Resource information
Productivity in Belarus'
agricultural sector has improved considerably, but large
parts of crop and livestock production are not
internationally competitive. The state's regulatory and
fiscal support system for agriculture has been instrumental
in improving the sector's performance. But the massive
distortions to agricultural incentives it creates to prevent
the sector from reaching its full potential. And the high
costs it causes to state budget may be difficult to sustain
in view if shrinking fiscal space. Agricultural sector
efficiency and competitiveness in Belarus can be increased
by re-orienting the sectoral policy framework towards less
distortive measures and reallocating associated budget
expenditures to support sustainable agricultural growth.
Assistance program could be provided to buffer against
structural adjustment shocks. The government will thus
achieve its sectoral goals to a higher degree, without
compromising on other important policy areas such as food
security and rural livelihoods, and possibly even at lower
cost to the state budget. This note provides an economic
justification for such reforms and outlines some potential elements.
