Young farmers across Europe will have access to cheap loans over 15 years to help them start and develop their business, Commissioner for Agriculture Phil Hogan announced this Monday – as revealed by the Irish Farmers Journal at the weekend.
The EIB loan is expected to mobilise an additional €1bn from participating private banks
"The initiative represents a programme loan of €1bn for young farmers and the bio-economy, completely financed by the European Investment Bank (EIB)," Commissioner Hogan said. "On top of that, the EIB loan is expected to mobilise an additional €1bn from participating private banks in EU member states; which would mean a total of €2bn to be invested in our agricultural sector and, in particular, to support young farmers."
The Joint Initiative for young farmers by the European Commission and the EIB will offer loans of up to 15 years, prioritising young farmers. This is longer than the average five to seven years offered by banks for this category of borrower, according to the commissioner.
Grace period
The EIB added that young farmers could enjoy up to five-year grace periods before starting repayments, "to address their specific needs" while they grow their farm.
The €1bn made available by the EIB is divided as follows:
€700m for loans to agricultural small and medium businesses, to be managed by local banks and leasing companies. Of this fund, at least 10% must go to farmers under 41.€75m for a pilot loan scheme for young farmers only.€200m in loans for agriculture and climate action.Hogan urged banks in EU countries to engage with the EIB to make the loans available to farmers.
"The money has been made available; it is now a question of drawing it down by the member states," he said.
Next generation
EIB vice-president Andrew McDowell commented: "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."
Jannes Maes, president of the EU-wide young farmers' organisation CEJA, agreed that difficult access to credit was one of the biggest barriers for young farmers across Europe. "CEJA welcomes this new step and encourages member states and financial institutions to ensure a quick implementation of the measures so that young farmers can fully benefit from these instruments,” he said.
Minister for Agriculture Michael Creed, too, welcomed the EU initiative. "I look forward to working with the Commission and the EIB to ensure that Irish farmers have access to appropriate financial products to enable them to sustain and develop their individual enterprises," he said.
Until the EU-backed loans become available, Minister Creed reminded farmers of the opportunity to apply for the separate Government-supported Future Growth Loans Scheme.
Read more
New loan scheme opens for applications
Banks in last-chance saloon with public
Young farmers across Europe will have access to cheap loans over 15 years to help them start and develop their business, Commissioner for Agriculture Phil Hogan announced this Monday – as revealed by the Irish Farmers Journal at the weekend.
The EIB loan is expected to mobilise an additional €1bn from participating private banks
"The initiative represents a programme loan of €1bn for young farmers and the bio-economy, completely financed by the European Investment Bank (EIB)," Commissioner Hogan said. "On top of that, the EIB loan is expected to mobilise an additional €1bn from participating private banks in EU member states; which would mean a total of €2bn to be invested in our agricultural sector and, in particular, to support young farmers."
The Joint Initiative for young farmers by the European Commission and the EIB will offer loans of up to 15 years, prioritising young farmers. This is longer than the average five to seven years offered by banks for this category of borrower, according to the commissioner.
Grace period
The EIB added that young farmers could enjoy up to five-year grace periods before starting repayments, "to address their specific needs" while they grow their farm.
The €1bn made available by the EIB is divided as follows:
€700m for loans to agricultural small and medium businesses, to be managed by local banks and leasing companies. Of this fund, at least 10% must go to farmers under 41.€75m for a pilot loan scheme for young farmers only.€200m in loans for agriculture and climate action.Hogan urged banks in EU countries to engage with the EIB to make the loans available to farmers.
"The money has been made available; it is now a question of drawing it down by the member states," he said.
Next generation
EIB vice-president Andrew McDowell commented: "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."
Jannes Maes, president of the EU-wide young farmers' organisation CEJA, agreed that difficult access to credit was one of the biggest barriers for young farmers across Europe. "CEJA welcomes this new step and encourages member states and financial institutions to ensure a quick implementation of the measures so that young farmers can fully benefit from these instruments,” he said.
Minister for Agriculture Michael Creed, too, welcomed the EU initiative. "I look forward to working with the Commission and the EIB to ensure that Irish farmers have access to appropriate financial products to enable them to sustain and develop their individual enterprises," he said.
Until the EU-backed loans become available, Minister Creed reminded farmers of the opportunity to apply for the separate Government-supported Future Growth Loans Scheme.
Read more
New loan scheme opens for applications
Banks in last-chance saloon with public
This is a subscriber-only article
SHARING OPTIONS: