Almost half (46%) of all loans issued in Latvia and Lithuania in the first six months under the LANDE European Investment Fund (EIF) guarantee programme have gone to farmers under the age of 40.
At the same time, it should be noted that farmers under 40 make up only around 12% of all farmers in the European Union. This underlines how important it is to think about how to attract the younger generation into farming, while also addressing the sector’s practical challenges, including improving access to financing.
This issue is also reflected in Latvia’s strategic plan for implementing the European Union’s Common Agricultural Policy (CAP), where the insufficient share of young farmers is identified as one of the most significant challenges for the sector’s future. The strategy provides for additional support for young and newly established farmers, to encourage generational renewal and strengthen the long-term competitiveness and resilience of Latvian agriculture.
In this context, the results of the EIF guarantee programme’s first six months are particularly significant. Although the programme was set up to improve access to financing for small farms in general, rather than for any specific age group, young farmers have in fact become one of the largest groups of beneficiaries under the programme. This is made possible by the EIF guarantee under the “InvestEU” programme, which covers up to 80% of the credit risk on loans of up to 50,000 euros, allowing farmers to obtain financing on better terms and reach a wider range of farms.
“The results vividly show how the farming sector is changing. Nowadays farmers can no longer plan the development of their farms with the same confidence as five or ten years ago. Climate change, market fluctuations and rising production costs are forcing farms to adapt far more quickly to changing conditions. That’s why financing solutions also need to evolve – they need to support farmers’ development plans and adapt to the realities of modern farming, rather than forcing farmers to fit their business into traditional financing models,” stresses Ņikita Gončars, founder and CEO of “LANDE Finance”.
“Our goal is to narrow the gap between small farmers’ financing needs and the solutions available on the market. The programme’s first results confirm that guarantee instruments significantly improve access to financing for Europe’s new generation of farmers. Cooperation with specialised financial partners, such as LANDE, helps direct support to where it’s needed most,” notes Marjut Falkstedt, Executive Director of the European Investment Fund.
The results of the programme’s first six months in Latvia and Lithuania suggest that a similar financing model could in future be successfully rolled out in other European countries where young farmers face similar demographic and financing-access challenges.
About “LANDE Finance”
“LANDE Finance” is an investment platform founded in 2019 that specialises in agricultural loans secured against farmland, harvests or agricultural machinery. The company is licensed by Latvijas Banka and operates across the European Union under the European Crowdfunding Service Providers Regulation (EU) 2020/1503.
Since its launch, LANDE has financed more than 2,000 agricultural projects in Latvia, Lithuania, Romania and Poland, with total investment exceeding 60 million euros.
About the European Investment Fund
The European Investment Fund is a member of the European Investment Bank (EIB) Group, specialising in providing guarantees, securitisation solutions and equity investments to improve access to financing for small and medium-sized enterprises and start-ups across Europe.
Acting as an anchor investor and working with a broad network of partner banks and investment funds, the EIF helps mobilise private investment and supports the development of the venture capital fund ecosystem, backing the growth of innovative European companies.
About “InvestEU”
The “InvestEU” programme provides the European Union with long-term financing, mobilising substantial private and public funds to support a sustainable recovery. It also helps mobilise private investment to deliver the European Union’s strategic priorities, including the goals of the European Green Deal and digital transformation.
“InvestEU” brings together all of the European Union’s previous financial instruments for investment support into a single framework, making it simpler, more efficient and more flexible to raise financing for investment projects in Europe. The programme consists of three parts – the “InvestEU” Fund, the “InvestEU” Advisory Hub and the “InvestEU” Portal.
The “InvestEU” Fund is implemented through partner organisations that invest in projects backed by a European Union budget guarantee of 26.2 billion euros. This guarantee increases partners’ capacity to take on risk and helps mobilise at least 372 billion euros in additional investment.