THE SUBSIDIZATION OF AGRICULTURE IN THE

REPUBLIC OF MOLDOVA FROM 2020 TO 2024

Onufrei Daniela, student,

Research advisor: Mocanu Natalia, Habilitated Doctor of Economics Sciences,
Professor at the State University of Moldova

The Republic of Moldova is a small country located in the center of the European
continent, situated in a flatland area. The climate of the Republic of Moldova is
favorable due to its location in the temperate zone, characterized by four distinct seasons
with favorable temperatures, sufficient precipitation, and fertile soil. These conditions
have led the Republic of Moldova to become an agrarian-industrial country, with
agriculture being the primary activity of the population. Of the total territory, 75%
consists of black soils, which are the most fertile and conducive to the growth of
agricultural crops.

From the aforementioned, we observe that agricultural activity is essential for the
economic life of the Republic of Moldova. The development of agriculture is closely
linked to the country's economy. Over 45% of the total exports of the Republic of
Moldova consist of agricultural crops or their finished products.

Agricultural activity encompasses the production, growth, or cultivation of

agricultural products, milking, breeding, and keeping animals for agricultural purposes,
as well as the primary/finished processing of plant-origin agricultural products, and
maintaining land in good agricultural and environmental conditions.

For the development of agriculture, financing is necessary. To promote the

development of agricultural activity, a series of actions need to be taken. The state can
influence the stimulation of agriculture through measures such as subsidizing
agriculture, providing grants for investments in agricultural activities, offering fiscal
incentives through reduced taxes and fees.

Subsidy, according to the regulation regarding subsidization in agriculture and rural

areas, is defined as non-reimbursable and non-taxable payment granted from the
National Fund for the Development of Agriculture and Rural Environment to achieve the
purpose stipulated by law.

A farmer is an individual or legal entity engaged in agricultural activities. To

receive a subsidy, the farmer needs to submit a subsidy application, and it must be
accepted by the National Fund for the Development of Agriculture and Environment. To
benefit from the subsidy, the farmer must meet the conditions specified in the regulation.

Funding of agriculture from the state budget

Year Budgetary Granting expenses to BE/GEA Subsidies granted to SGA/GEA

expenses (BE) agriculture (GEA) agriculture (SGA)
2024 82222000000 2376992500 2,89% 1607034900 67,60%
2023 84104000000 2470239500 2,93% 1706611500 69,08%
2022 75216321600 2793207500 3,71% 1751984400 62,72%
2021 55399600000 2815245800 5,08% 1090017100 38,71%
2020 51551945000 2628103500 5,09% 997867900 37,96%
Source: state budget for the years 2020-2024

According to the data from the previous table, we have observed that, in the total
budget expenditures of the year 2024, the expenses allocated to agriculture constituted
2.89%. We noted that in 2024, the expenditures allocated to agriculture, at 5.09% of the
total state budget expenditures, decreased by approximately 2 percentage points
compared to 2020. However, it is evident that, out of the total expenditures allocated to
agriculture in 2024, agricultural subsidies accounted for over 67%, compared to less
than 38% in 2020. Over the course of 5 years, agricultural subsidies have increased by
over 30%.
 Based on the conducted research, we find that over the past 5 years, the state
budget allocated slightly less, by 10%, in financial resources in 2024 compared to the
year 2020, which is viewed negatively. However, agricultural subsidization has
increased by 609 million or over 60%, which is viewed positively. This indicates that the
state has adopted a policy of intensive funding for agricultural activities by increasing
subsidies to farmers.

In conclusion, the Republic of Moldova needs to pay attention to agriculture

through intensive funding, as its activities directly influence the country's economy. The
more we invest in the development of agriculture, the more qualitative and competitive
domestic products will be on the international market, promoting the economic
development of the state and the Gross Domestic Product.

REFERENCES

1. Law No. 172 of 19.12.2019, on the state budget for the year 2020.
2. Law No. 158 of 16.12.2020, on the state budget for the year 2021.
3. Law No. 205 of 6.12.2021, on the state budget for the year 2022.
4. Law No. 359 of 22.12.2022, on the state budget for the year 2023.
5. Law No. 418 of 22.12.2023, on the state budget for the year 2024.
6. Law No. 771 of 31.03.2023, on subsidization in agriculture and rural areas.
7. Official website of the Agency for Intervention and Payments in Agriculture.