Agricultural subsidies: dozens of criminal cases, but corruption risks persist

Nearly 50 criminal cases involving passive and active corruption, influence peddling and money laundering offences committed by employees of the Agency for Intervention and Payments for Agriculture (AIPA) and economic agents in the process of granting agricultural subsidies were under the management of the National Anti-Corruption Centre (CNA) in mid-March 2023. Such figures are no longer news, but both experts and authorities say the area of agricultural subsidy granting remains one with high risks of corruption.

Dozens of criminal cases on subsidy violations

At the very beginning of this year, the NAC and the Anti-Corruption Prosecutor’s Office announced criminal prosecutions in 26 cases of abuse of power or office, passive and active corruption, influence peddling and money laundering committed by representatives of the AIPA and economic agents in the process of granting agricultural subsidies. In one criminal case alone, the amount of damage exceeded 3.5 million lei. AIPA then disassociated itself from employees who allegedly commit corruption and urged individuals and legal entities to report to the management in case of any misconduct in the process of examination of applications and petitions by AIPA employees.

This is not the first time that law enforcement agencies have reported criminal cases of abuses and violations in the application and payment of agricultural subsidies. In May 2021, the CNA announced that it had opened a criminal case in which decision-makers at AIPA “allegedly paid subsidies from the National Fund for the Development of Agriculture and the Rural Environment (FNDAMR) and from external financial assistance projects (over 100 million lei), including from the World Bank, to applicants who did not meet the mandatory conditions and eligibility criteria”. In 2015, the General Prosecutor’s Office reported 34 criminal cases involving agricultural subsidies.

Corruption risks linked to the human factor

There are several areas in agriculture with risks of corruption, but first and foremost there is the area of subsidies, economist Veaceslav Ionita told the Independent Press Association (API). He notes that subsidies in agriculture increase from year to year, but they are insufficient anyway, i.e. their granting depends on the decisions of some officials, hence the risks of corruption. “When the subsidies are not enough and hundreds of millions of lei are postponed to the next year, and someone decides that here is one who gets it this year and another one next year, the risk of corruption arises. Where there is state money, which is practically given as a gift, there is a problem. Yes, a lot of work is being done on procedures, measures are being taken to mitigate the risks, but they still exist,” says V. Ionita.

The expert believes that the best solution to eliminate the risks of corruption in this area would be to de-bureaucratise and automate the subsidy system, so as to exclude the human factor.

Anti-corruption activities of the Ministry of Agriculture

“Most cases of corruption in the agri-food sector occur in the process of exercising specific functions and competences of state institutions: regulation, certification, supervision and organisation. Thus, in order to prevent and reduce cases of corruption at the AIPA level, the Ministry verifies the legality of decisions to allocate FNDAMR funds. All draft regulations in the areas of activity of the Ministry of Agriculture and Food Industry are subject to anti-corruption expertise in order to identify the risks of corruption that may arise,” Sergiu Gherciu, Secretary General of the Ministry of Agriculture and Food Industry, commented to API. The official also said that the ministry regularly updates the sectoral plan of anti-corruption actions in the agri-food sector, ensures the organisation of annual trainings for employees, financially stimulates employees “to repress” corruption and influence peddling.

“In 2017, the Anti-Fraud Service was created within AIPA, which started several missions to identify and analyze the risks of fraud in the management of the NDAF, including the funds allocated from the external assistance programs, as a result of which several irregularities were detected,” the deputy director of the institution, Diana Coșalîc, told API. According to her, the Anti-Fraud Service has recorded and carried out fraud risk assessment missions on more than 500 grant files, detecting a number of irregularities. A large number of these files have been forwarded to the Attorney General’s Office.

More subsidies for farmers

The National Fund for Agricultural and Rural Development has increased significantly in recent years – from 900 million lei in 2017-2018 to 1.5 billion lei in 2023. In 2022 it was 1.5 billion lei, but was later increased by 250 million lei to help agricultural producers cope with the increase in fuel and raw material prices caused by the Russian invasion of Ukraine. Again this year, the authorities said they would identify an additional 200 million lei to subsidise farmers after a series of protests by farmers.

Daniela Ciobanu,

reporter, Independent Press Association (API)

This material is produced with the support of the project “Strengthening the Rule of Law and Anti-Corruption Mechanisms in the Republic of Moldova” co-funded by the European Union and the German Federal Ministry for Economic Cooperation and Development (BMZ), and implemented by the German International Cooperation Agency (GIZ). The views expressed are those of the authors and do not necessarily represent the position of the donors and GIZ. The donors and GIZ have no influence on the selection of the subject matter.