*4.2. The Dynamics of the Agriculture Sector GDP and GVA*

The Republic of Moldova's total GDP and GVA dynamics registered an upward trend from 2009 to 2014, with both parameters directly correlated. (Figure 3). As emphasized by Ursu [41] and Valeriu et al. [2], the Moldavian agricultural sector plays a key role in the Moldavian overall economy. He also pointed out that 31.70% of the total Moldavian employment sector worked in agricultural activities, in a context where approximately 2 million people (57.50% of the total population) were living in rural areas.

**Figure 3.** The dynamics of total and agricultural GDP and GVA.

Agricultural GDP makes up to 23.69% ± 2.96% of the Republic of Moldova's total GDP. The highest share of agriculture in relation to total GDP is recorded in 2010 (28.12%), while the year 2009 registered the lowest share (19.85%) of this sector. In the analyzed period (2008–2016), an average 1658.91 ± 255.51 USD for GDP per capita is recorded.

The values of agricultural GDP and GVA correlated with total governmental subsidies show that agricultural product taxes recorded an average value of 846.30 million USD during the analyzed period, with the highest value recorded in the year 2011 (1098.76 mil USD) and the lowest value in 2015 (612.82 mil USD).

The GVA of the agricultural sector makes up 13.46% ± 1.49% of the Republic of Moldova's total GVA. The highest share of agriculture in relation to total GVA was recorded in the year 2014 (15.17%), while 2008 registered the lowest share (10.74%) of this sector. The dynamics of both agricultural GDP and GVA indicators reveals the importance of governmental subsidies in the agriculture sector (Figures 2 and 3), with a major impact between the years 2012 and 2014. The share of the abovementioned indicators in the total GDP and GVA is also significant (Figure 3), a situation which underlines the importance of the agriculture sector for the Moldavian economy.

The agriculture sector can be considered a key sector, with considerable potential to sustain the economic development of the Republic of Moldova. The statement is based both on the agriculture potential of the country (the area of farmland as a share of its total land surface) as well as on the actual share of the agricultural GDP from the total GDP; the average share of the Moldavian GDP from agriculture from the total GDP during the analyzed period was 11.39%, which places the Republic of Moldova in the middle of the Commonwealth of Independent States (CIS), being surpassed by Uzbekistan, Tajikistan, Kirghizstan and Armenia (Figure 4).

**Figure 4.** CIS states—the share of GDP from agriculture from the total GDP [34].

However, the first three of the previously mentioned countries have an area of farmland ranging from four to over thirteen times higher than the Republic of Moldova. Thus, it can be stated that, considering the CIS competitors, the Republic of Moldova's economy considerably relies on the agricultural sector's performance.

Still, as shown in Figure 5, in terms of agricultural gross value added, the Republic of Moldova performs poorly, being the last one when compared with the rest of the CIS states.

**Figure 5.** CIS states—GVA for agriculture [34].

#### *4.3. The Dynamics of the Agriculture Production and Production Value*

The Republic of Moldova's agriculture production comprises mainly four major crops—maize, grapes, wheat and vegetables. These make up an average share of 76.66% of total the agricultural production recorded during the analyzed period (2008–2016). Maize recorded the highest production of the total production, with an average share of 34.67%, followed by wheat (25.22%), grapes (16.02%) and vegetables (0.74%).

The highest total agricultural production was recorded in the year 2008 (4.52 million tons), while the lowest was in 2012 (2.18 million tons) (Figure 6). Upon observation, the grape production dynamics are relatively constant, while maize, wheat and vegetable production have similar trends (Figure 6). This can emphasize the stability of the grape market. The dynamics of other major crops can also be influenced by the precipitation regime, since the Republic of Moldova does not have a large capacity for functional irrigation systems. According to the FAO [42], the irrigation potential has been estimated at 1.5 million ha, from which around 11% is actually used for agricultural irrigation.

**Figure 6.** The production quantity of major agricultural crops in the Republic of Moldova.

The growth of agriculture production from 2009 to 2011 can be also attributed to the growth of the national agricultural surface of 34,800 ha [42]. In 2012, the decrease in the national agricultural surface area, due to drought, generated a significant decrease in agriculture production (Figure 6) and, therefore, agricultural production value (Figure 7).

**Figure 7.** The production value of major crops in Republic of Moldova through agriculture.

The four major crops (maize, grapes, wheat and vegetables) mentioned above contributed an average of 47.06% of the total Republic of Moldova agriculture production value during the analyzed period (2008–2016).

Maize recorded the highest production value of the total production value, with an average share of 21.23%, followed by grapes (13.18%), wheat (12.09%) and vegetables (0.55%).

The highest total agriculture production value was recorded in the year 2011 (1355.5 million USD), while the lowest in 2009 (638.32 million USD) (Figure 7). It can be observed that the evolution of the production value in this year (Figure 7) is directly correlated with the agricultural loan dynamics (Figure 2). It can be observed that the agriculture production value dynamics (Figure 7) are significantly influenced by market supply-and-demand, as it differs from the agricultural production dynamics (Figure 6). The dynamics recorded between 2012 and 2014 can be also associated with the restrictions imposed by the Russian Federation on the Republic of Moldova's agri-food imports and exports.

The decrease in production and production value registered in 2009 and 2012 can be also explained by the decrease in foreign direct investments in the Moldovan agriculture sector. Thus, the foreign investments in Moldovan agriculture registered a share of 1.51% from the total investment values in the year 2009; this was 2.62% in 2011 compared to 2.85% in 2012 [43]. Furthermore, according to S, argo [17], the number of employees in the agriculture sector in 2012 was reduced by 60.6% compared to the year 2000 (770,000 employees), and by 4.5% compared to 2011. Exceptionally, for 2014, the EU also decided to double the export quotas without custom duties for grapes (from 10 to 20 thousand tons). Despite the embargo imposed by the Russian Federation on Moldovan agricultural products, exports of agri-food products increased by 12% in 2013 compared to 2012, and exports of agri-food products to the EU increased by 22% compared to the same period of 2013 [38]. S, argo [17] highlights that the lack of both agricultural post-harvest infrastructure and low to none cooperation between agricultural producers in the export process are major obstacles in maintaining the quota on traditional markets and expanding exports to potential new markets. Both the awareness of market requirements and the ability to make strategic decisions to meet those requirements are decisive for the development of agriculture. Furthermore, investments in equipment and in quality-enhancing infrastructure (especially greenhouses for vegetables) to strengthen the production capacity, to promote private investment as

well as to build sector resilience to adverse weather events (stimulating investments in anti-hail nets, anti-frost systems, on-farm irrigation structures, etc.), can be considered key points regarding the need for investment in the Moldavian agriculture sector.
