The government quadrupled the resources of the damage mitigation fund

By: STA Date: 2023. 03. 22. 09:00

Until March 31, more than 22,000 producers will receive a total of HUF 50.6 billion in agricultural damage mitigation allowances to mitigate the losses of the exceptionally droughty last year, announced Agriculture Minister István Nagy. To this end, the Hungarian government has more than quadrupled the resources of the agricultural damage mitigation fund.

(Photo: Pixabay)

Mitigating the damage caused by the historic drought is a priority task for agricultural policy in order to help farmers stay afloat. Last year, a particularly severe drought devastated 80 percent of the country’s agricultural land, of which 1.45 million hectares were reported to have suffered drought damage, emphasized István Nagy. At the same time, the minister stated that HUF 50.6 billion will be paid by March 31, 2023 to the 22,583 farmers who are entitled to compensate for the damages in 2022. Of this, HUF 49.7 billion is for drought damage, and the other sources are for compensation for other damage events. He emphasized that by providing additional resources, the government increased the resources of the agricultural damage mitigation fund by more than four times. In the agricultural risk management system consciously developed in the last decade, in addition to the damage mitigation fund, premium-subsidized plant insurances are a major help. Thanks to the insurance premium subsidies, the number of farms with drought insurance increased several times, so the agricultural insurance companies paid out about HUF 41 billion to those affected to mitigate last year’s drought damage and other damage caused by extreme weather.

In order to deal with the consequences of the historic drought of 2022, the government has established a Drought Emergency Task Force

At the suggestion of this, he also took extraordinary measures to ensure the financing background of agricultural production. The government has provided the greyhound sector with the option of a loan moratorium to help the financing of agricultural loans, which allowed producers to get a grace period until the end of 2023 in connection with the repayment of agricultural loans amounting to HUF 286.6 billion. In connection with market-based, variable-interest and non-interest-subsidized loans of small and medium-sized enterprises, an interest stop was introduced from the end of last year. Also, in view of last year’s drought, up to HUF 322 billion in advance and partial payment of the EU’s direct area- and animal-based subsidies, which was even larger than in previous years, was made, for which the government also created the necessary financing and technical conditions. In order to help farmers and livestock keepers affected by the drought, in order to help them finance their working capital, the possibility of special interest subsidies of up to 14 percent has been opened in the framework of the Agrár Széchenyi Card Overdraft. Also in 2022, thanks to the exceptional application of the official fuel price to agricultural machinery, agricultural producers were able to save around HUF 39 billion. Thanks to the measures taken for the financing situation of agriculture and the financial strengthening of the sector in previous years, the situation of Hungarian agriculture is stable despite the serious consequences of last year’s tragic drought, for which the farmers are now receiving serious help through the damage mitigation fund – added the Minister of Agriculture.


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