EU targets private investment with €111m funding programme

The European Union (EU) has unveiled a €111 million funding programme for European food producers designed to draw private investment into the sector and increase EU food exports.

Of the €111 million which will be available next year for agri companies to promote their produce, €26 million is available for companies to target EU consumers, and €68 million for companies to expand into international markets. The remainder has been set aside for multiple companies to collaborate on initiatives.

The funding will be allocated on a “co-financing” basis, and the EU hopes the total pot will be leveraged significantly by increasing the proportion of funding it will contribute to eligible initiatives to 80 percent. The previous maximum rate of co-financing was 50 percent. The EU says the previous rate regime was hindered by differing approaches between countries, exacerbated by the financial crisis.

“Under [the previous rules], the EU co-financing rate was 50 percent, with proposing organisations participating to a level of at least 20 percent, with the remaining funding being borne by the member states concerned. The practice has shown that some [countries] were co-financing, and others not. The economic crisis led to strong diverging rates of co-financing between countries. With the new system, in which countries no longer provide co-financing, a level playing field is created for all proposing organisations,” an EU spokesman told Agri Investor.

The new co-financing rates are also designed to encourage private investment in countries such as Cyprus and Greece which have experienced the most acute economic downturn in recent years. The EU will provide up to 85 percent of the funding for initiatives which target these countries. The EU has also ringfenced €30 million of funding for the dairy and pig meat sectors, calling them “troubled” and in need of special assistance.

Phil Hogan, the EU’s commissioner for agriculture and rural development, lauded the EU’s €110 billion agri export market, saying that it “creates jobs and growth in rural areas across Europe.” Last winter the European farmers union wrote to EU Commission president Jean-Claude Juncker calling for more investment by the EU in agricultural projects.

The EU says the amount of funding for agri producers to promote their products under this assistance programme will grow to €200m by 2019.