IAMO Policy Brief, Leibniz-Institut für Agrarentwicklung in Transformationsökonomien 18
How to revitalise the agricultural sector under the commitments of membership in the World Trade Organisation (WTO) has emerged as a major policy challenge for the Russian government. According to the current State Programme for the Development of Agriculture, a key support channel is via concessional credits to the livestock sector, which was singled out as the largest recipient of interest subsidies in 2013 - 2020. Currently, these payments are not considered green box compatible under WTO commitments, whereas similar measures within the EU's Common Agricultural Policy (CAP) are. While the Russian government may face little difficulty in dressing up its investment subsidies to make them look like green box compatible, the CAP is regarded here as a poor guide for policy reform. The available evidence shows that structural policy elements of the CAP were inefficient in reaching any of the manifold goals they were hoped to achieve. Drawing on the example of East Germany, it is argued that reforms of the institutional environment of agriculture are at least as important for successful agricultural modernisation as the generous availability of funding.