North Cork Fine Gael Councillor John Paul O’Shea has welcomed a €1 billion loans package aimed at increasing access to funding for EU farmers, especially young farmers. Announced in recent days by the European Commission and the European Investment Bank, the programme will be managed at member state level by banks and leasing companies operating across the EU.
Cllr O’Shea said the loan programme will address many of the current shortcomings that farmers face, with 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 agricultural sector to ensure that farmers remain able to pay loans back in difficult periods; and allowance of a ‘holiday/grace’ period allowing farmers not to pay back for a few months.
With participating banks to match the amount committed by the European Investment Bank, the total amount available increases to €2 billion. Cllr. O’Shea said the programme loan would make it easier for young farmers especially to make a start in the farming industry, something that has become more difficult in recent years. According to the European Commission in 2017, more than a quarter of loan applications submitted to banks by EU young farmers were rejected, compared to only 9% for other farms.
Cllr O’Shea’s Fine Gael colleague, Commissioner for Agriculture and Rural Development, Phil Hogan, said access to finance is crucial for young people wanting to join the profession. “With 11% 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-2020 Common Agricultural Policy. I am pleased to see this new joint initiative up and running.”
EIB Vice-President responsible for agriculture and bioeconomy, Andrew McDowell commented: “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/bioeconomy sector, by preserving and creating employment in the rural and coastal regions.”
Further information, including a FAQ document, may be accessed on the Department of Agriculture’s website at: https://www.agriculture.