The case in summary: A regulation from the Ministry of Finance makes it easier for farmers to get agricultural property loans. This can help to reverse a years-long trend of farm closures. Agriculture is facing large costs in connection with the controversial free-range requirement, which means that animals must run free in a fenced area from 2034. Finance Minister Trygve Slagsvold Vedum (Sp) believes that the interest rate on many agricultural loans has been too high. The chairman of the Norwegian Association of Farmers and Small Farmers believes that the regulations are good, but that it is necessary to increase the profitability of agriculture in order to give agriculture a real boost. The summary is made by an AI service from OpenAi. The content is quality assured by news’s journalists before publication. On the inside of an old barn, strips of plastic hang from the ceiling and you look straight down at the remains of a dung cellar. It may not seem like it, but this is the view of renovation and recovery for farmer Hågen Bentzen from Drevsjø in Engerdal municipality. It will perhaps also be a time of recovery for the rest of Norwegian agriculture. Changing In recent years, every sixth farm has been closed down. A development that bodes poorly for Norwegian agriculture. Now a regulation from the Ministry of Finance can help reverse the trend. A new barn will be built here. This would not have been possible without the new regulations. Photo: Armann Martesønn Kippersund / news The so-called “risk weights” for agricultural property loans were reduced from 100 to 50 per cent at the end of June. The risk weights are a rather technical term, but mean how much risk is involved in what you apply for a loan for. The higher the risk weight, the higher the risk. In other words, it is a way for the banks to protect themselves, if they lend money to businesses and people who risk not being able to pay back. For the farmers, in this context, it will mean that they can borrow money at a lower price. Among other things, Bentzen is expanding the barn and renovating the old one. He can therefore have 27 dairy cows, as opposed to 23. It doesn’t sound like a lot, but given that a dairy cow can produce between 7 and 8,000 liters of milk in a year, it is quite a lot. Armann Martesønn Kippersund It also costs more money The regulations still do not make it any easier to start up and expand. It is also important so that more farmers can continue operations in the future. The reason is the disputed loose operation requirement. The requirement is that in 2034 one must have moved away from having animals tied to stalls, or being closed in – to letting the animals roam free in a fenced area. This will lead to greater costs for agriculture. For Bentzen, it is clear what the future as a farmer would have looked like if the Ministry of Finance had not extended a hand. Elisabeth Gjems, leader of Innlandet Farmers’ Association, believes that the scheme, together with other subsidies from the state, came about during the count’s time. Pictured here with Hågen Bentzen. Photo: Armann Martesønn Kippersund / news – Then I had to work in the old barn, as long as it lasted. In 2034 I had to give up and find another job, he says. Will make life a little easier. – The interest rate for many agricultural loans has been too high, says Finance Minister Trygve Slagsvold Vedum (Sp). He thought it was therefore wrong to make too high demands on agriculture. In addition, he insists that it is professionally justifiable. – There are much smaller losses in agriculture. According to statistics from Statistics Norway (see below), there are therefore fewer bankruptcies in the agricultural sector than in other sectors. – We do not want the capital costs to be too high. Because it’s expensive if you’re going to invest, for example, in a barn, or make other moves, replies Vedum. – What is the risk in lowering the capital requirement? – We have capital requirements in Norway to have solid banks. This means that if something goes bankrupt, the banks must be able to stand up to it. Income is more important The chairman of the Norwegian Farmers’ and Small Farmers’ Association thinks it is good that the new regulation has been established, but believes that it does not sort out the actual problem in agriculture. The chairman of the Norwegian Farmers’ and Smallholders’ Association believes that the Storting must operate with a different statistical basis in order to improve better conditions for agriculture. Photo: Norsk Bonde- og Småbrukarlag – For a long time, farmers only had enough to pay off their debt. Now we see that they are wearing themselves out. So what we actually need is to increase profitability in agriculture. He adds that looking exclusively at the low bankruptcy figures does not give the overall picture needed to give agriculture a real boost. Published 05/08/2024, at 04.58
ttn-69
Regulation from the Ministry of Finance gives hope for Norwegian agriculture – news Innlandet – Local news, TV and radio
