency support is fully consistent with the Bank’s overall Partnership Strategy for Moldova. The project complements two other projects, which are currently under implementation: (i) the Disaster and Climate Risk Management Project, approved on August 5, 2010, and (ii) the Moldova Agriculture Competitiveness Project, approved on May 1, 2012.

The Emergency Agriculture Support Project has three components:

  • Cash Transfers to Affected Farmers. This component has two objectives: (i) to compensate a share of the losses that farmers suffered during the 2012 season, and (ii) to provide an incentive for planting winter wheat and corn during the 2013; 
  • Training and Awareness. This component has two objectives: (i) to ensure public dissemination of information in the eligible districts about the cash transfer program, and (ii) to improve knowledge about animal feeding;
  • Project Management. This component would support costs associated with project implementation, including operational costs and capacity development costs.

Since Moldova joined the World Bank in 1992, a total of US$ 950 million have been allocated to 46 projects in the country. Currently, the World Bank portfolio includes 12 active projects with total commitments of US$ 296 million. Areas of support include education, social assistance, e-governance, healthcare, water and sanitation, agriculture, business development, and others.

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