Government Emergency Ordinance No. 43 of 15.05.

2013
on measures to develop and support family farms and farmers' access to finance

Issued by: Romanian Government

Published in Official Gazette no. 364 of June 19, 2013

In the context of economic and financial difficulties in which is found the national economy,
especially agriculture production in Romania, to initiate and develop investment to contribute to
the employment and the exploitation of Romania’s economic resources and materials, to create new
opportunities for intensive and extensive development of agriculture - important sector of the
national economy.
As a result of the world financial crisis, in the context of the actual Romanian economy, a
significant number of domestic farmers face real difficulties both in accessing, and especially in
reimbursement undertaken exposures / loans due to increasing costs charged by the financial
lending institutions (banks, nonbanking financial institutions, leasing companies and other credit
institutions), and due to the diminishing amount of available guarantees to these credits,
guarantees which have declined by more their value relative to the originally evaluated value (to
date of grant funding), customers are placed in extreme difficulty, that to reimburse anticipatory
the funding required to or bring additional guarantees of initial funding to support and to continue
the ongoing credits.
Analyzing the system of credit institutions in Romania, we find that other economic sectors
have funding priority at the expense of agriculture, and because of the worldwide financial crisis
and regulations imposed by the National Bank of Romania on credit institutions, the appetite and
confidence in lending to agriculture decreased dramatically.
Since the absorption of European funds depends heavily on expanding number of potential
beneficiaries, by converting a larger number of rural households farm into farms with productive-
trade character, and boosting crop and animal production by supporting entrepreneurs at the level
of micro-farms with funding projects for both the investment and for the support of expenditure
cost of current activity and measures to encourage and support the acquisition of agricultural land
for increasing the area of land operated per farm, expansion and completion of financing sources
are required, especially for start-ups farms and family farms, with appropriate financial
instruments for lending.

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 At the same time, to fulfill the commitments made by the Ministry of Agriculture and Rural
Development to the subsistence farms, to modernize them and making them viable entities, which
subsequently can access EU funds for higher investment, it is required to start up the current and
the investment activity of the micro-farm.
Also, given that private beneficiaries of investment loans unfunded from the National Rural
Development Program can not benefit from the guarantees granted by the National Guarantee
Fund, governed by laws in force, and can not use such funding solutions offered by credit
institutions on the Romanian market, adequate national legislative additions are necessary to
guarantee the funding schemes currently implemented.
Given the negative consequences that may arise if the situation described is not regulated,
meaning that adopting the proposed measures in this document would significantly alter the
absorption and utilization of European funds allocated to Romania would cause maintaining of
large and important areas agricultural land still uncultivated, an agricultural production for self-
consumption weak both quantitatively and qualitatively, unable to generate revenue for the
sustainability of the process of modernizing the countryside, would cause existing Bio-ecological
and agricultural, it would generate a high unemployment rate and non-collection of amounts of
money that viable operators / traders could contribute decisively to the consolidated budget.
Given the foregoing, we consider as an immediate priority the support given to farmers, the
support and monitor them through financial programs and specific business projects created and
supported nationally by the concern of state institutions that aim to eliminate tax evasion in the
agricultural branch for producers and traders, aiming to increase healthy and fair local producers,
leading finally to a close monitoring and quality management of the flows between producers-
consumers traders-end consumers by drawing, analyzing and creating a legislative package-
program to support the small farmer at micro-farm level as a new form of company / individual
enterprise of agricultural production.
Considering that these elements concern the national interest and represent extraordinary
emergency and regulation of which can not be postponed,

under art. 115 para. (4) of the Romanian Constitution,

The Romanian Government issues this emergency ordinance.

Chapter I
General dispositions

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 Article 1. This emergency ordinance regulates the legal framework necessary for the
development and support of family farms and farmers' access to finance in order to increase the
competitiveness of agriculture.

