ECONOMY AND SOCIOLOGY  

 
 

 

53 

No. 1 / 2020 

EFFICIENCY OF SUBSIDIES ALLOCATION  
TO AGRICULTURAL ENTERPRISES IN THE REPUBLIC OF MOLDOVA 

 

Ina DOMBROVSCHI1,  PhD in Economics,   
State Agrarian University of Moldova 

 

DOI: https://doi.org/10.36004/nier.es.2020.1-05  
JEL Classification: H25, J43, E22, Q12, Q14, Q18 
UDC: 631.155.6(478) 

 
ABSTRACT 
As the Republic of Moldova has limited opportunities to provide generous financial support to 

farmers, it is extremely important to efficiently use subsidy means, so as to contribute to the development 
and modernization of agriculture and rural areas. The development of agriculture in a dynamic way can 
be achieved on the basis of an efficient subsidy system, administered, monitored and evaluated. The aim 
of the research is to analyse and evaluate the efficiency and impact of subsidization on the development 
of the agricultural sector and to ensure a stable increase in agricultural production, emphasizing main 
support measures in this direction. To carry out this study, various research methods were used, such as: 
observation method, table method, analysis and synthesis method, comparison method, monographic 
method, statistical data collection.  This article presents an analysis of the evolution of the subsidy fund for 
agricultural producers, which has increased 2.25 times in the last 7 years. There has also been analysed the 
structure of beneficiaries of subsidies according to the legal organizational form, who received subsidies 
during the reference period.  It has been found that households are in the top of beneficiaries of subsidies who 
had a share of 62.03% in 2018. The distribution of subsidies by development regions and per one hectare of 
agricultural land in the profile of development regions has been studied and it has been found that the 
predominant share is held by agricultural enterprises in the Centre region, about 38.9% of the means of the 
subsidy fund. The results of the research show an increase in the subsidy level, through support measures. In 
this context, we can mention that the support measures must ensure an efficient use of the subsidies. 

Keywords: financial result, efficiency, subsidies, investments, subsidy fund, support measures, subsidy means. 
 

În condițiile în care Republica Moldova are posibilități limitate de a acorda un suport financiar generos 
agricultorilor, este extrem de important utilizarea eficientă a mijloacelor de subvenționare, astfel, încât să 
contribuie la dezvoltarea și modernizarea agriculturii și spațiului rural. Dezvoltarea agriculturii pe cale 
dinamică poate fi realizată în baza unui sistem eficient de subvenționare, administrat, monitorizat şi evaluat. 
Scopul cercetării constă în analiza și evaluarea eficienței și impactului subvenționării asupra dezvoltării 
sectorului agricol și asigurării unei creșteri stabile a producției agricole, accentuând în această direcție 
principalele măsuri de sprijin. Pentru realizarea acestui studiu s-a apelat la diverse metode de cercetare 
precum: metoda observării, metoda tabelelor, metoda de analiză și sinteză, metoda comparațiilor, metoda 
monografică, preluarea statistică a datelor.   În prezentul articol, se regăsește o analiză a evoluției fondului de 
subvenționare a producătorilor agricoli, care, în ultimii 7 ani, a înregistrat o creștere de 2,25 ori. De asemenea, 
s-a analizat structura beneficiarilor de subvenții după forma organizatorică juridică, ce au accesat subvenții în 
perioada de referință, se constată că gospodăriile țărănești sunt în topul beneficiarilor de subvenții care, în anul 
2018 dețin o cotă de 62,03%. A fost studiată repartiția subvențiilor pe regiuni de dezvoltare și la un hectar de 
teren agricol în profilul regiunilor de dezvoltare și s-a constatat că cota preponderentă o dețin întreprinderile 
agricole din regiunea Centru, circa 38,9% din mijloacele fondului de subvenționare. Rezultatele cercetării 
constată o creștere a nivelului de subvenționare, prin intermediul măsurilor de sprijin. În acest context 
menționăm, că măsurile de sprijin trebuie să asigure o utilizare eficientă a mijloacelor de subvenționare. 

Cuvinte-cheie: rezultat financiar, eficiență, subvenții, investiții, fond de subvenționare, măsuri de 
sprijin, mijloace de subvenționare. 

                                                           
 
 
1 © Ina DOMBROVSCHI,  dombrovschi@mail.ru 



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В условиях, когда Республика Молдова имеет ограниченные возможности предоставления 
значительной финансовой помощи фермерам, очень важно использовать дотации эффективно, 
чтобы повлиять на развития и модернизацию сельского хозяйства и сельской местности. 
Развитие сельского хозяйства в динамике можно осуществить на основе эффективной системы 
дотаций, управляемой, наблюдаемой и оценённой. Цель исследования состоит в анализе и оценки 
эффективности и влиянии дотаций на развитие сельского хозяйства и обеспечения стабильного 
роста сельскохозяйственной продукции, акцентируя в этом направлении основные меры 
поддержки. В данном исследовании были использованы различные методы: наблюдение, метод 
таблиц, метод анализа и синтеза, метод сравнений, монографический метод, статистическая 
обработка данных. Был осуществлен анализ эволюции фонда дотаций сельскохозяйственных 
производителей, который в последние 7 лет зарегистрировал рост в 2,25 раза. Также, был сделан 
анализ структуры бенефициаров дотаций по организационно-юридической форме, где 
установлено что фермерские хозяйства в 2018 году удерживают 62,03%. Было исследовано 
распределение дотаций по регионам развития и на гектар сельскохозяйственных площадей в 
профиле регионов развития и установлено что наибольшую долю удерживают 
сельскохозяйственные предприятия из региона Центр (38,9% из средств фонда дотаций). 
Результаты исследования показывают рост уровня дотаций, как меры поддержки. Важно 
подчеркнуть, что меры поддержки должны обеспечить эффективное использование средств 
дотаций. 

Ключевые слова: финансовый результат, эффективность, дотации, инвестиции, фонд 
дотаций, меры поддержки, средства дотаций. 

 
INTRODUCTION 
The major objective of agricultural enterprises is determined by the ever-increasing requirements 

of the population and of the processing industry for agricultural products, and also by the economic and 
financial results. The achievement of the objective in question is conditioned by the pursuit of a profitable 
activity based on a reasoned system of state support. This support system is manifested by the allocation 
of subsidies from the state budget to stimulate investment in the agricultural sector. Subsidies are a form 
of government support for agricultural enterprises and households to supplement their incomes, 
stimulate the production of agricultural products and influence the cost of these products, and subsidies 
are a considerable source of coverage for agricultural production costs. 

The issue of subsidizing the agricultural sector has recently become relevant in the Republic of 
Moldova, being addressed in various scientific papers of local researchers. Among the local researchers 
who studied this subject we can mention Tomița P., Litvin A., Cimpoieș L. and others (Tomița 2013; Litvin 
2013; Cimpoieș 2013). The mentioned authors referred to the issues related to the structure and role of 
the subsidy, to the targeting of support measures, as well as to the aspects of the subsidy in the Republic 
of Moldova in correlation with other European countries. But at the same time, we consider it necessary 
to argue the effectiveness of the means of subsidization in agricultural enterprises. Based on the above, 
the aim of the research is to analyze and evaluate the efficiency and impact of subsidization on the 
development of the agricultural sector and to ensure a stable increase in agricultural production, 
emphasizing the main support measures in this direction. 

DATA SOURCES AND METHODS USED 
The informational and statistical support of the investigations was provided by the legislative acts 

of the Republic of Moldova, generalizing data of the National Bureau of Statistics of the Republic of 
Moldova, Agency for Interventions and Payment for Agriculture, Ministry of Agriculture, Regional 
Development and Environment of Moldova, Agency for Land Relations and Cadastre. The concepts of 
economists from the country and abroad served as methodological support. 

The following research methods were used in the stady: observation method, table method, analysis 
and synthesis method, comparison method, monographic method, statistical data collection. 

RESULTS OF OWN RESEARCH AND DISCUSSIONS 
 Subsidies in agriculture are a widespread phenomenon that is used practically in all the countries. 

The highest level of subsidy among European countries was registered in Norway, Switzerland and 
Iceland, where subsidies make up 65-75% of the agricultural production value. The average rate of 



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subsidies in the European Union (EU) is 35% of the agricultural production value (Tomita 2013: 73). 
Subsidizing the agricultural sector in the Republic of Moldova has become the most debatable topic, 

as the pace of growth of the national economy directly depends on the economic growth in agriculture, a 
branch that covers more than 30% of the republic's jobs. 

