Experts say agricultural subsidies are inefficient in Moldova

The 450 million lei subsidies offered by the Moldovan Government are very low compared to what farmers get in the neighbour countries, economic analyst Viorel Chivriga stated during the public debate organised by IDIS Viitorul on Wednesday, September 5. According to him, this is what makes the Moldovan agricultural sector highly uncompetitive, because a subsidy of 30-50 lei per hectare cannot enable a Moldovan farmer to compete with his foreign counterparts, who receive thousands of euros in subsidies. A bitter problem for the agricultural sector, says the expert, is that the government does not subsidise the exports, although in all the European Union countries this is a common practice employed to increase exports and access new markets. According to Chivriga, the recipients of agricultural subsidies say that the process of receiving subsidies is encountering a series of difficulties, such as defective legal provisions, bureaucratic obstacles and insufficient information. In addition, the expert says, there has never been an official analysis to assess the impact of agricultural subsidies on the recipients. Furthermore, the government has never published any list of such recipients, fact which calls into question the transparency of the process. Alexandru Slusari, vice-president of Uniagroprotect NGO, said that the practice of granting subsidies per hectare of farmland is wrong, as for the most part they are used irrationally. With governmental subsidies alone we will not be able to develop the agriculture, therefore we need assistance from donators, Slusari said. According to him, the mechanism of granting subsidies has to take into account the country’s priorities for the next 5-7 years and direct the funds to three main areas: facilitate access to the financial market (partial compensation for interests on loans), modernise farm equipment (a 30 percent refund of the new farm equipment purchased), and subsidise strategic crops. The public debate was held to discuss the new concept of the agricultural subsidies system, worked out by the Ministry of Agriculture and Food Industry in concert with the NGOs part of the Coalition for Rural Economic Development.