1. FINANCE
SC Friesian SRL has developed a good relationship with various leading banks in Romania among which a Raiffeisen Bank, Volksbank, Banca Comerciala Carpatica and Banca Transilvania. These banks have been involved in financing a number of investments SAPARD dossiers organized by Friesian BV, The Netherlands.
Nine SAPARD dossiers valued at a total investment of 5.8 million euro were prepared in co-operation with SC Primo ABC Consult SRL and submitted for financing and subsidy, resulting in 2.9 million euro subsidies. The SAPARD investments targeted modernization of cow stables and dairy farms as well as purchase of agricultural equipment and animals but also building of a new boarding-house.
Before rehabilitation
After rehabilitation
Romanian rural area has become more and more appealing to the banking sector, so several commercial banks in Romania included loans for agriculture in their products portfolio.
Banca Comerciala Carpatica offers two types of loans for agricultural activities:
Farming Credit
This credit is designed for the farmers, who can obtain from the bank necessary funds to support their own activity.
Eligible clients:
» corporations that have the technology and the qualifications to execute services for the farming production;
Farmers - corporations or family association/ authorized individuals that exploit land or animals to obtain farming production designed for the market
» corporations that realize activities in the following domains: pisciculture, aquaculture or apiculture
Finance manner.
» loan for current activity for a period of maximum 36 months;
» loan for investments worth maximum 95% of the value necessary to carry on the investment project, for a period of maximum 120 months.
Benefits
» according to the Agriculture Credit Law no. 150/2003, the credit beneficiaries can beneficiate of facilities from the state if they fulfil the legislative conditions. The bank will issue documents regarding the loan reimbursing in order to obtain budget allocations
» current activity credit is granted for a wide range of eligible activities
» current activity credit may be granted in revolving system (credit line) or with redeem graphic
» investment credits finance is granted also in other currency (EUR, USD)
» grace period for investment credit (maximum 12 months)
Farming Convention Credit
This product is designed for sustaining the agricultural domain, by offering to the legal entities necessary funds to sustain the activity.
Beneficiaries:
Bank's customers, legal entities (including the authorized individuals and family association) - who wish to purchase agricultural tools from the companies that have signed collaboration conventions with the bank.
Finance manner:
» loan for investments valuing max. 95% from the value without VAT of the investments project, on a period of max. 120 months.
Benefits:
» the loan will be reimbursed at established terms, according to a graphic
» the loan is granted in other currency also (EUR, USD)
» the grace period is of maximum 12 months
» if the client does not reimburse his debts, the company that has signed a collaboration convention with the bank:
» will reimburse to the bank the loan and the interests due to the loan contract or
» will reimburse the loan according to the graphic established by the loan contract
2. SUBSIDIES
A large number of subsidies and financing schemes are available for agricultural investments and exploitations. The availability of these funds is subject to adjustments and deadlines. Therefore, prior to any investment the current situation has to be assessed in detail.
We can provide any service in the application for the several funds and subsidies that are available in Romania, such as:
» Direct Payments per Hectare
» Complementary National Payments
» Funds for Rural Development
SC Friesian SRL has the expertise and experience to carry out successful applications for these funds.
Methods of payment for agriculture and available subsidies:
Direct payments per hectare will be implemented in 2007 and will be offered from EU funds. The amount offered in 2007 will be of approx. 40 to 45 Euro/hectare (approx. 120 to 150 lei). This amount will increase yearly, step by step, until 2013, when should reach over 200 Euro/hectare/year. The money will be grant to people cultivating the land, owners or renters, under a number of conditions. The institution that will distribute the direct payments per hectare is The Agency for Payments and Intervention for Agriculture (APIA).
The National Complementary Payments will be introduced starting 2007 and will be added to the direct payments per hectare. The difference is that the National Complementary Payment will be offered by the Romanian State from the budget of the Ministry of Agriculture. Payments will be offered for cultivated surfaces and per animal head, according to the European pattern. Farmers will receive the National Complementary Payments through APIA
The Funds for Rural Development represent the European money that will be given to Romania for investments in agriculture and rural development. According to the Council Regulation no. 1290/2005 regarding the finance of the communitary agricultural policy two European funds for agriculture have been created The European Fund for Agricultural Guaranty (FEGA) for financing the marketing measures and The European Fund for Agriculture and Rural Development (FEADR) to finance the programs for rural development.
