Romanian Govt. passes new measures to help farmers hit by severe drought

The Romanian government has approved a series of measures aimed at assisting farmers impacted by severe drought conditions. These initiatives include a drought insurance mechanism, changes to the "Farmer's Credit" program, and the suspension of high-interest loans, all designed to provide financial relief to the agricultural sector.

Minister of agriculture Florin Barbu announced the introduction of a drought insurance mechanism that will cover 7 million hectares of autumn and spring crops. This insurance will provide compensation of up to RON 3,000 (EUR 600) per hectare, helping to unlock credit for Romanian farmers, Ziarul Financiar reported.

The funding for this mechanism comes from a combination of a 3% contribution from the farmers' subsidies, approximately EUR 17 million annually from the EU's risk fund, and additional state budget contributions.

In response to farmers' requests, the government has also enhanced the "Farmer's Credit" program by increasing the guarantee rate to 100%, supported by the Guarantee Fund. This adjustment is intended to sustain agricultural businesses and production, allowing farmers to use the credit to repay installments from 2023 and 2024.

Additionally, farmers with outstanding loans can access this credit, provided they have a calamity report for the current year.

Furthermore, the government has approved the suspension of loans with interest rates exceeding 2% plus ROBOR, as well as the suspension of related outstanding payments, for farmers who have documented calamities for the agricultural years 2023 and 2024. These suspensions will be in effect until December 31, 2025.

Minister Barbu emphasized that the Ministry of Agriculture and Rural Development (MADR) is on track to complete over 80% of calamity reports by the September 15 deadline, ensuring that compensation of RON 1,000 (EUR 200) per hectare is distributed before the start of autumn planting.

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