Sixth annual EU conference on EAFRD financial instruments for agriculture and rural development in 2014-2020

The fi-compass ‘Sixth annual EU conference on EAFRD financial instruments for agriculture and rural development in 2014-2020’ organised by the European Commission, Directorate-General for Agriculture and Rural Development (DG AGRI), in partnership with the European Investment Bank (EIB), took place online on 16 November 2020. Over 250 participants from managing authorities, financial intermediaries, EU institutions and stakeholders from the agricultural and agri-food sectors joined this online event.

The conference was opened by Janusz Wojciechowski, Commissioner for Agriculture and Rural Development, highlighting the importance of the Common Agriculture Policy in the green transition in agriculture. “The future CAP […] needs to be ambitious, offering the right tools to encourage sustainable farming practices. However, this will not be sufficient if farmers do not have the means to invest in green technologies for instance. This is why we made financial instruments more attractive under the future CAP, with possibilities to use them under all relevant strategic objectives."

Christian Kettel Thomsen, EIB Vice-President, added that agriculture and bio-economy are an EIB priority and are relevant for addressing numerous policy themes such as climate and environmental protection, support for small and medium-sized business, as well as social and economic integration across the Union. He said “these challenges will not be overcome with public funding alone and this is why we believe that financial instruments have an essential role to play in mobilising more resources and expertise from the private sector too, arguably making more efficient and effective use of scarce public resources."

Mihail Dumitru, Deputy Director-General, DG AGRI, European Commission, underlined the importance for EAFRD managing authorities to plan and use financial instruments in their CAP Strategic Plans for the 2021-2027 period. Managing authorities are encouraged to consider the potential for financial instruments in different sectors of rural development policy, taking advantage of the novelties introduced by the new CAP regulation including, inter alia, the flexibility of rules with regards to eligibility, the simplified ex-ante assessment process and the new combination possibilities of grants and financial instruments. Additional EU level instruments are also available to address existing financing gaps in the agriculture and agri-food sectors in Member States namely InvestEU, the Just Transition Mechanism and the Recovery and Resilience Facility, which could be used as a complement to EAFRD financial instruments. He also highlighted the importance of the European Green Deal and the Digital transition in the agriculture and agri-food sectors.

The recently published fi-compass study on the ‘Financial needs in the agriculture and agri-food sectors in the European Union’ aims at providing an understanding of investment drivers, financing supply and financing difficulties, as well as the estimated financing gaps for both sectors, at EU level. Bruno Robino, Head of fi-compass, EIB, and Miglena Dobreva, Financial Instruments Advisor, EIB, set the scene on the agriculture and agri-food financing gaps. While for the first sector the estimated gap is ranging between EUR 19.8 to EUR 46.6 billion in the EU 24, with young farmers accounting for almost 30% of the total financing gap, it has been estimated that the gap for the agri-food sector is around EUR 12.5 billion. 78% of the gap affects small-sized agri-food enterprises and 57% is associated to long-term loans.

The conference continued with practical examples of EAFRD financial instruments implemented in a number of Member States and regions. Representatives from Poland Occitanie Region (France) and Italy (financial intermediary) presented advances made and success stories connected with their EAFRD financial instruments.

Monika Grążka, Director, Ministry of Agriculture, Poland, described how financial instruments co-financed from EU funds were introduced to the Polish Rural Development Programme 2014-2020, with 889 operations supported as of 30 September 2020.

Nathalie Dauder, Directorate of Agriculture, Agri-food and Forestry, Occitanie region, France, explained how the fund FOSTER (Fonds Occitanie de Soutien Territorial aux Entreprises Régionales) was designed to address the financing gap in the agriculture sector and ensure sufficient leverage of the EAFRD funds to bridge the gap. A recent survey commissioned by the Region confirmed the positive impact of the instrument for final recipients and partner financial intermediaries, with young and micro firms being among the main beneficiaries.

Matteo Sgambato, Head of Subsidised Finance, CREDEM, Italy, presented the AGRI Italy Guarantee Platform. Its objective is to provide better access to finance for final recipients in the agricultural and agro-industrial sectors in 8 Italian Regions through capital relief and loss protection provided by the European Investment Fund (EIF) to financial intermediaries.

We would like to kindly invite you to hear the end of year message from Ms Silvia Michelini, Director, Directorate-General for Agriculture and Rural Development of the European Commission.