‘Access to finance continues to be a barrier for young farmers’

There is no shortage of young people who want to get into farming, but many of them face imposing obstacles, the European Commissioner for Agriculture, Phil Hogan, has said.

Speaking earlier today at a European Council of Young Farmers (CEJA) event he said he wants to focus on those barriers which hinder young people from taking up agricultural activity, and identify better ways to remove those barriers.

“Access to finance continues to be an important barrier for generational renewal in the agricultural sector.

“Young farmers who are setting up usually have little collateral at their disposal and therefore are perceived as clients with a higher risk by lending institutions.

“The introduction of innovative and targeted Financial Instruments into Rural Development Programmes is particularly useful to address this funding gap.

“Financial Instruments can help to tackle the high investment needs required when setting-up, notably in view of the low turn-over during first years in businesses.”

He said that the recent omnibus proposal, which outlines further options for simplifying the CAP, contains a number changes pertinent for young farmers, namely:

  • The simplification of conditions related to start-up-support;
  • Specific provisions to allow start-up support to be provided through Financial Instruments; and
  • The simplification of eligibility rules regarding Financial Instruments.

Access to land

The Commissioner also said that access to land is the most important barrier to enter into the agricultural sector, with recent research and stakeholder consultations confirming this.

The limited availability of agricultural land, together with competition for land for non-agricultural purposes, puts pressure on prices, he said.

“Land mobility is low because the older generation does not pass it on to the next generation.”

This is, among other factors, linked to the receipt of direct payments or to preferences for keeping the land “within the family”.

“Other factors at national level, like fiscal law, heritage law and social law, can complicate matters further.”

The Commissioner said that he is committed to looking into ways to promote and simplify farm transfers between more experienced farmers and new entrants.

Access to knowledge is ‘fundamental’

“Young farmers need guidance as to how different investments can contribute to improving the economic and environmental performance of their holdings.

“This is why young farmers need access to knowledge about the latest technological developments as well as best production practices.

“Rural development funds support knowledge transfer activities, which include training, demonstration activities, farm visits, and exchanges for a practice-oriented learning process.”

Support for short exchange schemes and visits is a novelty of the current programming period. It will give farmers the possibility to learn directly and in a practical way from peers.

Besides the exchange schemes supported by Rural Development, Commissioner Hogan pointed out that young farmers can also participate in the initiative “Erasmus for Young Entrepreneurs” and take part in “Leonardo Da Vinci programmes” aiming to contribute to their professional and personal development.

“We are keen to involve young people in Erasmus+ apprenticeship programmes in agriculture. Apprenticeships allow young people to connect and obtain experience.”