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Romania Structural instruments for agriculture

Keywords: agriculture in Romania, structural funds, structural instruments, food processing Romania

INVESTMENT OPORTUNITIES from the EUROPEAN FUNDS FOR AGRICULTURE AND RURAL DEVELOPMENT to support the AGRO-FOOD sector through NRDP 2014 - 2020
IMPLEMENTATION of EUROPEAN AGRICULTURAL FUND for RURAL DEVELOPMENT

EAFRD is implemented through the National Rural Development Program (NRDP), during two financial programming periods:

- 2007-2013 (NRDP 2007-2013)
- 2014-2020 (NRDP 2014-2020)

The technical and financial implementation of EAFRD is provided by the Rural Investments Financing Agency (RIFA), for all the measures under the NRDP, except for the ones intended for the less-favoured areas.


MAIN OBJECTIVES of NRDP 2014 - 2020

-modernization and increase of farmsb viability by strengthening their market-opening and processing of agricultural products;
-encouraging the renewal of generations of farmers by supporting the installation of young farmers;
-development of basic rural infrastructure, as a prerequisite for attracting investment in rural areas and creating new jobs, and, implicitly, of the countryside;
-encouraging the diversification of the rural economy by promoting the creation and growth of SMEs in non-agricultural sectors of rural areas;
-promoting fruit growing sector, as a field with specific needs, through a dedicated subprogramme;
-encouraging the community-led local development through the LEADER approach; the transversal competences of LEADER improves the competitiveness, quality of life and diversification of the rural economy and the fight against poverty and social exclusion.


PUBLIC ALLOCATION for NRDP 2014-2020


Public allocation (EAFRD + State Budget)


EUR 10.24 billion


INVESTMENT OPPORTUNITIES for modernisation of agricultural and fruit-growing holdings and processing/marketing of agricultural products and fruits


Modernisation and improvement productivity and competitiveness require investments in physical assets in agriculture and food processing sector, such as:


-technical endowment of farms, such as performant equipment, machinery, efficient on-farm irrigation systems (on-farm irrigation technologies that would lead to water saving);
-fostering the cultivation and storage of vegetables / fruits (autochthonous varieties, adapted to the soil and climate conditions, constructions, protected areas for cultivation of vegetables), field crops (autochthonous varieties), livestock breeding (swine, cattle and poultry) and capitalization of autochthonous breeds;
-investments in order to diversify the agricultural activities within the holdings;
-stimulation of association and investments serving associative forms of farmers;
-investments to promote resource efficiency, including the production of renewable energy for own-use, as well as for reduction of GHG and ammonia emissions in agriculture;
-development and adaptation of agricultural and forestry infrastructure.


INVESTMENT MEASURES for modernisation of agricultural and fruit-growing holdings and processing/marketing of agricultural products and fruits


The main investment objectives of the National Rural Development Program 2014 - 2020, for modernisation of agricultural and fruit-growing holdings and processing/marketing of agricultural products and fruits, are financed through Measure 4 "Investments in physical assets".


Sub-Measures:


  • investments in agricultural holdings (4.1.);
  • investments in fruit-growing holdings (4.1.a);
  • investments in processing/marketing of agricultural products (4.2.);
  • investments in processing/marketing products in fruit growing sector (4.2.a);

Public allocation: EUR 2.30 billion

Investments in agricultural holdings - Sub-Measure 4.1.


Public allocation: EUR 1.49 billion


Objectives:
  • improvement of the general performances of agricultural holdings, by increasing competitiveness of agricultural activity, diversification of agricultural activities and increase of the quality of obtained products;
  • restructuring the small and medium-sized holdings and turning them into commercial holdings;
  • the compliance with Community standards applicable to all types of investments;
  • increase of the added value of agricultural products, through on-farm processing of products and their direct marketing, in order to create and promote integrated food chains.


Beneficiaries:
  • farmers, except non-authorized individuals;
  • cooperatives (agricultural cooperatives and agricultural cooperative companies) and producer groups set up based on the national legislation in force, serving membersb interests.


