AM: the government provides several tools to maintain farmers’ solvency

By: STA Date: 2025. 10. 27. 11:00

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The new agricultural support cycle, the implementation of the Common Agricultural Policy (CAP), has reached a new milestone, as after the investment decisions, the projects have already entered the implementation phase, which is why a call has opened up the opportunity for those affected to receive support for their interest costs in addition to their non-refundable investment support. Among other things, the details of this call and the smooth application process were discussed with representatives of the banking association by József Viski, the State Secretary responsible for agricultural and rural development support at the Ministry of Agriculture, the Ministry of Agriculture told MTI on Wednesday.

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The State Secretary explained that almost 180 billion forints have already been paid out this year for the implementation of agricultural and rural development investments. Together with the payments from previous years of the new cycle, farmers have already received funds in the amount of more than 416 billion forints, for approximately 66 thousand applications. However, the implementation of investments in practice raises numerous questions that affect the financing background, which is why it was necessary to establish a consultation forum where experiences can be exchanged with certain players in the banking sector. Keeping the interests of farmers in mind, it is a priority goal for both decision-makers and players in the banking sector to strengthen the smoothness and efficiency of support processes, they wrote in the statement. They added that József Viski highlighted that agricultural investments have a much slower return and are more difficult to respond to external market changes than industrial investments. Therefore, the process of implementing farmer developments must also be supported in order to maintain the competitiveness of Hungarian agriculture. This is served, among other things, by the call for interest and institutional guarantee fee support announced in mid-June during the current CAP agricultural support period. This support can be applied for for operations that have already received investment support.

The amount of support supplements the available support up to the maximum support intensity determined by the EU in addition to the investment support, so that it provides additional support, up to a total of 15 percent, for the interest on loans supplementing the self-financing of the supported operations and for the guarantee of the Agricultural Enterprise Credit Guarantee Foundation (AVHGA) serving as collateral for the investment loan.

The interest cost support is available to a wide range of agricultural enterprises. The support provided for forint-based investment loans taken out in order to finance the self-financing of farmers’ investments is also intended to encourage the smooth implementation of developments in agriculture. József Viski initiated regular consultations with the relevant banking players to discuss the experiences so far regarding the call. The forum, held for the first time, was attended by Szabolcs Szigeti, Deputy Secretary of State for the Implementation of the Common Agricultural Policy and Balázs Szabó, Deputy Secretary of State for Agricultural Economy, Péter Tóth, Deputy President for the Management of the National Paying Agency, Tamás Leskó, Deputy Business Executive Director of AVHGA, Dávid Hollósi, Chairman of the Agricultural Working Committee of the Hungarian Banking Association, who is also the Managing Director of the Agricultural and Food Business Unit of MBH Bank, Zoltán Demeter, Head of the Agricultural Business Unit of K&H Group, and István Szabó, Sales Director of OTP Agrár, the Ministry of Agriculture informed.

MTI