In these conditions, in order to move agriculture and rural area on a more dynamic path of 
development, it is necessary to promote them through subsidies (AIPA 2018, 2019): 

• Measures to stabilize agricultural production by protecting agricultural activities from 
unfavorable climatic factors such as prolonged drought, which is a common phenomenon; 

• Measures to stimulate agricultural activities to replace imports with competitive domestic 
products that can compete with imported products; 

• Measures to change the structure of agriculture that should focus on high value-added products 
which means there should be made a list of products and activities that are considered to provide high 
added value and to allocate special resources in this direction; 

• Measures to protect the rural environment, first of all the soil in all activities in the rural area, not 
only the agricultural ones; 

• Subsidy measures should focus on agricultural production with export potential, and especially 
on those high value-added products that do not cover domestic consumption needs such as potatoes, 
vegetables, fruits, meat and milk; 

• Measures to develop and support complex businesses with the involvement of several activities 
of the value chain. 

The implementation of subsidy measures will have an impact on increasing incomes of agricultural 
producers, will create favorable conditions for households. At the same time, these subsidy measures will 
help increase opportunities for business development in rural tourism. 

A high level of mobilization of financial resources to subsidize the agricultural sector has been 
registered during the last 7 years. Thus, in the period 2012-2018, the subsidy fund with the contribution 
of external development partners registered a high increase from 400 million lei in 2012 to 900 million 
lei in 2018 (figure 1). 

 

Figure 1. Evolution of the subsidy fund for agricultural producers  
in the Republic of Moldova, million lei 

Source: Elaborated by the author based on the Agency for Intervention and Payments in Agriculture. 
 
The data presented in figure 1 show an increase of the subsidy fund in 2018 compared to 2012 by 

500 million lei or 2.25 times. 
We would like to mention that one of the biggest challenges is the inability of the Agency for 

400

462,8

564,7
610

700

900 900

0

100

200

300

400

500

600

700

800

900

1000

2012 2013 2014 2015 2016 2017 2018



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Intervention and Payments in Agriculture (AIPA) to meet its financial obligations to all grant beneficiaries, 
because the agency pays on average about 70% of the total amount of subsidies authorized for the 
management year, the rest being transferred for the following budget year (figure 2). 

From the graphic presentation we can notice that from the subsidy fund for 2018 the 
agricultural producers were financed in proportion of 70.2%. An essential share is constituted of the 
arrears for 2017, which make up 24.6% of the authorized amount. The contribution for the National 
Fund for Vine and Wine and the expenses for the administration of the National Fund for Agriculture 
and Rural Development (NFARD) constituted respectively 3.2% and 2.0%. 
 
 
 
 

 
 
 
 
 
 
 
 

 
 
 
 

 
Figure 2. Distribution of NFARD in 2018 

Source: Prepared by the author on the database of the Agency for Intervention and Payments in 
Agriculture 

 
 
Thus, late payments to beneficiaries are the main problem. Solving this problem requires the 

grant fund to have a stable amount over several years that would allow 100% funding regardless of 
current budget revenues. 

The volume and structure of subsidies must correspond to the development objectives 
stipulated in the National Strategy for Agricultural and Rural Development for the years 2014-2020 
and contribute to the efficient use of subsidy means. The usefulness and relevance of the grant 
mechanism can be appreciated from the perspective of the support provided to the implementation 
of this strategy, which is limited to ensuring three objectives (Strategy 2014-2020): 

1. Food security of the country; 
2. Production of agricultural products with high added value; 
3. Sustainable use of financial resources. 
In the context of ensuring the country's food security, subsidizing agricultural producers can be 

geared towards supporting three main directions: 
1. Research on new production technologies; 
2. Promoting and implementing measures to adapt and mitigate the effects of climate change 

on agricultural production; 
3. Supporting efforts to diversify the food balance (in the case of our country, ensuring the 

internal resources of the necessary vegetables, meat and dairy products). 
The national strategy for agricultural and rural development for the years 2014-2020 expects 

the diversification of beneficiaries of subsidies and an increase in investments from 3 billion lei per 
year (in 2012) to about 4 billion in 2020 (Strategy 2014-2020:86). 

