During the past few years agricultural land prices have increased all over Europe and access to land has become an increasingly serious obstacle to the implementation of new agricultural activities. However, the purchase and ‘loan’ of land to local food producers by public sector or charitable organisations has encouraged a number of new entrants to meet consumer demand.
Land prices in France rose by 66% between 1997 and 2008, whilst according to a recent Rural Land Market Survey, land prices rose 14% in the UK during the first three months of 2011 alone. In peri-urban areas especially, the pressure upon agricultural land for urban or industrial development strongly affects the price of agricultural land and it can be very hard for people aiming to establish a new short food supply chain project to find land for their enterprise.
Many banks are also less likely to lend money to an agricultural enterprise without land ownership to secure against financing.
As the short supply chain sector is still relatively new, many projects have to be innovative in nature as they are ‘experimenting’ with local food systems and adapting them to the needs of their local market. This innovation is frequently interpreted as high risk by financial lenders, and can make it even harder for these types of enterprises to receive financial backing.
There are, however, several ethical or ‘slow’ loan trusts that have been established to enable investors to loan funds specifically to local food projects or community- based social enterprises. One such organisation is Crédal (www.credal.be), a community cooperative for ethical finance which has worked with the social economy in the Walloon region of Belgium for the last 25 years. Crédal aims to attract people’s savings to finance projects which have a social added value and to support, structure and sometimes to initiate projects for the social economy.
According to Jérôme Rassart, advisor to Crédal, the cooperative is increasingly offering its services and approach to the agricultural sector, “we are active in supporting an agriculture which is diversified, family-based, and local. It is necessary to make the profession of agricultural producer attractive and to settle the question of income. This includes guaranteeing the viability of short supply-chains. It is necessary therefore that financial institutions show openness to these entities, and do not limit themselves to the agro-industrial companies.”
Many banks are also less likely to lend money to an agricultural enterprise without land ownership to secure against financing.
As the short supply chain sector is still relatively new, many projects have to be innovative in nature as they are ‘experimenting’ with local food systems and adapting them to the needs of their local market. This innovation is frequently interpreted as high risk by financial lenders, and can make it even harder for these types of enterprises to receive financial backing.
There are, however, several ethical or ‘slow’ loan trusts that have been established to enable investors to loan funds specifically to local food projects or community- based social enterprises. One such organisation is Crédal (www.credal.be), a community cooperative for ethical finance which has worked with the social economy in the Walloon region of Belgium for the last 25 years. Crédal aims to attract people’s savings to finance projects which have a social added value and to support, structure and sometimes to initiate projects for the social economy.
According to Jérôme Rassart, advisor to Crédal, the cooperative is increasingly offering its services and approach to the agricultural sector, “we are active in supporting an agriculture which is diversified, family-based, and local. It is necessary to make the profession of agricultural producer attractive and to settle the question of income. This includes guaranteeing the viability of short supply-chains. It is necessary therefore that financial institutions show openness to these entities, and do not limit themselves to the agro-industrial companies.”
Reference:
EU Rural Review (2012) Local Food and Short Supply Chains, n12 page 28
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