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The purpose of this article is to outline the content of the new legislation, its objective, and the purpose of providing grants, and to clarify who may apply for a grant in this area and under what conditions, what the application must contain, what its required attachments are, and its connection to the obligation to register public sector partners in the public sector partner registry.

Many of you have likely already noticed that so-called agricultural subsidies and state aid in the agricultural sector now have a new legal basis. As of August 1, 2023, the new Act No. 277/2023 Coll. on the provision of subsidies within the competence of the Ministry of Agriculture and Rural Development of the Slovak Republic and on amendments to certain laws (hereinafter referred to as the “Act”) has been in effect. The effective date of certain provisions of the Act has been postponed to July 1, 2024.

The Act replaced the previous legal framework set forth in Section 12 of Act No. 280/2017 Coll. on the Provision of Support and Subsidies in Agriculture and Rural Development and on the Amendment of Act No. 292/2014 Coll. on contributions provided from European Structural and Investment Funds and on amendments to certain acts, as amended by later regulations, as amended by later regulations. With regard to the provision of state aid and de minimis aid within the competence of the Ministry of Agriculture and Rural Development of the Slovak Republic (hereinafter also referred to as “MPRV SR”), the draft law was based on the existing European legal framework and, above all, on the existing national legal basis for the provision of aid, i.e., Act No. 358/2015 Coll. on the Regulation of Certain Relationships in the Field of State Aid and De Minimis Aid and on Amendments to Certain Acts (the State Aid Act), which, in relation to the provision of aid by the MPRV SR, supplements it with provisions that take into account the specific characteristics of the provision of aid by the MPRV SR.

Pursuant to Section 2 of the Act, the Act regulates the purpose, conditions, and method of providing subsidies within the jurisdiction of the MPRV SR, as well as the oversight of the use of such subsidies. According to the explanatory memorandum to the Act, the main objective of the Act is to create a new legal basis for the provision of subsidies within the competence of the MPRV SR and, at the same time, to supplement the existing legal basis with the specific features of the provision of aid within the competence of the MPRV SR.

In connection with Act No. 280/2017 Coll. on the provision of support and subsidies in agriculture and rural development and on the amendment of Act No. 292/2014 Coll. on contributions provided from European Structural and Investment Funds and on amendments to certain acts, as amended, the state administration bodies responsible for providing support and aid are the MPRV SR and the Agricultural Payment Agency(hereinafter referred to as “PPA”). The PPA is a budgetary organization linked through financial relations to the budget of the MPRV SR. The PPA performs administrative tasks in the provision of support and subsidies as a state administration body and carries out activities related to the provision of support in agriculture and rural development based on accreditation granted by the MPRV SR.

Purpose of Granting Subsidies within the Competence of the MPRV SR

A subsidy from the budget chapter of the MPRV SR for the relevant budget year may be provided to support

a) services of public interest, 

• protected horse breeding in state-owned enterprises under the founding authority of the MPRV SR,
• the preservation and development of state property used for the protected breeding of horses in state-owned enterprises under the founding authority of the MPRV SR,
• the activities of the Slovak Republic Racing Authority, including the organization of horse races,
• the preservation and development of state property used for the activities of the Slovak Republic Racing Authority and the organization of horse races,
• the management and operation of water management facilities,
• the preservation and development of state-owned water management assets,
• maintenance of small watercourses within the framework of watercourse management administered by state-owned enterprises under the founding authority of the Ministry of Agriculture and Rural Development of the Slovak Republic,
• flood prevention measures implemented by state-owned enterprises under the founding authority of the Ministry of Agriculture and Rural Development of the Slovak Republic on assets under their administration or ownership,
• museum activities.

​b) public benefit purposes in agriculture, food production, forestry, hunting, fisheries, and rural development,

