Hogan unveils new €1bn loan scheme for young farmers
May 7th, 2019 9:50 AM
THE European Commission and the European Investment Bank (EIB) launched a €1 billion loan package specifically targeting young farmers (those under 40 years of age) on April 29th.
The package, announced by EU Farm Chief Phil Hogan and EIB Vice-President Andrew McDowell, aims at increasing access to funding for European farmers, especially the younger generation. Latest figures show that, in 2017, around 27% of loan applications submitted to banks for European young farmers were rejected, compared to around 10% for other farms.
The programme will be managed at Member State level by banks and leasing companies operating across the EU. Participating banks should match the amount committed by the EIB, therefore bringing the total amount to a potential €2 billion. It will seek to address many of the current obstacles that young farmers face – providing lower interest rates, longer periods of up to five years to start repaying the loan, longer periods to pay back the whole loan (up to 15 years), added flexibility, depending on the conditions, to respond to price volatility in the sector to ensure that farmers are able to pay loans back during difficult periods, for instance through a 'grace period' allowing farmers not to pay back for a few months.
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Commenting this week, Hogan said 'access to finance is crucial and too often an obstacle for young people wanting to join the profession … with 11% of European farmers under the age of 40 years, supporting young farmers is a priority for the Commission and the post-2020 CAP,' expressing his satisfaction the new joint initiative was 'up and running.'
EIB vice-president McDowell, responsible for agriculture and the bio-economy, said that 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.'
•Rose O'Donovan is the editor-in-chief of the Brussels-based agricultural publication Agra Facts.