Nadia Calviño at the EU Agri-Food Days: opening keynote speech 10 December 2024
Dear Commissioner, dear Christophe, distinguished guests and partners,
It is impressive to see a full house today to discuss one of the top European priorities. And I am very, very pleased to be here, to see and to explain what the European Investment Bank is doing to support European policies in this area. How can we work together to secure a successful future for European agriculture and the wider bioeconomy? And as President von der Leyen has explained – how the European Investment Bank is actually stepping up its financial support to this sector.
As our key food producers, guardians of our rural communities, protectors of our biodiversity, it is clear that Europe's farmers are vital to the European way of life, and a major force for our economic success. And this is why investing in Europe's agriculture and the bioeconomy is one of our core eight strategic priorities at European Investment Bank Group. We put it very high in our strategic roadmap. We presented it to our shareholders with 27 Member States and it was unanimously supported by them. Which means that, as the financing arm of the European Union and one of the world's largest multilateral financial institutions, we take our support to this sector very seriously.
Those of you that are working in farming know very well – you're the best placed to know – the challenges that we are confronted with, such as strong counterparties and clients, volatile prices, scarce long-term credit. And this is especially the case for young farmers, when finding the funds they need to modernise the production, to digitalise and adopt new technologies, to adopt more suitable, more modern practices in their daily business.
Even when the funding is there, it usually comes at a very high price: high interest rates, demands for collateral. At the same time, farmers are on the front line of increasingly extreme weather events. They are more costly, they are more frequent. And the need for affordable food continues to grow.
Well this, I think, is a short summary of the challenges of this sector. The European Investment Bank has been working closely with Europe's farmers for decades. We have been financing, we are financing, the key infrastructure investments: irrigation systems, transport and new equipment for the agrifood industry. More recently, we have also been financing investments in digital platforms that match farmers with their clients, for example, sustainable aquaculture, the circular economy, research, biotech.
And today I am happy to inform you that the European Investment Bank recently approved a €3 billion Pan-European agriculture programme for small and medium sized businesses. It is the largest financing package dedicated to European agriculture, forestry and fisheries in our group's history. And these funds can be blended with grants from the European budget or with national grants coming from national programmes.
And to crowd in more investment, we are looking at innovative financing mechanisms that could help de-risk these bioeconomy projects and make credit more affordable. For example, public guarantees, interest-rate rebates. Overall, we expect to mobilise more than €8 billion in financing for Europe's agriculture and the overall bioeconomy with a strong focus on support to young farmers, green investments and gender equality.
We also need to rethink insurance and other de-risking programmes for the sector, which is at the forefront of climate change. Just this morning, I was discussing with the commissioner, with Christophe [Hansen], the droughts and floods that we have recently seen in Central Europe, or even more recently, in my home country in Spain. They illustrate very well the need to deal with these increasingly extreme weather events. They are becoming increasingly uninsurable. So together with the European Commission, the insurance industry and farmers themselves, we are working on ways to provide European support to deal with these extreme situations.
And those efforts, obviously, have to complement national insurance schemes and need to be absolutely subject to a principle of building back better, reinforcing our adaptation, the resilience of our infrastructure. Every euro we invest in resilience and adaptation to climate change can save between €5 to €7 in repairs, in the costs – knowing also that some of the costs are simply irrecoverable, like the loss of human lives.
So, supporting ways to help limit the damage is an increasing focus for us at the European Investment Bank Group, because it's not only the right thing to do, but the smart thing to do for all of us.
And adaptation can take many forms. For example, we're investing in innovative solutions in companies that are developing high-performance seeds, such as Florimond Desprez in the north of France, which is increasingly focused on breeding plants that are resistant to extreme heat or droughts as well as illness or pests. We’re also working in broader infrastructure projects, for example, water management and irrigation in Navarra in Spain. Our canal extension project will conserve water and energy, it will restore existing bodies of water and also diversify the kinds of crops that can be grown in the region.
This is an important example of how climate and competitiveness go hand in hand to make a winning tandem for Europe. And we are looking into how to finance the second stage of this project, which is going to boost agricultural production in areas that were seeing rural communities shrink. Because as I said at the beginning, the agricultural sector is also key to preserve our communities throughout the whole of the European Union.
We have been participating very actively in the Strategic Dialogue on the Future of EU Agriculture that President von der Leyen was referring to and working on a comprehensive action plan, which in addition to these €3 billion in new financing and a fresh look at insurance that I already mentioned, also includes venture debt and private equity programmes to support innovative companies developing new agriculture technologies. And in the whole value chain of the agrifood industry, guarantee schemes that are making it easier for farmers to access credit or other forms of support, support for agricultural organisations and increased investment in rural infrastructure such as roads, irrigation, storage infrastructure, internet connectivity, education, water management, et cetera.
There is much to be done, but I remain optimistic because we are not working alone. There is a strong, concerted effort on the part of the European Commission, European Member States, the private sector, to improve the way we work together. Over the past 12 months since I took up the job as president of the European Investment Bank, I have visited each and every one of the 27 Member States to engage with our partners, to talk to our governors, the ministers of finance for the different member states.
And one key message that I have heard is that it is urgent to simplify the way the EU works. President von der Leyen has also mentioned it. This means cutting down red tape, the administrative burdens, and we at the European Investment Bank are also committed to this. We are engaging actively with the European Commission with concrete proposals on how to simplify sustainability reporting, so that we keep the incentives for the green transition, but in a manner which is proportionate and reduce the burden for financial institutions, for large and small companies and also for the farmers.
I think that together we can build a more resilient sector that continues to be at the heart of Europe. Europe is an agriculture powerhouse, and we're starting from a very strong basis on which we can build. And so I think that we can be ambitious when looking forward. By combining our strengths and sharing our knowledge, we can ensure that agriculture remains a successful contributor to economic success, but also to the strength of our local communities.
And I'm happy to report, and I close on this note, my confidence also comes from the fact that we have a close working relation with the European Commission, with DG Agri, with DG Environment, with all the different Directorate Generals. We just had a meeting with the new commissioner, and it took us about five minutes to agree on a number of work streams! Our visions are absolutely aligned, and I think that you know very well you can count on the European Investment Bank to be at your side in this important endeavour.
I look forward to continuing to see all of you and to engage in this constructive dialogue. And thank you very much for inviting me to open this event.