Financial support
Agricultural producer groups are eligible for financial support pursuant to Council Regulation No 1698/2005 of 20 September 2005 on support for rural development by the European Agricultural Fund for Rural Development (EAFRD), and to Rural Development Programme 2007-2013.
Lump sum financial support takes the form of annual payments within the period of initial 5 years from the date of entering the group in the agricultural producers’ register, kept by the voivodeship marshal competent for the group’s registered seat.
The amount of support is calculated on the basis of the annual value of produce sold by holdings of the members of a given group. The amount of support may not exceed:
- in the first and the second year – 5%;
- in the third year – 4%;
- in the fourth year – 3%;
- in the fifth year – 2%;
of the value of sold produce, up to the equivalent of EUR 1,000,000; and
- in the first and the second year – 2.5%;
- in the third year – 2%;
- in the fourth and fifth year – 1.5%;
of the value of sold produce, up to the equivalent of EUR 1,000,000. The amount of support may never exceed the equivalent of:
- In the first and second year – EUR 100,000;
- in the third year – EUR 80,000;
- in the fourth year – EUR 60,000;
- in the fifth year – EUR 50,000.
Example: the value of sold produce is EUR 1,200,000 – the support due amounts to 5% of EUR 1,000,000 plus 2.5% of EUR 200,000 in the first year of eligibility, which translates into the amount of EUR 55,000.
The amount of support is calculated on the basis of annual net revenues from sale of products or groups of products for which the group was specifically established, which were produced by holdings of group members and sold to customers not belonging to the group. Payments to producer groups are made after a full year of their operation elapses. Applications are to be submitted to regional branches of the Agency for Restructuring and Modernisation of Agriculture (ARiMR) competent for the group’s registered seat.
The support is granted to facilitate the establishment and administrative operation of producer groups with the following purpose:
- To adjust the production process and the produce of producers belonging to such groups to market requirements;
- Joint marketing of products, including their preparation for sale; centralisation of sales and of wholesale delivery;
- Setting common rules on delivering information on production, taking into account in particular the size and availability of crops.
The support can be granted to a given agricultural producer group only once throughout its entire period of operation, regardless whether such support comes from domestic or EU budget. For that measure, EUR 140 million has been earmarked in the budget of the Rural Development Programme 2007-2013 (of which EUR 105 million from the Community budget and EUR 35 million from the domestic budget). The support is not subject to taxation.
Pursuant to Article 28(1) of the Act of 7 March 2007 on support for rural development with the participation of the European Agricultural Fund for Rural Development (Dz. U. [Journal of Laws] No 64, item 427 and of 2008, No 984, item 634) support and technical support collected unduly or in an excessive amount shall be returned together with interest charged as on tax arrears, unless otherwise provided for in Council Regulation No 1698/2005 or the provisions of the Act. Support collected unduly refers in particular to the following:
- Support paid to a beneficiary who does not perform all or a part of its operations or duties resulting there from;
- Support used contrary to its purpose;
- Support paid without a legal basis or whose amount is higher than the amount established for a given operation.
Total financial support granted to agricultural producer groups under the Rural Development Programme 2004-2006 and 2007-2013 amounted to:
- In 2008: PLN 26.6 million;
- In 2009: PLN 54.6 million;
- In 2010: PLN 23.5 million.
nGP loan (with a subsidy from the Agency for Restructuring and Modernisation of Agriculture) – for investment projects in agriculture and in produce processing.
The loan may be used to finance the following investment projects:
1. projects supporting the operation of a group of agricultural producers in respect of the product for the production of which the group was established, and on the condition that the investment projects will serve group members;
2. In agricultural products processing, for the needs of operation of a group in respect of the product for the production of which the group was established, and on the condition that the investment projects will serve group members.
TAX EXEMPTIONS:
1. Exemption of income of a registered group, derived from sale of products or of groups of products for the production of which the group was established, and which were produced by holdings of group members – in the part spent for the needs of its members in the tax year or in the subsequent year, intended for the purchase of means of production transferred to group members as well as for their training;
2. Exemption from real estate tax for all buildings and structures of the agricultural producer group used solely for the purposes of operations consisting in selling products or groups of products produced by holdings of group members, in accordance with the certificate of formation.
Measures for agricultural producer groups
Under Rural Development Programme 2007-2013, agricultural producer groups may also become beneficiaries of the following measures: Increasing the added value of basic agricultural and forestry production (groups that are beneficiaries of the measure are given priority), Creation and development of micro-enterprises, and Information and promotion activities. Group members may also solicit support under measures Differentiating towards non-agricultural activities and Modernisation of agricultural holdings.
An agricultural producer group wishing to apply for financial support should file an application for financial support to a regional branch of the Agency for Restructuring and Modernisation of Agriculture within six months from the entry of the group into the register kept by a voivodeship marshal.
A statement of the voivodeship marshal that the group has been entered into the register of agricultural producer groups, issued not earlier than three months prior to filing the application, must be enclosed with the application.
Each year, within 30 days from the day on which a given year of operations ends, the group must file a payment application. The group may receive support for five subsequent years of its operation.
The payment application must be accompanied by the following documents:
- A statement of the voivodeship marshal that the group has been entered into the register of agricultural producer groups, issued not earlier than three months prior to filing the payment application;
- Lists of VAT invoices and bills to confirm:
- Net revenue of the group from the sale of products or groups of products for which the group has been established;
- The value and quantity of products or groups of products delivered to the group by its respective members;
- Net revenue of the group from the sale of products or groups of products for which the group has been established and which have been produced in the holdings of group members.
Complete information on support, as well as application forms and instructions how to complete them are available on the website of the Agency for Restructuring and Modernisation of Agriculture at www.arimr.gov.pl.
