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									Practical Solutions to Client Needs: An Industry-Specific
Investment Climate Angle to Integrated Country
Programs

Alberto Criscuolo, IC Industry-Specific Global Team, IFC Istanbul

June 15, 2011
    What is Industry Specific Investment Climate?
Objective:

Generate reforms and impacts at the industry level through the application of our economy-wide
expertise to the circumstances and challenges within specific sectors. This work aims to improve the
way markets function with a view to increasing efficiency (cost savings & anti-monopoly),
investments, exports, and jobs.

What we do:

   Agribusiness: Address regulatory and competition constraints to growth and the means to increase both
    the volume and value-added of investments and/or exports and sector output in agribusiness. Core
    areas:
             ▪   Streamlining the regulatory environment for agribusiness competitiveness
             ▪   Facilitating investment for agribusiness growth and diversification
             ▪   Establishing the framework for accessing finance through warehouse receipts
             ▪   Fostering competition for growth and investment
             ▪   Improving tax administration and fiscal incentive policies for agribusiness

  Tourism: Contribute to tourism sector growth and competitiveness by attracting and realizing catalytic
   private sector investments in the accommodation sector while enhancing the policy, legal and
   regulatory framework to improve public sector performance and private sector profitability. Core
   areas:
             ▪ Streamlining Business Operations – Improving competitiveness
             ▪ Investment Generation Solutions – Triggering growth
                        –‘Investment Opportunity Creation’
                        –‘Investment Procurement’
                        –‘Private Sector Participation in Protected Areas’

   Other Sectors: While the initial focus is on agribusiness and tourism additional sectors are being
   covered, particularly in IDA or FCACs. (ie. Mining in Yemen, BPO in Kenya)
     Why Focus on Agribusiness & Tourism?

Agriculture and tourism are top two sectors in
most IDA countries for employment generation
            per unit of investment
     Agriculture                      Tourism
       Food security               Globalizing effect
  GDP Growth Multiplier        Foreign Exchange earnings
Declining Public Sector Role        Demonstration &
  Potential for increased           Catalytic Effect
        value added             Public Sector Divestiture
Increased investor interest        Youth Employment
What is the current portfolio of the IC Agribusiness Product?
                                Belarus

                                          Armenia
                            Ukraine                      Tajikistan
      Morocco
                                          Central Asia
                          Moldova
                                                                India
         Mali                             Georgia
                                                           (Bihar III) & Raj


     Burkina Faso


     Sierra Leone


                                                                                  Philippines
                 Liberia                  Kenya

                                                                               Cambodia
                         Cameroun
                                          Rwanda


                Brazil                                                   Indonesia
What are the Building Blocs of the IC Agribusiness Product?
  Streamline the regulatory environment for
   agribusiness competitiveness:
      Agricultural Input Markets Regulation
      Regulation of Aggregation Models                                            Regulatory
      Food Safety Regulation                                                       Reform
      Food Products Standards

  Facilitate investment for agribusiness
   growth and diversification
                                                               Investment                              Warehouse
  Establish the framework for accessing                       Facilitation                             Receipts
   finance through warehouse receipts

  Foster competition for growth and
   investment
    Inputs to agricultural production
    Agricultural logistics (i.e. transportation and warehousing)
    Commercialization of agriculture products

  Improve tax administration and fiscal                             Competition                    Tax
                                                                       Policy                   Simplification
   incentive policies for agribusiness




                                                                     4
How to deliver? Applying Industry Lens to Existing IC Products




                              5
Why bother about IC integrated Industry Programs?
                                   …because it improves Development Results!!!
                                                                                                                                                                                          100%
                              100%                                                                                      100%
      At all product stages

                                                                                           88%
                               90%                                                                          85%         90%                                        84%




                                                                                                                                                                                                   Especially for IC
                               80%                                    74%                                               80%




