RESTRICTED  WORLD TRADE  
ORGANIZATION  WT/ACC/SPEC/MOL/1/Rev.4 
7 July 1999 
 (99-2821) 
Working Party on the 
Accession of Moldova Original:   English 
 
 
 
ACCESSION OF THE REPUBLIC OF MOLDOVA 
 
Information on Domestic Support and Export Subsidies  
in Agriculture in the Republic of Moldova  
 
Revision  
   The Permanent Mission of the Republic of Moldova has submitted the revised following 
information on Domestic Support and Export Subsidie s in Agriculture in the Republic of Moldova. 
 
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  WT/ACC/SPEC/MOL/1/Rev.4 
Page 2  
 
 Republic of Moldova
 
 
Domestic Support of Agriculture:  Transition and the Need for Flexibility  
 
 Primary agriculture accounts for 24 percent of GDP and 41 per cent of total employment in 
Moldova. Related services and other activities th at depend on agriculture account for a further 
45 per cent of GDP and 21 per cent of total employment.   Under the Soviet system, Moldovan agriculture was subject to multiple distortions that produced cropping patterns, input uses and production techniques that were far different from those 
that would have resulted from market forces. A ke y part of the Soviet system was substantial 
subsidies, which played an important role in ma intaining minimum living standards in rural areas. 
These subsidies were large, but it is impossible to quantify them, at least through information available in Moldova.   
 The Moldovan authorities are committed to the rapid transition of the Moldovan economy to 
a properly-functioning market economy, and have already made important progress in achieving this 
objective. The success of transition in ag riculture is the key to success overall. 
  The privatization of agricultural land is a key st ep in the transition process. The distribution of 
land and the legalizing of private property rights bega n in 1996, and are scheduled to be completed in 
2000. Upon completion, 90 per cent of total ag ricultural land will be in private hands.  
  There has also been a liberalization of most agricultural input and output prices, and the removal of quantitative measures on domestic inputs and outputs and on international trade. These 
changes and the privatization of land will ev entually produce new cr opping patterns, production 
techniques and input uses, and will allow Moldova’s clear comparative advantage in agriculture to 
emerge.   However, the process of transition has been accompanied by falls in output as producers have 
been unable to cope with the many changes faci ng them and with the consequences of the loss of 
traditional markets in the CIS countries. For example,  the output of food grains now stands at only 
53 per cent of the level achieved before the star t of the transition to the market economy. The 
corresponding figure for sugar beets is 41 per cent; for grapes, 27 per cent; for dairy products, 39 per cent; for meat (alive weight), 26 per cent; and for eggs, 48 per cent.  Capacity utilization in 
agro-industries has also fallen drastically. For meat products, capacity utilization is now at 
24 per cent; for integrated diary products, it is at 11 percent; for vegetable oil, 8 per cent; for gross 
processed wine, 8 per cent; and for canned fruits and vegetables, 29 per cent.     
 
Welfare and living standards have fallen sharpl y as a result of these developments, especially 
in rural areas. It is estimated that the average income per capita now amounts to only 35 per cent of 
minimum income requirements and this figure is fo llowing a downward trend. It can be said that 
almost all of the rural population (nearly 45 per cent of the total), as well as a majority of the urban 
population are at the limit of their toleran ce of the disruption accompanying transition. 
  In the first instance, the Moldovan authorities responded to this situation by providing short-
term credits to agricultural producers designed to help them overcome transitional problems. 
However, the difficulties have proved to be longer la sting than anticipated, and agricultural producers 
have not been able to repay these credits as they fall due. Consequently, in 1996 and 1997, when poor 
weather conditions added to alr eady-existing problems, the Government wrote off some of these 
debts. The amounts written off amounted to 306.5 million Leu (MDL) in 1995 and MDL 254.3 million in 1996. This debt relief amounts to an ex post facto  subsidy for agriculture. The subsidy 
cannot be allocated to particular crops; nor can it be identified as to the crop-year in which the  WT/ACC/SPEC/MOL/1/Rev.4 
 Page 3 
 
 
 original credit was contracted. Sometimes these credits were granted outside the usual channels of 
financial control over public expenditure; sometim es the precise amounts owed by individual debtors 
cannot be determined, and records of credit transacti ons are missing. The Government has taken steps 
to bring order and transparency to its support to ag riculture during the period of transition, and will in 
future exercise vigilance over expenditure and ensure  complete transparency of support measures.    
 
