EU launches billion-euro loan plan for young farmers

An aerial picture taken April 29, 2019 shows workers harvesting asparagus in a field at the ‘Beller Hof’ farm in Cologne, western Germany. — AFP pic
An aerial picture taken April 29, 2019 shows workers harvesting asparagus in a field at the ‘Beller Hof’ farm in Cologne, western Germany. — AFP pic

BRUSSELS, April 29 — The European Union today launched a plan to give up to €1 billion (RM4.6 billion) in cheaper loans to young farmers, who are often turned away by banks.

The European Commission, the EU’S executive arm, and the European Investment Bank want banks to match the loans, bringing the total to €2 billion.

“Access to finance is crucial and too often an obstacle for young people wanting to join the profession,” Agriculture Commissioner Phil Hogan said.

“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.”

Banks rejected 27 per cent of the loan applications submitted by young EU farmers in 2017, compared to only nine per cent for older applicants.

Those under 40 years old accounted for 11 per cent of the EU’s 10.3 million farmers in 2016, while the over 65s represented 32 per cent, according to Eurostat.

Young farmers are especially rare in Cyprus (3.3 per cent), in Portugal (4.2 per cent) and in the United Kingdom (5.3 per cent).

They are better represented in Austria (22.2 per cent), in Poland (20.3 per cent) and in Slovakia (19 per cent).

The EU’s 28 countries will offer young farmers lower interest rates, a five-year moratorium on repayments and then up to 15 years to pay back the whole loan.

The scheme also allows for flexibility in tougher times by offering grace periods of several months.

Senior EIB official Andrew McDowell said agriculture “is the backbone of the EU economy,” producing healthy food and protecting the environment. — AFP

Related Articles