We must view agriculture not only as food production but also through the lens of environmental protection

Improving the efficiency of European and Croatian agriculture in a green, sustainable way will help us slow down global warming and succeed in the fight against climate change, and it has the potential to create new jobs and sources of income for both citizens and the state, thus injecting new economic dynamics into predominantly agricultural regions. This requires a multi-layered approach that must be applied not only to how we grow food but also, more importantly, to how we finance agricultural production.

Changes are necessary in light of the fact that the world population is expected to reach 11 billion by 2100. As a result, global food demand could nearly double by 2050. If we want to feed the world without destroying the remaining natural resources, agriculture must find a way to coexist with nature. Additionally, the Russian attack on Ukraine has brought the issue of food supply and production security to the forefront.

The solution to these problems partly lies in investing in modern technologies, innovations in agriculture, and more efficient food consumption (the world currently wastes thirty percent of produced food) as well as in a thorough reassessment of what and how we eat. The European Investment Bank offers support for projects that provide solutions to these challenges both in Croatia and beyond.

Investment in modern agriculture

The European Union is the largest trader of agricultural products in the world. The food and beverage industry contributes nine percent of the EU’s gross domestic product and employs around 15.4 million people. In less developed regions, agriculture employs the most people, which is also the case in rural, continental Croatia. Despite its size, agriculture in the EU is not as productive as it could be. One reason for this is that farmers often struggle to secure financing for innovative projects whose implementation could increase the productivity of their households.

The lower level of investment in European agriculture is partly due to the lack of appropriate financial instruments, primarily venture capital funds that would support newly established and innovative projects. Without investment, there are no innovations, and discoveries are crucial for the success of European plans to produce more food in a sustainable manner. This is an area where the European Investment Bank Group is trying to provide an effective response.

To support a strategic shift towards a sustainable agriculture model for Croatia, the EU, and the world, the European Investment Bank is ready to finance projects that make agriculture more productive and sustainable. First and foremost, we are interested in projects that introduce technology into agriculture. Companies that already assist agricultural producers by offering big data, i.e., monitoring systems and better production targeting, have long been a reality in the European market. Among them is one Croatian company – Agrivi. This innovative company is one of the globally successful Croatian companies whose data management solutions in agriculture help make better, faster, and more rational decisions in the complex environment of agricultural production.

Part of the support for its success Agrivi received thanks to the venture capital fund Feelsgood, whose establishment, as one of the first Croatian venture capital funds, was enabled by the EIB Group through its European Investment Fund (EIF). Investing in funds like Feelsgood is one way the EIB Group supports the transformation of European agriculture and its modernization, and it is a successful model for continuing and accelerating that process.

Necessary changes in agriculture

The integration of real-time data on farms and in their supplier networks, as offered by big data companies, could result in the elimination of intermediaries in agriculture, directly connecting agri-food companies with retailers and consumers, using digital platforms, which are increasingly available in the European market. Technologies such as blockchain, which are the foundation of smart data tracking systems, can also help improve the efficiency of domestic agriculture as they offer a successful alternative to otherwise expensive paper or computer reports.

Increasing food production to meet the needs of a growing population should not be an end in itself. It is necessary to change the way we currently and unsustainably produce food and achieve agriculture that is in harmony with nature, rather than its opponent. The EIB is ready to support the transformation of agriculture towards a long-term sustainable model and finance the modernization of agricultural production to make it less harmful and more productive. This requires significant investments and new ways of financing agri-food innovators: introducing crowdfunding platforms, mini-bonds, and financial instruments for risk-sharing. Some of these financial instruments have already been introduced by the EIB in Croatia.

The European Investment Bank is eager to continue this partnership and collaborate with the public and private sectors to enable a new sustainable future for Croatian agriculture, capable of responding not only to the increasing food needs in the world but also to the demand for new jobs, thus accelerating the balanced economic development of Croatia.