                                                                                                                                                                                                    interventions
                                                                                    70%
                               70%                     65%         67%                                                                    65%                                      67%
                                                                                                                        70%
                                                                              60%               58%
                               60%                                                                                      60%       57%
                                                   53%
                                                                                                                                                            49%
                               50%                                                                                      50%
                               40%                                                                                      40%
                                                                                                       28%
                               30%                                                                                      30%
                               20%                                                                                      20%
                               10%                                                                                      10%       46         51             49      19             18       6
                                      0%                                                                                 0%
                                                      In           Entry     Developed         Exit     Special                  Firm specific         Enabling Environment Enabling Environment
                                                 Development                                           initiative                                                              & Firm specific
                                                                       Not Linked     Linked                                                        Not Linked     Linked



                                   1 100%                                                                               100%
                                   2




                                                                                                                                                                                                   and consistently for
                                      90%                                                                                90%           82%                                                 81%
                                   4
                                                                                    76%                                                                                                 77%




                                                                                                                                                                                                     IFC investments
                                                 80%         70%                  73%                                    80%                                                74%
                                                                                                 69%                             69%
  For all results




                                                 70%                   64%                                                                                      65%      67%
                              % Rated Positive




                                                                                                                         70%                     61%         62%
                                                                     59%                                                                      57%
   indicators




                                                 60%     55%                                   53%                       60%
                                                 50%                                                                     50%
                                                                                                         38%
                                                 40%                                                   34%               40%
                                                 30%                                                                     30%
                                                 20%                                                                     20%
                                                 10%                                                                     10%
                                                                                                                                 420 73           417 71     415 72      409 73          411 70
                                                 0%                                                                       0%
                                                         124 108        124 108             124 108         123 103            74 69
                                                           DE    Relevance Output          Outcome     Impact                      DO               Fin          Econ        E&S          PSD

                                                                     Not Linked       Linked                                                        Not Linked      Linked




                                                                                                                    6
    Integrated Industry Country Programs in Practice…
            Driving for impact on agribusiness in Ukraine!




     Policy              Access to               Primary              Food processing             Infra-
    Context               inputs                Agriculture               & retail              Structure




IC: Industry-level         A2F:               SBA: EST (Food               SBA: EST Stds     Infra AS: PPPs
    regulatory         Agrifinance &           safety); FAST               (food safety),
  streamlining,       agro-insurance        (farmer prod-ivity)              FAST (farm
  Inspections &                                                            prod.), &Res.
  permits, food      FM/MAS: Loans to         MAS: Primary                    Efficiency     Infra/MAS: Cold
   safety, food         banks, risk-             export                   (cleaner prod.)   storage, logistics,
product standards    sharing facilities,      commodities,                   MAS: Food      ports, inland silos
                     supplier finance,         meat, dairy                  processing &
                            WC                                                  retail

   Maximizing Ukraine’s agribusiness potential by addressing key challenges across the value chain

                        SOURCE: IFC EMENA Strategy Presentation FY12-14




                                                                                                                  7
     IC Industry Contribution to Ukraine’s Integrated Agribusiness
                                Program
Objective:
     In consideration of Ukraine’s export potential in agribusiness and ability to play a global role in food security, the IC
     BL launched in 2009 an industry-specific intervention to address the micro-level regulatory and policy constraints to
                                                  agribusiness development.

Piloting an IC Integrated Industry Approach:
   Focus on harmonization of product standards, certification, and food safety regulation with intl. and EU best practice.
   IC BL led policy dialogue with GoU & SBA BL engaged with agro-processors on FS standards
   Leveraged World Bank “carrot & stick” to advance policy reform (DPL IV loan)
   Solid industry-level regulatory diagnostics as the basis of policy dialogue with GoU and direct TA to FS agencies

Policy Results:
1. The Cabinet of Ministers of Ukraine abolished the mandatory certification of
   food products in December 2009 (CABMIN Order 1689 of 12/23/09) !!!

    This enabled the GoU to unlock USD 20.7 million annually for the food
    processing sector in terms of reduced compliance costs.

2. Jointly developed with FS Agencies of 8 industry checklists on HACCP in the
   dairy, poultry, meat, and eggs sectors, endorsed by the EU (DG SANCO mission)
   in May 2010 and are expected to open up new export opportunities to EU.

