Aid for Romanian farmers affected by the drought
The EU has approved aid worth two billion lei for Romanian farmers affected by the severe drought.
Mihai Pelin, 25.10.2024, 13:50
The European Commission has approved a state aid scheme for Romanian farmers affected by the drought, worth 400 million Euros, which will be granted for losses incurred from September 2023 to August 2024. Following the analysis carried out, the EC found that the scheme is necessary and adequate to compensate Romanian farmers for the losses suffered due to this extreme climate event. Moreover, the Commission established that the system is proportionate because it is limited to the minimum necessary funds and has a limited impact on competition and trade between member states. Based on these considerations, the Commission approved the scheme for Romania in accordance with EU rules on state aid. It is intended for agricultural producers who have had losses for one or more of the thirty-nine types of crops selected by the Commission. It is about wheat, rye, barley, oats or rapeseed, peas, sunflowers or corn, crops that were affected by the severe drought after the fall of 2023.
To qualify for this type of aid, agricultural producers must prove that they have lost more than thirty percent of their crops, and financial support will be obtained through direct subsidies. The maximum value of the aid amounts to 200 Euros per hectare for 100% loss, and payments will be made by December 31. In Romania, the authorities have already informed the farmers that until October 29, they can submit the requests and the minutes of damage assessment to the county departments for agriculture.
On the other hand, two weeks ago, the authorities in Bucharest established that farmers affected by the drought, who have concluded loan or leasing contracts, will be able to request the suspension of debt payments and loan rates until August 1, 2025, if they fulfill two conditions cumulatively. The person who requests the suspension must have a written report showing that he or she had a degree of damage of at least 50%, and the interest rate charged by the creditor is higher than 2.5% + ROBOR index for loans in lei and 2% + EURIBOR index for foreign currency loans. Furthermore, farmers will be able to take loans fully guaranteed by the state on favorable terms to pay their outstanding debts.
Unfortunately, the situation is serious. For this year alone, for example, the Romanian government estimates that around two million hectares have been affected by the drought and is considering financial compensation for the owners. However, losses are also announced for the farmers who managed to harvest the crops because some lots of corn have already been refused for export, due to the diseases emerged against the background of the drought. Calculations also show that Romania loses a thousand hectares of arable land every year due to desertification. In this context, the Environment Ministry fears a total desertification in the south of the country, in the next 50 years. (LS)
