Expert-Grup

Position Paper “Government Factoring – a Solution for Reviving Moldova’s Agricultural Sector”

Economic growth policiesFinancial sectorThursday, 19 June 20251473 views
Project:
Resilient CSOs + Responsible Budgeting = Accelerated AA implementation

Automatically translated summary. The full text is available in Romanian.

A position paper written by Alexandru Bădăru, executive director of the Farmers’ Force association (A.O. “Forța Fermierilor”), proposes government factoring to relieve the acute liquidity shortage in Moldova’s agriculture. It was prepared with EU and Friedrich Ebert Foundation support under the project “Civil Society for European Integration”.

Agriculture has been hit by the war in Ukraine, higher input and interest costs in 2022–2023, unfair competition from imported and transited Ukrainian produce, heat, drought, this year’s frosts and banks’ reluctance to lend. Agricultural subsidies are often paid more than 12 months late, and restrictive conditions on VAT refunds add to the strain. According to figures presented verbally by the Ministry of Agriculture and Food Industry, over 3,500 farms are at risk in 2024 and 2025, which also threatens national food security.

Subsidy payments are a legal obligation under Law No. 71/2023, and European integration will require full VAT refunds. The paper proposes government factoring, a mechanism for certifying and monetising budget claims, tested in 7 EU countries. With commercial banks, farmers could immediately receive over 90% of overdue subsidies or VAT, and the state would later repay the banks directly.

View the original in Romanian