The European Agricultural Fund for Rural Development

The European Agricultural Fund for Rural Development (EAFRD) is the funding instrument of the second pillar of the EU’s Common Agricultural Policy (CAP) and it is one of the European Structural and Investment Funds (ESIF). The EAFRD aims at strengthening the EU’s agriculture, agro-food and forestry sectors, as well as rural areas in general.

The EAFRD has a total budget of over EUR 96 billion for the period 2014-2020. Almost half of this budget is planned for investments, through grants and financial instruments, in agriculture, forestry, environment and natural resources management as well as sustainable development of the rural economy. By end of 2018, more than 54 managing authorities carried out ex-ante assessments for financial instruments under the EAFRD and around 25 of them have launched or are preparing, their financial instruments.

Financial instruments supported by the EAFRD can contribute to the achievement of most of the established EU priorities for rural development, for instance:

  • fostering knowledge transfer and innovation in agriculture, forestry and rural areas;
  • enhancing competitiveness of all types of agriculture and enhancing farm viability;
  • promoting food chain organisation;
  • promoting resource efficiency and supporting the shift towards a low-carbon and climate-resilient economy in the agriculture, food and forestry sectors; and
  • promoting social inclusion, poverty reduction and economic development in rural areas, in particular with regards to creation and development of small enterprises, as well as jobs creation.

Financial instruments under the EAFRD are available to all potential recipients in agriculture, forestry and in the rural areas who are undertaking financially viable investment projects.

For further information, please consult the fi-compass factsheet on EAFRD financial instruments.

Information from fi-compass for EAFRD financial instruments

On this website, EAFRD stakeholders can find a lot of useful and interesting information to improve their decision-making about financial instruments.

In order to provide managing authorities with a comprehensive set of information to enhance the use of EAFRD financial instruments in the 2021-2027 CAP Strategic plans, fi-compass published 24 country reports, investigating the financing needs of the agriculture and agri-food sectors in 24 EU Member States. Drawing on the results of two EU-level surveys focusing on access to finance conditions of more than 7 600 farmers and 2 200 agri-food enterprises, the reports shed light on investment drivers, financing supply and relevant difficulties in the two sectors, with a focus on young farmers. The studies also propose recommendations to address the identified gaps.

Publications, like a dedicated methodological EAFRD handbook for ex-ante assessment that has been produced especially for financial instruments in agriculture. It hosts a practical collection of informative reference guides with relevance for EAFRD financial instruments.

Case studies, such as experiences from guarantee and loan funds supporting farmers and rural businesses, show how these instruments can be used to support the EU's rural economy.

Targeted coaching is a relatively new and specific advisory service available to all EAFRD managing authorities. Targeted coaching is provided by fi-compass together with Directorate General for Agriculture and Rural Development (DG AGRI) of the European Commission in order to help managing authorities to build up their knowledge about financial instruments. Coaching also helps to improve understanding about the setting-up and implementation specificities of financial instruments. EAFRD managing authorities (national and regional) can request coaching services by email through fi-compass or their counterpart in DG AGRI.

The EU and macro-regional conferences on EAFRD financial instruments for agriculture and rural development provide substantial amounts of additional information from fi-compass. The conferences' website pages include a large library of video-recorded presentations and discussions about opportunities for EAFRD financial instruments, as well as useful insights from people with direct experience of using financial instruments for agriculture and rural development.

Videos feature information about EAFRD financial instruments and associated fi-compass support, as well as case study material and overview films from fi-compass events that promote the uptake of EAFRD revolving funds.

For example, successful experiences from French agri-food enterprises using an EAFRD financial instrument are presented in a video about the Occitanie Region’s FOSTER TPE-PME fund of funds, which was shown during a fi-compass EAFRD conference.


Studies about EAFRD financial instruments are undertaken by fi-compass to help Member States and regions to develop theory into good practice on the ground. Our EAFRD studies also provide useful insights for a range of stakeholders including policy-makers, academia, and the financial sector.

News articles, including interviews with agricultural financial instrument experts, highlight transferable lessons learned and other real-life EAFRD stories from the field.

EAFRD under the 2021-2027 Multiannual financial framework

The common agricultural policy (CAP) proposals for the period 2021-2027 aims at ensuring that the CAP can continue to provide strong support for European farming, enabling prosperous rural areas and the production of high-quality food. Nine common EU specific objectives set the basis for the policy tackling a wide range of emerging environmental, social and economic challenges - from preserving biodiversity to ensuring fair income, supporting generational renewal to climate change action.

The proposed CAP regulations COM/2018/392 final - 2018/0216 and COM/2018/393 final - 2018/0217, together with the draft Common Provisions Regulation (COM/2018/375 final) create the legislative framework for financial instruments implemented with EAFRD resources. A number of flexibilities have been introduced allowing the financing of stand-alone working capital, investments, capital rebates, interest rate and guarantee fee subsidies, as well as technical support for the benefit of the final recipients. The combination of financial instruments with grants will remain possible.

Financial instruments using EAFRD resources are expected to support predominantly the agriculture and agri-food sectors to make the progress needed for the European Green Deal and achieving the ambitious targets in line with the new Biodiversity and Farm to Fork strategies. They can also contribute to the new vision for rural areas through helping rural non-agricultural SMEs start or develop their activities. The recent fi-compass study reports on the financing needs of the agriculture and agri-food sectors in 24 Member States highlight the potential to use EAFRD resources to meet the financing gap and are a good starting point for any Member State willing to set up a new financial instrument in the 2021-2027 period. 

Relevant resources:

Study reports

Case studies under EAFRD

Methodological guidance