Credit support schemes provided by the support and guarantee fund for farmers and forestry in the Czech Republic

Credit support (investment) to Czech agriculture has been aimed at the esta blishment and modernisation of farms. Negative experience with grants (1991 ) and interest-free loans (1992-93) led to the establishment of the Support and Guarantee Fund for Farmers and Forestry (SGFFF) in 1993. The fund prov ides credit guarantees and interest subsidies. Through its schemes, the fun d has provided credits of some CZK 55 billion (US$1.8 billion) and had paid CZK 7.7 billion for interest subsidies in 1994-1998. Under current economi c conditions, the fund has become a decisive financial instrument. However, ossification of farm structure and the unsuitable allocation of sources, t ogether with the inability of farms to re-pay credits (the growth of mature d guaranties), represent a major problem for the system. A decrease of the level of support seems to be a necessary measure for the Government in the future.