According to the negotiations between Romania and the European Union, the former will benefit from approx. 7.5 billion euros for the period 2007-2013, which means 1.07 billion euros every year. The contribution of the Romanian state adds to the European funds, according to the type of investments that will be performed. The European funds will be implemented in Romania based on two key documents: The National Program for Rural Development 2007-2013 and The National Strategic Plan for Rural Development.
Similarly to the SAPARD Program, FEADR is based on the principle of co-financing the private investment projects. The Funds for Rural Development are meant for small farmers as well as for farmers' associations, young people, small and medium size enterprises from the agricultural and forestry field, owners of forests and local councils. These funds are divided in 4 groups. Each group (axis) consists of several measures:
A) Increase of performance of the agricultural and forestry sector = 3.25 bil. Euro (45% of the total)
a) support for semi-subsistence farms (approx. 85,000 small farms will receive 1.500 euro/year, for 3 years, if they make a plan for update)
b) the modernization of agricultural exploitations (16,000 agricultural exploitations will receive up to 70,000 euro / project).
c) the set-up of farms by the farmers below 40 years old (up to 40,000 / farm, according to the project).
d) support for establishing groups of agricultural producers (750 groups of producers will receive approx. 250,000 euro / project)
e) professional development and information (140,000 farmers will be trained)
B) Cultivation of agricultural land and forestry = 1.8 bil. euro (25% of the total)
a) subsidy for area for the underprivileged areas, especially mountain areas (approx. 370,000 farmers will receive extra between 25 and 250 euro / hectare/ year)
b) subsidy for pastures and meadows (approx. 95 euro / hectare / year)
c) subsidy for the first tree-plant of agricultural land (36,000 hectares will benefit from funds of approx. 5,000 euro / hectare)
C) Improvement of life quality in the rural area = 2.12 bil. euro (30% of the total)
a) diversification of non-agricultural activities (handicraft, crafts, traditional products, rural tourism), (19,000 beneficiaries will receive 10,000 euro / project)
b) investments in small enterprises in the countryside, barbershops, agricultural machinery repair shops, etc. (3,800 small enterprises will be financed with 20,000 euro / project)
c) renovation of villages (approx. 1,200 local councils will receive 1 mil. euro for roads, drainage system, restoration of historical and cultural buildings, etc.).
D) LEADER program = 0.18 bil. euro (2,5% of the total). Will be financed the set-up of Local Action Groups which will support the projects for villages development.
The Funds for Rural Development will be disbursed through The Agency for Payments for Rural Development and Fishing (APDRP, former SAPARD Agency).
The non refundable funds will be offered for the following types of investments:
» Modernization of agricultural exploits (Axis I)
» Increase of the economic value of forests (Axis I)
» Increase of the added value of the agricultural and forestry products (Axis I)
» Improvement and development of the infrastructure connected to the development and adjustment of the agriculture and forestry (Axis I)
» Diversification of the non-agricultural activities (Axis III)
» Support for the establishment and development of small enterprises with the purpose of promoting the entrepreneurial spirit (Axis III)
» Encouraging tourist activities (Axis III)
» Basis services for the rural economy and population (Axis III).
In order to benefit from FEADR funds for financing your own business, one must fit in an eligible beneficiary category, or become an eligible one. Right before starting the necessary documentation for finance, clarify the legal status and the financial situation of the commercial entity that you own. To benefit from non refundable funds one must draw up a project.
The project must contain a financing application (a standard document filled in based on the model offered for free by APDRP), as well as several relevant documents, which may differ according to the type of chosen investment. The project may be either drafted by you or by authorized state institutions or by private consultancy institutions.
The State-Help represents the subsidies and loans offered by The Ministry of Agriculture starting 2007 for supporting land cultivation and animal raise. The subsidies will be offered as:
» Subsidy for agricultural production, subsidy for seeds and planting material, subsidy for phytosanitary treatment, premium for crop insurance, subsidy for establishment of vineyards, orchards, subsidy for irrigations (in the vegetal sector)
» Subsidy for purchase of true breed animals and for breeding animals, loans for production, and subsidies for insemination centres of producers' associations (for the zootechnic field).
The state subsidy will be disbursed via APIA and the Division for Agriculture and Rural Development (DADR).
Market mechanisms represent the actions for protections of the agricultural producers in relation with the competition outside European Union as well as against the price changes of the food products. Main market mechanisms that will be implemented in Romania are:
» The intervention price.
» The subventions for export.
Market mechanisms are part of the responsibilities of the Agency of Payment and Interventions for Agriculture (APIA). |
Adress: SC FRIESIAN SRL
