Present system for subsidizing agricultural producers is inefficient

The Coalition for Rural Economic Development (CRED) finds the current system for subsidizing the agricultural producers as inefficient because it failed to achieve competitiveness of the Moldovan farms by means of modern technologies. The revision of the existing system for subsidization would promote certain sustainable qualitative and quantitative changes in agriculture, CRED members think. So, the system needs to be targeted at stimulating agricultural entities that account for large imports, offering certain direct payments depending on the cultivated surface, on the condition to obtain high productivity and quality. Deputy minister of the Agricultural Processing Industry Anatol Spivacenco said Tuesday November 14 at a roundtable on subsidization organized by CRED that the Ministry is open for discussions with the CRED representatives regarding the competitiveness of subsidization. The Ministry of Agriculture and Food Industry has been looking for many years for a more efficient mechanism that would lead to an increased value added for Moldovan products. Moreover, during the years the policy on the state subsidization was carried out inclusively in accordance with the existing budgetary possibilities, deputy minister said. “Agriculture in Moldova is very receptive to the subsidization and it was also founded that through small subventions there can be obtained constant increases in the production volumes, as in the zootechnics field”, deputy minister added. At the same time, Spivacenco mentioned that for next years the subsidization will aim at attracting investments in agriculture, especially the long-term ones and for the products that have sale markets as those in wine growing, fruit growing, cattle breeding, technical crops etc. The fund for subsidizing the agricultural producers in 2006 totals 220 mln lei. From these funds, just those planned for the field of tobacco and that of producing sugar beet are direct subventions. The strategic objectives of the advocacy campaign organized by CRED, which comprises about 45 nongovernmental organizations in the field, aim at submitting proposals to improve it, raising public and decision makers’ awareness as concerns the inefficiency or negative effects of the system of subsidization in agriculture, as well as the active involvement of the CRED member organizations and agricultural producers in promoting proposals to reorganize the present system for supporting agriculture. CRED campaign is financially supported by the Swedish International Development Cooperation Agency (Sida) and Soros Foundation Moldova.