Ex-Agridiff, the support mechanism for farms in difficulty has been reformed to provide better monitoring and better support for farmers.
Dlready in 2018, the “Agridiff” device had been renovated, thus being renamed AREA (aid for the recovery of agricultural holdings). Open to more beneficiaries, it has provided greater privacy to operators.
In 2019, two new texts came to strengthen the system to improve the monitoring of farms in difficulty and their support.
A restructuring plan of at least 3 years
In order to benefit from aids for farms in difficulty, the company must now be audited in the last twelve months preceding the date of submission of the aid application. This audit, carried out by an expert chosen by the operator on a list drawn up by the prefect, must demonstrate a prospect of a return to viability thanks to commitments made in a restructuring plan . The holding must also justify, in view of the last financial year closed or on the basis of the last closing of the accounts:
- in the case of a limited liability company (eg EARL, Gaec), a decrease of more than 50% in the subscribed capital of the share capital due to the accumulated losses of reserves and all other items falling within own funds;
- if it is a company with unlimited liability (eg SCEA) or a sole proprietorship, a decline of more than 50% of own funds.
From the audit, if a restructuring is necessary and likely to allow the recovery of the exploitation , the prefect can stop a restructuring plan in agreement with the principal creditors of the farmer, for a period which does not exceed not seven (she was three to five years ago).
This plan must include, in addition to the evidence requested today, a commitment not to increase its production capacity during the plan, a commitment to maintain its agricultural production activity until the end of the plan and a presentation of the expected results. . The technical and economic monitoring that accompanies this restructuring plan is at least three years (so far it was a maximum).
As in the previous scheme, farmers in difficulty can claim three financial benefits:
- A restructuring aid (before there was talk of recovery assistance). It corresponds, as the case may be, to the assumption of all or part of the costs or bank guarantees related to the restructuring, bank interest, the interest on loans or payment facilities contracted from suppliers or dividends corresponding to interest in the bank. case of a recovery or backup plan (see box). The amount of the aid includes a financial contribution from the State and, where appropriate, a supplement by other public funders. It is capped according to the number of work units and the annual budget allocated to the department prefect.
- A help for the realization of the audit and a help to the technical and economic follow-up which can each reach 1 500 € (before one spoke of help with the diagnosis). In both cases, the share allocated by the State is set at 80% of the cost of the service excluding taxes up to a limit of € 1,000. It can be supplemented by other public funders within the limit of 100% of the cost of the service excluding taxes. These two aids are paid to the organization that carried out the audit and the technical monitoring of the operation.
To benefit from these aids, the operator must meet certain criteria related to age, professional capacity or the duration of his activity. His company must also meet conditions related to its size and the number of employees. It must also meet three of the following criteria in view of the last closed accounting year or on the basis of the last financial statements:
- A debt ratio greater than or equal to 70%;
- A cash level less than or equal to zero;
- A gross operating surplus in relation to the gross product less than or equal to 25%;
- A disposable income per unit of self-employment less than or equal to an annual net minimum wage.
When farmers reach these levels of difficulty, their situation becomes very difficult to recover. They often wait too long before asking for help. However, we must not be ashamed, most of the difficulties are directly related to the economic situation. And taken early enough, they can turn the situation around to start on a good basis.
For an operation, all productions combined, it is necessary to monitor some ratios beyond which the warning signals are red:
|ratios||Red alert thresholds|
|Long and medium term debt / EBE *||> 3 (3 years of EBE are not enough to repay LMT debts)|
|EBE / Operating income||<30% (the profitability of the activity is too low)|
|Annuities / EBE||> 60% (beyond, too many loans, annuities too high or EBE too low)|
|FFCT ** / Operating revenues||> 4% (interest on short-term loans that are too high)|
|Equity / Total Balance Sheet||<25% (indicator of financial autonomy below which one should not go down)|
* Gross operating surplus, ** Short-term financial expenses
The company’s safety margin is also an important indicator to control. The final cash balance, after deducting loans, private levies and the MSA , must remain positive.