The Rural Development Program theoretically carries 333 million euros

The Ministry of Agriculture is intensively working on the Rural Development Program, which is nearing completion. Theoretically, 333 million euros could flow into Croatia each year, but the Ministry notes that they would be satisfied if future projects draw over 50 percent of the funds, and in the next few years up to 80 percent. This would place us among the most successful EU member states.

If a 50 percent drawdown is achieved, it will be a success because in earlier programs, during the Sanader and Kosor governments, that percentage was single-digit. There was no effort to draw funds from the EU because the conditions were far stricter than the funds approved by the Croatian government, and instead of learning from mistakes back then, we are only now having to do so. However, the Ministry of Agriculture believes they have done a great job and that the percentage could significantly increase in the future.

The EU is next, which is expected to agree on the budget for rural development as part of the Common Agricultural Policy for the period 2014 – 2020 in November. After that, the Croatian government would adopt the Rural Development Program (expected to be in December), and then it would need to be approved by the European Commission. The procedure is quite complex, and there are significant discussions taking place. According to testimonies from those who attended the meetings of the Council of Ministers and the European Commission itself, meetings can last into the early morning hours, so it is realistic to expect that the Croatian Program could be approved by Brussels only in September 2014.

However, the Ministry says that the first calls for proposals could be announced as early as March, and unlike IPARD, investments that begin after applying for the call will be recognized (if the project passes the call), which was not the case with IPARD. Additionally, the user does not have to be in the VAT system, advance payment of up to 50 percent of the support amount is possible, and the procedure is much simpler. Regarding controls, only five percent of projects will be controlled, while in IPARD literally everything was controlled.

However, this does not mean that investors can relax and ‘fool’ the controllers. They certainly have mechanisms to detect whether anything is being done contrary to regulations even within that five percent. As stated by the Ministry of Agriculture, it would be good for farmers to take more seriously how much they benefit from cooperation. The Rural Development Program is one of the most important strategic documents of the Croatian government, and it is estimated that projects worth between eight and nine billion kuna are already in preparation, which have a realistic chance of passing the call.