The economic impact of farm subsidies in Moldova's agricultural sector development.

Governmental support is needed to achieve and maintain the farm economic performance, which is on the long run is the key to its sustainable development. The governmental intervention into the agricultural sector was highly discussed explaining/justifying such an involvement. This is caused by some forms of market failure, when private markets are not able to function efficiently. Agricultural subsidizing policy is an important mechanism through which the government can support this sector. This paper aims to analyse the distribution and structure of governmental subsidies fund in Moldova during 2010-2018 and its possible outcome on the development of agricultural sector. The research analyses data related to the subsidies allocation dynamics and structure. The statistical data were provided by the Agency of Interventions and Payments in Agriculture, National Bureau of Statistics and Ministry of Finance. The supported subsidized measures are targeted on three main pillars: the increase in competitiveness of the agricultural sector through modernization and market integration; to ensure sustainable management of natural resources in agriculture; and to improve standards of living in rural areas. Subsidies tend to be allocated to support sectors that are already competitive and self-sufficient and does not require perhaps the governmental support for further development. The largest share of subsidies are allocated for the purchase of machinery and equipment, which does not increase the value-added of products.