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2021 Financing opportunities in Romania for investments in rural areas

New funding agricultural opportunities in Romania. Investors interested in making investments in rural areas – orchards, vegetables (including in protected areas), processing of agricultural products, animal husbandry, etc. – have at their disposal sources of non-reimbursable financing through the National Rural Development Program (PNDR). It sets out funding lines for achieving Romania’s priority objectives in the field of rural development, being funded under the European Agricultural Fund for Rural Development (EAFRD) – a financial instrument created by the European Union to support Member States in implementing the Common Agricultural Policy (CAP).

At the time this article is being written, the legislative framework for the Common Agricultural Policy (CAP) for the new programming period (2021-2027) is not finalized. Due to ongoing negotiations between the European Parliament and the Council of the European Union, the provisional start date for the proposed CAP reform has been pushed to 1 January 2023. In these circumstances, in order not to affect payments to farmers and other CAP beneficiaries for the period 2021-2022, a transitional regulation is established (EU Regulation 2020/2220).

The Regulation sets out the conditions for EAFRD support during these years, extending and amending the provisions set out in the previous regulations (eg EU Regulation No 1305/2013 on support for rural development from the European Agricultural Fund for Rural Development, EU Regulation 1306/2013 on the financing, management and monitoring of the common agricultural policy, EU Regulation 1307/2013 laying down rules on direct payments to farmers through support schemes under the common agricultural policy, etc). It will remain in force until the implementation of the new framework for CAP strategic plans. Practically, the application of the CAP norms that were in force in the period 2014-2020 is extended and the budget is supplemented using resources related to the years 2021 and 2022 of the new Multiannual Financial Framework (MFF 2021-2027). In addition to the resources in the new financial framework, the transitional measures also take into account the resources for rural development from the European Union’s Economic Recovery Instrument following the crisis caused by COVID-19 (EURI).

Stil, a number of new elements are being introduced to contribute to the European Green Deal, thus ensuring a smooth transition to the future framework of the CAP’s strategic plans. The transition period should provide sufficient time for the European Parliament and the EU Council to agree on the legal framework for the future CAP. Equally, this transition period provides EU countries with sufficient time to design and prepare for the implementation of the CAP’s strategic plans, with the assistance of the Commission.

According to the Minister of Agriculture and Rural Development, the budget allocated to Romania through the NRDP for the transition period 2021-2022 is approximately 3.26 billion Euros, of which:

➢ EAFRD Funds 2021-2027 CFM (Multiannual Financial Framework) – 2,569.10 million euros

➢ EURI Funds (European Union Recovery Instrument) – 692.09 million euros

In relation to the investments established under the NRDP, the budget allocations are as follows:

No. Measure / Sub-measure Public allowance (mil euros)
1 sM4.1 ” Investments in agricultural holdings” 760
2 sM4.1a ” Investments in orchards” 122,70
3 sM4.2 ” Support for investments in the processing and marketing of agricultural products “ 140,00
4 sM4.2a ” Support for investments in the processing and marketing of fruit products “ 10
5 sM4.3 „Investments for the development, modernization and adaptation of agricultural infrastructure”- the component for agricultural roads 100,66
6 sM6.1 ” Installation of young farmers” 100,00 (EURI)
7 sM6.2 ” Support for the establishment of non-agricultural activities” 50,00 (EURI)
8 sM6.3 ” Support for the development of small farms “ 87,00 (EURI)
9 sM6.4 ” Investments in the creation and development of non-agricultural activities” 100,00 (EURI)
10 sM9.1 ” Establishment of producer groups in the agricultural sector” 5,00
11  M10 „ Agri-environment and climate” 288,76 (of which 146,76 mil. euro EURI)
12 M11 „ Organic farming” 232,28 (of which 102,65 mil. euro EURI)
13 M13 „ Payments for areas facing natural or other specific constraints” 660,12
14 M14 „ Animal welfare” 273,60
15 sM16.4 ” Support for horizontal and vertical cooperation between actors in the supply chain “ 40,00 (EURI)
16 sM16.4a ” Support for horizontal and vertical cooperation between actors in the supply chain “- fruit growing. 10,00 (EURI)
17 sM17.1 ” Premiums for securing animal and plant crops” 20,00
18 M19.1 „ Preparatory support for the development of Local Development Strategies (future)” 5,00 (EURI)
19 M19.2 ” Support for the implementation of actions within the local development strategy “ 100
20 M19.4 „ Support for running costs and animation of LAGs”. 23,00 (EURI)

EAFRD co-financing rates remain unchanged, and in the case of EURI resources, the EU contribution rate is up to 100%.

In order to implement the transitional measures, the current program needs to be amended. The amendment process includes several stages, including consultation of partners in the working groups and the Monitoring Committee (MC). A number of consultations with working groups to amend the NRDP have already taken place earlier this year.

Besides a new version of the program resulting from the consultation process to be sent to the European Commission, it is also necessary to adapt the legal and procedural framework for implementation. This is followed by the modification of the working procedures and the applicant’s guides, before the launching of the submission sessions. For this year, the Ministry of Agriculture and Rural Development intends to launch project submission sessions in the second half of the year.

In the next period we intend to publish articles dedicated to the main measures / sub-measures within the NRDP and the investments that can be made through them having as reference the public information available to support potential investors. For more news on grants and non-reimbursable funds in Romania follow our NEWS website section or follow us on Linkedin or Facebook.

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