Rapid Food Security Assessment Republic of Moldova, September 2012

1. Rapid Food Security Assessment Republic of Moldova, September 2012 WFP – World Food Programme, ODXF, Food Security Analysis Service

2. Rapid Food Security Assessment Moldova 2012 • Complement Government Crop Assessment with an assessment of possible impacts of drought at the household level Provide a picture of the key drivers of HH food security, poverty situation, HH vulnerability, evaluate drought impact; Factor in • Demography, poverty, price patterns, • HH income structure, remittances, food expenditure • Outline potential problems to be faced

3. Approach • Selected outputs from an analysis of Moldova Household Budget Survey (HBS) for the years 2006-2010 (some 2011). • Interviews with stakeholders, field visits, interviews with small farmers, cooperatives, local government • Trends and current status in terms of Poverty, Income-Expenditure and Food Security-Vulnerability issues • Situation against which to evaluate impacts of drought at the household level

4. Moldova Drought Combination of low rainfall and high temperatures which affected Moldova in particular its south and centre Regions Impact on most key crops both winter crops (wheat) and summer crops (maize, sunflower) Yield drops of -25% (wheat), -59% (maize) and sunflower (-53%) (MAFI-FAO) Transnistria region also with strong impacts

5. A Regional Drought Event • Moldova 2012 drought is part of a regional patern of serious shortfalls in crop producton across Black Sea region and beyond. • E.g. (USDA/FAS) wheat crop production estimates : • Romania (-27% vs 2011) • Ukraine (-32% vs 2011) • Russia (-24% vs 2011) • Kazakhstan (-56% vs 2011)

6. Economic Context • Moldovan GDP growth strong in recent years but now weakening. • Economies of main trading partners (EU, CIS) with worsening growth perspectives • Weaker exports, stronger dollar leading to depreciation of Leu • Remittances contracting and contribution of household spending to the health of the economy likely to be further hit by drought and its consequences

7. Comparison with 2007 • Impacts at aggregate country wide level probably less than 2007 However, for the most affected areas in the South and Centre –2012 dryness started earlier, lasted longer, impacts most likely worse • Coming growing season: pessimistic perspectives given extreme dryness of soil. • Good and sustained rainfall required by end October • Investiment resources required are very thin • Possible reduction in area planted

8. Region of Transnistria • Drought magnitudes similar to southern Moldova. Impact on livestock considered critical. • Similarities: half of the land is with small holders, who hold it under a long term 99 yr lease, rather than owning it. • Many small holders lease land to large farmers. Even in good years, there are persistent problems in payment of the leases.

9. Context for Drought Impacts

10. Progress in Moldova • Recent years saw considerable progress for Moldova: • Major improvements in poverty rates and rising incomes • Decreased vulnerability • Improvements in Food consumption and Dietary patterns • Current situation will not lead to food supply problems, in that sense there is not a food security issue • However some concern remains for the most vulnerable sectors of society – highlight possible issues with a view to avoid losing the real gains and progress made

11. Poverty and Income in Moldova • Rural poverty rates dropping from 42% to 30.3% • But still a rural issue: 30.3% rural vs 10.4% urban • Highest poverty among farmers (36%) and agricultural workers (45%). • Rising incomes, more pronouncedly for urban population. • Income growth has favoured the poorest.

12. Poverty and Income in Moldova • Favourable evolution in poverty reduction predicated on recent high agricultural prices and high crop production • 2010: farmer’s incomes increase by 27%, driving poverty rate down by 10% in one year • Most of the increase in rural income is recent and tied to high produce prices. • Climate sensitive income structure: • Farmer: farming 35%, remittances 23%, wages/pensions 11% • Ag Worker: wages 60%, farming 18%, remittances 6%

13. Food Expenditure Rising incomes led to a drop in the proportion of expenditure on food, more noticeable for rural households, who still spend more than urban (44% vs 38%). As expected, the poorest have the highest proportions of expenditure on food. Urban: 83% of food energy from purchases Rural: 51% of food energy from purchases 19% of urban population has full dependency on purchases

