Romania's Approach: Supporting the Growth of Young and Newly Settled Farmers through DR-12 Intervention

This year, the long-awaited DR-12 intervention, a new addition to the National Strategic Plan 2023-2027, will finally be launched. This program will provide established young farmers with a financing amount of 200,000 euros per farm at an 80% intensity rate.

During the most recent meeting between the Minister of Agriculture and the Save the Romanian Peasant Union representatives, the topic of launching the DR-12 funding line in November of this year was brought up. The overall budget for this intervention is set to be 169,589,647 euros.

To be eligible for the funding, the young farmers are required to have finished the installation project (submeasure 6.1 of the 2014-2020 PNDR), which includes executing the business plan and receiving the second payment.

It should be noted that those who are newly established farmers, meaning they have been farming for less than 5 years, and are above the age of 45, will also have the opportunity to receive financial aid. However, in their case, the support amount will be reduced to 65%.

Details of Budget

The DR12 investment strategy has been granted a significant budget of 169,589,647.00 euros. Every project within this program has the potential to receive a maximum of 200,000 euros, and the average amount of funding for each project is 180,000 euros.

In 2023 and 2024, the allocation remained at 0. However, there will be an allocation of 67.835.859,00 euro in 2025 for 378 beneficiaries and 101.753.788,00 euro in 2026 for 566 beneficiaries.

Overview of the Intervention

This initiative is targeted towards young farmers who have been established through PNDR 2014-2020, including those in transition (as defined in article 19 paragraph 1 of Regulation (EU) no. 1305/2013), as well as those who have been recently established (within the last 5 years from the time of applying for financing). The objective is to strengthen their farms through effective management in order to improve the viability of their operations. Under this initiative, funding will be provided for investments in primary agricultural production, as well as for investments in conditioning and/or storage facilities and on-farm processing of agricultural products, with the aim of increasing the added value of their own primary agricultural products.

This project will address on-farm processing as a secondary aspect of the investment plan. By providing conditioning and storage facilities, farmers will be able to maintain their agricultural products in optimal conditions and improve their position in the supply chain. This intervention aims to encourage young or newly established farmers by making it easier for them to access capital, strengthening their agricultural activities, and promoting generational renewal in the agricultural sector. In turn, this will help reduce the migration of young people to urban areas or other countries. It is essential that the support provided to these farmers is reflected in the structural stability of their holdings, allowing them to continue their operations. This intervention will also contribute to the consolidation and growth of their holdings' competitiveness. Furthermore, ensuring ongoing support for this group also aligns with the environmental and social goals, which are crucial for the sustainability and revitalization of rural areas.

The intervention allows for the purchase of high-performance agricultural machinery, such as equipment for managing manure, and also encourages the adoption of new techniques and technologies. This is particularly beneficial for young farmers who are open to innovation, specifically precision agriculture. In terms of risk management, the intervention also aims to support farmers in utilizing techniques and technologies to mitigate the impact of extreme weather events caused by climate change.

Qualified recipients

• Eligible individuals for support under this intervention include young farmers who have successfully implemented their business plan through submeasure 6.1 of the 2014-2020 PNDR, including the transitional period.
• The individuals must have established their farming operations within the past 5 years and must be 45 years old or younger at the time of submitting their funding application. They must also be the primary owners of the farm.
• Note that natural persons are not considered eligible for this support.
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Qualified investments

Can physical investments be considered as eligible investments related to:

• The development of new or updated structures, comprising of safeguarded areas for farming produce, equipped with the necessary utilities for conducting agricultural operations and/or facilities for processing and storing farm products, in proportion to the farm's production capacity.
• Initiatives to develop and update fruit farms, such as the creation and transformation of fruit plantations; • Implementation, growth and/or modernization of facilities for conditioning and/or storing produce.
• The project will primarily focus on the farm level operations, specifically the establishment, expansion, and modernization of processing units. This will include acquiring necessary equipment, but it will not be the main financial component of the project.
• The acquisition of agricultural equipment, such as machinery, trailers, and semi-trailers, specialized for farming purposes, including those utilized for obtaining fodder, and high-performance tools for managing and applying fertilizers and/or plant protection products, can be done through leasing or direct purchase.
• The project will focus on developing and implementing a commercialization and marketing component at the farm level. This may include the establishment of on-site shops or food trailers dedicated solely to marketing the farm's own agricultural products. However, this component will only be considered secondary to the main focus of the project.
• The installation or renovation of facilities aimed at maintaining cleanliness and biosecurity on the farm, as a secondary aspect.
• As a secondary component, the equipment and systems for early warning of adverse weather phenomena and other related equipment aim to mitigate the impacts of such phenomena.
• Equipment and machinery utilized for the distribution and/or production of feed for farm animals.
• implementing digital solutions for the application of precision agriculture;
• As part of the project, the focus will be on the improvement or creation of access roads on the farm, which may include utilities and connections, but this will not be the main priority.
• The project prioritizes new investments and the modernization of irrigation equipment at the farm level as a secondary component.
• The utilization and generation of renewable energy (such as solar, wind, aerothermal, hydrothermal, geothermal, etc.) for both electrical and thermal purposes, as a supplementary aspect of an investment venture. The energy acquired will be solely used for self-consumption, with no involvement of the applicant as a prosumer.
• The project's secondary component involves investments aimed at reducing GHG emissions, including: o enhancing the energy efficiency of buildings where eligible activities are carried out; o purchasing low-energy equipment/machinery and other investments that contribute to GHG emissions reduction; o investing in the circular economy, such as: a) producing and utilizing renewable energy from biomass sources (e.g. animal/vegetable waste, secondary products, and by-products) solely for self-consumption; b) obtaining organic fertilizers from biomass sources (e.g. animal/vegetable waste, secondary products, and by-products) solely for self-consumption.

Are investments in intangible assets also eligible for:

• Arranging and executing quality control and food safety systems, as long as they pertain to the physical investments involved in the project;
• Obtaining technologies (expertise), patents, and licenses to facilitate the execution of project plans;
• The acquisition of software, deemed essential according to the technical and economic documentation of the project;
• Promoting the acquired merchandise, and so on.

Final Thoughts

The DR12 investment approach has been crucial in tackling a number of difficulties, mainly through sub-measure 6.1 which focuses on financial assistance. This strategy has played a vital role in promoting the growth of agricultural enterprises, resulting in higher income and improved living standards for young farmers in the long run. Furthermore, the provision of subsidies through different government and local programs has allowed young farmers to boost productivity, embrace new technologies, and implement sustainable practices.

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