Article 2. For the purpose of this emergency ordinance, the terms and expressions have the
following meanings:
a) agricultural land - productive agricultural land - arable land, vineyards, orchards, plant
nurseries, fruit trees, hops and mulberry trees, pastures, hay fields, greenhouses, solariums, growth
rooms and the like - the forest vegetation, if not part of forestry system, forest pastures, those
occupied with animal breeding construction and installation, fisheries and land reclamation
facilities, roads and farming technology, platforms and storage facilities serving the needs of
agricultural production and non-productive land, landscaped and used for agricultural production;
b) land acquisition - the purchase of agricultural land to increase the area exploited in the
following situations:
1. The purchase from the owners of agricultural land leased by the lessee natural or legal
person, up to a maximum ceiling of 1,000 ha property per farm, except the land owned by
the state and managed by the Agency of the State’s Domains;
2. The purchase of agricultural land by individuals or legal entities that works farming
land according to the application to the Agency for Payments and Intervention in
Agriculture (APIA), to expand the exploited agricultural land for the establishment / cost
effectiveness of family farms;
c) Guarantee fund - banking financial institution that has as object of activity the issuance of
guarantees and the undertaking of guarantee commitments, registered in the special register of the
National Bank of Romania, according to the law;
d) Micro-credit - financing instrument to support the agricultural sector at the level of
agricultural exploitation with the characteristics of family farm;
e) Family farm – the farm belonging to individuals as individual agricultural producers
registered in the Register of farms or registered as authorized individual person, individual
enterprise, familial enterprise, incorporated under the laws in force, which produces for its own
consumption and, eventually, sell the surplus. The economic size of the family farm is between 2
and 50 ESU (ESU - Economic Size Unit which express the economic size of an agricultural
exploitation determined on standard gross margin of the exploitation).

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 Chapter II
Guaranteeing the loans granted by financial institutions to farmers for purchase of
agricultural land, to finance agricultural production and farm equipment

Article 3. Annually, the budgetary provisions of the Ministry of Agriculture and Rural
Development, Chapter 83.01 "Agriculture, Forestry; Fisheries and Hunting” Title “Loans" are to be
allocated with the amounts necessary for guarantee funds used for:
a) guaranteeing up to 50% of the loan granted by financial institutions for the purchase of
agricultural land in cases defined in art. 2 letter b). Volume of credit will be less than 90% of the
acquired areas and minimum 10% contribution of the beneficiary. The difference of guarantees
necessary for full coverage and interest on the loan will be secured by borrowers with the
purchased land and / or other owned property;
b) guaranteeing of up to 80% of loans granted by financial institutions to farmers for
financing investments in agriculture and agricultural production, except for loans granted to
finance investments through Measure 121 of the National Rural Development Program;
c) maximum coverage to 80% of micro-credits granted by financial institutions under art.
14 para. (1) letter a) and c).

Article 4. The guarantees referred to in art. 3 are granted under the terms of the
Commission Communication on the application of art. 87 and 88 of the EC Treaty regarding the
state aid in the form of guarantees, published in the Official Journal of the European Union no.
2008/C155/02, respectively they cover, as applicable, up to a maximum of 80% of the financing
granted by financial institutions and they are linked to a specific financial transaction, for a
maximum amount of EUR 2,500,000 and to a limited duration. The guarantee funds have the
following aspects:
a) if the amount of funding decreases over time, the guaranteed amount has to decrease
proportionally, so any time the guarantee does not cover, as appropriate, more than 80% of the
funding;
b) the losses must be supported proportionally and in the same way by the financial
institutions and the guarantee funds;
c) the beneficiaries, except the individuals, pay an annual guarantee fee determined in
accordance with the Commission Communication no. 2008/C155/02;
d) the individuals beneficiaries pay an annual guarantee fee established by the Minister of
Agriculture and Rural Development. If the guarantee fee is below the Commission Communication
no. 2008/C155/02, the difference shall ensure by implementing a minimis scheme under the

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Regulation (EC) no. 1.535/2007 of the Commission from 20 December 2007 on the application of
Articles 87 and 88 of the EC Treaty to minimis aids in the production of agricultural products.

Article 5. Guarantee fees requested by the guarantee funds become their income.

Article 6. (1) Awarding the amounts provided for in Art. 3 letter a) is made based on the
agreements concluded between the Ministry of Agriculture and Rural Development and the
guarantee funds.
(2) The Ministry of Agriculture and Rural Development Guarantee allocates the necessary
funds in relation to the usage rate of the guarantees previously granted for this purpose.
(3) For the purposes referred to in Art. 3 letter a)- c) the guarantee funds can use the
existing amounts available to them and that is made available following the completion of
guarantees granted the beneficiaries SAPARD under Law no. 218/2005 regarding the stimulation
funds absorption allocated by SAPARD, the European Agricultural Fund for Rural Development,
European Fisheries Fund, the European Agricultural Guarantee by taking credit risk by the
guarantee funds, republished, as amended and supplemented, and public beneficiaries of SAPARD,
according to Government Emergency Ordinance no. 79/2009 on regulating measures to stimulate
the absorption of funds allocated through the National Rural Development for the renovation and
development of rural areas by improving the quality of life and diversification of the economy in
rural areas, approved by Law no. 373/2009, as amended and supplemented.

Article 7. The amounts allocated are distinctively mentioned in the accounting records of
the guarantee funds, being considered as "subordinated loans".

Article 8. The interest cashed by the guarantee funds as financial income from the
investment bank deposits in the amounts allocated to the Ministry of Agriculture and Rural
Development is a taxable income for them and will be used solely to cover the guarantees executed
by the financial institutions.

Article 9. The amounts allocated from the fund are used by the guarantee funds for the
establishment of coverage, with an exposure of up to 5 times.

Article 10. If the value of the guarantees executed by the financial institutions exceeds the
level of accumulated interest, the amounts allocated by the Ministry of Agriculture and Rural

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Development may be also affected. The refill of the allocated amounts will be realized from the
budget of the Ministry of Agriculture and Rural Development.

Article 11. Monthly, by the 10th of the current month the guarantee funds will send to the
Ministry of Agriculture and Rural Development the situation on the amounts received and used, in
order to complete the execution account for expired month and to send it to the Ministry of Finance
until the 15th of the current month.

Chapter III
The Fund for lending to family farms

Article 12. (1) In order to stimulate the family farms, the Fund for micro-credits in
agriculture, hereinafter named as the Fund, is available to the Ministry of Agriculture and Rural
Development.
(2) The Fund consists of budgetary provisions of the Ministry of Agriculture and Rural
Development budget, Chapter 83.01 "Agriculture, Forestry; Fisheries and Hunting" title "Loans" of
existing amounts available to the Ministry of Agriculture and Rural Development from the
reimbursed amounts.

Article 13. The Fund is managed by the Ministry of Agriculture and Rural Development,
under the law.

Article 14. (1) The Fund shall be used as follows:

a) for granting micro-credits to achieve investment objectives in agriculture, ineligible for
funding from the National Program for Rural Development, hereinafter referred to as NPRD, or
investment objectives below the minimum level of funding from the NPRD, the maximum amount is
up 15,000 euro per beneficiary. The microcredit beneficiaries are family farms defined in art. 2
letter e);
b) to provide micro-credits for assuring their own contribution to the financing of
investment projects in agriculture with a value of up to EUR 125,000 eligible and selected for
funding through the NPRD, for family farms as defined in Art. 2 letter e) recipients of NPRD
investment measures, the maximum is 75,000 euro per beneficiary;
c) for granting micro-credits to beneficiaries referred to in the above letters a) and b) to
ensure the necessary financial resources for agricultural production, to a maximum of 25,000 euro
per beneficiary.

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 (2) The beneficiaries of microcredit may require new financing under the terms of par. (1)
under the condition to complete the objectives on which they originally received the microcredit.

Article 15. The Fund will be accessed and implemented in accordance with the methodology
approved by the Ministry of Agriculture and Rural Development, the banking financial institutions,
as defined under the provisions of Government Emergency Ordinance no. 99/2006 on credit
institutions and capital adequacy.

Article 16. The access of institutions referred to in Art. 15 to the Fund resources is subject to
conditions of Government Emergency Ordinance no. 34/2006 on the award of public procurement
contracts, public works and services concession contracts, approved with amendments by Law no.
337/2006, as amended and supplemented, excluding state aid elements.

