Europe considers a start-up grant for young farmers

Monday, August 5, 2013

With under 35s representing a mere six per cent of farmers in the core EU countries, Brussels is looking at C$95,000 in start-up aid plus 25 per cent higher annual agricultural subsidies for approved young farmers

by NORMAN DUNN

Farming businesses from Sweden to Sicily are run by bosses who are at best well into middle age and sometimes very much older. In 2007, European Union (EU) statisticians found that 31 per cent of owners and tenants of farms within 15 of the longest-established EU countries (the so-called EU-15) were 65 or older. The percentage is thought to be nearer 35 now.

As for the under 35s in farming, back in 1990 this sector made up an estimated eight per cent of active farmers. Now the average figure is six per cent. In Britain, the most recent figures indicated that 52 per cent of all farmers in the U.K. are 55 or over. If you look at urban self-employed in the same country, only 22 per cent are 55 or over.

This aging of farmers is getting governments worried. In Ireland, for instance, there are as many farmers 80 years of age or over as there are 35 or younger.

Now of course there's nothing wrong with age and experience in any profession. It's a crucial mix often ensuring reliability. It's the balance that's now wrong as far as farming is concerned. The flow of young blood into the sector is being steadily reduced.

Europe's Council of Young Farmers (CEJA) is helping here by lobbying for an international program financed by the EU that would see approved young farmers (some admittedly not-so-young because the CEJA wants the upper age limit to be 40 years of age) getting a $95,000 start-up fund plus 25 per cent higher basic farm grants (i.e. Single Farm Payments) during the first five years of business.

Utopia? Not really. This approach is being officially discussed now. CEJA president Joris Baecke says EU headquarters and the parliament in Brussels are already involved in first steps. More concrete details are expected this summer and these could include this approach being made mandatory throughout Europe.

While we're on the subject, what kind of start-up costs would a young farmer in Europe face this year? Good cropping land in the south of England is going under the hammer for around the equivalent of C$12,900 an acre and, further north, $9,100 an acre. In eastern Europe, arable land prices can be much lower: $3,300 an acre in Poland, for example. And there's traditionally very hot competition when it comes to renting. Tenants in northwest Germany are currently paying the equivalent of $190-$200 an acre for good cropping land. In England at the start of this year, arable land tenures were costing an annual $125-$150 an acre.  

But any EU young farmer support program that eventually gets put in place won't exist to completely bankroll young folk starting off. Most experts reckon that the resultant grants are really rewards for very detailed five-year business development plans. In other words, the financial aid may help with equipment purchases and first-year expenses. But, mainly, it'll be an incentive for proper planning and introducing best business practices from the start.

And, naturally, it's hoped that any EU or government support in this respect will be a sign to bankers that the young farmer in question has done his or her homework and is therefore a better risk than most for more starting capital.

Some countries have already gone ahead with large-scale financial support for young farmers starting their own business. France, for example, offers grants for selected young entrants of up to $35,000. However, the selection process appears very strict, with entrants sometimes expected to return to college for an extra course if the administrators think this is needed for a particular farm plan. The French scheme includes a range of loans tailored especially for young farmers with a payback maximum of 15 years and annual interest at 2.5 per cent – not so impressive now, but excitingly low when the scheme was introduced four years ago.

And guess what? In that short time, the percentage of under 35s now running their own farms in France has moved forward to become one of the highest in EU at over 10 per cent. BF

Norman Dunn writes about European agriculture from Germany.