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AGRICULTURAL SUBSIDIES: NEW RULES APPLICABLE BETWEEN 2015 AND 2020

AGRICULTURAL SUBSIDIES: NEW RULES APPLICABLE BETWEEN 2015 AND 2020

Last updated: 2 April 2015


AGRICULTURAL SUBSIDIES: NEW RULES APPLICABLE BETWEEN 2015 AND 2020


The Government has recently adopted Emergency Ordinance no. 3/2015, amending the rules regarding the subsidies farmers will receive between 2015 and 2020 (the Official Journal no; 191 of March 23, 2015). The purpose of this Ordinance is to create the necessary framework for the absorption of approximately 11 billion Euros, granted to Romania for 2015-2020 under the Common Agricultural Policies. Besides the conditions farmers will need to fulfill in order to be granted these subsidies, the Ordinance introduces an incentive for young farmers creating their first agricultural exploitation, as well as more permissive rules regarding the activity of small farmers. The most important modification provided by this Ordinance are presented to you hereinafter


NEW RULES FOR THE GRANTING OF SUBSIDIES


The subsidies regulated through Ordinance no. 3/2015 are direct payments and transitional national aids (granted for the livestock and vegetable sectors).

Direct payments are aids granted directly to farmers, most commonly not related to production. Payments provided by Ordinance no. 3/2015: single area payments, redistributive payments, payments for agricultural activities with a positive effect on climate and the environment, payments granted to young farmers, payments coupled to production and simplified payments for small farmers. In 2014, the single area payment was 156.89 Euros/hectare.

The payment recipients are active farmers – natural or legal persons – who carry out agricultural activities as legal users of agricultural terrains or legal animal owners.

Following the entry into force of Ordinance no. 3/2015, farmers will need to submit a single request for subsidies at the competent local unit of the Agency for Payments and Intervention in Agriculture (APIA).

Farmers who receive direct payments exceeding 5,000 Euros will have to prove that their active farmer status. In order to do so, they need to be registered as freelancers, individual or family companies or legal persons who engage in agricultural activities.

Natural person farmers who fail to fulfill these registration formalities will have to prove that the total amount of the yearly direct payments received accounts for at least 5% of their total non-agricultural income or that their agricultural income accounts for at least a quarter of their fiscal year earnings.


YOUNG FARMER AIDS


Eligible young farmers who exploit terrains can receive aids under certain special conditions.

A “young farmer” is a natural person who establishes an agricultural exploitation for the first time or has already done so in the 5 years previous to the submission of the first payment application and who was not older than 40 at the time of the submission.

Payments for young farmers represent the equivalent of 25% of the direct surface payment per hectare.
This aid is granted for a maximum surface of 60 eligible hectares. Consequently, the young farmer will receive not only the direct surface payment, but also an extra 25% per hectare for a maximum number of 60 eligible hectares.


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