Bulgaria is going to receive European funding for projects in agriculture, approved in the previous programming period which ended in 2020. These funds are earmarked only for the agricultural sector and help farmers in 2021 and 2020 until the beginning of the new programming period- 2023-2027. The good news comes in time. The funding will mitigate the effect of high inflation and contribute to easing tight markets amid the economic and Covid-19 crisis.

The funding is available, but if administration does not work fast and provide timely financial assistance to farmers, this money may not be absorbed, because inflation may erode the purchasing power of this money, Ivanka Dushkova, Director of the non-profit-making association “Local Initiative Group Stambolovo-Kardzhali 54”, said for the BNR. Associations like this one are public-private partnerships which act as an intermediary between the state and the beneficiaries at local level. There are 64 such structures in the country, in charge of the primary screening of projects submitted by farmers and other public and private organizations.

This year, EUR 700,000 is earmarked for each local initiative group in the agriculture sector only. The money has nothing to do with the coronavirus crisis. However, the Covid-19 crisis will be taken into account in the new programming period 2023-2027, when the financial assistance is expected to increase. Application deadline was extended until June 2025. The projects are designed for almost all agricultural subsectors, so they can reach both large and small farmers, Ivanka Dushkova noted. In her words, however, the slow action of the state administration have led to the failure of already approved projects. When a given project is delayed by one or two years, the beneficiaries become demotivated, because the conditions are different. As a result, they give up working on the projects, Ivanka Dushkova explained and added:

“Construction costs, price of machinery and labor rose dramatically last year. As a result, the beneficiaries are unable to fulfill the project activities. The price of some construction materials increased twofold. The price of other materials increased fourfold.However, all Bulgarian companies have the same problem. Some projects were delayed by almost two years, but the administration has recently shifted on a higher gear. Unfortunately, people do not have own funding to finance their project before recovering their investment via the project-based funding. ”

In Ivanka Dushkova’s words, the local initiative group assesses the projects by compiling thousands of pages with protocols and reports. The entire process takes at least two months. The problem regarding delayed payments will be solved, if the central administration also speeds up the procedure. Ivanka Dushkova highlighted several other problems that impede the fulfillment of projects with EU funding: 

“Six months is a very long time, because the soaring inflation makes the fulfillment of the projects difficult. The State Fund Agriculture should hurry up. Banks also cause bug problems - it is not easy to take bank loans. Moreover, banks require mortgages, although the beneficiary presents a valid contract with the State Fund Agriculture. There is another problem. Beneficiaries must start paying off their loan immediately, but they have no money to do so. That is why there must be a period of grace which would allow farmers to receive targeted funding before they start repaying the credit amount.”

Written by: Gergana Mancheva

English version: Kostadin Atanasov