Improving the Competitiveness of Value Chains in Moldova's High-Value Agriculture (HVA) Sector

The initiative targeted binding regulatory constraints that hindered the sector's growth. The CIBER process, a methodology for value chain analysis, was employed to identify and assess these constraints. The CIBER process involved developing an inventory of business environment constraints, selecting priority constraints for further analysis, and assessing the importance of economic constraints. One such constraint was compulsory variety registration, which required farmers to register their crop varieties with the government. This process was deemed necessary to ensure the quality and safety of agricultural products, but it imposed significant costs and administrative burdens on farmers. The expected economic impact of compulsory variety registration was a 10% increase in production costs, resulting in a 5% decrease in crop yields. The constraint also had spillover effects on other sectors, such as input suppliers and traders. To alleviate this constraint, the implementing and supporting institutions, including the government and agricultural extension services, needed to simplify the registration process and reduce the associated costs. External incentives, such as subsidies or tax breaks, could also be provided to encourage farmers to adopt the new registration process. Another constraint identified through the CIBER process was poor regulation of access to surface water for irrigation purposes. This constraint resulted in high costs and uncertainty for farmers, who had to rely on expensive and unreliable irrigation systems. The expected economic impact of this constraint was a 15% decrease in crop yields, resulting in a 10% decrease in household income. To address this constraint, the implementing and supporting institutions needed to establish a fair and transparent system for allocating surface water rights, and provide support for farmers to adopt more efficient irrigation technologies. The CIBER process also identified restricted access to underground water for irrigation purposes as a significant constraint. This constraint resulted in high costs and uncertainty for farmers, who had to rely on expensive and unreliable irrigation systems. The expected economic impact of this constraint was a 12% decrease in crop yields, resulting in a 8% decrease in household income. To alleviate this constraint, the implementing and supporting institutions needed to establish a fair and transparent system for allocating underground water rights, and provide support for farmers to adopt more efficient irrigation technologies. In addition to these constraints, the CIBER process identified expensive access to electricity grid, repeated and expensive testing of seedlings, and import duties on greenhouses and accessories as significant barriers to the HVA sector's growth. These constraints resulted in high costs and uncertainty for farmers, input suppliers, and traders, and had spillover effects on other sectors. To address these constraints, the implementing and supporting institutions needed to simplify the process of accessing electricity, reduce the costs of testing seedlings, and eliminate or reduce import duties on greenhouses and accessories.