Mainstream and alternative sources of finance in Dutch agriculture

Research output: Chapter in Book/Report/Conference proceedingConference contributionAcademicpeer-review

Abstract

In this paper mainstream and alternative sources of finance in
Dutch agriculture is analysed. Dutch farmers make use of
different sources of finance whereby bank loans continue to
serve as the major source of debt financing. The average bank
loan was approximately 740,000 euro per farm in 2015 while
equity amounted 1.8 million euro per farm. Traditional family
loans amounted about 60,000 euro per farm. Recent
developments in, and examples of, alternative sources of finance
indicate that the diversity will increase in the future, whereby
various forms of financing will be used simultaneously. This can
also be of interest for mainstream banks since their funding
capacity is becoming more restricted as they are required to
retain more capital to comply with the Basel Accords. The
prospects for crowdfunding in agriculture are promising for
projects relating to sales in niche markets. The relative low
return on equity in agriculture indicates that private equity or
venture capital is often not a viable option.
Original languageEnglish
Title of host publication21st International Farm Management Congress Vol. 1, 2nd - 7th July 2017
Subtitle of host publicationFuture Farming Systems
Number of pages15
Publication statusPublished - 2017
Event21th International Farm Management Congress - Edinburgh, United Kingdom
Duration: 2 Jul 20177 Jul 2017
Conference number: 21

Conference

Conference21th International Farm Management Congress
CountryUnited Kingdom
CityEdinburgh
Period2/07/177/07/17

Fingerprint

Agriculture
Finance
Farm
Equity capital
Basel Accord
Bank loans
Niche markets
Debt financing
Equity
Financing
Farmers
Private equity

Cite this

van der Meulen, H. A. B., & van Asseldonk, M. A. P. M. (2017). Mainstream and alternative sources of finance in Dutch agriculture. In 21st International Farm Management Congress Vol. 1, 2nd - 7th July 2017: Future Farming Systems
van der Meulen, H.A.B. ; van Asseldonk, M.A.P.M. / Mainstream and alternative sources of finance in Dutch agriculture. 21st International Farm Management Congress Vol. 1, 2nd - 7th July 2017: Future Farming Systems. 2017.
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van der Meulen, HAB & van Asseldonk, MAPM 2017, Mainstream and alternative sources of finance in Dutch agriculture. in 21st International Farm Management Congress Vol. 1, 2nd - 7th July 2017: Future Farming Systems. 21th International Farm Management Congress, Edinburgh, United Kingdom, 2/07/17.

Mainstream and alternative sources of finance in Dutch agriculture. / van der Meulen, H.A.B.; van Asseldonk, M.A.P.M.

21st International Farm Management Congress Vol. 1, 2nd - 7th July 2017: Future Farming Systems. 2017.

Research output: Chapter in Book/Report/Conference proceedingConference contributionAcademicpeer-review

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AB - In this paper mainstream and alternative sources of finance inDutch agriculture is analysed. Dutch farmers make use ofdifferent sources of finance whereby bank loans continue toserve as the major source of debt financing. The average bankloan was approximately 740,000 euro per farm in 2015 whileequity amounted 1.8 million euro per farm. Traditional familyloans amounted about 60,000 euro per farm. Recentdevelopments in, and examples of, alternative sources of financeindicate that the diversity will increase in the future, wherebyvarious forms of financing will be used simultaneously. This canalso be of interest for mainstream banks since their fundingcapacity is becoming more restricted as they are required toretain more capital to comply with the Basel Accords. Theprospects for crowdfunding in agriculture are promising forprojects relating to sales in niche markets. The relative lowreturn on equity in agriculture indicates that private equity orventure capital is often not a viable option.

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van der Meulen HAB, van Asseldonk MAPM. Mainstream and alternative sources of finance in Dutch agriculture. In 21st International Farm Management Congress Vol. 1, 2nd - 7th July 2017: Future Farming Systems. 2017