President Maes, Vice-presidents, dear friends,
It is great to see you again, thank you for inviting me. I hope you all voted in the European elections and I hope you voted for candidates and parties who will help to keep young farmers on the map!
Before I start talking about policy, I would like to say that it has been my great pleasure to engage with your wonderful organisation so regularly and so extensively over the past 5 years.
When I first met you in 2015, I promised that, as a former young farmer myself, I would make it one of my top priorities to put general renewal and young farmers as high as possible on the EU agenda.
I am happy to reflect on the fact that I have delivered on that promise.
I hope you will indulge me if I give you a quick overview of the progress we have made during my term as Commissioner.
It is important to take stock of how far we have come, and it is equally important that CEJA stands ready to hold the next agriculture commissioner to the same standard!
As you know, for the first time ever, the crucial importance of young farmers and generational renewal has been explicitly stated as a key objective of the CAP.
Young farmers will benefit from a wide range of instruments, through a combination of mandatory and voluntary aspects:
At least 2% of the national direct payments envelope will have to be devoted to generational renewal. Spending today amounts to only 0.8%.
This amount has to be allocated either in the form of top-up income support in Pillar I and/or lump sum installation grants in Pillar II.
This is a very important innovation – Member States will have to “use it or lose it”. Member states may wish to spend more if there are identified needs. You can see that with this financial earmark, we are more than doubling our firepower to support generational renewal!
I believe this compares very favourably with your priorities, which argue in favour of supporting the direct payment model as the most straightforward means of rewarding vibrant, efficient, sustainable active farmers.
Our proposal also includes complementary income support measures: the top-up for young farmers under direct payments is kept and reinforced financially, but Member States will have more capacity to tailor the scheme to the specific needs of young farmers.
In addition, reserves for payment entitlements will be used, as a matter of priority, for young farmers and farmers commencing their agricultural activity.
There will be an increase in the maximum amount of available aid for the installation of young farmers and rural business start-ups, up to € 100,000.
Beyond direct payments, Member States will have the option to support different forms of cooperation between farmers. This could encompass farm partnerships between different generations of farmers;
It could mean retirement planning and lump sum payments for older farmers who permanently transfer their holding;
It could mean enhanced transition planning services;
It could mean improved brokerage for land acquisition;
It could support innovative national or regional organisations engaged in promoting and facilitating matching services between young and old farmers and so on.
This reflects and even builds upon the strong work done in some MS, including the one I know best, in relation to land mobility.
Making it easier for young farmers to enter the sector through such direct aids, should hopefully see the overall proportion of young farmers increase. This should ensure that the total pot of direct payments reaching young farmers will be well into the double digits as a percentage of the overall envelope.
On top of the financial aid young farmers will continue to benefit from investment support and knowledge transfer and training under the EIP-Agri, through Leader funding and through other rural development interventions.
Member States may also decide to use a certain share of their EAFRD allocation to finance actions in respect of transnational learning mobility with a focus on young farmers, in accordance with the Erasmus Regulation.
Member States will be allowed to establish financial instruments to support working capital: this instrument can be of primary importance for young farmers, who face more difficulties given the high investments and low returns of the start-up phase.
And while I am on the subject of financial instruments, I have been working hard to deliver for you on that front too.
I was therefore delighted when last month, after many months and indeed years of negotiation and persuasion, the European Commission and the European Investment Bank announced a new joint initiative loan programme offering new funding possibilities to young farmers.
Concretely, this initiative represents a programme loan of EUR 1 billion for young farmers and the bio-economy, completely financed by the EIB. This is an unprecedented development, and one which is to be warmly welcomed.
This reflects the growing understanding among policymakers that if we want a new generation of dynamic young farmers, capable of maintaining European food security while also doing more for the climate and environment, you need more support.
Farmers are business people and their needs have to be assessed from a business perspective.
We need to address price volatility and the need for short term working capital support to help maintain viable farm businesses, particularly during times of temporary liquidity difficulty.
That is why this new facility is so welcome. On top of that, the EIB loan is expected to mobilise an additional EUR 1 billion from participating private banks in EU Member States; which would mean a total of EUR 2 billion to be invested in our agricultural sector, and in particular to support young farmers.
This is one of the largest ever financing operations for EU agriculture by the European Investment Bank. In real terms, it will mean:
- A loan facility that prioritises young farmers.
- The loans for young farmers will have a longer maturity, up to 15 years (compared to an average of 5-7 years offered by banks);
- And the interest rate will be well below market rates.
As we speak, the first two pilot loans of €275 million are already being developed in France with Crédit Agricole and soon in Italy. And hopefully many more Member States will follow.
In addition to the programme loan, the initiative includes a recommendation for the combined use of EAFRD grants for young farmers and start-ups - as interest rate subsidies or for technical assistance together with financial instruments;
The European Investment Bank stands ready to provide advice through the fi-compass, or on a bilateral basis, to EAFRD managing authorities on how to better design all available financial help – for example to tackle price volatility for young farmers, or start-up business needs;
And managing authorities might also benefit from the European Investment Fund (EIF)’s management expertise.
I encourage you all to carefully study this new initiative and learn more about how to make the most out of this unique funding opportunity. And I would like to call on all private banks i our Member States to do the same.
The money has been made available; it is now a question of drawing it down by the Member States.
I urge banks, particularly those with a tradition of lending to the agriculture and rural economy, to get on board and engage with the EIB to reach the 2 billion EUR.
Other Future Initiatives
Dear friends, there are many other exciting initiatives coming down the tracks that will be of interest to CEJA members.
There will be huge new opportunities in the research and innovation space under both the future CAP and under Horizon Europe. Do not forget that an unprecedented amount of funding - €10 billion – will be dedicated to food and agriculture under Horizon Europe.
There will be the possibility to deepen your cooperation with young farmers in Africa, through an Africa-Europe farmers’ exchange which we expect to be established in the coming years.
This will be a great way to learn from each other learn and perhaps even form agri-business partnerships and new networks for the future.
There will be lots of activity in the climate and environment area and I know your members are well prepared to meet these challenges.
EU Elections, New EP & New College
Let me conclude by reminding you of the immediate task at hand:
When I became Commissioner in 2014, CEJA approached me and my team at a very early stage to engage with us in relation to the generational renewal challenge.
This is the right way to go about things.
You will soon have a new European Parliament and a new college of Commissioners to deal with, and I strongly encourage you to make your voices heard in the same direct and effective way.
If I can ever be of any assistance to you, my door is always open. A young farmer is always a young farmer – we always remain young at heart!
I will always keep a close eye on the issues that matter to you.
Thank you, and the best of luck for the busy year ahead.