Fondo de Fomento de la Granja

About the program

It is a Fund from the Ministry of Livestock, Agriculture and Fisheries which aims to finance business plans for farmers and also provide subsidies for agricultural insurance contracts.

Country Uruguay
Home 05.30.2004
Classification Development of production chains, Financing and credit
FNS Dimension Disponibilidad
Website http://www.mgap.gub.uy/portal/page.aspx
Objectives

Objectives

  • Cancel or amortize outstanding debt from farmers with the Bank of the Eastern Republic of Uruguay or any entity whose property belongs entirely to the aforementioned Bank; this debt must have been generated for their  productive activity and originated prior to June 30, 2002.
  • Cancel or amortize outstanding debt from farmers with the Bank of Social Welfare and or with the Mortgage Bank of Uruguay, generated for their  activity and originated prior to June 30, 2002.
  • Cancel or amortize debt from farmers and cooperative farming organizations with IFAD-COFAC (Today known as IFAD-BANDES) related to financing prior to June 30, 2002.
  • Develop a system of climate risk management through the following instruments: promotion of agricultural insurance and risk sharing schemes, financial support insurance and reinsurance for farmers’ insurance lines which have had excessive losses by insurers.
  • Promote a system of guarantees for the farming sector in order to provide resources to fund existing or future security.
  • Promote the integration of farmers to agribusiness producers and retail chains through the following instruments:
    • Financial support with fully or partially refundable promotion projects and horizontal or vertical integration of livestock, agribusiness and commercial chain funds.
    • Financial support with fully or partially refundable projects that promote stable and permanent market access to foreign funds.
    • Financial support with fully or partially refundable associative investments in infrastructure, machinery and equipment that is declared of interest, in the framework of policies and development plans for farmers of the Ministry of Livestock, Agriculture and Fishing equipment funds.
    • Financial support with fully or partially refundable investments in irrigation infrastructure, preferably with multi predial funds.
    • Support organizations and their producers destined for training, technical assistance, pre-feasibility studies and feasibility studies, institutional strengthening and technological development and innovation.
  • Compensate or finance farmers that are affected by emergencies not covered by current insurance systems.
  • Promote a food safety program in order to ensure quality parameters both for the domestic market and contribute to the development of potential export markets.
Components and/or products

Cancellation or debt repayment

The Fund cancels or amortizes outstanding debts that farming producer may have with: the Bank of the Eastern Republic of Uruguay or any entity whose property belongs entirely to said Bank; the Social Security Bank and any debt established with the Banco Hipotecario del Uruguay. It also cancels or amortizes debts with producers and farmers from cooperative farming created under the IFAD-COFAC (Today, IFAD-BANDES) funding.

Financing Business Plans in the Farming Sector

The Fund finances Assisted Group Plans (PAG), primarily oriented to family farming which aims to integrate these producers in commercial chains and / or strengthen these chains: production-processing-commercialization.

It also finances Business Plans (PEN). These initiatives are supported whereas they have strong content regarding quality improvement, product presentation, and high added value, import substitution, opening foreign markets, incorporating technologies or production and industrial processes in order to differentiate products for better integration into the local or international market. Producers who participate are not necessarily family producers.

Farm Insurance

Resources are allocated directly to subsidize insurance premiums which depend in each case to the producer’s economic size. The aim is to make insurance at affordable costs available to the producers of the vegetable, deciduous fruit trees, citrus, wine and farm animals, in order to reduce the main risks affecting productive activities.

The insurance coverage is as follows:

  • Hail: horticulture field, deciduous fruit trees, citrus groves and vineyards in production.
  • Additional high wind: hail in apple, pear and peach trees in production.
  • Hurricanes, storms and tempests (HTT) in deciduous fruit tree in the growing process, greenhouses and its contents, supporting structure vines and deciduous fruit trees, sheds and equipment for poultry and pigs, birds according to their breeding stage and beehives.
  • Civil liability additional to fires and HTT : Beekeeping.
Target population

Farmers and farming cooperatives of Uruguay.

Scope

Nacional

Geographical coverage Rural
Responsible organism

Ministry of Livestock, Agriculture and Fisheries

Executing organism Ministry of Livestock, Agriculture and Fisheries
Normative framework

Ley 17.503/2002: Crea el Fondo de Reconstrucción y Fomento de la Granja Ley 17.884/2004: Modifica la Ley 17.503 Ley 18.827/2011: Modifica la Ley 17.884 Decreto 480/2012: Decreta los términos y el reglamento del alcance legal del Fondo de Fomento de la Granja.

Financial sources

VAT from fruits, flowers and vegetables.