Voronezh authorities are asking to change the rules of granting soft loans in the agricultural sector

As it became known, at the meeting in the Ministry of Finance held on March 13 the only representative of the regions — in charge of agribusiness, Voronezh Deputy Prime Minister Viktor Logvinov proposed to delegate the approval of soft loans from the Ministry of agriculture to the subjects, not to limit the acceptance of applications in banks by approved limits, as well as to set the distribution of subsidies between the regions based on data from previous years. Such measures can increase the availability of preferencial crediting, the limits for which have been already almost exhausted, believe in the regional government.

On the example of Voronezh region Deputy Prime Minister explained to Federal officials that the farmers do not have enough subsidies in accordance with approved by the Ministry of agriculture plan for preferential crediting for 2017. Voronezh farmers have submitted to banks 339 applications for a total amount of 54.7 billion rubles, but only 107 of these were approved for 9.1 billion rubles. The banks stop taking applications: for every approved borrower from the approved for the region amount of subsidies they reserve the limit for the year, and the total amount is not enough.

The basic idea of the proposals is to increase the availability of soft loans for all manufacturers, even if it is necessary to cut the amount of subsidies for each of them. One of the proposals is just the transfer of authority for the approval of loans to the level of subjects. In addition, the regional government advises not to restrict banks with approved limits so that almost all applicants could obtain approval. If the Ministry of agriculture receives additional funds during the year, it finances undertaken in the past and deferred liabilities. If the funds are still not enough, preferential loans are given to all applicants, but for a certain period (for example, from January to August at a discounted rate, and from September to December — at market rate). In addition, there is a possibility to limit the amount of preferential short-term crediting — for example, to allocate a fixed amount per hectare or conventional head — or to establish what proportion of costs can be funded with a preferential loan. The reason is a common situation where large agricultural holdings post profit on deposits, and sowing campaign is financed by preferential loans, therefore they are not enough for other farmers.

Also, Mr. Logvinov noted that almost all preferential loans are currently granted at 5%, whereas the effective crediting rate may range between 2.5 and 3.5%. It is proposed to include the possibility of refinancing, to create competition between banks.

The biggest debate at the meeting was the issue of preferential short-term crediting for small farms, on which there should be allocated 20% of limits. At present this is the only sector in which more subsidies were allocated than necessary: initially, privileges were not enough (all the limits left for large agricultural enterprises), but the subjects managed to achieve an increase in funding, which for small farms is made as a separate entry. Voronezh authorities have offered to provide for the possibility of redistribution of surplus funds to other areas.

The Ministry of Finance and the Ministry of agriculture took the offers into consideration, but officially haven’t responded yet.

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