State proposes emergency farm loan. Farmers insist on doubling amount

The state suggests offering emergency farm loans as a solution for farmers who took to the streets. The mechanism, which is due to become functional on March 1, will allow farmers to access loans worth 500,000 lei with a 90% guarantee from the state.  For their part, farmers say that this amount can be kept only for micro farmers, but for the others it must be doubled. The subject was debated at the Ministry of Agriculture and Food Industry during a meeting of farmers with Prime Minister Dorin Recean, IPN reports.

Deputy Prime Minister Vladimir Bolea, Minister of Agriculture, said that it is a new instrument that was worked out urgently, being oriented towards micro and small farmers who face big financial problems. This lending mechanism will have a value of 500,000 lei per applicant, the maximum guarantee rate being 90% of the loan value. This model was developed exclusively for grain producers. Money can be raised at all banks in the country.

“What can this working capital be used for? Money is exclusively working capital, which is it is used for the procurement of seed material, fuel, lubricants, fertilizers, phytosanitary products, mechanized services in agriculture and costs associated with the remuneration of labor related to sowing works in spring 2024. With this sum of 500,000 lei, we seek to help farmers start the new year. The maximum term of the loan is 18 months, while the grace period is six months, until the new harvest,” explained Vladimir Bolea.

Sergei Ivanov, a member of the Board of Directors of the “Farmers’ Force” Association, an agricultural producer from Fălești district, said that the allocated amount of 50 million lei for farmers affected by drought is welcome, but other farmers also need support.  “Lend us at least a billion to be divided among these people who are standing in the streets. They experience problems. Help 200-300 people, but, as you say, there are not enough funds even for this. Let’s be real. Why can’t you help these 200 farmers? Not help, but offer them this ceiling of 500,000. If we multiply by 4,000 farmers per country, the amount will be 10 billion. But to 300 farmers you give not 10 billion, but 3 billion. The ceiling is 1 million already and you help a lot. Everyone accesses the ceiling depending on how many hectares they have. 500,000 for micro farmers, but for the others this amount must be higher,” said Sergei Ivanov.

Sergiu Stefanco, a farmer from Căușeni district, one of the leaders of the protests, claimed that today the banking sector refuses to lend to farmers. For these reasons, legislative changes are needed so that they could take out loans in appropriate conditions. This ceiling of 500,000 can help a farmstead with one hundred hectares only. There are debts for salaries, taxes, spare parts, diesel.

Prime Minister Dorin Recean said that agriculture is a very important sector that is subject to many risks and this is why it must be supported. Only this sector benefits from such subsidies. “Today, the emergency farm loan is available to micro and small producers to start spring works. I understand that this guaranteed loan is not enough, but, unfortunately, there is no more money to help so that we can meet all the needs,” stated the official.

The Premier urged the farmers to launch the agricultural season. According to him, the first solution – the emergency farm loan – was identified and will be implemented from March 1 already. The second solution – long-term financing arrangements with affordable interest rates and conditions – will be discussed the coming weeks.

For the third week in a row, farmers from several districts of the country have protested together with their tractors. Last week they blocked access to the Leușeni customs post. They say they are on the verge of bankruptcy and ask for financial support from the state so as to be able to buy diesel fuel, seeds and fertilizers.

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