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Granturi pentru producatorii agricoli afectati de seceta (1)

Grants for agricultural producers affected by drought (1)

The Official Gazette (Part I) no. 492 of 6 June 2023 published OUG 50/2023 on the establishment of a state aid scheme in the form of a grant to agricultural producers for certain agricultural crops established in the spring of 2022 and affected by soil drought from March to September 2022.

The recently approved legislative act recognizes the soil drought in March-September 2022 as an unfavorable meteorological phenomenon assimilated to a natural disaster and establishes a state aid scheme in the form of a grant, hereinafter referred to as the scheme, with the objective of granting compensation to agricultural producers who cultivated areas with corn, sunflowers, soybeans and peas in the spring of 2022 and were affected by the soil drought in agriculture in 2022.

Soil drought during 2022, as an unfavourable meteorological phenomenon assimilated to a natural disaster, has been reported by the National Meteorological Administration, as well as by the Academy of Agricultural and Forestry Sciences “Gheorghe Ionescu-Sisesti”, which issued information and characterizations on the negative effect on plants of high ground and air temperatures above the comfort limit, low precipitation and low soil moisture reserve.

 

Since the state aid scheme takes effect after the European Commission’s decision approving the state aid has been received, it was necessary to adopt the legislative act as a matter of urgency, so that the aid granted from the state budget would cover in due time the losses suffered by the farmers in question and ensure the reduction of their vulnerability by means of the financial liquidity absolutely necessary for the continuation of the activities specific to the agricultural campaigns in the agricultural year 2022-2023.

 

The authorities mention that the non-promotion of the present normative act as a matter of urgency would have negative consequences by:

 

  • the impossibility of partially compensating agricultural producers for the damage to maize, sunflower, soya and pea crops due to the occurrence of the meteorological phenomenon of pedological drought and to the damage/compromise of the cultivated areas and the yields obtained on these areas in 2022;
  • possible future distortions of agricultural markets regarding the supply-demand ratio and the uncontrolled evolution of prices for these primary agricultural products of the crop sector;
  • increased vulnerability of agricultural producers due to the lack of financial resources needed for the purchase of inputs and the continued implementation of specific agricultural campaigns in the agricultural year 2022-2023, in the current difficult economic and financial conditions;
  • the major risk that a significant part of the affected farmers will not be able to pay their contractual obligations to suppliers, leases, salaries, loans when due, will over-indebted and will not be able to continue their activity;
  • the risk of abandonment of agricultural activity due to lack of financial resources or due to the transfer of owned land to creditors for overdue debts;
  • major negative social impact on farmers and their family members, when income from agricultural activities is affected, with possible impact on abandonment of farming or even bankruptcy.

 

 

The support is granted for crops that have been affected by soil drought to a degree of more than 30% to 100%, according to the damage assessment reports:

  1. a) maize;
  2. b) sunflowers;
  3. c) soya;
  4. d) peas.

 

The amounts are payable until 31 December 2023 and the county directorates for agriculture are the competent authority responsible for implementing the scheme.

 

Beneficiaries of this scheme are agricultural producers who established maize and/or sunflower and/or soybean and/or pea crops in the spring of 2022, which were destroyed by soil drought in percentages of more than 30% and up to and including 100%, according to the crop damage assessment reports, respectively:

 

  1. a) agricultural producers who are natural persons;
  2. b) agricultural producers who are authorized individuals, individual enterprises and family enterprises established according to the provisions of Government Emergency Ordinance no. 44/2008 on the conduct of economic activities by authorized individuals, individual enterprises and family enterprises, approved with amendments and additions by Law no. 182/2016, with subsequent amendments and additions;
  3. c) agricultural producers who are legal entities, regardless of their legal status or their form of organisation, agricultural companies organised in accordance with Law No 36/1991 on agricultural companies and other forms of association in agriculture, as amended and supplemented, commercial companies organised in accordance with Companies Law No 31/1990, republished, as amended and supplemented, producer groups and organisations recognised under Government Ordinance No. 37/2005 on the recognition and operation of producer groups and organisations for the marketing of agricultural and forestry products, approved with amendments and additions by Law No 338/2005, as subsequently amended and supplemented, agricultural cooperatives organised in accordance with the Agricultural Cooperatives Act No 566/2004, as subsequently amended and supplemented.