 Producers have also required assistance in the form of relief from paying various taxes levied 
on them. In 1997 the Government was obliged to forgive tax obligations, mainly as regards the VAT, in the amount of MDL 552 million. Since then, be tween MDL 100-120 million in taxes due have been 
waived annually. There is ample evidence that the incidence of the value added tax fell on producers, 
so that forgiveness of the tax benefited producers.  However, because of methodological concerns of 
WTO members, this support has not been take n into account in calculating Moldova’s AMS. 
   Producers have continued to require credits  from the Government to secure inputs and for 
other purposes. Consequently agricultural debt outsta nding has continued to grow. The latest available 
figures, which are for the period January-Septemb er 1998, show such debt increasing at about 
MDL 50 million per month, with outstanding debt  reaching MDL 2,671 million on 1 October 1998.   
  The amount of debt outstanding has become a serious impediment to the privatization of agricultural entities. It is now clear that a requirement of completing privatization is the cleaning up of 
the balance sheets of the entities to be privatized. In order to allow the final stages of privatization to 
proceed, a proposal for further forgiveness of obliga tions has been made by the Government and is 
presently being considered by Parliament. The propo sal is for a further forgiveness of obligations 
outstanding in 1998 in the amount of MDL 2,200 million. This will include not only forgiveness of 
obligations owed directly to the Government, but  also assumption by the Government of claims by 
private creditors on agricultural entities, and the subsequent forgiveness of the corresponding 
obligations. 
  The Moldovan authorities have also put in place a strategy for dealing with the remainder of the transition in agriculture. This strategy, which h as been drawn up in the light of experience to date, 
envisages a process of more orderly change, with  the various components of the strategy phased 
appropriately in relation to each other. The main areas covered by the strategy are: 
 
- The creation of new institutional structures within the agricultural sector (1999-2005). 
This involves mainly the further economic and financial restructuring of farms; 
 
- The creation of market infrastructure fo r the agricultural sector and the processing 
industry (1999-2003). This is concerned ma inly with the efficient marketing of 
agricultural and processed goods; 
 
- The promotion of agricultural exports to new markets (2001-2008); 
 
- The development of domestic producers of inputs into agriculture and the processing 
industry (2002-2008); 
 
- The sustainable development of rural villag es, and of the agricultural sector and of 
the processing industry (2002-2008); 
 
- Institution building in support of the above (1999-2008). 
   This broad strategy is to be complemented  by clearly-defined Government programmes to 
assist the financial and physical restructuring of producers’ operations to overcome the structural disadvantages caused by the previous collectivi zation. The details of these programmes of WT/ACC/SPEC/MOL/1/Rev.4 
Page 4  
 
 restructuring were described in WT/ACC/MOL/10, pp. 4-12. It was also presented in Geneva at the 
informal WTO meeting on agriculture held on 10 May 1999. A summary table recapitulating needed 
expenditure within that programme is attached. The over-riding rationale for seeking the flexibility 
spelled out below is the need to en sure that this expenditure, which is a critical element in Moldova’s 
transition strategy, should be consiste nt with Moldova’s WTO obligations 
 
 It is essential that the commitments in the agricultural sector undertaken by Moldova should 
be compatible with, and supportive of, the strategy for transition in agricultu re, and that they also 
allow the authorities latitude to deal with unforeseen  contingencies. Concretely, this would require: 
  
- Ensuring that the Government has sufficient flexibility with regard to the provision of 
subsidies that may be required during 1999-2008; 
 
- Ensuring that the implementation period for tariff reductions yet to be agreed is 
compatible with the time period of the strategy.  
 
