Loss-making agricultural enterprises will develop a business plan for their financial recovery

Significant changes await the agricultural sector in the coming months. This was discussed at a training seminar on financial recovery held at the Vitebsk Concert Hall, which was attended by all interested parties – from accountants and economists of agricultural enterprises to chairmen of district executive committees.

As you know, at the beginning of July, Decree of the President No. 253 approved measures for the financial recovery of the sector. As Lyudmila Nizhevich, Deputy Minister of Agriculture and Food of Belarus, said, today 500 out of 1,469 agricultural organizations in the country have negative solvency.

Within the system of the Ministry of Agriculture and Food, 372 farms fall under the decree. Some of them will undergo pre-trial recovery, and some will go bankrupt. The lists will be approved by the government by October 1, 2016. Farms that provide a business plan containing pre-trial recovery measures by September 1 will have a chance to be included in the first category. If it is not approved, the agricultural enterprise will face bankruptcy proceedings.

Among the pre-trial recovery measures for agricultural enterprises and their investors, installment payments for obligations are provided (penalties, fines for violations of payments to the Social Protection Fund – for 5 years; arrears on the repayment of budget loans and borrowings – for 3 years; for taxes and fees – for 3 years; for payments for heat and electricity, gas – until December 31, 2018). The released funds should replenish working capital. A number of other benefits are also provided to improve the financial situation.

Problematic agricultural enterprises, as well as their individual facilities (e.g., farms), can be leased to legal entities and individual entrepreneurs, and trust management is allowed while maintaining the production focus and jobs. The annual rental fee will be 5% of the balance sheet value. All other income is received by the tenant.

The trust manager is granted a benefit in the form of exemption from property tax. His monthly remuneration

will be 10% of the profit, and year-end payments are also provided.

By decision of the President or in agreement with him, the head of an agricultural enterprise is allowed to transfer 25% plus 1 share free of charge. The mandatory condition is to ensure the effective operation of the farm (absence of losses, overdue obligations, restoration of solvency) for the quarter preceding the five-year business plan implementation period.

Work with agricultural enterprises for which bankruptcy procedures are required will be carried out taking into account the following features: the duration of the protection period is up to one month from the date of initiation of proceedings, rehabilitation procedures are 36 months from the court's decision, and liquidation is 12 months.

Sergey Lyashuk, "Vitebskiye Vesti". Photos from open sources.