Details: €1 billion to be made available to young farmers
The European Commission and the European Investment Bank (EIB) have today, Monday, April 29, launched a €1 billion programme loan specifically targeting young farmers.
The €1 billion loans package announced today by the European Commissioner for Agriculture and Rural Development, Phil Hogan, and EIB vice-president, Andrew McDowell, aims to increase access to funding for EU farmers, especially young farmers.
According to a statement from the European Commission, in 2017, 27% of the loan applications submitted to banks by EU young farmers were rejected, compared to only 9% for other farms.
Commenting on the announcement, Commissioner Hogan said: “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.
“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 €2 billion, and priority should be given to young farmers.”
- Lower interest rates;
- Longer periods of up to five 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;
- Allowance of a ‘holiday/grace’ period allowing farmers not to pay back for a few months.
Two pilot loans of €275 million have already been implemented in France through this scheme.
These loans are specifically targeted at young farmers and climate change mitigation.