Financial needs in the agriculture and agri-food sectors in France

Webinar

17 March 2021
About the event
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The European Commission – Directorate-General for Agriculture and Rural Development (DG AGRI) in partnership with the European Investment Bank (EIB) organised on 17 March 2021 the webinar on ‘Financial needs in the agriculture and agri-food sectors in France’. The key objective of the webinar was to shed light on the financial environment in which farmers and processors operate in the country. Almost 100 participants from managing authorities, financial intermediaries, EU institutions and stakeholders from the agricultural and agri-food sectors attended the online event.

Moderated by Bruno Robino, Head of fi-compass at EIB, the webinar was opened by Mario Milouchev, Director at DG AGRI, who highlighted the importance of financial instruments for rural development and how the new Common Agriculture Policy (CAP) strategic plans would simplify their implementation and facilitate farmers’ access to finance. Serge Lhermitte, Head of the Competitiveness and Environmental Performance Department at the Ministry of Agriculture and Food, emphasised the key role of financial instruments in the future French CAP plan in order to support the agriculture and agri-food sectors in the country to respond to the challenges of green transition, digitalisation and innovation.

Miglena Dobreva, Financial Instruments Advisor at the EIB and Guillaume Pierre, Research Expert at Ecorys, shared the main findings from the fi-compass study ‘Financial needs in the agriculture and agri-food sectors in France’. In the French agriculture sector, the estimated financial gap is between EUR 1.3 billion and EUR 1.7 billion, and of EUR 2.9 billion for the agri-food sectors, mainly affecting access to medium and long term loans. Among the main obstacles for these sectors identified by the study are low and volatile economic margins, as well as lack of business and credit history for new entrants and for start-ups.

Vincent Boulesteix, Deputy Head of the Financing of Enterprises Office from the French Ministry of Agriculture and Food, shared his experience with INAF, the National Initiative for French Agriculture. INAF is mobilising national resources together with support from the European Fund for Structural Investments (EFSI) in order to guarantee portfolios of loans to farmers and facilitate their access to financing with advantageous conditions. So far, 1 390 loans have been granted to final recipients, out of which young farmers represent 71%.

Nathalie Dauder, Head of the Competitiveness for the Agri-food and Plant Sector Department in Occitanie Region, explained the structure of the EAFRD financial instrument for rural development set-up under FOSTER (Fonds Occitanie de Soutien Territorial aux Entreprises Régionales) Fund of Funds. The instrument, including First Loss Portfolio Guarantees (FLPG), was designed to address the financing gap in the agriculture, food and forestry sectors and to ensure sufficient leverage on the EAFRD resources. So far, more than 670 final beneficiaries benefited from financing under the financial instrument for a total amount of EUR 73.1 million, which represent 60% of the FOSTER’s portfolio.

Johan Chassaing, Head of the Agriculture and Forestry Department in Provence-Alpes-Côte d’Azur Region, provided an overview on the two financial instruments being implemented in the Region since January 2019. The first one is an interest free loan, aimed at building up equity capital to mobilise bank loans to support the set-up creation or takeover of a business. The second one, a guarantee fund, facilitates access to bank loans to farmers and agri-food enterprises thanks to the guarantee provided by the Region. He concluded that communication between banks and final beneficiaries is very important to increase the awareness raising on financial instruments in the agricultural sector.

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Loïc Guitton, Manager responsible for the Agriculture Market at Banque Populaire Occitane, also shared insights related to the deployment of the FOSTER EAFRD financial instrument from the bank perspective. He described numerous advantages of the product for the farmers and agri-companies, and mentioned some examples of investments, such as the creation of agricultural holdings, the financing of processing equipment, the installation of young farmers in arboriculture and the construction of farm buildings for laying hens in organic farming.

