The Ministry of Rural Development has prepared a three-tier package of measures to aid farmers who have suffered frost damage, the second tier of which is comprised of an interest and charge free, long-term Frost Damage 2011 Current Asset Loan Programme from the Hungarian Development Bank. The order regarding these measures comes into force today.

The first tier of the package is a 1.27 billion HUF agricultural small sum (de minimis) support fund, which farmers who had suffered 70-100 percent damage have already received by the end of September 2011. The level of support was between 49 000 HUF and 55 800 HUF per hectare depending on the level of damage, significantly more than the damage mitigation paid in 2007, when farmers only received 40 thousand HUF.

The second tier is 100% interest and charge free loan package launched with an initial fund of 8 billion HUF and providing long-term loans with a maximum duration of twenty years and with a 3-year grace period, which will be paid out exclusively by the Hungarian Development Bank (MFB). Of the full 8 billion HUF budget fund, 4.7 billion HUF is support funding.

The MFB will launch the Frost Damage 2011 Current Asset Loan Programme on December 31 2011, making it possible for farmers to apply for the preferential loan from the beginning of January 2012.

A Frost damage current asset loan may be applied for by those corporations and private individuals (licensed traditional small-scale producers, family-run farms, self-employed private entrepreneurs) who deal in the primary production of agricultural products, whose crops were damaged by the frosts of spring 2011, and who certifies this fact according to the requirements of legislation.

The MFB Frost Damage 2011 Current Asset Loan Programme will offer farmers an interest and charge free loan of between 500 thousand HUF and 10 million HUF for a maximum duration of 20 years. The level of the loan will be determined of the basis of the level of damage sustained. In the case of 100 percent damage, a 1 600 000 HUF loan sum may be received per hectare, if the farmer affected has a suitable agricultural insurance agreement. Farmers without an insurance contract may apply for a loan of 800 000 HUF per hectare. Those receiving loans will pay a discounted guarantors fee provided by the Rural Credit Guarantee Foundation.

The third tier of the package of measures will be the payment 4.2 billion HUF in funds from the national agricultural damage mitigation system early next year. This latter measure will mean 32% damage mitigation for those applications deemed justified.

The total ratio of government frost damage support funding is expected to reach 60% of the yield value loss incurred as a result of the unexpected frosts in early May of 2011.

(Press Office of the Ministry of Rural Development)