Pawns on Moldovan agriculture's chess board. Info-Prim Neo economic analysis

The developments in the agricultural sector differ from year to year, depending directly on the weather conditions. It is clear that the institutions responsible for this sector, mainly the Ministry of Agriculture and Food Industry, must make effort to reduce this dependence to a minimum. This means that bread is made even if there is not enough precipitation and the vegetables are sold not only in summer, but also in winter. Most of the times, the agricultural producers have neither money not wish to make this effort. Thus, the Ministry should concentrate on reforms through the policies it pursues. The New Minister of Agriculture Valeriu Cosarciuc announced daring reforms at the very first meetings with the reporters. Those who expected these reforms applauded, while the others kept silent as they want to see first if Cosarciuc keeps his promises. The changes have yet a motivation and they derive from a situation that is sometimes determined by the interests of the investigation bodies. The Audit Office has recently issued a report on the use of the public money allocated by the Ministry of Agriculture and Food Industry to its subdivisions in 2008. After checking the subsidies provided to Lavmar-AGRO – 1 million lei, and Expodil – 1.1 million lei, the Court ascertained that the two companies were founded and have as directors the same persons (Gh. Marinov, A. Petrachi and M. Murtazaliev)”. “In 2008, Lavmar-AGRO received subsidies of 0.3 million lei in order to purchase refrigerating equipment worth 1.7 million lei. According to the information included in the database of the Fiscal Service, a fiscal invoice was issued on the same day to Expodil, through another firm. The company presented it to the Ministry, asking for subsidies to the same value. Thus, the two companies benefited from subsidies for the same equipment. Afterward, using another fiscal invoice circulation method, the two companies submitted again fiscal invoices to the Ministry for receiving subsidies for the same equipment. They were allocated subsidies of 1.2 million lei for the given equipment groundlessly. These are fraudulent schemes to get subsidies and to include a larger group of agricultural producers in the list of recipients, who were earlier discriminated. They are mainly small and medium-sized producers. There are many producers that have worked in agriculture for 10-15 years, but did not receive money from the state. On the other hand, other producers receive subsidies every year. However, the products are sold at the same prices, even if the costs are different. Statistical data show the small and medium-sized companies accounted for about 13% of the total subsidies though they produce the largest part of fruit, vegetables and grapes in some cases. The corporate producers focus mainly on field crops. During a seminar centering on subsidization issues, Mihai Suvac, division head at the Ministry of Agriculture, said the authors of the draft regulations on the use of the Agriculture Subsidization Fund made the project contest and the limitation of the sums applied for obligatory. According to him, the new rules are aimed at ensuring a greater coverage for the subsidies. Evidently, the limitation of the sums for the traditional bidders means reduction, which has always been a painful change. Thus, the large producers started to express their discontent. However, the draft regulations have been actively debated and the Ministry of Finance, the Ministry of Economy and NGOs approved of them, Suvac said, adding that the subsidization process became more transparent. In fact, not everybody wants transparency. Many do not agree with the requirements imposed on the bidders, including knowledge in the field. The contest of project was made compulsory not only in order to secure the money. If the subsidies for projects had been earlier granted by contest, the fraudulent schemes would have been identified at the initial stage. The regulations were not formulated behind closed doors. Representatives of different circles were consulted, including the farmers. They welcome the Ministry's decision to subsidize lending in agriculture. Vasile Myrzenko, the head of the National Farmers Federation, supports such an idea, saying the state contribution of 20% reduce the bank interest practically to zero. It were the interest rates that kept the agricultural producers far from banks. “We should not consider that preference is now given to the small and medium-sized companies to the detriment of the corporate companies,” Myrzenko said. “This would mean swinging to another extreme. However, the small and medium-sized agricultural companies are Moldova's future and they should be supported.” It is not right to think that absolutely all the large producers disagree with the intention to equalize access to budgetary resources. Nicolae Cotet, the director of the company ProtComAgro working in southern Moldova, said the company he heads is rather larger and has potential, but the small farmers do not have appropriate equipment to cultivate the land. “I help many of the farmers and provide machinery for them, but the state will not achieve results if the authorities rely on me or other producers to plow their lands and harvest their corn at lower prices. A clear policy is needed to support this category of farmers.” The current situation in agriculture, especially as regards subsidization of the agricultural producers, is very much like our daily life. If only the major chess pieces remain on the board, one will lose the game by two moves. The pawns, even if they are not so valuable, ensure victory. Moreover, a pawn can become queen if helped by the other pieces.