Moldova’s farmers demand VAT refund amid $208 million debt crisis
Farmers from southern Moldova, whose lands have been devastated by years of severe drought and who report being excluded from crucial credit programs, staged a protest in front of the Government on December 10.
The organizers, primarily small and medium farmers, warned the action represents a "final signal" before the crippling agricultural debt crisis "degenerates" into mass farm bankruptcies. The Minister of Agriculture and Food Industry, Ludmila Catlabuga, stated that authorities are now drafting a bill to stop forced executions (foreclosures) but stressed that farmers will ultimately remain liable for their existing debts.
The protesting farmers claim the state's total financial obligation to the sector is staggering: an estimated 1.3 billion lei (approx. $73 million) is due just from agricultural subsidies, with the total sum potentially exceeding three billion lei by year-end. This is exacerbated by a minimum of another 2.4 billion lei (approx. $135 million) in un-reimbursed Value Added Tax (VAT).
Key Demands: Relief and Reform
Farmers highlight that, unlike previous years, in 2024 no tax exemptions were granted for those whose harvests failed due to the severe drought impact. Adding to the strain, banks and input suppliers have sharply restricted financing in these high-risk regions.
The farmers presented three main demands:
An immediate moratorium on foreclosures of farm assets.
Effective financing mechanisms, including timely VAT reimbursement, subsidized diesel excise, and a direct payment per hectare system (Moldova Subsidies).
The cancellation of the controversial Law on Agricultural Chambers, which they consider "abusively adopted" and centralizing.
Protesters rallied with slogans such as: "Refinancing, not bankrupting!" and "Support the farmers, not the debts!"
"It seems to me that the bankruptcies are being artificially engineered through documents elaborated by the Government... State structures are utterly ineffective or corrupt," said one protester, alleging political interference in the crisis. Dinu Tudos, a farmer from the Cahul region, underscored the urgency. "We are being dispossessed of assets; people are being evicted from their homes. We are not asking for money from the state; we are asking for long-term crediting and a moratorium on executions," he stated.
Minister Promises Legislative Action
Minister Catlabuga confirmed that the Ministry is working on a legislative solution to stop foreclosures. "A good portion of the members of the Farmers' Force Association [the protest organizer] have worked side-by-side with us... on the bill we proposed," she declared, aiming to demonstrate collaboration. She clarified the limits of the proposed law, reminding that previous aid expired in October. "This law will not extinguish their existing debts. We only propose to stop the foreclosures and come up with solutions. We are also preparing a set of tools for micro-crediting, access to resources, and, potentially, reimbursement mechanisms," she said, aiming to prevent chain bankruptcies.
Opposition Slams Government for Favoring Holdings
Sergiu Stefanco, a deputy of the opposition Democrația Acasă Party, called the farmers' situation "catastrophic." Another opposition deputy, Sergiu Ivanov, urged Prime Minister Alexandru Munteanu "to come out to the farmers and take a stance like a good manager." Alexandr Slusari, former executive director of the Farmers' Force Association, strongly accused the pro-European government of favoring large transnational holdings. "You came to a pro-European government to ask for European-like agriculture, but it tacitly defends the interests of four or five transnational companies. Holdings already occupy over 50% of Moldova. This parasitic model will destroy entire villages. You are the last redoubt," Slusari warned the protesting small farmers.
Translation by Iurie Tataru
