France to Offer Farmers Hit by Drought Loans with Interest Covered by the State

Banks will offer farmers working-capital loans at a reduced interest rate of around 2.5%. The state will cover the remaining interest, making the loans effectively interest-free for borrowers. The total value of these loans could reach €2 billion. The funds can be used, in particular, to purchase forage and other production inputs.

A separate measure is planned for recently established farmers who defer repayment of existing loans: the state will cover the interest and additional costs associated with the deferral. The authorities also intend to accelerate the release of a €21 million reserve from the agricultural support fund.

The government will also review how drought losses on grassland are assessed. An updated map of losses as of the end of September is due to be published in mid-October. Satellite observations will then be compared with assessments conducted on the ground and data from reference farms. Farmers had previously questioned the accuracy of satellite assessments, which affect compensation amounts.

The measures were reported by the French Ministry of Agriculture and Le Comptoir des éleveurs.