Productivity in Belarus'agricultural sector has improved considerably, but largeparts of crop and livestock production are notinternationally competitive. The state's regulatory andfiscal support system for agriculture has been instrumentalin improving the sector's performance. But the massivedistortions to agricultural incentives it creates to preventthe sector from reaching its full potential. And the highcosts it causes to state budget may be difficult to sustainin view if shrinking fiscal space. Agricultural sectorefficiency and competitiveness in Belarus can be increasedby re-orienting the sectoral policy framework towards lessdistortive measures and reallocating associated budgetexpenditures to support sustainable agricultural growth.Assistance program could be provided to buffer againststructural adjustment shocks. The government will thusachieve its sectoral goals to a higher degree, withoutcompromising on other important policy areas such as foodsecurity and rural livelihoods, and possibly even at lowercost to the state budget. This note provides an economicjustification for such reforms and outlines some potential elements.
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