On July 13, 2023, on the online application platform, the Agency will provide cooperating banks with a credit facility limit for 2023 and funds for subsidies to cover interest on the loans to maintain financial liquidity in order to improve financial liquidity in connection with restrictions on the agricultural market caused by the aggression of the Russian Federation against Ukraine.
Loans to maintain financial liquidity (UP facility)
encompass:
- a limit for new loans in the amount of PLN 2.5 billion,
- funds in the amount of PLN 100 million for subsidies to cover the interest on the above-mentioned loans.
Farmers can apply for loans at banks.
Rules for granting loans to maintain financial liquidity by agricultural producers (UP facility)
Loans to maintain financial liquidity with interest subsidies may be granted by banks to agricultural producers in order to reduce the risk of possible loss of financial liquidity in connection with restrictions on the agricultural market caused by the aggression of the Russian Federation against Ukraine, no later than on December 31, 2023.
The loans cover agricultural production carried out as part of the following activities:
- cultivation of non-perennial plants,
- cultivation of perennial plants,
- plant propagation,
- animal husbandry and breeding,
- cultivation of plants combined with animal husbandry (mixed activity),
- treatment of seeds for plant propagation.
The loan may be granted to settle financial liabilities related to running agricultural activities on a farm and to cover current expenses incurred by agricultural producers that contribute to maintaining financial liquidity through the purchase of, among others:
1) certified seed and nursery material,
2) mineral fertilizers, plant protection products, concentrates and feed concentrates for farm animals,
3) fuel for agricultural purposes,
4) livestock, classified as current assets in accordance with the provisions of the Polish Accounting Act,
5) functional and reproductive queen bees,
6) fuel materials for heating greenhouses and tunnels,
7) roughage.
The loan cannot be granted to repay loans intended for the acquisition of fixed assets purchased as part of the implementation of investments financed from the Rural Development Program 2007-2013 or constituting eligible costs under measures provided for in the Rural Development Program 2014-2020.
Loan amounts and own contribution
The amount of loans granted to an agricultural producer may not exceed:
- PLN 100,000 – for agricultural producers who run farms within the meaning of the provisions on agricultural tax with an area of no more than 50 ha of agricultural land;
- PLN 200,000 – for agricultural producers who run farms within the meaning of the provisions on agricultural tax with an area between 50 and 100 ha of agricultural land;
- PLN 400,000 – for agricultural producers who run farms within the meaning of the provisions on agricultural tax with an area exceeding 100 ha of agricultural land.
The area of a farm is determined on the basis of the area of agricultural land owned by the agricultural producer on the date of submitting the application for a loan from the UP facility.
When determining the loan amount, amounts of preferential loans granted to the agricultural producer from other credit lines are not taken into account.
The borrower is not required to make an own contribution.
The interest due to the bank is payable by:
- borrower – in the amount of 2%,
- the Agency – the remaining part.
The bank cannot capitalize interest or charge it in advance.
Amount of financial assistance
The maximum amount of subsidies will be specified in the loan agreement according to the interest rate applicable on the date of its conclusion.
Assistance in the form of subsidies to cover the interest on the load may be utilized during the loan period, however not later than within:
- 36 months for loans up to PLN 100,000;
- 48 months for loans up to PLN 200,000;
- 60 months for loans up to PLN 400,000;
counting from the date of conclusion of the loan agreement. If the loan is granted for a period longer than 36, 48 or 60 months, after the lapse of 36, 48 or 60 months from the date of granting the loan, respectively, the interest subsidies no longer apply.
Hence, the Ministry of Agriculture’s announcements that the repayment period for the liquidity loans will be the same for all farmers, i.e. 60 months, was not fulfilled!
The legal regulations stipulate that the bank will not be liable for exceeding the amount of public assistance obtained by the borrower from other public assistance schemes.
What documents must be submitted to the bank to obtain a loan?
It was specified that it is necessary to submit:
- a declaration of the agricultural producer, among others about the risk of loss of financial liquidity and that the loan will not be used to repay loans granted for the purchase of fixed assets acquired as part of the implementation of investments financed from the RDP 2007-2013 funds or constituting eligible costs under the RDP 2014-2020 measures,
- in the case of agricultural producers running farms within the meaning of the agricultural tax regulations with an area of more than 50 ha of agricultural land, a document confirming the area of agricultural land on the farm, e.g. an order for payment of agricultural tax, agricultural land ownership act with an excerpt from the land register, agricultural land lease agreement with an excerpt from the land register, certificate issued by the head of the ARiMR poviat office indicating the area stated for the purposes of direct payments,
- a set of documents required by the bank.
It has also been reserved that the subsidies will be granted provided that the borrower repays the principal and interest installments in full on the dates set out in the loan agreement, taking into account an additional 7-day repayment period.
