Agricultural policy development in Moldova over one decade: recent estimates and an outlook towards EU accession

Abstract

Public support for the agricultural sector of Moldova represents an essential priority of the bodies entitled to the development and implementation of public policies in the field of agriculture. Given the accelerated attempts to join the European Union, an alignment of the Moldovan agricultural policy to the EU’s Common Agricultural Policy (CAP) and broader EU green infrastructure with Green Deal and Farm to Fork, are receiving an increasing attention. In order to support the policy makers and the experts with input for the EU legal approximation and future EU accession negotiations, this article presents recent estimates of public support for the agricultural sector of the Moldova using the OECD methodology. More specifically, the Producer Support Estimate (PSE) results are presented for eleven products covering the period 2007-2018. Despite increasing budgetary support of agricultural producers from the Government of Moldova, PSE for most commodities is negative. Given the relatively low relevance of trade interventions, the calculated price differentials hint at non-policy-related barriers to price transmission between the border and the farm gate. Potential reasons are discussed, and policy recommendations are developed. Furthermore, the structure of public policies for agriculture and rural areas, approximated by the General Services Support Estimate (GSSE), are presented. The comparison with the current CAP reveals that the structure of instruments differs substantially. Funding for the current Moldovan agricultural policy is heavily concentrated on investment support and the inspection and control system. Although the CAP might be further reformed until Moldova joins the EU, environmental and rural development policy objectives will remain paramount within the EU, and the relevant ministries should start to develop suitable joint strategies.