The European Commission and the European Investment Bank on Monday April 29 launched a loan package worth 1 billion euros, designed specifically for young farmers.
The program will be managed at the level of member states by banks and leasing companies operating throughout the European Union. The participating banks must correspond to the amount allocated by the European Investment Bank (EIB), so the total amount should be 2 billion euros, and priority should be given to young farmers.
This program is intended to address many of the current shortcomings that farmers face and provide:- Lower interest rates;
- Longer periods (up to 5 years), before the start of loan repayment;
- Longer repayment periods for the entire loan (up to 15 years);
- Additional flexibility, depending on the conditions, for responding to price volatility in the agricultural sector, to guarantee farmers the opportunity to repay loans in difficult periods (for example, during the “vacation / grace period”, which allows farmers not to pay for several months).
The new loan program is part of a joint initiative of the Commission and the EIB Young Farmers, which aims to pool the existing support of the European Agricultural Fund for Rural Development (EAFRD), as well as the financial resources and experience of the EIB.
In addition to the loan package, this includes the continued use of EAFRD grants for young farmers and startups, which can be used as subsidies at the interest rate or for technical assistance in combination with financial instruments.
In addition, the EIB and the European Investment Fund (EIF) offer advisory support and expertise to governments.