Eligibility criteria - Sub-Measure 4.1

  • the applicant must fall within the category of eligible potential beneficiaries;
  • the investment has to be made in the context of a farm with an economic size equal to at least b, 8000 SO;
  • the investment must fall within at least one of the eligible actions provided for in sub-measure;
  • the applicant must secure the co-financing of investment;
  • the economic viability of the investment must be demonstrated on the basis of technical and economic studies;
  • the investment will be preceded by an assessment of the expected environmental impact, if it can have negative effects on the environment,
  • investments necessary for the compliance to EU standards, applicable to agricultural production carried out by young farmers who are installed for the first time in a holding, shall be made within 24 months from the date of installation;
  • investments necessary for the compliance to the new requirements imposed by the European legislation will be implemented within 12 months from the date on which these requirements have become mandatory;
  • investments in facilities whose main purpose is the generation of electricity, through the use of biomass, must comply with the provisions of art. 13 (d) of r. 807/2014, by demonstrating the use of a minimum of 10% heat;
  • the investment will comply with the legislation in force in the field of: public health, animal health and food safety;
  • the applicant will demonstrate that the average annual profit (as an average of the last three fiscal years) does not exceed 4 times the amount of the support requested;
  • in the case of farm-level processing, the processed raw material and the final product will be agricultural product (as defined in Annex I to the TFEU).


Selection criteria (principles of selection) - Sub-Measure 4.1.


  • the farm size principle aimed at medium - sized holdings;
  • the principle of agricultural potential of the area aimed at areas with potential set on the basis of specialized studies;
  • the principle of priority sector according to socio-economic analysis;
  • the principle of integrated supply chains (the combination of the primary agricultural production with the processing /marketing of the production obtained, within the same investment project);
  • the principle of the association of farmers, who hold small or medium-sized holdings, within the cooperatives or producer groups;
  • the principle of agricultural skill level of farmbs manager;
  • the principle of autochthonous breeds/plant varieties;
  • the principle of water economy, if the project provides the modernization of irrigation system at farm level.


Non-refundable financial support - Sub-Measure 4.1.


if the economic size of holding is up to 500,000 SO:
the support intensity will be 50% of the total eligible expenditure, without exceeding :
  • for projects that provide for simple acquisition contracts: EUR 500,000 / EUR 100,000 for small farms;
  • for projects that provide for construction-assembly operations:
- EUR 1,000,000 for vegetable sector/ EUR 200,000 for small vegetable farms;
- EUR 1,500,000 for vegetable crops in protected spaces (greenhouses) and livestock sector / EUR 300,000 for stockyard small farms;
  • for projects that provide for creation of integrated supply chains: EUR 2,000,000 / EUR 400,000 for small farms.

if the economic size of holding is over 500,000 SO:

the support intensity will be 30% of the total eligible expenditure, without exceeding :
  • for projects that provide for simple acquisition contracts: EUR 500,000;
  • for projects that provide for construction-assembly operations:
- EUR 1,000,000 for vegetable sector ;
- EUR 1,500,000 for vegetable crops in protected spaces (greenhouses) and livestock sector
  • for projects that provide for the creation of integrated supply chains: EUR 2,000,000


for cooperatives and producer groups

the support intensity will be 50% of the total eligible expenditure, without exceeding EUR 2,000,000 euros, regardless of the type of investment.

The intensity of the non-refundable support will be able to grow with additional 20 % (but the combined rate shall not exceed 90%), in the case of:
  • collective investments (made by associative forms of farmers as cooperatives and producer groups) and integrated projects;
  • operations supported within PEI;
  • investments related to agricultural environment and organic farming, in accordance with R.1305/2013;
  • investments in areas experiencing natural constraints and other type of constraints, in accordance with R. 1305/2013.


Investments in fruit-growing holdings (Sub-Measure 4.1.a)


Public allocation: EUR 253.62 million


Objectives:
  • increase of competitiveness, diversification of production, increased quality of obtained products and improvement of the general performance of fruit-growing holdings;
  • increase of added value of products, by supporting on-farm fruit processing and direct marketing of the obtained products;
  • development of short supply chains;
  • more efficient production costs, by promoting on-farm production and use of energy from renewable sources and by reducing energy consumption.

Beneficiaries:

  • farmers, except non-certified natural persons;
  • producer groups and cooperatives (agricultural cooperative companies and agricultural cooperatives), established under the national legislation in force, operating in the fruit-growing sector, provided that the investments carried out serve the interests of their own members.


Eligibility criteria - Sub-Measure 4.1.a


  • the applicant must fall within the category of eligible potential beneficiaries;
  • the investment must fall within at least one of the eligible actions provided for in sub-measure;
  • the applicant must secure the co-financing of investment;
  • the economic viability of the investment must be demonstrated on the basis of technical and economic studies;
  • the investment will comply with the standards imposed by national and European legislation, including those concerning environmental effects; the investment will be preceded by an assessment of the expected environmental impact, if it can have negative effects on the environment;
  • the investment must be carried out only in the territorial administrative units presented in the annex of the National Framework for Implementation;
  • the beneficiaries must use only biological certified fruit material;
  • for plant nurseries, the applicant undertakes that the resulting fruit material will be biological certified;
  • the size of the holding shall not be less than 8000 SO;
  • for farm-level processing, the processed raw material and the final products must be mentioned in Annex I to the TFEU;


Selection criteria (principles of selection) - Sub-Measure 4.1.a


  • the principle of fruit species priority (peach, nectarine, apple, apricot, cherry and shrubs);
  • the principle of farms size aimed at small-sized holdings;
  • the principle of priority of culture system (intensive, environmentally friendly crops, Romanian is in protected areas);
  • the principle of integrated supply chains (investment covering the food chain: production-storagepackaging-processing-marketing);
  • the principle of association (investments made by producer groups, their members and cooperatives from the fruit sector);
  • the principle of ownership (of fruit plantations / land);
  • the principle of skill levels (higher education or secondary education in projectbs field);
  • the principle of age (young people under 40 years);
  • the principle of conversion;
  • the principle of water economy, if the project provides the modernization of irrigation system at farm level.


Non-refundable financial support - Sub-Measure 4.1.a


Small farms: support intensity is 50% of total eligible expenditure, without exceeding :
  • EUR 100,000 for investments involving simple acquisition contracts;
  • EUR 300,000 for investment in production (machinery, establishment, conversion);
  • EUR 450,000 for investments leading to an integrated food chain at farm level (production, processing,marketing).

Medium farms: support intensity is 50% of total eligible expenditure, without exceeding:
  • EUR 200,000 for investments involving simple acquisition contracts;
  • EUR 600,000 for investment in production (machinery, establishment, conversion);
  • EUR 900,000 for investments leading to an integrated food chain at farm level (production, processing,marketing).

Investment in production (setting up, machines) for propagating material and fruit planting material
support intensity is 50% of total eligible expenditure, without exceeding EUR 600,000.

Large farms: support intensity is 50% of total eligible expenditure, without exceeding:
  • EUR 250,000 for investments involving simple acquisition contracts;
  • EUR 750,000 for investment in production (machinery, establishment, conversion);
  • EUR 1,050,000 for investments leading to an integrated food chain at farm level (production,processing, marketing).

Associative forms: support intensity is 50% of total eligible expenditure, without exceeding:
  • EUR 350,000 for investments involving simple acquisition contracts;
  • EUR 600,000 to obtain propagating material and fruit planting material;
  • EUR 750,000 for investment in production (machinery, establishment, conversion);
  • EUR 1,050,000 for investments leading to an integrated food chain at farm level (production,processing, marketing).
Investments in processing/marketing of agricultural products (Sub-Measure 4.2.)


Public allocation: EUR 506.54 million


Objectives:

  • setting-up and/or modernization of processing and marketing units;
  • introduction of new technologies for development of new products and technological processes;
  • application of environmental protection actions, including the decrease of energy consumption and GHG emissions;
  • promotion of investments for the production and use of energy from renewable sources;
  • increase the number of jobs.

