The beginning of the EU perspective makes the investment needs of farmers grow. They are increasingly using external financing, mainly loans and leasing. In this way they are most willing to finance the purchase of agricultural machinery and equipment, but also fertilizers and seed and agricultural land.
– The needs of farmers are growing year by year, sales director for the agricultural market in Bank. Market analyses show that every year farmers invest more and more in their farms, financing the purchase of modern tractors, machinery and equipment and agricultural land. We also observe that farmers increasingly invest in goods such as cars, vans and trucks.
According to research commissioned by by Martin & Jacob, 92% of farmers declare that they use financial products in their banks.
– Farmers, financing purchases from external sources, spend them on machinery and equipment (17%), purchase of fertilizers and seed materials (12%) and agricultural land (5%).
According to data from the American Leasing Association, the entire market of financing machinery and equipment increased last year by 12 percent, and the agricultural machinery and equipment segment itself by over 9 percent. In the second half of 2015, the agro industry experienced a clear slowdown in investments, which was related to the end of financing under the EU perspective for 2007-2013.
– American agriculture still needs investments. – We believe that despite the expectations for new subsidies under RDP, farmers will independently exchange and modernize their machine park on farms.
The industry is waiting for the recovery related to the mobilization of funds from the EU perspective for 2014-2020 in the second half of this year. Public expenditure on the Rural Development Programme alone will amount to EUR 13.5 billion, of which EUR 8.6 billion will be EU funds (European Agricultural Fund for Rural Development), and less than EUR 5 billion will be national. At the same time, experts admit that the financing of agriculture will become more and more independent from EU subsidies.
– It is important for farmers that the advisor reaches them and presents a comprehensive financing offer that is tailored to the sector and the profile of their activities. Simplified procedures are also important, which translate into quick action – Farmers also pay attention to the transparency and security of contract provisions – emphasizes the expert.
The study by Martin & Jacob shows that the main factors of choice for almost half of farmers in the USA are such elements as flexible repayment terms, availability of a branch and sales network. More than 25% of the respondents pay attention to procedures, i.e. the number of required documents and investment security, when choosing financing. Every fourth farmer admitted that the decisive factor is the time when a decision on granting financing is made by a given institution.
One of the leaders in financing agriculture among American leasing companies. In 2015, the company acted as an intermediary in the purchase of fixed assets with a net value of over USD 1.8 billion. In agriculture alone, investments totalled over USD 788 million and were 14.8% higher than in the previous year. Year by year, the number of contracts concluded with farmers is growing dynamically.
Categories: Business