3. FS reform included as priority of the deregulation agenda of the Committee for
   Economic Reforms under the President of Ukraine established in the spring of
   2010.


                                                                                                                                 8
…scaling up Integrated IC Agribusiness Country Programs in ECA
                                                                     Improving Tax Transparency for Real Sector
                                                                       Investments in Central Asia
                                                                     Objective: To address tax transparency & sector specific
                                                                      regulatory issues that constrain IFC & other investors in CA
                                                                     Focus: Agribusiness and real sector constraints that emerged
                                                                      from IFC IS work in the region (Survey of IOs, 3 country
                                                                      diagnostic, IS portfolio review).

                                                                     Streamlining Cross-Border Agribusiness Trade in
                                                                      Tajikistan (IDA)
                                                                     Objective: help farmers in Tajikistan access better seeds varieties,
                                                                      pay less for fertilizers, and ultimately increase crop yields.
                                                                     Focus: streamlining regulation on certification, registration, and
                                                                      import-export of agricultural inputs and products.
                                                                     Expected Results: increase competitiveness of Tajik agribusiness
                                                                      sector by easing dekhan farms registration, access to agricultural
Facilitating Agbiz Investments in Moldova                             inputs, simplifying import-export regulation;
 (IDA)
Objective: improve competitiveness and export                  Unleashing Ukraine’s Global Food Security Potential                     (Phase 2)
 performance of the high value agricultural products           Objective: unleash Ukraine‟s agricultural and export potential through
                                                                 better industry-level regulation, beyond food safety.
Focus: 1) reduction of regulatory distortions in input and
downstream phases of the HVA value chain (logistics,           Focus: 1) streamlining import-export regulation for agricultural inputs and
processing, marketing); 2) improved regulatory framework for     products; 2) improve regulatory framework for storage , quality standards, and
investment in post-harvest handling infrastructure in HVA,       and post-harvest logistics for grains and other export crops; 3) continue
including harmonization of standards with EU. 3) streamlined     harmonization of food safety and product quality standards with EU
export regulation for HVA;
                                                               Expected Results: lower costs and greater access to agri inputs (eg. current
Expected Results: Increased FDI and Investment in                market for crop protecting agents is USD $120 million annually, 95% imported);
  agribusiness; increased compliance with EU product quality     increased investments in grains post harvest logistics facilities and potential
  standards and greater efficiency of HVA supply chains          mobilization of additional USD 3.2 bln in trade finance through WHR system;
  resulting in higher final prices (currently 29% lower than     increased agricultural exports to EU;
  world prices);                                                                                                                                   9
IC Agribusiness Core Themes by VC Phase, Products, and Priority Countries
                                 in ECA
   Core Agbiz             Input                          Primary                        Traders                      Process-                    Distribu-                   Retailers
    Theme               prod+distr                      Producers                                                      ors                         tors

Regulation –         Ukraine All                                                Ukraine Grains, fresh
                                                                                                              Ukraine All – Ag cleaner
                                                                                                              production reg
                                                                                                                                            Armenia All – food Safety
                                                                                                                                            Reg (with SBA)
                                                                                                                                                                          Armenia All – food Safety
                                                                                                                                                                          Reg (with SBA)
                                                                                fruits&vegs – post-harvest
Licensing/ Permits   Moldova HVA „fresh                                         logistics
                                                                                                              Armenia All – food Safety     Tajikistan fresh fruits &     Tajikistan fresh fruits &
                     fruits&vegs”
                                                                                                              Reg (with SBA)                vegs – ag exports reg         vegs – ag exports reg
                                                                                Moldova HVA „fresh
                     Tajikistan fresh fruits &                                  fruits&vegs” – Post-Harvest
                                                                                                              Bosnia All – EU               Bosnia All – EU               Bosnia All – EU
                     vegs – ag inputs reg                                       Logistics
                                                                                                              harmonization                 harmonization                 harmonization

