Access to finance: unlocking investment for Europe’s next generation of farmers

Becoming a farmer requires more than land: it requires capital. Yet, for many aspiring or young farmers, financing a farm start-up or expansion remains out of reach. High collateral requirements, limited credit history and fluctuating income make banks reluctant to lend. As a result, even the most motivated new entrants struggle to invest in land, equipment or sustainable technologies that would allow them to build viable, competitive businesses.

The EU Strategy for Generational Renewal in Agriculture recognises access to finance as a cornerstone for ensuring that young people can enter, remain and thrive in farming. By strengthening financial instruments, guarantees and investment support, the EU aims to make capital work for renewal, not against it.

Why financial access matters

Access to finance determines who can farm, what they can grow, and how they can innovate. When credit is scarce or unaffordable, opportunities for renewal vanish. Across Europe, young farmers tend to operate smaller farms and face higher debt ratios than older generations. Traditional credit models often demand collateral that newcomers lack, leaving them dependent on family transfers or short-term arrangements.

These constraints do more than limit individual careers - they slow down the adoption of sustainable technologies, constrain generational renewal, and weaken the resilience of rural economies. Without adequate finance, even good land access or training support cannot take root.

New financial models taking hold across Europe

The EU CAP Network's Assessment of Generational Renewal Strategies across Member States(2025) has mapped national and regional financial instruments across Europe which are already advancing innovative ways to reduce risk, improve affordability, and make lending to young and new farmers attractive again. Successful approaches include:

• Public guarantee schemes that share risk between governments and financial institutions, enabling banks to offer lower interest rates and longer maturities to new entrants.
• Dedicated agricultural investment banks and loan funds providing stable, low-interest financing for agricultural innovation, investment and generational renewal.
• Combined public-private instruments that blend EU, national and private capital, leveraging public funds to unlock larger volumes of affordable credit.
• Green and thematic loans that link favourable conditions to sustainable and climate-friendly investments, aligning financial access with green goals.

These approaches demonstrate that financial innovation can remove structural barriers and foster a new generation of farmers who are both resilient and forward-looking.

A European strategy for lasting change

The EU Strategy for Generational Renewal in Agriculture builds the on analytical work and evidence gathered by the EU CAP Network across Member States to create a fairer and more transparent financial environment for farmers. The Strategy promotes a mix of financial innovation and governance reforms designed to make credit more accessible, equitable and future-oriented:

• A new EU Young Farmers' Starter Pack, combining financial support, training and advisory services to help new entrants start their activity and manage the early years of business development.
• Expanded EU and national guarantee mechanisms to reduce borrowing costs and increase banks' willingness to lend to young and small farmers;
• Dedicated loan schemes and investment funds under the CAP post-2027 to finance farm establishment, land purchase and sustainable innovation;
• Enhanced cooperation with the European Investment Bank Group and financial intermediaries, ensuring tailored financial instruments for rural development;
• Better monitoring of access to finance and renewal measures through the European Semester, fostering more consistent policy support across Member States;
• Capacity-building and financial literacy support, helping young farmers prepare viable business plans and access existing instruments more effectively;

Together, these measures aim to create a level financial playing field where entrepreneurial farmers, regardless of their starting point, can access the capital they need to grow, modernise and contribute to Europe's sustainable future.

For more information

Press release : Commission proposes measures to support generational renewal in agriculture to secure Europe's food, farming and rural future

Communication: Strategy for generational renewal in agriculture (PDF)

Generational renewal in agriculture

CAP Network study on the best practices in Member States