ECONOMY AND SOCIOLOGY
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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
Theoretical and scientifical journal
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No. 1 / 2020
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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No. 1 / 2020
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
Theoretical and scientifical journal
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No. 1 / 2020
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
https://www.expert-grup.org/ro/biblioteca/item/1379-politicile-de-subventionare-si-eficienta-fondului-de-subventionare-a-agriculturii
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