OREANDA-NEWS. August 19, 2013. As the Deputy Minister of Agriculture and Food Industry Viorel Gutu noted, the document shall promote the development of farmers' associations and domestic agricultural products. It was developed by the ministry in order to create a legal framework for the establishment, recognition and operation of groups of farmers to promote, implement and use of agricultural products by the producers’ groups.

Viorel Gutu noted that the bill provides a number of preferences for agricultural producers united in groups: the best position at the market, better prices for products, direct negotiations, partial exclusion of intermediaries, lower costs of investment, opportunities for consolidation of the capital, growth of production on the basis of the long-term contracts, increased efficiency, reduced costs etc.

The document defines the objectives of the producer groups and their associations in the development of marketing strategies, rules of production and marketing, as well as stimulation of their activities by the state through providing financial support (subsidies). In particular, to stimulate the creation of the producer groups the state will provide them with 5 years’ financial support. In the first year, the support provided by the state will amount to 5% of the annual turnover, in the second - 4%, in the third - 3%, in the fourth-2% and 1% in the fifth. It is stipulated that a group of farmers may consist of a minimum five members. Viorel Gutu noted that private farmers in Moldova should be competitive at the agricultural market so they shall unite in groups for more successful promotion of their products at the domestic and foreign markets.

The deputy head of the Ministry of Agriculture said that within the project supported by the World Bank, it is supposed to allocate up to USD 350 thousand to stimulate the creation of the producer groups. In addition, they will receive additional incentives under the subsidy program. According to Viorel Gutu, the draft law on groups of producers and their associations was designed in correspondence with EU regulations, as well as practices of some EU countries such as Romania, Hungary, Poland, the Baltic States, etc.