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World Bank Supports Moldova’s Fruit Farmers

May 19, 2015

WASHINGTON, May 19, 2014 — The World Bank’s Board of Executive Directors today approved a US$12 million additional financing to the Republic of Moldova for the Agriculture Competitiveness Project, which will support small-scale farmers in coping with difficulties in exporting to Russia.   

Moldovan agricultural and food exports to the Russian Federation were subject to reinforced import controls through 2013 and 2014. The most affected export items were wine, and summer varieties of apples and plums. Prior to the strengthening of import controls, approximately 30 percent of the country’s wine exports, valued at US$35 million, 93 percent of apple exports, valued at US$43.7 million and 80 percent of plum exports, valued at US$21.1, went to the Russian Federation. 

“Moldova’s horticulture sector was highly affected by the events of 2013 and summer 2014, when the country’s fruit farmers were no longer able to export their produce to what was a traditional market,” said Alex Kremer, World Bank Country Manager for Moldova. “The World Bank has worked closely with the Government of Moldova to put in place a robust and targeted compensatory mechanism to support small-scale farmers affected by these restrictions, in order to protect rural jobs and safeguard economic activity.”

The US$12 million will be used to provide targeted compensatory grants to small-scale apple, plum and grape growers, with farms of less than 15 hectares, who sold their produce domestically for processing in the fall of 2014. The grants will compensate about 50 percent of the difference between the estimated normal price and the processing sales price in 2014. By helping fruit growers and essentially the rural economy, the new funding will focus on sustaining existing gains in the agriculture sector and will complement the longer-term support under the main Agriculture Competitiveness Project focused on strengthening the export competitiveness of Moldova’s agriculture. 

Since Moldova joined the World Bank in 1992, over US$1 billion has been allocated to approximately 60 projects in the country. Currently, the World Bank portfolio includes 9 active projects with a total commitment of US$246 million. Areas of support include regulatory reform and business development, education, social assistance, e-governance, healthcare, agriculture, environment, and others. The International Finance Corporation has invested US$233 million in 24 projects in various sectors, and the Multilateral Investment Guarantee Agency has provided guarantees totaling US$95 million. Both institutions are members of the World Bank Group.

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