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Potential and Complexity of Implementing Financial Instruments in the Framework of Rural Development Policies in Italy—The Friuli Venezia Giulia Revolving Fund

Author

Listed:
  • Federica Cisilino

    (Council for Agricultural Research and Economics, Research Centre for Agricultural Policies and Bio-Economy, 00187 Rome, Italy
    These authors contributed equally to this work.)

  • Francesco Licciardo

    (Council for Agricultural Research and Economics, Research Centre for Agricultural Policies and Bio-Economy, 00187 Rome, Italy
    These authors contributed equally to this work.)

Abstract

Although in recent years some credit institutions have shown a willingness to support agricultural entrepreneurs, there is still a lack of private financing or co-financing in the agricultural sector. Many farms, in fact, are not able to meet the indicators or to provide the fees required by banks to obtain investment loans. The financial instruments introduced by the European Commission within the Rural Development Programme aim at supporting access to credit for farms to make them more economically viable, competitive, and suited to market requirements. The objective of this paper is to analyze the role played by the financial instruments introduced by the European Union to support and encourage the improvement of farms and, in general, the agriculture, forestry, human capital, and rural development in Italy. The paper explores the topic in detail by presenting a case study of a region that has successfully applied these instruments using a revolving fund with a special background. The quantitative data used in this study are administrative; some information was obtained through a survey. Regional information on the implementation of this fund is examined in terms of both opportunities and limitations to highlight the best practice. The findings suggest that certain conditions are required to develop and implement effective financial instruments: a real and effective collaboration between regional administration, banking institutions, and farms that are willing to grasp the newness; a reasonable period of time (some years); know-how because knowledge and experience are crucial, together with the ability to face complexity both in terms of normative issues and financial engineering instruments themselves. Several implications derive from these findings.

Suggested Citation

  • Federica Cisilino & Francesco Licciardo, 2022. "Potential and Complexity of Implementing Financial Instruments in the Framework of Rural Development Policies in Italy—The Friuli Venezia Giulia Revolving Fund," Sustainability, MDPI, vol. 14(23), pages 1-21, December.
    • Handle: RePEc:gam:jsusta:v:14:y:2022:i:23:p:16090-:d:990962
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    References listed on IDEAS

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    1. Carillo, Felicetta & Licciardo, Francesco & Corazza , Eugenio, 2021. "Investments financing at farm level: A regional assessment using FADN data," Economia agro-alimentare / Food Economy, Italian Society of Agri-food Economics/Società Italiana di Economia Agro-Alimentare (SIEA), vol. 23(3), December.
    2. Felicetta Carillo & Francesco Licciardo & Eugenio Corazza, 2021. "Investments financing at farm level: A regional assessment using FADN data," Economia agro-alimentare, FrancoAngeli Editore, vol. 23(3), pages 1-24.
    3. Allen N. Berger & W. Scott Frame, 2007. "Small Business Credit Scoring and Credit Availability," Journal of Small Business Management, Taylor & Francis Journals, vol. 45(1), pages 5-22, January.
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