As a result of scaling up and increasing the value of sustainable means of production, the average capital on an agricultural holding increased from €1,5 million in 2001 to €3,5 million in 2018. This is reported by Wageningen Economic Research in a study on sustainable agri-financing, commissioned by the ministry. from LNV.
At the same time, the total amount of bank loans in the agricultural sector rose from €18 billion in 2001 to €33 billion in 2018. Due to low interest rates, financing costs have nevertheless fallen in recent years. In 2014, financing costs averaged €30.000 per company, in 2018 this had fallen to €22.000.
Value increase of land and phosphate rights
Dairy farming experienced a strong increase in the value of its assets in 2018, due to the introduction of phosphate rights. On average, the value of intangible assets on dairy farms increased by more than €1 million between 2017 and 2018. The balance sheet value was over €2018 million in 4,5, about half of which is land. The balance sheet value has more than doubled compared to 2001. The acreage owned increased from an average of 26 hectares in 2001 to 40 hectares in 2018. The acreage of land in use in 2018 was an average of 57 hectares.
The balance sheet value in arable farming has also risen sharply, mainly as a result of the increase in the value of land. In 2018, the land was valued almost €130.000 higher than in 2017. Land makes up 70% of the total value of an arable farm. In 2018, the average balance sheet value was €4,4 million. The size of arable farms increased from an average of 51 hectares in 2001 to 63 hectares of cultivated land in 2018, and the cadastral area owned by them from 27 hectares to 47 hectares.
Financing Aid
Transition to sustainable agriculture will require adjustments that will reduce returns, the researchers conclude. This can lead to a 'dip in the cash flow' of the company despite a strong equity position. To prevent this from becoming an obstacle for entrepreneurs, financial public support by the government could be considered, if it wants to get 'the large group' of farmers and horticulturists in motion to take significant steps towards sustainability. All the more so as the financing of agricultural conversion by banks is often still seen as uncertain/risky. That is why the Ministry of Agriculture, Nature and Food Quality has set up the Sustainable Agriculture Conversion Scheme, which consists of a guarantee fund and a bridging loan.
Members of Parliament, including Roelof Bisschop of the SGP, have asked Minister Schouten to investigate the financing options and impossibilities in the agricultural sector. Schouten writes in the letter accompanying the House of Representatives to the research into sustainable agro-financing that the financing options are good compared to other countries, with the exception of financing in the event of a company takeover.
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This is in response to it Boerenbusiness article:
[url = https: // www.boerenbusiness.nl/ artikel/10890480/nederlandse-boerderij-is-drieenhalf-mljoen-waard]Dutch farm is worth three and a half million [/url]
That has been announced before, know farmers who have sold. However, not bought back, a few years later the land was more expensive and the money evaporated.
It is better to invest in land, if you invest the money in stables and stable equipment, you will never get a sale again.
Selling land means that 1 generation can live rich and then it is over and the family business is gone.
It is even better to sell your company in its entirety now, in 1.5 years you can easily buy back a much larger and more beautiful farm for half the money.