Beneficiaries:

  • enterprises, cooperatives and producer groups defined according to the national legislation in force.


Eligibility criteria - Sub-Measure 4.2.


  • the applicant must fall within the category of eligible potential beneficiaries;
  • the investment must fall within at least one of the eligible actions provided for in sub-measure;
  • the financial support will be limited to investments in processing agricultural products included in the annex I to the TFEU in order to obtain products of annex I and non-Annex I;
  • the applicant must secure the co-financing of investment;
  • the economic viability of the investment must be demonstrated on the basis of technical and economic studies;
  • the applicant should not be in difficulty, in accordance with the legislation in force;
  • investment will be preceded by an assessment of the expected environmental impact if it can have negative effects on the environment, in accordance with the legislation in force;
  • the investment will comply with the laws in force in the field of public health, animal health and food safety;
  • the applicant will demonstrate that the average annual profit (as an average of the last three fiscal years) does not exceed 4 times the amount of the support requested.


Selection criteria (principles of selection) - Sub-Measure 4.2.


  • the principle of creating integrated supply chains (collection, processing and marketing);
  • the principle of high added value product (e.g. certified organic products, traditional products);
  • the principle of association (cooperatives or producer groups);
  • the principle of agricultural potential aimed at areas with potential on the basis of the specialized studies.


Non-refundable financial support - Sub-Measure 4.2.


The support intensity will be:
  • 50% of the total eligible expenditure, for SMEs and producer groups/co-operatives,
  • 40% of the total eligible expenditure, for other types of enterprises,

and shall not exceed:
  • EUR 1,000,000 for SMEs, for projects which do not entail investments that lead to an integrated food chain;
  • EUR 1.500.000 for other enterprises, whose projects do not entail investments that lead to an integrated food chain;
  • EUR 2,500,000 for investments leading to an integrated food chain (any type of applicant) and for associative forms (cooperatives and producer groups) whose projects do not entail investments that lead to an integrated food chain;


Investments in processing/marketing products in fruit growing sector (Sub-Measure 4.2.a)


Public allocation: EUR 47.23 million

Objectives:

  • modernization and creation of processing and marketing units;
  • introduction of new technologies for developing new products and technological processes;
  • increase the added value of products in the fruit-growing sector;
  • improving internal quality control;
  • increase the number of jobs;
  • decreasing of energy consumption and GHG emissions.

Beneficiaries:

  • enterprises, defined according to national legislation in force ;
  • producer groups and cooperatives, as defined in national legislation in force, providing that the investments carried out serve the interests of their own members.


Eligibility criteria - Sub-Measure 4.2.a


  • the applicant must fall within the category of eligible potential beneficiaries;
  • the investment must fall within at least one of the eligible actions provided for in sub-measure;
  • the applicant must secure the co-financing of investment;
  • the economic viability of the investment must be demonstrated on the basis of technical and economic studies;
  • the applicant should not be in difficulty, in accordance with the legislation in force;
  • the investment must be carried out only in the territorial administrative units presented in the annex of the National Framework for Implementation;
  • the investment will comply with the laws in force in the field of public health, animal health and food safety;
  • the investment will be preceded by an assessment of the expected environmental impact if it can have negative effects on the environment, in accordance with the legislation in force.
  • the financial support will be limited to investments in processing agricultural products included in the annex I to the TFEU in order to obtain products of annex I and non-Annex I;
  • alcoholic beverages may be produced only by micro-enterprises and associative forms (producer groups and cooperatives);
  • the applicant will demonstrate that the average annual profit (as an average of the last three fiscal years) does not exceed 4 times the amount of the support requested.


Selection criteria (principles of selection) - Sub-Measure 4.2.a


  • the principle of high added value product (e.g. certified organic products, traditional products);
  • the principle of integrated supply chains (collection, storage, conditioning, processing and marketing);
  • the principle of association (producer groups and cooperatives from fruit sector).


