80% of the subsidies released in agriculture in 2010-2013 were investment subsidies, as compared to 30% in 2007, shows a study presented by the World Bank. The WB considers this is progress, as the creation of the Agency for Payments and Intervention in Agriculture and the setting of clear procedures for distributing subsidies, IPN reports.

The study reveals that the largest part of the subsidies continues to be absorbed by large farms that produce grain or other traditional crops, while the effective support provided to small farms that grow vegetables and other high value added crops is insignificant.

“The large corporate farms benefitted from 70-80% of the subsidies provided over the last three years. This does not match the relative share of the two sectors in agricultural production - 70% individually as opposed to 30% corporately. Between 2010 and 2012, the average value of subsidies for corporate farms has increased and the difference between the value of these subsidies and of the subsidies received by private farms became more evident,” said Felicia Pricop, specialist in agriculture at the World Bank Office in Moldova.

The study says the subsidies do not stimulate the introduction of modern practices in agriculture and of innovations, while the large number of subsidized areas and the fact that the size of subsidies is not capped limit the number of recipients.

The World Bank recommends approving a multiannual subsidization program that would lay down clear rules for the private sector and would improve subsidization planning. The subsidized areas should be reduced and emphasis should be put on the support for the introduction of advanced technology and on the private sector’s efforts to comply with EU requirements on food safety and quality. It is also necessary to support the producers that work with new sorts of plans resistant to climate change and the young people who start businesses in agriculture.