EU low-interest loan scheme for young farmers on the way

Access to long-term loans with low-interest rates for young farmers will be signed off on later this month by EU Commissioner for Agriculture and Rural Affairs Phil Hogan.

The commissioner made the announcement while speaking at the pre-launch of the new degree programme in International Agricultural Engineering at the Institute of Technology (IT) Tralee today, Friday, March 5.

He was also part of the EU’s Citizens’ Dialogue where the main topic centered on: ‘Future of CAP: Agricultural Technology, Research & Innovation’.

There will be an announcement at the end of this month of a fairly substantial fund of money that will give long-term loans, at low interest rates, to young people involved in farming.

Hogan added: “Equally, other programmes will also be made available to allow young people – who want to get involved in agri-business – to access low-interest rate loans too.”

The commissioner went on to say that young people who live and work in rural areas deserve a good quality of life and access to services.

“So, if these young people are living and working in rural areas, their quality of life and the services available to them must be improved; this will also show that we in the EU are serious about rural development and sustainable rural communities.”

‘Working together’

According to Hogan, the EU will go guarantor on the new long-term, low-interest loan scheme.

It will take the hit, as he pointed out, should the case arise.

“We are going to give a guarantee on the Rural Development Programme (RDP) to the European Investment Bank, that on the first loss, we take the hit – this reduces the risk to the bank and reduces the interest rate to the young farmer or the agri-business,” he continued.

That is how all of this is going to work – it is about a collaborative partnership approach.

Hogan went on to say that he was focused now on supporting generational renewal.

He pointed out that the EU wanted to not just help young farmers but also young people who were focused on setting up businesses.

“Therefore, we will be insisting that every member state demonstrates what it will do nationally in the form of taxation measures and highlight other policy measures that are in place,” Hogan continued.

“We would expect all member states to do a little bit more.”

‘Going there to come back’

Meanwhile, the commissioner pointed to Europe and how just 6% of farmers are under the age of 40.

This needs to change, he added, and measures must be put in place to achieve that.

“Installation aid support and soft loans for agri-business and for farmers – especially young people that are taking over the farm because usually it needs a few euros to be spent, particularly in terms of capital investment – will be the focus,” continued Hogan.

Young farmers will have new objectives and new horizons in terms of the farm and, of course, there are two families that will have to be looked after.

“Therefore, the financial side of all that has to be looked at; so too do the options available under the RDP and under the direct payments so that the whole generational renewable process can be assisted.”

Hogan added that 6% of farmers under the age of 40 “was very low and not sustainable”.

“I know there are many options in rural areas now in terms of educational opportunities and agri-business, but if young people want to stay in farming then more is going to have to be done to help them,” he said.

“We need the technology services and the farm advisory services to be really geared up to providing the help that’s needed.

“The EU will provide the necessary guidance, training and institutional education that is required.”