• the presentation and promotion of activities in agriculture, food production, forestry, hunting, fisheries, or rural development,
• publishing activities,
• the conservation of the gene pool of endangered animal populations, the protection of animals and their welfare,
• the preservation of endangered genetic resources of old and regional plant varieties,
• the protection and improvement of living conditions for endangered game species,
• organizing international events and participating in international events,
• organizing competitions and exhibitions, and participating in competitions and exhibitions,
• covering costs associated with membership in international organizations,
• organizing educational and advisory activities and participating in advisory and educational activities,
• the presentation and protection of natural, historical, and cultural heritage,
• working with the younger generation—preschoolers, schoolchildren, apprentices, and students,
• establishment and maintenance of a herd book and breeding records for animals,
• performance testing, testing, and estimation of the breeding value of animals,
• bee pollination activities,
• awarding winners in equestrian competitions,
• implementation of food aid,
• organizing hunting dog training and falconry,
• organizing and conducting breeding inspections, organizing professional training for members of evaluation committees,
• representing the Slovak Republic in international organizations in accordance with a special regulation or based on an authorization from the Ministry of Agriculture and Rural Development of the Slovak Republic (MPRV SR), activities carried out in the field of hunting based on an authorization from the MPRV SR,
• activities carried out in the field of statistics falling within the competence of the MPRV SR and performed on the basis of an authorization from the MPRV SR,
• monitoring the management, performance, damage, and losses of agricultural enterprises, food enterprises, enterprises operating in forestry and raw wood processing, and enterprises operating in fisheries, carried out based on a mandate from the MPRV SR,
• providing information, opinions, analyses, and proposals to the Ministry of Agriculture and Rural Development of the Slovak Republic on current issues in agriculture, the food industry, forestry, rural development, and fisheries based on a mandate from the Ministry of Agriculture and Rural Development of the Slovak Republic,
• compensation for losses of animals, compensation for losses of destroyed facilities used for animal husbandry and costs associated with the cleaning and disinfection of infected farms, which arose as a result of mandated veterinary measures pursuant to a special regulation,
• construction, technical improvements, repair, and maintenance of public buildings, public spaces, parks, and local infrastructure,
• the procurement, technical improvement, repair, and maintenance of machinery and equipment used to carry out public benefit activities of municipalities and higher territorial units.

c) agricultural production, food production, processing, and marketing of agricultural and food commodities and products, forestry including the utilization of raw timber, fisheries, and rural areas in accordance with specific regulations.

Who is eligible to apply for a grant? 

Under the legal provisions of Section 3 of the Act, an applicant for a grant may be a person specified in the call for grant applications.

A grant to support a service of public interest may be awarded to an applicant that is a state-owned enterprise under the founding authority of the Ministry of Agriculture and Rural Development of the Slovak Republic.

A grant to support a public benefit purpose in agriculture, food production, forestry, hunting, fisheries, and rural development may be granted to an applicant that is a municipality, a higher territorial unit, a nonprofit organization, a civic association, a foundation, the Slovak Chamber of Agriculture and Food, the Slovak Forestry Chamber, the Slovak Hunting Chamber, a hunting ground user, a hunting organization, an animal breeder who does not engage in animal breeding as a business activity, a special-purpose facility of a church or religious society, if it is a legal entity, a non-investment fund, or an interest group of legal entities.

A grant to support agricultural production, food production, processing, and marketing of agricultural and food commodities and products, forestry including the utilization of raw timber, fisheries, and rural areas may be granted to an applicant who is a person engaged in economic activity, regardless of their legal status and method of financing, in accordance with specific regulations, economic activity means any activity consisting in the offering of goods or services, or the offering of goods and services on the market.

A grant may be awarded to an applicant who meets the conditions set forth in the Act and specific regulations (e.g., Articles 107 and 108 of the Treaty on the Functioning of the European Union, Regulation (EU) No. 360/2012, as amended, Regulation (EU) No. 1407/2013, as amended, Regulation (EU) No. 1408/2013, as amended, Regulation (EU) No. 651/2014, as amended, Regulation (EU) No. 717/2014, as amended, Regulation (EU) 2022/2472, Regulation (EU) 2022/2473, Section 8a(4) and (8) of Act No. 523/2004 Coll., as amended, Act No. 358/2015 Coll.).

A grant may be awarded to an applicant who:

1. is registered in the register of non-governmental organizations pursuant to a special regulation, in the case of an applicant under paragraph 3(c), (d), or (e) of the Act—a nonprofit organization, civic association, or foundation
2. does not receive funds from other public sources for the same eligible costs or expenses.

A grant may be awarded on the basis of a call for proposals, a call announced under an effective aid scheme, an opinion of the aid coordinator regarding the provision of ad hoc aid, or a decision by the European Commission to grant ad hoc aid.

Method of Granting the Grant

A grant may be awarded to an applicant based on an application for a grant (hereinafter also referred to as the “application”). The applicant submits the application in paper or electronic form in response to a call for applications and within the deadline specified in the call. If the application is submitted electronically, the applicant’s electronic identity must be verified in accordance with a separate regulation.

The application shall contain, in particular, the following information:

a) the applicant’s identification details, including

1. first name, last name, birth number, and permanent residence address, in the case of a natural person,
2. first name, last name, permanent address, business address, and organization identification number, in the case of a natural person who is an entrepreneur,
3. name, registered office address, organization identification number, and information regarding the statutory body or members of the statutory body, in the case of a legal entity,

b) the purpose for which the grant is requested,
c) information necessary to request a criminal record check, except for a person who is not criminally liable under a special regulation,
d) other requirements, if specified in the call for proposals or the aid scheme.

The applicant shall attach to the application the annexes specified in the call for proposals or in the aid scheme.

