New €30m fund created to provide low-cost loans to French farmers and agri businesses

In a bid to help farmers tackle increasing challenges, the European Investment Fund and Regional Council of Nouvelle-Aquitaine have signed an agreement to create a guarantee fund worth €30 million to generate low-cost loans of up to €150 million over three years to farmers and agri businesses.

The deal was signed by Alain Rousset, president of the Regional Council of Nouvelle-Aquitaine, and Pier Luigi Gilibert, director-general of the European Investment Fund. “Nouvelle-Aquitaine hopes to respond to challenges like climate change, environmental, economic and health issues. This requires continuous investment in research and innovation over the next 10 years,” said Rousset.

The ALTER’NA fund gives farmers and agri businesses access to credit in the agricultural sector through the provision of low-interest-rate loans. The fund, worth €30 million – € 16 million from the Region and €14 million from the European Agricultural Fund for Rural Development – is expected to guarantee low-cost loans worth €150 million over three years to farmers and agri business, the European Commission said. Around 1,500 farmers are estimated to benefit from it. There is also potential for further funds from the European Fund for Strategic Investment at a later stage, Alfio Lo Castro, manager for the program, said this week. The guarantee fund will complement current subsidy programs and bank support.

It will help prepare the region for the future of agriculture by capitalizing on changing market trends towards organic and ecological production, less pesticide use, as well as short supply chains, Lo Castro explained. Sectors covered by the program include livestock, fruit and vegetables and vineyards. “Investments could focus on energy-efficient greenhouses for fruit and vegetables, for example. It could also focus on short supply chains and incentivize farmers to market and add value to their produce though direct sales as well as help agri businesses to sell certified organic produce. Other investments include modernizing farm holdings like the installation of a robotic milking parlor for instance,” he added.

As part of the creation of this fund, the EIF has published a call for an expression of interest to select the bank or agencies that will implement the loan portfolio and offer farmers advantageous loans to invest in infrastructure and activities that meet market trends. Banks have until 15 February 2019 to respond, in order to introduce the loans by June 2019. “A similar project worth €30 million has already been introduced in 2015 in the Occitanie region of France, which is having positive results. Many other regions and member states are interested in the guarantee instrument and applications are in the approval process,” Lo Castro stressed.

The move comes after EU Farm Commissioner Phil Hogan launched a finance initiative in 2016 to improve access to credit for farmers and agri businesses to ensure a viable future.

Investors can read the call for an expression of interest here: http://www.eif.org/what_we_do/resources/esif-eafrd/call-for-expression-interest.pdf