The webinar continued with a panel discussion on how EAFRD financial instruments could support green investments in the Nouvelle-Aquitaine Region with the participation of: Jean-Guillaume Peytavi, Financial Instruments and Financial Monitoring Officer at Nouvelle-Aquitaine Region; Aubin Bonnet, Senior Mandate Manager at the European Investment Fund; Jean-Baptiste Clavel, Manager of the Agriculture Market Development at Crédit Agricole; and Szilvia Bencze, Policy Officer on financial instruments, DG AGRI. The EAFRD Nouvelle-Aquitaine Fund of Funds (Alter’NA), launched in November 2018, is an EIF-backed guarantee instrument aimed to facilitate access to finance for farmers and agri-businesses in the Region, promoting investments in the development, processing and marketing of agricultural products. The financial instrument primarily supports the Region’s ambitious agro-ecological transition plan for 2030, ‘Neo Terra’, which focuses on climate and environment. In order to facilitate the deployment and dissemination of information about Alter’NA among the relevant stakeholders, EIF, in collaboration with the EIB advisory services, developed a fully-fledged web portal to help final recipients and banks check the eligibility criteria for the potential investment to be supported under the instrument. As of January 2021, EUR 53.2 million have been disbursed to more than 300 final recipients, the majority of which small size farms with less than EUR 1 million turnover. For example, Crédit Agricole, one of the financial intermediaries under the Alter’NA Fund of Funds, reported that as of end February 2021 their pipeline of transactions under the product includes ca. 390 deals for roughly EUR 61 million. In addition, the representative from DG AGRI highlighted that thanks to the new flexibilities in future CAP and CPR rules, financial instruments can facilitate the transition to a greener agriculture with schemes including capital rebate, which could be used to incentivise the farmers to come up with business ideas with much higher environmental ambition.

In his closing remarks Michael Pielke, Head of Unit at DG AGRI, pointed out how the examples presented during the event gave great insights on the success factors and lessons learned related to use of financial instruments. He highlighted that the new CAP and the new CPR rules will offer more flexibility in terms of combination possibilities and eligibility conditions, which will amongst other enable financial instruments to contribute to the recovery from the COVID-19 crisis.

Presentations

pdf presentation      pdf audio      pdf video      pdf case study      pdf file not yet available


Title Speakers

Introduction by the moderator

Bruno Robino, Head of fi-compass, European Investment Bank

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Opening statement from DG AGRI

Mario Milouchev, Director, DG AGRI, European Commission

Opening statement from the French Ministry of Agriculture and Food

Serge Lhermitte, Head of the Competitiveness and Environmental Performance Department, Ministry of Agriculture and Food

pdf

Financing needs in agriculture and agri-food sectors in France

Miglena Dobreva, Financial Instruments Advisor, European Investment Bank

Guillaume Pierre, Research Expert, Ecorys

Panel discussion and Q&A with the audience – Financing needs in agriculture and agri-food sectors in France

Miglena Dobreva, Financial Instruments Advisor, European Investment Bank

Guillaume Pierre, Research Expert, Ecorys

pdf

The French National Agriculture Initiative (INAF)

Vincent Boulesteix, Deputy Head of the Financing of Enterprises Office, Ministry of Agriculture and Food

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AGRI financial instruments – FOSTER Occitanie

Nathalie Dauder, Head of the Competitiveness, Agri-food and Plant Sector Department, Occitanie Region

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EAFRD financial instruments in the Region Provence-Alpes-Côte d’Azur

Johann Chassaing, Head of the Agriculture and Forestry Department, ProvenceAlpes-Côte d’Azur Region

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FOSTER: An economic development tool

Loïc Guitton, Manager of the Agriculture Market, Banque Populaire Occitane

Panel discussion and Q&A with the audience – Current experiences with financial instruments in France

Vincent Boulesteix, Deputy Head of the Financing of Enterprises Office, Ministry of Agriculture and Food

Nathalie Dauder, Head of the Competitiveness, Agri-food and Plant Sector Department, Occitanie Region

Johann Chassaing, Head of the Agriculture and Forestry Department, ProvenceAlpes-Côte d’Azur Region

Loïc Guitton, Manager of the Agriculture Market, Banque Populaire Occitane

pdf

Panel discussion and Q&A with the audience – EAFRD financial instruments supporting green investments in Nouvelle-Aquitaine Region, France

Jean-Guillaume Peytavi, Financial Instruments and Financial Monitoring Officer, Nouvelle-Aquitaine Region

Szilvia Bencze, Policy Officer on financial instruments, DG AGRI, European Commission

Aubin Bonnet, Senior Mandate Manager, European Investment Fund

Jean-Baptiste Clavel, Manager of the Agriculture Market Development, Crédit Agricole

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Closing remarks

Michael Pielke, Head of Unit, DG AGRI, European Commission

Programme
Financial needs in the agriculture and agri-food sectors in France
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Besoins de financement dans les secteurs de l’agriculture et de l’agroalimentaire en France
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