A €1bn loans package, specifically targeting young farmers, has been announced by the European Commission and the European Investment Bank (EIB).
In 2017, 27% of the loan applications submitted to banks by EU young farmers were rejected - compared to only 9% for other farms - according to the European Commission.
The package, announced by Agriculture Commissioner Phil Hogan, aims at increasing access to funding for EU farmers - especially young farmers.
The programme will be managed at member state level by banks and leasing companies operating across the EU.
Participating banks should match the amount committed by the EIB - therefore bringing the total amount to a potential €2bn.
The programme will address many of the current shortcomings that farmers are faced with such as lower interest rates, longer periods of up to five years to start re-paying the loan and longer periods to pay back the whole loan - up to 15 years.
The new loan programme is part of a joint 'Young Farmers' initiative between the European Commission and the EIB.
In addition to the loan package, this includes a continued use of European Agricultural Fund for Rural Development (EAFRD) grants for young farmers and start-ups that can be used as interest rate subsidies or for technical assistance, in combination with financial instruments.
Commissioner Phil Hogan said: "Access to finance is crucial and too often an obstacle for young people wanting to join the profession.
"With 11% of European farmers under the age of 40 years old, supporting young farmers in the sector is a priority for the European Commission and the post-2020 Common Agricultural Policy. I am pleased to see this new joint initiative up and running."
EIB vice-president responsible for agriculture and bioeconomy, Andrew McDowell, said: "The agricultural sector is the backbone of the EU economy and has a key role to play not just in producing healthy food but also to battle climate change and preserve the environment.
"With this new initiative, the EIB is looking towards the future of the sector and addressing an important market gap, the lack of access to finance of farmers, especially the next generation of farmers."