14. Vulnerability • Vulnerability: Households with > 65% expenditures on food. • Overall 8.9%. • Higher in rural areas (4.1% vs 12.5%) • Highest among farmers (14.6%) and ag workers (18.2%). • Decrease for rural population from 2006 to 2010: • 23% to 12.5% but now stable or rising slightly • Higher for population below poverty line: • increasing since 2008 (26% up from 20%)

15. Food Consumption and Diet • Food Security analysed through caloric intake and proportion of staples (nutrient diversity) • Currently stable/improving, but sensitive to shocks (drought) • Calorie intake is acceptable overall but concerns for the poor: • Poorest urban have markedly lower caloric intake (higher costs, no own production) • High calorie deficiency : 16% overall, 19% urban, 14.6% rural. • Diet quality: dependency on staples, 48% overall

16. Food Consumption and Diet • Poor Dietary Intake – both calorie deficient and high staples • PDI overall is low: • 1.5% down from 4.5% in 2006. • No difference urban and rural. • Rural rates seem sensitive to drought and floods. • Gains for poorest have been recent (2009-2010) and remain at 6% (from 15% in 2008 post-drought) • 2007 Food Security Survey: • Poor food consumption (diversity/nutrients) at 11% overall • But 17% for rural smallest land owners.

17. Region of Transnistria • Very little socio-economic information available or collected. • No organized regular surveys, Moldova HBS type. • Poverty – no official definition

18. Drought Impacts

19. Drought Impacts Moldova • Severe shortfall in crop production at household level • Sharp reduction in food intake from own production for smallholders, increased reliance on purchases • Changes in tax code a frequent complaint. High levels of debt. • Problematic for those who already spend a large proportion on food • Key factor is the near / mid term evolution of food prices. If rises are likely, there are concerns for the poorest both urban and rural

20. Coping Strategies • Cut-down on living expenses • Switch to cheaper, possibly less nutritious food. • Reduction in calorie intake • Sale of productive assets (livestock, milking cows)

21. Safety Nets • Remittances are an important safety net, benefitting all income groups, specially rural • Recent drop in remittances as proportion of GDP (21.9% in 2010, 14.9% in 2011) • For households, stable or decreasing since 2008, strong decrease for poorest urban population (pick-up in 2011?) • Some groups benefit in particular– for female headed rural households (30% of income vs 9% for urban male HH)

22. Safety Nets • Social Welfare transition from categorical to means tested • Need to pay attention to targetting effectiveness at the poorest sectors of society • Flexibility of the system in responding to climate shocks such as droughts or floods

23. Region of Transnistria • Migration: assumed as not less than in Moldova • Remittances: not tracked in any way, though would like to tax them. • Social support: categorical (pensioner, disabled, unemployed). Aware of the need to move to means-testing, but lacking in ability to account for HH income. • Support to large families, school meals (primary)

24. Region of Transnistria • Committee for Distribution of Humanitarian and Technical Assistance; decides to whom, how, how much • When humanitarian assistance is provided, Committee decides, local authorities carry out the distribution • Drought response: Price controls, bread subsidy • Loan restructuring: Govern and group of experts seeking loan re-scheduling, re-finance, targetting farmers

25. Key Points Potential of the agricultural sector to lift rural population out of poverty. But need to reduce dependency on weather patterns. Willingness of farmers is there. Agricultural workers and farmers have highest weather sensitive share of income and their poorest members are the ones most vulnerable to impacts of drought. Evolution of food prices will be a main driver of household food security given dependence on purchases even from rural population and differential levels of vulnerability

26. Key Points Remittance scenario: possibly reduced safety net role specially for poorest sectors (urban) and particular types (female rural households) Need to identify household coping strategies (migration, sale of productive assets), indebtness and its impacts. Clarify situation for ethnic minorities (access to assistance) and account for gender dimension Clarify effectiveness of Ajutor Social.Land income based on statistics who may not reflect drought impact, hence rural small holders may not be covered

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