Non-refundable financial support - Sub-Measure 4.2.a


Micro and small enterprises - the support intensity is 50% of total eligible expenditure, without exceeding:
  • EUR 600,000 for investments that do not lead to an integrated food chain;
  • EUR 900,000 for investments which covers the entire food chain (collection, storage, processing, packaging and marketing);

Medium enterprises - the support intensity is 50% of total eligible expenditure, without exceeding:
  • EUR 800,000 for investments that do not lead to an integrated food chain;
  • EUR 1,100,000 for investments which covers the entire food chain (collection, storage, processing,packaging and marketing);

Large enterprises - the support intensity is 40% of total eligible expenditure, without exceeding:
  • EUR 1,000,000 for non-investment projects that lead to an integrated food chain;
  • EUR 1,500,000 for investments which covers the entire food chain (collection, storage, processing, packaging and marketing);

Investments in the production of alcoholic beverages - the support intensity is 50% of total eligible expenditure and shall not exceed:
  • EUR 200,000 for micro-enterprises;
  • EUR 300,000 for associative forms (producer groups and cooperatives).


Preparatory measures contributing to the objectives of investment measures


Measure 6 "Farm and business development" through 2 Sub-Measures:
  • start-up aid for young farmers (6.1.);
  • start-up aid for development of small farms (6.3.).
Public allocation: EUR 699.03 million

Measure 9 "Setting-up of producer groups and organizations" through two Sub - Measures:
  • setting-up of producer groups and organizations in agriculture and forestry (9.1.)
  • setting-up of producer groups in the fruit-growing sector (9.1.a)
Public allocation: EUR 20.00 million


The main goals of Sub-Measures 6.1. and 6.3.


Sub-Measure 6.1
  • supports the setting-up for the first time of young farmers, as heads/managers of an agricultural holding;
  • contributes to an improved management, an increased competitiveness of the agricultural sector;
  • supports the modernization process and the compliance with the requirements in terms of environmental protection.
Sub-Measure 6.3
  • supports the structural transformation and opening to market of small farms with potential to develop into viable farm business and increase their capacity to identify new opportunities for the capitalization of their production;
  • sustains the improvement of the agricultural holding management, increase market orientation and income of the small sized agricultural holdings.


The main goals of Sub-Measures 9.1. and 9.1.a


  • achieving a higher level of competitiveness through a better integration of small producers in the agricultural chain;
  • obtaining of high added value products;
  • promotion in local markets of the short supply circuits, producer groups and organizations and inter-branch organization;
  • compliance with community standards regarding the environment, food safety and climate.
After accessing and implementing Sub-Measures 9.1. and 9.1.a, the beneficiaries may access the investment Sub-Measures 4.2. and 4.2.a, getting an extra score in the selection stage.


Complementary measures - Support for access infrastructure


Measure 4 "Investments in physical assets", through:

Sub-Measure 4.3. "Investments for the development, modernization or adaptation of the agricultural and forestry infrastructure"
  • supports restructuring of administration and use of access infrastructure;
  • in order to adapt to climate change and for environmental protection, supports the modernizing of irrigation facilities ensuring the efficient use of water by using new technologies leading to a real reduction of water consumption.
Main goals:
  • setting-up, extension and modernization of agricultural farm access infrastructure;
  • setting-up, extension and modernization of access to forestry fund land;
  • modernization of existing irrigation infrastructure.
Public allocation: EUR 670.68 million

Complementary measures - Support for non-agricultural activities


Measure 6 "Farm and business development", through :

Sub-Measure 6.2 - "Start-up aid for non-agricultural activities in rural areas"
  • grants start-up support for facilitation of diversification by setting up and development of microenterprises and small enterprises in the non-agricultural sector in the rural areas, for a sustainable economic development, job creation and poverty reduction in the rural area.
  • Public allocation: EUR 117.77 million
Sub-Measure 6.4. - "Investments in creating and developing non-agricultural activities"
  • grants investment support to micro-enterprises and small enterprises in the rural area, linked to setting-up or developing non-agricultural activities in rural areas.
  • Public allocation: EUR 176.54 million


