The subsidised price of wheat will be increased from 0.75 kuna to 1.05 kuna per kilogram, but its market price should be agreed by wheat producers and buyers in accordance with market trends rather than by the government, Agriculture Minister Petar Cobankovic said at a press conference on Tuesday.
He was speaking after a meeting with representatives of a dozen commercial banks about banks accepting a warehouse receipt as a guarantee for the award of loans to agricultural producers, who that way could wait for a better price of wheat.
Cobankovic said that this would pose no risk to the banks, and that although the banks said it was a new product for which it would take them some time, he believed some of them would be willing to accept the terms offered by the government.
Under the government's proposal, banks would give loans to producers at about one kuna per kilogram of wheat based on a warehouse receipt issued by one of the nine licensed wheat storage silos, with a total capacity of nearly 80,000 tonnes. The interest rate would be 3% and would be subsidised by the Croatian Bank for Reconstruction and Development, which Cobankovic said has HRK 300 million at its disposal for agricultural production loans.
Cobankovic said that the payment of agricultural subsidies for this year could be expected to start in January 2012 at best and would be completed by April.