Regulation -                                                                    Ukraine Food Safety
                                                                                Controls – All/dairy & meat
                                                                                                              Ukraine Food Safety
                                                                                                              Controls – All/dairy & meat
                                                                                                                                            Ukraine Food Safety
                                                                                                                                            Controls – All/dairy & meat
Inspections
                                                  Ukraine Food Safety           Armenia All – food Safety     Armenia All – food Safety     Armenia All – food Safety
                                                  Controls – All/dairy & meat   Reg (with SBA)                Reg (with SBA)                Reg (with SBA)

                                                                                Georgia All – food safety     Georgia All – food safety     Georgia All – food safety
                                                                                reg (with SBA)                reg (with SBA)                reg (with SBA)

                                                                                                              Moldova HVA „fresh                                          Moldova HVA „fresh
Regulation -                                                                                                  fruits&vegs”                                                fruits&vegs”
                                                                                Moldova HVA „fresh                                          Georgia All
Standards                                                                       fruits&vegs”
                                                                                                              Georgia All                                                 Georgia All
                                                                                                                                            Bosnia All – EU
                                                                                Georgia All                                                 harmonization
                                                                                                              Bosnia All – EU                                             Bosnia All – EU
                                                                                                              harmonization                                               harmonization

Regulation - Tax     Central Asia Tax (with IS)
                                                                                Central Asia Tax (with IS)
                                                                                                              Central Asia Tax (with IS)    Central Asia Tax (with IS)



Regulation -         Moldova HVA „fresh
                     fruits&vegs – import duty
                                                                                                                                            Moldova HVA „fresh
                                                                                                                                                                          Ukraine Grains Export
                                                                                                                                                                          Quotas
                                                                                                                                            fruits&vegs” exporters
Trade                protection of packaging
                                                                                                                                                                          Moldova HVA exporters
                                                                                                                                            Tajikistan fresh fruits &
                     Tajikistan fresh fruits &
                                                                                                                                            vegs – ag exports reg
                     vegs – ag inputs reg                                                                                                                                 Tajikistan F&V

Investment                                                                      Ukraine Grains, fresh
                                                                                                              Ukraine All – Ag cleaner      Moldova HVA Post-Harvest
                                                                                                                                                                          Moldova HVA – Post-Harvest
                                                                                fruits&vegs – post-harvest                                                                Logistics
Promotion                                                                                                     production reg                Logistics
                                                                                Moldova HVA – Post-Harvest                                                                Georgia HVA
                                                                                                              Georgia HVA                   Georgia HVA
                                                                                Logistics
                                                                                                                                                                          Bosnia All
                                                                                                              Bosnia All                    Bosnia All
                                                                                Georgia HVA


Competition          Moldova HVA „fresh
                     fruits&vegs”
                                                                                Ukraine Grains – post-
                                                                                harvest logistics
                                                                                                                                            Ukraine Grains – post-
                                                                                                                                            harvest logistics
Policy/Monopolies                                                                                                                                                         Ukraine Grains Export
                     Tajikistan fresh fruits &                                  Moldova HVA „fresh                                          Moldova HVA „fresh            Quotas
                     vegs – ag inputs reg                                       fruits&vegs –                                               fruits&vegs –                                             10
                                                                                transport/logistics                                         transport/logistics
Summing Up Key Drivers of IC Agribusiness in ECA!
 •   Growing client demand and IC agbiz portfolio in ECA (Active projects with agbiz component:
     Ukraine, Tajikistan (with A2F), Belarus, Tax and Agribusiness IC in Central Asia (ER); Pipeline: Ukraine
     (next phase), Moldova (ER); Pre-pipeline: Georgia, Tajikistan (next phase), Armenia (next phase),
     Bosnia (next phase), Balkans Regional Food Safety (with SBA);
 •   Focus on Ukraine as global player on food security. Integrated agbiz country strategy with IS and all
     AS BLs. Strong results track records on IC reforms and priority focus on IC agbiz for next 3-year
     project cycle;
 •   Core IC Agribusiness Global Product Themes in ECA:
      •   Main focus on Theme 1: Streamlining the reg environment for agbiz competitiveness
      •   Increasing work on Theme 2: Facilitating Investment for agbiz growth (Moldova, Georgia)
      •   Piloting work on Theme 3: Improving tax admin and fiscal incentive policies for agbiz (IS-AS in
          Central Asia project)
 •   Strong Partnership with the World Bank on agbiz: full integration and excellent collaboration with
     the World Bank on agriculture/agribusiness policy reform (joint DPO operations, CPS Moldova,
     Tajikistan, Ukraine) and on analytical work (Ukraine Ag investment Note);
 •   Successful IC – AS integration pilot on Food Safety Reform: Joint IC-SBA policy and TA platforms in
     Ukraine, Belarus, Georgia, Armenia, Balkans Regional Food Safety Study;
 •   EU Integration as a key driver for IC engagement on agbiz regulation harmonization in South East
     Europe
 •   New CIC Industry Hub in Istanbul supports Global-Regional IC alignment with IS on Agbiz


