Access to finance remains one of the main barriers for new farmers entering agriculture. While land is essential, establishing or expanding a farm requires capital, and many young or aspiring farmers struggle to secure it. High collateral requirements, limited credit histories, and variable income make lenders cautious, leaving new entrants with few options to invest in land, equipment, or technologies.
The EU Strategy for Generational Renewal in Agriculture identifies financial access as a central factor for helping young people enter and remain in farming. The approach focuses on improving financial tools, guarantees, and investment support to reduce obstacles for new farmers.
© European Commission
Financial access and structural challenges
Credit availability influences who can enter the sector and how businesses develop. When financing is limited or expensive, opportunities for innovation and renewal diminish. Across Europe, younger farmers often manage smaller farms and carry higher debt ratios than older producers. Many cannot meet traditional collateral requirements and rely instead on family support or short-term arrangements.
Limited financial access restricts investment in sustainable technologies and affects broader rural development. Without appropriate financing options, improvements in land access or training cannot be fully utilised.
Emerging financial models across Europe
The EU CAP Network's 2025 assessment of generational renewal strategies mapped financial instruments in use across Member States. Several models aim to improve affordability and reduce risk for lenders and new farmers.
These include public guarantee schemes that distribute risk between governments and banks, dedicated agricultural investment banks and loan funds offering lower-interest lending, combined public–private instruments that blend funding sources, and green or thematic loans that link lending conditions to environmental practices.
These mechanisms seek to make lending more accessible and provide structured pathways for new farmers to establish viable operations.
EU framework for improving financial access
The EU Strategy for Generational Renewal in Agriculture draws on evidence collected across Member States to develop a more transparent financial environment for farmers. The strategy includes the introduction of a Young Farmers' Starter Pack combining financial support with training and advisory services, the expansion of EU and national guarantee schemes to lower borrowing costs, and dedicated loan and investment programs under the post-2027 CAP for farm establishment, land acquisition, and innovation.
Additional measures include cooperation with the European Investment Bank Group to provide tailored financial instruments for rural development and improved monitoring of financial access through the European Semester process. Capacity-building and financial literacy support aim to help young farmers prepare business plans and navigate available financial tools.
The overall objective is to create conditions where new entrants have a clearer pathway to securing the capital needed to build and maintain farm businesses.
© European CommissionFor more information:
European Commission
Tel: +32 2 299 96 96
www.agriculture.ec.europa.eu.go
