EUROPE – Farmers in EU countries, particularly small farming operations and young farmers, are facing challenges in securing financing and financial investment, reveals a new survey by the European Commission.

EU Commissioner Janusz Wojciechowski shared these findings at the 9th annual EU conference on the European Agricultural Fund for Rural Development (EAFRD)-funded financial instruments held in Brussels, Belgium.

He estimated that the “unmet demand for financing for farmers in the EU” amounted to approximately USD 65.5 billion in 2022.

Wojciechowski presented the findings of two recent surveys conducted by the European Commission, the politically independent executive arm of the EU, among farmers in the region.

For small- and medium-sized businesses in the agri-food processing industry, the unmet financial gap amounted to USD 5.8 billion, with significant variations across member states, he said.

Addressing over 250 representatives from managing authorities, financial institutions, and other agricultural experts, Wojciechowski shared his thoughts on the findings: “The requirements imposed by EU banks on farmers are burdensome and strict.”

“This makes it extremely challenging for agricultural producers and young farmers to compete with other businesses in the economy, where the results may be visible immediately after the company is established,” he said.

According to an article published by the European Parliamentary Research Service (EPRS), small farms make up the vast majority of the EU’s 10 million farms.

The report outlines that small farms are the primary contributors to global food production which suggests that they have higher cropping intensity and yields compared to larger farms.

The report reveals that Romania has the highest number of small farms, with nine out of every ten farms being smaller than 5 hectares.

There are existing initiatives and strategies that EU has put in place to ensure the growth and advancement of small farms in the region.

In June 2021, after extensive negotiations among the European Parliament, the Council of the EU, and the European Commission, an agreement was reached on the reform of the Common Agricultural Policy (CAP), which commenced on January 1, 2023.

Under the new CAP, changes have been made to the existing income support system. These measures aim to ensure a more equitable distribution of financial support for farmers and workers throughout the EU.

“The Common Agricultural Policy is key to securing the future of agriculture and forestry, as well as achieving the objectives of the European Green Deal,” reads an excerpt from the policy.

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