The purpose of this article is to outline the content of the new legislation, its objective and the purpose of providing subsidies, and to clarify who can apply for subsidies in this area and under what conditions, what the application must contain, what attachments are required, and how it relates to the obligation to register public sector partners in the register of public sector partners.
Many of you have probably already noticed that so-called agricultural subsidies and state aid in the agricultural sector 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 acts (hereinafter referred to as the “Act”) will come into effect. The effectiveness of certain provisions of the Act has been postponed until July 1, 2024.
The Act replaced the previous legal regulation laid down in Section 12 of Act No. 280/2017 Coll. on the provision of support and subsidies in agriculture and rural development and amending Act No. 292/2014 Coll. on contributions from European Structural and Investment Funds and amending certain acts, as amended. 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 followed the existing European legal framework and, in particular, the existing national legal basis for the provision of aid, i.e. Act No. 358/2015 Coll. on the regulation of certain relations 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 subject matter of the Act is the purpose, conditions and method of granting subsidies within the competence of the MPRV SR and the control of the use of subsidies granted. 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 amending Act No. 292/2014 Coll. on contributions from European Structural and Investment Funds and amending certain acts, as amended, the state administration bodies providing support and assistance are the MPRV SR and the Agricultural Payment Agency (hereinafter referred to as the “PPA”). The PPA is a budgetary organization linked by financial relations to the budget of the MPRV SR. The PPA provides administrative activities in the provision of support and subsidies as a state administration body and performs activities related to the provision of support in agriculture and rural development on the basis of accreditation granted by the MPRV SR.
Purpose of granting subsidies within the competence of the MPRV SR
Subsidies from the budget chapter of the MPRV SR for the relevant budget year may be granted to support
a) services of public interest,
- protected horse breeding in state-owned enterprises within the founding competence of the MPRV SR,
- the preservation and development of state property used for the protected breeding of horses in state-owned enterprises within the founding competence of the MPRV SR,
- the activities of the Slovak Horse Racing Authority, including the organization of horse races,
- the preservation and development of state property used for the activities of the Slovak Horse Racing Authority and the organization of horse races,
- administration and operation of hydromelioration facilities,
- preservation and development of state hydromelioration property,
- care for small watercourses within the framework of watercourse management administered by state-owned enterprises within the founding competence of the MPRV SR,
- preventive measures for flood protection implemented by state-owned enterprises within the founding competence of the MPRV SR on property under their administration or ownership,
- museum activities.
b) public benefit purposes in agriculture, food production, forestry, hunting, fisheries and rural development,
- presentation and promotion of activities in agriculture, food production, forestry, hunting, fisheries or rural development,
- publishing activities,
- protection of the gene pool of endangered animal populations, protection of animals and their welfare,
- the preservation of endangered genetic resources of old and local plant varieties,
- the protection and improvement of the living conditions of endangered game species,
- the organization of international events and participation in international events,
- the organization of competitions and exhibitions, participation in competitions and exhibitions,
- reimbursement of costs associated with membership in international organizations,
- organization of educational and advisory activities and participation in advisory and educational activities,
- presentation and protection of natural, historical and cultural heritage,
- work with the younger generation – preschoolers, schoolchildren, apprentices and students,
- establishment and maintenance of herd books and breeding records for animals,
- performance testing, testing and estimation of the breeding value of animals,
- bee pollination,
- awards for winners of equestrian competitions,
- provision of food aid,
- organisation of 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 specific regulations or on the basis of authorization from the MPRV SR, activities carried out in the field of hunting on the basis of authorization from the MPRV SR,
- activities carried out in the field of statistics falling within the competence of the MPRV SR on the basis of authorisation 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 on the basis of a mandate from the MPRV SR,
- providing information, opinions, analyses and proposals to the MPRV SR on current issues in agriculture, food production, forestry, rural development and fisheries on the basis of a mandate from the MPRV SR,
- compensation for losses of animals, losses of equipment used for animal husbandry that has been destroyed, and costs associated with cleaning and disinfecting infected farms incurred as a result of veterinary measures ordered in accordance with specific regulations,
- construction, technical upgrading, repair and maintenance of public buildings, public spaces, parks and local infrastructure,
- procurement, technical upgrading, repair and maintenance of machinery and equipment used for the performance of 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 wood, fisheries and rural areas in accordance with specific regulations.
Who can apply for a subsidy?
The legal provisions of Section 3 of the Act stipulate that applicants for subsidies may be persons specified in the call for applications for subsidies.
Subsidies to support services of public interest may be granted to applicants who are state-owned enterprises established by the Ministry of Agriculture and Rural Development of the Slovak Republic.
A subsidy to support a public benefit purpose in agriculture, food production, forestry, hunting, fisheries and rural development may be granted to an applicant who is a municipality, a higher territorial unit, a non-profit organization, a civic association, a foundation, the Slovak Chamber of Agriculture and Food, the Slovak Chamber of Forestry, the Slovak Chamber of Hunting, 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, an interest group of legal entities.
Subsidies to support agricultural production, food production, processing and marketing of agricultural and food commodities and products, forestry, including the valorization of raw wood, fisheries and rural areas may be granted to applicants who are persons engaged in economic activities regardless of their legal status and method of financing in accordance with specific regulations; economic activity is any activity consisting in offering goods or services or offering goods and services on the market.