 

It is important to note that the beneficiaries mentioned are eligible to apply for the scheme if:

 

  1. a) they have a damage assessment report, drawn up no later than 30 November 2022 inclusive, in accordance with the model provided in Annex no. 4 to the Regulation on the management of emergency situations caused by dangerous meteorological phenomena resulting in soil drought, approved by the Order of the Minister of Agriculture and Rural Development and the Minister of Internal Affairs no. 97/63/2020, as subsequently amended and supplemented, for maize and/or sunflower and/or soya and/or pea crops established in the spring of 2022 and areas affected by soil drought;
  2. b) are registered in the records of the Agency for Payments and Intervention for Agriculture with the single application for payment 2022, identifying the crops established in the spring of 2022, i.e. maize and/or sunflower and/or soya and/or peas, and the areas declared for these crops;
  3. c) they are not in difficulty, as referred to in Article 3(d), with the exception of beneficiaries whose difficulty is caused by soil drought and is proven by the record in the minutes provided for in point (a), with percentages of more than 30% and up to and including 100%.

 

For maize and/or sunflower and/or soya and/or pea crops established in the spring of 2022 and affected by soil drought, the affected area for which State aid is granted, mentioned in the damage assessment report, may not exceed the area of the same crop declared in the single application for payment for 2022.

 

The eligible expenditure taken into account when granting the subsidy is the expenditure provided for in the Framework Technologies for Crop Harvest 2021-2022, carried out by the Research Institute for Agricultural Economics and Rural Development, the maximum amount of 335 lei/ha that may be granted as state aid in the form of a subsidy per hectare for each crop affected by the disaster is between 5.2% and 7.8% of the eligible expenditure and corresponds to the requirements of point. 356(b), 357 and 358 of section 1.2.1.2 “Aid to compensate for damage caused by an adverse climatic event which can be assimilated to a natural disaster” of the EU Guidelines.

 

 

The eligible expenses mentioned above are the following:

  1. a) maize – 4.503,30 lei/ha;
  2. b) sunflower – 4.259,20 lei/ha;
  3. c) soya – 5.369,0 lei/ha;
  4. d) peas – 6,396.30 lei/ha

 

State aid in the form of a unitary grant is a maximum of 335 lei/ha for a 100% degree of damage, which is provided for in the damage assessment report for any of the above crops.

If the percentage of damage specified in the damage assessment report is greater than 30% and up to 100%, the amount of the unit grant that may be awarded is reduced accordingly.

For any of the crops mentioned, the total amount of the grant that may be awarded to a beneficiary is determined by multiplying the amount of the unit grant of a maximum of 335 lei/ha by the percentage of damage and the area affected, as indicated in the damage assessment report, and dividing the result by one hundred.

After the date of receipt of the European Commission’s decision approving the granting of State aid, the measures envisaged by this scheme will be applied, i.e. beneficiaries who meet the above-mentioned criteria may submit an application for a grant to the DAJ, in accordance with the model provided in Annex no. 1 (below), which includes a declaration on their own responsibility that they are not in difficulty within the meaning of point. 33 (63) of the EU Guidelines, or are in difficulty at the date of submission of the application and prove that the financial hardship was caused by the soil drought in 2022 by holding a record of the finding and assessment of the damage to maize and/or sunflower and/or soya and/or pea crops in which the percentage of damage greater than 30% and up to and including 100% at the date of submission of the aid application is registered.

 

The grant application is accompanied by the following documents:

  • copy of the document referred to in Article 5 letter a) – damage assessment report;
  • copies of documents identifying the bank details, such as credit institution, IBAN code, for making transfers.

 

Legal basis:

OUG 50/2023 on the establishment of a state aid scheme in the form of a grant to agricultural producers for some agricultural crops established in the spring of 2022 and affected by the soil drought from March to September 2022.