Where can a grant applicant find such a call for proposals? 

The MPRV SR publishes the call for proposals on its website at least 15 days before the deadline for submitting applications. Pursuant to Section 8(8) of the Act on the Provision of Grants, the MPRV SR may delegate the performance of certain tasks related to the provision of grants to a state budgetary organization or a state-funded organization that possesses the professional, personnel, and material resources to perform these tasks. In addition to the MPRV SR, the PPA also publishes calls for applications on its website. The PPA also receives and reviews the submitted applications. 

An example of a call published by the PPA is the “Call for Applications for Grants to Support a Processor’s Participation in an Exhibition.” The purpose of this call is to support a processor’s participation in exhibitions, the presentation of processed agricultural products, processed fishery and aquaculture products, and food industry products, and the strengthening of processors’ export-oriented activities. The conditions for granting aid are set out in the current de minimis aid scheme for processors’ participation in exhibitions, which is published on the website of the Ministry of Agriculture and Rural Development of the Slovak Republic.

The call defines all the requirements for an application for funding, including mandatory attachments and confirmations, and specifies the conditions for granting aid. After reviewing the applications, the PPA will aggregate the requests from all service providers. If the sum of the requests from all service providers exceeds the limit set for this scheme, the PPA will establish a conversion factor. The requests adjusted by this factor constitute the final amount of funding for each service provider. The PPA will prepare a draft contract for the provision of funds to ensure the provision of the subsidized service and invite the service provider to sign this contract. After the contract is signed and enters into force, the PPA will transfer the funds to the service provider’s account.

Mandatory annexes pursuant to Section 8a(4) and (5) of Act No. 523/2004 Coll. on Public Administration Budgetary Rules and on Amendments to Certain Acts, as amended, and pursuant to Point J of the scheme, are, among others, e.g.:

1. certificate of registration as an independent farmer, 
2. an extract from the register of land communities, 
3. an extract from the relevant register by which the applicant proves the right to carry out economic activity,
4. a certificate of VAT registration, if the applicant is a VAT payer, or a declaration by the applicant that they are not a VAT payer, 
5. confirmation of a bank account, 
6. a confirmation from the relevant labor inspectorate, not older than three months, that the applicant has not violated the prohibition on illegal employment in the previous three years (Act No. 82/2005 Coll. on Illegal Work and Illegal Employment and on Amendments to Certain Acts), 
7. a certificate from the competent bankruptcy court, not older than three months, stating that no bankruptcy proceedings have been initiated against the applicant, that the applicant is not in bankruptcy or restructuring, and that no petition for bankruptcy has been dismissed against the applicant due to lack of assets,
8. if the applicant is required to be registered in the Public Sector Partners Register (hereinafter “RPVS”) pursuant to Section 2(2) of Act No. 315/2016 Coll. on the Public Sector Partners Register and on Amendments and Supplements (hereinafter referred to as the “PSPR Act”), registration in the RPVS is required for the grant to be provided prior to the signing of the grant agreement,
9. a copy of the document evidencing paid costs or expenses,
10. a declaration by the grant applicant under the De Minimis Aid Scheme for the Organizer’s Participation in an Exhibition, as amended, which is Annex No. 3 to the call for proposals. 

It is important to emphasize that the applicant for funds is not the same as the aid recipient. The applicant is the person who provides services to the aid recipient and who submits the application to the paying agency. The service provider may be, for example, an authorized breeding organization or a recognized breeding organization based on an authorization issued by the Ministry of Agriculture and Rural Development of the Slovak Republic.

Regarding registration in the RPVS (Annex No. 8): According to Section 2(2) of the RPVS Act: “A public sector partner pursuant to paragraph 1(a), first through fourth points, the sixth point, and the seventh point is not a person to whom a one-time performance under a contract is to be provided, the value of which does not exceed EUR 100,000. The provisions of paragraph 4 shall apply mutatis mutandis to a one-time performance.” 

One of the mandatory attachments to the call for proposals is registration in the RPVS, in the event that financial limits are met. In general, we can say that the obligation to register in the RPVS applies to an entity that is a natural person or a legal entity (whether an entrepreneur or not) that meets one of the definitions of a public sector partner under Section 2(1)(a) of the RPVS Act.

In the case of grant applicants responding to a call from the MPRV SR or the PPA, attention must be paid to the conditions for granting the subsidy. Each of these calls, in fact, specifies as one of the conditions that a grant may be awarded to an applicant registered in the RPVS, provided the applicant is required to register in the RPVS.

The law firm Hronček & Partners, s. r. o. is ready to provide you with comprehensive legal advice and services regarding grant applications and related legal matters. At the same time, we can provide you with advice and services regarding registration in the Register of Public Sector Partners.