Access to finance for smaller farms in the EU

The European Commission – Directorate-General for Agriculture and Rural Development (DG AGRI), in partnership with the European Investment Bank, organised the conference ‘Access to finance for smaller farms in the EU’, on Tuesday, 17 May 2022 in Brussels and online.

Smaller farms are the backbone of our agriculture sector, representing 90% of the EU agricultural holdings. They secure the resilience of the EU food system and play a vital role in maintaining biodiversity, ensuring environmental sustainability, preserving agricultural and rural heritage, creating jobs and livelihood in rural areas. However, smaller farms find it difficult to access finance due to their limited assets and capital, being considered riskier clients by the banking sector.

Watch the conference recording:

The conference’s main aim was to shed light on currently implemented EAFRD financial instruments and national schemes supporting the financing of smaller farms in the EU. It comes at a moment when Member States are preparing their new CAP Strategic Plans, which need to address the needs of smaller farms. The examples displayed at the conference showed the importance of micro-finance, small loans and guarantees, and are an excellent basis for further work on this subject. Support given in Croatia, Romania, Hungary and Italy was in the centre of the discussions.

Mihail Dumitru, Deputy Director-General, DG AGRI, European Commission, opened the conference by stating that the reformed Common Agricultural Policy will be fairer, greener and more effective. He explained how CAP strategic plans can support smaller farms such as through ensuring that more financial resources reach them quickly and at preferential conditions. Hubert Cottogni, Director and Head of Mandate Management, European Investment Fund, added that the flexibility and simplification introduced in the new regulation will facilitate the combination of grants with EAFRD financial instruments in the same operation. He welcomed the new possibility for the EAFRD financial instruments to support stand-alone working capital finance and the purchase of land by younger farms. Pierre Bascou, Director, Directorate B – Sustainability, DG AGRI, European Commission, underlined the importance of the CAP vis à vis the transition of the agricultural sector into sustainability, resilience and competitiveness, and gave a thorough overview on the distribution of the EAFRD support through financial instruments to the agricultural sector.