2 billion programme for agriculture launched by European Investment Bank
Access to finance is key for farmers and rural entrepreneurs to realise their projects and move towards more sustainable business models. Nevertheless, agricultural businesses are still less successful in their loan applications than SMEs in other sectors with even more difficulties reported by younger farmers, according to a survey recently carried out by the fi-compass programme – a platform providing advisory services on financial instruments under the European Structural and Investment Funds supported by the European Commission in partnership with the European Investment bank – together with around 7.600 farmers in 24 EU Member States. Higher perceived risks from financial institutions and lack of experience of farmers are considered the primary reasons for this gap. The results of the survey were presented at a conference organised in Brussels on 29 April 2019 to address “price volatility and financing needs of young farmers in agriculture”.
In reaction, the European Investment Bank announced the launch of a 2-billion-euro loan package, fully dedicated to agriculture and the bioeconomy, that will be mobilised in cooperation with partner banks. This package includes a 700 million programme for agricultural small and medium enterprises, to be managed by local banks and leasing companies across the EU, of which minimum 10% will be dedicated to young farmers under 41, enabling them to benefit competitive financing terms and more flexible loans to address their specific needs. On top of this, the programme will be complemented by two pilot loans, one amounting 75 million, fully dedicated to supporting young farmers, and another 200 million loan for agriculture and climate action.
This new programme is one of the largest agriculture financing initiatives backed by the European Investment bank to scale-up investment in the agricultural sector. As mentioned by Agriculture and rural development Commissioner Phil Hogan, “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.”
With its team of highly qualified rural business advisors, the RUBIZMO initiative intends to help farmers accessing the resources they need to make their rural innovation projects a reality. Through dedicated training and coaching sessions, as well as an extensive library of proven business examples, the RUBIZMO project will offer tailor-made support to rural stakeholders, supporting the development of success-oriented business environments across Europe.
For more information, you can read the full press release of the European Investment bank, and access the results of the survey of the fi-compass programme on ‘Financial needs and access to finance of EU agricultural enterprises’. Follow our journey and discover the RUBIZMO process to support rural business success throughout Europe.