Whether starting with organic farming or modernizing the agricultural machinery park, when farmers want to invest, public subsidies often come into play. Securing income is also becoming increasingly important. Many farmers are now looking at other alternatives to raise extra capital. Alternatives include trading in the Forex Market entrusting their investments to trusted forex brokers like those from https://moreforexbrokers.com/ja/fx-brokers/.
Almost every year, nature has been showing what it is capable of – in a negative sense. The winter too mild, too dry, and too sunny, late April with frost onset as well as heavy rain, hail, and hurricane, for example, thwarted fruit growers and drastically reduced harvest yields. Farmers also have to adapt to new risks in terms of financial security. There is a great interest in new policies. United Hagelversicherung reports more than 11,500 new contracts for a product that ensures storms and heavy rain events in addition to hail.
The Farmers Association sees a learning process on both sides in this regard. The insurance industry has to design new products and farmers have to learn how to use them properly. After all, weather damage can quickly become life-threatening.
Agricultural finance: encouraging investment
Short-term financial bottlenecks can also be overcome with public funding if they are triggered by extreme weather, plant, or animal diseases. If a company can demonstrate a drop in earnings of at least 30 percent in a sector, there is the possibility of receiving liquidity assistance – for example, to buy seeds for the next year.
Weather damage can quickly become life-threatening.
Expansion and modernization investments are also funded. Agricultural businesses can obtain loans of up to ten million euros for up to 30 years. It is important that public promotional loans are only to be applied for from banks. In the agricultural sector, these are often savings banks and cooperative banks. Some of these banks also have credit advisors who specialize in the needs of agricultural businesses.
Leasing as Alternative
In addition to classic loan financing via the house banks, leasing has now also entered the agricultural sector as a form of financing. In the agricultural sector, this is an interesting option, especially for machines that are only used seasonally. Instead of taking out an agricultural loan to buy machines, systems, or equipment, agricultural businesses can also lease these goods. The farmer is allowed to use the leased property during the specified leasing period and pays the lessor the contractually agreed leasing installments. The lessor remains the owner of the leased property. In return, the farmer saves the acquisition costs and the credit line is preserved. The company can deduct the leasing installments from tax.