EU funds
Commission launches EUR 1 bn loan package for young farmers
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In 2017, 27% of the loan applications submitted to banks by EU young farmers were rejected, compared to only 9% for other farms.
The EUR 1 billion package announced at the end of April by Commissioner for agriculture Phil Hogan and EIB Vice-President Andrew McDowell, aims at increasing access to funding for EU farmers, especially young farmers.
Phil Hogan, Agriculture and rural development Commissioner (Photo by Europost.eu)
“The agricultural sector is the backbone of the EU economy and has a key role to play not just in producing healthy food but also to battle climate change and preserve the environment," commented EIB Vice-President responsible for agriculture and bioeconomy, Andrew McDowell.
“With this new initiative, the EIB is looking towards the future of the sector and addressing an important market gap, the lack of access to finance of farmers, especially the next generation of farmers. This programme loan will also support growth and competitiveness in the agriculture/bioeconomy sector, by preserving and creating employment in the rural and coastal regions."
The programme will be managed at Member State level by banks and leasing companies operating across the EU. Participating banks should match the amount committed by the EIB, therefore bringing the total amount to a potential EUR 2 billion, and priority should be given to young farmers.
The programme will address many of the current shortcomings that farmers face with:
Two pilot loans of EUR 275 million are about to be implemented in France through this scheme. These loans are specifically targeted at young farmers and climate change mitigation.
The EUR 1 billion package announced at the end of April by Commissioner for agriculture Phil Hogan and EIB Vice-President Andrew McDowell, aims at increasing access to funding for EU farmers, especially young farmers.
Phil Hogan, Agriculture and rural development Commissioner (Photo by Europost.eu)
Access to finance is crucial and too often an obstacle for young people wanting to join the profession. With 11% of European farmers under the age of 40 years old, supporting young farmers in the sector is a priority for the European Commission and the post-2020 Common Agricultural Policy. I am pleased to see this new joint initiative up and running
, said Agriculture and rural development Commissioner Phil Hogan:“The agricultural sector is the backbone of the EU economy and has a key role to play not just in producing healthy food but also to battle climate change and preserve the environment," commented EIB Vice-President responsible for agriculture and bioeconomy, Andrew McDowell.
“With this new initiative, the EIB is looking towards the future of the sector and addressing an important market gap, the lack of access to finance of farmers, especially the next generation of farmers. This programme loan will also support growth and competitiveness in the agriculture/bioeconomy sector, by preserving and creating employment in the rural and coastal regions."
The programme will be managed at Member State level by banks and leasing companies operating across the EU. Participating banks should match the amount committed by the EIB, therefore bringing the total amount to a potential EUR 2 billion, and priority should be given to young farmers.
The programme will address many of the current shortcomings that farmers face with:
- Lower interest rates;
- Longer periods of up to 5 years to start repaying the loan;
- Longer periods to pay back the whole loan (up to 15 years);
- Added flexibility, depending on the conditions, to respond to price volatility in the agricultural sector to ensure that farmers remain able to pay loans back in difficult periods (for instance, through a ‘holiday/grace' period allowing farmers not to pay back for a few months).
Two pilot loans of EUR 275 million are about to be implemented in France through this scheme. These loans are specifically targeted at young farmers and climate change mitigation.
This article is part of the work programme titled "The impacts of EU cohesion policy in Hungary - Present and Future" which is carried out by Net Média Zrt., the publisher of Portfolio.hu, between 1st April 2019 and 31st March 2020 with European Union financing. The views in this article solely reflect the opinions of the author. The European Commission as the funding entity does not take any responsibility for the use of information presented in this article.
