GOOD NEWS IN CRISIS TIME Budget For Agriculture Production Loans Up 50%

The Ministry of Agriculture will increase the budget for agricultural production loans by 50% this year, according to a Ministry document sent to BURSA upon request. The production loans have generated good results so far, while the number of farmers who apply for such subsidized interest loans has been increasing. In response, the Ministry of Agriculture has increased the budget by 50%.

According to the Ministry, the budget increment for this year is intended to cover both the reimbursement of the loans from 2008 (at the end of 2009) and the loans taken by farmers in 2009 and due in 2010. The information provided by the Ministry of Agriculture indicates that some 700 professional farmers, most of whom grain and animal farmers, took agricultural production loans in 2008. The budget for that year was 91.6 million RON.

Ministry representatives told Bursa that a draft law was being created to stipulate either a differentiated disbursement of the 30% aid (according to production types) or a 30% subsidy for all kinds of agricultural production. The measure would be accompanied by an extension of the loans to 360 days. Contacted by BURSA, representatives of the farmers welcomed the Ministry"s decision because it would increase the number of those benefitting from the 30% subsidy and therefore of the overall farming output.

"The application as of 2003 of Law 150/2003 on agricultural production loans has generated effects as a significant number of farmers have taken banking loans to finance production and received public funding as a percentage of the volume of the loans," the quoted document indicates.

In the previous years, data from the Ministry of Agriculture made available to us indicate that the average volume of public funds was 10% for 2006 and 2007 and 17% for 2008. The same document indicates that the disbursements were 34.5 million RON in 2006 and 43.5 million RON in 2007.