The regulation on the allocation of subsidies to companies processing agricultural products is currently under public discussion, aimed at compensating for the increase in energy costs from February 1 to December 31, 2023. Thus, it concerns the procurement of energy during this period, which is particularly important, as we will see below, but also the consumption within that time frame. Some companies and the Croatian Chamber of Economy (HGK) have made interesting remarks, which I believe are well-argued, and I hope they will be considered by the Ministry of Agriculture.
Miroslav Božić, advisor to the CEO of the Croatian Sugar Industry (HIŠ), addresses two shortcomings of the regulation. One is that the increase in costs is recognized from February 1 until the end of 2023, questioning why the cost increase from January is not recognized. He believes it is more a matter of carelessness on the part of the regulation’s proposers and reminds that for the subsidy in 2022, the state indeed set the period from February 1 to the end of 2022. However, the reason then was entirely justified, namely, in February of that year, Russia invaded Ukraine, a crisis ensued, and energy prices skyrocketed. Until the Russian attack, prices had been stable (after the corona crisis), and therefore, the subsidy for January 2022 was justifiably omitted.
Data shows everything
However, as mentioned, a regulation is now being written that only acknowledges the increase in energy costs procured from February 1 to the end of 2023 and consumption during that period. And what about January, company leaders ask, because the Russian army did not go on vacation that month, nor did energy prices return to normal levels! Therefore, Božić, on behalf of HIŠ, as well as Vindon, ViR, Koka, and HGK, propose that the regulation recognizes the consumption period from January 1 to the end of 2023.
So, this concerns consumption, but not the procurement of energy. Božić, along with others, especially HGK, believes that the procurement period for energy from January 1 to December 31, 2023, should be extended, so to speak, retroactively, or to use the legal term – retroactively – and that the subsidy for the increase in energy prices should cover the period of their procurement from the beginning of the last quarter of 2022 (i.e., October 1) until the end of 2023.
The point is, as he explains, that part of the energy that was actually consumed during 2023 was procured in the last months of the previous year to fill storage tanks for that purpose. He emphasizes that these are energies procured in the last quarter of 2022, which were not consumed by the end of that year but were intended for consumption in 2023 and were consumed in that year. Božić further writes that data from the processing industry shows that most of the energy quantities purchased during the first three quarters are typically consumed during the same calendar year, while those purchased in the last quarter are consumed in the following year. Therefore, he proposes that the regulation be amended to include subsidies for energy procured in the last quarter of 2022, under two conditions: that they were not consumed in 2022, and therefore no subsidy could have been realized on this basis, and that these quantities were actually consumed during the eligible period from January 1 to December 31, 2023.
