Addressing price volatility and financing needs of young farmers and agriculture

The fi-compass event ‘Addressing price volatility and financing needs of young farmers and agriculture’ was organised by the European Commission’s Directorate General for Agriculture and Rural Development (DG AGRI) in partnership with the European Investment Bank (EIB).

During the event, the European Commission and the European Investment Bank (EIB) announced the launch of EUR 1 billion EIB loans package for agriculture and the bioeconomy, with specific targets to support younger farmers. This new loan programme is part of a joint ‘Young Farmers' initiative' between the European Commission and the EIB.

Phil Hogan, Commissioner for Agriculture and Rural Development, emphasised the importance for young farmers to access finance. With 11% of European farmers under the age of 40 years old, supporting young farmers in the sector, it is a priority for the European Commission and the post-2020 Common Agricultural Policy.

EIB Vice-President responsible for agriculture and bioeconomy, Andrew McDowell highlighted that with this new initiative, the EIB is looking towards the future of the sector and addressing an important market gap, the lack of access to finance of farmers, especially the next generation of farmers.

Mr Pekka Pesonen, Secretary General of COPA – COGECA and Mr Jannes Maes, President of CEJA - European Council of Young Farmers provided farm policy statements on the future of EU young farmers and their financing needs. Access to credit and access to investment and technology are the main challenges according to the farmers’ associations. Young farmers need a better access to credit, mainly for three reasons: to gain access to land; to buy machinery; and to diversify activities. Mr Maes acknowledged that this Initiative addresses for a first time one of the main obstacle in front of young farmers’ development, namely the need of adequate financing. He stressed that business planning has to be a crucial part of any future activity linked to young farmers’ business investments and access to EU support.

Mr Marco Marrone, Deputy Director Mandate Management of the European Investment Fund (EIF) and Mr Ferran Minguella, Head of Unit - Adriatic Sea Department, Lending Operations of European Investment Bank (EIB), underlined how the EIB Group supports the European Commission policies through financial products (lending and blending), other than the traditional grant funding.

Mr Michael Pielke, Head of Unit of DG Agriculture and Rural Development, European Commission presented different examples of approaches supporting young farmers with EAFRD financial instruments. Mr Simon Barnes and Mr Frank Lee from the European Investment Bank (EIB) focused on the results of recent DG AGRI – fi-compass studies. In particular, they presented the survey on financial needs and access to finance of EU agri-enterprises that involved 7,600 farmers across 24 EU Member States.

In the second part of the day, the event concentrated on practical examples of EAFRD financial instruments, with a specific focus on young farmers and examples from Estonia and Portugal, and on presentations from the financial sector, with examples from banks offering flexible products to the agricultural sector, as a tool to address price volatility in agriculture.