Alexander Paraschiy, the Head of Research at Concorde Capital, comments on how state subsidies for agricultural firms are currently being used and how to make them more effective
At the current moment, the state is taking quite a passive role on the issue of distributing subsidies. In essence, the first entity that arrives and makes an offer will practically gain a large piece of this pie. Though all agricultural firms can compete for state support in theory, only 10-20 enterprises have been able to gain it in recent years.
This situation has to be changed towards a clear strategy of development and transition to understandable stimuli. If the state supports a certain sphere, it’s necessary to understand what goals are supposed to be reached. Only then can state support be distributed. What we have now is the state’s agrarian budget is approved for a year, based on the immediate situation. That’s why there is so little effectiveness: who runs quickest to a ministry or fiscal committee can compete for something. The rest collect whatever lobbyists were able to secure for them.
I believe that the more important question now is how to stimulate farmers in the future, and whether they need subsidies. Regarding the agricultural sector’s development, particularly the construction of new capacities and introducing new technologies, then state stimuli are very important for companies that invest in development and create jobs. At the same time, it’s necessary to improve control on the use of state support.
Alexander Paraschiy comments state subsidies for agricultural firms
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