Moldova has already indicated its need for additi onal flexibility with regard to its obligations 
under the WTO Agreement on Agriculture. Moldova’s need for flexibility extends only over a short 
adjustment period up to 2005.   Specifically, Moldova requests the agreement of  WTO members that, on an exceptional basis, 
it would calculate its current AMS and its AMS commitments through 2005 by applying Article 6.4.a 
and b. The attached tables have been drawn up so as to illustrate the consequences of proceeding in 
this way, and lay out a schedule of commitments through which Total AMS is reduced by 13.3 per 
cent by 2005. Table DS:1 and its supporting tables differ from those previously submitted to members 
in three ways: value added taxes have been rem oved, as suggested by members; the base period is 
now 1996-1998, the most recent period for which data are available; the calculation excludes a 
de minimis  equal to 10 per cent of the average value of agricultural production during 1996-1998. 
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  WT/ACC/SPEC/MOL/1/Rev.4
 Page 5Table DS:1  
Agricultural Products:  Commit ments Limited Subsidization  
(Article 3 of the Agreement on Agriculture)  
 
Domestic support: Total AMS Commitments  
 
Base Total AMS 
(millions SDR) Years of implementation Annual and final bound commitment 
levels (millions SDR) Relevant Supporting Tables and 
document reference 
1 2 3 4 
157.0000 2000 157.0000 Supporting tables: DS:4, 6, 7 and 9 
 2001 152.8238  
 2002 148.6476  
 2003 144.4714  
 2004 140.2952  
 2005 136.1990   
 WT/ACC/SPEC/MOL/1/Rev.4 
Page 6 
Supporting table DS: 1  
Domestic Support  
Reporting Period:  Calendar years 1996-1998  
 
Measures exempt from the reduction commitment -- "Green Box"  
 
 
Measure type  
Name and description of measure with reference to 
criteria in Annex 2 of the Agreement on Agriculture  
Monetary value of measure in year 
in question (MDL millions)  
Data sources 
1 2 3 4 5 6 
  1996 1997 1998  
Measure to conserve soil and to prevent erosion 3.4 12.4 5.5 Ministry of Finance 
Aids for purchase of agricultural research equipment  3.2 - - Ministry of Finance 
Preparation of plant classification 0.8 - - Ministry of Finance a. General services 
Fund for environmental and natural resources protection 13.9 11.6 13.1 Ministry of Finance 
f. Payments for relief from 
natural disasters Natural Calamities Law: compensation by mean s of debt 254.0 261.0 - Ministry of Finance 
l.  Other  4.0 - - Ministry of Finance 
 
    
    
 
  
  WT/ACC/SPEC/MOL/1/Rev.4
 Page 7Supporting table DS: 2  
Domestic Support  
Reporting Period:  Calendar Years 1996–1998  
 
Measures exempt from the reduction commitment - Special and Differential Treatment - "Development Programmes"  
 
 
Measure type  
Name and description of measure with reference to criteria in 
Article 6:2 of the Agreement on Agriculture  
Monetary value of measure in year in 
question  
Data sources 
1 2 3 4 5 6 
  1996 1997 1998  
None 
 
 
 
  
 WT/ACC/SPEC/MOL/1/Rev.4 
Page 8 
Supporting table DS: 3  
Domestic Support  
Reporting Period:  Calendar Years 1996–1998  
 
Measures exempt from the reduction commitment - Direct Payments under Production-Limiting Programmes - "Exempt Direct Payments"  
 
 
Measure type  
Name and description of measure with reference to criteria in 
Article 6:5 of the Agreement on Agriculture  
Monetary value of measure in year in 
question  
Data sources 
1 2 3 4 5 6 
  1996 1997 1998  
None 
 
 
 
 
  
  WT/ACC/SPEC/MOL/1/Rev.4
 Page 9Supporting table DS: 4 
Domestic Support  
Reporting Period:  Calendar Year 1996  
 