As an argument for the implementation of the strategic objectives we can see the diversification 
of the beneficiaries according to the form of legal organization (table 1).  

Subsidy fund 
900 mil. lei 

 

Financing  agricultural 
producers in 2018 

631,8 mil.lei 

Expenses for the 
administration of NFARD 

18,0 mil.lei 

Arrears to farmers in 
2017 

221,4 mil.lei 

Contribution to the 
National Vine and Wine 

Fund  
28,8 mil.lei 

 Start-up projects 
45,0 mil.lei 



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Table 1  
Distribution of the subsidy fund according to the forms of organization  

of agricultural enterprises in 2018 

 Type of  organization  
Number of 

beneficiaries 
Share, 

% 

Authorized 
amount of 
subsidies, 

mil. lei 

Share, 
% 

1. Joint-stock company 43 0,97 41,9 4,34 

2. Agricultural production 
cooperative 

111 2,52 71,1 7,37 

3. Limited liability company 1418 32,15 582,7 60,42 

4. Peasant household 2736 62,03 252,1 26,14 

5. Sole proprietorship 73 1,65 12,9 1,34 

6. State enterprise 3 0,07 0,3 0,03 

7. Public association 22 0,50 2,8 0,30 

8. Limited partnership 5 0,11 0,6 0,06 

9. Production and trade 
company 

0 0 0 0 

Total 4411 100,00 964,4 100,00 

Source: Elaborated by the author on the database of the Agency for Intervention and Payments in 
Agriculture. 

 
The data presented in table 1 show that in the structure of the beneficiaries of subsidies in 2018, 

the predominant share belongs to the peasant households - 62.03%. More than 32% of the 
beneficiaries are limited liability companies. This fact reflects a change from the 2012-2015 average 
when limited liability companies and joint-stock companies owned 44% and peasant households and 
individual enterprises -52%. At the same time, the structure of the amounts authorized by subsidies 
show us that more than 582 million lei or more than 60% belongs to limited liability companies, while 
to the peasant households - 26.14%. 

Positive development in subsidy policies in recent years have resulted in the inclusion of 
agriculture in national development strategies as a priority sector and the drafting of the following 
legislation: 

- Subsidy Regulation for the years 2017-2021; 
- Government Decision on the distribution of funds of the National Fund for Agriculture and 

Rural Development (NFARD) no. 455 of 21.06.2017, no. 201-213. 
The subsidy regulation for the years 2017-2021 stipulates the eligibility criteria for subsidizing 

agricultural producers and the ceiling (maximum amount) of subsidies in the profile of measures and 
sub-measures. 

We believe that setting subsidy ceilings for each measure will ensure an efficient use of funds. 
The amounts granted to subsidizing measures are the most important means by which the money can 
be directed so as to achieve the development objectives of agriculture and rural area. 

The research on subsidies granting has shown that the most important technical constraint is 
that the allocation takes place on an annual basis. This method has the following disadvantages: 

- the farmer lacks the confidence that the measure will be in force the next year; 
- it does not allow businesses to join development projects, because their implementation lasts 

more than a year; 
- it allows corruption, because there exists the fear that the subsidies will not be paid later. 
Taking into account these disadvantages and the need to improve the subsidy system, the 

Government has decided to change the way grants are awarded in 2017 on the basis of multi-annual 
programs, in which the objectives and subsidy measures remain stable. Thus, starting with 2017, the 



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support measure “Stimulating investments in the acquisition of the No-till and Mini-till equipment” 
was introduced with an amount of 54.4 million lei. In the profile of support measures, the 
predominant share in 2018 belongs to the following measures: 

- stimulating investments for the development of post-harvest and processing infrastructure 
27.68%; 

- stimulating investments in the acquisition of agricultural machinery and equipment - 27.08%; 
- stimulating investments for the establishment, modernization and deforestation of multi-

annual plantations (including fruit and vineyards) - 20.36%. 
By the Government's decision, starting with 2017 the support measures will remain stable, 

which will allow the adjustment to the European practices, ensuring (GD 2017): 
1. planning and establishing possible subsidy support measures in accordance with the 

National Strategy for Agriculture and Rural Development for a period of at least 5 years, thus ensuring 
continuity in the support of agricultural producers. 

