The Romanian government is planning support measures for farmers affected by this year's severe drought, Prime Minister Marcel Ciolacu announced after a meeting with Agriculture Minister Florin Barbu on August 28. 

The broad relief package is designed to provide immediate and long-term assistance to the country's agricultural sector. As in other parts of Southeast Europe, Romania's farmers have suffered as a result of drought and heatwaves this summer. 

"We have developed several normative acts through which we come up with support measures for farmers affected by this year's severe drought," Barbu stated. He added that the government intends to pass these acts in the upcoming meetings.

One of the central pillars of the relief effort includes the creation of a drought insurance system that will cover 7mn hectares of agricultural land, including both autumn and spring crops. Barbu explained that this measure is aimed at mitigating the ongoing impacts of increasingly frequent droughts.

"Such a mechanism is needed to help our farmers who face severe drought year after year," Barbu said. Under this system, farmers could receive compensation of up to RON3,000 (€602) per hectare. This initiative, Barbu noted, would also unlock credit access for Romanian farmers, following discussions with the banking sector and the Financial Supervisory Authority (FSA).

Funding for the insurance mechanism will be drawn from several sources, including a 3% contribution from subsidies paid by farmers, approximately €17mn annually from the European Union's risk fund, and contributions from the state budget. The state-owned company Eximbank Asigurari is expected to play a role in managing the insurance system.

Another key measure includes enhancements to the Farmer's Credit scheme, which provides loans at a fixed interest rate of 1.95%. The government plans to increase the guarantee on these loans to 100%, ensuring greater access to credit for farmers.

The aid budget allocated to support this credit scheme will be increased from RON1.4bn to RON1.8bn. Furthermore, loans with interest rates higher than 2% plus the ROBOR rate, as well as related fees and outstanding instalments, will be suspended until December 31, 2025. Enforcement actions for debts to banks, utility providers, and suppliers will also be halted for the same period.

"This measure takes the huge pressure off the shoulders of farmers, who due to drought have no production and, therefore, no funds available to pay these amounts," Barbu said.

The government also announced that over 80% of the reports verifying the damage caused by the drought had been completed. The aim is to finalise these assessments by the September 15 deadline so that farmers can receive compensation of RON1,000 per hectare before the start of the autumn planting season.