Articles, Blog

Benefits of financial instruments from the European Agricultural Fund for Rural Development

August 15, 2019

We would like to introduce
you to the Smiths: James, his wife Anne, and their children
John and Emily… …and this is their family farm…
…and their rural village. The farm has been in the family
for six generations, but the financial crisis
has really hit home and the Smiths are worried
about their future. James has been struggling to find
finance to improve farm productivity. His wife Anne is a nurse
at the village health centre, but her hours have been cut in half and she’s been thinking about
starting her own B&B business. When Emily grows up, she would like
to study agribusiness at University and one day take over the family farm. At the moment, though,
this dream seems very uncertain. The mayor and the
Village Development Council have ambitions to transform the village
into a smart and sustainable community. It’s a pretty market village, positioned
not that far from the large tourist town. Even though there’s plenty
of unrealised potential, they are struggling to find funding
and to attract new business entrants. Fortunately, the managing authority
for the Rural Development Programme offers financial instruments and grants,
to help people, families and communities take the opportunities for development. Financial instruments can be co–funded by the European Agricultural Fund
for Rural Development. They can take the form of loans,
guarantees or equity, with the potential for funds
to be reused for further investments. By supporting financially
viable investment projects, financial instruments are a sustainable
and efficient way to foster the growth and development
of people, businesses and resources in the agriculture and forestry sectors,
as well as in the rural economy. Through smart implementation
of financial instruments and grants in rural development, many of the ideas
in the village were able to come to life. James found out
from the local farmers association that both grants and financial instruments
from the European Agricultural Fund for Rural Development could be used
to improve his farm’s productivity. He’s used a grant
to upgrade the farm assets and a financial instrument guarantee
to secure a loan to invest in IT for precision farming approaches. This is driving down seed and fertilizer
use and driving up productivity. And he was also able to set up
a small anaerobic plant that converts animal waste
into electricity. Good news, both for the farm’s profits
and the environment. The Village Development Council obtained
a grant with the support of LEADER to turn the old railway
line into a greenway and connect the village to its neighbouring
towns and boost the tourism potential. This has brought tourists
and spending to the village and has made it popular across the region. Anne received a grant
to help her prepare a business plan, and she also secured a loan
from a financial instrument to transform the old annex into a B&B. Thanks to the tourist traffic from
the village’s new greenway connection, business in the first few years has been
better than she could have dreamed of. The village has become vibrant again.
Many restaurants and cafés have opened up. More and more young people
and families have moved into the village, attracted by its good quality of life and the prospect of an easy cycle
to work in the neighbouring town. While John started his own company in the
village, Emily graduated in agribusiness and took over her dad’s farm. Emily is full of ideas
on how to make the farm even more financially
and environmentally sustainable. For more information about
financial instruments under the EAFRD, please contact your local
managing authority. Or visit–

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