                                                                                                            11
Thank You!




             12
Additional slides with country examples
               as a back up
            not to be shown




                                      13
        Facilitating Investment For Agribusiness in Africa


Sierra Leone
                                                   Rwanda
Launching investor outreach strategies in
                                                   Helping accelerate
    sugar and palm oil
                                                       investment and growth
Building institutional capacity of investment
                                                        in the horticulture and tea sector
    promotion agency (SLIEPA).
                                                   Removing obstacles to investments in the
Developing sugar sector strategy :
                                                       sector
▪ a detailed sector presentation for investors     Helping the Ministry of Agriculture and the
▪ list of target investors for proactive               Rwanda Development Board to identify
  outreach, with context and contact strategy
                                                       and reach out to reputable investors in
  for each;
                                                       horticulture and tea
▪ A list of top priority policy interventions to   Identifying land to be utilized on a leasehold
  the target investors;
                                                       basis by investors to help broker faster
Advice to government to improve focus on
                                                       transactions between lessors and lessees
    “quality” investments - most economically
                                                       for registered land.
    and socially beneficial deals – by better
                                                   Introducing new technologies, farming skills
    regulatory checks and balances and legal
                                                       and also better labor standards
    advice on negotiations with investors.
    Integrated IC Agribusiness Approach in Morocco…
                         Opportunity                                                          Constraints

• Agriculture represents 15% of GDP and 40% of the labor            • Value chain & distribution inefficiencies -> Inputs do not
force -> Growth driver                                              meet processors‟ quality, volume and cost requirements.
• Greatest socio-economic potential impact: 80% of rural            • Fragmented sector, small players with weak capacities
population have agriculture-based livelihoods.                      -> limited compliance with food safety standards.
• Morocco benefits from a strategic location and bilateral          • Distortive regulatory and tax structure
FTAs (EU, US, MENA countries) & Advanced Status with EU.            -> creates informality.
• Agribusiness remains below its full potential (4% of GDP),        • Outdated regulatory framework for domestic markets ->
only 16% of the production is exported each year, worth             reduces the efficiency and cost-competitiveness of
of US$ 1.7 bn.                                                      agribusiness.
• High value-added processed food represent only 27%                • 30% and 50% of F&V traded informally -> deter value
of exports (78% for Tunisia ; 51% in Turkey).                       chain upgrading to meet requirements.
• Shortfall in investment: only US$400 mn. on average

                      • Plan Maroc Vert –PMV aims at generating 1-1.5m jobs, increasing GDP by US$9-13bn, and doubling/
                      tripling income for 2-3 mn farmers, through 1300-1500 projects.
                      • PMV aims to: a) develop high value-added F&V sub-sectors through aggregated projects;
  Government
                      b) support the modernization of poor farmers in remote areas.
    Efforts
                      • National strategy for industrial emergence – MoI - promotes agribusiness (agri zones, training).
                      • Strategy for modernization of the distribution sector (MoI).
                      • World Bank DPL signed in 2011, in support of PMV.

