On Thursday, 14 May, the government supported the draft Cabinet regulation “State aid for short-term loans to agriculture to mitigate the negative impact of the spread of Covid-19” developed by the Ministry of Agriculture (MofA). It provides for the single area payment advance to be granted to farmers as a short-term interest-free loan in order to mitigate the negative impact of the Covid-19 crisis. In turn, cash flow will be stabilized, as well as economic viability and development will be ensured for primary agricultural product producers and farmers.
The draft regulation provides that a short-term loan until 31 December 2020 will be granted to farmers as de minimis aid or as an agreed state aid according to a decision of the European Commission if the total amount of de minimis aid granted to a farmer in the last three fiscal years has reached 25 000 euros.
The short-term loan will be calculated from the amount of the single area payment advance, taking into account the following conditions of the draft regulation:
- the minimum amount of the short-term loan – 700 euro;
- the aid rate is defined 40 euro per hectare applied for the single area payment;
- the maximum amount of the agreed short-term state aid loan – 100 000 euro.
Farmers will be able to submit an application for a short-term loan to the Rural Support Service (RSS) from 20 May to 15 August 2020.
Loan repayment: The RSS will deduct the short-term loan amount paid-out from the advance payment amount calculated for the farmer or the calculated final payment for the areas approved for the single area payment in the current year.
The planned number of the aid recipients is 15.2 thousand primary agricultural product producers with a total declared area of 1.5 million ha. Total amount of short-term loans: 60 million euro not requiring additional funding from the state budget.
Information source: Ministry of Agriculture, Rural Support Service