2. the activities of receiving, examining, inspecting, authorizing applications for grants and 
making payments shall be based on the following principles: 

a. efficiency based on economic-financial arguments; 
b. decisional transparency; 
c. continuity of support processes for agricultural producers. 
3.  classification of agricultural producers in small, medium and large agricultural producers, 

criteria characteristic of the definitions were provided in Law no. 206-XVI of 07.07.2006 on the 
support of the small and medium enterprises sector, adapted to the peculiarities of the agricultural 
sector, being defined depending on the land areas processed by agricultural producers. 

4.  the implementation of a new system for monitoring the reasonability of investment costs,  
not to allow an artificial increase in the value of investments in order to unfairly benefit from higher 
subsidies, given that the investment subsidy is calculated from expenses incurred, confirmed by 
invoices, payments, and so on. 

5. the size of the subsidies will not exceed 50% of the investment cost, and the agricultural 
producer under a measure will be entitled to the subsidy only once a year. 

The Regulation also provides for the inclusion of two new support measures, namely the 
stimulation of promotion activities on external markets consists in the allocation of financial 
resources for supporting producer groups via agricultural professional associations in participating 
and organizing agri-food exhibitions, fairs, and competitions, including external markets’ chains, to 
increase competitiveness and promote local agricultural and food products. 

In addition, in order to encourage organic agri-food production, to support small and medium-
sized businesses and to attract young people and women farmers to agriculture, subsidies in 
increased amounts are granted to (AIPA 2017): 

a) young agricultural producers and women farmers -15%; 
b) agricultural producers engaged in cultivating organic crops or breeding organic livestock -20%. 
From the perspective of developing the competitive advantages of the agricultural sector and 

its integration in European and international trade, submeasure 1.6 "Stimulating investments for 
post-harvest and processing infrastructure development", corresponds mostly to the first objective 
of the National Strategy for Agriculture and Rural Development for 2014-2020 which consists in 
increasing the competitiveness of the agri-food sector through restructuring and modernization. 
Moreover, the level of concentration of subsidy applications is close to 35%, and the share of the 
allocation of subsidized amounts varies from 22.6% in 2013 to 27.68% in 2018. In figure 3 we present 
the evolutionary nature of the means subsidized under submeasure 1.6. 

The data presented in figure 3 show us that despite the decrease in the allocated amounts from 
141.3 million lei in 2014 to 76.4 million lei in 2015, within the period 2015-2017 an increasing trend 
is maintained. Thus, in 2017 the amount of subsidies for the development of post-harvest-processing 
infrastructure increased by 104.8 million lei or almost by 2.37 times compared to 2015. In 2018, there 
was a decrease in the allocated amounts from 181.2 million lei to 170.2 million lei. 



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Figure 3. Dynamics of subsidized amounts aimed at stimulating investments 

 for post-harvest and processing infrastructure development, mil. lei 
Source: Elaborated by the author on the database of the Agency for Intervention and Payments in Agriculture 

 
One of the most stable subsidy measures over the years is "Stimulating agricultural producers to take 

loans from financial institutions." The impact of this measure on increasing the competitiveness of 
agriculture is manifested by: 

• boosting the use of credit by a large number of agricultural producers; 
• increasing the profitability of the operational activity; 
• increasing incomes of agricultural producers and reducing poverty in rural areas. 
The subsidy regulation for the years 2017-2021 provides for the granting of loans to agricultural 

producers for purchasing the following goods and services: 
• seeds and planting material; 
• fuel; 
• fertilizers; 
• means of plant and animal protection; 
• fodder; 
• greenhouse modules, verandas, tunnels, film for greenhouses; 
• equipment, agricultural equipment, irrigation systems, anti-hail equipment, etc.; 
• technological equipment and machinery to develop post-harvest infrastructure and primary 

processing.  
The maximum amount of credit for a beneficiary is 100 thousand lei, and for producer groups the 

credit ceiling is 300 thousand lei. 
The subsidy for the purchase of refrigerators for storing fruits, vegetables, grapes will constitute 

