Moldova to maintain tax level for meat producers

Instead of introducing a zero tax rate for Moldovan livestock companies, the government will limit imports of meat from Ukraine in the form of quotas and customs duties, according to a statement from Octavian Calmac, Moldova Deputy Minister of Economy. 

“Poland and other countries of the European Union export meat to Moldova within strict quotas and do not pose a threat to national producers,”​ said Calmac. “But meat imports from Ukraine can actually pose a threat to the Moldovan livestock industry.”​ 

Members of the committee said the new measures will be introduced as soon as possible. However, it is still not clear if such step can actually be used, given the free trade zone agreement (FTZA) with the European Union, signed by the country last year. The EU also has the same agreement with Ukraine.

Smuggling​

Representatives from Moldova’s union of livestock producers claimed the “official statistics contain reliable information, but do not include data on illicit imports and parallels”​. According to Moldovan farmers, as a result of smuggling, Moldova’s meat industry faces its biggest competition from Poland, and the government has to deal with this problem as well. 

Rada Mudryak, chairman of the Parliamentary Committee on Agriculture, said that, with the signing of FTZA with Europe, Moldovan farmers had been anticipating launching export supplies to Europe. 

However, they were now disappointed as, when the agreement was signed, they lost the ability to export their products to the Customs Union, while exports to the EU have not yet been launched. 

Eurasian market important​

“Moldova cannot fully export its products to the EU. For example, we have not even exported 1kg of meat to the EU, and I don’t think we will be able to do this​ [in the short-term],” said Mudryak. “The Eurasian market​ [of the Customs Union] is very important for Moldova.”​ 

He also stressed that, due to this situation, Moldovan farmers were facing a critical situation, with debts to their creditors accumulating. “Some banks have already started to demand the return of loans from farmers. But farmers have nothing to return them, because they still have not been able to sell their products,”​ he added. 

Russia fully blocked imports of Moldovan meat from 27 October 2014, but lifted part of the restrictions in June 2015. Experts say the Moldovan government may shift towards the Customs Union in its meat trade strategy, but to do so the government would have to freeze the country’s FTZA agreement with the EU.