The subsidy may be granted to applicants who meet the conditions laid down 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.).
The subsidy may be granted to an applicant who:
- is registered in the register of non-governmental organizations in accordance with a special regulation, in the case of applicants under paragraph 3(c), (d) or (e) of the Act - a non-profit organization, civic association or foundation
- does not receive funds from other public sources for the same eligible costs or expenses.
The subsidy may be granted on the basis of a call for proposals, a call for proposals announced on the basis of an effective aid scheme or the opinion of the aid coordinator on the provision of ad hoc aid or a decision of the European Commission on the provision of ad hoc aid.
Method of granting the subsidy
The subsidy may be granted to the applicant on the basis of an application for a subsidy (hereinafter referred to as the “application”). The applicant shall submit the application in paper or electronic form on the basis of a call and within the deadline specified in the call. If the application is submitted in electronic form, the applicant's electronic identity must be verified in accordance with a special regulation.
The application shall contain the following information in particular:
a) the applicant's identification details, including
- first name, surname, birth number and permanent address, in the case of a natural person,
- name, surname, permanent address, business address and organization identification number, if it is a natural person - entrepreneur,
- name, registered office, organization identification number, information on the statutory body or members of the statutory body, if it is a legal entity,
b) the purpose for which the subsidy is requested,
c) information necessary to request an extract from the criminal record, except for persons who are not criminally liable under a special regulation,
d) other requirements, if specified in the call or aid scheme.
The applicant shall attach to the application the annexes specified in the call or aid scheme.
Where can those interested in a subsidy find such a call?
The call is published by the MPRV SR 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 Subsidies, the MPRV SR may entrust part of the tasks involved in the provision of subsidies to a state budgetary organization or a state-funded organization that has the professional, human, and material resources to perform these tasks. In addition to the MPRV SR, calls are also published by the PPA on its website. The PPA also receives and checks the applications received.
An example of a call published by the PPA is “Call for applications for subsidies for the participation of processors in exhibitions”. The purpose of this call is to support the participation of processors in exhibitions, the presentation of processed agricultural products, processed fishery and aquaculture products and food industry products, and to strengthen the export activities of processors. The conditions for granting aid are set out in the current scheme of minimum aid for the participation of processors 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 applications for financial assistance, including mandatory attachments and confirmations, and specifies the conditions for granting aid. After checking the requirements, the PPA will add up the requirements of all service providers' applications. If the sum of the requirements of all service providers' applications exceeds the limit set for this scheme, the PPA will set a conversion coefficient. The requirements converted by the coefficient are the final amount of funds for each service provider. The PPA shall prepare a draft contract for the provision of funds to ensure the provision of the subsidized service and shall invite the service provider to sign this contract. After the signing and entry into force of the contract, the PPA shall transfer the funds to the service provider's account.
Mandatory annexes within the meaning of 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 within the meaning of point J of the scheme include, among others:
- certificate of registration as an independent farmer,
- extract from the register of land communities,
- extract from the relevant register proving the applicant's authorization to carry out economic activities,
- certificate of registration for VAT, if the applicant is a VAT payer, or a declaration by the applicant that he is not a VAT payer,
- confirmation of a bank account,
- confirmation from the relevant labor inspectorate, not older than three months, that the applicant has not violated the prohibition of illegal employment in the previous three years (Act No. 82/2005 Coll. on illegal work and illegal employment and on amendments to certain acts),
- confirmation from the relevant bankruptcy court, not older than three months, 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 due to lack of assets,
- if the applicant is required to register in the register of public sector partners (hereinafter referred to as “RPVS”) pursuant to Section 2(2) of Act No. 315/2016 Coll. on the Register of Public Sector Partners and on amendments and supplements (hereinafter referred to as the “RPVS Act”), registration in the RPVS is required for the provision of a subsidy prior to the signing of the grant agreement,
- a copy of proof of payment of costs or expenses,
- a declaration by the applicant for the subsidy in accordance with the Minimum Aid Scheme for the participation of processors in exhibitions, as amended, which is Annex 3 to the call.
It is important to emphasize that the applicant for financial resources is not the recipient of the aid. The applicant is the person who provides the service 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 MPRV SR.
Regarding registration in the RPVS (Annex No. 8): According to Section 2(2) of the RPVS Act: "A public sector partner under paragraph 1(a), first to fourth points, sixth point and seventh point shall not be a person to whom a one-off 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 one-off performance."
One of the mandatory attachments to the call is registration in the RPVS, if the financial limits are met. In general, we can say that the obligation to register in the RPVS applies to entities that are natural persons or legal entities (entrepreneurs and non-entrepreneurs) that meet one of the definitions of a public sector partner under Section 2(1)(a) of the RPVS Act.
In the case of applicants for subsidies in a call from the MPRV SR or the PPA, attention should be paid to the conditions for granting subsidies. Each of these conditions states that a subsidy may be granted to an applicant who is registered in the RPVS if 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 in connection with grant applications and related legal advice. At the same time, we can provide you with advice and services in the area of registration in the register of public sector partners.
