Price volatility in agriculture can discourage farm investments and hinder farmers’ access to affordable finance. Ultimately, it can negatively impact on the achievement of rural development policy objectives. Financial instruments, supported by the European Agricultural Fund for Rural Development (EAFRD), could play a useful role in helping to mitigate the impact of such issues. As part of fi-compass activities, Directorate General for Agriculture and Rural Development (DG AGRI) at the European Commission and the European Investment Bank has studied the feasibility of a market responsive financial instrument supported by EAFRD. The study assesses:
- The market needs and gaps for a market responsive financial instrument in the dairy sector
- The potential to build on/replicate an existing fund called “MilkFlex” in Ireland
- The key success factors and possible value added of a such an instrument
- Potential replicability in other agricultural sub-sectors
This brochure provides some initial information from the fi-compass study.