Young farmers in Europe will receive a share of €1billion in loans as part of a scheme to help nurture agricultural newcomers.
With young farmers three times more likely to have fundraising applications rejected than their elders, the European Commission in partnership with the European Investment Bank (EIB) has freed up €1bn cash to be available in loans.
European banks participating in the loans are expected to match fund the EIB, bringing up the total loan amount available to €2bn.
Andrew McDowell, the EIB’s vice president responsible for agriculture and bioeconomy, said: “The agricultural sector is the backbone of the EU economy and has a key role to play not just in producing healthy food but also to battle climate change and preserve the environment.
“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. This programme loan will also support growth and competitiveness in the agriculture [and] bioeconomy sector[s], by preserving and creating employment in the rural and coastal regions.”
The programme will be implemented by European Member States, and will include perks such as lowered interests, a grace period of up to five years before recipients must start paying back their loan and increased flexibility of loan payments depending on price volatility.
Agriculture and rural development commissioner Phil Hogan said: “Access to finance is crucial and too often an obstacle for young people wanting to join the profession.
“With 11 per cent of European farmers under the age of 40 years old, supporting young farmers in the sector is a priority for the European Commission and the post-2020Common Agricultural Policy. I am pleased to see this new joint initiative up and running.”
