Agro Perspectiva

Cabinet cancelled restrictions on agrarians credits interest rates partial compensation depending on interest rates scale

27.06.2008 08:36 "Agro Perspectiva" (Kyiv) — As to Cabinet Decree ¹ 561 (from Jun 18, 2008), Cabinet has abolished procedure of usage in 2008 of financial means stipulated by State budget for Agrarian-Industrial Complex companies support. Procedure gave right to receive partial credits interest rates compensation from State only to agrarians which had attracted credits on condition if annual interest rates amount didn’t exceed 18% in national currency.

It is to be admitted, previous wording of procedure of usage in 2008 of financial means stipulated by State budget for Agrarian-Industrial Complex companies support said that credits compensations were to be granted to agrarians on contest basis on condition if annual interest rates amount didn’t exceed 18% for short-term and 17% for medium/long-term credits in national currency as well as 12% for short-term and 11% for medium/long-term credits in foreign currency.

New wording of procedure stipulates that compensations should be granted on contest basis to agrarians which had obtained national/foreign currency credits up to interest rates fixed by banks for these credits usage.

Besides, Cabinet Decree also stipulates that compensations for short-term credits (obtained in 2007/08) should be granted in national currency as much as NBU discount rate (foreign currency – as much as 6% annual interest rates).

Decree says grains storage, flour milling, bakery companies and mixed feeds producers, canning companies, meat/dairy processors, groats producers and initial wool processors should be granted compensations only for credits attracted to purchase resources from agricultural producers.

As to Decree, compensations for medium-term credits attracted within 2005, 2006, 2007 and 2008 should be granted in national currency as much as NBU discount rate (foreign currency – as much as 6% annual interest rates). Grains storage, flour milling, bakery companies and mixed feeds producers, canning companies, meat/dairy processors, groats producers, initial wool processors and sunseeds processors should be granted compensations only for credits attracted to construct/reconstruct working facilities, purchase domestic equipment for agricultural products processing, purchase resources from agricultural producers or acquire resources (up to exchange markets contracts) for mixed feeds production.

It is to be reminded, Cabinet (with its Decree ¹ 126 from Feb 27, 2008) had fixed procedure of usage in 2008 of financial means stipulated by State budget for Agrarian-Industrial Complex companies support through credits cheapening mechanism.