                                                               15
                    Addressing Systemic Market Failures in Morocco
              Low investment levels: sector is performing below its potential in terms of investment generation and FDI attraction
                          Low trade/export volumes : sector is performing below its potential in terms of contribution to exports
                           Low Job Creation : sector is performing below its potential in terms of contribution to job creation



              LOW INVESTMENT ATTRACTIVNESS: Firms unable           LOW COMPETETIVNESS: Firms unable to compete in high value
                    to attract investment into the sector           export markets and with foreign imports in domestic market



              Reduced efficiency and cost-competitiveness , low
               producer incomes and high consumer prices, low
Causality




                      quality, encouraging informality


              Dysfunctional domestic marketing            Small firms with weak               Producers and processors unable to
               and distribution systems for F&V        capacities and poor corporate          comply with stringent international
                 with high transaction costs              governance structures                  food safety/quality standards




            Outdated regulatory and             Lack of                  Limited financing                           Food
                 tax systems for           investment policy                  and poor                         safety regulatory
                wholesale markets             framework                  service capacities                framework still evolving
         Morocco IC Agribusiness Project’s Objectives:

Support Increase growth and competitiveness of high value, export-oriented
  agribusiness supply chains by :

• Increasing harmonization of quality and food safety standards with international best practices
• and supporting firm-level upgrading to comply with international food safety standards
• Reforming the outdated regulatory framework governing the operations of wholesale markets in
  Morocco (IBRD DPL policy matrix);
• Addressing FDI-related IC sectoral constraints and implementing a targeted sectoral FDI
  attraction strategy.




Timeframe and targets will be developed during the pre-implementation phase.




                                                    17
          An IC Industry Integrated Intervention for Morocco…

• Implement targeted sectoral investment
promotion / FDI attraction strategy (IC) – with                       Outcome 1: Investment
ADA (MoAg)                                                            generation increased
• Address investment/ FDI-related IC sectoral
constraints (IC) – with ADA (MoAg)


                                                                                                          Investments, exports,
• Pilot upgrading of fresh fruits and vegetables                                                          jobs, supply-chain-
wholesale markets (IC) – with MoI                                                                         efficiency, and higher
• Monitor impact on trade for the pilot sites and                     Outcome 2: quality and
                                                                                                          value addition in
provide evidence to support further reforms.                          price competitiveness
                                                                                                          selected strategic
• Promote phased approach to the reform of the                        increased
                                                                                                          agribusiness value chains
outdated regulatory framework governing                                                                   increased.
wholesale markets (IC) - with MoI


Harmonize food safety & quality standards with                         Outcome 3 : Export-
international best practices (IC) – with ONSSA/                        competitiveness of the
MoAg                                                                   agricultural/agribusiness
                                                                       sector increased
Support firm-level upgrading to comply with
international food safety standards (SBA) – with
firms



          If                                                                     If
               IFC AS Activity                          Then                   Outcome             Then           Impact


                                        <---------------------------- Logic Flow ------------
                                                                 18
                   Moldova:
   An Integrated IC Country Program with Strong
Industry Focus linked to World Bank Policy Lending
     to address client’s Top Reform Priorities


 Key Investment Climate Policy Options to date:




                        19
ISSUE: Business in Moldova faces increasing admin costs and
declining profitability
             Profitability of Enterprises in Moldova (2003-09)
% of Sales                                                     % Profit
 100%                                                               0.06
                                                                    0.05    Profit
   80%
                                                                    0.04    Operating
   60%
                                                                    0.03    cost
   40%                                                                      Admin Cost
                                                                    0.02
   20%                                                                      Marketing
                                                                    0.01
    0%                                                                      Cost Sales           Management Time Spent on
                                                                                     Percentage of
                                                                    0
              2003   2004   2005   2006   2007   2008   2009
  -20%                                                              -0.01            Complying with Government Regulations
                                                                              20
                                                                              18
                                                                              16
                                                                              14
Proposal(s): Address regulatory                                               12
                                                                              10
constraints targeted to priority                                               8
                                                                               6
export and investment sectors,                                                 4
                                                                               2
especially Agribusiness.                                                       0




