Published legislation and draft legislation - Colombia

New requirements for agricultural sector funding

Decree 691/2018 circulars P-9 & P-10/2018

With the aims of breaking down barriers to small producers accessing credits and of improving the reach of the instruments relating to agricultural sector financing, the Ministry of Agriculture & Rural Development has published a consultation draft of a decree to modify the scope of the definition of small producer as it is understood in current legislation, by eliminating some of the requirements that make the analysis undertaken by financial institutions more costly.

The Decree proposes the following changes:

  • The definition of Small Producer raises the upper limit for total assets from 145 MMW (about COP 113,280,000 = EUR 32,365), to 284 MMW (about COP 221,870,000 = EUR 63,390).
  • The requirement to submit documents accrediting assets jointly with the spouse or permanent partner in order to be classified as a Small Producer has been eliminated.
  • The requirement to demonstrate that the individual must obtain at least two thirds of his/her income from farming, or for at least 75% of his/her assets to be in the agricultural sector, has been suppressed.

Furthermore, the National Agricultural Credit Committee has changed the definition of “low-income rural woman”, suppressing the expression “head of household”, so that more people can access agricultural and rural credits: small-scale producers, rural women, low-income rural woman, ethnic communities, medium-scale producer and large-scale producer.

In addition, the Committee has tightened the requirements for accessing Special Agricultural Promotion Development programs, changing the conditions needed to access agricultural financing projects developed by producers in cooperative marketing and/or production systems. So, it has set up the following:

  • Certification by the Tax Inspector or Legal Representative of the cooperative association and/or solidarity sector organization, validating that the conditions for accessing the loan have been met.
  • Assessment by financial intermediaries of the credit applications, using risk management control systems and rules to detect money laundering and the financing of terrorism.