Calculation of the Total Aggr egate Measurement of Support  
 
 
Description of basic products 
(including non-product specific 
AMS)  
Product-specific AMS (from 
Supporting Tables DS:5 to DS:7 
below, in MDL millions)  
Product-specific Equivalent 
Measurements of Support (from 
Supporting Table DS:8 below, in 
MDL millions)  
Current Total AMS (aggregate) 
(in MDL millions) 
1 2 3 4 
Milk sector support 28.9 - 28.9 
Total current AMS   28.9 
    
 WT/ACC/SPEC/MOL/1/Rev.4 
Page 10 
Supporting table DS: 4 
Domestic Support  
Reporting Period:  Calendar Year 1997  
 
Calculation of the Total Aggr egate Measurement of Support  
 
 
Description of basic products 
(including non-product specific 
AMS)  
Product-specific AMS (from 
Supporting Tables DS:5 to DS:7 
below, in MDL millions)  
Product-specific Equivalent 
Measurements of Support (from 
Supporting Table DS:8 below, in 
MDL millions)  
Current Total AMS (aggregate) 
(in MDL millions) 
1 2 3 4 
Milk sector support  38.4 - 38.4 
Total current AMS   38.4 
  
  WT/ACC/SPEC/MOL/1/Rev.4
 Page 11Supporting table DS: 4 
Domestic Support  
Reporting Period:  Calendar Year 1998  
 
Calculation of the Total Aggr egate Measurement of Support  
 
 
Description of basic products 
(including non-product specific 
AMS)  
Product-specific AMS (from 
Supporting Tables DS:5 to DS:7 
below, in MDL millions)  
Product-specific Equivalent 
Measurements of Support (from 
Supporting Table DS:8 below, in 
MDL millions)  
Current Total AMS (aggregate) 
(in MDL millions) 
1 2 3 4 
Milk sector support  75.0 - 75.0 
Viticulture sector support  50.0 - 50.0 
Debt relief for entire agricultural sector (from table DS: 9) 2,219.0 - 2,219.0 
Total current AMS   2,344.0 
 
 
    
 
  
 WT/ACC/SPEC/MOL/1/Rev.4 
Page 12 
Supporting table DS: 5 
Domestic Support  
Reporting Period:  Calendar Years 1996-1998  
 
Product-Specific Aggregate Measurements of Support: Market Price Support  
 
 
Description 
of basic 
products  
Calendar / 
marketing year 
beginning   
Measure 
type(s)  
Applied 
administered 
price  
External 
reference price  
Eligible 
production  
Associated 
fees/levies  
Total market 
price support  
Data sources 
1 2 3 4 5 6 7 8 
(4 – 5 x 6) –7 9 
None 
 
  
 
    
 
     
 
  
  WT/ACC/SPEC/MOL/1/Rev.4
 Page 13Supporting table DS: 6 
Domestic Support  
Reporting Period:  Calendar Years 1996-1998  
 
Product-Specific Aggregate Measurements of  Support: Non-Exempt Direct Payments  
  
 
Description 
of basic 
product  
Calendar / 
marketing 
year 
beginning   
Measure 
type(s)  
Applied 
administere
d price  
External 
reference 
price   
Eligible 
production  
Total price-
related 
direct 
payments  
Other non-
exempt 
direct 
payments 
(MDL 
millions)  
Associated 
fees/levies  
Total direct 
payments 
(MDL 
millions)  
Data 
sources 
1 2 3 4 5 6 7 
(4+5-6) 8 9 10 
(7+8+9) 11 
Milk 1998 Grants     75.0  75.0 Ministry of 
Finance 
Viticulture 1998 Grants     50.0  50.0 Ministry of 
Finance 
     
 WT/ACC/SPEC/MOL/1/Rev.4 
Page 14 
Supporting table DS: 7 
Domestic Support  
Reporting Period:  Calendar Years 1996-1998  
 
