More flexible loans, more time to pay back

The European Commission – DG Agri and the European Investment Bank (EIB) have launched a €1 billion  loans package  for agriculture and the bioeconomy with specific targets to support younger farmers.  The sum will be matched by the implementing financial institutions, thereby mobilising close to €2 billion of long-term financing for small and medium-sized enterprises in the sector. The announcement was made at the  fi-compass  conference " Addressing price volatility and financing needs of young farmers and agriculture " which took place in Brussels on 29 April 2019.

Thanks to this package, loans for agricultural small and medium enterprises will be managed by local banks and leasing companies active across the EU and will include a minimum 10% window for farmers under 40. The programme will address many of the current shortcomings that farmers face providing, among others, better terms for the loans to the farmers,

  • 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 to temporary suspend their repayments).

Access to finance for young farmers

Commenting on these good news, Jannes Maes, President of EU Young Farmers said “Commissioner Hogan and his team have proved their dedication to the future of the agricultural sector in answering one of the three biggest challenges for young farmers across Europe: access to credit. CEJA has been advocating for better tools to deal with this challenge. The initiative is promising and will provide vital support to young people wanting to enter or remain in the sector”.2019_05 Young farmers web

Jerome Bandry, CEMA Secretary General, expressed great satisfaction on the financial support for young farmers in the EU and added “we cannot think about the future of European agriculture without a generation renewal in the sector. Young farmers are willing to bring innovative farming practices, invest and use digital technologies to drive their businesses to the next level but of course risks need to be considered.  This set of financial measures will definitely help them in supporting their ambitions and plans to sustain the future of agriculture in Europe”.

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