Article 17. (1) The Ministry of Agriculture and Rural Development allocates, under the law,
with interest, amounts from the Fund to the selected institutions under art background. 16, under
the working agreements concluded with them in order to provide microcredit under the following
conditions:
a) Maximum reimbursement term: up to 10 years;
b) Maximum amount level: as requested by the selected institution and within the resource
limits allocated to the Ministry of Agriculture and Rural Development;
c) the grace period granted by selected institutions under art. 16 to the beneficiaries of
microcredit loans: between 1 and 3 years, depending on the specific investment project.
(2) In the agreements with the selected institutions there will be provided the allocated and
assigned amounts, the deadlines for reimbursement of the loan, conditions of loan performance and
costs.
(3) The institutions selected under Art. 16 will grant micro-credits from to the beneficiaries
in accordance with the rules drawn up in application of this ordinance and their own micro-credit
rules approved by the National Bank of Romania.

Article 18. Annually, based on its Order, the Minister of Agriculture and Rural Development
establishes the types of investments eligible for micro-credit under this ordinance and the
maximum funded micro-credit.

Article 19. The terms of repayment of the micro-credit and payment of the due interest shall
be established by negotiation between beneficiaries of micro-credit and the selected institution,

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according to the destination of micro-credit and the period of recovery of production obtained from
investment credited within the limits set by the Conventions of working arrangements concluded
with the Ministry Agriculture and Rural Development.

Article 20. The micro-credits granted under the provisions of this ordinance are guaranteed
by guarantee funds and / or the borrower using as collateral animals, agricultural machinery and
equipment, mortgage on buildings and agricultural land, plantations or any other collateral
accepted by the credit institutions.

Article 21. (1) The unused amounts from the Fund at the end of each year, engaged by the
Ministry of Agriculture and Rural Development with selected institutions and highlighted into the
special account of the common fund to the State Treasury to the Ministry of Agriculture and Rural
Development is reported to the next year and used to cover the obligations arising from micro-
credit contracts concluded by commercial banks, credit institutions or financial institutions
referred to in Art. 4 with the categories of applicants referred to in Art. 6, within the limits of the
amounts set out in the work conventions concluded between the Ministry of Agriculture and Rural
Development and selected institutions.
(2) The amounts in the Fund at the end of each year, from the repayment of micro-credit
and interest payments from micro-credit granted and registered in the Special Account of the
common fund to the State Treasury to the Ministry of Agriculture and Rural Development is
reported to the next year and it is used to issue new micro-credits, under this ordinance.
(3) The amounts representing due installments of microcredit and interest payments
referred to them, reimbursed by the beneficiaries of micro-credit, existing into the accounts of the
selected institutions at the end of the current year must be transferred until 20 December in the
special account opened at the State Treasury, to the Ministry of Agriculture and Rural Development,
will be carried over and used next year to issue new microcredit, under this ordinance.

Article 22. (1) If the beneficiary of micro-credit has arrears in the micro-credit
reimbursement and the payment of respective interest, the selected institution will reimburse the
Ministry of Agriculture and Rural Development this amounts from their own funds.
(2) If the the Ministry of Agriculture and Rural Development finds that the selected
institutions have paid undue amounts to the beneficiaries of micro-credit through withdrawal
applications, the selected institutions are obliged to repay these amounts from their own funds,
within 10 days from date of notification, in to the Fund's special account of the State Treasury, to
the Ministry of Agriculture and Rural Development.

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 Article 23. (1) The beneficiaries of micro-credit for investment in agriculture must comply
the destinations for which they were granted micro-credit.
(2) Changing the micro-credit destination by beneficiaries of microcredit is sanctioned
according to law.

Article 24. The total amount allocated to the measures provided for in art. 14 is annually
approved by Order of the Minister of Agriculture and Rural Development and Minister of Public
Finance.

Article 25. Within 30 days of the entry into force of this ordinance, the Ministry of
Agriculture and Rural Development will issue methodological norms for its application, approved
by Government decision.

No. 43
15.05.2013