Main goals:

Sub-Measure 6.2.
  • diversifying the rural economy by increasing the number of micro-enterprises and small
  • enterprises in the non-agricultural sector, developing services and job creation in the rural area;
  • fostering the maintenance and development of traditional craft activities.
Sub-Measure 6.4.
  • fostering the rural business environment, contributing to an increased number of nonagricultural activities carried-out in rural areas, as well as to the development of the existing non-agricultural activities,
  • leading to job creation, increase of rural population income and attenuation of disparities between the rural and the urban areas.


Complementary measures - Support for basic rural infrastructure


Measure 7 "Basic services and village renewal in rural areas", through:

Sub - Measure 7.2. "Investments in creating and upgrading of small-scale infrastructure":
  • support investments for improvement of the small-scale basic infrastructure, ensuring a sustainable economic development and reducing the poverty in the rural area.
Main goals:
  • increase the number of rural area inhabitants benefiting from an improved basic infrastructure.
  • Public allocation: EUR 1.10 billion


Complementary measures - Support for operational groups


Measure 16 - "Co-operation"
  • supports the setting-up and operation of the OGs (operational groups) set up by farmers, researchers, advisors, enterprises or NGOs, in order to undertake a joint development-innovation project for capitalizing on existing opportunities in the agro-food and forestry sectors;
  • provides support for direct costs of pilot/development projects which are not currently supported under other rural development measures within the NRDP 2014-2020.

Main goals:

  • fostering innovation, co-operation and the development of the knowledge base in rural areas;
  • strengthening the links between agriculture, food production and forestry and research and innovation,
  • including for the purpose of improved environmental management and performance;
  • improving competitiveness of primary producers by better integrating them into the agricultural chain through quality schemes, adding value to agricultural products, promotion in local markets and short supply circuits, producer groups and organisations and inter-branch organisations.
  • Public allocation: EUR 31.13 million


Conditions of accessing funds for more projects within the same sub-measure


A beneficiary may request funding for one or more projects within the same sub-measure only under the following conditions:
  • he complies with the eligibility criteria of the sub-measure;
  • the projects do not lead to a common technological flow.


Projects submitted for funding through PNDR 2014-2020 during 2015 sessions (until 11 November, 2015)


Sub-Measure 4.1.- "Investments in agricultural holdings"
  • Number of projects: 668
  • Total value of projects: EUR 266.29 million
Sub-Measure 4.1.a - "Investments in fruit-growing holdings"
  • Number of projects: 38
  • Total value of projects: : EUR 17.06 million
Sub-Measure 4.2. - "Investments in processing/marketing of agricultural products"
  • Number of projects: 46
  • Total value of projects: EUR 45.54 million
Sub-Measure 4.2.a - "Investments in processing/marketing products in fruit growing sector"
  • Number of projects: 3
  • Total value of projects: EUR 0.99 million
Sub-Measure 4.3.- "Investments for the development, modernization or adaptation of the agricultural and forestry infrastructure"
  • Number of projects: 39
  • Total value of projects: EUR 38.67 million
Sub-Measure 6.1. - "Start-up aid for young farmers"
  • Number of projects: 2874
  • Total value of projects: EUR 120.77 million
Sub-Measure 6.2. - "Start-up aid for non-agricultural activities in rural areas"
  • Number of projects: 999
  • Total value of projects: EUR 59.84 million
Sub-Measure 6.3. "Start-up aid for development of small farms"
  • Number of projects: 809
  • Total value of projects: EUR 12.11 million
Sub-Measure 6.4. - "Investments in creating and developing non-agricultural activities"
  • Number of projects: 503
  • Total value of projects: EUR 76.01 million
SubbMeasure 7.2. -"Investments in creating and upgrading of small-scale infrastructure"
  • Number of projects: 296
  • Total value of projects: EUR 291.76 million

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