The Ministry of Agriculture has submitted to the European Commission the Strategic Plan for the Development of Agriculture and Rural Areas (SPRZSR) in Bulgaria for the period 2023-2027 for a final preliminary assessment. The document includes all the changes made after the 405 comments received in May of this year, the main ones being the improvement of the quality of the intervention logic, the complementarity and delimitation with other funds and programmes, the interrelationships of the single parts of the Plan and the quality and coherence of individual support interventions . Internal coordination of the document between the responsible EC units and its final approval is awaited. In several consecutive issues, we will present its most important highlights to you. Today we present to you what changes are expected in rural areas and the possibilities for their financing.
A number of municipalities in the country with a traditional agricultural livelihood fall under the list of rural municipalities. In practice, this will deprive them of support in agriculture and animal husbandry and lead to even greater depopulation of Bulgarian villages.
The “guillotine” is included in the National Strategic Plan for the Development of Agriculture and Rural Areas for the period 2023-2027, where there is a new national definition of “rural areas”. According to her, a rural municipality is one in which there are no settlements with a population of more than 15,000 people. According to this definition, 215 municipalities out of a total of 265 municipalities in Bulgaria are classified as rural areas. For comparison, under the current definition, rural areas included municipalities where the largest settlement has up to 30,000 inhabitants. The document does not specify the reasons for the changes.
In the Plovdiv region, the following municipalities are included under the new definition of “rural area”: Brezovo, Kaloyanovo, Krichim, Lucky, “Maritsa”, Perushtitsa, Parvomai, Rakovski, “Rodopi” and Sadovo.
Out of the list are the municipalities of Plovdiv, Asenovgrad, Sopot, Karlovo, Hisarya, Saedinenie, Kuklen, Stamboliyski, as well as their adjacent settlements
According to the preliminary assessment for the application of financial instruments, access to finance represents a significant difficulty for Bulgarian farmers. In our country, 22% of those interviewed during the evaluation indicate access to finance for investments as the main problem, compared to the EU average of 12%. Difficulties in accessing financing for working capital account for 19%, with average values of 10% in the EU. In the survey for non-agricultural enterprises, difficulties in accessing finance are found in our country for only 6%, against an average value of 10% for the EU. The preliminary assessment prepared for the application of financial instruments under the SPRZSR shows a financial shortfall in the sectors falling under the SPRZSR in the amount of BGN 2.382 billion.
The analysis carried out within the framework of the preliminary assessment shows that, in view of the specificities of the “Agriculture” sector, the support needs for accessing external finance, the capacities of financial institutions and the financial instruments implemented so far both in Bulgaria and in other member countries, the most appropriate financial product to implement would be a guarantee scheme for granted investment loans and working capital loans.
The envisaged financial product complements the instruments currently operating on the market, applied by the “Manager of the Fund of Financial Instruments in Bulgaria” EAD (credit scheme) and the National Guarantee Fund (guarantee scheme with individual approval and no loss limit).
The financial product proposed under the SPRZSR will focus on micro-enterprises, young farmers and small farms
According to the preliminary assessment, 50% of the financial resources available for the implementation of a financial instrument should be allocated to support young farmers and very small holdings.
According to national legislation, the financial instruments referred to in regulation no. 2021/1060 are implemented through the “Financial Instruments Fund Manager in Bulgaria” EAD (FMFIB), which performs the function of the holding fund. FMFIB is a commercial company with the sole owner in the capital of the Republic of Bulgaria, with the main function of managing the funds foreseen for financial instruments under operational and other programs co-financed by the European Structural and Investment Funds. The implementation tasks of the financial instrument will be assigned through the conclusion of a financial agreement between the managing authority, the paying agency and FMFIB.
