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EU Commissioner Hogan: direct payments for Romanian farmers to increase after 2020
Direct payments for Romanian farmers will increase through the proposal for the post-2020 agriculture budget, European Agriculture and Rural Development Commissioner Phil Hogan told a press conference on Thursday, adding that he hopes to do more under the Romanian Presidency of the Council of the EU, as of 1 January 2019
He stated that people want to know what will be the budget after 2020 and, taking into account that the UK will leave the EU, thus results 12 billion euro minus in the budget of the EU. The proposal that he made for the post-2020 agriculture budget means an increase on direct payments for Romanian farmers. He mentioned the success in reducing this difference between the farmers of Western and Eastern Europe, adding that negotiations will be carried out in the next months and a lot will be done during the Romanian Presidency, as of 1 January 2019. After signing some operational agreements between the European Investment Fund (EIF) and representatives of four selected banks for lending to risk-sharing farmers, the official also brought to mind the cohesion funding which increased by 8 percent.
According to the quoted source, with the help of the European Investment Bank and the National Rural Development Programme (PNDR) of Romania, significant sums can be mobilized for the access to credits for Romanian farmers.
The European Investment Fund (EIF) has selected four Romanian banks under the first agricultural financing agreement of Romania to provide new funding to farmers across the country. The four banks are Romanian Commercial Bank (Banca Comerciala Romana), ProCredit Bank, Raiffeisen Bank and UniCredit Bank, which will provide financing worth 155 million euros for over 1,300 farmers and entrepreneurs of the rural area.
Last year, Romania received 126 million euro through a European Investment Fund (EIF) financing agreement, money destined to Romanian farmers to benefit from investment and development loans under favorable conditions.
The funding agreement is supported by 70 percent from the European funds and 30 percent from the banks' contribution.
According to the EIF representatives, it is a risk-sharing credit product that will significantly reduce interest rates and improve loan guarantee requirements for businesses active in the agricultural sector. Director of the EIF Hubert Cottogni stated that in addition to helping Romanian farmers, they are also helping Romania for the future financial programming.
Romania is the fifth EU country to sign a loan agreement with the EIF, after Estonia, Germany, Italy and France.
After signing this agreement, a call for interest for credit institutions was launched, with the four banks currently signing operational agreements with the European Investment Fund (EIF).
The maximum amount of a credit will be 1 million euro and the interest rate will be 0 percent for the PNDR contribution accounting for a maximum of 70 percent of the loan, and for the financial institution's contribution the interest rate will be in line with their own lending policy. The tool addresses priority to small farms and investors up to 50,000 euros.
The EIF is an international financial institution, part of the European Investment Bank Group, specialized in risk financing for SMEs. The EIF supports the EU's objectives by fostering innovation, research and development, entrepreneurship and the creation of new jobs.