For us to have more fruits and vegetables from local farms on shelves, small and medium-sized farmers need to develop their businesses and enter new markets. Unfortunately, small local producers continue to have limited access to the retail market due to a lack of farmer group association and representation.
In order to help them enter the retail market, with the support of the Foundation for the Agriculture Development and Carrefour Foundation, we started a new project. As part of the project, Nod Verde (a food hub from Cluj) took on the responsibility of connecting local farmers to the delivery procedures of retail partners. The food hub ensures that local farmers meet the retailers’ needs in terms of procedures, product quality, timing, quantities and storage. Through the project, a partnership was concluded with the retail sector, thanks to which we can already find fresh vegetables and fruits from 10 small and medium-sized farmers from Cluj on the shelves of the Carrefour hypermarket.
At the same time, in order to be able to deliver a larger volume of products to supermarkets, local producers need to access financing and develop their businesses. We invited local farmers to a meeting dedicated to the topic of financing in agriculture, where we discussed the advantages of a credit and those of non-refundable financing.
Loans for farmers are granted on more flexible terms
When it comes to loans, Alexandra Kardos, head of the Patria Credit Zalău agency, says that the biggest challenge in working with farmers is their fear of working with banks, although loans for farmers are granted under different conditions than for other types of business.
“The main benefits that farmers can have are related to the possibility of accessing a loan regardless of the form of organization they have: simple agricultural producer, individual enterprise, authorized natural persons (PFA) or even SRLs. They can choose to repay the installments seasonally, depending on the nature of the business. They do not need to come up with co-financing from their own sources. They can access up to 100% of the investment value. (…) Costs can be negotiated according to the need for credit ”, said the representative of Patria Credit during the meeting.
Non-refundable financing for farmers
Another option for small local producers is grant funding. Márton Balogh, director of the Civitas Foundation (Cluj-Napoca Office), says that European funds represent a great chance for farmers who want to develop their businesses. In 2023, the implementation of the National Strategic Program 2023-2027, the main source of financing for Romanian farmers, will actually begin. Therefore, all farmers who have development ideas for their businesses are urged to follow the funding opportunities that will come and apply with their projects.
Although accessing grant funding may seem like a difficult process, Alexandru Răchită, a raspberry producer who has gone through the experience of accessing European funds, encourages farmers to do it. “I recommend all farmers who have not yet accessed a European program to do it confidently, they will not regret. This is the only way they can develop quite quickly and easily”, states Alexandru.
The producer says that the application process for obtaining funding was not a complicated one, but believes that one thing to improve in accessing grant funding would be to reduce the number of required documents and build a better relationship between the institutions that provide grant funding and the banking system, so that the credits needed for certain financing lines become more accessible.
The meeting on the topic of financing for farmers took place on February 2, at the Civitas Foundation Office (Cluj-Napoca).
