To make it even easier for agricultural entrepreneurs to invest in sustainability or to convert to organic, a Guarantee Credit for Agriculture (BL) has been created. This would usually involve a 90% guarantee, but for the banks, and big sources of funding, the scheme proved unsuitable. As a result, a modified scheme will be launched on January 1, 2022, stated outgoing Dutch Minister of Agriculture, Nature and Food Quality (LNV) Carola Schouten.
On top of the four existing modules in the BL, a 'fifth' module will be added, the section Working Capital Conversion Sustainable Agriculture. Its purpose is to facilitate funding to compensate for the foreseeable decline in the cash flow of a company making the switch.
Growers switching to more sustainable cultivation methods temporarily face additional costs and lower yields. This reduces the cash flow (working capital) and has consequences for the liquidity of companies during the conversion period. It is important for the continuity of the business that the company can continue to meet current expenses during the conversion period.
The new module facilitates a guaranteed credit for so-called
working capital in the event of conversion. The Ministry of Agriculture, Nature and Food Quality offers a 70% guarantee on 2/3 of the total working capital credit for plans that are compatible with the Investment Fund for Sustainable Agriculture, or in the case of conversion, that meets the rules of Skal Biocontrole. The maximum size of the guarantee for entrepreneurs, who may combine modules, is 2.5 million euros.