(AIPA 2018):    for a beneficiary - 3 million lei; and for producer groups - 4.5 million lei. 
Based on the fact that the level of technical endowment of agriculture in the Republic of Moldova is 

low, one of the priority directions of subsidy is considered "Stimulating investments for procurement of 
agricultural machinery and equipment" whose share for the period 2013-2018 is on average 23.87%. 
According to the data of the Agency for Intervention and Payments in Agriculture within the period 2012-
2016 annually there were purchased over 1500 units of high capacity tractors, high precision seeders, and 
multi-operational grain harvesters. More than 20% of the total allocated resources are intended for the 
purchase of multifunctional combines for harvesting cereals, peas, and another 10% were allocated for 
baling, pressing of vegetable waste. Of the amount of subsidies for this measure, 10% was intended to 
purchase the No-Till and Mini-Till technology. 

The analysis of the support measures and the allocated amounts shows that almost 80% of the total 
amount of subsidies effectively contributed to the achievement of the strategic objectives. Therefore, in 
order to increase the effectiveness of support measures, it is necessary to implement the subsidy 
instruments in more detail in order to make them more targeted. 

The study on the allocation of subsidies in territorial profile allowed us to identify some 

69,8

141,3

76,4

108,8

181,2

170,2

0

20

40

60

80

100

120

140

160

180

200

2013 2014 2015 2016 2017 2018

m
il

.l
e

i



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discrepancies between development regions and administrative districts by the total volume of subsidies 
[5], their structure and the amount allocated in the calculation per hectare of agricultural land. On average 
in 2015-2017, most subsidies were allocated to the districts: Cahul (5.09%), Comrat (5.18%), Causeni 
(4.33%), Hincesti (4.16%), Ialoveni (3.94%). The least subsidies were allocated to the districts: 
Basarabeasca (1.0%), Vulcănești (0.9%), Leova (1.3%), Dubăsari (0.98%). In the period 2015-2018, the 
ratio between the shares of districts with the largest amounts of subsidies compared to the smallest was 
from 3.9: 1.0 to 5.2: 1.0. The calculations showed us that the biggest beneficiaries of subsidies are the 
districts where the economic level of development is high, and the level of consultancy and information 
for agricultural producers was also high. 

Table 2 
Dynamics of subsidies calculated per 1 ha of agricultural land in the profile of the districts 

from the Centre region, lei 

Districts 2015 2016 2017 
On average 
2015-2017 

Anenii Noi 297,46 244,91 402,86 315,1 
Calarasi 119,44 140,51 347,74 202,6 
Criuleni 150,50 534,06 502,28 395,6 
Dubasari 111,06 350,33 306,70 256,0 
Hincesti 216,82 245,45 326,13 262,8 
Ialoveni 312,67 483,99 528,76 441,8 
Nisporeni 497,04 243,32 368,69 369,7 
Orhei 221,03 244,81 321,30 262,4 
Rezina 88,96 192,43 291,40 190,9 
Straseni 422,54 416,02 400,34 413,0 
Soldanesti 242,54 280,61 536,32 353,2 
Telenesti 166,44 220,04 233,30 206,6 
Ungheni 177,53 228,82 386,72 264,4 
Total 232,62 294,25 380,97 309,3 

Source: Author's calculations based on information from the Agency for Intervention and Payments in 
Agriculture and the Agency for Land Relations and Cadastre. 

 
At the same time, the calculations performed in table 2 attest to the existence of discrepancies 

in the amount of subsidies per hectare of agricultural land in the profile of the districts from the Centre 
region. Thus, on average for the years 2015-2017, the highest amounts of subsidies per hectare of 
agricultural land were received by the districts of Ialoveni - 441.8 lei, Straseni - 413.0 lei and Criuleni 
- 395.6 lei. And the districts with the lowest amounts of subsidies per hectare were: Rezina - 190.9 lei, 
Călărași -202.6 lei and Telenești -206.6 lei. 

