2015年-世界发展银行全球_Moldova_Public_Expenditure_Review___Agriculture_85页_2mb

Summary of the Public Expenditure Review: Agriculture in Moldova

Core Content

This report, prepared by the World Bank, provides a comprehensive analysis of Moldova's public expenditures and tax policies in the agricultural sector, focusing on the period 2009–2013. It evaluates the effectiveness of current spending and tax treatments and proposes reforms to enhance the sector's competitiveness, resilience, and equity.

Main Viewpoints

• Agriculture's Economic Role: Agriculture is a critical component of Moldova's economy, contributing 14% of GDP and employing 25% of the labor force. It accounts for over 20% of GDP when combined with agro-processing.
• Agricultural Exports: Agro-food products make up about 60% of Moldova's merchandise exports, highlighting the sector's importance as a source of foreign exchange.
• Productivity and Poverty: Despite its size, Moldova's agricultural productivity is low, at around 60% of the national average. This results in higher poverty rates in rural areas (18.8%) compared to urban areas.
• Fiscal Challenges: Moldova has a relatively large public sector, with direct budget spending on agriculture at 1.4% of GDP in 2013, and public support reaching 2% of GDP when including tax expenditures.
• Fiscal Sustainability: The government needs to continue fiscal consolidation to reduce the deficit to 3% of GDP by 2016. Further increases in public spending are not warranted.

Key Information

Public Spending on Agriculture

• Structure and Trends: Direct budget spending includes subsidies (current and capital) and services (research, education, food safety, extension). Tax expenditures involve reduced CIT, VAT, SSCs, and health contributions.
• Composition: In 2013, 1.4% of GDP and 3.6% of total government outlays were allocated to agriculture.
• Priority Areas: The National Agriculture and Rural Development Strategy (NARDS) outlines three main pillars:
  • Pillar I: Enhanced competitiveness through restructuring and modernization (82.8% of total spending).
  • Pillar II: Sustainable management of natural resources (12.4% of total spending).
  • Pillar III: Improved conditions for living and working in agricultural and rural areas (4.7% of total spending).
• Efficiency and Equity: Allocative efficiency has improved, but concerns remain about the effectiveness and equity of spending. Recurrent subsidies may need to be redesigned, and donor-funded projects play a significant role in supporting certain areas.

Tax Expenditures in Agriculture

• Favorable Tax Treatment: Tax expenditures are used to support the agricultural sector, which is high-risk, low-profitability, and capital-intensive.
• Fiscal Cost: The annual fiscal cost of tax expenditures in agriculture is estimated at more than 0.6% of GDP, with VAT concessions being the largest component.
• Effectiveness: These tax expenditures do not effectively address sector challenges. They may slow restructuring and hinder the entry of foreigners into agriculture.
• Distributional Impact: VAT concessions on agricultural products are regressive, benefiting higher-income quintiles more than lower-income ones.

Recommendations

Direct Budget Spending

• Reduce: The credit subsidy program, land consolidation program, and anti-hail service should be considered for reduction if they have not delivered expected results.
• Redesign: Research and education programs, the irrigation system, and the Seeds Commission testing program require reform. The food safety system should also be reformed.
• Increase: Support for extension services, post-harvest infrastructure (funded by reducing the large machinery program), and 'smart' subsidies promoting technology use should be increased.

Tax Policies

• Revamp Incentives: Introduce a capital allowance or tax credit, return the CIT rate for agricultural enterprises to 12%, and remove VAT exemptions for machinery and tractors.
• Land Use Incentives: Abolish or ease restrictions on land acquisition by foreigners, improve land valuation, and introduce a special tax on uncultivated land.
• Income Support: Introduce a presumptive turnover-based tax to bring low-income farmers into the tax net and consider removing the reduction in the SSC rate for farmers.
• VAT Reform: Reintroduce a unified VAT rate for agricultural products while ensuring proper compensation for low-income households to limit production inefficiencies and administrative costs.

Conclusion

The challenge for Moldova is to optimize its public spending on agriculture to ensure it is both efficient and equitable. This includes reducing or redesigning ineffective programs and increasing support for those that have shown positive results. Tax expenditures should also be reformed to make them more effective and aligned with the goals of competitiveness, sustainability, and equity. The proposed reforms aim to enhance the value for money of public support and improve the overall performance of the agricultural sector.