Product-Specific Aggregate Measurements of Support: Othe r Product-Specific Support and Total Product-Specific AMS  
 
 
Description 
of basic 
product  
Calendar / 
marketing 
year 
beginning   
Measure type(s)  
Other 
product-
specific 
budgetary 
outlays  
Other 
product 
specific 
support 
(MDL 
millions)   
Associated 
fees/levies  
Total other 
product-
specific 
support 
(MDL 
millions)  
Market price 
support 
(Supporting 
Table DS:5)  
Non-exempt 
direct 
payments 
(Supporting 
Table DS:6) 
(MDL 
millions)  
Total 
AMS  
Data 
sources 
1 2 3 4 5 6 7 
(4+5+6) 8 9 10 11 
Milk 1996 Reduction of 
land tax  28.9  28.9   28.9 Ministry of 
Finance 
 1997 Reduction of 
land tax  38.4  38.4   38.4 Ministry of 
Finance 
 1998 Grants      75.0 75.0 Ministry of 
Finance 
Viticulture 1998 Grants      50.0 50.0 Ministry of 
Finance 
      
  WT/ACC/SPEC/MOL/1/Rev.4
 Page 15Supporting table DS: 8 
Domestic Support  
Reporting Period:  Calendar Years 1996-1998  
 
Product-Specific Equivalent Measurements of Support  
 
 
Description 
of basic 
products  
Calendar / 
marketing 
year 
beginning   
Measure 
type(s)  
Applied 
administer-
ed price  
Production 
eligible to 
receive the 
applied 
administere
d price  
Market 
price 
support 
budgetary 
outlays  
Equivalent 
measure-
ment of 
support   
Non-
exempt 
direct 
payments  
Other 
product 
specific 
support  
Associated 
fees/levies  
Total 
monetary 
value of 
equivalent 
commitment  
Data 
sources 
1 2 3 4 5 6 7 8 9 10 11 12 
None 
   
 
   
 
 
     
  
 WT/ACC/SPEC/MOL/1/Rev.4 
Page 16 
Supporting table DS: 9 
Domestic Support  
Reporting Period:  Calendar Years 1996-1998  
 
Non-Product-Specific AMS  
 
 
Measure type(s)  
Calendar / 
marketing year 
beginning   
Non-product-
specific budgetary 
outlays 
(MDL millions)  
Other non-product-
specific support  
(MDL millions)  
Associated 
fees/levies  
Total non-
product-specific 
support 
(MDL millions)  
Data sources 
1 2 3 4 5 6 (3+4+5) 7 
Debt relief for entire 
agricultural sector  1998    2,219.0 Ministry of Finance 
 
   
  WT/ACC/SPEC/MOL/1/Rev.4
 Page 17Supporting table ES: 1 
Export Subsidies  
Reporting Period:  Calendar Years 1996-1998  
 
Export Subsidies: Outlay and Quantity  
  
 
Description 
of products  
Direct export 
subsidies  
Sales of stocks  
Producer 
financed 
subsidies  
Cost reduction 
measures  
Internal transport 
subsidies  
Total product 
specific export 
subsidies  
Quantity of 
subsidized 
exports  
Data source 
1 2 3 4 5 6 7 8 9 
None 
 WT/ACC/SPEC/MOL/1/Rev.4 
Page 18  
 
 Domestic Support
 
Reporting Period:  Calendar Year 1996  
 
De-minimis calculations regarding Base Total AMS of the Republic of Moldova  
 
Description of measure Current AMS 
(million lei) Volume of 
production  
(million lei) 3/4 
(%) 
1 2 3 4 
1996 
Milk sector improvement 28.9 348.70 8.7 
Current Total AMS 28.9   
1997 
Milk sector improvement 38.4 493.52 7.8 
Current Total AMS 38.4   
1998 
Milk sector support 75.0 532.83 14.1 
Viticulture sector support 50.0 255.61 19.6 
Non-product specific support 2,219.0 4,600.00 48.2 
Current Total AMS 2,344.0   
 
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