EU External Investment Plan

Turning bad times into good: how the EU External Investment Plan is helping Liviu’s farm weather COVID-19

Liviu Burcovschi in his apple orchard

Liviu Burcovschi is a 55-year-old fruit and vegetable farmer from the rural Ocnita district in northern Moldova. In spring 2020 he decided to continue investing in his family farm – just as the country went into lockdown due to the coronavirus (COVID-19) pandemic.

The odds were now stacked against him. But through the EU External Investment Plan, the EU has helped him to access financing for mechanising some of the work on his orchard. So his farm is now more efficient and he earns more for his produce.

We’re backing a project that helps means small-scale farms and food and drinks businesses in Moldova, like Liviu’s, to access the finance they need to become more competitive.

Especially in these challenging times, we’re putting the EU External Investment Plan to work for small businesses like Liviu’s, and keeping up our support when it’s most needed.  

Every challenge is an opportunity

As elsewhere, the coronavirus pandemic has had a major impact on people’s jobs and livelihoods in Moldova. Many companies have laid off staff. Others have closed down altogether. Banks face delays in being repaid and have become much more cautious about who they’ll lend to.

The pandemic has also seen a dramatic shift in consumer behaviour. Poorer households are buying less fresh fruit and vegetables, replacing them with canned or other products that store better. Meanwhile, richer consumers are buying more neatly packed fresh produce.

Against all the odds, Liviu Burcovschi decided to continue investing in his farming business – and his and his family’s future.

With the help of a loan Liviu could mechanise some of the work in the fields.

That’s where an EU-backed project called Fruit Garden of Moldova came in. With it we’re helping small-scale farmers and food producers like Liviu to:

  • modernise their businesses
  • get investment loans more easily, through local banks
  • start exporting to the EU, or expand their existing exports.

Since the project started in 2016 we’ve provided €42 million for 165 investment loans out of overall €120 million made available by the European Investment Bank (EIB).

In addition, €2.2 million in grants help to fund the technical assistance needed to design investment projects and train entrepreneurs to make best use of them.

In the midst of the coronavirus crisis, Liviu received a loan from his local bank to mechanise some of the work in the orchard. This will help him to:

  • increase his own and his workers’ productivity
  • complete demanding tasks like weeding in time

Liviu financed his investment project half from his own resources and half from a local currency loan from his bank. The loan comes with preferential terms and is financed from the European Investment Bank (EIB). It was approved in April 2020.

In spring this year, Liviu started to grow open-field tomatoes on half a hectare. He also extended his cherry orchard by another 5 hectares.

And his is not an isolated case. During the corona-related state of emergency in Moldova from mid-March to mid-May 2020, 21 farmers and small-scale entrepreneurs applied for loans from the EIB Fruit Garden of Moldova credit line which is 40% more than during the same period in 2019. So, it’s more important than ever to keep supporting small businesses during these challenging times.

Nothing can stop nature

Work in the fields has continued, despite government restrictions, such as social distancing, which Liviu and his team have fully respected.

The pandemic didn’t stop nature. But things that were routine to us before are now a real challenge.

Due to the restrictions imposed, cooperation with the bank was more challenging than usual. “As soon as the first wave of fear had passed and rules for working with clients were established, I signed the loan agreement” Liviu explains. With this paper in hand, the seller agreed to deliver the machinery so that Liviu could complete the field work in time, instead of having to wait until the funds from EIB arrived in Moldova.

This investment has helped to create two permanent jobs for work in the fields – the first on his farm. Until now Liviu had only employed seasonal workers during the harvest season.

Liviu expanded his orchards and now grows apples and cherries.

Who we’re working with

In figures

€120 million

in loans for investment projects provided through the European Investment Bank (EIB)

€2.2 million

in funding for outside experts to design investment projects and train entrepreneurs (technical assistance)

Turning an inheritance into a business

Liviu has invested in growing fruit to ensure a decent life for himself and his family and a peaceful retirement at home.

Liviu’s first apple orchard was planted 11 years ago on land he inherited from his parents in his native village of Sauca. But his agricultural journey started long before, when he graduated as an agronomist from the agricultural college in nearby Soroca in 1986. 

Liviu was a fruit trader until 2016, when he decided to officially register his smallholder farm with the local authorities. In doing so he turned what had until then been a side activity into a real family business, specialised in growing tree fruits.

Now his smallholder farm in the rural Ocnita district has 10 hectares of apple orchards and 2 hectares of cherry orchards.

In 2019 Liviu moved from Moldova’s capital, Chisinau, back to his village. It was a permanent move for good together with his family. He is thankful that his two grandchildren also moved and is sure they will follow in their grandfather’s footsteps.