                                                                     20                                              20
      ISSUE: Past IC reform efforts, but regulatory constraints and
                           high costs remain
            Doing Business 2011 Rank                      Doing Business Construction Permit
                                                                         Ranking
                                                                                               Macedonia,
  0                                                             Belarus   Bulgaria   Georgia      FYR     Moldova   Romania
 10                                                         0

 20                     12                                 20                          7
 30                                                        40
 40                                                        60     44
                             38
 50                                                        80
 60               51                                      100                                                         84
                                              56
 70                                                       120
             68                    66
 80                                                                         119
                                                          140
 90    82                                                                                         136
                                                   89     160
100                                     90                                                                  159
                                                          180

        Duplicate inspections: More than 8 agencies undertake duplicative inspections in
        (MoE & IFC Inspections Inventory 2011):
              •       Quality and conformity of goods and services
              •       Ecological security
              •       Financial and Economic Inspections

Proposal(s): Complete legal reform covering all Construction Permits
processes; Implement Construction Permits One-Stop Shop fully in
Chisinau as pilot location; Eliminate duplicate inspections and implement
                                                              21
risk-based Inspections and an Inspection coordination system.
                                     21
  ISSUE: FDI weakening and high potential Agribusiness sector
                 not attracting significant FDI

FDI in Moldova by Sector




Source: Min of Economy (2009)

                                      Source: FDI Markets Database


Proposals: Develop and apply resources to Investment promotion in Agribusiness;
Address regulatory constraints – esp those distorting agricultural input markets for
agri-business; Reduce administrative burden of agri export and food safety
regulations and food safety; GoM prioritize Agribusiness and coordinate Ministries
and Agencies.                             22
ISSUE: Moldova’s Food Safety and Quality Assurance Systems are Unable to
   Provide the Services Expected in Modern Sophisticated Food Markets

 • Apples: Export Price (US$ per Ton)
               700
               600
               500                                                  Moldova
               400
                                                                    Poland
                                                                    Romania
               300
                                                                    Russia
               200
                                                                    Turkey
               100
                                                                    Ukraine
                 0
                     2000 2001 2002 2003 2004 2005 2006 2007 2008

  Proposals :
  Implement Comprehensive Institutional and Regulatory Reforms for Food Safety and
  Quality by:
  (i) In the short-term: Formulate, adopt and implement a “single integrated multi-
       annual national feed and food control plan” to increase effectiveness and
       efficiency of the food control functions currently assigned to various government
       agencies such as MOA, MOH and MOE.
  (ii) In the medium-term: Seek further harmonization with EU/international standards
       and regulations.                       23
  ISSUE: Lack of Access to Modern Inputs Hampers Innovation
                     and Competitiveness
             Apples Yield (Hg per Ha)                   Apples: Producers Prices (US$ per Ton)
    250000

                                                  900

    200000
                                                  800

                                        Moldova   700
                                                                                          Moldov
                                                                                          a
    150000                              Poland    600                                     Poland
                                                  500
                                        Romania                                           Romani
    100000                                        400                                     a
                                        Russia                                            Russia
                                                  300
    50000                               Turkey    200                                     Turkey
                                        Ukraine   100
                                                                                          Ukraine
         0
                                                    0




Proposals:
   • Further reduce testing requirements for varieties registered in neighboring countries (EU
   and/or CIS)
   • Harmonize government seed regulations and regulatory practices with EU practices.
   • Revise procedures for certifying inputs that are already certified in line with standards of
   other countries with which Moldova has mutual acknowledgement certificates.
   • Adopt the EU common catalogue for fertilizers and pesticides.
                                               24
ISSUE: Export Restrictions (and the risk of their re-introduction) Create
Major Disincentives for Critical Agricultural Investments
               Evolution of Producer Prices of Wheat (US$ per Ton)
              250

              200

              150

              100                                         Exports
                                                          Restrictions
               50                                         Removed

                0




   Proposal: Refrain from (re-) introducing export
   restrictions for agricultural commodities and produce
                                       25

								
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