 
Figure 4. Distribution of subsidies in the profile of development 

 regions within the period 2015-2018 (in percentages) 
Source: Elaborated by the author on the database of the Agency for Intervention and Payments in Agriculture 

24,99%

37,53%

29,45%

8,03%
   South  Region

Centre Region

North Region

ATU Gagauzia



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Analyzing the distribution of subsidies by development regions on average for the period 2015-
2018 (figure 4) we can see that the predominant share of the means of the subsidy fund belongs to 
the Center region-37.53% which is explained by the increase of subsidized amounts per hectare of 
agricultural land in 2018 compared to the average 2015-2017 by almost 37%. The North Region in 
the reference period used 29.45% of the total amount of subsidies or 8.08% less than the Center 
region. The agricultural producers from the South region and ATU Gagauzia received respectively 
24.99% and 8.03% of the means of the subsidy fund. 

Calculations show that for each hectare of agricultural land in the period 2015-2017, the 
amount of subsidies on average for the republic is 261.2 lei, which is insufficient for the development 
of competitive agriculture (figure 5). 
  

 

Figure 5. Dynamics of subsidies in calculation per hectare of agricultural land 
 in the profile of development regions (lei/ha) 

Source: Author's calculations based on the information from the Agency for Intervention and Payments 
in Agriculture and the Agency for Land Relations and Cadastre. 

 
The level that exceeds the average subsidy per republic is attested in ATU Gagauzia -309.5 

lei/ha and the Center region -309.3 lei / ha. In the South region it is attested that for every hectare of 
agricultural land in 2015-2017 there were allocated 253.1 lei or 7.9 lei less than the average per 
republic. The lowest level of subsidy was registered in the North region -213.2 lei/ha or 48 lei less 
than the average per republic. 

The data presented in figure 5 show the dynamic increase of the subsidy level which is a result 
of the considerable increase of the subsidy fund in the period 2015-2017 compared to the period 
2012-2014. 

Regarding the economic efficiency, we can see the following: 
- Comparing the growth rate of subsidies and sales revenues, we can notice that the growth 

rate of revenues is lower than that of subsidies by 8.85 pp, which shows that there is a reduction in 
the efficiency of using subsidies; 

- The dynamics shows the reduction of revenues per one leu of subsidies in 2017 compared 
to 2016 by 5.22 lei or by 28.84%. 

CONCLUSIONS 
In order to develop agriculture and rural areas in a more dynamic way, it is necessary to 

subsidize agricultural producers, which can promote a wide range of support measures and especially 
those related to the protection of agricultural activities from unfavorable climatic factors such as 
drought, which is a common phenomenon in our country. It has been found that in the last seven years 

211,9
188,7

151,5
183,1 187

213,2

309,3

253,1

309,5

261,2

0

50

100

150

200

250

300

350

North Region Centre Region South Region ATU Gagauzia Total RM

2012-2014 2015-2017



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the trend of subsidizing the agricultural sector has been upward. Thus, in 2018 compared to 2012, 
the subsidy fund increased by 500 million lei or 2.25 times. In the structure of the subsidies 
beneficiaries, the largest share of subsidies are accessed by Ltd (limited liability company) which, in 
2018, obtained subsidies in the amount of 582.7 million lei or 60.4% of the value of the National Fund 
for Agriculture and Rural Development, being followed by PH (peasant households) which received 
subsidies in the amount of 252.1 million lei or 26.1% of the value of the National Fund for Agriculture 
and Rural Development. 

Analyzing the distribution of subsidies by development regions, we found out that within the period 
2015-2018 the predominant share is held by agricultural enterprises in the Centre region -37.53% of the 
means of the subsidy fund. 

The calculations showed us that in the reference period the amount of subsidies per hectare of 
agricultural land constituted 261.2 lei on average for the republic, ATU Gagauzia - 309.5 lei / ha, the Centre 
Region -309.3 lei / ha, the North Region and the South Region respectively 213.3 and 253.1 lei/ha. 

The research results show an increase in the dynamics of the subsidy level. At the same time 
with the increase of subsidies level, there is a reduction in economic efficiency, which is manifested 
by the decrease in sales revenues per one leu of subsidies. In the current situation, we consider that 
measures to monitor subsidies and their efficient use are necessary. 

 
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ARTICLE HISTORY 
Received 09 April 2020 
Accepted 03 June 2020 

  

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https://www.expert-grup.org/ro/biblioteca/item/1379-politicile-de-subventionare-si-eficienta-fondului-de-subventionare-a-agriculturii
https://www.legis.md/cautare/getResults?doc_id=76222&lang=ro